Can a Texas county auditor also work for a nonprofit that gets county funding?

Plain-English summary

A county attorney wrote on behalf of the Dimmit County auditor, who had a second job. The auditor had been hired in 1986 as executive director of a private, nonprofit housing corporation, at a salary set by its board. In 1989 the district judges appointed him county auditor, and he kept both roles. The nonprofit was a private venture, but it had financial ties to the county: the county had dedicated to it the interest on an economic development loan the county made to a private business, and the county also gave the nonprofit office space and telephone and photocopying services. The question was whether the auditor could lawfully hold both jobs.

The office worked through three bodies of law. Because the nonprofit was private, the auditor's role there did not trigger the Texas Constitution's dual-office-holding rules or the common-law doctrine of incompatibility, both of which concern holding two public offices. But two statutes did apply, and they pointed in opposite directions. The county-auditor oath of office, Local Government Code section 84.007(b), requires the auditor to swear he will not be "personally interested in a contract with the county," which the office read to bar any direct personal or pecuniary interest in a county contract. Chapter 171 of the Local Government Code, the general conflicts-of-interest law for local officials, takes a different approach: an official who has a "substantial interest" in a business entity (defined as receiving more than 10 percent of the prior year's gross income from it) may keep that interest, but must file a disclosure affidavit and abstain from any vote or decision that would specially affect the entity.

Faced with that conflict, the office applied the Code Construction Act's tie-breaker. Ordinarily a specific provision (here, the auditor oath) beats a general one (chapter 171), but not when the general provision is the later enactment and the legislature meant it to prevail. The auditor-oath predecessor dated to 1905; chapter 171's predecessor dated to 1983. Given chapter 171's breadth, its detailed disclosure-and-abstention machinery, and its criminal penalty, the office concluded the legislature intended chapter 171 to control, so it prevails over section 84.007(b) to the extent of conflict. The practical upshot was that the auditor could keep the nonprofit job by complying with chapter 171, assuming his nonprofit income crossed the 10 percent line and his duties required decisions affecting the nonprofit. Whether those facts were actually true was outside the opinion process, and the office overruled two 1940s-1960s opinions to the extent they were inconsistent.

Currency note

This opinion was issued in 1994. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The Local Government Code conflicts-of-interest and county-auditor provisions have been amended since 1994. The section numbers and the 10 percent threshold described here reflect the law as it stood then. Read this page for the office's reasoning on how the two statutes interact, and verify the current text of chapter 171 and section 84.007 before relying on any specific rule.

What the opinion meant for those who asked

For the county auditor and the county: The opinion concluded the auditor could continue serving as the nonprofit's executive director by following chapter 171, rather than being flatly disqualified by the oath. Chapter 171 required, where it applied, a disclosure affidavit and abstention from any vote or decision that would specially affect the nonprofit.

For other local officials weighing outside roles: The opinion treated chapter 171 as the controlling conflicts-of-interest rule for local public officials, including county auditors, when it clashes with an older, office-specific provision like the auditor oath. It read the "substantial interest" trigger as receiving more than 10 percent of prior-year gross income from the business entity.

On whether this particular auditor was actually in conflict: The opinion did not decide. Whether the auditor had a disqualifying personal interest, whether his nonprofit income crossed the 10 percent line, and whether his duties required decisions affecting the nonprofit were all fact questions the office said were beyond the opinion process.

Common questions

Did the auditor's second job at a private nonprofit violate the dual-office rules?
No. The office concluded that because the nonprofit was a private venture, the role did not implicate the Texas Constitution's dual-office-holding provisions or the common-law incompatibility doctrine, which apply to holding two public offices.

What did the county-auditor oath of office require?
Under section 84.007(b), the auditor had to swear he would not be "personally interested in a contract with the county." The office read that to bar any direct personal or pecuniary interest in a county contract.

How did chapter 171 change the picture?
Chapter 171 lets a local official keep a "substantial interest" in a business entity if the official files a disclosure affidavit and abstains from votes or decisions specially affecting the entity. A "substantial interest" meant receiving more than 10 percent of the prior year's gross income from the entity. Violating chapter 171 is a class A misdemeanor.

Which law won when the two conflicted?
Chapter 171. Because it was the later enactment (its predecessor dated to 1983 versus 1905 for the auditor oath) and the office found the legislature intended it to prevail, the office concluded chapter 171 controls over section 84.007(b) to the extent of conflict.

Did this opinion change any earlier opinions?
Yes. The office overruled Attorney General Opinions V-381 (1947) and WW-1241 (1962) to the extent they were inconsistent with this conclusion.

Background and statutory framework

The analysis sorted the auditor's situation into the laws that did and did not apply. The Texas Constitution's dual-office-holding provisions (Tex. Const. art. XVI, §§ 33, 40) and the common-law incompatibility doctrine (Thomas v. Abernathy County Line Independent School District, 290 S.W. 152 (Tex. Comm'n App. 1927, judgm't adopted); State ex rel. Brennan v. Martin, 51 S.W.2d 815 (Tex. Civ. App.—San Antonio 1932, no writ)) govern holding two public offices, so they did not reach a public auditor's private employment. Two statutes did apply.

The first was the auditor oath in Local Government Code section 84.007(b), which requires the auditor to swear, among other things, that "he will not be personally interested in a contract with the county." The office had long read that prohibition strictly: older opinions concluded the predecessor statute (article 1649, V.T.C.S.) barred an auditor from contracting with the county for telephone services, officers' bonds, or electrical equipment (Attorney General Opinion V-381 (1947)) and from owning stock in a corporation doing business with the county (Attorney General Opinion WW-1241 (1962)). The office construed "interest" to mean a direct personal or pecuniary interest (Attorney General Opinion DM-109 (1992)) and said an auditor must divest such an interest to hold office, while noting that whether this auditor actually had such an interest in a particular county contract was a fact question beyond the opinion process.

The second was chapter 171, the general conflicts-of-interest statute for local public officials, which includes county auditors. Section 171.004 requires an official with a "substantial interest" in a business entity to file a disclosure affidavit before a vote or decision on a matter involving the entity and to abstain if the action would have a special economic effect distinguishable from the effect on the public; a violation is a class A misdemeanor (§ 171.003). A nonprofit corporation is a "business entity" (Attorney General Opinion JM-424 (1986)), and a "substantial interest" exists when funds received from the entity exceed 10 percent of the person's gross income for the previous year (§ 171.002(a)(2)). Chapter 171 thus would let the auditor keep a personal interest in a county contract that section 84.007(b) flatly forbade, creating the conflict.

To resolve it, the office turned to the Code Construction Act (Gov't Code § 311.026): where a general and a special provision conflict irreconcilably, the special provision normally prevails as an exception, unless the general provision is the later enactment and the manifest intent is that it prevail (see also Gordon v. Lake, 356 S.W.2d 138 (Tex. 1962); Townsend v. Terrell, 16 S.W.2d 1063 (Tex. 1929)). The auditor-oath predecessor was adopted in 1905 (Acts 1905, 29th Leg., ch. 161) and chapter 171's predecessor in 1983 (Acts 1983, 68th Leg., ch. 640). Given chapter 171's broad definition of "local public official," the scope of conduct it regulates, and its detailed requirements and penalties, the office concluded the legislature intended chapter 171 to prevail over section 84.007(b) to the extent of conflict, consistent with an earlier opinion holding chapter 171 impliedly modified the county commissioners' oath (Attorney General Opinion DM-279 (1993), discussing Local Gov't Code § 81.002).

Citations

Constitutional and statutory provisions discussed:

• Local Gov't Code § 84.007(b) (county auditor oath of office; no personal interest in a county contract)
• Local Gov't Code § 84.021 (auditor's assistants; footnote)
• Local Gov't Code ch. 171 (conflicts of interest of local public officials), §§ 171.002(a)(2), 171.003, 171.004
• Local Gov't Code § 81.002 (county commissioners' oath, referenced via DM-279)
• Gov't Code § 311.026 (Code Construction Act; general vs. special provisions)
• Tex. Const. art. XVI, §§ 33, 40 (dual office holding)
• Acts 1905, 29th Leg., ch. 161; Acts 1983, 68th Leg., ch. 640 (predecessor enactment dates)

Cases discussed:

• Thomas v. Abernathy County Line Independent School District, 290 S.W. 152 (Tex. Comm'n App. 1927, judgm't adopted)
• State ex rel. Brennan v. Martin, 51 S.W.2d 815 (Tex. Civ. App.—San Antonio 1932, no writ)
• Gordon v. Lake, 356 S.W.2d 138 (Tex. 1962)
• Townsend v. Terrell, 16 S.W.2d 1063 (Tex. 1929)

Attorney General opinions discussed:

• V-381 (1947) and WW-1241 (1962) (overruled in part); DM-109 (1992); JM-424 (1986); DM-279 (1993); Letter Opinion 88-126 (1988)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0303
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1994/dm0303.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

September 6, 1994

Honorable Charles D. Johnson
County Attorney
Dimmit County Courthouse
Carrizo Springs, Texas 78834

Opinion No. DM-303

Re: Whether the county auditor oath of office provision, Local Government Code § 84.007(b), prevails over chapter 171 of the Local Government Code (RQ-572)

Dear Mr. Johnson:

On behalf of the county auditor of Dimmit County, you ask whether the county auditor may also be employed as the executive director of a private, non-profit housing corporation. You explain that the non-profit housing corporation at issue was created in 1986. At that time, the person who is now the county auditor was hired as its executive director, at a salary which is set by its board of directors.

Although the non-profit housing corporation is a private venture, it has an economic relationship with the county. The county has dedicated certain economic development funds to the non-profit housing corporation, namely the interest the county receives on an economic development loan that the county made to a private business. The county also provides the non-profit housing corporation with office space and telephone and photocopying services. In 1989, the district judges appointed the executive director of the non-profit housing corporation as county auditor and he began receiving a county salary. Since that time, he has continued to serve, and to receive a salary, as executive director of the non-profit housing corporation.

On the basis of the foregoing facts, you ask whether the county auditor may also be employed as the executive director of the non-profit housing corporation. Because the non-profit housing corporation is a private venture, the county auditor's position as its executive director does not implicate the Texas Constitution's dual office holding provisions. Tex. Const. art. XVI, §§ 33, 40. For the same reason, this instance of dual employment does not implicate the common-law doctrine of incompatibility. See Thomas v. Abernathy County Line Independent School District, 290 S.W. 152 (Tex. Comm'n App. 1927, judgm't adopted); State ex rel. Brennan v. Martin, 51 S.W.2d 815 (Tex. Civ. App.—San Antonio 1932, no writ). This situation does implicate the county auditor oath of office provision, Local Gov't Code § 84.007(b), and chapter 171 of the Local Government Code, however.

The county auditor's oath of office is set forth in section 84.007 of the Local Government Code, which provides in pertinent part:

(b) The county auditor must take the official oath and a written oath that lists the positions of public and private trust previously held and the length of service in each of those positions and that states:

(1) that he has the qualifications required by this chapter; and

(2) that he will not be personally interested in a contract with the county.

Id. (emphasis added). This provision prohibits the county auditor from having a personal interest in any county contract. In Attorney General Opinion V-381 (1947), this office concluded that the now-repealed statutory predecessor to the county auditor oath of office provision, article 1649, V.T.C.S., in conjunction with a Penal Code provision, prohibited a county auditor from contracting with the county to provide it with telephone services, officers' bonds, or electrical equipment. Similarly, in Attorney General Opinion WW-1241 (1962), this office concluded that now-repealed article 1649, in conjunction with now-repealed article 2364, prohibited a county auditor from owning stock in a corporation which had business dealings with the county. Although you do not mention any specific contracts, it seems likely from the circumstances described in your letter that the county has a contract with the non-profit housing corporation and with the private business which has an economic development grant, the interest on which the county has dedicated to the non-profit housing corporation.

The crucial question is whether the county auditor has a "personal interest" in either of these contracts. This office has construed the term "interest" in similar statutes to mean "a direct personal or pecuniary interest." See Attorney General Opinion DM-109 (1992). We believe that section 84.007(b) prohibits a county auditor from having a direct personal or pecuniary interest in any county contract, and requires that he or she must divest himself or herself of such an interest in order to hold office. The determination whether the county auditor of Dimmit County has such an interest in a particular county contract involves questions of fact which are beyond the scope of the opinion process.

The situation you describe also implicates the conflicts of interest provisions applicable to local public officials, including county auditors,[1] in chapter 171 of the Local Government Code.[2] Section 171.004 of the Local Government Code requires a local public official, who has a "substantial interest" in a business entity, to submit an affidavit disclosing that interest "before a vote or decision on any matter involving the business entity" and to abstain from further participation in the matter if the action would "have a special economic effect on the business entity that is distinguishable from the effect on the public." Local Gov't Code § 171.004(a)(1). The violation of this provision is a class A misdemeanor. Id. § 171.003. The term "business entity" includes a non-profit corporation. See id. § 171.001(2) (defining "business entity"); Attorney General Opinion JM-424 (1986). A person has a "substantial interest" in a business entity if "funds received by the person from the business entity exceed 10 percent of the person's gross income for the previous year." Id. § 171.002(a)(2).

Assuming that the county auditor's income as executive director exceeded 10 percent of his gross income for the previous year, that his official duties require a "vote or decision"[3] on a matter involving the non-profit housing corporation or the private business which has an economic development grant, and that he is otherwise within the criteria set out in Local Government Code, chapter 171, he would be able to continue his employment with the non-profit housing corporation by complying with the requirements of section 171.004. Chapter 171 would thus permit the county auditor to have a personal interest in a contract with the county, while section 84.007(b) expressly bars the county auditor from being "personally interested in a contract with the county." The two provisions would thus conflict as applied to the county auditor.

The Code Construction Act, Gov't Code ch. 311, provides as follows:

(a) If a general provision conflicts with a special or local provision, the provisions shall be construed, if possible, so that effect is given to both.

(b) If the conflict between the general provision and the special or local provision is irreconcilable, the special or local provision prevails as an exception to the general provision, unless the general provision is the later enactment and the manifest intent is that the general provision prevail.

Gov't Code § 311.026; see also Gordon v. Lake, 356 S.W.2d 138 (Tex. 1962); Townsend v. Terrell, 16 S.W.2d 1063 (Tex. 1929). Section 84.007(b) of the Local Government Code expressly applies only to county auditors, while chapter 171 of the code applies to local public officials in general. For the reasons stated above, it is not possible to give effect to both chapter 171 and section 84.007(b) to the extent of conflict. Therefore, we must apply the rule of statutory construction set forth in Government Code section 311.026(b) to the extent of conflict.

The statutory predecessor to section 84.007(b), the specific provision, was adopted in 1905, while the statutory predecessor to chapter 171 was adopted in 1983. See Acts 1983, 68th Leg., ch. 640, at 4079; Acts 1905, 29th Leg., ch. 161, at 381. Given the breadth of the definition of "local public official" in chapter 171,[4] the scope of the conduct which it regulates,[5] and the detailed requirements[6] and penalties[7] it imposes, we believe that the legislature intended for chapter 171 to prevail over the county auditor oath of office provision in section 84.007(b) to the extent of conflict. Because chapter 171 is the later enacted statute and we believe that it is the intent of the legislature for chapter 171 to prevail over the specific county auditor oath of office provision in section 84.007(b), we conclude that chapter 171 prevails over section 84.007(b) to the extent of conflict. See also Attorney General Opinion DM-279 (1993) (concluding that Local Gov't Code ch. 171 impliedly modified provisions setting forth county commissioners' oath, Local Gov't Code § 81.002).

You have not supplied this office with sufficient information to determine definitively whether the county auditor has a "substantial interest" in the non-profit housing corporation or whether the county auditor must make "decisions" on matters that affect the non-profit housing corporation. See supra note 3. Assuming that the county auditor's income as executive director of the non-profit housing corporation exceeds 10 percent of his gross income for the previous year and that he must make "decisions" on matters that affect it, he must adhere to the requirements set forth in chapter 171 of the Local Government Code, including submitting an affidavit and abstaining from participating in any decision[8] which would "have a special economic effect" on the non-profit housing corporation.[9]

SUMMARY

Chapter 171 of the Local Government Code prevails over the county auditor oath of office provision, Local Gov't Code § 84.007(b), to the extent of conflict. A county auditor who is employed as the executive director of a private, non-profit housing corporation which receives funding from the county is required to adhere to the requirements set forth in chapter 171 of the Local Government Code, if his income as executive director exceeds 10 percent of his gross income for the previous year. Attorney General Opinions V-381 (1947) and WW-1241 (1962) are overruled to the extent they are inconsistent with this opinion.

DAN MORALES
Attorney General of Texas

JORGE VEGA
First Assistant Attorney General

DREW T. DURHAM
Deputy Attorney General for Criminal Justice

JAVIER AGUILAR
Special Assistant Attorney General

RENEA HICKS
State Solicitor

SARAH J. SHIRLEY
Chair, Opinion Committee

Prepared by Mary R. Crouter
Assistant Attorney General

[1] Section 171.001(1) of the Local Government Code defines the term "local public official" to mean: . . . .

[4] Local Gov't Code § 171.001(1) (defining "local public official"); see supra note 1.

[5] See Local Gov't Code § 171.004 (governing local public officials' participation in votes or decisions).

[6] See id.

[7] See id. § 171.003. We note that the legislature has not enacted a penalty for violations of section 84.007(b) of the Local Government Code.

[8] We note that section 84.021 of the Local Government Code authorizes a county auditor to appoint assistants and provides that an assistant "during the absence or unavoidable detention of the county auditor, may perform the duties required by law of the county auditor." We do not decide here whether this provision authorizes a county auditor to delegate decisions to an assistant in the event of a conflict of interest.

[9] Letter Opinion No. 88-126 (1988), which held that a county auditor is not prohibited under chapter 171 of the Local Government Code from selling materials to the county but did not consider the effect of the county auditor's oath set forth in section 84.007(b) of the Local Government Code, is consistent with this opinion. Attorney General Opinions V-381 (1947) and WW-1241 (1962), which were issued before the enactment of the statutory predecessor to chapter 171 of the Local Government Code, are overruled to the extent they are inconsistent with this opinion.