OFFICE OP THE Arr0RNF.V GENERAL. ST*TE OF TEXAS JOHN CORNYN



### May 26,1999

Ms. Kimberly K. Edwards Executive Director Texas Public Finance Authority 300 West 15th Street, Suite 411 P.O. Box 12906 Austin, Texas 7871 l-2047 Opinion No. JC-0053

Re: Whether abond pricing attended by less than
aquorum of the Texas Public Finance Authority Board of Directors constitutes ameeting subject to the Open Meetings Act (RQ-0016)

Dear Ms. Edwards:

You ask whether the meeting of a committee of less than a quorum of the Texas Public Finance Authority Board ofDirectors (the “Board”) appointed by the Board to act on its behalf in selling bonds pursuant to article 717q ofthe Revised Civil Statutes is subject to the Open Meetings Act, TEX. GOV’T CODE ANN.ch. 551(Vernon 1994 &Supp. 1999). Ifso, you ask whether meetings of such committees may be held outside the state. We conclude that apricing committee appointed by the Board is a governmental body within the meaning of the Open Meetings Act and that its meetings are subject to the Act. This conclusion applies to pricing committees composed of staff
or staff and board members; it is not limited to pricing committees composed ofboard members. We also conclude that because the Act requires ameeting of a governmental body to be held in a location accessible to the public, itprecludes apricing committee from meeting in an inaccessible location, such as the office of an underwriter in another state.

We begin with abrief review ofthe Texas Public Finance Authority (the “Authority”) and the nature of the committees at issue in your request. The Authority, established and governed by the Texas Public Finance Authority Act, TEX. REV. Crv. STAT. ANN.art. 601d (Vernon Supp. 1999), is a“public authority and body politic and corporate,” 

### id. 53, authorized to issue and sell bonds on its own behalf and on behalf of certain state agencies, see 

### id. $5 9-9D. Itis governed by the Board, which is composed of six members appointed by the Governor with the advice and consent ofthe Senate. 

### Id. 54(a). Amajority ofthe full membership ofthe Board constitutes aquorum. 

### Id. §6(b).

You inform us that the Authority is charged with issuing and selling general obligation and
revenue bonds and other obligations and is anissuer under article 717q ofthe Revised Civil Statutes,Ms. Kimberly K. Edwards - Page 2 (X-0053)

Section 3ofarticle 717q requires agoveming body authorized to act onbehalf ofanissuer’ to adopt
an ordinance, order or resolution authorizing the sale ofbonds and permits the governing body to designate one or more officers or employees to act on its behalf in selling bonds. See 

### id.art.717q, 53. Section 3provides in pertinent part:

The issuance ofobligations shall be authorized by resolution, order, or ordinance of the governing body of an issuer, which resolution, order, or ordinance shall fix the maximum amount of obligations to be issued or, if applicable, the maximum principal amount which may be outstanding at any time, the maximum term obligations issued and delivered pursuant to such authorization shall be outstanding, the maximum interest rate to be borne by the obligations, the manner of sale (which may be by either public or private sale), price, form, terms, conditions, and the covenants thereof. The 

### resolution, order, or ordinance authorizing the issuance ofobligations may provide for the designation of apaying agent and registrar for the obligations and 

### may authorize one or more designated ofleers oremployees ofthe issuer toactonbeharfof the issuerfrom time totime intheselling anddelivering ofobligations authorized andfrxing thedates,price, interestrates,interestpayment periods, andotherprocedures asmaybespecified intheresolution, order, orordinance. Obligations may be issued in such form or such denomination, payable at such time or times, in such amount or amounts or installments, atsuch place orplaces, in such form, under such terms, conditions, and details, in such manner, redeemable prior to maturity at any time or times, bearing no interest, or bearing interest atany rate orrates (either fixed, variable, floating, adjustable,
or otherwise, all as determined in accordance with the resolution, .order, or ordinance providing for the issuance of the obligations, which resolution, order, or ordinance may provide aformula, index, contract, or any other arrangement for the periodic determination of interest rates), not to exceed the maximum net effective interest rate allowed by law and may be signed or otherwise executed in such manner, with manual or facsimile signatures, and with or without a seal, all as shall be specified by the governing body of the issuer in the resolution, order, or ordinance authorizing the issuance of the obligations.


### Id. (emphasis added).

‘“Governing body” in article 717q means “the board, council, commission, commissioners court, or other designated body (acting either individually orjointly, when authorized by law) authorized by law to issue bonds foror on behalf of an issuer.” TEX.E&v. CIV.STAT.ANN. art.717q, g l(7) (Vernon Supp. 1999).Ms. Kimberly K. Edwards - Page 3 (X-0053)

You explain that when the Board sells bonds pursuant to anegotiated sale (as opposed to a competitive sale, for which bids are opened in apublic meeting), it appoints one or more of its offtcers or employees under the authority of section 3“to serve as apricing committee to negotiate the final terms and conditions of the bond sale within the parameters established in the bond resolution and [to] complete the sale by signing a bond purchase contract.” Letter from Ms. Kimberly K. Edwards, Executive Director, Texas Public Finance Authority, to Honorable John Comyn, Texas Attorney General 2(Feb. 1,1999) (on file with Opinion Committee) [hereinafter “Request Letter”]. “[Alfter the Board has established the general parameters for the pricing and other terms and conditions ofthe bonds inthe bond resolution, which it adopts in apublic meeting, the exact, technical features ofthe bonds can be established through negotiations between the issuer and the underwriter to maximize investor demand on the day of pricing and thus lower interest rates.” 

### Id. You state that “[a]hhough the pricing committee exercises some discretion with respect to fixing the final terms of the sale, the discretion is limited to action within the provisions of the bond resolution” adopted by the Board. 

### Id. at 3. You also inform us that typically the meetings of pricing committees occur on the premises ofthe underwriter’s trading desk, often inNew York City
or other financial centers outside the state, see 

### id.at 2,6, and explain that the presence of apricing committee atthe underwriter’s office “ensures meaningful negotiations, and guarantees that persons with the authority to act are available torespond tomarket conditions,” 

### id.at6. We understand from the facts presented in your letter that after the Board establishes the parameters of the sale in the resolution and appoints the pricing committee, the pricing committee negotiates the sale and executes the bond purchase contract. No further action is taken by the Board.

With this background, we turn to your questions. Again, you ask whether the meeting of a pricing committee composed of two or more but less than a quorum of the Authority’s Board appointed by the Board pursuant to aresolution under section 3ofarticle 717q issubject tothe Open Meetings Act. Ifso, you ask whether meetings ofpricing committees may be held outside the state.

Based on the facts you have provided, we conclude that apricing committee appointed by the Board pursuant to section 3 of article 717q to negotiate and finalize a bond sale is itself a “governmental body” subject to the Act. For purposes ofthe Act, the term “governmental body” is defined to include “aboard, commission, department, committee, or agency within the executive or legislative branch of state government that is directed by one or more elected or appointed members.” TEX. GOV’T CODE ANN.4551.001(3)(A) (Vernon 1994). In addition, the Act defines
a“meeting” as “a deliberation between aquorum of agovernmental body, orbetween aquorum of
agovernmental body and another person, during which public business orpublic policy over which the governmental body has supervision or control is discussed or considered or during which the governmental body takes formal action.” 

### Id. 6551.001(4). Because the Act defines ameeting to involve discussion, consideration or final action on public business orpublic policy over which the governmental body has supervision orcontrol, see 

### id.,agovernmental body must have the authority to supervise or control public business or policy in order to fall within the Act’s scope. See Gulf 

### RegionnlEduc. TelevisionAH.v. University ofHouston, 746 S.W.2d 803,809 (Tex. App.-Houston [14th Dist.] 1988, writ denied). For this reason, Attorneys General have concluded that bodies thatMs. Kimberly K. Edwards - Page 4 (JC-0053)

would otherwise fall within the definition of a state-level governmental body set forth in section 551.001(3)(A) that have merely advisory duties arenot subject tothe Act. See, e.g., Tex. Att’y Gen. Op. Nos. JM-331 (1985) (citizens advisory panel to state agency with no power to supervise or control public business not subject to the Act); H-994 (1977) (university committee that made recommendations toboard ofregents regarding selection ofadministrative officers not subject tothe Act); Tex. Att’y Gen. LO-97-058, at 5-6 (Texas Funeral Service Commission complaint review committee not subject to Act when itmeets informally with licensees to make recommendations to full Commission); LO-93-64 (student fee advisory committee at a public university that made recommendations for consideration by board ofregents not subject to the Act).

As you describe the pricing committees, the committee members are appointed by the Board pursuant to aresolution under section 3ofarticle 717q and are authorized pursuant tothe resolution to negotiate and commit to bond sale terms and to execute abond purchase contract onbehalf ofthe Board. Based on these facts, we believe a pricing committee is a “committee within the executive branch that isdirected by one ormore appointed members,” TEX. GOV'T CODE ANN. 5 551.001(3)(A) (Vernon 1994) members appointed by the Board pursuant to section 3 of article 717q. Given that pricing committee members are appointed by the Board pursuant to statutory authority, apricing committee falls within this definition regardless ofits composition, 

### i.e., whether itiscomposed ofboard members, staff, or acombination ofthe two. Furthermore, because
a pricing committee is authorized to negotiate the terms of a bond sale and to execute a bond purchase contract without any further action by the Board, it has control over public business. Accordingly, we conclude that apricing committee appointed by the Board pursuant to section 3of article 717q is itself a governmental body within the Act’s definition of the term. See Tex. Att’y Gen. LO-97-058, at3-5 (TexasFuneral ServiceCommissioncomplaintreviewcommitteeconsisting oftwo Commission members and others that was delegated authority to investigate complaints and supervise investigations exercised and controlled public business and was itself agovernmental body subject to the Act when it reviewed investigations). Again, we stress that this conclusion is not limited to pricing committees composed of board members; it applies with equal force to pricing committees composed of staff or staff and board members. See 

### id.

You urge us to conclude that apricing committee isnot subject to the Act because a“pricing committee acts only after the full Board has deliberated the material terms ofthe bond issue in an open meeting and adopted aresolution governing the sale” and because “the activities ofthe pricing committee must be carried out only upon and within the limits of the Board’s delegation, which
occurs in an open meeting. Although the pricing committee exercises some discretion with respect to fixing the final terms of the sale, the discretion is limited to action within the provisions of the bond resolution already adopted by the Board.” Request Letter, 

### supru, at 3. You also describe a pricing committee’s duties as “technical and ministerial in carrying out the policy direction and decisions of the full Board as set out in the bond resolution.” 

### Id. at 5. Elsewhere in your letter, however, you state that a pricing committee’s “ability to negotiate and renegotiate is extremely important to ensuring that the Authority isborrowing for the State atthe lowest possible cost,” 

### id., and that the presence of a pricing committee at the underwriter’s office “ensures meaningfulMs. Kimberly K. Edwards - Page 5 (X-0053)

negotiations, and guarantees that persons with the authority to act are available torespond to market conditions,” see 

### id. at 6, thus indicating that pricing committees exercise substantial authority.

You contend, in essence, that apricing committee does not control public business within the meaning ofthe Act because acommittee’s discretion islimited in advance by the Board. While
we are not aware of anyjudicial or attorney general opinion addressing an analogous situation, we believe that existing opinions ofthis office resolve your contention. This office has concluded that
agovernmental body need not have total and complete control over public business orpublic policy in order to be subject to the strictures of the Act. In Attorney General Opinion DM-284, for example, this office considered whether several associations established under the Insurance Code
were governmental bodies subject to the Act. See Tex. Att’y Gen. Op. No. DM-284 (1994). The opinion concluded that although the former State Board of Insurance and the Commissioner of Insurance exercised some control over these associations and the associations were not completely autonomous, they were nevertheless subject tothe Act because they were not merely advisory bodies and exercised some control and supervisory authority over public business. See 

### id. at 4; see also Tex. Att’y Gen. Op. No. H-438 (1974) (governmental body need not exercise complete control over public business in order to be subject to the Act; supervision over public business is sufficient). Here, although the Board’s resolution may limit the discretion ofapricing committee, itappears that
aresolution also authorizes a committee to exercise substantial delegated authority within those limits to negotiate bond sale terms and to execute abond purchase contract on the Board’s behalf without subsequent action by the Board. Because apricing committee exercises authority 

### over a bond sale that is not contingent on subsequent Board action, we believe that apricing committee exercises sufficient control over public business to constitute a governmental body within the meaning of the Act.

Now we address whether apricing committee may hold its meetings in the office of an underwriter inNew York City oranother financial center outside the state. We conclude that the Act requires a meeting of a governmental body to be held in a location accessible to the public and therefore precludes apricing committee from meeting in an inaccessible location, such asthe office of an underwriter in another state. The Act does not contain any language governing meeting locations, and we have not been able to locate any Texas judicial or attorney general opinion addressing this issue. Our conclusion isbased on the language ofthe Act, which presupposes that
ameeting isphysically accessible to the public.

“The Act is intended to safeguard the public’s interest in knowing the workings of its governmental bodies.” 

### Cox Enterprises, Inc. Y.Board of

### Trustees, 706 S.W.2d 956, 960 (Tex. 1986). To this end, section 551.002 of the Government. Code provides that every meeting of a governmental body must be open to the public except asprovided elsewhere in the Act. See TEX. GOV’T CODE ANN. 5 551.002 (Vernon 1994). We believe that section 551.002 requires that a meeting must be physically accessible to the public. While a governmental body may conduct closed sessions regarding certain matters, see 

### id. $5 551.071-.085 (Vernon 1994 & Supp. 1999) (bases for executive sessions), it may do so only if the governmental body first meets in open session, see 

### id. 5551.101 (Vernon 1994). Again, the announcement that agovernmental body willMs. Kimberly K. Edwards - Page 6 (X-0053)

meet in executive session must be physically accessible to the public. Even the recent provision authorizing a governmental body to conduct a meeting by videoconference call assumes that members ofthe public will have physical access to each location ofthe meeting where amember of the governmental body will bephysically present. See 

### id.5551.126(d) (Vernon Supp. 1999)(“Each of the locations shall be open to the public during the open portions of the meeting.“)?

We

### notethat section 55l.OOl(4) ofthe Act provides that the term “meeting” does not include the attendance of a quorum of a governmental body at a regional, state or national convention
or workshop “if formal action is not taken and any discussion of public business is incidental to the convention[] or workshop.” 

### Id. 5 55l.OOl(4) (Vernon 1994). Section 55l.OOl(4) allows members of agovernmental body to participate in certain types of conventions or workshops held outside the governmental body’s jurisdiction ifthe members do not take final action or deliberate regarding public business. Section 551.001(4) does not authorize a governmental body to hold a meeting at a location inaccessible to the public,

In sum, although noprovision ofthe Act mandates where meetings must beheld orexpressly prohibits a governmental body from holding a meeting at an inaccessible location, the Act’s provisions assume that meetings will be held in locations accessible to the public. A meeting held in an inaccessible location would violate the Act. Whether ameeting location is accessible to the public for purposes of the Open Meetings Act is ultimately a question of fact, however, and may depend upon, for example, the type of governmental body, the nature ofthe interested public, the meeting location, and its distance from the governmental body’s jurisdiction. 

### See,e.g., Wiedemann
v. Town of

### Hilton Head Island, 500 S.E.2d 783, 785-86 (S.C. 1998) (town council required to demonstrate necessity ofholding workshop atprivate club 45miles outside city’s municipal limits); 

### Rhea Y.School Bd. ofAlachua County, 636 So.2d 1383, 1386 (Fla. Dist. Ct. App. 1994) (meeting ofcounty school board held 100miles from board’s headquarters atconvention hotel did not afford citizens of county reasonable opportunity to attend); Kan. Att’y Gen. Op. Nos. 86-153 (meeting of Kansas Dental Board in Kansas City, Missouri at dental school reunion not inaccessible to the interested public for purpose of Kansas Open Meetings Act); 82-133 (retreat of Kansas municipal governing body in Colorado mountains unreasonably inaccessible to residents ofmunicipality and would violate Kansas Open Meetings Act). Although this office is not atrier of fact and may not be able to resolve this fact-bound issue in other instances,” we find ithighly unlikely that ameeting of a Texas governmental body in an underwriter’s oftice in New York City, half a continent’s distance from the state, is accessible to the public for purposes of the Texas Open Meetings Act.

‘The Seventy-sixth Legislahlre has enacted, and the Governor has signed into law, Senate Bill 1368, which renumbers sectioti551.126,addedbyActofMay30,1997,75thLeg., R.S.,ch. 1038,f,2,1997Tex.Gen. Laws3896, 3897, as section 551.127. See Act of April 23, 1999, 76th Leg., R.S., S.B. 1368, 5 19.01(50) (1999) (enacting nonsubstantive corrections to various codes) (effective September 1, 1999).

‘See Tex. Att’y Gen. Op. Nos. K-0007 (1999) at 5 (“[tlhis oftice does not make fact findings”); DM-383 (1996) at 2 (questions of fact are inappropriate for opinion process); DM-98 (1992) at 3 (questions of fact cannot be resolved in opinion process); H-56 (1973) at 3 (improper for Attorney General to pass judgment on matter that would be question forjury determination); M-187 (1968) at 3 (Attorney General cannot make factual findings).Ms. Kimberly K. Edwards - Page 7 (X-0053)

SUMMARY

A pricing committee appointed by Texas Public Finance Authority Board ofDirectors pursuant to section 3of article 717q of the Revised Civil Statutes to act onthe Board’s behalf in negotiating
abond sale and executing abond purchase contract is agovernmental body subject to the Open Meetings Act, TEX. GOV’T CODE ANN. ch. 551 (Vernon 1994 & Supp. 1999). Because the Act requires a meeting ofagovernmental body tobe held in alocation accessible to the public, it precludes a pricing committee from meeting in an inaccessible location, such as the office of an underwriter in another state.

Yo svery truly,

Lo ;, “i c L O-b? “\

“J JOkN CORNYN Attorney General ofTexas

ANDY TAYLOR First Assistant Attorney General

CLARK KENT ERVIN Deputy Attorney General - General Counsel

ELIZABETH ROBINSON Chair, Opinion Committee
Prepared by Mary R. Crouter Assistant Attorney General