April 24, 1990 

Honorable Carlos Valdez Opinion NO. JM-1165 

Nueces County Attorney 

Nueces County Courthouse Re: Whether consultant to 

901 Leopard, Room 206 private corporation that conCorpus Christi, Texas 78401 tracts with the state receives compensation "directly 

or indirectly" from state 

funds within article XVI, 

section 40, of the Texas 

Constitution (RQ-1872) 

Dear Mr. Valdez: 

You request advice about the application of article 

XVI, section 40, of the Texas Constitution to a consultant 

contract entered into by the mayor of Corpus Christi. YOU 

inform us that the mayor, working as an independent contractor, contracted with a private corporation that provides 

services to retarded people. Through contracts with either 

the State of Texas or with private individuals, the 

corporation receives revenues from the state or private 

individuals. These revenues are comingled and used to 

pay business expenses including fees paid to independent 

contractors such as the mayor. 

you also state that the mayor was not an employee of 

the corporation. She never received a salary or any other 

benefit paid to employees, but was strictly a consultant who 

contracted on an hourly basis as needed. Earlier this year, 

she terminated her contract with the corporation. 

Article XVI, section 40, of the Texas Constitution 

prohibits individuals from holding more than two civil 

offices of emolument, with certain exceptions. The 

provision that is relevant to your question, however, 

applies to state employees and certain other persons 

compensated directly or indirectly by the state. This 

provision states as follows: 

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Honorable Carlos Valdez - Page 2 (JM-1165) 

State employees or other individuals who 

receive all or part of their compensation 

either directly or indirectly from funds of 

the State of Texas and who are not State 

officers, shall not be barred from serving as 

members of the governing bodies of school 

districts, cities, towns, or other local 

governmental districts; provided, however, 

that such State employees or other individuals shall receive no salary for serving as 

members of such governing bodies. 

Tex. Const. art. XVI, 5 40. 

You wish to know whether this language applies to an 

independent contractor who contracts with a private entity 

that receives part of its revenues under contract with 

the State of Texas. An individual who receives compensation "directly or indirectly from funds of the State of 

Texas . . . shall receive no salary I8 for serving as a member 

of the governing body of a city. 

The present language of article XVI, section 40, was 

adopted in 1972. The amendment was proposed by Senate Joint 

Resolution 29 of the 62d Legislative Session. S.J.R. 29, 

Acts 1971, 62d Leg., at 4133. The following portion of the 

title of the resolution describes the provision under 

consideration: 

permitting State employees or certain other 

individuals, who are not State officers, to 

serve as members of the governing body of 

school districts, cities, or towns, or other 

local governmental districts without forfeiting their salary for their State 

employment. 

This portion of the 1972 amendment was a response to 

Bovett v. Calvert, 467 S.W.Zd 205 (Tex. Civ. App. - Austin 

1971, writ ref'd n.r.e.), s, 405 U.S. 1035 

(l-2), which interpreted the text of article XVI, section 

33, of the Texas Constitution that was repealed in 1972. 

w G. Braden, The Constitution of the State of Texas: An 

Annotated and Comparative Analysis (2d. 1977). Article XVI, 

section 33, formerly provided that the state would not pay 

salary or compensation to any agent, officer or appointee 

who held any other office or position of honor, trust, or 

profit under the state. & H.J.R. 27, Acts 1967, 60th 

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Honorable Carlos Valdez - Page 3 (JM-1165) 

-cf., at 2989. Bovett v. Calvert held that employees of 

Texas A & M University could serve on a city council but 

could not receive a state salary from the university while 

doing so. The proposal which amended section 40 of article 

XVI in 1972 also amended section 33. a S.J.R. 29, Acts 

1971, 62d Deg., at 4133. The effect of the 1972 amendment, 

as indicated by its title, was that persons compensated by 

state funds who held local offices could receive their state 

salary, but could not receive compensation for the local 

office. 

The repealed version of article XVI, section 33, 

applied to public officers and employees at the stat& and 

local level. Viewed in this historical context, the 

provision that was designed to correct the Bovett v. Calvert 

result should apply within the same parameters as former 

section 33 -- that is, to public officers and employees. 

Article XVI, section 40, deals primarily with state and 

local officers. In this context, it is reasonable to read 

the provision you inquire about as applying to state and 

local employees, in contrast to officers, and not reaching 

an independent contractor who may provide goods or services 

in exchange for payment, some of which is traceable to state 

funds. The scope of the provision is reflected in its 

language: 

State employees or other individuals who 

receive [compensation from state funds] . . . 

who are not State officers . . . . (Emphasis 

added.) 

Tex. Const . art. XVI, § 40. We construe the provision you 

inquire about as applying to state employees and employees 

of local government, for example, school teachers, but not 

to independent contractors. m Attorney General Opinion 

MW-230 (1980); see also Attorney General Opinion JM-118 

(1983) (teacher paid from federal funds who received state 

retirement benefits). 

A prior opinion of this office construing the repealed 

language of article XVI, section 33, supports our conclusion. Attorney General Opinion V-303 (1947) considered 

whether that provision barred an employee of the State 

Highway Department from working as an independent contractor 

for a school district. The relevant language of that 

constitutional provision read as follows: 

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Honorable Carlos Valdez - Page 4 (JM-1165) 

The accounting officers of this State 

shall neither draw nor pay a warrant upon the 

Treasury in favor of any person for salary or 

compensation as agent, officer of appointee, 

who holds at the same time any other office 

or position of honor, trust, or profit under 

this State. . . . 

H.J.R. 27, Acts 1967, 60th Leg., at 2989. 

The opinion stated that a person holding an "office or 

position of honor, trust or profit" in a school district, 

would be holding it "under this State." An independent 

contractor, however, was not an agent or employee of the 

school district. See also Attorney General Opinion MW-129 

(1980) (an independent contractor is not an employee for 

purposes of the Open Meetings Act). Thus, a predecessor of 

the relevant provision in article XVI, section 40, did not 

reach someone who was an independent contractor of a school 

district. The mayor of Corpus Christi was an independent 

contractor of a private corporation that contracts with the 

State of Texas -- a much more remote relationship with a 

public entity than that discussed in Attorney General 

Opinion V-303. 

Finally, Attorney General Opinion JM-782 (1987) also 

lends support to our construction of this provision. It 

construed the language of article III, section 18, of the 

Texas Constitution that bars members of the legislature from 

being "interested, either directly or indirectly, in any 

contract with the State, or any county thereof, authorized 

by any law passed during the term for which he was elected." 

The legislator wished to be employed by a transit system 

that received state-administered federal grant funds. The 

transit system was operated by a nonprofit corporation 

established by political subdivisions to receive and 

administer federal grant funds under various federal 

programs. We stated that the legislator as employee of the 

transit system would have no direct or indirect interest in 

any contract with the state. His interest in any contract 

with the state was too remote to be an indirect interest 

under section 18 of article III. 

Accordingly, article XVI, section 40, does not prohibit 

the mayor of Corpus Christi from contracting as an independent contractor with a private corporation that receives 

state funds under contract with the state. In view‘of our 

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Honorable Carlos Valdez - Page 5 (JM-1165) 

answer to your first question, we need not answer your 

second question. 

SUMMARY 

An individual who contracts as an independent contractor with a private corporation 

that receives state funds under contract with 

the state does not receive all or part of his 

"compensation either directly or indirectly 

from funds of the State of Texas" within 

article XVI, section 40, of the Texas Constitution. The individual may serve as a member 

of the governing body of a school district, 

city, town, or other local governmental 

district and receive salary for that service. 

JIM MATTOX. 

Attorney General of Texas 

P MARY KELLER 

First Assistant Attorney General 

JUDGE ZOLLIE STEAKLHY 

Special Assistant Attorney General 

RENEA HICKS 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Susan L. Garrison 

Assistant Attorney General 

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