Honorable Marcus D. Taylor Opinion No. JM-1187 

Criminal District Attorney 

Wood County Re: Eligibility of a realtor 

P. 0. Box 689 to serve on the board of dirQuitman, Texas 75783 ectors of an appraisal district (RQ-1880) 

Dear Mr. Taylor: 

YOU ask about the following situation involving a 

member of the board of directors of an appraisal district: 

The appraisal district signed an earnest 

money contract with an individual to purchase 

z;;;zn property to house the appraisal 

. The realtor for the seller iS a 

member of the appraisal district board of 

directors. That board member has abstained 

from all votes concerning this matter. 

You ask whether the real estate transaction in question 

would contravene section 6.036 of the Tax Code,1 the common 

law doctrine of incompatibility, or the common law rules 

relating to conflicts of interest. 

The common law doctrine of incompatibility is 

inapplicable to the situation you describe since it applies 

to incompatibility of two or more public positions. See 

Attorney General Opinions JM-133, JM-129 (1984). The board 

member's work as a realtor is in a private capacity, not a 

public capacity. 

Section 6.036 of the Tax Code governs conflicts of 

interest involving appraisal district board members. That 

1. Although your request letter refers to section 

6.03 of the Tax Code, we assume you are asking about section 

6.036 of the Tax Code, which deals with conflicts of 

interest. 

P. 6259 
Honorable Marcus D. Taylor - Page 2 (JM-1187) 

section prohibits an appraisal district from entering into a 

contract with a member of the board of directors of an 

appraisal district. Whether the real estate transaction you 

describe violates section 6.036 depends on whether the board 

member himself has entered into a contractual relationship 

with the board. Your description of the transaction in 

question suggests that the board member has a contractual 

relationship only with the seller, not with the board. If 

that is the case, there is no violation of section 6.036. 

If, however, the board member acted as an agent for the 

board as well as the seller, the transaction would be in 

violation of section 6.036 and the board member's abstention 

would not cure the violation. See uenerallv Janes v. P 

Co;-, ;Z?itS.W.2d 733, 740 (Tex. App. - Houston [lst DisE.7 

ref*d n.r.e.) 

genekally paid by seller, 

(real estate commission is 

and broker is generally recognized 

as seller's agent); &illiu Camnbeu 480 S.W.2d 250 

(Tex. Civ. App. - Houston ;14% Dist.] '1972 writ 

n.r.e.) (broker may act for both buyer a;d seller with 

ref'd 

fuli 

knowledge and consent of both principals); Chamberlain v. 

North Cent. Inv. Corm% 

Amarillo 1968, : 

432 S.W.Zd 581 (Tex. Civ. App. - 

writ ref d n.r.e.) (dealing with relationship 

between vendor and members of multiple listing service). 

Chapter 171 of the Local Government Code governs 

conflicts of interest involving local officials.2 It makes 

it an offense' for a local public official to participate in 

a vote or decision on a matter involving a business entity 

in which the local public official has a substantial 

interest if it is reasonably foreseeable that an action on 

the matter would confer an economic benefit to the business 

entity involved. Local Gov't Code S 171.003(a)(l). A board 

member of an appraisal district is a "local public official" 

for purposes of chapter 171. & 5 171.001(l); Attorney 

General Opinion JM-1060 (1989). A person has a "substantial 

interest" in a business entity if he owns "10 percent or 

more of the voting stock or shares of the business entity" 

or owns either 10 percent or more or $5,000 or more of the 

2. Chapter 171 preempts the common law of conflicts 

of interest as applied to local public officials. Local 

Gov't Code 5 171.007(a); see also Attorney General Opinion 

JW-424 (1986). Also, a member of the board of an appraisal 

district must comply with both chapter 171 of the Local 

Government Code and section 6.036 of the Tax Code. m Tax 

Code 5 6.036(f) (section 6.036 does not limit application of 

any other law). 

P. 6260 
Honorable Marcus D. Taylor - Page 3 (JM-1187) 

or owns either 10 percent or more or $5,000 or more of the 

fair market value of the business entity or if "funds 

received by the person from the business entity exceed 10 

percent of the person's gross income for the previous year." 

Local Gov't Code s 171.002(a)(l). You have not provided 

sufficient information for us to know whether the board 

member in question has a substantial interest in a business 

entity that is involved in a real estate transaction with 

the board. 

If the board member does have such an interest, the 

board member must comply with section 171.004, which 

provides: 

(a) If a local public official has a 

substantial interest in a business entity or 

in real property, the official shall file, 

before a vote or decision on any matter 

involving the business entity or the real 

property, an affidavit stating the nature and 

extent of the interest and shall abstain from 

further participation in the matter if: 

(1) in the case of a substantial 

interest in a business entity the 

action on the matter will have a 

special economic effect on the business 

entity that is distinguishable from the 

effect on the public: or 

(2) in the case of a substantial 

interest in real property, it is 

reasonably foreseeable that an action 

on the matter will have a special 

economic effect on the value of the 

prope*y, distinguishable from its 

effect on the public. 

(b) The affidavit must be filed with the 

official record keeper of the governmental 

entity. 

(c) If a local public official is required 

to file and does file an affidavit under 

Subsection (a), the official is not required 

to abstain from further participation in the 

matter requiring the affidavit if a majority 

of the members of the governmental entity of 

which the official is a member is composed of 

persons who are likewise required to file and 

p. 6261 
Honorable Marcus D. Taylor - Page 4 (JM-1187) 

. 

who do file affidavits of similar interests 

on the same official action. 

See also j& 55 171.006 (effect of violation), 171.005 

(separate vote required on matter in which member of 

governing body has substantial interest). We note that 

Attorney General Opinion JM-379 (1985) indicated that 

t~pa*icipationl~ in a matter included deliberation with the 

board about the matter. 

Because chapter 171 of the Local Government Code 

preempts the common law of conflicts of interest as applied 

to local public officials, we need not consider whether the 

common law would nrohibit the transaction in cuestion. 

Local Gov't Code §-171.007(a): see also Attorney- General 

Opinion JM-424 (1986). 

SUMMARY 

Whether chapter 171 of the Local 

Government Code or section 6.036 of the Tax 

Code prohibits a member of the board of 

directors of an appraisal district from 

acting as a real estate agent for a vendor 

who sells real property to the appraisal 

district depends on the facts of the specific 

transaction. 

Very truly yo 

J A;, f* 

JIM MATTOX 

Attorney General of Texas 

MARYEEJXER 

First Assistant Attorney General 

IOU MCCREARY 

Executive Assistant Attorney General 

JUDGE ZOLLIE STEAKLEY 

Special Assistant Attorney General 

RENEA HICKS 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Sarah Woelk 

Assistant Attorney General 

P. 6262