OFFICE OF THE ATTORNEY GEXERAL . STATE OF TEXAS 

JOHN CORNYN 

October 3,200l 

The Honorable Frank Madla 

Chair, Senate Committee on 

Intergovernmental Relations 

Texas State Senate 

P.O. Box 12068 

Austin, Texas 787 1 l-2068 

Opinion No. JC-04 18 

Re: Whether the Railroad Commission of Texas 

may promulgate a rule imposing standards of 

conduct on its members in a contested case 

hearing (RQ-0374-JC) 

Dear Senator Madla: 

You have requested our opinion as to whether the Railroad Commission of Texas may 

promulgate a rule that requires its members to observe certain standards of conduct in a contested 

case hearing. For the reasons explained below, we conclude that it may not do so. We do not decide 

whether the Commission may adopt aspirational, ethical guidelines designed to advance public 

confidence in the Commission, since we deem the rule in question mandatory, despite conflicting 

language in the rule and its preamble. 

The Railroad Commission (the “Commission”) is a statewide body established by article 

XVI, section 30 of the Texas Constitution. It is “composed of three members, one of whom shall 

be elected biennially at each general election for a term of six years.” TEX. REV. CIV. STAT. ANN. art. 

6447 (Vernon Supp. 2001). Among its various delegated powers, the Commission is authorized to 

“make all rules necessary for their government and proceedings.” Id. Pursuant to the 

latter authority, the Commission voted to adopt, by a 2-l vote, a new rule to be denominated as 

section 1.10, title 16 of the Texas Administrative Code (“Rule 1.10”). Rule 1.10 became effective 

May 28,200l and reads as follows: 

lj 1.10. Commissioner Conduct. 

(a) Participation in Contested Cases. 

(1) When considering contested case issues, a Railroad 

Commissioner shall not allow any relationship, personal or pecuniary, 

to influence decisions or policies, and shall not convey, or permit 

others to convey, the impression that any person is in a special 

position to influence commission decisions. 
The Honorable Frank Madla - Page 2 (JC-0418) 

(2) A commissioner will recuse himself or herself from a 

contested case issue any time his or her impartiality might reasonably 

be questioned, including but not limited to, any time he or she, or 

anyone within the third degree of kinship by affinity or consanguinity 

with the commissioner: 

(4 is a party to the proceeding; 

(B) is acting as counsel to a party; or 

(C) has a financial or other interest in the matter in 

controversy that could be substantially affected by the outcome of the 

proceeding. 

(3) A commissioner otherwise subject to the provisions of 

paragraph (2) of this subsection who elects not to recuse himself or 

herself will place in the record, and in the Texas Register, a written 

explanation of any potential conflict and a reasoned justification for 

not complying with paragraph (2) of this subsection. 

(4) A commissioner who believes another commissioner has 

violated this section shall raise the issue in a posted meeting at the 

first opportunity. 

(b) Interpretation guidance. The following commentary is to 

assist in the application of this section. 

(1) In considering whether to recuse himself or herself from 

deliberation or decision in any particular contested case, a 

commissioner should consult Rule 18b, Texas Rules of Civil 

Procedure, which pertains to judges. Reference to this rule is 

appropriate for a commissioner acting in a quasi-judicial capacity. 

(2) In subsection (a) of this section, the degree of relationship 

should be computed according to Texas Government Code, Chapter 

573. 

26 Tex. Reg. 3737 (2001) (to be codified at 16 TEX. ADMIN. CODE 9 1 .lO) (Tex. Railroad Comm’n). 

It has been suggested that the adoption of Rule 1.10 was beyond the Commission’s authority because 

it is inconsistent with, and exceeds, the standards promulgated by chapter 572 of the Government 

Code. 
The Honorable Frank Madla - Page 3 (Jc-0418) 

Before addressing this matter, we must first consider whether the directives of Rule 1.10 are 

mandatory or permissive. The issue arises because of certain language in the order accompanying 

the adoption of the proposed rule, to the effect that compliance with the rule is strictly voluntary. 

See 26 Tex. Reg. 3737 (2001). In our opinion, this language is at variance both with the text of the 

rule and the required “notice” proposing the rule. 

A “notice of proposed rule” must contain, inter alia, “a brief explanation of the proposed 

rule.” Section 2001.024(a)(l), Government Code. The notice accompanying proposed Rule 1.10 

contains the following language: 

Under the proposed rule, a commissioner will recuse himself or 

herself from a contested case issue any time his or her impartiality 

might reasonably be questioned, including but not limited to, any 

time he or she, or anyone within the third degree of kinship by 

affinity or consanguinity with the commissioner is a party to the 

proceeding; is acting as counsel to a party; or has a financial or any 

other interest in the matter in controversy that could be substantially 

affected by the outcome of the proceeding. Should the commissioner 

choose not to recuse himself or herself, the commissioner will place 

in the record, and in the Texas Register, a written explanation of any 

potential conflict and a reasoned justification for not complying with 

the recusal standards. A commissioner who believes another 

commissioner has violated this section is required to raise the issue 

in a posted meeting at the first opportunity. 

(Emphasis added). 

An “agency order finally adopting a rule must include,” in its entirety: 

(1) a reasoned justification for the rule, as adopted consisting solely 

Of: 

(A) a summary of comments received from parties interested 

in the rule that shows the names of interested groups or 

associations offering comment on the rule and whether they 

were for or against its adoption; 

(B) a summary of the factual basis for the rule as adopted 

which demonstrates a rational connection between the factual 

basis for the rule and the rule as adopted; and 

(C) the reasons why the agency disagrees with party 

submissions and proposals; 
The Honorable Frank Madla - Page 4 (JC-04 18) 

(2) a concise restatement of the particular statutory provisions under 

which the rule is adopted and of how the agency interprets the 

provisions as authorizing the rule; and 

(3) a certification that the rule, as adopted, has been reviewed by 

legal counsel and found to be a valid exercise of the agency’s legal 

authority. 

Section 2001.033, Government Code. The order adopting Rule 1.10 adds another “explanation” of 

the rule that is not required by section 2001.033. Furthermore, this “explanation” is at variance with 

the explanation offered in the notice of the proposed rule. In the first place, the second “explanation” 

uses the word “would” instead of “will.” More significantly, the second explanation categorically 

states: 

In addition, the commission re-states here what was stated during the 

February 6,2001, open meeting deliberations when new 9 1.10 was 

proposed; the provisions of this rule are not binding on a 

commissioner. They are offered as guidance to commissioners, 

whose constitutional and statutory duties necessarily combine the 

legislative and the judicial functions. And they are offered as a rule 

so that members of the public will know the standards of ethical 

conduct to which the cornmissioners, individually and voluntarily, 

hold themselves. 

No similar language is to be found in the notice of proposed rule. The Commission states that the 

rule is permissive. However, this contradicts the language of the rule itself, and it is to an 

examination of that language that we now turn. 

The portions of Rule 1.10 at issue here use the following language, in relevant part: 

(a) Participation in Contested Cases: 

(1) . . . . 

(2) A commissioner will recuse himself or herself any time 

his or her impartiality might reasonably be questioned . . . . 

(3) A commissioner . . . who elects not to recuse himself or 

herself will place in the record, and in the Texas Register, a 

written explanation of any potential conflict and a reasoned 

justification for not complying . . . . 
The Honorable Frank Madla - Page 5 (JC-04 18) 

(4) A commissioner who believes another commissioner has 

violated this section shall raise the issue in a posted meeting 

at the first opportunity. 

(Emphasis added). 

It is well established that the rules of an administrative agency are to be construed in the same 

manner as statutes. Lewis v. Jacksonville Building & Loan Ass ‘n, 540 S.W.2d 307,3 10 (Tex. 1976); 

City of Lubbock v. Public Utility Comm ‘n, 705 S.W.2d 329,330-3 1 (Tex. App.-Austin 1986, writ 

ref d n.r.e.). Section 3 11.016 of the Government Code, part of the Code Construction Act, although 

not strictly applicable to a rule adopted under a statute, as opposed to a code, states the long-standing 

rule regarding the use of the word “shall”: “‘shall’ imposes a duty,” while “‘may’ creates 

discretionary authority.” See Lewis, supra, at 3 10. Thus, the requirement of subdivision (4), supra, 

in using “shall,” appears to be mandatory. The term “will” is seldom used in rules or statutes in the 

context of “mandatory” versus “permissive,” either in Texas or elsewhere. But see, Campbell v. Pan 

American World Airways, Inc., 668 F.Supp. 139, 142 (E.D.N.Y. 1982) (“will,” like “shall,“is 

mandatory). But if subdivision (4), in its use of the word “shall,” is held to be mandatory, it 

necessarily follows that subdivisions (2) and (3), upon which subdivision (4) is premised, must 

themselves be mandatory. In the first place, subdivision (4) speaks in terms of a “violation” of 

section (a), language that is hardly conducive to a characterization of subdivisions (2) and (3) as 

voluntary. Furthermore, in Jones v. Dodendorf, 546 N.E.2d 92,93 (Ill. App. 1989), the court said 

that, when a statute prescribes what result will ensue if its terms are not complied with, the statute 

is deemed mandatory. Conversely, if a statute does not prescribe what results will follow if specific 

requirements are not met, the statute is considered permissive. Christian Disposal, Inc. v. Village 

of Eolia, 895 S.W.2d 632,634 (Mo.App. 1995). Since Rule 1.10 prescribes the consequences that 

must follow a violation of subdivisions (2) and (3), it seems clear that the use of “will” in those 

provisions should be construed as mandatory. 

In sum, despite the disclaimer that accompanies the order adopting Rule 1.10, which 

disclaimer is no part of the rule, we believe that the provisions of the rule under consideration here 

should be deemed to impose mandatory requirements upon the members of the Railroad 

Commission. We thus turn to a consideration of whether the Commission exceeded its statutory 

authority in adopting the rule. 

Section 572.002 of the Government Code defines “elected officer” to include “an executive 

or judicial officer elected in a statewide election.” TEX. GOV’T CODE ANN. 0 572.002(4) (Vernon 

Supp. 2001). It thus embraces members of the Railroad Commission. Section 572.058(a) provides: 

(a) An elected or appointed officer, other than an officer subject 

to impeachment under Article XV, Section 2,’ of the Texas 

‘A member of the Railroad Commission is not an officer subject to impeachment under article XV, section 2 

(continued...) 
The Honorable Frank Madla - Page 6 (JC-04 18) 

Constitution, who is a member of a board or commission having 

policy direction over a state agency and who has a personal or private 

interest in a measure, proposal, or decision pending before the board 

or commission shall publicly disclose the fact to the board or 

commission in a meeting called and held in compliance with Chapter 

551. The officer may not vote or otherwise participate in the 

decision. The disclosure shall be entered in the minutes of the 

meeting. 

Id. 9 572.058(a) (Vernon 1994) (footnote added). The term “personal or private interest,” as used 

in section 572.058, “has the same meaning as is given to it under Article III, Section 22, of the Texas 

Constitution, governing the conduct of members of the legislature.” Id. 0 572.058(f). A person who 

violates section 572.058 “is subject to removal from office on the petition of the attorney general on 

the attorney general’s own initiative or on the relation of a resident or of any other member of the 

board or commission.” Id. 9 572.058(b). 

Section 572.058 sets out the sole statutory requirements for a member of the Commission 

who has a “personal or private interest” in any “measure, proposal, or decision” that is pending 

before the Commission. A member must “publicly disclose the fact” in an open meeting, and refrain 

from voting on or participating in any decision on the matter. Cf: TEX. REN. CIV. STAT. ANN. art 6447 

(Vernon Supp. 2001) (“No commissioner shall hold any other office of any character, while such 

commissioner, nor engage in any occupation or business inconsistent with his duties as such 

commissioner.“).2 Although subsection (f) adopts the meaning of “personal or private interest” 

found in article III, section 22 of the Constitution, that provision does not itself define the term. The 

commentary to article III, section 22 notes that “it is often difficult to define and distinguish 

‘personal or private interest. “’ TEX. CONST. art. III, 0 22 interp. commentary (Vernon 1997). 

It is well established that a state agency has only those powers that are specifically 

enumerated or that may reasonably be implied therefrom. Railroad Comm ‘n v. Lone Star Gas Co., 

844 S.W.2d 679, 685 (Tex. 1992). The Commission majority asserts that article 6447, which 

permits the commissioners to “make all rules necessary for their government and proceedings,” 

furnishes the authority for Rule 1.10. See 26 Tex. Reg. 3737,3738 (2001) (to be codified at 16 TEX. 

ADMIN. CODE 9 1.10) (Tex. Railroad Comm’n). We need not determine, however, whether Rule 1.10 

is “necessary” for the “government and proceedings” of the Commission, because the rule is both 

inconsistent with, and imposes burdens in excess of, statutory requirements. 

‘(. . .continued) 

of the Texas Constitution. 

2Recently enacted legislation from Senate Bill 3 10 deletes this passage and adds: “The members are subject 

to the provisions of Chapter 572, Government Code, that apply to elected officers, including the requirements governing 

personal financial statements, standards of conduct, and conflicts of interest.” See Act of May 27,2001,77th Leg., R.S., 

ch. 1233,200l Tex. Sess. Law Serv., WL TX LEGIS 1233 (2001) (to be codified as an amendment to TEX. REV. CIV. 

STAT. ANN. art. 6447) (eff. Sept. 1,200l). 
The Honorable Frank Madla - Page 7 (JC-0418) 

An agency may not impose additional burdens, conditions, or restrictions in excess of 

relevant statutory provisions. Railroad Comm ‘n v. Arco Oil & Gas Co., 876 S.W.2d 473,481 (Tex. 

App.-Austin 1994, writ denied). Neither may it enact regulations that are inconsistent with properly 

enacted statutes. State v. Jackson, 376 S.W.2d 341, 345 (Tex. 1964). On the one hand, the 

Commission rule requires less than the statute. Whereas section 572.058(a) states that an official 

“shall publicly disclose” a conflict, and “may not vote or otherwise participate in the decision,” Rule 

1.10 fails specifically to require disclosure of a personal or private interest. TEX. GOV’T CODE ANN. 

9 572.058(a) (Vernon 1994) (emphasis added). In addition, it seems to offer the official a choice 

regarding recusal, by providing an alternative in the form of a “written explanation of any potential 

conflict and a reasoned justification” for non-recusal. On the other hand, the Commission rule 

requires more than the statute. First, it lists examples of conflicts that may or may not be 

contemplated by section 572.058(a). More significantly, Rule 1.10 requires the commissioner to 

provide a “written explanation” and a “reasoned justification,” and thus imposes burdens clearly not 

contemplated by the statute. Furthermore, it requires a commissioner “who believes another 

commissioner has violated this section [to] raise the issue in a posted meeting at the first 

opportunity.” Consequently, Rule 1.10 both exceeds and is inconsistent with the legislative 

directive. 

Rule 1.10 also attempts to give some meaning to “personal or private interest” as used in 

section 572.058. -The vagueness and absence of guidance regarding this term might indicate a 

legislative contemplation that each agency delineate its intent. Rule 1.10 offers, first, certain 

standards for recusal, and then suggests that commissioners considering doing so should reference 

rule 18b of the Texas Rules of Civil Procedure, which is applicable to judges. Rule 18b provides 

a detailed list of occasions for recusal, including those in which the judge is related within the third 

degree of kinship to a party or to his counsel. TEX. R. CIV. P. 18b. 

The legislature has specifically committed the administration and enforcement of chapter 572 

to the Texas Ethics Commission. TEX. GOV’T CODE ANN. 8 571.061 (Vernon Supp. 2001). The 

Ethics Commission is empowered to “adopt rules to administer this chapter or any other law 

administered and enforced by the commission.” Id. 8 571.062 (Vernon 1994) (emphasis added). 

Furthermore, the Ethics Commission is directed to “prepare a written opinion answering the request 

of a person subject to any of the following laws,” including chapter 572, “for an opinion about the 

application of any of these laws to the person in regard to a specified existing or hypothetical factual 

situation.” Id. 8 57 1.091 (Vernon Supp. 2001). A number of opinions issued by the Ethics 

Commission have construed section 572.058. See, e.g., Tex. Ethics Comm’n Op. Nos. 3 16 (1996), 

256 (1995), 2 18 (1994). In our view, because the Railroad Commission is not the proper body to 

construe, administer, or enforce the statutory directive of chapter 572 of the Government Code, it 

may not describe, by rule or by reference to the Rules of Civil Procedure, what standards are 

applicable thereto. 

In summary, that portion of Rule 1.10 that requires a member of the Commission to provide 

a written justification for his failure to recuse himself in a contested case imposes an additional 

burden not authorized by statute and thus exceeds the authority of the Commission. That portion 
The Honorable Frank Madla - Page 8 (JC-04 18) 

of Rule 1.10 that establishes standards for recusal in a contested case is invalid because it encroaches 

upon authority properly granted by the legislature to the Texas Ethics Commission. 
The Honorable Frank Madla - Page 9 (JC-0418) 

SUMMARY 

That portion of Rule 1.10 adopted by the Railroad 

Commission of Texas that requires a member of the Commission to 

provide a “written explanation” and “reasoned justification” for his 

failure to recuse himself in a contested case imposes an additional 

burden not authorized by statute and thus exceeds the authority of the 

Commission. That portion of Rule 1.10 that establishes standards for 

recusal in a contested case is invalid because it encroaches upon 

authority properly granted by the legislature to the Texas Ethics 

Commission. 

JOl!?N CORNYN 

Attorney General of Texas 

HOWARD G. BALDWIN, JR. 

First Assistant Attorney General 

NANCY FULLER 

Deputy Attorney General - General Counsel 

SUSAN D. GUSKY 

Chair, Opinion Comrnittee 

Rick Gilpin 

Assistant Attorney General, Opinion Committee