Can a Texas state legislator also work as the paid president of a municipal management district?

Plain-English summary

The chair of the Texas House Committee on General Investigating & Ethics asked the AG whether a sitting state legislator may also serve as the president of a municipal management district that operates under chapter 375 of the Local Government Code. The request asked the AG to confirm or clarify an earlier opinion, GA-0386, and to address whether any other statutes or constitutional provisions would prohibit the dual employment or the legislator's receipt of pay from both positions.

The starting point is Article XVI, section 40(d) of the Texas Constitution, which provides that no member of the Legislature may hold any other office or position of profit under this State. No Texas court has defined "position of profit," but prior AG opinions read it to mean salaried, nontemporary employment, and they read "under this State" to cover employees of state agencies and of political subdivisions that function as agencies of the State. A municipal management district is such a political subdivision. So an employee of a municipal management district holds a position of profit under the State, and if the district's president is a nontemporary, salaried employee, section 40(d) bars that person from also serving as a legislator. The AG confirmed GA-0386 was still correct and noted that whether a particular individual who carries the title of president and receives a regular monthly payment actually holds a "position of profit" is a fact question outside the opinion process.

The flip side, also from GA-0386, is that section 40(d) does not reach an independent contractor. The AG confirmed that too. The hard part is telling an employee apart from an independent contractor. An independent contractor pursues an independent business and does a specific piece of work using their own means and methods without submitting to the other party's control over the details. The dividing line is the right to control: an employer controls both the end and the means, while a person who hires an independent contractor controls only the end. The AG cautioned that the test is fact-intensive and varies by context, that no single test governs the section 40(d) question, and that AG opinions often use the Texas Supreme Court's five-factor right-to-control test. A mere affirmation or a recital in a contract that someone is an independent contractor is unlikely, by itself, to establish the status; a state agency could at least apply the five-factor test with supporting fact findings.

The AG then surveyed the other limits the request asked about. Generally, a legislator may accept a fee for work done in a capacity other than as a legislator, but chapter 572 of the Government Code limits a legislator's private employment: section 572.051 bars accepting employment or compensation that could reasonably be expected to impair the official's independent judgment, section 572.053 bars voting on a bill that would directly benefit a business entity in which the member has a controlling interest (echoed by Article III, section 22), and section 572.056 bars soliciting or accepting a commission or fee for personally soliciting a government contract. Penal Code provisions on abuse of office (chapter 39) and bribery and corrupt influence (chapter 36) may also apply. Because whether any of these is violated depends on the facts, and because the AG does not resolve fact questions or decide whether criminal statutes have been violated, the opinion did not say whether this particular dual service was prohibited. It pointed instead to the Texas Ethics Commission, which can issue opinions and bring civil charges under chapter 572, and to local prosecutors for any warranted criminal charges.

Currency note

This opinion was issued in 2019. 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

State legislators considering a district job: The AG concluded that a salaried, nontemporary employee of a municipal management district, including a president who fits that description, is barred by article XVI, section 40(d) from also serving as a legislator, while an independent contractor is not.

Districts and agencies sorting employee from contractor: The opinion explained that the distinction turns on the fact-intensive right-to-control test, that the Texas Supreme Court's five-factor test is commonly used, and that a bare contractual label is unlikely to establish independent-contractor status on its own.

Anyone asking whether a specific arrangement is legal: The AG declined to decide. Whether the described employment violates chapter 572 of the Government Code or the Penal Code is a fact question for the Texas Ethics Commission and local prosecutors, not for an attorney general opinion.

Common questions

Can a Texas legislator be the paid president of a municipal management district?
At the time of this opinion, not if the president is a salaried, nontemporary employee of the district. The AG concluded article XVI, section 40(d) bars holding that "position of profit" while serving as a legislator.

Is an independent contractor treated the same way?
No. The AG confirmed that section 40(d) does not prohibit a person who works as an independent contractor from also serving as a legislator.

How do you tell an employee from an independent contractor here?
The AG explained the question turns on the right to control: an employer controls both the result and the means, while one who hires an independent contractor controls only the result. The Texas Supreme Court's five-factor test is commonly applied, and the inquiry is fact-intensive.

If section 40(d) doesn't bar it, is the arrangement automatically fine?
No. The AG noted that chapter 572 of the Government Code limits a legislator's private employment and that Penal Code chapters 36 and 39 may apply, but whether any are violated is a fact question.

Who decides whether a specific arrangement crosses the line?
The AG pointed to the Texas Ethics Commission, which can issue opinions and bring civil charges under chapter 572, and to local prosecutors for any criminal charges.

Background and statutory framework

Article XVI, section 40(d) bars a legislator from holding another office or position of profit under the State (Tex. Const. art. XVI, § 40(d)). Prior opinions read "position of profit" as salaried, nontemporary employment and "under this State" to include political subdivisions functioning as state agencies (Tex. Att'y Gen. Op. Nos. GA-0386 (2005), H-1304 (1978), JC-0430 (2001), JM-782 (1987); Orndorff v. State, 108 S.W.2d 206, 209 (Tex. Civ. App.-El Paso 1937, writ ref'd)). A municipal management district under chapter 375 is such a subdivision (Tex. Loc. Gov't Code §§ 375.001-.357; § 375.001(a)), so a salaried, nontemporary district employee may not also be a legislator, while whether a given president holds a position of profit is a fact question (Tex. Att'y Gen. Op. No. GA-0087 (2003)).

Section 40(d) does not reach independent contractors (Tex. Att'y Gen. Op. Nos. JC-0430 (2001), H-1304 (1978)). The AG described independent-contractor status by reference to the right-to-control line (Pitchfork Land & Cattle Co. v. King, 346 S.W.2d 598, 602-03 (Tex. 1961); Newspapers, Inc. v. Love, 380 S.W.2d 582, 591 (Tex. 1964); Limestone Prods. Distrib., Inc. v. McNamara, 71 S.W.3d 308, 312 (Tex. 2002)), noted the test is context-dependent (Harris Cty. Appraisal Dist. v. Tex. Workforce Comm'n, 519 S.W.3d 113, 118-19 (Tex. 2017); Tex. Civ. Prac. & Rem. Code § 95.003), and set out the Texas Supreme Court's five-factor test (Limestone Prods. Distrib., 71 S.W.3d at 312; Indus. Indem. Exch. v. Southard, 160 S.W.2d 905, 907 (Tex. 1942)), adding that right of control is inferred from facts where no contract settles it (Producers Chem. Co. v. McKay, 366 S.W.2d 220, 226 (Tex. 1963); Thompson v. Travelers Indem. Co., 789 S.W.2d 277, 279 (Tex. 1990)).

On other limits, the AG cited chapter 572's standards of conduct (Tex. Gov't Code §§ 572.001-.069; § 572.001(a); § 572.051(a)(3), (a)(5); § 572.053(a), (b); § 572.056(a), (c); § 305.022(a), (b)), the constitutional bar on voting on a personal-interest bill (Tex. Const. art. III, § 22), the lawful-fee exception in the Penal Code (Tex. Penal Code § 36.10(a)(1)), and the abuse-of-office and bribery chapters (Tex. Penal Code §§ 39.02, .03, .06; §§ 36.02, .07, .08), while leaving the fact-bound application to the Ethics Commission and prosecutors (Tex. Gov't Code §§ 572.007, .008; § 571.091(a); Tex. Att'y Gen. Op. Nos. GA-1081 (2014), GA-0760 (2010), KP-0226 (2019)).

Citations

Constitutional and statutory provisions:

• Tex. Const. art. XVI, § 40(d); art. III, § 22
• Tex. Loc. Gov't Code §§ 375.001-.357; § 375.001(a)
• Tex. Gov't Code §§ 572.001-.069; § 572.001(a); § 572.051(a)(3), (a)(5); § 572.053(a), (b); § 572.053(c); § 572.056(a), (c); §§ 572.007, .008; § 571.091(a); § 305.022(a), (b)
• Tex. Penal Code § 36.10(a)(1); §§ 39.02, .03, .06; §§ 36.02, .07, .08
• Tex. Civ. Prac. & Rem. Code § 95.003

Cases and Attorney General opinions:

• Orndorff v. State, 108 S.W.2d 206, 209 (Tex. Civ. App.-El Paso 1937, writ ref'd)
• Pitchfork Land & Cattle Co. v. King, 346 S.W.2d 598, 602-03 (Tex. 1961)
• Newspapers, Inc. v. Love, 380 S.W.2d 582, 591 (Tex. 1964)
• Limestone Prods. Distrib., Inc. v. McNamara, 71 S.W.3d 308, 312 (Tex. 2002)
• Harris Cty. Appraisal Dist. v. Tex. Workforce Comm'n, 519 S.W.3d 113, 118-19 (Tex. 2017)
• Producers Chem. Co. v. McKay, 366 S.W.2d 220, 226 (Tex. 1963)
• Thompson v. Travelers Indem. Co., 789 S.W.2d 277, 279 (Tex. 1990)
• Indus. Indem. Exch. v. Southard, 160 S.W.2d 905, 907 (Tex. 1942)
• Tex. Att'y Gen. Op. Nos. GA-0386 (2005), H-1304 (1978), JC-0430 (2001), JM-782 (1987), GA-0087 (2003), GA-1081 (2014), GA-0760 (2010), KP-0226 (2019)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0227
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2019/kp-0227.pdf

Original opinion text

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

January 7, 2019

The Honorable Sarah Davis Opinion No. KP-0227
Chair, Committee on General Investigating
& Ethics Re: Whether a state legislator may
Texas House of Representatives simultaneously serve as president of a
Post Office Box 2910 municipal management district operating under
Austin, Texas 78768-2910 chapter 375 of the Local Government Code
(confirmation and clarification of Attorney
General Opinion GA-0386) (RQ-0229-KP)

Dear Representative Davis:

     You ask multiple questions regarding a state legislator's dual service as a legislator and as

the president of a municipal management district. [1] You first ask whether Attorney General Opinion
GA-0386 is still the correct interpretation of existing law. See Request Letter at 1; see also Tex.
Att'y Gen. Op. No. GA-0386 (2005). Attorney General Opinion GA-0386 concluded that article
XVI, section 40(d) of the Texas constitution prohibits an employee of a municipal management
district operating under chapter 375 of the Local Government Code from simultaneously serving
as a member of the Texas Legislature. See Tex. Att'y Gen. Op. No. GA-0386 (2005) at 5; see also
TEX. LOC. GOV'T CODE §§ 375.001-.357 (providing for municipal management districts). The
opinion also concluded that article XVI, section 40(d) did not apply to an independent contractor
of a municipal management district. See Tex. Att'y Gen. Op. No. GA-0386 (2005) at 5.

    Article XVI, section 40(d), provides, in relevant part, that "[n]o member of the Legislature

of this State may hold any other office or position of profit under this State .... " TEX. CONST.
art. XVI, § 40(d). While no Texas court has addressed the meaning of "position of profit," prior
opinions of this office construe the phrase to mean "a salaried, nontemporary employment." Tex.
Att'y Gen. Op. Nos. GA-0386 (2005) at 2, H-1304 (1978) at 2; see also Tex. Att'y Gen. Op. No.
JC-0430 (2001) at 1 (distinguishing an "office" from a "position of profit"). Additionally, prior
attorney general opinions construing the phrase "under this State" apply it to "employees of state
agencies and of political subdivisions which can be characterized as agencies of the state." Tex.
Att'y Gen. Op. No. JM-782 (1987) at 5; see also Orndorff v. State, 108 S.W.2d 206, 209 (Tex.
Civ. App.-El Paso 1937, writ ref'd) (concluding that a political subdivision in a subordinate
position to the State performing duties imposed by the State is "under this State"); TEX. LOC.
GOV'T CODE § 375.001(a) (stating a municipal management district is "essential to the
accomplishment" of purposes under the Texas constitution). Accordingly, employees of a
municipal management district, as a political subdivision of the State, hold a position of profit
"under this State." See Tex. Att'y Gen. Op. No. GA-0386 (2005) at 2; see also Orndorff, 108
S.W.2d at 209. No judicial or attorney general opinion since Opinion GA-0386 changed these
principles. If the president of a municipal management district is a nontemporary, salaried
employee of the district, he or she is prohibited by article XVI, section 40(d) from simultaneously
serving as a legislator. Whether an individual who carries the title of president and receives a
regular monthly payment holds a position of profit is a fact question not appropriate for an attorney
general opinion. See Tex. Att'y Gen. Op. No. GA-0087 (2003) at 1 ("whether a public servant's
outside employment creates a conflict of interest frequently requires resolving fact questions,
which is beyond the purview of the opinion process").

    Prior opinions of this office concluded that article XVI, section 40(d) does not extend to

an independent contractor. See Tex. Att'y Gen. Op. Nos. JC-0430 (2001) at 2, H-1304 (1978) at
2, Tex. Att'y Gen. LO-93-31 (1993) at 2. No judicial or attorney general opinion since Opinion
GA-0386 has determined otherwise. Accordingly, an independent contractor is not prohibited by
article XVI, section 40(d) from simultaneously serving as a state legislator. An independent
contractor is one who, "in the pursuit of an independent business, undertakes to do a specific piece
of work for other persons, using his own means and methods, without submitting himself to their
control in respect to all its details." Pitchfork Land & Cattle Co. v. King, 346 S.W.2d 598, 602-
03 (Tex. 1961). Whether a person acts as an independent contractor depends on the amount of
control that the employer exerts or has a right to exert over the details of the work. See
Newspapers, Inc. v. Love, 380 S.W.2d 582, 591 (Tex. 1964). Regarding an employee, an employer
controls both the end sought to be accomplished and the means and details of the accomplishment.
See Limestone Prods. Distrib., Inc. v. McNamara, 71 S.W.3d 308, 312 (Tex. 2002). A person who
retains an independent contractor controls the end sought to be accomplished, while the
independent contractor controls the means and details of accomplishing the work. See id.

    The question whether an individual is an independent contractor is complex and does not

allow for a uniform test: it arises in many varied contexts, and each of the different contexts can
give rise to a different test by which to analyze the question. See, e.g., Harris Cty. Appraisal Dist.
v. Tex. Workforce Comm'n, 519 S.W.3d 113, 118-19 (Tex. 2017) (considering common-law test,
as well as twenty-factor test established by the Workforce Commission); TEX. CIV. PRAC. & REM.
CODE § 95.003 (providing factors to determine independent contractor in tort liability context).
No judicial opinion or statute provides a uniform test to be used in the context of article XVI,
section 40(d). Opinions from this office often refer to a five-factor test set out by the Texas
Supreme Court. See Tex. Att'y Gen. Op. No. GA-0386 (2005) at 3-4, Tex. Att'y Gen. LO-95-022
(1995) at 1-2 n.2. The Texas Supreme Court recognizes that other tests exist, but it considers the
following five-factor test an essential test by which to establish the right to control:

           (1) The independent nature of the worker's business; (2) the
           worker's obligation to furnish necessary tools, supplies, and
           materials to perform the job; (3) the worker's right to control the
           progress of the work except about final results; (4) the time for
           which the worker is employed; and (5) the method of payment,
           whether by unit of time or by the job.

Limestone Prods. Distrib., 71 S.W.3d at 312; Indus. Indem. Exch. v. Southard, 160 S.W.2d 905,
907 (Tex. 1942).

    Absent a contract establishing the right to control, "right of control is necessarily

determined as an inference from ... facts and circumstances." Producers Chem. Co. v. McKay,
366 S.W.2d 220, 226 (Tex. 1963). Given the fact-intensive nature of the right-to-control
determination, it is unlikely that a mere affirmation by an interested person claiming it, or a joint
recital of a statement that a person is an independent contractor will alone suffice. See generally
Thompson v. Travelers Indem. Co., 789 S.W.2d 277, 279 (Tex. 1990) (examining fact
circumstances to determine existence of employer-employee relationship); Southard, 160 S.W.2d
at 907. As a practical matter, a state agency or unit of government could at a minimum utilize this
five-factor test along with supporting fact findings to determine independent contractor status for
purposes of article XVI, section 40(d).

     You also ask whether other statutory or constitutional provisions "prohibit the described

employment or the receipt by the legislator of compensation for both positions." Request Letter
at 2. Generally, a state legislator "may accept a fee for work performed in a capacity other than as
a legislator." Tex. Ethics Comm'n Op. No. 371 (1997) at 1 (citing TEX. PENAL CODE
§ 36.10(a)(1), [2] Tex. Ethics Comm'n Op. Nos. 358 (1997) at 2, 178 (1993) at 1). There are,
however, statutory limitations on a legislator's private employment. For example, chapter 572 of
the Government Code, which expressly applies to state legislators, governs standards of conduct
and conflicts of interest of state officers and employees. See TEX. GOV'T CODE §§ 572.001-.069;
see also id. § 305.022(a), (b) (providing that compensation for lobbying activities must not be
made contingent on the outcome of administrative actions). Chapter 572 recites the State's policy
that a state officer "may not have a direct or indirect interest, including financial and other interests,
or engage in a business transaction or professional activity, or incur any obligation of any nature
that is in substantial conflict with the proper discharge of the officer's ... duties in the public
interest." Id. § 572.001(a). A state legislator's dual service could implicate several sections of
chapter 572 depending on the circumstances. See Tex. Att'y Gen. Op. No. KP-0226 (2019) at 2-3.

    Section 572.051 prohibits a state officer or employee from accepting "other employment

or compensation that could reasonably be expected to impair the officer's or employee's
independence of judgment in the performance of the officer's or employee's official duties." TEX.
GOV'T CODE § 572.051(a)(3). It also provides that a state officer should not "intentionally or
knowingly solicit, accept, or agree to accept any benefit for having exercised the officer's ...
official powers or performed the officer's . . . official duties in favor of another." Id.
§ 572.051(a)(5). The Commission recognizes that compliance with the standards of conduct in
section 572.051 is a matter of personal ethics. See Tex. Ethics Comm'n Op. Nos. 371 (1997) at 1,
228 (1994) at 2 n.2. It advises a member of the Legislature, before entering into a contract, to
consider "whether there is any conflict, or appearance of conflict, between the legislator's
responsibilities as a public servant and his or her private contractual obligations" and to refrain
from business activities that create a conflict or the appearance of such a conflict. Tex. Ethics
Comm'n Op. Nos. 374 (1997) at 1, 408 (1998) at 1.

    Section 572.053 prohibits a member of the Legislature from voting "on a measure or a bill,

other than a measure that will affect the entire class of business entities, that will directly benefit
a specific business transaction of a business entity in which the member has a controlling interest."
TEX. GOV'T CODE § 572.053(a), [3] (b) (defining "controlling interest"); see also TEX. CONST. art. III,
§ 22 ("A member who has a personal or private interest in any measure or bill, proposed, or
pending before the Legislature, shall disclose the fact to the House, of which he is a member, and
shall not vote thereon."). In an independent contractor relationship, the terms of the contract would
likely determine whether the legislator has a controlling interest. See Tex. Att'y Gen. Op. No.
GA-1081 (2014) at 3 n.3 (stating that attorney general opinions do not construe contracts).

    Section 572.056 provides that a "state officer may not solicit or accept from a governmental

entity a commission, fee, bonus, retainer, or rebate that is compensation for the officer's personal
solicitation for the award of a contract for services or sale of goods to a governmental entity."
TEX. GOV'T CODE § 572.056(a). A "governmental entity" includes political subdivisions such as
the municipal management district. Id. § 572.056(c). To the extent a contract between the
municipal management district and the legislator provides for a commission, fee, bonus, retainer,
or rebate as compensation for the legislator's personal solicitation for the award of a contract for
services or sale of goods to the municipal management district, the compensation would be
prohibited.

   Provisions of the Penal Code may also apply. Chapter 39 provides for offenses related to

the abuse of office. See TEX. PENAL CODE §§ 39.02 (abuse of official capacity), .03 (official
oppression), .06 (misuse of official information). Chapter 36 pertains to bribery and corrupt
influence. See id. §§ 36.02 (bribery), .07 (acceptance of honorarium), .08 (gift to public servant
by person subject to his jurisdiction).

    As a violation of these provisions is determined based on relevant facts, it is not for an

attorney general opinion to conclude whether the employment you describe is prohibited. See Tex.
Att'y Gen. Op. No. GA-0087 (2003) at 1 ("whether a public servant's outside employment creates
a conflict of interest frequently requires resolving fact questions, which is beyond the purview of
the opinion process"). As this office does not answer fact questions or determine whether
violations of criminal statutes have occurred, we cannot determine whether this particular dual
service violates chapter 572 or provisions of the Penal Code. See Tex. Att'y Gen. Op. No. GA-
0760 (2010) at 3 ("Whether particular conduct constitutes a violation of a criminal statute involves
questions of fact that are outside the purview of the opinion process."). Instead, the Commission [4]
is authorized to bring civil charges for an alleged violation of these provisions, and a local
prosecutor may bring any criminal charges warranted by particular circumstances. See TEX.
GOV'T CODE §§ 572.007, .008.

                                   SUMMARY

                    To the extent the president of a municipal management
           district is a nontemporary, salaried employee of the district, he or
           she is prohibited by article XVI, section 40(d) of the Texas
           constitution from also serving as a state legislator.

                   Article XVI, section 40(d) does not prohibit an individual
           who works as an independent contractor from also serving as a state
           legislator. The Texas Supreme Court's right-to-control test to
           determine whether an individual is an independent contractor is fact
           intensive, and a mere affirmation or joint statement without factual
           support is likely insufficient to establish an individual as an
           independent contractor.

                    Though generally a state legislator may accept a fee for work
            performed in a capacity other than as a legislator, provisions in
            chapter 572 of the Government Code limit a legislator's private
            employment. Penal Code chapter 36 contains criminal provisions
            potentially applicable to a legislator's private compensation. A
            violation of these provisions is determined based on relevant facts
            and outside the purview of an attorney general opinion. Instead, the
            Texas Ethics Commission may issue opinions on ethical questions
            or bring civil charges for a violation of chapter 572, and local
            prosecutors may bring any criminal charges warranted by particular
            circumstances.

                                         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

[1] See Letter from Honorable Sarah Davis, Chair, House Comm. on Gen. Investigating & Ethics, to Honorable Ken Paxton, Tex. Att'y Gen. at 1-2 (Apr. 30, 2018), https://www2.texasattorneygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter").

[2] Penal Code section 36.10(a)(1) provides that provisions regarding gifts to public servants do not apply to "a fee prescribed by law to be received by a public servant or any other benefit to which the public servant is lawfully entitled or for which he gives legitimate consideration in a capacity other than as a public servant." TEX. PENAL CODE § 36.10(a)(1). The exception for work performed in a nonpublic capacity "means that it must be the services rendered and not the status of the public servant rendering the services that is of value to the person for whom the services are performed." Tex. Ethics Comm'n Op. No. 416 (1999) at 1; Tex. Att'y Gen. Op. No. GA-0087 (2003) at 4.

[3] An offense under this subsection is a Class A misdemeanor. See TEX. GOV'T CODE § 572.053(c).

[4] The Commission also has jurisdiction to prepare a written opinion about the application of chapter 572 "in regard to a specified existing or hypothetical factual situation." Id. § 571.091(a).