Previous columns have discussed the requirements and prohibitions concerning the oath of office under Chapter 81, Local Government Code, and nepotism under Chapter 573, Government Code. Statutory conflicts of interest are another area where an unwary member of Commissioners Court may commit an inadvertent violation with serious consequences. Two principal statutes govern these requirements and procedures.
Local Government Code Chapter 171 – Conflicting Business Interests
Before a vote or decision involving a business entity or real property in which a member of the Commissioners Court has a substantial interest, the member of the Commissioners Court must file an affidavit with the county clerk stating the nature and extent of the interest and abstain from participation in the matter. A “substantial interest” includes:
- ownership of a value of $2,500 or more in real property;
- ownership of 10 percent or more of the business entity;
- ownership of a value of $15,000 or more in the business entity; or
- receiving 10 percent or more of the person’s gross income from the business entity in the previous year. Gross income is calculated for the 12-month period prior to the Commissioners Court’s consideration of the matter – A.G. Opinion JC-0063 (1999).
The requirement to file the affidavit and abstain also applies if the substantial interest is owned by a person related to the Commissioners Court member within the first degree by consanguinity or affinity. For example, if a child of a Commissioners Court member has a substantial interest in a business or receives 10 percent of his or her income from a business, the requirements of Chapter 171 will apply – A.G. Opinion JC-0585 (2002).
When considering the budget, a separate vote should be taken on any item specifically involving a business entity in which a Commissioners Court member has a substantial business interest to avoid conflicts of interest. The member may vote on other items and the final budget.
A Commissioners Court member may serve on the board of directors of a nonprofit entity without compensation. The requirements of Chapter 171 do not apply to consideration of a matter involving the nonprofit entity – A.G. Opinion GA-0068 (2003); A.G. Opinion GA-0597 (2008).
A knowing violation of the requirement to file an affidavit and abstain is a Class A misdemeanor – Walk v. State, 841 S.W. 2d 430 (Tex. App. – Corpus Christi, 1992, pet. ref’d). If the offending member cast the deciding vote, the contract or action is voidable – A.G. Opinion JM-424 (1986).
Local Government Code Chapter 176 – Relationship Disclosure
Commissioners Court members are required to disclose certain affiliations and relationships with contractors and vendors with the county. The Texas Ethics Commission has developed the form for this disclosure. The disclosure requirement applies to the 12-month period preceding the date of the contract with the vendor or the date that the Commissioners Court began considering entering into a contract with the vendor. Commissioners Court members must disclose 1) income that exceeds $2,500, or 2) a gift that exceeds $100 from the vendor by filing the disclosure form within seven business days.
The Commissioners Court member must also disclose income or gifts received by family members within the first degree by consanguinity or affinity. For example, income or gifts to a son-in-law from a vendor or contractor must be disclosed – A.G. Opinion KP-0428 (2023).
The vendor must also file a disclosure statement. After filing, the forms are posted on the county website.
This statute contains several vague and indefinite provisions that have not been interpreted by either the courts or the attorney general. Penalties for violations range from a Class C to a Class A misdemeanor, depending on the value of the contract with the vendor. Fortunately, there are some exclusions and grace periods. “Gift” does not include 1) a political contribution; 2) food as a guest; or 3) a benefit offered on account of kinship or a personal, professional, or business relationship independent of the official status of the recipient. There is no criminal penalty unless the Commissioners Court member fails to file the disclosure form within seven business days after receiving notice of the violation from the county attorney.
In summary, Commissioners Court members need to be aware of the affidavit and abstention requirements for county transactions with their businesses and the disclosure filing requirement for certain relationships with county vendors to avoid conflicts of interest. Consult legal counsel whenever these issues arise.