CHAPTER 171. REGULATION OF CONFLICTS OF INTEREST OF OFFICERS OF MUNICIPALITIES, COUNTIES, AND CERTAIN OTHER LOCAL GOVERNMENTS
LOCAL GOVERNMENT CODE
TITLE 5. MATTERS AFFECTING PUBLIC OFFICERS AND EMPLOYEES
SUBTITLE C. MATTERS AFFECTING PUBLIC OFFICERS AND EMPLOYEES OF
MORE THAN ONE TYPE OF LOCAL GOVERNMENT
CHAPTER 171. REGULATION OF CONFLICTS OF INTEREST OF OFFICERS OF
MUNICIPALITIES, COUNTIES, AND CERTAIN OTHER LOCAL GOVERNMENTS
Sec. 171.001. DEFINITIONS. In this chapter:
(1) "Local public official" means a member of the governing body
or another officer, whether elected, appointed, paid, or unpaid,
of any district (including a school district), county,
municipality, precinct, central appraisal district, transit
authority or district, or other local governmental entity who
exercises responsibilities beyond those that are advisory in
nature.
(2) "Business entity" means a sole proprietorship, partnership,
firm, corporation, holding company, joint-stock company,
receivership, trust, or any other entity recognized by law.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Sec. 171.002. SUBSTANTIAL INTEREST IN BUSINESS ENTITY. (a) For
purposes of this chapter, a person has a substantial interest in
a business entity if:
(1) the person owns 10 percent or more of the voting stock or
shares of the business entity or owns either 10 percent or more
or $15,000 or more of the fair market value of the business
entity; or
(2) funds received by the person from the business entity exceed
10 percent of the person's gross income for the previous year.
(b) A person has a substantial interest in real property if the
interest is an equitable or legal ownership with a fair market
value of $2,500 or more.
(c) A local public official is considered to have a substantial
interest under this section if a person related to the official
in the first degree by consanguinity or affinity, as determined
under Chapter 573, Government Code, has a substantial interest
under this section.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1, Sec. 40(a), eff. Aug. 28,
1989; Acts 1991, 72nd Leg., ch. 561, Sec. 37, eff. Aug. 26, 1991;
Acts 1995, 74th Leg., ch. 76, Sec. 5.95(27), eff. Sept. 1, 1995;
Acts 1997, 75th Leg., ch. 849, Sec. 1, eff. Sept. 1, 1997.
Sec. 171.0025. APPLICATION OF CHAPTER TO MEMBER OF HIGHER
EDUCATION AUTHORITY. This chapter does not apply to a board
member of a higher education authority created under Chapter 53,
Education Code, unless a vote, act, or other participation by the
board member in the affairs of the higher education authority
would provide a financial benefit to a financial institution,
school, college, or university that is:
(1) a source of income to the board member; or
(2) a business entity in which the board member has an interest
distinguishable from a financial benefit available to any other
similar financial institution or other school, college, or
university whose students are eligible for a student loan
available under Chapter 53, Education Code.
Added by Acts 1989, 71st Leg., ch. 1, Sec. 41(a), eff. Aug. 28,
1989.
Sec. 171.003. PROHIBITED ACTS; PENALTY. (a) A local public
official commits an offense if the official knowingly:
(1) violates Section 171.004;
(2) acts as surety for a business entity that has work,
business, or a contract with the governmental entity; or
(3) acts as surety on any official bond required of an officer
of the governmental entity.
(b) An offense under this section is a Class A misdemeanor.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1, Sec. 40(a), eff. Aug. 28,
1989.
Sec. 171.004. AFFIDAVIT AND ABSTENTION FROM VOTING REQUIRED.
(a) If a local public official has a substantial interest in a
business entity or in real property, the official shall file,
before a vote or decision on any matter involving the business
entity or the real property, an affidavit stating the nature and
extent of the interest and shall abstain from further
participation in the matter if:
(1) in the case of a substantial interest in a business entity
the action on the matter will have a special economic effect on
the business entity that is distinguishable from the effect on
the public; or
(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.
(b) The affidavit must be filed with the official record keeper
of the governmental entity.
(c) If a local public official is required to file and does file
an affidavit under Subsection (a), the official is not required
to abstain from further participation in the matter requiring the
affidavit if a majority of the members of the governmental entity
of which the official is a member is composed of persons who are
likewise required to file and who do file affidavits of similar
interests on the same official action.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 1, Sec. 40(a), eff. Aug. 28,
1989.
Sec. 171.005. VOTING ON BUDGET. (a) The governing body of a
governmental entity shall take a separate vote on any budget item
specifically dedicated to a contract with a business entity in
which a member of the governing body has a substantial interest.
(b) Except as provided by Section 171.004(c), the affected
member may not participate in that separate vote. The member may
vote on a final budget if:
(1) the member has complied with this chapter; and
(2) the matter in which the member is concerned has been
resolved.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Renumbered from Sec. 171.006 and amended by Acts 1989, 71st Leg.,
ch. 1, Sec. 40(a), eff. Aug. 28, 1989.
Sec. 171.006. EFFECT OF VIOLATION OF CHAPTER. The finding by a
court of a violation under this chapter does not render an action
of the governing body voidable unless the measure that was the
subject of an action involving a conflict of interest would not
have passed the governing body without the vote of the person who
violated the chapter.
Acts 1987, 70th Leg., ch. 149, Sec. 1, eff. Sept. 1, 1987.
Renumbered from Sec. 171.008 by Acts 1989, 71st Leg., ch. 1, Sec.
40(a), eff. Aug. 28, 1989.
Sec. 171.007. COMMON LAW PREEMPTED; CUMULATIVE OF MUNICIPAL
PROVISIONS. (a) This chapter preempts the common law of
conflict of interests as applied to local public officials.
(b) This chapter is cumulative of municipal charter provisions
and municipal ordinances defining and prohibiting conflicts of
interests.
Amended by Acts 1989, 71st Leg., ch. 1, Sec. 40(a), eff. Aug. 28,
1989.
Sec. 171.009. SERVICE ON BOARD OF CORPORATION FOR NO
COMPENSATION. It shall be lawful for a local public official to
serve as a member of the board of directors of private, nonprofit
corporations when such officials receive no compensation or other
remuneration from the nonprofit corporation or other nonprofit
entity.
Added by Acts 1989, 71st Leg., ch. 475, Sec. 2, eff. Aug. 28,
1989.
Sec. 171.010. PRACTICE OF LAW. (a) For purposes of this
chapter, a county judge or county commissioner engaged in the
private practice of law has a substantial interest in a business
entity if the official has entered a court appearance or signed
court pleadings in a matter relating to that business entity.
(b) A county judge or county commissioner that has a substantial
interest in a business entity as described by Subsection (a) must
comply with this chapter.
(c) A judge of a constitutional county court may not enter a
court appearance or sign court pleadings as an attorney in any
matter before:
(1) the court over which the judge presides; or
(2) any court in this state over which the judge's court
exercises appellate jurisdiction.
(d) Upon compliance with this chapter, a county judge or
commissioner may practice law in the courts located in the county
where the county judge or commissioner serves.
Added by Acts 2003, 78th Leg., ch. 227, Sec. 21, eff. Sept. 1,
2003; Acts 2003, 78th Leg., ch. 1206, Sec. 3, eff. June 20, 2003.