THE ATTORNEY GENERAL 

OF TEXAS 

Honorable John T. Montford Opinion No. JM-1065 

Chairman 

State Affairs Committee Re: Whether the Lubbock Power 

Texas State Senate and Light Company may contract 

P. 0. Box 12068 with the Texas Tech Research 

Austin, Texas 78711 Foundation if a Lubbock city 

councilman is chairman of the 

foundation board of directors 

(RQ-1676) 

Dear Senator Montford: 

You request an opinion about possible conflicts of 

interest involving a proposed contract between the city of 

Lubbock, acting through Lubbock Power and Light, and the 

Texas Tech University and Health Sciences Center Research 

Foundation, a nonprofit corporation which is closely 

associated with Texas Tech University. A member of the 

Lubbock City Council serves as chairman of the board of 

directors of the Texas Tech Research Foundation. YOU wish 

to know how the laws on dual office holding, dual agency, 

and conflict of interest for state and municipal officers 

affect this individual's participation in the contracting 

process. 

Article XVI, section 40, -of the Texas Constitution 

prevents one person from holding or exercising "at the same 

time, more than one civil office of emolument.11 It is well 

established that a city council member is a civil officer of 

emolument within this provision if he receives compensation 

for his service. See. e.a Tillev v. Roaers, 405 S.W.2d 

220 (Tex. Civ. APP. - Beaukont 1966, writ ref'd n.r.e.) : 

Attorney General Opinion MW-39 (1979): Letter Advisory No. 

154 (1978). Article XVI, section 40, will not apply in this 

case unless the chairman of the foundation board also holds 

or exercises a civil office of emolument. 

The Lubbock city attorney's office has submitted a 

brief discussing the status of the foundation's directors 

and a copy of the by-laws of Texas Tech University and 

Health Sciences Center Research Foundation. The by-laws 

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Honorable John T. Montford - Page 2 (JM-1065) 

identify the foundation as a nonprofit corporation organized 

to support research projects and associated educational 

undertakings at the university and health sciences center 

and to seek and obtain contracts, grants, and gifts for the 

advancement of such research, as well as similar and related 

purposes set out in articles I and II of the by-laws. 

According to article IV, the eleven members of the board of 

directors serve three-year terms. Seven are appointed by 

the Board of Regents of Texas Tech University, and the 

remaining four members are appointed by the Board of City 

Development of Lubbock. Several ex-officio non-voting 

members are drawn from the university administration. 

Article V of the foundation by-laws provides that the 

directors elect the chairman, who is the chief executive 

officer of the foundation. He or his designee is 

responsible for negotiating service contracts with other 

agencies. Contracts and agreements with other agencies 

must be approved and executed by both the chairman or his 

designee and the executive director. The executive director 

is appointed by the board of regents upon the recommendation 

of the foundation and may be dismissed by the regents. 

is custodian of the funds and the financial records of t:z 

foundation. See aenerallv V.T.C.S. art. 1396-2.23B (audit 

or financial report required of nonprofit corporations 

assisting state agencies). Article X of the by-laws grants 

the board of regents final approval of amendments to the 

foundation's by-laws. 

In addressing your question about dual office holding, 

we must determine whether the chairman of the board of 

directors is a civil officer of emolument within article 

XVI, section 40, of the Texas Constitution. We will not 

address any other legal issues raised by the relationship 

between the university and the foundation. See aenerallv 

Attorney General Opinion H-1309 (1978). Our answer will be 

based on the by-laws which have been submitted to us and 

will not undertake the investigation or resolution of fact 

questions. 

The definition of public officer also applies to a 

civil officer within article XVI, section 40, of the 

constitution. Attorney General Opinion MW-415 (1981). A 

public officer is an individual upon whom a "sovereign 

function of the government is conferred," to be exercised 

for the benefit of the public laraelv independent of the 

control of others. Aldine Inden. School Dist, v. Standley, 

280 S.W.2d 578, 583 (Tex. 1955). 

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Honorable John T. Montford - Page 3 (JM-1065) 

No sovereign function of the government is conferred 

upon the chairman of the foundation board of directors. He 

does not exercise governmental authority over the university 

by delegation from the legislature or by the board of 

regents from its statutory authority to manage and operate 

Texas State Technical Institute. See Educ. Code 5 135.24. 

His authority derives from and is exercised on behalf of the 

nonprofit corporation, a private entity. See aenerally 

Attorney General Opinions JM-852 (1988) (nonprofit corporation distinguished from a state-supported institution of 

higher education): JM-782 (1987) (employee of a nonprofit 

corporation which provides transportation services is not an 

employee of a state agency or political subdivision). The 

by-laws give the board of regents control over the executive 

director of the foundation and veto power over amendments to 

the by-laws, but do not authorize the regents to control the 

chairman of the board. Nor has the chairman any authority 

to govern the university. Accordingly, he is not a public 

officer, a public employee, or a civil officer within 

article XVI, section 40, of the Texas Constitution. This 

provision of the constitution does not prevent a member of 

the Lubbock City Council from serving as chairman of the 

Texas Tech Research Foundation board of directors. 

In view of our decision that the chairman of the board 

of directors of the foundation is not a public officer or 

employee, we need not consider the conflict of interest 

doctrines that apply to state officials. See, e.a., Attorney 

General Opinions JM-852 (1988) (contract between city 

council and university which employs city council members): 

JM-817 (1987) (contract between state university and firm in 

which regent has a financial interest). 

You finally inquire about conflict of interest provisions applicable to municipal officials. The city 

attorney's brief discusses the conflict of interest 

provisions of the Lubbock City Charter; We will not, 

however, interpret these provisions. See Attorney General 

Opinion JM-846 (1988). 

Chapter 171 of the Local Government Code applies to 

conflicts of interest of "local public officials," including 

members of the governing body of a city. Local Gov't Code 

5 171.001(1). Under the conditions described in chapter 

171, a local public official is barred from participation in 

a vote or decision involving a business entity in which he 

has a substantial interest. Id. 5 171.003. A "business 

entity" includes a nonprofit corporation. Attorney General 

Opinions JM-852 (1988): JM-424 (1986). A person who owns a 

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Honorable John T. Montford - Page 4 (JM-1065) 

specified percentage of voting stock or a certain amount of 

the fair market value of a business entity has a substantial 

interest in it, as does one who receives funds from it in 

excess of 10 percent of his gross income for the previous 

year. Local Gov't Code § 171.002 as amended by Acts 1987, 

70th Leg., ch. 362, 5 2, at 1799.) I 

A memorandum from the Lubbock city attorney's office 

states that the foundation's directors do not receive 

compensation, but they are reimbursed for some expenses and 

receive token gifts, including commemorative awards such as 

plagues. These gifts have never exceeded $200 per board 

member, per year. The brief from the city of Lubbock 

concludes that the city council member does not have a 

substantial financial interest in the foundation, since it 

is highly unlikely that $200 in gifts would amount to 10 

percent of his gross income. In the absence of contrary 

facts, we will assume that the city council member's receipt 

of $200 per year from the foundation does not constitute a 

substantial interest in it. Accordingly, chapter 171 of the 

Local Government Code does not apply to his participation in 

votes or decisions of the Lubbock City Council on the 

proposed agreement with the Texas Tech Research Foundation. 

He may participate in those proceedings. See Attorney 

General Opinion JM-424 (1986) (policy against dual agency 

does not prohibit contracts authorized under former article 

988b, V.T.C.S., recodified as chapter 171 of the Local 

Government Code). 

SUMMARY 

The chairman of the board of directors of 

the Texas Tech University and Health Sciences 

Center Research Foundation, a nonprofit 

corporation closely associated with Texas 

Tech University, does not occupy or exercise 

a civil office of emolument within article 

1. Former article 98823, V.T.C.S., was recodified as 

chapter 171 of the Local Government Code by the 70th session 

of the legislature. Acts 1987, 70th Leg., ch. 149. The 

same session of the legislature adopted amendments to former 

article 988b, V.T.C.S., without reference to the legislature's repeal and recodification of that provision. The 

amendments are preserved and given effect as part of the 

code provision. Gov't Code 5 311.031(c). 

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Honorable John T. Montford - Page 5 (JM-1065) 

XVI, section 40, of the Texas Constitution. 

This constitutional provision does not bar a 

city councilman of the city of Lubbock from 

serving as chairman of the foundation's board 

of directors. 

If the city councilman does not have a 

substantial interest in the Texas Tech 

Research Foundation as defined by chapter 171 

of the Local Government Code, that statute 

does not bar him from participating in votes 

and decisions of the city council concerning 

agreements between the city and the foundation. 

Very truly yo r , Ld!!h.Jk . 

JIM MATTOX 

Attorney General of Texas 

MARY KELLER 

First Assistant Attorney General 

LGU MCCRRARY 

Executive Assistant Attorney General 

JUDGE ZOLLIE STEAKLEY 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Susan L. Garrison 

Assistant Attorney General 

p. 5551