Can a city charter limit who serves on a tax increment reinvestment zone board?

Plain-English summary

The chair of the Texas Senate Committee on Intergovernmental Relations (the request started with the prior chair, Senator Juan Hinojosa, and was answered to Senator Eddie Lucio, Jr.) asked about the City of Galveston's charter and how it interacts with a tax increment reinvestment zone the city created under chapter 311 of the Tax Code. A tax increment reinvestment zone is an economic-development tool: a city designates an area, captures the growth in property tax revenue there, and a board of directors helps oversee the zone. The questions were whether Galveston's charter rules for city boards reach the zone's board, and if so, whether the charter's residency requirement and term limits apply to zone board members.

The AG split the request. The first question, whether the Galveston charter applies at all, asked the AG to interpret a city charter, and the AG's office does not ordinarily construe city charters; it deferred to municipal officials and declined to address that question. The second question, by contrast, turned on the Tax Code, which the AG can construe. So the AG presumed (for the limited purpose of answering) that the charter applies and asked whether charter residency and term-limit rules could conflict with the state statute.

On residency, the AG explained that a home-rule city has broad powers but cannot enact a charter provision that conflicts with general state law. Tax Code section 311.009(e) sets precise eligibility rules for a zone board member, and they let a person qualify by owning real property in the zone even if the person does not live in the county, let alone the city. A charter rule that required city residency would knock out a non-resident landowner the statute makes eligible. That is an irreconcilable conflict: the charter would narrow a right the Legislature granted. So a charter residency requirement is likely void as applied to a chapter 311 zone board.

On term limits, the AG reached the same result. Section 311.009(c) gives board members two-year terms but says nothing limiting how many terms a person may serve, which means the statute allows unlimited terms. A charter cap (Galveston's ended service after six years) would cut off a person's statutory eligibility to keep serving. Because the charter would prohibit what the statute permits, the AG concluded the charter term-limit provision is likely void to the same extent as the residency requirement.

Currency note

This opinion was issued in 2015. 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.

What the opinion meant for those who asked

The City of Galveston (as the opinion described it): The opinion described the question of whether the city's charter applies to a tax increment reinvestment zone board as one for the city to determine, not the AG. As a general matter, it described a charter residency requirement and a charter term limit for such a board as likely void where they conflict with Tax Code section 311.009.

People serving on or appointed to a tax reinvestment zone board (as the opinion described it): The opinion described section 311.009(e) as making a non-resident landowner eligible to serve, so a charter rule requiring city residency would likely not validly bar that person. It described section 311.009(c) as allowing unlimited two-year terms, so a charter term cap would likely not validly end a member's eligibility.

Where the AG declined to opine: The opinion stated that interpreting a city charter "is outside the purview of an attorney general opinion" and that it would "not address the applicability of the Charter." It answered the Tax Code questions only by presuming the charter applies "for the limited purpose of addressing these legal questions." The page does not decide whether Galveston's charter actually governs the zone board, because the AG did not.

Common questions

Can a city's charter decide who is eligible to serve on a tax increment reinvestment zone board?
Not where the charter conflicts with the Tax Code. The AG concluded that a home-rule charter provision inconsistent with state law is void, and that charter residency and term-limit rules likely conflict with Tax Code section 311.009.

Why wouldn't the AG say whether Galveston's charter applies?
Because interpreting a city charter is something the AG's office leaves to municipal officials. The AG said construing a charter is outside the purview of an AG opinion, so it declined that question and answered only the Tax Code issues, presuming the charter applied.

Can a charter require zone board members to live in the city?
Likely not, the AG concluded. Tax Code section 311.009(e) lets someone qualify by owning property in the zone even without living in the county or city, so a city-residency rule would knock out a person the statute makes eligible, an irreconcilable conflict.

Can a charter limit how many terms a board member serves?
Likely not. The AG explained that section 311.009(c) sets two-year terms but no cap on the number of terms, so it allows unlimited terms. A charter cap (here, six years) would end a member's statutory eligibility and is likely void.

What does it mean that a home-rule charter "conflicts" with state law?
A home-rule city has broad self-government powers, but its charter cannot contain anything inconsistent with the constitution or general state law. The AG noted that a charter and a statute are not treated as conflicting if they can reasonably both stand, but when a charter narrows or removes a right the statute grants, that is an impermissible conflict and the charter provision is void.

Background and statutory framework

The request concerned the interaction between the City of Galveston's charter and a tax increment reinvestment zone created under chapter 311 of the Tax Code. The AG declined the first question, whether the charter applies, because construing a city charter is outside the purview of an AG opinion and the office defers to municipal officials on their own charters (Tex. Att'y Gen. Op. No. GA-0449 (2006)). It addressed the second question, which required construing the Tax Code, by presuming the charter applies for that limited purpose (Tex. Att'y Gen. Op. No. GA-0356 (2005)).

Tax Code section 311.009(e) sets the eligibility requirements for a zone board member, including, for certain boards, owning real property in the zone whether or not the person resides in the county where the zone is located (Tex. Tax Code Ann. § 311.009(e); § 311.009(e)(1)-(2); see § 311.009(a)-(b); § 311.005(4)). Section 311.009(c) provides for two-year terms unless longer terms are allowed under article XI, section 11 of the Texas Constitution (Tex. Tax Code Ann. § 311.009(c)). Under the Home-Rule Amendment, a home-rule city has "full power of local self-government" but no charter or ordinance may contain a provision inconsistent with the constitution or general law (Tex. Const. art. XI, § 5; City of Houston v. State ex rel. City of W. Univ. Place, 176 S.W.2d 928, 929 (Tex. 1943); Proctor v. Andrews, 972 S.W.2d 729, 733 (Tex. 1998)). A charter and a statute are not held repugnant if any reasonable construction leaves both in effect (City of Richardson v. Responsible Dog Owners of Tex., 794 S.W.2d 17, 19 (Tex. 1990)).

The AG noted that in the tax increment financing context, a home-rule city does not exercise full self-government but must look to general law implementing article VIII, section 1-g(b) of the Texas Constitution (Tex. Const. art. VIII, § 1-g(b); Tex. Att'y Gen. Op. Nos. JC-0009 (1999), GA-0276 (2004), GA-0342 (2005)). The Legislature did not completely preempt the field (Tex. Tax Code Ann. § 311.008(b)) but reiterated the prohibition on conflicting city provisions (Tex. Tax Code Ann. § 311.018) and set precise eligibility requirements tied to the subsection under which the zone was created. The AG reasoned that a charter requirement narrowing a state-granted right is likely impermissible (Talley v. City of Killeen, 418 S.W.3d 205, 209 (Tex. App.-Austin 2013, pet. denied)), so a city-residency requirement that would bar a non-resident landowner eligible under section 311.009(e) is likely void. The same reasoning applied to a charter term limit, because the state's general laws may permit what a charter prohibits, and section 311.009(c) imposes no limit on the number of terms (City of Canyon v. Fehr, 121 S.W.3d 899, 904 (Tex. App.-Amarillo 2003, no pet.)).

Citations

Constitutional and statutory provisions:

• Tex. Const. art. XI, § 5 (Home-Rule Amendment; no charter provision inconsistent with general law)
• Tex. Const. art. XI, § 11 (longer terms of office)
• Tex. Const. art. VIII, § 1-g(b) (tax increment financing)
• Tex. Tax Code Ann. § 311.005(4) (zone created by petition)
• Tex. Tax Code Ann. § 311.008(b) (authority necessary and convenient to implement chapter 311)
• Tex. Tax Code Ann. § 311.009(a)-(c), (e) (board composition, terms, and member eligibility)
• Tex. Tax Code Ann. § 311.018 (prohibition on conflicting city provisions)

Cases:

• City of Houston v. State ex rel. City of W. Univ. Place, 176 S.W.2d 928, 929 (Tex. 1943)
• Proctor v. Andrews, 972 S.W.2d 729, 733 (Tex. 1998)
• City of Richardson v. Responsible Dog Owners of Tex., 794 S.W.2d 17, 19 (Tex. 1990)
• Talley v. City of Killeen, 418 S.W.3d 205, 209 (Tex. App.-Austin 2013, pet. denied)
• City of Canyon v. Fehr, 121 S.W.3d 899, 904 (Tex. App.-Amarillo 2003, no pet.)

Prior Attorney General opinions referenced:

• Tex. Att'y Gen. Op. Nos. GA-0449 (2006), GA-0356 (2005), GA-0342 (2005), GA-0276 (2004), JC-0009 (1999)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0026
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2015/kp0026.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts were corrected; the linked PDF is authoritative.

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

July 13, 2015

The Honorable Eddie Lucio, Jr. Opinion No. KP-0026
Chair, Committee on Intergovernmental
Relations Re: Question relating to the Galveston City
Texas State Senate Charter and tax increment reinvestment zone
Post Office Box 12068 governed by chapter 311 of the Tax Code
Austin, Texas 78711-2068 (RQ-0004-KP)

Dear Senator Lucio:

Your predecessor asked several questions relating to the City of Galveston's Charter ("Charter") as it may affect governance of a tax increment reinvestment zone created by the city under chapter 311 of the Tax Code. [1] Specifically, the questions are:

(1) Does the provision of the Galveston City Charter that regulates eligibility to serve on a board created by the city apply to members of the board of directors of a tax increment reinvestment zone created under Chapter 311, Tax Code?

(2) If the charter provision does apply, do the residency requirements and term limits provided by the provision apply to board members of a tax increment reinvestment zone?

Request Letter at 1.

Our analysis of these questions is necessarily limited. The first question requires the construction of a provision of a city charter, a task which is outside the purview of an attorney general opinion. See Tex. Att'y Gen. Op. No. GA-0449 (2006) at 1 ("In deference to municipal officials' authority to interpret their charters and ordinances, this office does not ordinarily construe city charters or ordinances."). Accordingly, we do not address the applicability of the Charter. The second question is contingent upon an affirmative answer to the first, but as it involves the construction of provisions of the Tax Code, it presents legal questions that we can address. See Tex. Att'y Gen. Op. No. GA-0356 (2005) at 2 (considering charter's implication of state law). Thus, while the City of Galveston must determine the applicability of its Charter, we will presume that it applies for the limited purpose of addressing these legal questions.

With that presumption, we consider the legal issues in the second question. The first issue concerns a charter residency requirement, which prohibits a person from serving as a member of a board "if that person has not been a resident of and domiciled in the city for at least one (1) year immediately preceding the appointment." Request Letter at 1-2. Your predecessor noted that a potential conflict arises when this requirement is considered against subsection 311.009(e) of the Tax Code. Id. at 2. Subsection 311.009(e) provides that to be eligible for appointment to a tax increment reinvestment zone board, a person

must be at least 18 years of age and:

(1) if the board is covered by Subsection (a):

(A) be a resident of the county in which the zone is located or a county adjacent to that county; or

(B) own real property in the zone, whether or not the individual resides in the county in which the zone is located or a county adjacent to that county; or

(2) if the board is covered by Subsection (b), own real property in the zone or be an employee or agent of a person that owns real property in the zone. [2]

TEX. TAX CODE ANN. § 311.009(e) (West 2015) (footnote added). The second issue in the second question involves the potential conflict between the Charter's term limit requirements and subsection 311.009(c), which provides that "[m]embers of the board are appointed for terms of two years unless longer terms are provided under Article XI, section 11, of the Texas Constitution." TEX. TAX CODE ANN. § 311.009(c) (West 2015).

The Home-Rule Amendment, article XI, section 5, of the Texas Constitution, bestows upon certain cities the "full power of local self-government." City of Houston v. State ex rel. City of W. Univ. Place, 176 S.W.2d 928, 929 (Tex. 1943); see TEX. CONST. art. XI, § 5. But article XI, section 5 also provides that "no charter or any ordinance passed under said charter shall contain any provision inconsistent" with the constitution or general laws of the state. TEX. CONST. art. XI, § 5. Thus, home-rule cities have broad discretionary powers subject only to limitations enacted by the Legislature. Proctor v. Andrews, 972 S.W.2d 729, 733 (Tex. 1998). "A city is preempted from regulating in a field if the city's regulation is expressly prohibited, if the legislature intended state law to exclusively occupy that field, or if the city regulation conflicts with the state law even if state law is not intended to occupy that field." Tex. Att'y Gen. Op. No. GA-0342 (2005) at 2. "A general law and a city ordinance will not be held repugnant to each other if any other reasonable construction leaving both in effect can be reached." City of Richardson v. Responsible Dog Owners of Tex., 794 S.W.2d 17, 19 (Tex. 1990).

A home-rule city's general police powers to promote the health, safety, and general welfare of its people may be legislatively circumscribed. See Tex. Att'y Gen. Op. No. JC-0009 (1999) at 4-5 (recognizing that the Legislature may impose limits on the taxation authority of political subdivisions, including home-rule cities, pursuant to its plenary legislative powers). Particularly with respect to chapter 311 of the Tax Code, this office has recognized that "in the case of tax increment financing permitted by article VIII, section 1-g(b), a home-rule city does not exercise full power of local self-government but rather must look to general law implementing section 1-g(b) for the authority to engage in tax increment financing." Tex. Att'y Gen. Op. No. GA-0276 (2004) at 5 (explaining that article VIII, section 1-g(b) of the Texas Constitution—the basis for chapter 311—is, for cities, an exception to the constitutional requirement that taxation be equal and uniform). Mindful of these principles, we consider generally whether charter requirements governing residency and term limits could conflict with state law.

We first consider a city-residency requirement. In authorizing a city to do what is "necessary and convenient" to implement chapter 311, the Legislature has not completely preempted the field of tax increment financing. See TEX. TAX CODE ANN. § 311.008(b) (West 2015). Yet, the Legislature has expressly reiterated the prohibition against a city enacting a conflicting provision. Id. § 311.018 (West 2015). And the Legislature has enumerated precise eligibility requirements for a board member, particular even to the subsection under which the zone was created. Id. § 311.009(e)(1)-(2). Such precision reveals an intent by the Legislature to affirmatively direct the eligibility requirements with respect to a prospective board member's nexus to the zone by residence or property ownership. Mere difference is not necessarily a conflict, but when the difference serves to narrow or restrict a right or privilege authorized by state statute it is likely impermissible. See, e.g., Talley v. City of Killeen, 418 S.W.3d 205, 209 (Tex. App.-Austin 2013, pet. denied) (concluding that ordinance imposing 240-hour deadline in which to file a disciplinary appeal "impermissibly narrowed" the ten-day deadline in statute). Thus, a charter provision requiring city residency that would preclude someone who otherwise satisfies the Legislature's nexus requirement from being eligible to serve as a board member would be inconsistent with state law. The conflict between a city residency requirement and subsection 311.009(e) would be irreconcilable: a person who was a city resident could satisfy the eligibility criteria imposed by the statute, but a non-resident landowner eligible to serve under subsection 311.009(e) would be ineligible because of the charter. Accordingly, a charter's inconsistent eligibility requirement that a person must be a resident of the city is likely void when applied to members of the board of directors of a tax increment reinvestment zone created under chapter 311 of the Tax Code.

The same analysis applies to consideration of the second issue regarding a term-limit requirement. Subsection 311.009(c) establishes a term of office for board members of two years but is silent regarding the total number of years or terms for which a board member may serve. See TEX. TAX CODE ANN. § 311.009(c). Because subsection 311.009(c) imposes no term limit, it would allow a zone board member to serve an unlimited number of terms. A charter's limit on terms a person may serve, here after six years, would have the effect of ending a person's statutory eligibility to continue indefinitely serving as a board member. See generally City of Canyon v. Fehr, 121 S.W.3d 899, 904 (Tex. App.-Amarillo 2003, no pet.) (recognizing the fact that "charter provisions and ordinances are subject to the general laws of this state also means that this state's general laws may permit what a charter prohibits"). This irreconcilable inconsistency between such a charter term-limit provision and subsection 311.009(c) would likely render the charter provision void to the same extent as the residency requirement.

SUMMARY

The question whether the City of Galveston's Charter applies to a board of a tax increment reinvestment zone created by the City under chapter 311 of the Tax Code is outside the purview of an attorney general opinion.

As a general matter, however, a charter provision allowing only city residents to serve on a tax increment reinvestment zone board is inconsistent with Tax Code subsection 311.009(e) and is likely void. Similarly, a charter provision limiting the number of terms a tax increment reinvestment zone board member may serve where subsection 311.009(c) would permit the board member to serve an unlimited number of terms likely renders such a charter provision void.

Very truly yours,

KEN PAXTON
Attorney General of Texas

CHARLES E. ROY
First Assistant Attorney General

BRANTLEY STARR
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

CHARLOTTE M. HARPER
Assistant Attorney General, Opinion Committee

[1] See Letter from Honorable Juan Hinojosa, Chair, Senate Comm. on Intergov'tl Relations, to Honorable Ken Paxton, Tex. Att'y Gen. at 1 (Jan. 6, 2015), https://texasattorneygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter").

[2] Subsection (a) provides the requirements for the board of a reinvestment zone, "except as provided by Subsection (b)." TEX. TAX CODE ANN. § 311.009(a). Subsection (b) applies to zones designated under Section 311.005(4) allowing for a zone to be created by petition. See id. § 311.009(b).