                                  January     11, 1989




Mr. Steve Lilly                                  Opinion   No.   JM-1005
President,   Board of Directors
Angelina   & Neches River                        Re:   Whether officials   and
  Authority                                      employees   of  a river. au-
P. 0. BOX 387                                    thority may be represented
Lufkin, Texas 75901                              by the Attorney   General  in
                                                 suits under Chaoter 104 of
                                                 the Civil Practice    and Re-
                                                 medies Code    (RQ-1524)

Dear    Mr.    Lilly:

      you      ask about   chapter 104 of the   Civil            Practice   and
Remedies       Code, section 104.001, which provides             in part:

                  In a  cause      of action   based       on   conduct
              described   in      Section   104.UU2,1       the   state



   1.     Section       104.002   provides:

                   The State is  liable for            indemnification
               under this chapter only     if         the damages     are
               based on an act or omission            by the person in
               the course and scope of the            person's   office,
               employment,  or  contractual           performance     for
               or service on behalf of the            agency, institu-
               tion, or department   and if:

                        (1) the   damages  arise   out  of   a
                    cause of action for negligence,    except
                    a wilful or wrongful   act or an act    of
                    gross negligence:   or

                        (2) the    damages    arise    out   of    a
                    cause of   action for deprivation        of    a
                    right, privilege,      or immunity     secured
                    by the   constitution     or laws    of   this
                    state or the United States! except when
                    the court in its     judgment or the       jury
                    in its   verdict finds     that the     person
                                                    _-          - ..
                                                    (Footnote continued)



                                            p. 5162
Mr.   Steve   Lilly    - Page   2   (JM-1005)




          shall indemnify   the  following   persons   for
          actual damages, court   costs, and   attorney's
          fees adjudged against:

              (1)  an employee,  a member of the   govern-
          ing board, or    any other officer   of a state
          aaencv. institution.   or deDa*ment;

              (2) a former employee,      former member    of
          the governing    board,   or   any   other  former
          officer of    a state   aaencv. institution.     01:
          denartment; who   was   an employee    or  officer
          when the act or omission on which the damages
          are based occurred:

               . . . .

              (5) the estate of a person            listed   in this
          section.   (Emphasis added.)

Subsection     (a) of section       104.004   provides:

                 (a) The attorney general shall   defend
          a public servant or estate listed in  Section
          104.001 jn a cause of action covered by   this
          chapter.

      As President of the Board of Directors               of the    Angelina
Neches River Authority   (ANRA) you ask:

          Will the Attorney    General defend an individu-
          al,  or the  estate  of an individual  who is, or
          was, an employee    or a member of the governing
          board of    ANRA   for an   action  described  in
          Section 104.002 of the Code?

      The focus of      your inquiry,    as indicated     in your    re-
quest,   is  whether  ANRA   is  a "state  agency,   institution,     or
department"    within the meaning     of section 104.001.        Should
we find     that   ANRA    is a "state    agency,    institution,     or
department"    within the meaning of section 104.001, we          would
of course     have   to   conclude not    only   that   the   attorney


 (Footnote    Continued)
                   acted   in bad  faith,   with  conscious
                   indifference or reckless disregard;   or

                         (3)    indemnification is        in the    in-
                      terest of   the state      as determined   by
                      the attorney general      or his designee.




                                    p. 5163
Mr.   Steve   Lilly   - Page   3   (JM-1005)




general has a duty to represent   ANRA employees   and   officers
under section   104.004, but   also that ~the state     might   be
liable for the indemnification     of such employees   and   offi-
cers under section 104.001.

      ANRA was created in 1935 as the "Sabine-Neches         Conser-
vation and Reclamation     District"   under article XVI,    section
59, of the    Texas Constitution.      Acts  1935, 44th Leg.,     ch.
97, at 237.    The creating act was amended in 1939 and         1945.
Acts 1939, 46th Leg., ch. 8, at 1080; Acts 1945, 49th           Leg.,
ch. 287, at 456.     The name    of the authority   was changed    to
Angelina  and   Neches~River     Authority  in   1977.  Acts    1977,
65th Leg., ch. 394, at 1079.

      you note   that, while  "state agency,   institution,     or
departmentH   is  not defined  for  purposes  of  chapter     104,
"state agency" is defined in the Texas Sunset Act,        chapter
325 of the Government   Code, to include certain river author-
ities.   Govgt. Code §§ 325.002, 325.023.

      River authorities    have been held to be state boards        or
agencies under    article     XVI,  section   30a,  of   the    Texas
Constitution  which provides that      members of certain     boards
may hold office for terms       of six years.   The provisions      of
section 30a   for six     year terms   make an   exception   to   the
general restriction    to   two year terms    for public   officers
under article XVI, section 30.

      It had been held in fl
State, 173 S.W. 525 (Tex. Civ. App. - Saz AntonTo           1915, Wrii
ref'd) that the boards, and members thereof,          referred    to   in
section 30a, were "state       boards" and "state officers,"         and
did not include a board of trustees         of an independent     school
district.    In &ower     Colorado     River Auth . V.      ccraw,     83
S.W.2d 629 (Tex.     1935)' a mandamus       proceeding   against    the
attorney general to compel him to approve a bond issuance of
a river authority,    it was objected that the act creating          the
river authority    was unconstitutional      because it provided      for
six year   terms    for members     of   the authority's      board    of
directors.    Finding section 30a the only possible           constitu-
tional authorization     for such six year terms, and         following
the conclusion    of San Antonj&Ql@eD.         School Dist,      swxar
that section    30a referred     to "state     boards,"   the' supreme
court held that     the provision    for    the six year    directors'
terms was constitutional     under section 30a.

      This conclusion   was followed   in J.awer Neches   Valley
Auth. v. Mann, 167 S.W.2d 1011 (Tex. 1943), another mandamus
proceeding  to compel the attorney    general to appeal a bond
issuance of a conservation   and reclamation   district,   where
the objection   to the six  year terms of the authority's     di-
rectors was raised.


                                       p. 5164
Mr.   Steve   Lilly   - Page   4   (JM-1005)




      Attorney   General Opinion M-822 (1971) considered         wheth-
er various   river authorities     and other water districts      which
had entered into a water pollution          control compact    consti-
tuted a "state      agency" for    purposes   of   a federal   program
wherein   increased    federal grants    were to be made     available
for pollution    control projects    certified    by the state or     an
agency of the state.       The opinion concluded     that the    signa-
tories of the water pollution       control compact constituted        a
"state agency" for purposes      of the requirements      of the    fed-
eral program.

      Attorney    General    Opinion H-297        (1974) considered       the
provisions    of former V.T.C.S.        article 6252-9c, now         chapter
305 of the Government         Code, requiring      registration    by    cer-
tain persons      who   sought to      influence     legislative      action
through     lobbying    activities.        Those    provisions     exempted
mter    alia   a member of        the   "executive    branch"     from    the
registration     requirement,     "member    of the executive        branch"
being defined      for    purposes     of the    act    as   "an   officer,
officer-elect,     candidate      for,    or   employee     of   any    state
agency, department,        or office      in the    executive    branch     of
state government."        m     Acts   1985,   ch.   479, 5 1, at       1652,
1666.    Acknowledging     that "in other contexts         'state    agency'
may be    limited to      those agencies       exercising    power    state-
-wide," the opinion concluded          that for purposes       of the lobby
law under     consideration,       a river authority         was   a   state
agency, and its general manager            was exempt from the        regis-
tration requirement.

      Other opinions'of         this office have, however,    concluded
that river authorities           were not state    agencies within   the
meaning of particular          statutory  provisions.

      Attorney  General Opinion V-569        (1948) ruled that     none
of various river authorities      and other article XVI,       section
59, conservation    and reclamation    districts   -- including     the
Sabine-Neches   Conservation    District,   the predecessor    of ANRA
-- was a "department,      commission,    institution   or agency    of
the State Government"     under   the Employees'    Retirement     Act,
and that their employees     were thus ineligible      for membership
in the Employees‘    Retirement    System.     The opinion    acknowl-
edged that such districts      had been held to be state agencies
and their employees     state employees    "for certain    purposes,00
citing Lower Colorado River Auth. v. NcCraw, suora.             Howev-
er, the opinion     concluded:

              [W]e believe that construing     the Act as   a
          whole, this     and similar   agencies and   their
          employees   were not intended to be covered      by
          the Retirement    Act for   the reasons that    the
          50th   Legislature    contemplated    only   those
          'employees   of the State' whose duties     relate



                                       P. 5165
Mr.   Steve    Lilly    - Page    5    (JM-1005 ,)




             to state-wide   activities   with no     intervening
             corporate  entity    or body    between the     State
             and the employee.      In the case of      conserva-
             tion and reclamation     districts    the   district
             is the employer much the same as counties         are
             the employers   of its [sic] employees      and have
             control   of   their    duties.      The    district
             controls the working     hours of its      employees
             and is responsible     for the compensation       due
             its employees.

Attorney      General   Opinion       V-569     (1948)   at 5.

      Attorney   General   ~Opinion W-202  (1957) addressed    the
question    whether    river   authorities were  state   agencies
within the meaning of section 3(b) of former article 6252-9,
V.T.C.S.   which provided:.

                 If an   officer    or   employee   of   a state
             agency, legislator     or legislative   employee   is
             an officer, agent,       or member of,    or owns    a
             controlling     interest    in   any   corporation,
             firm, partnership,     or   other business    entity
             which is under the jurisdiction       of any   state
             regulatory    agency     he  shall   file   a sworn
             statement   with   the Secretary     of State    dis-
             closing such interest.

Section 2(a)   of   the Act   defined                "state agencyH    as   "any
office, department,    commission   or               board of  the    executive
department  of government."

       The    opinion   concluded       that:

                 [T]he   statute    is   intended     to   regulate
             State   officials     and   employees     as   distin-
             guished from local governmental        officials    and
             employees.       This     construction        excludes
             governmental     officers      and    employees       of
             subdivisions    of the    State, such as      counties
             and   cities,    and   other    strictly     municipal
             corporations   whose    operations    and    jurisdic-
             tion pertain     only   to    a particular       locale
             within the State.

                 . . . .

                 By the express terms of Article XVI,        Sec-
             tion 59,    such  River Authorities      'shall   be
             governmental   agencies and tidies oolitic       a d
             cornorate.   . . .' They      are all   limited   ?n
             their   area   of   operation    to   a particular


                                              p. 5166
Mr.   Steve    Lilly        - Page    6    (JM-1005)




           locale within    the   State by    the    respective
           enabling   statutes.      The   enabling      statutes
           vary considerably,    but   it may    be said      that
           River Authorities     incorporated     pursuant      to
           Article XVI, Section 59 of the        Constitution,
           are quasi   municipal   corporations.             - *
                                    .    .
           Fresh Water SUDD~V     Dlstrlct No.      2 V.      a?m
           135 Tex. 280, 142 S.W.Zd 945 (1940).           (Empha:
           sis in opinion.)

                .   .   .    .

               The Lower    Colorado    River    Authority    and
           similar River     Authorities,    which    are  quasi
           municipal   corporations   and political     subdivi-
           sions of    the   State,   are    not   among   those
           governmental    agencies which were intended        to
           be regulated    by [the Act].

Attorney      General       Opinion       WW-202     (1957)   at 3.

      In support of its conclusion,  the opinion cited Willacy
Countv Water Control   and Imorovement  Dist.   No. 1 v. Aben-
droth, 142 Tex. 320, 177 S.W.2d 936 (1944) where the Supreme
Court had stated:

               Irrigation     districts,      navigation      dis-
           tricts, levee and improvement        districts,      and
           like   political      subdivisions     created    under
           Section 59a of Article        XVI of the     Constitu-
           tion, and statutes enacted thereunder            carry-
           ing out the     purposes    of such    constitutional
           provision,    are   not    classed   with    municipal
           corporations,     but   art held    to be. ~olw
                . .
           Subdivisions    of the S ate. oerformina       aovern-
           mental functions.      and standina uoon the       su
           f otina    as   counties     and   other     nolitical
           &divisions      established      bv law.     (Emphasis
           in opinion.)

      See also    Attorney   General Opinion M-522 (1969)       (stat-
ing that a&le       XVI,    section 59, districts    "are   political
subdivisions   of   the    state   . . . standing    upon   the   same
footing as counties     and other political    subdivisions     estab-
lished by law").

      Attorney  General    Opinion  H-10  (1973)   addressed     the
question whether a state employee may also serve as director
of a rivers authority   in   light of the provisions   of   article
WI'   section 40, of    the Texas Constitution   which    generally
prohibits   dual office holding but which states in part:



                                                   p. 5167
Mr.   Steve   Lilly   - Page   7     (JM-1005)




          State   employees     . . .'who   are   not   State
          officers,   shall not be barred from serving as
          members of    the   governing   bodies   of  school
          districts,    cities,    towns,   or   other  local
          governmental   districts    . . .

The opinion concluded  that the river authority    was a   'local
governmental district#  under   the constitutional    provision,
and that a state employee    was thus not barred from     serving
at the same time as director   of the authority.

      Attorney    General Opinion JR-197       (1984) did not consider
river authorities       or other     article XVI,     section 59,. dis-
tricts, but     rather the      question whether      county     attorneys
were "officers     or employees      of any agency, institution,          or
department     of   state      government"    under     former      article
6252-26, V.T.C.S.         (The provisions    of article 6252-2.6 were
repealed   in   1985    by   the legislation      enacting     .the   Civil
Practice   and    Remedies   Code,     in which the      former     article
6252-26    provisions      were    codified   as    chapter     104,    .the
chapter under consideration         herein.     Acts 1905, 69th       Leg.,
ch. 959, at 3242, 3300.)

       The opinion concluded    that   "article 6252-26 was     meant
 to apply only to officers      and employees  of state    agencies,
 institutions   and departments   having state-wide   jurisdiction"
 and thus did not apply to county attorneys,      who were covered
~rather by former    article 6252-19b,    now  chapter 102 of     the
 Civil Practice   and Remedies   Code.

       Chapter 102     of the   Civil Practice     and Remedies     Code
 makes provisions      similar   to   those   in   chapter    104,   but
 applies to conduct      of employees     and officers     of a   "local
 government,"    while chapter 104 applies to conduct of employ-
 ees and officers     of a "state agency, institution,       or depart-
 ment."     Section 102.002 provides      in part:

              (a)  A local           government  may   pay    actual
          damages awarded           against an   employee    of   the
          local government          if the damages:

                (1)    result from an act or omission             of
          the employee    in the course and scope of             his
          employment   for the local government:  and

                (2)   arise        from   a cause   of action     for
          negligence.

 Section 102.001   defines "local   government"  as   "a   county,
 city, town, special purpose district,    and any other    politi-
 cal subdivision  of the   state."  Section 102.004    authorizes
 the local government,   not  the attorney general,   to   provide


                                          p. 5168
Mr.   Steve   Lilly   - Page   8   (JM-1005)




legal counsel  in suits under chapter 102.   Attorney  General
Opinion JR-197, m,       concluded that the provisions of what
are now chapters  102 and 104 respectively,  are to be read Ir!
pari materia  and "are not intended to, and do not, cover the
same officers  and employees.H

      The provisions   of chapter 101 of the Civil Practice    and
Remedies  Code, the Texas    Tort Claims Act formerly    V.T.C.S.
art. 6252-19,    also appear    to stand   in oari materiq    with
those of chapters    102 and 104.   Section 101.021 provides:

               A governmental      unit   in the    state   is liable
          for:

                (1)   property  damage, personal    injury,
          and death proximately   caused by the    wrongful
          act or omission   or  the negligence   of an   em-
          ployee acting within his scope oft employment
          if:

                    (A)     the property    damage,    personal
          injury,  or   death  arises  from  the  operation   or
          use of a motor-driven      vehicle or motor-driven
          equipment;    and

                      (B)   the employee would be personal-
          ly liable     to the claimant according to   Texas
          law: and

                (2)   personal    injury    and    death * so
          caused by   a   condition  or   use   of   tangible
          personal  or real property    if the governmental
          unit would,   were    it a private     person,     be
          liable to   the   claimant according      to   Texas
          law.

Section   lOl.,OOl, subsection       (2) defines      ~lgovernmental    unit"
as:

                    (A)    this state and all the        several
          agencies    of   government     that     collectively
          constitute     the   government,    of   this    state,
          including   other    agencies    bearing     different
          designations,    and   all departments,       bureaus,
          boards,     commissions,      offices,       agencies,
          councils,   and courts:

                   . (B)    a oolitical    subdivision    of this
           tate. &pcludina       any   city,    county,     school
          iistrict , junior college district,         levee     im-
          provement    district,   drainage district,        irri-
          gation district,     water improvement        district,


                                          p. 5169
Mr.   Steve   Lilly   - Page   9   (JM-1005)




          water control and improvement       district,   water
          control and preservation      district,   freshwater
          supply district,     navigation     district,    con-
          servation  and reclamation     district,   soil con-
          servation  district,     communication     district,
          and river authority;     and

                    ('3    any other institution,      agency,
          or organ of government      the status and author-
          ity of which are      derived from the     Constitu-
          tion of    Texas or    from   laws passed    by   the
          legislature     under   the   constitution.      (Em-
          phasis added.)2


      In the light     of the authorities      and statutory      provi-
sions discussed    above, we conclude that ANRA is not a "state
agency, institution      or department"     under section      104.001.
The provisions    of   chapters   101   and 102,    standing   in   oari
materia with     those   of   chapter 104,     indicate    that    river
authorities   are "political      subdivisions11 of     the state,     or
"units of    local government,"       and  not state     agencies     for
purposes   of chapters   101, 102, and 104.      They are not "state
agencies,   institutions    or departments"     under chapter 104.




    2. Section 101.103 provides  for legal         representation      in
suits under chapter 101 as follows:

              (a) The     attorney   general    shall    defend
          each   action    brought     under  this      chapter
          against a governmental     unit that has      author-
          ity and    jurisdiction    coextensive     with    the
          geographical     limits   of   this   state.       The
          attorney general      may  be fully    assisted     by
          counsel provided by an insurance       carrier.

              (b) A governmental     unit having an area of
          jurisdiction  smaller     than the   entire    state
          shall employ its own counsel according       to the
          organic act   under which      the unit   operates,
          unless the governmental     unit has relinquished
          to an insurance   carrier    the right to     defend
          against the claim.

You do not   ask about  and we do    not address    the       scope    of
these provisions   with respect    to their   coverage        of   river
authorities  or other governmental   units.




                                      p. 5170
Mr.   Steve   Lilly   - Page     10    (JM-1005)




      We do not think that the inclusion          of river authorities
as nstate agencies"       under the     Sunset Act --     to which     you
referred   in your    request -- is      dispositive.     Compare,      for
example,    section     402.042    of   the   Government     Code    which
specifies   that inter alia "the head of a department            of state
government,"    "the head of a state board,' and "the            chairman
of the governing      board of     a river    authority"   may    request
attorney   general opinions.       The statute's    separate   reference
to chairmen     of the    governing   boards    of river     authorities
indicates   that    such   persons    were not     considered     by   the
legislature   which enacted       the provision    to   be included      in
the categories    of heads      of departments    of state    government
or heads of state boards.

      We think that     the ruling in Attorney        General     opinion
V-569 (1948)'    that conservation       and reclamation       districts
such as river authorities       are employers    standing   in much the
same relationship    to their employees      as counties to       theirs,
and having responsibility        for their    duties, working       hours
and compensations,    indicates   that    a river authority     and    not
the state should be responsible         for the conduct of such         an
employee which is the basis for an award of damages               against
the employee.     Chapter    102 rather than      chapter 104 of       the
Civil Practice     and   Remedies     Code   thus   governs     a    river
authority's   responsibility       for such   conduct of      the    river
authority's   employees    and officers,    including   the    provision
of legal representation      to such persons.




              The Angelina-Neches      River Authority his not
          a "state agency, institution,        or   departmentI
          within the meaning of section 104.001 of            the
          Civil    Practice     and   Remedies    Code.      Thus
          section 104.004 of        that code, providing       for
          representation     by   the   attorney    general     in
          causes    of   action     for certain     conduct     of
          officers   and    employees   of   a "state    agency,
          institution,    or department"     under chapter 104
          does not apply      to the Angelina-Neches        River
          Authority    or to its officers or employees.

                                                 Very
                                                   truly       Y       ,

                                                L-l /tciLc
                                                   JIM
                                                       A’,
                                                            MATTOX
                                                   Attorney  General   of Texas

MARY KELLER
First Assistant       Attorney        General


                                           p..5171
,
    Mr.   Steve   Lilly   - Page   11      (JM-1005)

.




    Lou MC-Y
    Executive     Assistant     Attorney     General

    JUDGE ZOLLIE STEAKLEY
    Special Assistant  Attorney            General

    RICK GILPIN
    Chairman,  Opinion        Committee

    Prepared by William Walker
    Assistant Attorney  General




                                               p. 5172
