Untitled Texas Attorney General Opinion ( 2008 )

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT
October 17, 2008
The Honorable David H. Aken Opinion No. GA-0671
San Patricio County Attorney
San Patricio County Courthouse, Room 108 Re: Whether under section 81.002(a) of the Local
Sinton, Texas 78387 Government Code, the county commissioner's oath
provision, a county may employ a subcontracting
company that is owned by a commissioner
(RQ-0701-GA)
Dear Mr. Aken:
You are concerned about a potential conflict of interest involving a contract in San Patricio
County.! You tell us that the San Patricio County Commissioners Court "hired an architectural and
construction firm to develop and construct a project for the county." Request Letter, supra note 1,
at 1. You inform us that the company "as a general contractor" accepted bids on a fencing
component ofthe project and "selected the fence company that submitted the lowest bid." Id. You
further inform us that the selected fence company is "owned by a San Patricio County
Commissioner." Id
Citing two conflict-of-interest provisions-section 81.002(a), Local Government Code, and
chapter 171, Local Government Code-you ask generally whether there is "a conflict of interest in
this situation[.]" Id You appear, however, to be concerned specifically about a conflict of interest
under section 81.002(a) of the Local Government Code. See ide You state that section 81.002(a)
"appears to prohibit a member ofthe commissioners court from having any indirect or direct interest
in any claim against or contract with the county." Id. And you query whether "despite compliance
with chapter 171 ... regarding the filing of affidavits and abstentions [under section 81.002], a
member ofthe commissioners court would be barred from any interest in a county contract whether
he voted on it or not." Id.
Requiring an official oath from a county judge or county commissioner, section 81.002(a)
provides that
[b]efore undertaking the duties of the county judge or a county
commissioner, a person must take the official oath and swear in
1See Letter from Honorable David H. Aken, San Patricio County Attorney, to Honorable Greg Abbott, Attorney
General of Texas (Apr. 15, 2008) (on file with the Opinion Committee, also available at http://www.
texasattorneygeneral.gov) [hereinafter Request Letter].
The Honorable David H. Aken - Page 2 (GA-0671)
writing that the person will not be interested, directly or indirectly, in
a contract with or claim against the county except:
(1) a contract or claim expressly authorized by law; or
(2) a warrant issued to the judge or commissioner as a fee of
office.
TEX. Loc. GOV'T CODE ANN. § 81.002(a) (Vernon 2008). Section 81.002(a) codifies the strict
common-law rule that prohibited contracts between a governmental body and an entity in which a
member of the governmental body had an interest. See Tex. Att'y Gen. Ope No. GA-0090 (2003)
at 2 (stating section 81.002 "incorporates the strict common-law prohibition against conflicts of
interest"); see also Meyers v. Walker, 276 S.W. 305, 307 (Tex. Civ. App.-Eastland 1925, no writ)
(holding contract void saying that if a "public official directly or indirectly has a pecuniary interest
in a contract, no matter how honest he may be, and although he may not be influenced by the interest,
such a contract so made is violative ofthe spirit and letter of our law, and is against public policy").
Under section 81.002(a), a county commissioner who makes a prohibited contract, violates the
commissioner's oath, and under common law, the contract is void. See TEx. Loc. GOV'T CODE
ANN. § 81.002(a) (Vernon 2008) (oath of office); Meyers, 276 S.W. at 307 (void contract under
public policy).
Chapter 171 of the Local Government Code pertains to conflicts of interests of local public
officials and provides, in relevant part, that if a
local public official has a substantial interest in a business entity or in
real property, the official shall file, before a vote or decision on any
matter involving the business entity or the real property, an affidavit
stating the nature and extent of the interest and shall abstain from
further participation in the matter if:
(1) in the case of a substantial interest in a business entity the
action on the matter will have a special economic effect on the
business entity that is distinguishable from the effect on the public[.]
TEX. Loc. GOV'TCODEANN. § 171.004(a)(1) (Vernon 2008). Chapter 171 permits local governing
bodies"to enter into contracts when a member of the body is interested in a business entity or real
property but requires the interested public official, in certain circumstances, to notify the body ofthe
interest and abstain from participation in the matter. See id A violation of section 171.004 is a
criminal violation punishable as a Class A misdemeanor. See id § 171.003.
Chapter 171 was adopted after the enactment of section 81.002, and it "effected a major
change in the traditional common-law prohibition." Tex. Att'y Gen. Ope No. DM-279 (1993) at 2;
see TEX. Loc. GOV'TCODEANN. § 171.007(a) (Vernon 2008) ("This chapter preempts the common
law ofconflict ofinterests as applied to local public officials."). This office has harmonized section
The Honorable David H. Aken - Page 3 (GA-0671)
81.002(a) and chapter 171 by construing chapter 171 to "authorize a commissioners court to enter
into contracts or take actions in which the county judge or commissioner has a financial interest 'to
the same extent that other local governmental bodies may take such actions.'" Tex. Att'y Gen. Ope
No. GA-0090 (2003) at 3 (quoting DM-279 (1993) at 4); see also TEX. Loc. GOV'T CODE ANN.
§ 171.001(1) (Vernon 2008) (defining "local public official" broadly to include a member of a
governing body of specified political subdivisions). Compare TEx. Loc. GOV'T CODE ANN.
§ 81.002 (Vernon 2008) (applying oath provision to only county judge and county commissioner),
with id § 171.004(a) (applying conflict-oi-interest provision to "local public officials").
Additionally, this office has concluded that chapter 171 "modifies the section 81.002 oath of office
provision with respect to a county judge's or commissioner's financial interest that does not rise to
the level of a 'substantial interest.'" Tex. Att'y Gen. Ope Nos. GA-0090 (2003) at 4, DM-0279
(1993) at 4. Under such construction of the two statutes, chapter 171 applies to all contracts
involving a business entity or real property in which a county judge or commissioner has an
interest--even ifthe interest is not substantial-while section 81.002(a) applies to county contracts
involving a county judge or commissioner who has an interest other than in a business entity or real
property, for example an employment contract. 2 See Tex. Att'y Gen. Ope Nos. GA-0645 (2008) at
3-4 (evaluating county commissioner's employment "contract" with the county under section 81.002
and noting the anomaly in which a "county commissioner may benefit from a contract with the
county that involves a business entity or real property in which the commissioner has a substantial
interest . . . , yet section 81.002 prohibits the commissioner from entering an employment
relationship with the county';), JC-0061 (1999) at 3 ("[S]ection' 81.002 precludes a county
commissioner from having an employment relationship with the county. Chapter 171 does not
repeal the oath of office provisions with respect to employment relationships with the county.").
Accordingly, any contract involving a business entity or real property in which a judge or
commissioner has an interest is outside the scope of section 81.002(a). Because the commissioner-
owned fencing company is a business entity, it is governed by chapter 171 and section 81.002(a)
does not apply.
While you are primarily concerned about section 81.002(a) and suggest that the
commissioner has complied with the affidavit and recusal requirements of chapter 171, the
applicability ofchapter 171 depends on the existence and nature ofa public official's interest, a vote
or decision by the governing body that is on "any matter involving the business entity," and a special
economic impact. TEX. Loc. GOV'T CODE ANN. § 171.004(a) (Vernon 2008); see also Tex. Att'y
Gen.Op. No. GA-0337 (2005) at4 (stating determination under chapter 171 often involves questions
offact). In the circumstances you describe, we believe the determination about whether chapter 171
requires an affidavit and recusal is likely to revolve around whether any vote or decision by the
commissioners court with respect to the general contractor is a vote or decision "involving" the
subcontractor. See Tex. Att'y Gen. Ope No. DM-0309 (1994) at 2-3 (concluding that the phrase
"involving the business entity" includes a business entity that represents a party with an interest in
a matter before the governmental body); see also id. at 3 (recognizing that chapter 171 "does not
confine the term 'business entity' to only those business entities with a direct interest in the action").
2See also Tex. Att'y Gen. Op. No. Ie-0121 (1999) at 2, 7 (concluding that chapter 171 "does not apply to and
therefore does not create an exception to the oath of office with respect to bail bonds because a commissioners court
plays no role in the taking and approval ofbail bonds" and concluding countyjudge was prohibited by section 81.002(a)
from acting as a surety on a bail bond in the county).
The Honorable David H. Aken - Page. 4 (GA-0671)
SUMMARY
The county commissioners' oath prOVISIon, Local
Government Code section 81.002, prohibits a county judge or
commissioner from being directly or indirectly interested in a contract
with the county. Chapter 171 ofthe Local Government Code excepts
from section 81.002 a county judge's or county commissioner's
interest in a business entity or real property. Such a contract with the
county in which a county judge or commissioner is interested is
governed by chapter 171 and not prohibited by section 81.002.
Very truly yours,
KENT C. SULLIVAN
First Assistant Attorney General
ANDREW WEBER
Deputy Attorney General for Legal Counsel
NANCY S. FULLER
Chair, Opinion Committee
. Charlotte M. Harper
Assistant Attorney General, Opinion Committee