Untitled Texas Attorney General Opinion ( 1984 )

The Attorney General of Texas
JIM MATTOX February 21, 1984
Attorney General
SupremeCourt Building Mr. W. G. Kirklin Opinion No. ~~-126
P. 0. BOX 12548 Chairman
Austin. TX. 78711. 254S
Texas Health Facilities Commission Re: Eligibility of an
51214752501
Telex 9101874.1387
P. 0. Box 50049 individual to serve on the
Telecopier 512,4750280 Austin, Texas 78763 Texas Health Facilities
Commission
714 Jackson, Suite 700
Dear Mr. Kirklin:
Dallas, TX. 752U2-4506
214/742-8944
You ask whether Ms. Dora McDonald's appointment and continued
service on the Texas Health Facilities Commission comply with article
4824 Alberta Ave., Suite 160 4418h. section 202, V.T.C.S., and article 6252-9b, V.T.C.S.,
El Paso, TX. 79905.2793
respectively. Additionally, YOU ask whether w related
9151533.3484
constitutional or statutory impediments exist.
I”
3, Texas, Suite 700 Article 4418h, section 2.02, V.T.C.S., provides in pertinent part
HOUS,O~. TX. 77002-3111 that
713/2236SB8
[t]he governor shall not appoint to the commission
806 Broadway, Suite 312
any person who is actively engaged as a health
Lubbock, TX. 79401-3479 care provider or who has any substantial pecuniary
806/747-5238 interest in a facility.
Ms. McDonald is not a health care provider, nor does she have a direct
4309 N. Tenth, Suite B
McAlle”, TX. 78501-1685
pecuniary interest in a health care facility.
512/682-4547
Mr. McDonald is a program consultant for Horizon Health
Corporation, a corporation that provides specialized treatment
200 Main Plaza, Suite 400
San Antonio, TX. 78205-2797
serviced in psychiatry and in substance abuse. Horizon Health owns
5121225.4191
one treatment facility in Texas and manages speciality units in three
Texas hospitals. Mr. McDonald does no hiring or firing, nor is he
engaged in expansion, purchasing, acquisition, or financial management
An Equal OpportunityI activities. Neither Mr. nor Ms. McDonald owns any interest in Horizon
Affirmative Action Employer
Health. Mr. McDonald is on a fixed salary, sharing directly in
neither the profits nor losses of Horizon Health. Thus, Ms.
McDonald's only interest in a health care facility stems from her
community property portion of her husband's fixed salary.
Whether Ms. McDonald's community interest in her husband's salary
constitutes a "substantial pecuniary interest" in a health care
facility depends upon the extent of that interest under Texas law.
The earnings of each spouse during marriage are community property.
Family Code Q5.01; Commissioner of Internal Revenue v. Chase Manhattan
p. 533
Mr. W. G. Kirklin - Page 2 (J&l&) ,'1,,,.,
,.,
Bank, 259 F.2d 231, 239 (5th Cir. 1958); Vallone v. Vallone, 644
S.W.2d 455, 458 (Tex. 1982~);Maben v. Maben, 574 S.W.2d 229, 232 (Tex.
Cl". App. - Fort Worth 1978, no writ).
Under Texas law each spouse owns a present, vested, undivided
one-half interest in all community property, but the husband is the
sole authorized manager of the general community property. However,
the wife has managerial power over a special community composed of her
income and the income of her separate property. Free v. Bland. 369
U.S. 663 (1962), conformed to in 359 S.W.2d 297 (Tex. 1962); Chase
Manhattan Bank, supra. The Texas Family Code, section 5.22, provides
for separate management of certain community property:
(a) During marriage, each spouse has the sole
management, control, and disposition of
the community property that he or she
would have owned if single, including but
not limited to:
(1) personal earnings;
(2) revenue from separate property;
(3) recoveries for personal injuries;
and
(4) the increase and mutations of, and
the revenue from, all property
subject to his or her sole
management, control and disposition.
The court Estate of Wyly v. Commissioner of Internal Revenue,
in
610 F.2d 1282, 1288 (5th Cir. .1980), construed subsection (a)(2) of
section 5.22 to create a "special community" or "sole management
community" interest in the earning spouse. The other spouse,
receiving a community property interest by operation of law, "has only
'ownership' in an almost abstract sense, with no concomitant direct
management rights." The court noted that a spouse's management powers
over his or her "sole management" portion of community property are
described in exactly the same terms which section 5.21 uses for
separate property. Thus, in Texas,
a spouse is able, in the absence of fraud, to deal
with sole management community as he or she might
with his or her own separate property, free from
any participation, consent, or interference by the
other spouse.
Id. at 1289.
p. 534
Mr. W. G. Kirklin - Page 3 (JM-126)
Applying the Fifth Circuit's construction of subsection (a)(2) to
subsection (a)(l), we conclude that Ms. McDonald has only abstract
ownership of one-half of her husband's salary. Mr. McDonald may deal
with his salary "free from w participstion, consent, or
interference" by Ms. McDonald. This is not a sufficiently
"substantial pecuniary interest in a facility" to disqualify Ms.
McDonald's'appointment under article 441811.
Article 6252-9b. section 1, V.T.C.S.. states the Texas conflict
of interest policy regarding the conduct of state officers and
employees:
[Nlo ,state~.officeror state employee shall have
any interest, financial‘ or otherwise, direct or
indirect, or engage in any business transaction or
professional activity or incur any obligation of
any'nature which is in substantial conflict with
the proper discharge of his duties in the public
interest. (Emphasis added).
Section 2(12) refers to a' "substantial interest" rather than "any
interest" and defines it as follows:
An individual has a 'substantial interest' in a
business entity if he:
(A) has controlling interest in the business
entity;
(B) has ownership in excess of 10 percent of
the voting interest in the business
entity or in excess of $25,000 of the
fair market value of the business entity;
(0 has any participating interest, either
direct or indirect, by shares, stock, x
otherwise, whether or not voting rights
are included, in the profits, proceeds,
or capital gains of the business entity
in excess of 10 percent of them;
@‘) holds the position of a member of the
board of directors or other governing
board of the business entity;
(E) serves as an elected officer of the
business entity;
(F) is an employee of the business entity.
(Emphasis added).
p. 535
.
Mr. W. G. Kirklin - Page 4 (~~-126)
Under these tests, considering Ms. McDonald's limited, non-managment
community property interest in one-half of her husband's salary, she
is not disqualified from serving on the commission.
Because Ms. McDonald agreed to abstain in any matters in which
her husband's employer is an applicant, a party, or an interested
person, the necessity of such abstention under article 6252-9b is not
in issue. Assuming that the occasions for such abstention are
infrequent, they will not substantially "conflict with the proper
discharge of [her] duties in the public interest," -See V.T.C.S. art.
6252-9b. 01.
Ms. McDonald has further agreed to disclose all potential
conflicts. Disclosure and abstention in particular proceedings
wherein conflict exists are the primary concerns of the statute. See
Final Report of the Public Servant Standards of Conduct AdvisG
Committee (Aug. 1983); See also Attorney General Opinion H-269 (1974).
Additionally, Ms. McDonald must comply with the financial disclosure
provisions of article 6252-9b. However, she need only file a
financial statement of her own possibly conflicting financial
activities and those activities of her snouss over which she has the
right to exercise any degree of act& control. Attorney General
Opinion H-269.
Based upon the given facts, we perceive no additional impediments
to Ms. McDonald's appointment and service on the Texas Health
Facilities Cosxnission.
SUMMARY
An individual's limited, non-managerial,
"abstract" community property interest in one-half
of her husband's salary does not disqualify her
from serving on the Texas Health Facilities
Commission.
JIM MATTOX
Attorney General of Texas
TOM GREEN
First Assistant Attorney General
DAVID R. RICHARDS
Executive Assistant Attorney General
p. 536
Mr. W. G. Kirklin - Page 5 (JM-126)
Prepared by Rick Gilpin
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Rick Gilpin, Chairman
Jon Bible
Colin Carl
Susan Garrison
Jim Moellinger
Nancy Sutton
Bruce Youngblood
p. 537