Mr. Kenneth W. Littlefield Opinion NO. JM-1175
Commissioner
Texas Department of Banking Re: Whether the Department of
2601 N. Lamar Boulevard Banking may hire the son of a
Austin, Texas 70705-4294 member of the Finance Commis-
sion (RQ-1999)
Dear Mr. Littlefield:
You ask whether the Banking Department may hire the son
of a member of the Finance Commission as a hearings officer.
We assume from your letter that the position in question is
a classified position.
The applicability of the nepotism statute, article
599621, V.T.C.S., depends 'on whether the Finance Commission
may exercise control over the hiring decision in question.
Pena v. Rio Grande Citv Consol. Index. School Dist., 616
S.W.2d 658 (Tex. Civ. APP. - Eastland, 1981). The
relationship between the Finance Commission, the Banking
Commissioner, and the Banking Department is described in
part in article 342-201, V.T.C.S., which provides:
By and with the advice and consent of the
Senate, the Finance Commission, by at least
five (5) affirmative votes, shall elect a
Banking Commissioner who shall serve at the
pleasure of the Finance Commission, provided
that the Banking Commissioner first elected
shall take office at the expiration of the
term of office of the present Banking
Commissioner. Saidr
shall be an emolovee of the Finance
Commission and subiect to its orders and
directions. The Banking Commissioner shall
receive such compensation as is fixed by the
Finance Commission. The salary of an
employee of the Banking Department in any
other exempt position may not exceed the
amount that is $2,000 less than the salary of
the Commissioner. The Position
Classification Act of 1961 (Article 6252-11,
Vernon's Texas Civil Statutes) applies to a
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Mr. Kenneth W. Littlefield - Page 2 (JM-1175)
position of the Banking Department only if it
is classified in groups l-10 under the
position classification plan in effect on
January 1, 1989, or comparable positions
under any successor plan. The legislature in
the General Appropriations Act may determine
the total amount appropriated to the Banking
Department but may not determine the number
or salaries of employees of the Banking
Department in exempt positions. The Finance
Commission, subject to the limits provided by
this article, shall determine the number of
employees of the Banking Department in exempt
positions and the salaries of those
employees. The Banking Department may use
funds appropriated to it for any purpose to
pay the salaries determined by the Finance
Commission. (Emphasis added.)
The statement that the Banking Commissioner is subject to
the orders of the Finance Commission would seem to indicate
that all decisions, including hiring decisions, by the
Banking Commissioner or subordinate Banking Department
employees are subject to review by the Finance Commission.
If that were so, the nepotism statute would prohibit the
Banking Department from hiring the son of a member of the
Finance Commission. See Pena, suora. The Texas Supreme
Court, however, has rejected such a broad interpretation of
the Finance Commission*s authority over the Banking
Commissioner. In Ch emi cal Sank & Trust Co. v. Falkner, 369
S.W.2d 427 ITex. 19631. the court determined that the
Banking Commissioner was
I. a state officer, rather than an
employee, for purposes of article 1733, V.T.C.S. In
reaching that decision the court wrote:
While the statute does say the Banking
Commissioner is an 'employee of the Finance
.Commission and subject to its orders and
directions', he is far more than an employee
of the Finance Commission because of the many
powers and duties given him directly by the
Legislature which are not subject to the
control of the Finance Commission.
&& at 430. The court gave no examples of powers and duties
of the Banking Commissioner not subject to control of the
Finance Commission. Because we find no instance in which
the legislature stated explicitly that a power or duty of
the Banking Commissioner was not subject to the control of
the Finance Commission, we must conclude that the Supreme
Court found that limitation on the power of the Finance
Commission to be implicit in certain statutes granting
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'Mr. Kenneth W. Littlefield - Page 3 (JM-1175)
specific powers to or imposing specific duties on the
Banking Commissioner. To answer your question, then, it is
necessary to determine whether hiring decisions of the
Banking Commissioner or his subordinate Banking Department
employees are subject to the control of the Finance
Commission.
The only statute other than article 342-201 that deals
in any detail with employees of the Banking Department is
article 342-213, V.T.C.S., which provides:
1. The Banking Commissioner or his
designee shall develop an intraagency career
ladder program, one part of which shall be
the intraagency posting of all nonentry level
positions for at least 10 days before any
public posting.
2. The Banking Commissioner or his
designee shall develop a system of annual
performance evaluations based on measurable
job tasks. All merit pay for Banking
Department employees must be based on the
system established under this section.
3: The Banking Commissioner shall prepare
and maintain a written plan to assure
implementation of a program of equal
employment opportunity whereby all personnel
transactions are made without regard to race,
color, disability, sex, religion, age, or
.national origin. The plans shall include:
(1) a comprehensive analysis of all the
agency's work force by race, sex, ethnic
origin, class of position, and salary or
wage:
(2) plans for recruitment, evaluation,
selection, appointment, training, promotion,
and other personnel policies:
(3) steps reasonably designed to overcome
any identified underutilization of minorities
and women in the agency's work force; and
(4) objectives and goals, timetables for
the achievement of the objectives and goals,
and assignments of responsibility for their
achievement.
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Mr. Kenneth W. Littlefield - Page 4 (JM-1175)
The plans shall be filed with the
Governo??s office within 60 days of the
effective date of this Act, cover an annual
period, and be updated at least annually.
Progress reports shall be submitted to the
Governor*s office within 30 days of November
1 and April 1 of each year and shall include
the steps the agency has taken within the
reporting period to comply with these
requirements.
Reading those provisions with -mica1 Bank in mind, we
conclude that the conferral of such authority on the Banking
Commissioner with respect to personnel matters indicates
that the Finance Commission's role in regard to Banking
Department personnel matters is limited to those powers and
duties that are specifically imposed on the Finance
Commission. See aenerally V.T.C.S. art. 342-201 (Finance
Commission shall determine number and salaries of ,Banking
Department employees in exempt positions); & arts.
342-202, 342-203, 342-204 (Finance Commission to set
salaries for certain Banking Department positions): Attorney
General Opinion JM-254 (fact that commissioners court
authorizes positions and approves salaries of employees of
county attorney does not prohibit county attorney from
hiring relative of county commissioner;-;‘since commissioner-s
court has no control over persons appointed to fill
positions).
Because we conclude that hiring decisions of the
Banking Commissioner are not subject to the control of the
.Finance Commission, we conclude that the nepotism statute
does not prohibit the Banking Department from hiring the son
of a member of the Finance Commission.
SUMMARY
The nepotism statute, article 5996a,
V.T.C.S., does not prevent the Banking
Department from hiring the son of a member of
the Finance Commission.
Very
truly Y ,
Ll b
JIM
/L-h
MATTOX
Attorney General of Texas
WARYKELLER
First Assistant Attorney General
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Mr. Xenneth W. Littlefield - Page 5 (JM-1175)
JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General
.RENEA HICKS
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Sarah Woelk
Assistant Attorney General
p. 6199