OFFICE ofthe ATTORNEY GENERAL 

GREG ABBOTT 

January lo,2003 

The Honorable Steven D. Wolens 

Chair, Committee on State Affairs 

Texas House of Representatives 

P. 0. Box 2910 

Austin, Texas 78768-2910 

Opinion No. GA-001 0 

Re: Whether the divestiture provision in section 

12.152(b) of the Utilities Code applies to an 

interest under section 12.053(b)(l)(B) 

(RQ-0575-JC) 

Dear Representative Wolens: 

You ask about the relationship between section 12.053 and section 12.152 of the Utilities 

Code, both of which provide that a person with certain pecuniary interests is not eligible for 

appointment as commissioner of the Public Utility Commission (the “PUC” or “Commission”).’ 

Unlike section 12.053, section 12.152 provides that a person who discloses and divests certain types 

of interests is not ineligible. You ask in essence whether the divestiture provision in section 

12.152(b) applies to an interest under section 12.053(b)(l)(B). We conclude that the section 

12.152(b) divestiture provision cures a disqualification due to an interest under section 12.053(b)( 1) 

that also falls within section 12.152(a)(2)(B). It does not cure a disqualification due to an interest 

that falls under section 12.053(b)(l) but that is not within the scope of section 12.152(a)(2)(B). 

Section 12.053(b)(l)(B) and section 12.152(a)(2)(B) contain similar but not identical 

restrictions on a person’s eligibility for appointment as commissioner of the PUC. Section 

12.053(b) p rovides in pertinent part as follows: 

(b) A person is not eligible for appointment as a commissioner ifthe 

person: 

(1) at any time during the two years preceding appointment: 

‘See Letter from Honorable Steven D. Wolens, Chair, Committee on State Affairs, Texas House of 

Representatives, to Honorable John Cornyn, Texas Attorney General (July 9,2002) (on file with Opinion Committee) 

[hereinafter Request Letter]. 

An Equal Employment Opportunity Employer . Printed on Recycled Paper 
The Honorable Steven D. Wolens - Page 2 (GA-0010) 

(B) owned or controlled, directly or indirectly, stocks or 

bonds of any class with a value of $10,000 or more in a public utility, 

affiliate, or direct competitor of a public utility; or 

(2) is not qualified to serve under Section 12.15 1, 12.152, or 

12.153. 

TEX. UTIL. CODE ANN. $12.053 (Vernon 1998) (emphasis added); see aZso id. @11.003(2) (Vernon 

Supp. 2003) (defining “affiliate”), 11.004 (Vernon 1998) (defining “utility”), 11.006 (defining 

“affiliate”). 

Similarly, section 12.152 provides in pertinent part: 

(a) A person is not eligible for appointment as a commissioner or 

executive director of the commission if: 

(2) the person or the person’s spouse: 

(B) directly or indirectly owns or controls more than a 10 

percent interest or a pecuniary interest with a value exceeding 

$10,000 in: 

(i) a business entity or other organization that is 

regulated by or receives funds from the commission; or 

(ii) a utility competitor, utility supplier, or other 

entity affected by a commission decision in a manner other than by 

the setting of rates for that class of customer. 

Id. $ 12.152(a) (Vernon Supp. 2003) (emphasis added); see also id. 5s 11.003( 1) (defining “affected 

person”), 11.005 (Vernon 1998) (“In this title, an entity, including a utility competitor or utility 

supplier, is considered to be aflected in a manner other than by the setting of rates for that class of 

customer if during a relevant calendar year the entity provides fuel, utility-related goods, 

utility-related products, or utility-related services to a regulated or unregulated provider of 

telecommunications or electric services or to an affiliate in an amount equal to the greater of $10,000 

or 10 percent of the person’s business.“) (emphasis added). Section 12.152, in speaking in terms of 

ownership or control of a “pecuniary interest” rather than “stocks or bonds” and including within the 

list of prohibited interests ownership or control in a business that “receives funds from the 

commission” or in another “entity affected by a commission decision in a manner other than by the 

setting of rates for that class of customer,” applies to a broader universe of interests than section 

12.053(b)(l). See id. @ 12.053(b)(l) (V ernon 1998), 12.152(a)(2)(B) (Vernon Supp. 2003). 

Furthermore, section 12.053 applies only to interests owned by the potential PUC member, whereas 
The Honorable Steven D. Wolens - Page 3 (GA-0010) 

section 12.152 applies to interests owned both by the potential PUC member and his or her spouse. 

See id. $5 12.053(b)(l)(B), 12.152(a)(2). On the other hand, section 12.053 applies to interests 

owned at any time during the two years preceding appointment, whereas section 12.152 applies to 

interests owned at the time of appointment. See id. $5 12.053(b)(l), 12.152(a)(2)(B). 

Unlike section 12.053, section 12.152 contains an exception that provides that a person who 

has a pecuniary interest described by section 12.152(a)(2)(B) may be appointed commissioner if he 

or she discloses and divests the interest: 

(b) A person otherwise ineligible because of Subsection 

(a)(2)(B) may be appointed to the commission and serve as a 

commissioner or may be employed as executive director if the person: 

(1) notifies the attorney general and commission that the 

person is ineligible because of Subsection (a)(2)(B); and 

(2) divests the person or the person’s spouse of the 

ownership or control: 

(A) before beginning service or employment; or 

(B) if the person is already serving or employed, 

within a reasonable time. 

Id. $ 12.152(b) (Vernon Supp. 2003). 

Certain pecuniary interests, such as the ownership of stock with a value exceeding $10,000 

in a public utility or a direct competitor of a public utility, fall under both section 12.053(b)(l)(B) 

and section 12.152(a)(2)(B). See id. $8 12.053(b)(l)(B) (V ernon 1998) (a person is ineligible for 

appointment if he or she at any time during the preceding two years “owned or controlled, directly 

or indirectly, stocks or bonds of any class with a value of $10,000 or more in a public utility, 

affiliate, or direct competitor of a public utility”), 12.152(a)(2)(B) (Vernon Supp. 2003) (a person 

is ineligible for appointment if the person “directly or indirectly owns or controls more than a 10 

percent interest or a pecuniary interest with a value exceeding $10,000 in . . . a business entity or 

other organization that is regulated by. . . the commission” or “a utility competitor”). In light of this 

overlap, you ask whether the divestiture provision in section 12.152(b) cures a conflict under section 

12.053(b)(l)(B): 

Can an appointee to the Public Utility Commission of Texas who 

owns or controls, directly or indirectly, stocks or bonds with the value 

of $10,000 or more [in a public utility, affiliate, or direct competitor 

of a public utility], at any time during the two years preceding 

appointment, cure that conflict and therefore be eligible for service if 

that person notifies the attorney general and commission that the 

person is ineligible because of this conflict, and divests him/herself 
The Honorable Steven D. Wolens - Page 4 (GA-0010) 

of the ownership or control of the stock either before the beginning 

of service or employment or within a reasonable period of time? 

Request Letter, supra note 1, at 2. Or you ask, “Put a different way, does the cure provision on 

eligibility in Sec. 12.152(b) apply to the conflict provision of Sec. 12.053(b)(l)?” Id. at 3. Based on 

the legislative history, we conclude that the section 12.152(b) divestiture provision “cures a conflict” 

due to an interest under section 12.053(b)( 1) that also falls within section 12.152(a)(2)(B). It does 

not “cure a conflict” due to an interest that falls under section 12.053(b)( 1) but that is not within the 

scope of section 12.152(a)(2)(B). 

In construing these provisions, we must attempt to give effect to the legislature’s intent. See 

TEX. GOV’T CODE ANN. $ $ 3 11.02 1, 3 11.023 (Vernon 1998); Mitchell Energy Corp. v. Ashworth, 

943 S.W.2d 436,438 (Tex. 1997). To do so, we construe statutes according to their plain language. 

See RepublicBank Dallas, N.A. v. Interkal, Inc., 691 S.W.2d 605, 607-08 (Tex. 1985); Bouldin v. 

Bexar County SherifS’s Civil Serv. Comm’n, 12 S.W.3d 527,529 (Tex. App.-San Antonio 1999, no 

pet.); see also Fleming Foods of Tex., Inc. v. Rylander, 6 S.W.3d 278, 284 (Tex. 1999) (where 

codified statute is unambiguous, plain-meaning rule applies even if codification is inconsistent with 

its statutory predecessor). When a statute is ambiguous, we may consider, among other things, the 

object sought to be attained, the circumstances under which a statute was enacted, legislative history, 

and the consequences of a particular construction. See TEX. GOV’T CODE ANN. 5 3 11.023 (Vernon 

1998); see also id. 8 3 11.021 (“In enacting a statute, it is presumed that . . . the entire statute is 

intended to be effective[ ,] a just and reasonable result is intended[, and] a result feasible of execution 

is intended . . . .“). 

Sections 12.053 and 12.152 conflict, creating an ambiguity that cannot be resolved on the 

basis of the statutes’ plain language. Both provisions address eligibility for appointment as 

commissioner of the PUC and describe overlapping disqualifying interests, such as ownership of 

stock in a public utility or a public utility competitor. See TEX. UTIL. CODE ANN. 8s 12.053(b)(l)(B) 

(Vernon 1998), 12.152(a)(2)(B) (Vernon Supp. 2003). Importantly, however, section 12.152 

contains a divestiture provision, whereas section 12.053 does not. See id. $8 12.053, 12.152(b). 

Section 12.152 permits the divestiture of interests that pose an absolute bar to appointment under 

section 12.053. Although subsection (b)(2) of section 12.053 mentions section 12.152, that reference 

does not indicate how the two provisions should be reconciled. See id. 5 12.053(b)(2) (Vernon 1998) 

(“A person is not eligible for appointment . . . if the person . . . is not qualified to serve under Section 

12.151, 12.152, or 12.153.“). 

Because of this ambiguity, we turn to the legislative history for guidance. The language in 

section 12.053 predates the language in section 12.152 by twenty years. When the Public Utility 

Regulatory Act was first enacted in 1975, as article 1446c, it contained a provision, section 6(a), that 

made a person ineligible for appointment to the PUC “if at any time during the two year period 

immediately preceding his appointment . . . he owned or controlled, directly or indirectly, stocks or 

bonds of any class with a value of $10,000, or more in a public utility or any affiliated interest.” Act 
The Honorable Steven D. Wolens - Page 5 (GA-0010) 

of June 2, 1975,64th Leg., R.S., ch. 721, art. II, § 6(a), 1975 Tex. Gen. Laws 2327,233 1 (codified 

as article 1446c, 8 6(a) of the Revised Civil Statutes).2 

In 1995, the Seventy-fourth Legislature adopted Senate Bill 3 19, a nonsubstantive 

recodification of the Public Utility Regulatory Act, that repealed article 1446~ and enacted article 

1446c-0, titled the “Public Utility Regulatory Act of 1995.“3 In Senate Bill 3 19, section 6(a) of 

article 1446~ became section 1.023(c) of article 1446~-0.~ 

Later in the same session, the legislature adopted Senate Bill 373, which substantively 

amended the Public Utility Regulatory Act of 1995 and continued the PUC following sunset review .’ 

In Senate Bill 373, the legislature substantively amended section 1.023(~)~ and added subsections 

(e> and (0 t o section 1 .023.7 Those two subsections are the genesis of what is now section 12.152. 

Because the legislature amended section 1.023(c), the legislature clearly did not intend the addition 

of section 1.023(e) and (f) to repeal section 1.023(c). The divestiture provision, section 1.023(f), 

very clearly applied only to an interest under section 1.023(e)(2)(B), but it applied 

“[nlotwithstanding any other provision of this Act.” Act of May 27, 1995,74th Leg., R.S., ch. 765, 

9 1.06, sec. 1.023(f), 1995 Tex. Gen. Laws 3972,3973 (“Notwithstanding any otherprovision of this 

Act, a person otherwise ineligible because of the application of Subsection (e)(2)(B) of this section 

may be appointed . . . if the person . . . .“) (emphasis added). 

*A separate provision, section 6(b), prohibited a commissioner from having certain interests “during his period 

of service,” and section 6(f) provided for divestiture by a commissioner “upon becoming the owner of any stocks or 

bonds or other pecuniary interest in a public utility or other affiliated interest. . . otherwise than voluntarily.” Act of June 

2, 1975, 64th Leg., R.S., ch. 721, art. II, 0 6(b), (f), 1975 Tex. Gen. Laws 2327, 2331-32. The substance of these two 

provisions now appears in section 12.154(f) of the Utilities Code, which applies to a commissioner “[dluring the period 

of service with the commission.” TEX. UTIL. CODE ANN. $ 12.154(a), (f) (Vernon 1998). As section 12.154 applies to 

interests acquired by a commissioner while serving on the PUC, it is not relevant here. 

3See Act of Mar. 29, 1995,74th Leg., R.S., ch. 9, 1995 Tex. Gen. Laws 3 1. 

%ee id. at 34. 

‘See Act of May 27, 1995,74th Leg., R.S., ch. 765, 1995 Tex. Gen. Laws 3972; SENATE COMM. ON STATE 

AFFAIRS, BILL ANALYSIS, Tex. S.B. 373, 74th Leg., R.S. (Apr. 24, 1995) (bill continues and revises functions of the 

PUC). 

“See Act of May 27,1995,74th Leg., R.S., ch. 765,1995 Tex. Gen. Laws 3972,3973 (adding interest in “direct 

competitor of a public utility” to list of disqualifying interests). 

7See id. New subsection (e) of section 1.023 began with the language - “[a] person is not eligible for 

appointment as a public member of the commission” - even though the 1995 amendments did not provide for a special 

category of “public” member of the PUC. See id. (emphasis added). Rather, Senate Bill 373 amended the provision 

establishing qualifications for commissioners to provide that to be eligible for appointment as a commissioner a person 

must be “a representative of the general public,” so all members were “public members.” See id. (amending section 

1.023(a)). A bill analysis indicates that both amendments were based on standard Sunset Commission language. See 

HOUSE COMM. REPORT, BILL ANALYSIS, Tex. S.B. 373 (May 20, 1995). In 1997, the legislature deleted the reference 

to a “public” member when it codified section 1.023(e) in section 12.152 of the Utilities Code. See TEX. UTLL. CODE 

ANN. 9 12.152 revisor’s note (Vernon 1998) (“Because, under the law as amended [in 19951, each member of the 

commission must be a ‘public’ member, the reference to ‘public’ is omitted from the revised law as unnecessary.“). 
The Honorable Steven D. Wolens - Page 6 (GA-0010) 

The legislative history indicates that the purpose of this legislation was to prevent conflicts 

of interest on the part of commissioners. A bill analysis states that the amendment to section 

1.023(c) “[slpecifies that conflict of interest provisions apply to direct competitors of utilities” and 

that section 1.023(e) applies standard Sunset Commission language to “prohibit[] conflicts of interest 

for commission members.” HOUSECOMM. REPORT,BILLANALYSIS, Tex. S.B. 373,74th Leg., R.S. 

(May 20, 1995). In addition, an interim report to the Seventy-fourth Legislature that appears to be 

the genesis of the bill recommended that the conflict of interest provisions for PUC commissioners 

be tightened. See TEXAS ALTERNATIVES: COMPETITIVE AND REGULATORY OPTIONS IN 

TELECOMMUNICATIONS AND ELECTRIC POWER, A REPORT TO THE 74~~ LEGISLATURE, JOINT 

INTERIM COMM. ON TELECOMMUNICATIONS, JOINT INTERIM COMM. ON THE PUC, AND THE TEXAS 

SUNSET ADVISORY COMM’N, at 16- 17 (Jan. 10, 1995) (“Recommendation 7: Tighten the conflict 

of interest provisions for PUC commissioners and apply them to the executive director, the general 

counsel, and the public counsel.“); see also TEXAS SUNSET COMM'N REPORT TO THE 74~~ 

LEGISLATURE, at 3 (1995) (explaining that Sunset Commission made no independent 

recommendations on the PUC but rather joined with interim committees in publication of a final 

report and recommendations). 

In 1997, the legislature codified the Public Utility Regulatory Act of 1995 in Title 2 of the 

Utilities Code as part of the state’s continuing statutory revision program. See TEX. UTIL. CODE 

ANN. $5 1.001, 11.001 (Vernon 1998). The legislature intended the codification to be 

nonsubstantive. See id. 5 1.001(a). Interestingly, the legislature separated section 1.023(c), the 

eligibility provision dating from 1975, and section 1.023(e) and (f), the eligibility and divestiture 

provisions dating from 1995, into separate statutes in separate subchapters. Section 1.023(c) became 

Utilities Code section 12.053 in Subchapter B, entitled “Commission Appointment and Functions”; 

section 1.023(e) and (f) became Utilities Code section 12.152 in Subchapter D, entitled “Prohibited 

Relationships and Activities.” A cross-reference to section 12.152 was added to section 12.053 as 

subsection (b)(2). See id. 3 12.053 revisor’s note (“The revised law adds a cross-reference to 

Sections 12.15 1, 12.152, and 12.153, which also specify eligibility for appointment as a 

commissioner.“). Section 12.152(b), the codification of the divestiture provision, omitted the 

language “notwithstanding any other provision of this Act” that had been included in section 

1.023(f). See id. 5 12.152 (Vernon Supp. 2003). The Revisor’s Note to section 12.152 does not 

mention this omission. See id. revisor’s note. Significantly, the 1997 codification of the Public 

Utility Regulatory Act of 1995 did not clarify the relationship between the two provisions. See 

Fleming Foods of Tex., Inc. v. Rylander, 6 S.W.3d 278,286 (Tex. 1999) (when “specific provisions 

of a ‘nonsubstantive’ codification and the code as a whole are direct, unambiguous, and cannot be 

reconciled with prior law, the codification rather than the prior, repealed statute must be given 

effect”). 

Based on this legislative history, we conclude that sections 12.053 and 12.152 must be 

harmonized to the extent possible and that meaning must be given to both. The critical legislative 

history dates from 1995, when the legislature inserted the new eligibility provision, now section 

12.152, into the Public Utility Regulatory Act of 1995 as standard sunset language, while amending 

the older eligibility provision, now section 12.053, that dated from 1975. From these two actions, 

it is clear that the legislature did not intend to repeal the older provision. It is also evident from the 

express language of the former statute, however, that the legislature intended the divestiture 
The Honorable Steven D. Wolens - Page 7 (GA-0010) 

provision to apply “[nlotwithstanding any other provision of this Act.” Act of May 27, 1995,74th 

Leg., R.S., ch. 765, $ 1.06, sec. 1.023(f), 1995 Tex. Gen. Laws 3972,3973 (“Notwithstanding any 

other provision of this Act, a person otherwise ineligible because of the application of Subsection 

(e)(2)(B) of this section may be appointed . . . if the person . . . . “). Thus, while the legislature did 

not intend to repeal the older provision, it appears to have intended the new divestiture provision to 

apply to interests that would fall under both provisions. Moreover, under the rules of statutory 

construction, to the extent section 12.053 and the section 12.152 divestiture provision conflict, 

section 12.152 prevails as the more recently enacted provision. See TEX. GOV’T CODE ANN. 5 

3 11.025(a) (Vernon 1998) (“if statutes enacted at the same or different sessions of the legislature are 

irreconcilable, the statute latest in date of enactment prevails”) (Code Construction Act). This 

construction gives meaning to both provisions and, because it requires the divestiture of interests that 

may pose a conflict, effectuates the legislature’s intent to prevent conflicts of interest on the part of 

Commission members. 

Accordingly, we conclude that the section 12.152(b) divestiture provision cures a 

disqualification due to an interest under section 12.053(b)(l)(B) that also falls within section 

12.152(a)(2)(B). By its plain language, section 12.152(b) does not cure disqualification due to an 

interest that falls under section 12.053(b)(l) but that is not within the scope of section 

12.152(a)(2)(B). See TEX. UTIL. CODE ANN. $ 12.152(b) (Vernon Supp. 2003) (“A person otherwise 

ineligible because of Subsection (a)(2)(B) may be appointed to the commission and serve as a 

commissioner . . . if the person . . . .“) (emphasis added). 

Finally, we note that the two statutes conflict in yet another respect, which we do not resolve 

here. Section 12.053 ineligibility is triggered by interests owned at any time during the two years 

preceding appointment, whereas section 12.152 ineligibility is triggered by interests owned at the 

time of appointment. See id. $5 12.053(b)(l)(B) (Vernon 1998), 12.152(a)(2)(B) (Vernon Supp. 

2003). It may be the case that a person who is a candidate for appointment to the Commission had 

an interest under section 12.053(b)(l)(B) within the preceding two years but does not presently have 

the interest. If that interest was of a type covered by section 12.152(a)(2)(B), it would make sense, 

as a practical matter, that the prospective appointee could satisfy the divestiture provision by 

disclosing the interest under section 12.152(b)( 1). S ee id. 5 12.152(b)( 1) (“A person otherwise 

ineligible . . . may be appointed to the commission and serve as a commissioner . . . if the person . 

. . notifies the attorney general and commission . . . . “). However, section 12.152(b) permits the 

divestiture of only those interests that fall within section 12.152(a)(2)(B), which does not appear to 

contemplate interests owned or controlled prior to the time of appointment. See id. 9 

12.152(a)(2)(B) (“A person is not eligible for appointment as a commissioner . . . if . . . the person 

or the person’s spouse . . . owns or controls. . . . “), (b) (“A person otherwise ineligible because of 

Subsection (a)(2)(B) may be appointed to the commission and serve as a commissioner . . . if the 

person . . . . “) (emphasis added). 
The Honorable Steven D. Wolens - Page 8 (GA-0010) 

SUMMARY 

Utilities Code section 12.053 and section 12.152 provide that a 

person with certain pecuniary interests is not eligible for appointment 

as commissioner of the Public Utility Commission. Unlike section 

12.053, section 12.152 provides that a person who discloses and 

divests certain types of interests is not disqualified. The section 

12.152(b) divestiture provision cures a disqualification due to an 

interest under section 12.053(b)( 1) that also falls within section 

12.152(a)(2)(B). It does not cure a disqualification due to an interest 

that falls under section 12.053(b)( 1) but that is not within the scope 

of section 12.152(a)(2)(B). 

BARRY R. MCBEE 

First Assistant Attorney General 

NANCY FULLER 

Deputy Attorney General - General Counsel 

RICK GILPIN 

Deputy Chair, Opinion Committee 

Mary R. Crouter 

Assistant Attorney General, Opinion Committee