Court Opinion

ID: 4130304
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:02:43.60361+00
Date Added: 2024-06-11T14:31:58.939196
License: Public Domain

April   24, 1990

Honorable  Carlos Valdez               Opinion    NO.   JM-1165
Nueces County Attorney
Nueces County Courthouse               Re:    Whether    consultant      to
901 Leopard, Room 206                  private corporation      that con-
Corpus Christi,   Texas  78401         tracts    with   the   state    re-
                                       ceives compensation      "directly
                                       or   indirectly"     from     state
                                       funds   within    article      XVI,
                                       section    40,   of   the     Texas
                                       Constitution       (RQ-1872)

Dear   Mr.   Valdez:

       You request      advice about      the application      of    article
XVI, section     40, of the      Texas Constitution      to a consultant
contract    entered into by the        mayor of Corpus Christi.           YOU
inform us that       the mayor,      working as     an independent       con-
tractor,    contracted    with a private corporation         that provides
services to retarded people.           Through contracts      with    either
the    State    of   Texas    or   with    private    individuals,        the
corporation     receives     revenues     from the    state    or    private
individuals.       These    revenues    are    comingled     and   used    to
pay business     expenses     including     fees paid     to    independent
contractors    such as the mayor.

      you also state that    the mayor was   not an employee      of
the corporation.    She never received    a salary or any     other
benefit paid to employees,    but was strictly   a consultant   who
contracted  on an hourly basis   as needed.    Earlier this year,
she terminated   her contract with the corporation.

       Article XVI,      section 40,      of the    Texas     Constitution
prohibits   individuals      from   holding     more    than    two    civil
offices    of     emolument,    with      certain     exceptions.        The
provision     that    is  relevant     to   your    question,      however,
applies    to   state    employees     and    certain     other     persons
compensated    directly    or    indirectly     by    the   state.      This
provision   states as follows:

                                      p. 6154
Honorable     Carlos    Valdez     - Page    2   (JM-1165)

            State   employees     or   other    individuals     who
            receive all     or  part of     their    compensation
            either directly    or    indirectly    from funds     of
            the State    of Texas     and   who are    not    State
            officers,   shall not be barred from serving as
            members of    the    governing   bodies    of    school
            districts,    cities,     towns,    or   other    local
            governmental     districts;     provided,     however,
            that such    State employees       or other    indivi-
            duals shall receive no salary for serving             as
            members of such governing       bodies.

Tex.   Const.    art.   XVI,     5 40.

      You wish to    know whether this       language applies to        an
independent   contractor    who contracts     with a private       entity
that receives    part    of    its revenues    under    contract     with
the State of Texas.       An individual      who receives      compensa-
tion "directly     or indirectly     from funds     of the     State    of
Texas . . .   shall  receive    no salary I8 for  serving   as  a  member
of the governing    body of a city.

      The present language     of article XVI,     section 40,     was
adopted in 1972.     The amendment   was proposed by Senate Joint
Resolution   29 of   the 62d Legislative     Session.    S.J.R.     29,
Acts 1971, 62d Leg., at 4133.      The  following   portion   of   the
title   of   the   resolution   describes    the   provision     under
consideration:

            permitting   State employees     or certain    other
            individuals,    who are   not State officers,      to
            serve as    members of    the governing    body    of
            school districts,    cities, or towns, or      other
            local   governmental     districts   without    for-
            feiting    their    salary     for   their     State
            employment.

      This portion of     the 1972 amendment      was a response        to
Bovett v. Calvert,    467 S.W.Zd      205 (Tex. Civ. App. - Austin
1971, writ     ref'd  n.r.e.),     s,                  405 U.S. 1035
(l-2),    which interpreted    the    text of article XVI,        section
33, of the     Texas Constitution      that was    repealed    in   1972.
w    G. Braden, The Constitution        of the State of Texas:          An
Annotated   and Comparative    Analysis    (2d. 1977).     Article XVI,
section 33, formerly provided       that    the state would not        pay
salary or compensation      to any agent,      officer or      appointee
who held any other     office or position       of honor, trust,        or
profit under     the state.     &     H.J.R.   27, Acts     1967,     60th

                                            p. 6155
Honorable     Carlos   Valdez   - Page    3   (JM-1165)

-cf., at 2989.      Bovett v.    Calvert held   that employees     of
Texas A & M University      could serve   on a city council       but
could not receive a state       salary from the university     while
doing so.    The proposal which amended section 40 of        article
XVI in 1972 also     amended section 33.      a   S.J.R. 29,    Acts
1971, 62d Deg., at 4133.      The effect of the 1972     amendment,
as indicated   by its title,     was that persons compensated      by
state funds who held local offices could receive their state
salary, but    could not    receive compensation    for the    local
office.

      The   repealed     version     of   article    XVI,    section    33,
applied to public       officers and employees         at the stat&     and
local    level.    Viewed      in   this   historical     context,      the
provision   that was designed       to correct the Bovett v. Calvert
result should     apply within       the same     parameters   as    former
section 33 --     that is,      to public     officers   and   employees.
Article XVI,     section    40,    deals   primarily    with   state    and
local officers.      In this context,       it is reasonable      to   read
the provision    you    inquire about as       applying to state        and
local employees,     in contrast       to officers,    and not    reaching
an independent    contractor      who may provide goods or        services
in exchange    for payment,     some of which is traceable        to state
funds.    The   scope    of the     provision     is reflected     in    its
language:

            State   employees    or other   individuals     who
            receive   [compensation from state funds] . . .
            who are not State officers    . . . .    (Emphasis
            added.)

Tex. Const . art. XVI, § 40.        We construe the provision      you
inquire about as applying       to state employees   and    employees
of local government,     for   example, school teachers,     but   not
to independent     contractors.     m    Attorney  General    Opinion
MW-230   (1980);   see also    Attorney   General   Opinion    JM-118
(1983) (teacher paid from       federal funds who received       state
retirement   benefits).

      A prior opinion of this office construing           the   repealed
language of article       XVI, section 33,      supports    our   conclu-
sion.   Attorney     General   Opinion    V-303     (1947)    considered
whether that     provision    barred    an employee      of   the   State
Highway Department     from working as an independent         contractor
for a   school    district.     The    relevant     language    of    that
constitutional    provision   read as follows:

                                         P- 6156
Honorable     Carlos   Valdez     - Page    4    (JM-1165)

                The  accounting    officers  of  this    State
            shall neither draw nor pay a warrant upon the
            Treasury   in favor of any person for salary or
            compensation   as agent, officer of    appointee,
            who holds at the     same time any other    office
            or position   of honor, trust, or profit     under
            this State. . . .

H.J.R.   27, Acts      1967,    60th   Leg.,    at 2989.

      The opinion stated that a person holding an "office                or
position   of honor,     trust or profit"       in a school     district,
would be    holding it     "under    this State."       An   independent
contractor,    however, was     not an    agent or     employee   of    the
school district.      See also     Attorney   General Opinion       MW-129
(1980) (an     independent    contractor     is not    an employee      for
purposes   of the Open Meetings Act).         Thus, a predecessor        of
the relevant provision       in article     XVI, section 40, did        not
reach someone who was an independent          contractor    of a    school
district.    The mayor     of Corpus Christi       was an    independent
contractor    of a private corporation       that contracts     with    the
State of    Texas -- a much      more remote      relationship    with     a
public    entity    than   that    discussed     in Attorney      General
Opinion V-303.

      Finally, Attorney      General Opinion      JM-782    (1987)    also
lends support     to our    construction    of   this provision.         It
construed   the language     of article III,       section   18,  of    the
Texas Constitution     that bars members of the legislature            from
being "interested,      either directly      or indirectly,        in   any
contract with the State,        or any county thereof,        authorized
by any law passed during the term for which he was elected."
The legislator    wished    to be   employed by      a transit      system
that received   state-administered       federal grant funds.           The
transit system     was   operated    by   a    nonprofit     corporation
established    by   political      subdivisions      to    receive      and
administer    federal    grant     funds    under    various       federal
programs.    We stated that the legislator         as employee     of   the
transit system would have no direct or indirect             interest     in
any contract with the state.         His interest      in any    contract
with the state     was too    remote to be      an indirect      interest
under section 18 of article III.

     Accordingly,  article XVI, section 40, does not prohibit
the mayor of Corpus Christi from contracting  as an   indepen-
dent contractor   with a private corporation    that  receives
state funds under contract with   the state.  In view‘of    our

                                           p. 6157
    Honorable     Carlos    Valdez     - Page     5    (JM-1165)

    answer   to   your      first     question,        we   need   not    answer   your
    second   question.

                                      SUMMARY

                   An individual    who contracts     as an indepen-
                dent contractor     with a private        corporation
                that receives    state funds under contract with
                the state does not receive all or part of his
                "compensation    either    directly   or    indirectly
                from funds     of the   State of     Texas"      within
                article XVI, section 40, of the Texas Consti-
                tution.    The individual    may serve as a member
                of the governing    body    of a school      district,
                city,    town,   or   other    local     governmental
                district   and receive salary for that service.

                                                      JIM      MATTOX.
                                                      Attorney  General     of Texas
P   MARY KELLER
    First Assistant        Attorney     General

    JUDGE ZOLLIE STEAKLHY
    Special Assistant  Attorney           General

    RENEA HICKS
    Special Assistant        Attorney     General

    RICK GILPIN
    Chairman,  Opinion       Committee

    Prepared by Susan L. Garrison
    Assistant Attorney General

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