Untitled Texas Attorney General Opinion

OFFICE OF THE ATTORNEY GENERAL - STATE OF TEXAS

JOHN CORNYN

February 22,200l

The Honorable Jeff Wentworth Opinion No. JC-0345

Chair, Redistricting Cornmittee

Texas State Senate Re: Whether members of the board of directors of

P.O. Box 12068 the Texas State Affordable Housing Corporation are

Austin, Texas 7871 l-2068 state officers whose gubernatorial appointments

must be made with the advice and consent of the

Texas Senate (RQ-0284-JC)

Dear Senator Wentworth:

You ask whether members of the board of directors of the Texas State Affordable Housing

Corporation (“AHC”) are state officers whose gubernatorial appointments must be made with the

advice and consent of the Texas Senate pursuant to article IV, section 12 of the Texas Constitution.

Whether the governor’s appointment of members of the AHC board of directors must be made with

the advice and consent of the Texas Senate depends upon whether they are “state officers” within

the meaning of that provision. We conclude that the AHC board members are “state officers” and

that their appointments are therefore subject to senate confirmation.

Article IV, section 12 of the Texas Constitution provides that all vacancies in “State or

district offices, except members of the Legislature, shall be filled unless otherwise provided by law

by appointment of the Governor.” TEX. CONST. art. IV, $ 12(a). All such appointments made by

the governor are made with or confirmed by “the advice and consent of two-thirds of the Senate

present.” Id. 5 12(b), (c). Wh en a state or district officer is appointed by the governor, the senate

must confirm the nominee in order for the nominee to be entitled to hold office. See Denison v. State

ex rel. Alfred, 6 1 S. W.2d 1017,1020-2 1 (Tex. Civ. App.-Austin), writ ref’dper curiam, 61 S. W.2d

1022 (1933). As one court has explained, article IV, section 12

clearly contemplates that the Legislature may, should it see fit,

provide by law for the filling of offices created by it otherwise than

by appointment by the Governor, and that in such event confirmation

by the Senate is not essential. . . . But where appointment, or perhaps

nomination for appointment would be more accurate, is not

‘otherwise, provided by law,’ that power rests with the Governor.

And the clear import, language, and requirement of the Constitution

is that any and every appointment by the Governor to fill a vacancy

in a state or district office must be with the advice and consent of

The Honorable Jeff Wentworth - Page 2 (JC-0345)

two-thirds of the Senate . . . . And where such required advice and

consent to such nomination by the Governor is refused, the nominee

or appointee is not legally entitled to the office.

Id.; see also Tex. Atty. Gen. LO-95-024, at 4 (TEx. CONST.art. IV, 0 12 “mandates that the senate

confirm every gubernatorial appointment to a state or district office in the executive or judicial

branch of government. The phrase in article IV, section 12(a), ‘unless otherwise provided by law,’

permits the legislature to delegate, by statute, the appointing power to an officer other than the

governor, but it does not permit the legislature to statutorily bypass the senate confirmation

process.“).

Chapter 2306 of the Government Code establishes the Texas Department of Housing and

Community Affairs and various housing programs. The AHC is a nonprofit corporation provided

for by subchapter Y of chapter 2306 that must dedicate its activities to the public purpose of

promoting health, safety and welfare by providing housing to those with low incomes. See TEX.

GOV’T CODE ANN. 85 2306.552, .553 (Vernon 2000). The board of directors of the corporation

consists of five members with expertise in housing or related areas who are appointed by the

governor. See id. 5 2306.554(a). Subchapter Y does not specify whether the board members’

appointments must be confirmed by the senate.

It is not clear from the face of subchapter Y whether board members are public officers or

merely officers of a nonprofit corporation. Compare id. ch. 2306, subch. Y with TEX.TRANSP.CODE

ANN.g431.1ol(f)(v emon Supp. 200 1) (expressly providing that a member of the board of directors

of a local government corporation established under Transportation Code, chapter 43 1, subchapter

D “is not a public official by virtue of that position”). Indeed, the subchapter points in both

directions. On the one hand, for example, members of the board are entitled to reimbursement of

their travel expenses “as provided by the General Appropriations Act,” TEX. GOV’T CODE ANN.

8 2306.554(c) (V emon 2000). Another provision elsewhere in chapter 2306 provides that both the

Texas Department of Housing and Community Affairs and the AHC are generally subject to the

Open Meetings and Open Records Acts. See id. 0 2306.039. On the other hand, however, the AHC

board members are immune from civil liability not as public officers but rather “to the same extent

that a volunteer who serves as an officer, director, or trustee of a charitable organization is immune

from civil liability under Chapter 84, Civil Practice and Remedies Code.” Id. 8 2306.561 (b).

As AHC board members are appointed by the governor, the senate must confirm them if they

hold state or district offices within the meaning of article IV, section 12. See Denison, 61 S.W.2d

at 1020-21. Thus, we must determine whether an AHC board member is a state or district officer

within the meaning of that constitutional provision. Over the years this office has construed article

IV, section 12 to distinguish between state and district versus local officers, see Tex. Att’y Gen. Op.

No. O-5 153 (1943) (whether person holds state or district office as opposed to a county, municipal,

or other local office depends primarily on geographical extent of officer’s duties); see also Tex. Att’y

Gen. LO-95-024, and officers and employees, see Tex. Att’y Gen. Op. Nos. JM-58 (1983) WW- 190

(1957). As the corporation’s duties are not limited to one area of the state, its board members are

The Honorable Jeff Wentworth - Page 3 (JC-0345)

not “local officers.” Nor do the board members appear to be mere employees. Rather we believe

that the corporation’s board members are either state officers or officers of a nonprofit corporation.

The distinction between state officers and officers of nonprofit corporations appears to be an

issue of first impression. However, in deciding whether the AHC board members are state officers,

we are guided by the long-established definition of a public office:

Public office is the right, authority, and duty created and

conferred by law, by which, for a given period, either fixed by law,

or enduring at the pleasure of the creating power, an individual is

invested with some portion of the sovereign functions of the

government, to be exercised by him for the benefit of the public.

Kimbrough v. Barnett, 55 S.W. 120,122 (Tex. 1900); see also Aldine Indep. Sch. Dist. v. Standley,

280 S.W.2d 578 (Tex. 1955) (status as an officer as opposed to an employee is determined by

“‘whether any sovereign function of the government is conferred upon the individual to be exercised

by him for the benefit of the public largely independent of the control of others”‘) (quoting Dunbar

v. Brazoria County, 224 S.W.2d 738,740 (Tex. Civ. App.-Galveston 1949, writ ref d)). Applying

these criteria, we conclude that service on the AHC board of directors is (1) a “right, authority, and

duty created and conferred by law,” and that an AHC board member (2) “is invested with some

portion of the sovereign functions of the government,” (3) “to be exercised by him for the benefit

of the public.” Although an AHC board member’s term is not fixed by law, we do not believe that

this is determinative.

First, service on the AHC board of directors is a “right, authority, and duty created and

conferred by law.” Kimbrough, 55 S.W. at 122. Although it must be incorporated in order to exist,

the AHC is a creature of statute, subchapter Y of chapter 2306. See TEX. GOV’T CODE ANN.

§ 2306.552 (Vernon 2000). Its board members are appointed pursuant to law, see id. 8 2306.554,

and the board’s and corporation’s powers are conferred and limited by law, see id. $5 2306.5545

(requiring board to develop policies relating to employee conflicts of interest), .555 (corporation’s

powers), .5555 (requiring board to develop and implement public access policies), .557 (governing

distribution of corporation’s earnings), .559 (requiring corporation to report financial activity to

certain state officials on an annual basis), .560 (requiring corporation to undergo yearly audit and

to file copy of audit with certain state officials).

Second, the AHC board of directors is “invested with some portion of the sovereign functions

of the government.” Kimbrough, 55 S.W. at 122. Although the AHC is charged with engaging in

many activities traditionally associated with the private sector such as “mortgage banking activities

and lending transactions and acquiring, holding, selling, or leasing real or personal property,” TEX.

GOV’T CODE ANN. 8 2306.553(a) (Vernon 2000)’ the corporation has the “powers provided for the

[Texas Department of Housing and Community Affairs] under [chapter 23061,” id. § 2306.555(a).

The department’s powers under chapter 2306 include, for example, the authority to “act for and on

behalf of this state” and to “adopt and enforce bylaws and rules.” Id. 5 2306.053(b). Given that the

The Honorable Jeff Wentworth - Page 4 (JC-0345)

legislature has provided that the AHC has powers coextensive with a state agency, we conclude that

its board members are “invested with some portion of the sovereign functions of the government.”

Kimbrough, 55 SW. at 122.

Third, the AHC board members exert their authority “for the benefit ‘of the public.” Id. The

corporation’s charter must specifically dedicate the corporation’s activities “to the public purpose

authorized by [subchapter Y].” TEX. GOV’T CODE ANN. 8 2306.552(b) (Vernon 2000). The

corporation’s purpose is “to promote the public health, safety, and welfare through the provision of

adequate, safe, and sanitary housing” for those with low incomes. Id. 8 2306.553(a).

The indicia of an office also include tenure “for a given period, either fixed by law, or

enduring at the pleasure of the creating power.” Kimbrough, 55 S.W. at 122. Subchapter Y

expressly provides that the AHC is subject to the Texas Sunset Act, TEX. GOV’T CODEANN. ch. 325

(Vernon 1998 & Supp. 2001)’ and, unless continued in existence as provided by that Act, is

“abolished and [subchapter Y] expires September 1,2001.” Id. 5 2306.5521 (Vernon 2000). But

subchapter Y is silent with respect to the duration of the board members’ terms and does not provide

for the board members’ removal.

A fixed term is an indicium of an office because it helps protect an officer’s independence

from the control of others. We do not believe, however, that the complete absence in subchapter Y

of any provision regarding the duration of board members’ terms or their removal from office is

significant. It could be merely the result of legislative oversight, or the legislature may have

intended for the board members’ terms to be governed by the constitution. See TEX. CONST. art.

XVI, 9 30 (providing that duration of offices not fixed by the constitution shall not exceed two

years); see also id. 59 3Oa, 30b (authorizing legislature to establish terms exceeding two years for

certain offices by statute). Furthermore, although subchapter Y provides that the AHC must file

reports with state officials and entities, see TEX. GOV’T CODE ANN. 50 2306.559, .560 (Vernon

2000), and is subject to audit by the state auditor, see id. 8 2306.560, we are not aware of any statute

that vests the governor, the Texas Department of Housing and Community Affairs, or any other

officer or body with the authority to exercise direct control over the AHC or its board of directors.

Thus, we do not find AHC board members’ lack of a legislatively fixed term dispositive.

In sum, we conclude that the members of the board of directors of the AHC hold state offices

within the meaning of article IV, section 12 of the Texas Constitution and that their gubernatorial

appointments are therefore subject to senate confirmation.

The Honorable Jeff Wentworth - Page 5 (JC-0345)

SUMMARY

Members of the board of directors of the Texas Affordable

Housing Corporation hold state offices within the meaning of article

IV, section 12 of the Texas Constitution. Therefore, their guber-

natorial appointments are subject to confirmation by the Texas

Senate.

Yo sve trul

dAG!T

JOHN CORNYN

Attorney General of Texas

ANDY TAYLOR

First Assistant Attorney General

CLARK RENT ERVIN

Deputy Attorney General - General Counsel

SUSAN D. GUSKY

Chair, Opinion Committee

Mary R. Crouter

Assistant Attorney General - Opinion Committee