of InsuranceCom- missioners,the BankingDepartment,the RailroadCommission, or the Texas LiquorControlBoard?" "
The Act itselfIs a conflictsof interestsstatuteas set out in the quotedportionsof Ssction1, supra. The Legislatureevidently felt that a substantialconflictof interestswould not result from stock ownershipper se, for filing of the affidavitis requiredonly when one is "an officer,agent, or memberof, or owns a controllinginterestin any corporation,firm, partnershipor otherbusinessentity. . . ." As explainedhereafter,the pbrase "memberof" does not apply to stock 'ownership. . I . ..r*.
Eon. Zollie Steakley,page 5 (W-202)
A minoritystockholderclearlycouldbe an agent or officer of a corporationand would be requiredto file the affidavit. A minority . stockholdercan controla corporation.The percentageof stockrequired to controla 'corporationIncludesmauy matters,such as stock distribu- tion amongstthe stockholders, emouut of stockvoted by proxy,by whom the proxieswere held, and the outsidebusinessand personalrelationships betweenthe stockholders to the corporation.
One vote or share over fifty per cent (@) of the stockowner- ship will be controllingas a matter of law. Ownershipof fifty per cent (50%)or less can be controllingunder certaincircumstances.It Is a questionof fact to be determinedin each such case. Initially,it is for the individualstockholderto determineif his interestis controlling, but his decisionIs not final. The individualstockholdergenerallyknows if his Interestis controlling; however,in this matter his determination will be subjectto reviewby his superiors,and if necessary,by the courts Therefore,a minoritystockholder,in those cases in which his interest is a controllinginterest,would be requiredto file the affidavitrequire< by Section3(b) of the Act.
Two other of your questionsare:
"Is an officeror employeeof a State agency,legislator or legislativeemployeerequiredto file the sworn stat-t under Section3(b) If he Is a member of a creditunion organ- ized under the provisionsof Title 46, R.C.S. of Texas, and which is subjectto the jurisdictionof the RankingDepartmentt'
"6. IS an officeror employeeof a State agency,legis- lator or legislativeemployeerequiredto file the sworn state- ment under Section3(b) if he is the owner of a policy of ln- suranceIn a mulpl life, mutual casualtyor fire insurance companyunder the jurisdictionof the Board of InsuranceCom- missioners?"
Section3(b) is not designedto requirethe disclosureof every financialinterestor investmentby the affectedpersonnel. This is clear indicatedby requiringonly disclosureby officers,agents,members,or ovnersof designatedinterests. This Bill, accordingto Section1, is directedonly againstsubstantialconflictsof interestsIn the discharge of public duties. Every financialinvestmentin a businesssubjectto the jurisdictionof the State regulatoryagenciescould,under some cir- cumstances,cause some degree of conflictof interests,but every conflict will not be substantial.Accordingly,the dividingline betweenInterests that are requiredto be disclosedby Section3(b) and those that are Mt requiredto be disclosedis whether the financialinterestis of such nature, quality,and quantumas to tend to createa substantialconflict. Hon. Zollie Steakley,page 6 (WV-2021
The dominantrelationship between the creditunion and Its mem- ber is that of borroweror investor,as the case may be. The dominant relationship betweenthe owner of a mutual insurancepolicyand the in- sursncecompanyis that of the insuredand the insurer. In both cases the participation in managementupon the part of most membersis, as a practicalmatter,negligible.Members of creditunionsandmutualin- surancecompaniesare not primarilyinterestedin the managementaspects, nor Q they regardthemselvesas being the ownersof interestsin busi- ness entitles. Such interests,per se, are not substantialenoughto tend to causea substantialconflictof interestswithinthe meaningof the Act. This is not true of an officeror agent of such entitles,or