              THE        ATTORNEY           GENERAL
                             OF   TEXAS

                             April 5, 1988




Mr. Sidney J. Braguet                     Opinion   No.    JM-884
Chairman
Texas Commission  for the                 Re:   Whether   a conflict    of
    Deaf                                  interest results from certain
P. 0. Box 12904                           employments   by members of the
Austin, Texas    78711                    Texas Commission    for the Deaf
                                          (RQ-1234)

Dear   Mr.    Braguet:

      You request an    opinion about     conflicts   of   interest
that might arise when members of the        Texas Commission     for
the Deaf serve as officers or employees        of other entities.
You state that some     commission   members serve     as members,
employees,    or  advisory     members,    of   nonprofit      local
councils   for the deaf with which the      Texas Commission     for
the Deaf contracts   to deliver direct      services as provided
by the appropriations    act,   and you ask whether       such dual
service constitutes     a conflict    of   interest under      state
law.

     Section        81.006 of   the Human Resources            Code   provides
in part that        the commission  shall:

             (2) provide direct services to the deaf,
         including   interpreter   services,     information
         and    referral     services,      message      relay
         services,    advocacy    services,     services    to
         elderly deaf and hearing impaired,          training
         in basic life skills and job-seeking         skills,
         and individual    and family counseling:

             (3) work     to   ensure     more     effective
         coordination   and   cooperation     among   public
         and    nonprofit     organizations        providing
         social and    educational    services     to    deaf
         individuals.   . . .

Hum.   Res.    Code      881.006(a).      In   addition,     the    commission
may:




                                    p. 4318
Mr.   Sidney   J. Braguet   - Page   2   (JR-884)




             (4) contract with or  provide grants             to
         agencies, organizations,   or individuals            as
         necessary to implement this chapter.

Hum. Res. Code 581.006(b).     The current          appropriations    act
appropriates  funds for   "Local Contract           Services"    subject
to the following   rider:

             5.  The Commission   shall use  all    funds
         appropriated  in Local   Contract Services    to
         enter into contracts   with local councils   for
         the deaf for only those services and amounts
         so listed.

Acts 1987, 70th Leg.,      2nd C.S., ch.       78, art. II,    at 12,
14.    Similar    provisions     were    included    in   the   prior
appropriations    act.   Acts   1985,    69th Leg., ch.    980, art.
II, at 10, 12.     A number of contracts       have been awarded to
local councils with starting         dates of September     1, 1987.
&R   Tex. Comm'n    for the     Deaf, 12 Tex. Reg. 2868        (1987)
(notice    of  contract      awards):     Texas    Sunset   Advisory
Commission,   Final Reuort     (Jan. 1985) at 160.

      Officers   of state agencies are prohibited          from having
a direct    or   indirect pecuniary        interest     in a   contract
entered into on behalf of their agency.            Kevers v. Walker,
276 S.W. 305      (Tex. Civ. App.      - Eastland    1925,    no writ);
Attorney    General    Opinion    Nos.    JM-817,     JM-671     (1987);
MW-179   (1980); H-1309      (1978).    If the    commission    members
who serve as     members,   employees,      or advisory members        of
local councils are      compensated     for   their services,       they
have a pecuniary      interest in      the local     council and      the
contracts   benefitting     it.   m      Attorney    General    Opinion
NOS. JM-171     (1984); H-1309       (1978);    H-916 (1976);      M-714
 (1970).    Contracts     made   in    violation     of    the    policy
prohibiting    such pecuniary    interests    are illegal and void.
Mevers    . Walker             .    Thus, the     commission      cannot
legallyVcontract     &it??local        council in which       a commis-
sion member     has   a pecuniary      interest.      The    commission
member will have to       resign from either the         commission    or
the local    council before      such contracts       may be    validly
entered into.

      If a commission   member holds a position         with a local
council which authorizes       him to    enter into contracts       on      -,
behalf of it, another      legal doctrine would also         bar such
contracts.     In such cases, the same individual        attempts   to
represent   both the Commission      for the Deaf and       the local
council in contract      formation.    Attorney    General    Opinion
                                                                            ?,
H-1309   (1978)   stated that     a policy    against dual     agency




                                 p. 4319
    Mr.   Sidney   J. Braguet     - Page    3    (JM-884)




    prevented   one person from representing         both a state agency
    and the other party in         forming a contract.      The    state is
-   entitled to the best efforts and unbiased             judgment   of its
    agent.    Attorney     General Opinion      O-2929   (1942)    (guot$ng
    and discussing     Scott    v.~;~;sQ, 130 S.W.        610 (Tex.     Civ.
    App. 1910, no      writ)).             if a commission      member     is
    also an employee        or   membek    of   a   local    council    with
    authority   to contract on behalf of the council, the policy
    against dual     agency     would    prevent the     commission     from
    entering   into a contract with that local council.

          Section 8 of         article 6252-9b, V.T.C.S.,            is relevant
    to your question.          It   includes the following           standard of
    conduct:

                 (c) No state officer    or state    employee
             should accept other employment    or   compensa-
             tion which could   reasonably  be expected     to
             impair his independence    of judgment   in   the
             performance  of his official duties.

    V.T.C.S.  art. 6252-9b,  §S(c).~ This provision    applies                 to
    the officers and employees    of a "state agency,"   which                 is
    defined in part as:

                 (A)    any department,          commission,       board,
             office,    or other agency         that:

                   (i)    is in the   executive      branch      of state
                   government;

                   (ii)  has authority  that   is not             limited
                   to a geographical   portion of the              state:
                   and

                   (iii) was    created    by the   constitution       or
                   a statute    of this    state.   . . .

    V.T.C.S.  art. 6252-9b, §2(8).   Thus, section    8 of article
    6252-9b, V.T.C.S.,   applies to the Commission   for the Deaf,
    even though it is not a "major state     agency" for purposes
    of that statute.

          You point  out section 81.002(d)                  of    the Human   Re-
P   sources Code which provides as follows:

                 (d) An officer.    emolovee.  or    Daid con-
             sultant of   an association    reuresentino     the
             Jnterests  of deaf or hearina-imnaired     nersons
             mav not   be  a member     or  emnlovee    of   the




                                      p. 4320
Mr.   Sidney    J. Braguet   - Page   4 (JN-884)




         commission,    nor   may     a person     who   cohabits
         with or is     the spouse of       an officer,      mana-
         gerial employee,       or    paid consultant      of    an
         association     representing       the    interests     of
         deaf or hearing-impaired         persons be a member
         of the   commission       or   an    employee    of   the
         commission     grade    17    and    over,     including
         exempt employees,      according      to the    position
         classification      schedule      under    the   General
         Appropriations     Act.     (Emphasis added.)

Hum. Res.      Code   581.002(d).   It  is a ground for           removal
from   the      commission     if a    member violates            section
81.002(d).       &.8 Hum. Res. Code .$81.0021(a)(3).

      Section 81.002(d)      was   adopted in 1985        in connection
with review     of   the   commission     by   the    Sunset     Advisory
Commission.     m    Acts    1985, 69th      Leg., ch.     619, 51,      at
2300.   It   is one    of    a   number    of    "across     the    board"
recommendations    of    the Sunset     Advisory    Commission       which
the legislature    adopted for       the Commission      for   the Deaf.
&.8 Bill    Analysis     to S.B.    No.    384, 69th      Leg.     (1985).
Conflict of     interest provisions        are    recommended     by    the
Sunset Commission      to    prevent     agencies     from    developing
close ties with professional         trade organizations       and other
interest groups which may         not be in the       public interest.
Texas Sunset Advisory      Commission,     Final ReDOrt (Jan. 1985)
at 2.   In   our opinion,      "an association      representing       the
interests   of deaf or hearing-impaired         persons"     directs    its
major efforts toward       advocacy of policies         regarding     deaf
or hearing-impaired      persons.     Whether a particular          entity
is the kind of association        described    by   that provision       is
a fact question      which cannot be       answered    in an     Attorney
General Opinion.

       We finally point       out the     following   provision       which
was   adopted in 1987:

             (f) A person is not eligible    for appoint-
         ment as  a member   of the   commission  if   the
         person or the person's  spouse:

                   (1)  is employed by or participates          in
               the management     of  a business   entity       or
               other   organization     regulated    by        the
               commission   or  receiving    funds  from       the
               commission.   . . .

Hum. Res. Code 581.002(f);   Acts 1987, 70th             Leg., ch. 343,
52, at 3490.  This provision   does not apply            to a member of




                                p. 4321
Mr.   Sidney   J. Braguet     - Page     5   W-884)




the Texas   Commission    for the   Deaf   who held  office   on
September  1, 1987.    L   5511, 14, at 3497, 3498.    Although
it does not apply to the conflicts      of interest you inquire
about, it   should   prevent    them with   respect  to persons
appointed after the effective     date of this provision.

                               SUMMARY

             Common law   prohibitions    against     conflict
         of interest prevent the Texas Commission           for
         the   Deaf  from   contracting     with    a     local
         council for the deaf      if a commission      member
         serves the local council       as a paid     employee
         or   in   a  decision-making      capacity       which
         authorizes  him to    contract   for the     council.
         Whether a particular       local council      is    "an
         association  representing    the deaf or hearing-
         impaired personsn within section 81.002(d)           of
         the Human Resources    Code is a fact question.




                                             JIM      MATTOX
                                             Attorney  General   of Texas

MARYKELLER
First Assistant     Attorney     General

Lou MCCREARY
Executive  Assistant        Attorney     General

JUDGE ZOLLIE STEAKLEY
Special Assistant  Attorney            General

RICK GILPIN
Chairman,  Opinion     Committee

Prepared by Susan L. Garrison
Assistant Attorney General




                                   p. 4322
