Municipal Corner

Chapter 556 of the Texas Government Code does not apply to certain public entities that are not considered state agencies based on factors outlined by the Office of the Attorney General. Tex. Att’y Gen. Op. No. KP-398 (2022).

In a recent opinion, the Office of the Attorney General addressed whether a specific insurance association was considered a state agency, and thus, subject to Chapter 556 of the Texas Government Code. The Office of the Attorney General concluded the entity was not a state agency subject to such statutory requirements.

The Honorable Briscoe Cain, Chair of the Texas House Committee on Elections, sought a determination by the Office of the Attorney General as to whether the Texas Windstorm Insurance Association (the “Association”) was subject to Chapter 556 of the Texas Government Code as a state agency. Under Section 556.006(a), a state agency is prohibited from using “appropriated money to attempt to influence the passage or defeat of a legislative measure.” See TEX. GOV’T CODE §§ 556.001–.009. State agency is defined in Chapter 556 as “a department, commission, board, office, or other agency in the executive branch of state government, created under the constitution or a statute, with statewide authority.” Id. § 556.001(2)(A).

The Opinion then outlines the precedent governing whether a public entity is considered a state agency. As previously discussed in Attorney General Opinion JC-0161, there are several factors that must be considered when determining whether a public entity is a state agency. See Tex. Att’y Gen. Op. No.
JC-0161 (1999). The Attorney General considers (1) whether the board members were appointed by the Governor; (2) whether the board members have to be trained on open meetings, public information, and conflict-of-interest laws; (3) whether the entity is subject to the Sunset Act; (4) whether the entity has rulemaking authority; and (5) whether the entity has statewide authority to perform its duties.

Next, the Opinion provided a detailed discussion of each of the above factors and their applicability to the Association. The Opinion also considered whether the Association was funded by taxes or state funds in addition to the five factors discussed above. Based on this analysis, the Attorney General concluded that the Association was not considered a state agency for the purposes of Chapter 556. This Opinion may be useful for other similarly situated entities when determining whether they are subject to certain statutory requirements.

A county does not have the authority to place a sign in a state highway right-of-way without approval of the Texas Department of Transportation or an agreement with the Texas Transportation Commission. Tex. Att’y Gen. Op. No. KP-399 (2022).

In a recent opinion, the Office of the Attorney General addressed whether Goliad County possessed sufficient authority to erect signage in a state highway right-of-way under Chapter 394 of the Texas Transportation Code, which regulates outdoor advertising on rural roads. The Office of the Attorney General concluded the County did not have the authority to do so.

Goliad County is included in the Governor’s continuing disaster proclamation under Section 418.014 of the Texas Government Code due to “the ongoing surge of individuals unlawfully crossing the Texas-Mexico border” that allegedly “poses ongoing and imminent threat of severe damage, injury, and loss of life and property, including […] human trafficking.” Governor of the State of Texas, Disaster Proclamation (May 31, 2021). The Goliad County sheriff placed signs along U.S. Highway 59 in an unincorporated area near the border between Bee County and Goliad County warning travelers to avoid entering Goliad County if involved in human trafficking or carrying illicit drugs. The Texas Department of Transportation eventually removed the signs. The County subsequently filed a request for determination with the Office of the Attorney General to address this matter.

The Attorney General concluded that a county does not have the authority to place the signs in question on the state highway right-of-way. The County argued that Section 394.003 allows a political subdivision to erect signs to protect life and property, and therefore, the sheriff had the right to erect the signs at issue. The Attorney General concluded that Chapter 394 did not grant such authority and Title 6 of the Transportation Code prohibits the placement of a sign on a state highway unless authorized by state law. Therefore, the County did not have the right to erect such signs without approval of the Texas Department of Transportation or an agreement with the Texas Transportation Commission.

A commissioners court of a county may renew a lease agreement authorized by Chapter 319 of the Texas Local Government Code without complying with the competitive purchasing procedures of Chapter 262 of the Texas Local Government Code. Tex. Att’y Gen. Op. No. KP-391 (2021).

In a recent opinion, the Office of the Attorney General addressed whether a county must comply with the competitive bidding procedures of Chapter 262 of the Local Government Code “before renewing or extending a contract for management of a county facility that was originally awarded through a request for proposals.” The Office of the Attorney General concluded the commissioners court of the county could renew a lease agreement without requiring the county to comply with competitive purchasing procedures.

Subchapter C of Chapter 262 outlines competitive processes that a county must use for purchases exceeding $50,000. See TEX. LOC. GOV’T CODE § 262.023(a). The Opinion discusses in detail the background of the contract at issue that is authorized by Chapter 319 of the Local Government Code, related to a commissioners court’s ability to lease buildings to provide for annual exhibits of horticultural, agricultural, livestock, mineral, and other products that are of interest to the community, as well as the regulatory requirements associated with Chapter 262. Ultimately, the Attorney General concludes that the county commissioners court could renew a lease agreement without requiring the county to comply with competitive purchasing procedures. Additionally, and while declining to construe contracts, the Attorney General concluded that, in general, a commissioners court may agree to reasonable terms in a contract, including an assignment clause, provided such terms are consistent with applicable statutes and constitutional provisions regarding county contracting and the authority of the commissioners court generally.

Attorney General addresses Chapter 22 of the Texas Local Government Code governing Type A general-law municipalities operating under a mayor and alderman form of government and the potential disqualification of candidates and elected officers under certain circumstances. Tex. Att’y Gen. Op. No. KP-394 (2021).

The Attorney General recently responded to the City of Cumby’s inquiring regarding Type A general-law municipalities operating under a mayor and alderman form of government related to potential disqualification of candidates and elected officers under Section 22.008 of the Texas Local Government Code. Section 22.008 states that “(a) an officer who is entrusted with the collection or custody of funds belonging to the municipality and who is in default to the municipality may not hold any municipal office until the amount of the default, plus 10 percent interest, is paid to the municipality,” and “(b) if a member of the governing body changes the member’s place of residence to a location outside the corporate boundaries of the municipality, the member is automatically disqualified from holding the member’s office and the office is considered vacant.” Tex. Local Gov’t Code § 22.008.

The Office of the Attorney General first addressed whether a city may apply Section 22.008(a) to any of its elected officials. The City of Cumby interpreted this Section in a city ordinance as authorizing all City elected officials as officers “entrusted with the collection or custody of funds belonging to the municipality.” The Attorney General noted that while Type A general-law municipalities possess authority to prescribe the powers and duties of any of its officers, including additional duties, the Texas Supreme Court has recognized that such authority “does not empower [a city council] to confer upon one officer the powers, duties, or rights expressly conferred by law upon another.” Beard v. City of Decatur, 64 Tex. 7, 10 (Tex. 1885). Thus, the Attorney General concluded that a court would likely conclude the City may not assign the City treasurer’s statutory duty to collect or keep custody of funds to other officers.

Next, the Opinion addresses whether the City may define default as either (a) unpaid “[t]axes or other liability due to the City of Cumby or Hopkins County”; or (b) unpaid “[w]ater, sewer, garbage, or any other utility in the candidate’s name or associated with the address upon which the candidate establishes residency in the City of Cumby.” The term “default” is not defined in the Local Government Code for the purposes of subsection 22.008(a); however, the Attorney General provides a common definition of “default” and states that unpaid taxes or utilities can be associated with default. The Attorney General further notes that Section 22.008 limits (a) the scope of persons to whom it applies, and (b) the type of political subdivisions to which it applies. The Opinion then outlines the factual and legal background regarding the City’s ordinance to disqualify candidates and elected officials who were in default with the municipality and the county.

Ultimately, the Attorney General concluded that Local Government Code Section 22.008(a) prohibits an officer of a Type A general-law municipality entrusted with the collection or custody of municipal funds from holding office while in default to the municipality until the amount, plus interest, is paid. Furthermore, the Attorney General held that a court would likely conclude that by applying Section 22.008(a) to an officer in default to the county, or to an officer residing with another person in whose name a utilities account in default is held, the City went beyond its statutory authority. Moreover, because the Legislature has determined the qualifications for a Type A general-law municipality’s governing body, the Attorney General stated that a court would likely conclude that the City has no authority to add to those qualifications and would likely find that the general ordinance authority found in Section 51.012 of the Local Government Code does not authorize an ordinance disqualifying an officer on the basis of default to the county. Finally, since the Legislature has already determined what disqualifies an elected officer from continuing to hold office, the Attorney General determined that a court would likely find that an ordinance adding to those disqualifications is “inconsistent with state law” and is prohibited under Section 51.012.

“Municipal Corner” is prepared by Kathryn Thiel. Kathryn is an Associate in the Firm’s Districts Practice Group. If you would like additional information or have questions related to these or other matters, please contact Kathryn at 512.322.5839 or kthiel@lglawfirm.com.