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:
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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
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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:
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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
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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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