Untitled Texas Attorney General Opinion

Novsmber 19, 1986
Mr. Vernon M. Arrell Opinion No. JM-578
Commissioner
Texas Rehabilitation Conrmission Re: Qualifications for membership
118 East Riverside Drive on the Texas Planning Council for
Austin, Texas 78704 Developmental Disabilities
Dear Mr. Arrell:
You ask about the effect of certain laws relating to conflicts of
interest and to qualifications for membership on the Texas Planning
Council for Developmental Disabilities. Section 112.012 of the Texas
Human Resources Code states that "[tlhe members of the [Texas Planning
Council for Developmental Jisabilities] shall be appointed by the
governor in accordance with applicable federal developmental dis-
ability laws." Section 6C24 of Title 42 of the United States Code
requires that each state which receives federal assistance for
developmental disabilities "shall establish a State Planning Council
which will serve as an advocate for persons with developmental
disabilities." 42 U.S.C. 56024(a)(l) (Supp. III 1985). Congress
intended that the council help develop the state plan that is required
by federal law prior to thq!state's receipt of federal financial aid.
Id. 46024(b). Promulgatior,of the state plan includes the specifica-
tion and review of services to be provided to persons with develop-
mental disabilities. Id. Thus, the council's function is primarily
advisory, recommending the type of services to be provided. When the
Texas Rehabilitation Cormorissioncontracts with private SSl-ViCS
providers, however, members of the council may be in a position to
recommend or review a service provider in which the member may have a
pecuniary interest.
You ask about a failure to comply (1) with the membership quali-
fications required by federal law, 42 U.S.C. 86024, (2) with section 8
of article 6252-9b, V.T.C.S., and (3) with common-law conflict of
interest. You do not ask whether certain individuals fail to comply
with these laws; your querltionassumes noncompliance. You focus on
the effect of noncompliance, particularly noncompliance which arises
subsequent to a valid appo::ntmentto the council: i.e., whether this
results in automatic vacatxm of the member's positionor whether the
member may simply abstain from participating in particular matters.
Section 6024(a)(l) of 'Title 42 requires that each state council
include representatives from various state agencies which administer
certain federal assistance programs, from higher education and
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Mr. Vernon M. Arrell - Page 2 (m-578)
university-affiliated training facilities, from local agencies, and
from nongovernmental agencies and private nonprofit groups concerned
with services to persons with developmental disabilities. Section
6024(a)(2) specifies that the council shall consist of a certain
percentage of "consumer" members and sets forth qualifications for the
consumer members:
(2) At least one-half of the membership of each
such Council shall consist of persons who --
(A) are rersons with developmental dis-
abilities or parents or guardians of such
persons, or
(B) are immediate reiatives or guardians of
persons with mentally impairing developmental
disabilities, who are not employees of a state
agency which rgceives funds or provides services
under this s&chapter, who are not managing
employees (as yefined in section 1126(p) of the
Social Security Act 142 U.S.C. §1320a-5(b)]) g
any other entity which receives funds or
rovides servi?es under this snbchapter, and who
are not person; with an ownership or cor.trolin-
terest (within-the meaning of section 1124(a)(3)
of the Social Securitv Act 142 U.S.C. §1320a-
3(a)(3)]) with
-- respect-to such an'entity.
(Emphasis added).
42 U.S.C. 06024(a)(2).
Your concern focuses on the underscored qualifications in section
6024(a)(2)(B), those which involve pecuniary interests in service
providers or in state agencj.es. You ask about the effect of noncom-
pliance with these requirements, particularly noncompliance which
arises subsequent to a valid appointment. You ask whether a violation
of section 6024(a)(2)(B) results in automatic vacation of the member's
position or whether the me!nbermay simply abstain from participating
in matters involving a conflict. Neither alternative fully comprehends
the effect of noncompliance with section 6024(a)(2)(B).
Section 6024(a)(2) sa!ts forth certain qualifications for the
consumer members of the state planning council required by federal law
as a prerequisite to the xeceipt of federal assistance for develop-
mental disability programs. It is not unusual for acts calling for
such advisory boards to require qualifications for council membership
that avoid conflicts of ir.terest. Section 6024(a) does not provide
for "automatic resignation" when a member fails to meet its qualifica-
tions, either at the time of appointment or at any time thereafter.
Nor does the section aul:borize abstention to cure qualification
defects. The effect of noncompliance with section 6024(a)(2) is
simply that -- noncompliznxce; the state would not' have a state
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Rr. Vernon M. Arrell - Page 3 (JM-578)
planning council which meets the requirements of federal law.
Although this failure does not necessarily invalidate state actions,
it may ultimately affect the state's receipt and use of federal
financial assistance. See 45 C.F.R. 51386.30 (1985); see generally
Burgess v. Affleck, 683F.:!d 596 (1st Cir. 1982) (dealing with an
improperly constituted Wedicaid" advisory committee subject to
similar federal regulations).
Section 112.014 of the Human Resources Code provides for
vacancies on the Council as follows:
(a) A positior. on the council becomes vacant
if:
(1) a member resigns from the council by
providing written notice to the chair;
(2) a menlber ceases to be a resident of
this state; or
(3) a member misses three consecutive
regular or spe::ialcouncil meetings.
(b) If a position on the council becomes
vacant, the chair shall provide written notice to
the governor, agency commissioner, or executive
director, as appropriate, requesting a new
appointment to fill the remainder of the member's
term.
This section does not pravide for automatic vacation of a Council
member's position for nonmmpliance with section 6024(a)(2) of the
federal act.
Moreover, as indicated, section 112.012 of the Human Resources
Code states that "members elf the council shall be appointed by the
governor in accordance witt. applicable federal developmental disabil-
ity laws." Section 6024(a)(2) does not fix a maximum number of
council members; it simply requires that at least 50% of the nembers
meet certain qualifications. Although state law at one time fixed the
number of council members, see Acts 1983, 68th Leg., ch. 970, §l, at
5272 (replaced by Acts 198Iz69th Leg., ch. 603, §14, at 2275), it no
longer does so. See Tex. tlum.Res. Code 0~112.012, 112.013. Section
112.012 grants thegovernor ,generaldiscretion in making appointments,
so long as he complies with federal developmental disability laws.
This discretion includes the implied authority to change the number of
members on the council -- pseticularly if this action is necessary for
compliance with federal law. Consequently, a member of the council
who failed to meet the r~zquirements of section 6024(a)(2), either
at the time of appointment or at any time thereafter, would not
necessarily be prohibited :from serving on the council. For this
reason, Texas common-law principles of automatic resignation are
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Mr. Vernon M. Arrell - Page 4 (JM-578)
?
irrelevant. See generally I?hagan v. State. 510 S.W.2d 655, 660-62
(Tex. Civ. App. - Fort Wdrth 1974, writ ref'd n.r.e.); Attorney
General Opinions H-1065 (1977); H-578 (1975). In fact, section
6024(a)(l) expressly requires the appointment of council members who
represent the agency which administers federal funds for state
developmental disability programs. Thus, a member who became dis-
qualified under section 6024(a)(2) because the member became an
employee of the administering agency could technically serve under
section 6024(a)(l). Although the governor could at any time request
the resignation of council members who fail to comply with section
6024(a)(2), the section 1tscl.fdoes not prohibit their service.
The result or effect on the council of not having 50% of its
members meet the requirements of section 6024(a)(2) would simply be
that the state would not hz,vea council that met the requirements of
federal law. To remedy the defect, the governor would have to appoint
a sufficient number of "consumer" members to comply with section
6024(a)(2). Although the Eignificance of this response would appear
to moot your remaining questions about the effect of noncompliance,
you also ask about the ind#!pendenteffect of an assumed violation of
article 6252-9b and of common-law conflict of interest principles.
Article 6252-9b establishes a general state policy that no state
officer or state employee sl~ll have any interest in or engage in any
business or activity that is in substantial conflict with the public ?
duties of the officer or employee. V.T.C.S. art. 6252-913,91. Article
6252-9b effects this policy 'byrequiring that certain public officers
file financial statements c.nd affidavits revealing certain financial
interests. Id. §§3, 5; see also id. 56. Article 6252-91,is primarily
a disclosurestatute; it?&!r~not~overn the qualifications of persons
appointed or elected to particular offices. See Attorney General
Opinion H-71 (1973). Moreover, because of the purely advisory nature
of the Texas Planning Council for Developmental Disabilities and
because the Council is not a major state agency, most of the Act's
disclosure provisions do not apply to the council. See, e.g., Attorney
General OpinionsP-255 (1974) (only members of an agency named in the
act as a %ajor state age*+' must file a financial statement).
You inquire specificaLly about section 8 of article 6252-9b.
Section 8 provides all stat{?officers and employees with the following
general ethical standards o:iconduct:
(a) No state oEficer or state employee should
accept or solicit any gift, favor, or service that
might reasonably ':endto influence him in the dis-
charge of his official duties or that he knows or
should know is be:ing offered him with the intent
to influence his official conduct.
(b) No state officer or state employee should
accept employment or engage in any business or
professional activity which he might reasonably
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Mr. Vernon M. Arrell - Page 5 (``-578)
expect would require or induce him to disclose
confidential information acquired by reason of his
official position.
(c) No state officer or state employee should
accept other employment or compensation which
could reasonably be expected to impair his, in-
dependence of judgment in the performance of his
official duties.
(d) No state csfficeror state employee should
make personal invsstments which could reasonably
be expected to create a substantial conflict
between his pr::vate interest and the public
interest.
(e) No state officer or state employee should
intentionally or knowingly solicit, accept, or
agree to accept any benefit for having exercised
his official. po'qers or performed his official
duties in favor cf another.
V.T.C.S. art. 6252-9b, 58.
Although article 62524b provides sanctions for certain officers
in specific instances, ser:,e.g.. 5$6(c), 10(b), 12A(b), section 8
contains no civil or cZ&al penalties or removal sanctions. See
Attorney General Opinion H-71. Accordingly, a member of the counx
would not be automatically disqualified from participating in a matter
involving a conflict of interest under section 8 or from continuing to
serve on the council because of a violation of section 8. Just because
section 8 does not impose sanctions, however, does not mean that state
officers and employees may ignore its ethical requirements. Ethical
violations of section 8 must be decided on a case-by-case basis. See
Attorney General Opinion H.-l309 (1978). Accordingly, this opin=
cannot comment on the effect of violations in general; the effect will
depend upon the circumstances of the violation.
You also ask about conmon-law conflict of interest. Public policy
prohibits public officers f,romhaving a direct or indirect pecuniary
interest in a contract e!H:ered into by the agency served by the
officer. See City of Edinbcrg v. Ellis, 59 S.W.2d 99, holding approved
(Tex. Co& App. 1933); Meyers v. Walker, 276 S.W.305 (Tex. Civ. App.
- Eastland 1925. no wriT'; Attorney General Opinion H-1309. This
policy may even apply to contracts with private, not-for-profit
entities established to benefit the work of a state agency. Attorney
General Opinion H-1309. Common-law conflict of interest does not
affect qualifications for membership on the council; it relates to
contracts entered into by f;overnmentalentities. The council does not
hold the authority to ent,er into contracts; its role is advisory.
Couanon-lawconflict of intclrestprohibitions therefore do not apply.
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Mr. Vernon M. Arrell - Page 6 (JM-578)
SUMMARY
Section 6024(a)(2) of Title 42 of the United
States Code sets forth certain qualifications for
the "consumer" portion of the membership of the
Texas Planning Ccuncil for Developmental Disabili-
ties which is required by federal law as part of
the federal pro8ram of financial .assistance for
state developmental disability programs. Section
6024(a)(2) does not provide for automatic resigna-
tion when a member fails to meet its qualifications
either at the ttino of appointment or at any time
thereafter. Nor ioes the section authorize absten-
tion to cure qualification defects.
Section 8 o:i article 6252-9b. V.T.C.S., pro-
vides state officers and employees with general
ethical standards of conduct. Section 8 contains
no civil or crillinal penalties or removal sanc-
tlops. The ethkal duty imposed by section 8,
however, requires ~compliance.
Common-law conflict of interest prohibits
public officers Erom having a direct or indirect
pecuniary intere!;t in a contract entered into by
the agency serve'1 by the officer. The principle
does not affect qualifications for membership on
the council. Because'the council serves only in an
advisory capacity, it does not enter into con-
tracts. Consequently, ccmmn-law conflict of
interest does not apply to the council.
L-LJ~
Very truly your
.
J I-M MATTOX
Attorney General of Texas
JACK HIGHTOWER
First Assistant Attorney General
MARY KELLER
Executive Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Jennifer Riggs
Assistant Attorney General
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