Do planning, zoning, or historic commission members have to recuse themselves when they own property in the district?

Plain-English summary

Representative Joe Deshotel, who chaired the Texas House committee on land and resource management, asked the AG about the conflict-of-interest rules in chapter 171 of the Local Government Code. The City of Beaumont had created a historic-cultural landmark preservation overlay district and a Historic Landmark Commission to act on buildings and structures within it. At a recent planning and zoning hearing on a permit for a business office in the district, residents testified that the building would hurt their property values. At least two of the planning and zoning commissioners owned property in the district, and a staff person who prepared reports for both commissions lived there too. The representative wanted to know whether those people could vote on matters affecting the district.

The AG worked through chapter 171 piece by piece. First, who is covered? A "local public official" under chapter 171 is a member or officer of a district, elected or not, paid or not, who exercises responsibilities beyond the merely advisory. The AG had previously concluded a planning and zoning commission member is a local public official, and a city employee is not. For the Historic Landmark Commission, the AG looked at Beaumont's ordinances and found the commission has real final authority in places (its decisions can be appealed to district court, and certain exteriors cannot be altered, demolished, or removed without its approval), so its members exercise more than advisory responsibilities and are local public officials too. The staff employee, by contrast, is not.

Second, what counts as a conflict? A "substantial interest" in real property exists when a person has equitable or legal ownership with a fair market value of $2,500 or more. So if a commissioner's ownership interest in district property hits that threshold, chapter 171 is triggered, and the commissioner must file an affidavit stating the nature and extent of the interest before voting on a matter involving the property.

Third, must the official sit the vote out? Only if it is reasonably foreseeable that the action will have a special economic effect on the property's value, distinguishable from its effect on the public. The AG said that whether any particular vote crosses that line is a fact question, and the opinion process cannot resolve fact questions, so it declined to answer that part.

Currency note

This opinion was issued in 2016. 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. Chapter 171 of the Local Government Code and Beaumont's local ordinances may have been amended since this opinion issued, so confirm the current dollar threshold and affidavit rules before relying on them.

What the opinion meant for those who asked

The requesting legislator (as the opinion described it): The opinion answered the question of who is covered and what they must do. It told the representative that both the planning and zoning commissioners and the historic landmark commissioners are local public officials subject to chapter 171, that a supporting city employee is not, that a district property interest of $2,500 or more is a substantial interest requiring an affidavit, and that whether a member must abstain from a given vote is a fact question outside the opinion process.

Planning, zoning, and historic landmark commissioners who own district property (as the opinion described it): The opinion treated such commissioners as local public officials who, if they hold a substantial property interest in the district, must file an affidavit stating the nature and extent of that interest before voting on a matter involving the property, and who must abstain when an action is reasonably foreseeable to have a special economic effect on their property distinguishable from its effect on the public. The opinion noted that chapter 171 carries criminal penalties.

City staff who support the commissions (as the opinion described it): The opinion described a city employee who prepares staff reports as not a local public official, and therefore not subject to chapter 171's affidavit and abstention requirements, consistent with a prior AG opinion.

Common questions

Does a planning and zoning commissioner have to recuse from a vote that affects their own property?
As the opinion read chapter 171, the commissioner must first file an affidavit if the property interest is worth $2,500 or more, and must abstain from the vote when it is reasonably foreseeable that the action will have a special economic effect on the property distinguishable from its effect on the general public. Whether a specific vote meets that test is a fact question the AG would not resolve.

Is a historic landmark commission member a "local public official"?
The opinion concluded yes for Beaumont's commission. Even though the commission often forwards recommendations to others, the city's ordinances give it final authority in certain situations (its decisions can be appealed to district court, and some exterior alterations, demolitions, or removals require its approval), so its members exercise more than advisory responsibilities.

Are city staff who prepare reports covered by the conflict rules?
No. The opinion explained that a city employee is not a local public official under chapter 171, so the staff person who prepared reports for the commissions, even though he lived in the district, was not subject to the affidavit and abstention requirements.

What makes a property interest "substantial" under chapter 171?
The opinion pointed to the statutory definition: an equitable or legal ownership interest in real property with a fair market value of $2,500 or more. A close relative's substantial interest can also count.

Background and statutory framework

Chapter 171 of the Local Government Code regulates the pecuniary conflicts of interest of certain local public officials. Section 171.004 requires that, if a local public official has a substantial interest in real property, the official must file an affidavit stating the nature and extent of the interest before a vote or decision on any matter involving the property, and must abstain from further participation if it is reasonably foreseeable that an action on the matter will have a special economic effect on the value of the property distinguishable from its effect on the public (Tex. Loc. Gov't Code § 171.004(a), (a)(2)). A "local public official" includes a member of a governing body or another officer, whether elected, appointed, paid, or unpaid, of a district, who exercises responsibilities beyond those that are advisory in nature (id. § 171.001(1)).

This office had previously determined that a city employee is not a local public official subject to chapter 171 (Tex. Att'y Gen. Op. No. GA-0195 (2004) at 2), and that a member of a planning and zoning commission is a local public official under chapter 171 (Tex. Att'y Gen. Op. No. DM-309 (1994) at 2). Whether a historic landmark commission member is a local public official depends on the city's ordinances defining the commission's duties and powers; Beaumont's ordinances give its Historic Landmark Commission a measure of final authority over certificates of appropriateness, demolition, and relocation, with appeals to district court (Beaumont, Tex., Code of Ordinances § 28.02.007(b), (d), (e), (g); § 28.03.017(d)(1), (d)(2)).

A substantial interest in real property sufficient to trigger chapter 171 is an equitable or legal ownership with a fair market value of $2,500 or more, and a local public official also has a substantial interest if a person related in the first degree by consanguinity or affinity has one (Tex. Loc. Gov't Code § 171.002(b), (c)). Chapter 171 provides for criminal penalties (id. § 171.003). Whether a member's action on a particular matter will have a special economic effect on the value of the property distinguishable from its effect on the public requires the resolution of fact issues and is outside the opinion process (Tex. Att'y Gen. Op. No. GA-0796 (2010) at 6).

Citations

Statutes and ordinances:

• Tex. Loc. Gov't Code § 171.001(1) (definition of local public official)
• Tex. Loc. Gov't Code § 171.002(b), (c) (substantial interest in real property)
• Tex. Loc. Gov't Code § 171.003 (criminal penalties)
• Tex. Loc. Gov't Code § 171.004(a), (a)(2) (affidavit and abstention)
• Beaumont, Tex., Code of Ordinances § 28.02.007(b), (d), (e), (g)
• Beaumont, Tex., Code of Ordinances § 28.03.017(d)(1), (d)(2)

Texas Attorney General opinions:

• Tex. Att'y Gen. Op. No. DM-309 (1994)
• Tex. Att'y Gen. Op. No. GA-0195 (2004)
• Tex. Att'y Gen. Op. No. GA-0796 (2010)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0105
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2016/kp0105.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

August 8, 2016

The Honorable Joe Deshotel Opinion No. KP-0105
Chair, Committee on Land and
Resource Management Re: Application of the conflict of interest rules
Texas House of Representatives in chapter 171 of the Local Government Code
Post Office Box 2910 to members of a planning and zoning
Austin, Texas 78768-2910 commission or historic landmark commission
who reside or own property within the historic
district (RQ-0094-KP)

Dear Representative Deshotel:

    You ask about the application of the conflict of interest rules in chapter 171 of the Local Government Code to members and staff of a planning and zoning commission ("P&Z Commission") or a historic landmark commission ("HL Commission") who reside or own property within the historic district. [1] You tell us that the City of Beaumont ("City") created a historic cultural landmark preservation overlay district ("district"). Request Letter at 1. You also tell us that the City created the HL Commission to approve or recommend action on buildings and structures within the district. See id. at 1-2 (stating that the purpose of the HL Commission is to preserve the integrity of the district and balance the City's interest in encouraging growth through commerce).

    You state that at a recent P&Z Commission hearing, an application for a permit for a business office within the City, and presumably the district, was considered, and residents testified that the building would have a "negative impact on their property values." Id. at 2. You indicate that at least two members of the P&Z Commission reside in and have a property interest in the district. See id. at 1. You indicate further that a staff person of the P&Z Commission, who is primarily responsible for preparing staff reports for the P&Z Commission and the HL Commission, lives within the historic district. See id. at 2. You ask whether a P&Z Commissioner or HL Commissioner and the staff person, "as public officials pursuant to Chapter 171 of the Local Government Code, who reside[] or own[] property in the geographically defined historic district may vote or decide on matters that affect that district." Id. at 3.

    Chapter 171 of the Local Government Code regulates the pecuniary conflicts of interests of certain local public officials. Section 171.004 provides:

           (a) If a local public official has a substantial interest in ... real
               property, the official shall file, before a vote or decision on any
               matter involving the ... real property, an affidavit stating the
               nature and extent of the interest and shall abstain from further
               participation in the matter if:

               (2) in the case of a substantial interest in real property, it is
                   reasonably foreseeable that an action on the matter will have
                   a special economic effect on the value of the property,
                   distinguishable from its effect on the public.

TEX. LOC. GOV'T CODE § 171.004(a). Subsection 171.004(a) applies to a "local public official" who holds a "substantial interest" in a business entity or real property. Id. We address these elements in turn.

    A "local public official" includes a "member of the governing body or another officer, whether elected, appointed, paid, or unpaid, of any district . . . who exercises responsibilities beyond those that are advisory in nature." Id. § 171.001(1). This office has previously determined that a city employee is not a local public official and, as such, is not subject to chapter 171. See Tex. Att'y Gen. Op. No. GA-0195 (2004) at 2. This office has also previously concluded that a member of a planning and zoning commission is a local public official under chapter 171. See Tex. Att'y Gen. Op. No. DM-309 (1994) at 2. We find no authority on the question whether a member of an HL Commission similar to the one here is a local public official under chapter 171. To analyze this question, we examine the City's ordinances providing for the HL Commission's duties and powers.

    One primary duty of the HL Commission is to make recommendations about a historic-cultural landmark preservation designation to the P&Z Commission and the City Council. See BEAUMONT, TEX., CODE OF ORDINANCES § 28.02.007(b). It is also given authority to determine whether a certificate of appropriateness is warranted for any construction, reconstruction, alteration, change, restoration, removal, or demolishment of an exterior architectural feature of a building located in the historic district. See id. § 28.02.007(d). And it is tasked with reviewing requests for a certificate of demolition or relocation prior to the demolition or relocation of any building or structure with a historic preservation designation. See id. § 28.02.007(e). While in the exercise of these powers the HL Commission often is required to forward a recommendation to another person or entity for finality, the City's ordinances do contemplate that the HL Commission has a certain amount of final authority. For example, a party may appeal a decision of the City Council or HL Commission to the district court. Id. § 28.02.007(g). The exterior of certain structures may not be altered or changed without the certificate of appropriateness from the HL Commission. See id. § 28.03.017(d)(1). Certain buildings or structures may not be demolished or removed without the approval of the City Council or the HL Commission. See id. § 28.03.017(d)(2). In all of these instances, a decision of the HL Commission, even if concurrent with any authority of the City Council, is treated as a final decision authorizing or prohibiting certain actions with regard to structures within the historic district. These provisions tend to suggest that the HL Commission exercises responsibilities beyond that which are advisory in nature and that a member thereof is a local public official.

    We next consider whether either of the two commission's members' particular property interests within the district constitute a "substantial property interest." With respect to real property, a substantial interest sufficient to trigger chapter 171 includes an interest in real property that is "an equitable or legal ownership with a fair market value of $2,500 or more." TEX. LOC. GOV'T CODE § 171.002(b); see also id. § 171.002(c) (providing that a local public official also has a substantial interest if a person related to the official in the first degree by consanguinity or affinity has a substantial interest). You provide no information about the nature of the property interests owned by the members of the two commissions, but to the extent a member's ownership interest in the real property equals or exceeds $2,500, it is a substantial property interest under chapter 171.

    In the event these local public officials have the requisite substantial property interest, they must file "an affidavit stating the nature and extent of the interest" before a vote or decision on any matter involving the real property. Id. § 171.004(a). And they are required to abstain from "further participation in the matter" if "it is reasonably foreseeable that an action on the matter will have a special economic effect on the value of the property, distinguishable from its effect on the public." Id. § 171.004(a)(2); see also id. § 171.003 (providing for criminal penalties). However, this office cannot decide in the opinion process whether a member's action on a particular matter will have a special economic effect on the value of the property distinguishable from its effect on the public because such a question requires the resolution of fact issues. Tex. Att'y Gen. Op. No. GA-0796 (2010) at 6.

                                   SUMMARY

                    Members of the Beaumont Planning and Zoning
           Commission and the Beaumont Historical Landmark Commission
           are local public officials subject to chapter 171 of the Local
           Government Code. A Beaumont city employee providing staff
           support for the two commissions is not a local public official subject
           to chapter 171. Any real property interest within the historic district
           owned by members of either commission and valued at $2,500 or
           more is a substantial property interest for which the members must
           file an affidavit stating the nature and extent of the interest before a
           vote or decision on any matter involving the property.

                   Whether the members must abstain from voting on matters
           involving their property interest depends on whether it is reasonably
           foreseeable that an action on the matter will have a special economic
           effect on the value of the property, distinguishable from its effect on
           the public. Such question involves fact issues and is outside the
           purview of an attorney general opinion.

                                          Very truly yours,

                                          KEN PAXTON
                                          Attorney General of Texas

JEFFREY C. MATEER
First Assistant Attorney General

BRANTLEY STARR
Deputy First Assistant Attorney General

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

CHARLOTTE M. HARPER
Assistant Attorney General, Opinion Committee