Financial Reporting
ATTORNEY GENERAL CONSIDERS BOARD MEMBER FINANCIAL REPORTING REQUIREMENTS
Case citation: Tex. Att’y Gen. Op. GA-1082 (Sept. 23, 2014).
Summary: The El Paso County Attorney asked the Attorney General to consider school board trustee requirements for filing personal financial statements. The opinion request arose from Texas Education Code § 11.0641, enacted in 2013 that requires certain school district trustees to file a financial statement with the board of trustees and the commissioners court “beginning January 1, 2015.” A financial statement filed pursuant to § 11.0641 is governed by chapter 572, subchapter B, of the Government Code “as if the trustee were a state officer and the commissioners court… were the Texas Ethics Commission.” Under Texas Government Code § 572.026(a) state officers, and consequently school district trustees, must file the statement “[n]ot later than April 30 each year.” The financial statement must include “an account of the financial activity of the individual … for the preceding calendar year.” Thus, pursuant to § 11.0641, on January 1, 2015, a school district trustee has until April 30, 2015, to file a statement concerning that trustee’s personal financial activity that occurred during the 2014 calendar year.
The request first concerned the effect of a resignation on the financial statement filing requirement. For example, does a school district trustee “who resigns before and does not hold over” the office either “after January 1, 2015” or “between January 1, 2015 and April 29th 2015” have to file a financial statement for the 2014 calendar year? The Attorney General also was asked whether a commissioners court may “adopt a rule requiring school trustees who resign before and do not hold over after January 1, 2016 to file a personal financial statement under the new statute such that a trustee must file a financial statement for every year, or part of a year, during which he held office after January 1, 2015.”
Ruling: The Attorney General concluded that a school district trustee subject to § 11.0641 of the Education Code who holds office at any time on or after January 1, 2015, including in a holdover capacity, must file a financial statement under § 11.0641 for the 2014 calendar year. A school district trustee who has resigned and whose successor has been duly qualified and sworn into office prior to January 1, 2015 is not required to file a 2014 financial statement under § 11.0641. The Attorney General observed that the Texas Ethics Commission (the “Commission”) is charged with administering and enforcing the financial statement filing scheme of Government Code, chapter 572. The Commission has issued instructions that the filing requirement “extends to each person who served as a state officer for any part of the period beginning January 1 of the year the statement is due and ending April 30.” Under article 16, section 17 of the Texas Constitution, known as the holdover provision, all state officers “shall continue to perform the duties of their offices until their successors shall be duly qualified.” If a trustee resigns prior to January 1, 2015, but a successor is not duly qualified and sworn into office prior to that date, then the trustee who resigned still holds office on January 1 by operation of the constitutional holdover provision. Likewise, a trustee who resigns between January 1, 2015, and April 29, 2015, is still an officeholder on January 1. Under § 11.0641, a school district trustee holding office at any time on or after January 1, 2015, including in a holdover capacity, must file a financial statement by April 30, 2015, for the 2014 calendar year. A school district trustee who has resigned and whose successor has been qualified and sworn into office prior to January 1, 2015, is not required to file a 2014 financial statement under § 11.0641. By way of example, under such a rule, “a trustee who leaves office during 2015 and is replaced before the end of the 2015 calendar year either by resignation [or] end of term would still be subject to filing a personal financial statement in April of 2016 for the period of time he served as a trustee during 2015.”
The Attorney General also concluded that the El Paso County Commissioners Court did not have the authority to impose additional burdens or conditions in excess of the existing statutory filing requirements chosen by the Legislature. According to the Attorney General, “[A] commissioners court’s power is limited to that which is expressly delegated to it by the Texas Constitution or Legislature, or necessarily implied to perform its duties.” Section 11.0641 assigns a commissioners court the specific duty to “determine from any available evidence whether a statement required to be filed under [section 11.0641] is late,” and if it is late, to determine the amount of a civil penalty, subject to certain limitations. Section 11.0641 does not give the commissioners court express authority to promulgate rules requiring the filing of additional financial statements. Such authority would be implied only if the promulgation of the rules was “necessary to accomplish its assigned duty.” The rule described here is not related to the assigned duty of determining timeliness of statements and, instead, imposes additional burdens and conditions in excess of the existing statutory filing requirements. An administrative rule ‘”may not impose additional burdens, conditions or restrictions”’ beyond what is authorized by statute. Thus, the commissioners court lacks authority to adopt a rule requiring a school district trustee who has resigned and whose successor has been duly qualified and sworn into office prior to January 1, 2016, to file a personal financial statement under § 11.0641 of the Education Code concerning the personal financial activity that occurred during the 2015 calendar year.
Conflicts of Interest
DOES SERVICE AS A JUVENILE PROBATION OFFICER AND BOARD TRUSTEE CREATE A CONFLICT OF INTEREST?
Case citation: Tex. Att’y Gen. Op. GA-1083 (October 7, 2014).
Summary: The Nolan County Attorney asked the Attorney General whether concurrent service as a juvenile probation officer and a school board trustee creates a conflict of interest. The County Attorney noted that the school district partially funds the Juvenile Department at which the individual serves as a probation officer. Therefore, the district’s preparation of its budget potentially requires the probation officer to be involved in decisions concerning funding of the Juvenile Department. In addition, under certain circumstances, the board may be required to call a meeting between the district and the Juvenile Department involving the probation officer and a juvenile case manager. The Attorney General considered whether the two positions created a prohibited conflict of interest under the Texas Constitution, the doctrine of incompatibility, or chapter 171 of the Local Government Code.
Ruling: The Attorney General determined that concurrent employment as a juvenile probation officer and a school board trustee did not create a conflict of interest. The Attorney General first considered article XVI, section 40 of the Texas Constitution, which provides that “[n]o person shall hold or exercise at the same time, more than one civil office of emolument.” A “civil office” for purposes of this provision is a “public office.” The position of school district trustee is a public office, but as it is an uncompensated position, it is not one “of emolument.” Thus, article XVI, section 40 did not bar the dual service.
Absent a constitutional prohibition, the Attorney General next considered the doctrine of incompatibility. There are three aspects of incompatibility: (1) self-appointment, (2) self-employment, and (3) conflicting loyalties. The last of the three, conflicting loyalties incompatibility, requires that both positions be public offices. Because a juvenile probation officer does not exercise duties independent of the control of others, the position was not considered a “public office” and conflicting-loyalties incompatibility did not apply. Likewise, self-appointment incompatibility did not apply because the board of trustees had no appointment authority over juvenile probation officers.
Self-employment incompatibility prohibits an individual “from holding both an office and an employment that the office supervises.” According to the Attorney General, the board of trustees does not directly supervise the probation officer. In addition, the district’s partial funding of the Juvenile Department does not authorize the district to supervise employees of the Juvenile Department. Similarly, Education Code § 37.013, which authorizes a meeting held between the district and the Juvenile Department’s board, is not a basis for the district or its presiding member to control, supervise or impose policies on the employees of the Juvenile Department. Thus, dual service as a probation officer and board trustee is not prohibited by self-employment compatibility.
The Attorney General next considered conflicts of interest governed by chapter 171 of the Local Government Code, which provides that “[i]f a local public official has a substantial interest in a business entity,” the official must declare the interest in an affidavit filed with the governmental body and abstain from further participation in the matter. The Attorney General observed that, while a board trustee is a “local public official,” it is unlikely that the Juvenile Department is a “business entity” under the statute. Even if it were a business entity, the statute does not bar concurrent dual service, but only requires that the official file an affidavit and abstain from participation in the matter that creates a conflict. The Attorney General advised that following the procedures under Local Government Code, chapter 171 of declaring a conflict and abstaining from participation “may be a prudent course for local officials who wish to avoid any appearance of impropriety.”
Comments: While no conflict existed here, when in doubt the Attorney General advised that declaring a conflict and abstaining from participation is a safe way to avoid a conflict under these circumstances.
