# THE A-ITORNEY GENER.\L OFTEXA~

roanr L. aILL 

### AII~TIN.TISXA~ 78711 A-- cI~A% July 27. 1973

The Honorable Herbert C. McKee, Chairman Texas Air Control Board 820 East 53rd Street Austin, Texas 78751

Dear Mr. McKee: Opinion No. **H- 71**  Re: Quertions concerning the application and constitutionality of Article 6252-9, V.T.C.S. (Acts 1957)

You **have** requested our opinion concerning the application and constitutionality of Article 6252-9, V.T. C.S. (Acts, 1957) and particularly $3(l) thereof relating to standards of conduct as that section may apply to members ofthe Texas Air Control Board. Section 2.02 of Article 4477-2 requires that one of‘the nine members be aprofessional engineer with at leaot **ten**years experience in the actual practice of his profession including work inair control; one shall be a licensed physician currently engaged in general practice with experience inthe field of industrial medicine; one shall be engaged in the management of aprivate manufacturing or industrial concern for atleast ten years; one shall be experienced in the field of municipal government; one shall be an agricultural engineer with atleast ten years inhis profession; and the remaining four shall be chosen from the general public. Board members receive no salary but do receive $25 for each day in attendance at meetings or hearings or on authorized business of the Board and reimbursement for travel and other necessary expenses (§ 2.05). You were appointed to the Board in 1966to fill the space allocated tothe professional engineer with experience inthe air pollution field. You have asked that we answer five specific questions, which are:

p. 307Honorable Herbert C. McKee, page 2 (H-71)

“1. Is Section 3(i) of Article 6252-9 (1957Act) constitutional?

“2. Is Section 3(i) of Article 6252-9 constitutional as applied to members ofthe Texas Air Control Board serving pursuant to the Texas Clean Air Act (V.A. C.S., Article 4477-5) and proceedings under which these members were appointed by the Executive and confirmed by the Senate?

“3. Can the present members ofthe Texas Air Control Board continue to serve in this capacity?

“4. Ifthe answer to No. 3is yes, can such a Board member avoid a substantial conflict within the intent ofthe Declaration of Policy contained in Section Iof the 1957Act ifhe disqualifies himself on any items of business pertaining to companies or other entities with which he has significant business and/or professional association?

“5. Inaddition to the procedure specified in No, 4, is any other action required by such a Board, member in order to avoid **any** conflict of interest which would be in violation ofthe 1957Act or any other applicable statute? ” Article 6252-9 as enacted in 1957 (Acts 1957, 55th Leg., p. 213, ch. 100) declared the policy ofthe state in $1 as follows:

“Section 1. Itis hereby declared tobe the policy of the Legislature that noofficer or employee of a state agency, Member ofthe Legislature or legislative employee should have any interest, financial or otherwise, direct or indirect, or engage in any business or transaction or professional activity or incur any obp. 308The Honorable Herbert C. McKee, page 3 (H-71)

ligation of any nature which is in substantial conflict with the proper discharge of his duties inthe public interest. To implement such policy and to strengthen the faith and confidence of the people of Texas intheir Government, there is herein enacted a code of ethics setting forth standards of conduct to be observed by state officers and employees inthe performance of their official duties. It is inthe intent of the Legislature that this code shall serve not only as a guide for official conduct of the State’s public eervants but also as abasis for diecipline ofthose who refuse to abide by its terms. ” Section 2contained definitions. The “Standards of Conduct I’of 53include 53(i), the primary section giving rise toyour inquiries, and which reads as follows:

“(i) No officer or employee of a state agency nor any firm, association, corporation or other business entity inwhich he is a member, agent, or officer, or inwhich he owns a controlling interest, shall sell goods or services to any person, firm, association, or corporation which is licensed by or regulated in any manner by the state agency in which such officer or employee serves. ” Section 4provided that the failure of any officer or employee of a State agmcy, etc., to comply with the standards which apply tohim “shall constitute grounds for expulsion, removal from office, or discharge, whichever is applicable. ” In 1971the 62nd Legislature attempted to amend Article 6252-9 by adopting the so-called 1971Ethics Bill (Acts 1971, 62nd Leg., Regular Session, Ch. 962, p.2906). Its statement ofpolicy was the same. Ithad, in its $4, standards of conduct, and had a similar provision that failure to comply would constitute grounds for expulsion, removal from office, or discharge. Itwent further inthat it required financial statements of certain State officers

p. 309The Honorable Herbert C. McKee, page 4 (H-71)

and employees, called for the creation of aState Ethics Commirrion, etc. However, the 1971Act was declared unconstitutional by the opinioor of this office inAttorney General’s Opinion **M-1039** (1972) which in part w:; in answer toquestions from your office. Having held the 1971Act unconstitutional, the opinion looked tothe 195’i Act, and particularly S3(i), upheld the constitutionality of that section, and stated that whether members of the Air Control Board may have dealings with companies regulated by the Board “must first be determined by the employing State agency . . . .‘I Finally, the 63rd Legislature, inHouse Bill No. 1, effective January 1, 1974, repealed the 1.957Act and enacted the 1973 Ethics Code. It contains the same declaration ofpolicy. Pertinent toyour questions is 56which provides in subsection (a):

“This section applies only to an elected or appointed officer who is amember ofa Board or a Commission having policy direction over astate agency, excluding officers subject to impeachment under Article XIV, $2of the Texas Constitution. Ifsuch an officer has apersonal or private interest in any measure, proposal, or decision pending before the Board or Commission, he shall publicly disclose the fact tothe Board or Commission ina meeting called and held in compliance with the Open Meetings Law (Art 6252-17, Vernon’s Texas Civil Statutes) and shall not vote or otherwise participate inthe decision. The disclosure shall be entered in the minutes of the meeting. ” The remaining subsections of 56contain definitions and provisions for removal inthe event the required disclosure is not made. Section 8of the 1973 Bill cont.ains its “standards **of**conduct” which **are** fewer in number than in either the 1957 or 1971Acts. Pertinent toyour inquiry are subsections b, c and ewhich are as follows:

“(b) **No** state officer or state employee should accept employment or engage inany business or

p. 310The Honorable Herbert C. McKee, page 5 (H-71)

professional activity which he might r,earonably expect would require or induce him to disclose confidential information acquired by reason of his official position.

‘l(c) No state officer or state employee should accept other employment or compensation which could reasonably be expected to impair his independence ofjudgment in the performance of his official duties.

‘l(e) No state officer or state employee should intentionally or knowingly solicit, accept, or agree to accept any benefit for having exercised his official powers or performed his official duties infavor of another. ‘I No penalty is provided inthe 1973 Act for violation ofthe standards of conduct. The authority of the Legislature ofthe State of Texas is plenary. Government Services Insurance Underwriters v. Jones, 368 S.W. 2d 560 (Tex. 1963). Itmay **enact** any law which is not prohibited either by the Constitution of the State or of the United States. Shepherd v. San Jacinto Junior College District, 363 S.W.2d 742 (Tex. 1962); Oser v. Cullen, 435 S.W. 2d 896 (Tex. Civ. App., Houston, 1969). Undoubtedly it has the power to determine the public policy of the State and to set standards of conduct for governmental officials so long as those standards do not inhibit the performance of any constitutional duties. As we said inAttorney General Opinion H-15(1973) dealing with House Bill 1of the 63rd Legislature as originally proposed:

“In setting standards with which all persons entrusted with public responsibility must comply, the Legislature does not encroach upon the constitutional prerogatives of the other branches ofthe government; it acts intheir aid, as well as its own, to promote public confidence in the integrity of all branches of the government.

p. 311The Honorable Herbert C. **McKee,** page 6 (H-71)

“So long as the Legislature does notinterfere withthedischarge bytheother branches **of**their constitutional duties no constitutional problem reaultr. State Board ofInsurance v. Betts, supra [308S.W. 2d846 (Tex. 1958)l. Requiring ethical deportment uniformly required of all other public servants canbenounwarranted burden. Nor can requiring disclosure of relevant financial matters be condemned out of hand. And, it has always been alegislative function to define crimes and set punishments. ” (p. 65) Neither the 1957 nor the 1973 ethics law purports to deal with qualifications for office. It is not unusual for acts creating regulatory boards to require as aqualification for board membership, qualifications which potentially involve conflicts of interest. For instance, the Texas Cosmetology Commission (Article 734c, Vernon’s Texas Penal Code); the State Board of Barber Examiners (Article 734a, §26, Vernon’s Texas Penal Code); the Texas Optometry Board (Article 4552-2. 01, Vernon’s Texas Civil Statutes) and numerable others. Potential conflicts of interest do not disqualify persons from membership. See our Letter Advisory No. 13(1973) with reference to the membership of tenants as commissioners of ahousing authority. Our answers to your specific questions therefore are as follows: (1) Sec. 3(i) of Art. 6252-9, the 1957 Act, is constitutional as a proper legislative regulation of the conduct ofpublic officers. (2) Since 53(i) of Article 6252-9 governs the conduct of officials after their appointment,it does not conflict in anyway with statutes determining the qualifications of those tobe appointed such as Article 4477-5, Vernon’s Texas Civil Statutes, prescribing the qualifications of members of the Texas Air Control Board. (3) The present members of the Texas Air Control Board can continue to serve inthat capacity unless it is demonstrated that they have exceeded the proper bounds prescribed by Article 6252-9 inany of its versions or any other statute or comtion law rule governing the proper conduct of public officers. Although the 1957 Act said that violation of its standards

p. 312The Honorable Herbert C. McKee, page 7 (H-71)

of conduct would constitute grounds for removal from office, nevertheless it provided no machinery for removal. Removal would havetobe inaccordance uithArticle 15of the Constitution, “Impeachment, ” and Tit;< 100oi Vernon’s Texas Civil Statutes entitled “Officers - Removal Of.” House Bill 1of the 63rd Legislature, which will be effective on January 1, 1974, provides for sanctions only inthe event anofficer fails topublicly disclose apersonal or private interest and provides no sanctions for failing to a~bideby the standards of conduct. Our answer toyour third question therefore is that the members of the Texas Air C ontrol Board, whatever the circumstances are, may continue to serve intheir present capacities until their terms expire, they retire, or they are removed in some statutory manner. Inanswer to your fourth and fifth questions, we do not believe that the standards of conduct set out inthe 1957 Act can be totally satisfied merely by aboard member disqualifying himself on items of business “pertaining to companies or other entities with which he has significant business and/or professional association.” For instance, and despite the liberalization of 53(i) by Attorney General Opinion M-1069, where an officer of a state agency is at the same time an officer, agent, or member ofor owns a controlling interest m another business entity, under the 1957 Act he and such business entity are prohibited from selling goods or services to another person, firm or corporation licensed or regulated by the agency. We underst.and, for example that your request for our opinion was prompted inpart by adverse criticism growing out of a contract between a corporation subject to thejurisdiction of the Texas Air Control Board and Southwest Research Institute, ofwhich you are adirector. On its face, such a contract wouI,d not comport with the standards of conduct set out in $3(i) ofthe 1757 .4Cl. This ISnot to say, however, that such fact automatically presents a conflict o interest contrary to the public policy pronounced by the Legislature and prohabited by the Act. Nor dowe determine that it should result in removal from office. As Attorney General Opinion M-1039 held there may be circumstances under which aliteral interpretation of 53(i) would defeat the legislative intent and that the section would not be given such an application. Inour opinion the finding of these facts inany given case and the application of-the law to them to determine whether there is such a conflict of interests as towarrant

p. 313The Honorable Herbert C. McKee, page 8 (H-71)

action are matters for those charged with enforcement of the ethics legirlation,i. e., the heads ofagencies and district attorneys inthe first instance a&Id theLegislature or the courts if removal from office is to be sought. Itwo.11” be incol. sistent with the constitutionally guaranteed rights were wetomake those determinations inthe process ofwriting opinions. Under the new Ethics law which becomes effective on January 1, 1974, the propriety of such acontract would depend on whether or not it might reasonably be expected to require or induce you to disclose confidential information acquired by reason of your official position or would be reasonably expected to impair your independence ofjudgment inthe perf0rmanc.e of your official duties or was abenefit conferred for your having exercised your official powers or duties infavor of another. SUMMARY Article 6252-9 as enacted in 1957 and as later amended does not govern the qualification of persons for office. Members of the Texas Air Control Board are qualified for office ifthey meet the requirements of Article 4477-5, Vernon’s Texas Civil Statutes. Their conduct in office is’to be governed, until January 1, 1974, inpart, by Article 6252-9, and thereafter by applicable portions of the 1973 Ethics Bill, and they may be subject to removal under appropriate procedures inthe event they violate the provisions of that Article. Very truly yours, A

APPROVED: n 

# uAttorney General of Texas

irst Assistant

DAVID M. KENDALL, Chairman p. 314 Opinion Committee