                                         KEN PAXTON
                                    ATTORNEY GENERAL OF TEXAS




                                          August 8, 2016



The Honorable Joe Deshotel                         Opinion No. KP-0105
Chair, Committee on Land and
     Resource Management                           Re: Application of the conflict of interest rules
Texas House of Representatives                     in chapter 171 of the Local Government Code
Post Office Box 2910                               to members of a planning and zoning
Austin, Texas 78768-2910                           commission or historic landmark commission
                                                   who reside or own property within the historic
                                                   district (RQ-0094-KP)

Dear Representative Deshotel:

        You ask about the application of the conflict of interest rules in chapter 171 of the Local
Government Code· to members and staff of a planning and zoning commission ("P&Z
Commission") or a historic landmark commission ("HL Commission") who reside or own property
within the historic district. 1 You tell us that the City of Beaumont ("City") created a historic
cultural landmark preservation overlay district ("district"). Request Letter at 1. You also tell us
that the City created the HL Commission to approve or recommend action on buildings and
structures within the district. See id at 1-2 (stating that the purpose of the HL Commission is to
preserve the integrity of the district and balance the City's interest in encouraging growth through
commerce).

         You state that at a recent P&Z Commission hearing, an application for a permit for a
business office within the City, and presumably the district, was considered, and residents testified
that the building would have a "negative impact on their property values." Id. at 2. You indicate
that at least two members of the P&Z C.ommission reside in and have a property interest in the
district. See id. at 1. You indicate further that a staff person of the P&Z Commission, who is
primarily responsible for preparing staff reports for the P &Z Commission and the HL Commission,
lives within the historic district. See id. at 2. You ask whether a P&Z Commissioner or HL
Commissioner and the staff person, "as public officials pursuant to Chapter 171 of the Local
Government Code, who reside[] or own[] property in the geographically defined historic district
may vote or decide on matters that affect that district." Id. at 3.




         1
          See Letter from Honorable Joe Deshotel, Chair, Comm. on Land & Res. Mgmt., .Tex. House of
Representatives, to Honorable Ken Paxton, Tex. Att'y Gen. at 1-3 (Feb. 9, 2016), https://www.
texasattomeygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter").
The Honorable Joe Deshotel - Page 2           (KP-0105)



        Chapter 171 of the Local Government Code regulates the pecuniary conflicts of interests
of certain local public officials. Section 171.004 provides:

               (a) If a local public official has a substantial interest in ... real
                   property, the official shall file, before a vote or decision on any
                   matter involving the ... real property, an affidavit stating the
                   nature and extent of the interest and shall abstain from further
                   participation in the matter if:



                   (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.

TEX. Loe. Gov'T CODE § 171.004(a). Subsection 171.004(a) applies to a "local public official"
who holds a "substantial interest" in a business entity or real property. Id. We address these
elements in tum.

        A "local public official" includes a "member of the governing body or another officer,
whether elected, appointed, paid, or unpaid, of any district . . . who exercises responsibilities
beyond those that are advisory in nature." Id. § 171.001(1). This office has previously determined
that a city employee is not a local public official and, as such, is not subject to chapter 171. See
Tex. Att'y Gen. Op. No. GA-0195 (2004) at 2. This office has also previously concluded that a
member of a planning and zoning commission is a local public official under chapter 171. See
Tex. Att'y Gen. Op. No. DM-309 (1994) at 2. We find no authority on the question whether a
member of an HL Commission similar to the one here is a local public official under chapter 171.
To analyze this question, we examine the City's ordinances providing for the HL Commission's
duties and powers.

         One primary duty of the HL Commission is to make recommendations about a historic-
cultural landmark preservation designation to the P&Z Commission and the City Council. See
BEAUMONT, TEX., CODE OF ORDINANCES § 28.02.007(b). It is also given authority to determine
whether a certificate of appropriateness is warranted for any construction, reconstruction,
alteration, change, restoration, removal, or demolishment of an exterior architectural feature of a
building located in the historic district. See id. § 28.02.007(d). And it is tasked with reviewing
requests for a certificate of demolition or relocation prior to the demolition or relocation of any
building or structure with a historic preservation designation. See id. § 28.02.007(e). While in the
exercise of these powers the HL Commission often is required to forward a recommendation to
another person or entity for finality, the City's ordinances do contemplate that the HL Commission
has a certain amount of final authority. For example, a party may appeal a decision of the City
Council or HL Commission to the district court. Id. § 28.02.007(g). The exterior of certain
structures may not be altered or changed without the certificate of appropriateness from the HL
Commission. See id. § 28.03.017(d)(l). Certain buildings or structures may not be demolished or
removed without the approval of the City Council or the HL Commission. See id.
The Honorable Joe Deshotel - Page 3              (KP-0105)



§ 28.03.017(d)(2). In all of these instances, a decision of the HL Commission, even if concurrent
with any authority of the City Council, is treated as a final decision authorizing or prohibiting
certain actions with regard to structures within the historic district. These provisions tend to
suggest that the HL Commission exercises responsibilities beyond that which are advisory in
nature and that a member thereof is a local public official.

         We next consider whether either of the two commission's members' particular property
interests within the district constitute a "substantial property interest." With respect to real
property, a substantial interest sufficient to trigger chapter 171 includes an interest in real property
that is "an equitable or legal ownership with a fair market value of $2,500 or more." TEX. Loe.
Gov'T CODE § 171.002(b); see also id. § 171.002(c) (providing that a local public official also has
a substantial interest if a person related to the official in the first degree by consanguinity or affinity
has a substantial interest). You provide no information about the nature of the property interests
owned by the members of the two commissions, but to the extent a member's ownership interest
in the real property equals or exceeds $2,500, it is a substantial property interest under chapter 171.

        In the event these local public officials have the requisite substantial property interest, they
must file "an affidavit stating the nature and extent of the interest" before a vote or decision on any
matter involving the real property. Id. § 171.004(a). And they are required to abstain from "further
participation in the matter" if "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."
Id. § 171.004(a)(2); see also id. § 171.003 (providing for criminal penalties). However, this office
cannot decide in the opinion process whether a member's action on a particular matter will have a
special economic effect on the value of the property distinguishable from its effect on the public
because such a question requires the resolution of fact issues. Tex. Att'y Gen. Op. No. GA-0796
(2010) at 6.
The Honorable Joe Deshotel - Page 4           (KP-0105)



                                       SUMMARY

                        Members of the Beaumont Planning and Zoning
               Commission and the Beaumont Historical Landmark Commission
               are local public officials subject to chapter 171 of the Local
               Government Code. A Beaumont city employee providing staff
               support for the two commissions is not a local public official subject
               to chapter 171. Any real property interest within the historic district
               owned by members of either commission and valued at $2,500 or
               more is a substantial property interest for which the members must
               file an affidavit stating the nature and extent of the interest before a
               vote or decision on any matter involving the property.

                       Whether the members must abstain from voting on matters
               involving their property interest depends on whether 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. Such question involves fact issues and is outside the
               purview of an attorney general opinion.

                                              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
