Untitled Texas Attorney General Opinion ( 2009 )

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT
June 2, 2009
The Honorable Mike Jackson Opinion No. GA-0719
Chair, Committee on Nominations
Texas State Senate Re: Whether an attorney who acts as an unpaid
Post Office Box 12068 advisor to the board of trustees of an independent
Austin, Texas 78711 school district may also represent the district for
compensation in the collection ofdelinquent taxes
(RQ-0767-GA)
Dear Senator Jackson:
On behalf of the Pasadena Independent School District (the "District"), you ask about the
"potential conflict of interest for an attorney hired ... to represent the District in the collection of
delinquent ad valorem taxes but who also acts as an unpaid advisor to the ... Board of Trustees."J
You inform us that "[t]he concern for conflict of interest has been raised by a citizen of Pasadena
and the District would like to ensure that [it is] abiding by all laws and rules of this state." Request
Letter at 1. Neither your request letter nor other information submitted to this office specifies any
rules or laws implicated by the private attorney's dual service or proffers any legal arguments. 2
Thus, our discussion is limited to identifying only those legal provisions we glean or believe may
be implicated here in order to provide some guidance to the District.
You ask about "potential conflict[s] of interest for" the attorney hired by the District rather
than the District or its board of trustees. See id It does not appear that the attorney is an officer or
an employee of the District. See id. (stating that the attorney acts as outside counsel with respect to
the delinquent tax collection contract and as an unpaid advisor to the board oftrustees); Tex. Att'y
Gen. Op. No. JM-1060 (1989) at 23 ("In our opinion, an attorney who contracts under [section
6.3 O(c)] is an independent contractor and not an employee of the taxing unit. "). Thus, the attorney's
services as an unpaid advisor and as District representative for the collection of delinquent taxes do
not appear to implicate laws pertaining to dual office holding or the common-law doctrine of
incompatibility. See, e.g., Tex. Att'y Gen. Op. No. GA-0195 (2004) (discussing the applicability
lRequest Letter at 1 (available at http://www.texasattomeygeneral.gov).
2See id (and attachments); Brief from Doris W. Barnes at 1 (Dec. 17,2008) (hereinafter Barnes Brief).
3Modified on other grounds by Tex. Att'y Gen. LO-89-70.
The Honorable Mike Jackson - Page 2 (GA-0719)
of Texas Constitution article XVI, section 40, common-law doctrine of incompatibility, and Texas
Local Government Code chapter 171 in connection with simultaneous services as a city employee
and director or officer of a water supply corporation). Nor do these services implicate the general
conflict of interest provisions prohibiting a local public official from participating in decisions on
any matter involving a business entity or real property in which the official has a substantial interest,
unless a member of the District's board of trustees has the requisite interest in the delinquent tax
collection contract or the attorney's practice. See TEx. Loc. GOV'T CODE ANN. §§ 171.001-.010
(Vernon 2008).
A District taxpayer alleges that the "unpaid legal counsel position is in fact a valuable gift
of services that provides a strong inducement to retain the [current] Delinquent Tax Attornei' who
"has served in both capacities since 1985." Barnes Brief at 1. Materials submitted with the brief
suggest that the "gift" contravenes Tax Code section 6.30(c). See Barnes Brief at 1 & attached letter
from Doris Barnes to Attorney General Greg Abbott at 2 (June 22, 2003) ("In light of Attorney
General Opinion JC-0443 [construing Tax Code section 6.30(c)], this appears to be a gift of services
provided solely to keep the lucrative delinquent tax collection contract. ").
Section 6.30(c) of the Tax Code permits a school district to "contract with any competent
attorney to represent the [taxing] unit to enforce the collection of delinquent taxes." TEx. TAX CODE
ANN. § 6.30(c) (Vernon 2008); see also id. § 1.04(12) (defining "taXing unit" to include a school
district). Ifa taxing unit contracts with an attorney under section 6.30 of the Tax Code, section 33.07
authorizes the taxing unit to provide that the obligor of the delinquent taxes "incur an additional
penalty to defray costs of collection." Id. § 33.07(a). "The amount of the penalty may not exceed
the amount of the compensation specified in the contract with the attorney to be paid in connection
with the collection of the delinquent taxes." Id.; see also City a/Houston v. First City, 827 S.W.2d
462,474 (Tex. App.-Houston [1st Dist.] 1992, writ denied) ("[s]ection 33.07 is designed to pay
the taxing unit's collection costs"). Thus, the entire section 33.07 penalty is to be paid as
compensation to the contract attorney for representing the taxing unit in the collection of delinquent
taxes. See TEx. TAX CODE ANN. § 33.07(a) (Vernon 2008); Tex. Att'yGen. Op. Nos. JC-0443
(2001) at 2, JM-857 (1988) at 7; Tex. Comm. on Profl Ethics, Op. 545 (2002). Attorney General
Opinion JC-0443 concludes that an attorney under a section 33.07 contract "may not donate any of
the section 33.07 compensation to the county, whether the donation is to enhance the collection of
delinquent taxes or for another county purpose" because "[t]he purpose of the penalty ... is to
compensate the attorney and not to pay other county expenses." Tex. Att'y Gen. Op. No. JC-0443
(2001) at 3 (considering whether a contracting attorney may donate personnel, equipment, or dollars
back to the county).
At issue here is donation of other legal services in conjunction with, or under, a contract for
collection of delinquent taxes. 4 We cannot determine Whether a particular donation constitutes an
4See, e.g., LAW OFFICE OF DEXTER D. JOYNER, MEMORANDUM OF UNDERSTANDING PURSUANT TO MEETING OF
JUNE 6, 2002, § X, attached to Barnes Brief (setting out attorney's responsibilities "[t]o serve as delinquent tax attorney
to [the District]" and "[t]o serve as general counsel to Board of Trustees at board meetings and at employee and student
hearings").
The Honorable Mike Jackson - Page 3 (GA-0719)
allocation of the section 33.07 penalty for a District purpose other than delinquent tax collection
because itis a question of fact. See Tex. Att'y Gen. Op. No. JC-0443 (2001) at 1,4. As Attorney
General Opinion JC-0443 advised, however, ifthe District's tax-collection contract provides for such
a "donation," it "would certainly raise the issue that the contract impermissibly allocates some ofthe
article 33.07 penalty to the" District for another purpose, i.e., the provision of other general legal
services. Id
Because you ask about "potential conflict of interest for an attorney," the Texas Disciplinary
Rules of Professional Conduct (the "Rules") also may need to be considered in relation to any
perceived conflicts of interest arising from the attorney's paid and unpaid services to the District.
See generally TEx. DISCIPLINARY R. PROF'L CONDUCT 1.01-9.01, reprinted in TEx. GOV'T CODE
ANN. tit. 2, subtit. G app. A (Vernon 2005 & Supp. 2009) (Tex. State Bar R. art. X, § 9). The
propriety of actions taken under the Rules are to be decided initially by the attorney, or by the
disciplinary arm of the Supreme Court of Texas and the State Bar of Texas. See id Preamble 15
(Vernon 2005) (stating that the Rules are basis for lawyer's self-assessment, or for sanctioning a
lawyer under the administration of disciplinary authority); see also TEx. GOV'T CODE ANN. § 81.071
(Vernon 2005) ("Each attorney admitted to practice in this state ... is subject to the disciplinary
... jurisdiction of the supreme court and the Commission for Lawyer Discipline, a committee of the
state bar."). The issuance of opinions regarding questions of professional conduct is a statutory
function of the Committee on Professional Ethics (the "Committee"), which consists of nine
members of the Texas State Bar who are appointed by the Texas Supreme Court. See TEx. GOV'T
CODE ANN. § 81.091 (Vernon 2005) (creating the Committee); id § 81.092(a) (providing that the
Committee shall "express its opinion on the propriety of professional conduct"); see also Tex. Att'y
Gen. Op. No. GA-0488 (2006) at 3 (stating that the Committee is the "appropriate body to consider
the attorney's responsibility under the" Rules). Accordingly, questions relating to the propriety of
the attorney's representation of the District under the Rules should be directed to the Committee.
The Honorable Mike Jackson - Page 4 (GA-0719)
SUMMARY
The attorney's services to the Pasadena Independent School
District as an unpaid advisor and collector of delinquent taxes do not
appear, in this instance, to implicate laws pertaining to dual office
holding, the common-law doctrine of incompatibility, or the general
conflict of interest provisions contained in chapter 171 of the Local
Government Code.
However, the provision of free legal services to a school
district by an attorney under or in conjunction with a contract for the
collection of delinquent taxes may contravene Tax Code section
33.07. Whether a donation oflegal services by an attorney under a
particular contract violates section 33.07 is a question of fact not
appropriate for the attorney general opinion process.
The Texas Disciplinary Rules of Professional Conduct also
may need to be considered in relation to the attorney's services to the
school district. Questions about any potential conflicts of interest
arising from the attorney's conduct must be addressed by the
Committee on Professional Ethics.
ANDREW WEBER
First Assistant Attorney General
JONATHAN K. FRELS
Deputy Attorney General for Legal Counsel
NANCY S. FULLER
Chair, Opinion Committee
SheelaRai
Assistant Attorney General, Opinion Committee