### KEN PAXTON ATTORNEY GENERAL OF TEXAS
July 13, 2015

The Honorable Eddie Lucio, Jr. OpinionNo. KP-0026 Chair, Committee on Intergovernmental Relations Texas State Senate Re: Question relating to the Galveston City Charter and 

# atax increment reinvestment zone governedbychapter 311 ofthe Tax Code (RQ-0004-KP) Post Office Box 12068 Austin, Texas 78711-2068
Dear SenatorLucio: Your predecessor asked several questions relating to the City of Galveston's Charter ("Charter") as it may affect governance ofa tax increment reinvestment zone created by the city under chapter 311 ofthe Tax Code. 1 Specifically, the questions are: (1) Does the provision of the Galveston City Charter that regulates eligibility to serve on a board created by the city apply to members ofthe board ofdirectors ofa tax increment reinvestment zone created under Chapter 311, Tax Code? (2) If the charter provision does apply, do the residency requirements and term limits provided by the provision apply to board members ofa tax incrementreinvestment zone? Request Letter at 1. Our analysis of these questions is necessarily limited. The first question requires the construction ofa provision ofa city charter, a task which is outside the purview ofan attorney general opinion. See Tex. Att'y Gen. Op. No. GA-0449 (2006) at 1 ("In deference to municipal officials' authority to interpret their charters and ordinances, this office does not ordinarily construe city charters or ordinances."). Accordingly, we do not address the applicability ofthe Charter. The second question is contingent upon an affirmative answer to the first, but as it involves the construction ofprovisions ofthe Tax Code, it presents legal questions that we can address. See Tex. Att'y Gen. Op. No. GA-0356 (2005) at 2 (considering charter's implication of

1 See Letter from Honorable Juan Hinojosa, Chair, Senate Comm. on Intergov'tl Relations, to Honorable Ken Paxton, Tex. Att'y Gen. at I (Jan. 6, 2015), https://texasattomeygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter").The Honorable Eddie Lucio, Jr.

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state law). Thus, while the City ofGalveston must determine the applicability ofits Charter, we will presume that it applies for the limited purpose ofaddressing these legal questions.
Withthatpresumption, we considerthe legal issues in the second question. The first issue concerns a charter residency requirement, which prohibits a person from serving as a member of a board "ifthatpersonhas notbeen a resident ofand domiciled inthe city for at least one (1) year immediately preceding the appointment." Request Letter at 1-2. Your predecessor noted that a potential conflict arises when this requirement is considered against subsection 311.009(e) ofthe Tax Code. 

### Id at 2. Subsection 311.009(e) provides that to be eligible for appointment to a tax incrementreinvestment zone board, a person
must be at least 18 years ofage and: (1) ifthe board is covered by Subsection (a): (A) be a resident ofthe county in which the zone is located or a county adjacentto that county; or (B) ownreal property in the zone, whether or not the individual resides in the county in whichthe zone is located or a county adjacent to that county; or (2) if the board is covered by Subsection (b), own real property in the zone or be an employee or agent of a person that owns real property inthe zone.2
TEX. TAX CODEANN. § 311.009(e) (West 2015) (footnote added). The secondissue inthe second question involves the potential conflict between the Charter's term limit requirements and subsection 311.009(c), which provides that "[ m]embers ofthe board are appointed for terms of twoyears unless longerterms areprovidedunderArticleXI, section 11, oftheTexasConstitution." TEX. TAX CODE ANN. § 3 l l .009(c) (West 2015).
TheHome-RuleAmendment, articleXI, section5, oftheTexas Constitution,bestowsupon certain cities the "fullpower oflocal self-government." City of Houston v. State ex rel. City of

### W. Univ. Place, 176 S.W.2d928, 929 (Tex. 1943);see TEX. CONST. art. XI,§ 5. Butarticle XI, section 5 also provides that "no charter or any ordinance passed under said charter shall contain any provisioninconsistent" withthe constitutionor general laws ofthe state. TEX. CONST. art. XI,§ 5. Thus, home-rule cities have broad discretionary powers subject only to limitations enacted by the Legislature. Proctor v. Andrews, 972 S.W.2d 729, 733 (Tex. 1998). "A city is preempted from regulating in a field ifthe city'sregulation is expresslyprohibited, ifthe legislature intended state law to exclusively occupy that field, or ifthe city regulation conflicts with the state law even if

2Subsection (a) provides the requirements for the board of a reinvestment zone, "except as provided by Subsection (b)." TEX. TAX CODE ANN. § 3l1.009(a). Subsection (b) applies to zones designated under Section 311.005(4) allowing for a zone to be created by petition. See id § 3 l l.009(b).The Honorable Eddie Lucio, Jr.

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state law is notintended to occupythat field." Tex. Att'y Gen. Op. No. GA-0342 (2005) at 2. "A general law and a city ordinance will not be held repugnant to each other ifany other reasonable construction leaving both in effect can be reached." 

### City ofRichardson v. Responsible Dog Owners ofTex., 794 S.W.2d 17, 19 (Tex. 1990).
A home-rule city'sgeneralpolicepowersto promotethehealth, safety, andgeneral welfare ofits people may be legislatively circumscribed. 

### See Tex. Att'y Gen. Op. No. JC-0009 (1999) at 4-5 (recognizing that the Legislature may impose limits on the taxation authority of political subdivisions, including home-rule cities, pursuant to its plenary legislative powers). Particularly with respect to chapter 311 ofthe Tax Code, this office has recognized that "in the case oftax increment financing permitted by article VIII, section 1-g(b), a home-rule city does not exercise full power oflocal self-government but rather must look to general law implementing section 1- g(b) for the authority to engage intax increment financing." Tex. Att'y Gen. Op. No. GA-0276 (2004) at 5 (explaining that article VIII, section 1-g(b) ofthe Texas Constitution-the basis for chapter 311-is, for cities, an exception to the constitutional requirement that taxation be equal and uniform). Mindful ofthese principles, we consider generally whether charter requirements governing residency and term limits could conflictwith state law.
We first consider a city-residency requirement. In authorizing a city to do what is "necessary and convenient" to implement chapter 311, the Legislature has not completely preempted the field oftax increment financing. 

### See TEX. TAX CODE ANN. § 311.008(b) (West 2015). Yet, the Legislature has expressly reiterated the prohibition against a city enacting a conflicting provision. 

### Id. § 311.018 (West 2015). And the Legislature has enumerated precise eligibility requirements for a board member, particular even to the subsection under which the zone was created. 

### Id. § 311.009(e)(l)-(2). Suchprecision reveals an intent by the Legislature to affirmatively direct the eligibility requirements with respect to a prospective board member's nexustothezonebyresidenceorpropertyownership. Meredifferenceisnotnecessarily a conflict, but when the difference serves to narrow orrestrict a right orprivilege authorized by state statute it is likely impermissible. 

### See, e.g., Talley 

### v. City of Killeen, 418 S.W.3d 205, 209 (Tex. App.- Austin 2013, pet. denied) (concludingthat ordinance imposing 240-hour deadline in whichto file a disciplinary appeal "impermissibly narrowed" the ten-day deadline in statute). Thus, a charter provision requiring city residency that would preclude someone who otherwise satisfies the Legislature's nexus requirement from being eligible to serve as a board member would be inconsistent with state law. The conflict between a city residency requirement and subsection 311.009(e) would be irreconcilable: a person who was a city resident could satisfy the eligibility criteria imposed by the statute, but a non-resident landowner eligible to serve under subsection 311.009(e) would be ineligible because of the charter. Accordingly, a charter's inconsistent eligibility requirement that a person must be a resident ofthe city is likely void when applied to members ofthe board ofdirectors ofa tax incrementreinvestment zone createdunder chapter 311 ofthe Tax Code.
The same analysis applies to consideration of the second issue regarding a term-limit requirement. Subsection 311.009(c) establishes a term ofoffice for board members oftwo years but is silent regarding the total number ofyears or terms for which a board member may serve. 

### See TEX. TAX CODE ANN. § 3l1.009(c). Because subsection 311.009(c) imposes no term limit, it

### The Honorable Eddie Lucio, Jr.

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would allow a zone board member to serve an unlimited number ofterms. A charter's limit on terms apersonmay serve, here after sixyears, wouldhavethe effect ofending aperson's statutory eligibility to continue indefinitely serving as a board member. 

### See generally City ofCanyon v. Fehr, 121 S.W.3d 899, 904 (Tex. App.-Amarillo2003, no pet.) (recognizingthefact that "charter provisions and ordinances are subject to the general laws ofthis state also means that this state's general laws may permit what a charter prohibits"). This irreconcilable inconsistency between such a charter term-limit provision and subsection 31 l.009(c) would likely render the charter provision void to the same extent as the residency requirement.

### The Honorable Eddie Lucio, Jr.

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### SUMMARY The question whether the City of Galveston's Charter applies to a board ofa tax increment reinvestment zone created by the City under chapter 311 ofthe Tax Code is outside the purview ofan attorney general opinion. As a general matter, however, a charter provision allowing only city residents to serve on a tax increment reinvestment zone board is inconsistent with Tax Code subsection 311.009(e) and is likely void. Similarly, a charter provision limiting the number of terms a tax increment reinvestment zone board member may serve where subsection 311.009(c) would permit the board member to serve an unlimited number ofterms likely renders such a charter provision void.

CHARLES E. ROY First Assistant Attorney General BRANTLEY STARR Deputy Attorney General for Legal Counsel VIRGINIA K. 

### HOELSCHER Chair, Opinion Committee CHARLOTTE M. HARPER Very truly yours,

# ~?~ KEN PAXTON Attorney General ofTexas

Assistant Attorney General, Opinion Committee