    OFFICE OF THE ATTORNEY GENERAL - STATE OF TEXAS

   JOHN CORNYN




                                         February 22,200l



The Honorable Jeff Wentworth                     Opinion No. JC-0345
Chair, Redistricting Cornmittee
Texas State Senate                               Re: Whether members of the board of directors of
P.O. Box 12068                                   the Texas State Affordable Housing Corporation are
Austin, Texas 7871 l-2068                        state officers whose gubernatorial appointments
                                                 must be made with the advice and consent of the
                                                 Texas Senate (RQ-0284-JC)


Dear Senator Wentworth:

         You ask whether members of the board of directors of the Texas State Affordable Housing
Corporation (“AHC”) are state officers whose gubernatorial appointments must be made with the
advice and consent of the Texas Senate pursuant to article IV, section 12 of the Texas Constitution.
Whether the governor’s appointment of members of the AHC board of directors must be made with
the advice and consent of the Texas Senate depends upon whether they are “state officers” within
the meaning of that provision. We conclude that the AHC board members are “state officers” and
that their appointments are therefore subject to senate confirmation.

         Article IV, section 12 of the Texas Constitution provides that all vacancies in “State or
district offices, except members of the Legislature, shall be filled unless otherwise provided by law
by appointment of the Governor.” TEX. CONST. art. IV, $ 12(a). All such appointments made by
the governor are made with or confirmed by “the advice and consent of two-thirds of the Senate
present.” Id. 5 12(b), (c). Wh en a state or district officer is appointed by the governor, the senate
must confirm the nominee in order for the nominee to be entitled to hold office. See Denison v. State
ex rel. Alfred, 6 1 S. W.2d 1017,1020-2 1 (Tex. Civ. App.-Austin), writ ref’dper curiam, 61 S. W.2d
1022 (1933). As one court has explained, article IV, section 12

               clearly contemplates that the Legislature may, should it see fit,
               provide by law for the filling of offices created by it otherwise than
               by appointment by the Governor, and that in such event confirmation
               by the Senate is not essential. . . . But where appointment, or perhaps
               nomination    for appointment       would be more accurate, is not
               ‘otherwise, provided by law,’ that power rests with the Governor.
               And the clear import, language, and requirement of the Constitution
               is that any and every appointment by the Governor to fill a vacancy
               in a state or district office must be with the advice and consent of
The Honorable Jeff Wentworth      - Page 2         (JC-0345)




                two-thirds of the Senate . . . . And where such required advice and
                consent to such nomination by the Governor is refused, the nominee
                or appointee is not legally entitled to the office.

Id.; see also Tex. Atty. Gen. LO-95-024, at 4 (TEx. CONST.art. IV, 0 12 “mandates that the senate
confirm every gubernatorial appointment to a state or district office in the executive or judicial
branch of government. The phrase in article IV, section 12(a), ‘unless otherwise provided by law,’
permits the legislature to delegate, by statute, the appointing power to an officer other than the
governor, but it does not permit the legislature to statutorily bypass the senate confirmation
process.“).

        Chapter 2306 of the Government Code establishes the Texas Department of Housing and
Community Affairs and various housing programs. The AHC is a nonprofit corporation provided
for by subchapter Y of chapter 2306 that must dedicate its activities to the public purpose of
promoting health, safety and welfare by providing housing to those with low incomes. See TEX.
GOV’T CODE ANN. 85 2306.552, .553 (Vernon 2000). The board of directors of the corporation
consists of five members with expertise in housing or related areas who are appointed by the
governor. See id. 5 2306.554(a).    Subchapter Y does not specify whether the board members’
appointments must be confirmed by the senate.

         It is not clear from the face of subchapter Y whether board members are public officers or
merely officers of a nonprofit corporation. Compare id. ch. 2306, subch. Y with TEX.TRANSP.CODE
ANN.g431.1ol(f)(v        emon Supp. 200 1) (expressly providing that a member of the board of directors
of a local government corporation established under Transportation Code, chapter 43 1, subchapter
D “is not a public official by virtue of that position”).       Indeed, the subchapter points in both
directions. On the one hand, for example, members of the board are entitled to reimbursement of
their travel expenses “as provided by the General Appropriations Act,” TEX. GOV’T CODE ANN.
8 2306.554(c) (V emon 2000). Another provision elsewhere in chapter 2306 provides that both the
Texas Department of Housing and Community Affairs and the AHC are generally subject to the
Open Meetings and Open Records Acts. See id. 0 2306.039. On the other hand, however, the AHC
board members are immune from civil liability not as public officers but rather “to the same extent
that a volunteer who serves as an officer, director, or trustee of a charitable organization is immune
from civil liability under Chapter 84, Civil Practice and Remedies Code.” Id. 8 2306.561 (b).

         As AHC board members are appointed by the governor, the senate must confirm them if they
hold state or district offices within the meaning of article IV, section 12. See Denison, 61 S.W.2d
at 1020-21. Thus, we must determine whether an AHC board member is a state or district officer
within the meaning of that constitutional provision. Over the years this office has construed article
IV, section 12 to distinguish between state and district versus local officers, see Tex. Att’y Gen. Op.
No. O-5 153 (1943) (whether person holds state or district office as opposed to a county, municipal,
or other local office depends primarily on geographical extent of officer’s duties); see also Tex. Att’y
Gen. LO-95-024, and officers and employees, see Tex. Att’y Gen. Op. Nos. JM-58 (1983) WW- 190
(1957). As the corporation’s duties are not limited to one area of the state, its board members are
The Honorable Jeff Wentworth      - Page 3        (JC-0345)




not “local officers.” Nor do the board members appear to be mere employees. Rather we believe
that the corporation’s board members are either state officers or officers of a nonprofit corporation.

        The distinction between state officers and officers of nonprofit corporations appears to be an
issue of first impression. However, in deciding whether the AHC board members are state officers,
we are guided by the long-established definition of a public office:

                       Public office is the right, authority, and duty created and
               conferred by law, by which, for a given period, either fixed by law,
               or enduring at the pleasure of the creating power, an individual is
               invested with some portion of the sovereign functions of the
               government, to be exercised by him for the benefit of the public.

Kimbrough v. Barnett, 55 S.W. 120,122 (Tex. 1900); see also Aldine Indep. Sch. Dist. v. Standley,
280 S.W.2d 578 (Tex. 1955) (status as an officer as opposed to an employee is determined by
“‘whether any sovereign function of the government is conferred upon the individual to be exercised
by him for the benefit of the public largely independent of the control of others”‘) (quoting Dunbar
v. Brazoria County, 224 S.W.2d 738,740 (Tex. Civ. App.-Galveston         1949, writ ref d)). Applying
these criteria, we conclude that service on the AHC board of directors is (1) a “right, authority, and
duty created and conferred by law,” and that an AHC board member (2) “is invested with some
portion of the sovereign functions of the government,” (3) “to be exercised by him for the benefit
of the public.” Although an AHC board member’s term is not fixed by law, we do not believe that
this is determinative.

          First, service on the AHC board of directors is a “right, authority, and duty created and
conferred by law.” Kimbrough, 55 S.W. at 122. Although it must be incorporated in order to exist,
the AHC is a creature of statute, subchapter Y of chapter 2306. See TEX. GOV’T CODE ANN.
§ 2306.552 (Vernon 2000). Its board members are appointed pursuant to law, see id. 8 2306.554,
and the board’s and corporation’s powers are conferred and limited by law, see id. $5 2306.5545
(requiring board to develop policies relating to employee conflicts of interest), .555 (corporation’s
powers), .5555 (requiring board to develop and implement public access policies), .557 (governing
distribution of corporation’s earnings), .559 (requiring corporation to report financial activity to
certain state officials on an annual basis), .560 (requiring corporation to undergo yearly audit and
to file copy of audit with certain state officials).

        Second, the AHC board of directors is “invested with some portion of the sovereign functions
of the government.” Kimbrough, 55 S.W. at 122. Although the AHC is charged with engaging in
many activities traditionally associated with the private sector such as “mortgage banking activities
and lending transactions and acquiring, holding, selling, or leasing real or personal property,” TEX.
GOV’T CODE ANN. 8 2306.553(a) (Vernon 2000)’ the corporation has the “powers provided for the
[Texas Department of Housing and Community Affairs] under [chapter 23061,” id. § 2306.555(a).
The department’s powers under chapter 2306 include, for example, the authority to “act for and on
behalf of this state” and to “adopt and enforce bylaws and rules.” Id. 5 2306.053(b). Given that the
The Honorable   Jeff Wentworth    - Page 4        (JC-0345)




legislature has provided that the AHC has powers coextensive with a state agency, we conclude that
its board members are “invested with some portion of the sovereign functions of the government.”
Kimbrough, 55 SW. at 122.

         Third, the AHC board members exert their authority “for the benefit ‘of the public.” Id. The
corporation’s charter must specifically dedicate the corporation’s activities “to the public purpose
authorized by [subchapter Y].” TEX. GOV’T CODE ANN. 8 2306.552(b) (Vernon 2000). The
corporation’s purpose is “to promote the public health, safety, and welfare through the provision of
adequate, safe, and sanitary housing” for those with low incomes. Id. 8 2306.553(a).

         The indicia of an office also include tenure “for a given period, either fixed by law, or
enduring at the pleasure of the creating power.” Kimbrough, 55 S.W. at 122. Subchapter Y
expressly provides that the AHC is subject to the Texas Sunset Act, TEX. GOV’T CODEANN. ch. 325
(Vernon 1998 & Supp. 2001)’ and, unless continued in existence as provided by that Act, is
“abolished and [subchapter Y] expires September 1,2001.” Id. 5 2306.5521 (Vernon 2000). But
subchapter Y is silent with respect to the duration of the board members’ terms and does not provide
for the board members’ removal.

         A fixed term is an indicium of an office because it helps protect an officer’s independence
from the control of others. We do not believe, however, that the complete absence in subchapter Y
of any provision regarding the duration of board members’ terms or their removal from office is
significant.   It could be merely the result of legislative oversight, or the legislature may have
intended for the board members’ terms to be governed by the constitution. See TEX. CONST. art.
XVI, 9 30 (providing that duration of offices not fixed by the constitution shall not exceed two
years); see also id. 59 3Oa, 30b (authorizing legislature to establish terms exceeding two years for
certain offices by statute). Furthermore, although subchapter Y provides that the AHC must file
reports with state officials and entities, see TEX. GOV’T CODE ANN. 50 2306.559, .560 (Vernon
2000), and is subject to audit by the state auditor, see id. 8 2306.560, we are not aware of any statute
that vests the governor, the Texas Department of Housing and Community Affairs, or any other
officer or body with the authority to exercise direct control over the AHC or its board of directors.
Thus, we do not find AHC board members’ lack of a legislatively fixed term dispositive.

        In sum, we conclude that the members of the board of directors of the AHC hold state offices
within the meaning of article IV, section 12 of the Texas Constitution and that their gubernatorial
appointments are therefore subject to senate confirmation.
The Honorable   Jeff Wentworth     - Page 5      (JC-0345)




                                        SUMMARY

                        Members of the board of directors of the Texas Affordable
                Housing Corporation hold state offices within the meaning of article
                IV, section 12 of the Texas Constitution.    Therefore, their guber-
                natorial appointments  are subject to confirmation by the Texas
                Senate.

                                              Yo   sve    trul



                                              dAG!T
                                              JOHN     CORNYN
                                              Attorney General of Texas



ANDY TAYLOR
First Assistant Attorney General

CLARK RENT ERVIN
Deputy Attorney General - General Counsel

SUSAN D. GUSKY
Chair, Opinion Committee

Mary R. Crouter
Assistant Attorney General - Opinion Committee
