2013-11-18 Ethics Committee Agendas:\I�gallnur docurrsents\rssisce{laneeus\i3\�thics cornmitte� age47d�.dc�c
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1. Consider the approval of the Ethics Committee Minutes of October 12, 2012,
2. Receive a report and hold a discussion regarding the City of Denton Ethics policies.
3, Receive a report and hold a discussion regarding legislation enacted in the 83rd
Texas Legislative Session relating to matters impacting the ethical abligations of
municipal elected officials.
4. Receive a report and hold a discussion regarding City Council travel policies.
CITY OF DENTON CITY COUNCIL ETHICS COMMITTEE MINUTES
October 12, 2012
Ethics Committee Meeting oi the City of Denton City Council on Friday, October 12, 2012 at
2:30 p.m. in the City Hall Conference Room at City Hall.
Present: Council Member Engelbrecht; Council Member Gregory; Council Member
]�.c�de��$ [.rity Atta�-���,� Anita L�ur����; D�����ty City ���kc��•���y f���i�1��; T�i�-ec�or of
A����iraist�•��ive ��'e�`w�c�s Betty Wi1i������s; ax��i City S�c�°�t����y :����nif��- W��t��`�.
1, Election of a Chair,
Council Member Roden motioned, Council Member Engelbrecht seconded to nominate Council
Member Gregory as chair, Motion passed unanimously.
2. Review and give staff direction regarding the current Council Ethics Policy to detennine
if it warrants updates/changes.
City Attorney L�i�r���� stated that she had provided the C�am�a�ittee ��tl� a copy of tl�� current
etliics police �.�7c� ��c�s���itian, information from the City Ch�a���- ��ic� th� �:e�3cie of Ordin��i�.��s.
Council Member Gregory asked about the difference between the ethics resolution as a
resolution rather than an ordinance.
Burgess stated that a resolution was an expression of intent and had no effect of law.
Council Member Roden felt that a resolution was less stringent than an ordinance which
sometime drew criticism from the public.
Burgess replied that tlie current resolution recites the statutes that must be followed and thus had
additional enforcements in it.
Co�����il Ni�i����er t����.gory �tz�t��� that the Ethic� l�olicy came up ci�r������ tl�e last elec�ic��� and that
wa� c��1� ��'tl�e re���asis he �'��t i���; Committee �l��a�ild look at the r�:,�s�i��i�esx� every so ��tc�� to see if
it needed to be updated. He felt the Uest time to do that was when there was no election in
progress.
Council Member Engelbrecht asked what the difference was between affinity and consanguinity.
Burgess stated that affinity meant by marriage and consanguinity meant by blood.
Council Member Roden asked if Council received the Ethics Policy after being elected.
Betty Williams, Director of Administ�•ative Services, stated that new council members received
the Policy in iheir New Member Manual.
Council Member Rodeza questioned if it would be of any vahie to have the members sign the
Ethics Policy.
Burgess stated that she had never seen a requirement to sigz�. an Ethics Policy but had seen
information on memUers attending ethics seminars.
City of Denton Ethics Cornmittee Minutes
October 12, 2012
1'age 2
Council Member Gregory suggested that council members take an ethics update every two years
or so for possible changes.
Council Mennber Engelbrecht suggested possibly having a 15 minute work session each year for
a review.
City Secretary Walters suggested it could be a topic on the council's annual plamiing session
agenda.
Conse;nsus ofthe Committee was that no changes or updates were needed on the Ethics Policy at
this time.
Council Member Engelbrecht tnotioned, Council Member Roden seconded to make a
recommendation to Council for a short update on the Ethics Policy during th.e council's annua]
planning sessian. Motion carried unanimously.
Council Member Roden suggested a work session to present this information to the Council.
3. Discuss and give staff direction regarding discipline procedures for violations of the
Council Ethics Policy.
City Attomey Burgess reviewed the provisions in the current resolution for submitting an ethics
complaint.
Council Member Gregory asked if that procedure would be done in an open meeting.
l���r�e �s stat�� that wrs����l depend c�s� tt��: circx�rr��t�x��c�s wl�eii�cr i� ��ca���� k�� �3��x� iz� f�n �a��i� or
cl����l me�tiz��. An �;�����loyee or �f�cc;r of th� �il� ������� �L��e �l�e ,�r����ss tl�at�� i�� z� c1��ed
session as allowed for by the Open Meetings Ae�. � c����<� �����ii�i� c��s�1��.i ���t �� �����€� fa�` an
individual who was not a governmental officer such as an advisory board member.
i:;a��tt€�il Member ��°c�ory �a�1��d ��1�� ��c����cl i�e the process if an G����}c�intee acted way out of
i�cr����ds on an ade�i�c�t�y b����c1, 1-�� c�Lx���ic���ed if the complaint r�vc���ld come to the Ethics
Committee for possible reprimand.
Burgess stated that the Committee had lirnited jurisdiction in relation to an elected official such
as the City Manager, City Attoniey and Municipal Judge. Advisory boards were not included in
the provisions.
Council Member Gregory left the meeting.
4. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries froin the
City Council or the public with -specific factual information or recitation of policy, or
accept a proposal to place the rnatter on the agenda for an upcoming ineeting
AND
Under Section 551.0415 of the Texas Open Meetings Act, provide reports about items of
cominunity interest regarding which no action will be taken, to include: expressions of
City of Denton Ethics Committee Minutes
October 12, 2012
Page. 3
thanks, congratulations, or condolence; information r����°�ii��� ho�ici�y tir:���d��l�s`, an
honorary or salutary recognition of a public ofiicial, publi� �z�t��loye�, +�r t�t����` c:i�iz�n; a
ret��i�i���• about an upcoming event or�����ized or ����i�sored by the governing body;
in��rx����tion regarding a social, ceremoni�i, or comr��xr�ity event organized or sponsored
by an entity other than tlie governing body that was attended or is scheduled to be
attended by a member of the governing body or an official or employee of the
municipality; or an announcement involving an imminent threat to the public health and
safety of people in the municipality that has arisen after the posting of the agenda.
The Committee did not have any items.
With no further business, the meeting was adjourned at 3:35 p.m.
DALTON GREGORY, CHAIR
COUNCIL ETHICS COMMITTEE
JENNIFER WALTERS
CITY SECRETARY
s:\legal\our documents\miscellaneous\13\ais ethics policy 111813.doc
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AGENDA DATE: November 18, 2013
DEPARTMENT: Legal Department
CA: Anita Burgess, City Attorney
SUBJECT: Receive a briefing on the City Ethics Policy.
F��,['���1�(lL1�i3: The City Council Ethics Committee met on October 12, 2012 to consider
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whether the Council Ethics Policy was current and whether any changes were warranted. The
Committee reported to the City Council on December 3, 2012, that the Ethics Policy was still
current, but that Ethics training would be appropriate at the City Council's annual retreat.
The City staff will be glad to assist the Committee with any desired revisions of policy or
regulations upon additianal review of same.
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Anita Burgess, City Attorney
5;VOur pocumenlsl4esoBulloml76�Etlda Pollcy-AmendiumlD6C
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AS, on May 18, 2004 City Council passed Resolutian R2004-025 adopting an
Ethics Policy for Elected and Appointed Officials and upon a recommendation by tlie Counc�l
Etivcs Sub-cammittee•hereby approves an amendment to the palicy as set forth herein, and
E AS, the City Council of the City of Denton acknowledges thai our government
is a representative democracy and those who are elected or appainied to serve others as
representat�ves accept a public -irust that requ�res them to faithfully and diligently fulfill their
public responsibilit�es; and
E AS, the City Counczl of the City of Denton recognizes the those individuals
who serve as pub.lic servanis must adhere io a higher eihical siandard af conduct since the
activities of gover.nment should benefit the community as a whole and should never benefit the
individual interest of public decision makers; NOW, THE FO ,
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SECTION 1. That the following ETHTCS POLTCY for Elecied and Appointed
Officials — City of Dentan, Texas, which shall apply to all elected and appou�.ted officials of the
C7ty, is here�by amended to read as follows:
. .• � .� .�r •��� � -� •' � �'•� �i
This Ethics Policy has been adopted to encourage aud ensure the hi�est standards of personal
and public conduct during ienure in. office. Adherence to t1v.s Policy will maintain the
confidence and trust ui tlxe decision-m.al�ers and representatives of the City who must remain
independent, impartial, and accountable to the people they serve. In addition, elected and
�appoi.nted afficials must adhere to Texas state statues and City Charter prov7.sions and City
Council Ru1es ofProceciure governing tl�ieir corid:uct` Th'ese�ar'�`lYst'ed"at"t1i�' erid"`��'�:s Pd'li�cy.
Thus, elected City Council Mexnbers as well as appointed members af the City's Boards and
Commissions are asked to subscribe ta the Texas statutes, City of Denton Chaxter, Rules of
Procedures for City Boards and Coxnmissions, and this Ethics Policy. .
1. As a represeniatiue of ihe Cxty af Denton, I° be ethical. .
I will act witli iritegrify aiid'moral courage. I'will`�be absolutely ti-ut3i�7i:""i'wi1T"'ina.�e'���:�`�`��ial
decisions that are free of bribes, unlawful gifts, narrow political interests and other personal
interests that might impair my independence of judgrnent. I will always decide what is best for
the whole city. I will respect confidences and uiformation designated "confidential" to i11e extent
�:�OdP daVmcp(4�c6QBUPIIXi{��1�6�C1 PO�BLj"-ABICRdPppIIDOC
permitted by law. I will use my iifle and city logo or letterhead only when conducting o�cial
City business and will not exceed my authority.
2. A.s a representat�ve of the City of Denton, I�11 be sexvice-orientec�.
I will be friendly, receptive, courteous, and respectful to everyone. I will be athuied to and care
about the needs an.d issues oi all Denton citizens. �
3. As a representative of the Cfty of Denton, I wiIl be f�scally responsible,
T will malce prudent decisions, taldng inio account the long-term financial needs of the City and
its financial stability. 1 will malce decisions that seek to promote pro�a.ms and services for City
residents.
4a As a representative of the City of Denton, I vrill be communicahve.
I will communicate that I atn approachable, open-minded and willing to enter into dialog. I will
listen carefully and my response will add value to the conversation.
5. As a representat�ve of the City of Denion, I w�Il be cooperat�ve.
I will work toward consexrsus building and gain value from d.i�erse opuuons. I will approach
my position and relationships with. a positive attitude. I wi11 consider the broader regional and
statewide implications of decisions. I wzll work with the Universities, DISD, the Chambers of
' Comm�erce; csther governm.ental entities, and local rsonprofit°�gencies and others as pari�iers on
cornmon issues.
6. .As a represeniaiive of the City of Denton, Y vc�ill be progressive and receptive to new
ideas.
i v�:lt"promofe intelligent'"and thoughtful �siriovation ���:��ever possi�ile: I'wiTl�be�sensitive"`to the
need for coamprornise, to thinit creatively, and unprove existing models when necessary, I will
keep my ]�nowledge of local government current and grawi.n.g.
7e As a representati�re of the City of Denton, T will not be delu�.quent zn payzn.g monies
o�ed ihe City.
I wi11 not be in arrears on any city t�es, uhlity service charges, or ather oUligations owed the
CI�.
Elected officials and appou�.ted officials, boards and commissions must adhere to the following
Texas statutes;
Civil Statutes
. Open Meetings Act (Tex. Govt. Code. Ann. Ch, 551) .
•Public•Tnformation Act/Open Records"Act••��(Tea: ���-�t: ������.".�n:� �h: �5�)'�
Conflicts of. Interest (Tex. L,oc. Govt. Code, Ch. 171; Ch. 212)
Official Misconduct (Tex. Penal Code, Ch. 35, Ch. 39)
Nepotism (Tex. Rev. Civ. Stat, Ann., arts. 5996a & 5996b)
Whistleblower Protection (Tex. Rev. Civ, Stat. �i,, art. 6552-16a)
Page 2 of 3
+ R as►
Competitive Bidding and Procurement (espec. Tex. Loc. Govt. Code, Ch. 252)
State Penal Laws
Bribery (Tex. Pena1 Code, § 36.02)
Coercion ofPublic Servant or Voter (Tex. Penal Code, § 36.03)
Improper Influence (Tex. Pena1 Code § 36.04)
Taznpering with a Witness (Tex. Penal Code § 36.04)
Retaliation (Tex. Penal Code § 36.06)
� Gifts to PubliG Qf�'icials (Tex. Pena1 Code § 36.08) . '
Offering Gift to Public Servant (Tex.1'enal Code § 36.09)
Abuse of Office (Chapter 39) -
Official Miseonduct (Tex. Penal Code § 39.01)
Official Oppression (Tex. Penal Code § 39.02)
Misuse af Official Information �(Tex, Penal Code § 39.03)
City Documents
In addition, the City of Denton Charter, the City Council Rules of Procedure, House Rules and
Code of Election Ethics are applicable.
The Ethies Policy is designed as a positive guide to the behavior and decoxlun of Council and
bo�ard members as thc� repr�ser�t tke citrzens af De��on. � I wi1�1 v����.t��ily� �acc�pt� reprimand
from my colleagues if I should acf contrary to this policy.
SECTION 2. This resolution shall become effective immediately upon its passage and
approval.
PASSED .AND APPROVED this the 1J/ ��1, day of m •� , 2006.
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EULTNE BROCK, MAYOR
ATTEST:
JENNIFER WALTER�, CTTY SECRETARY
BYa � p . —R". . . ,.. ��� ,f ..: �
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APPR��'�� AS Iry� LEGAL FORM:
EDW]N M. �:���E x CITY � C�RNEY
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Page 3 0£3
c:ldocumenu and settin�ljericharldesktoplcommittees reso 3 compare.doc
RESOLUTION N0. R2009- ���
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SECTION 1. History of the City Council Ethics Committee and findings.
A. On September 7, 2004, the Denton City Council established the City
Council Ethics Committee by Ordinance No. 20Q4-255, which is being
• rescinded by Ordinance No. 2009-137 adopted on this date, to act as an
advisory body to the Denton City Council on issues that may arise under
the Ethics Policy for the City of Denton.
B. The Denton City Council finds that it is in the public interest to re-
establish the Commi'ttee as a standing committee of the City Council.
��CT�(�N '�. Re-establishment of the City Council Ethics Committee and statement of
duties and purpose of the Committee. '
�4, �'I�e-�ity Cou�cil heFeby re-establishes the City Council Ethics Committee
as a standing committee of the City Council. The Committee shall consist
- of three (3) City Council members to be appointed by the Mayor of the
City of Denton, and •approved by the Denton City Council. The City
Manager, or his or her desib ee, shall serve as the recording secretary to
the Committee and - shall provide such administrative services as
necessary.
���: • The Cornmittee members shall serve at the pleasure of the City Council
until successors are duly appointed by •the Mayor and approved by the
Denton City Council. The presiding officer of the Committee shall be
chosen annually by the Committee. Members of the Committee must be
b current elected City Council members of the City of Denton, Texas. �
C. The duties and purpose of the Committee shall be to advise the Denton
City Council on the Ethics Policy and to gather information from the
Citizens of Denton regarding the Ethics Policy, conduct hearings and
inquiries as herein s�t forth and consider other matters �s•d�legated by the
� City Council.
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���T1t�N i. �1�1 p����an; including, ��y �lect�d�`�, �_it�te� s���ci� �i�' the City of
Denton; or any person acting on behalf of a public or pnvate entity may request the Committee
to consider an issue arising under the Ethics Policy by filing a written 3�totice of Potential
Violation, (`Tlotice"), of the Ethics Policy with the City Secretary. The �it3r � S�cretary shall
make a copy of the Notice and provide a copy of the Notice to the Elected or Appointed Official
who is named in the Notice, and to the Chair of the Committee. Within thirty days, the Cha.ir
shall place the notice on the Agenda of the Committee and the Committee shall provide notice of
the meeting to the Elected or Appointed Official, and meet and conduct hearings, as necessary.
The Committee may, in its cliscretion, determine to advise the City Council on the Notice. The
Committee may extend this time period if the Committee needs additional information in order
to properly advise the City Council regarding any issues raised in the Notice.
DENTON CITY CHARTER
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Sec. 14.04. - Personal interest.::���"
Any officer or employee of the cify having a substantial interest in a business entity or
real property, as those terms are defined in chapter 171 of the Texas Local Government
Code as it now reads or may hereafter be amended, shall comply with Chapter 171 and, if
necessary, shall abstain from voting on a matter involving the business entity or real property
and file an affidavit setting forth the substantial interest in the matter to be voted upon.
(Ord. No. 79-86, § 2, 92-91-79, ratified 1-99-80; Ord. No. 99-057, Amend, No. 25, 2-16-99, ratified 5-9-99)
.�,
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Sec. '14.05. - Nepotism .;�
No person shall be appointed to an office or be employed by the City of Denton who
is related to any member of the council within tfie second degree of affinity or the third
degree of consanguinity, and this shall apply to heads of departments in their respective
departrrrenfis: This does not apply to a person who was appointed or employed by the city
prior to the election or appointment of the council member.
(Ord, �lo: 20Q6-232; Amend. No. 23, 8-28-06, rafified 91-7-06)
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Each member of a board or cammissian, i.n addition to quaIifications prescribed by federal
or state law or ordinance, shali be a qualified voter of the city. .
(Cade I966, § 1-21(a); Ord. No. 93-140, § I, 8-3-93) �
, #, .. * ...
A memtier ai a b'oard 'or canuuission of the city having a substan�iaT 7nterest in a business
ent�ty or ieal property, as those terms are defined in chapter 171 of the Texas Local
Government Code as it now reads or may hereaiter be amended, shall comply R�ith chapter I71
and, if necessary, shall abstai.n from votir�g on a matter involvuig the business entity or real
property and file an davit setting forth the substantial interest in the matter to be voted
upan.
(Code I966, § Y-22; Ord. No. 96-154, § LI, 7-9-96; Ord. No. 99-265, § 1, 8-3-99)
Charter reference—Personal interest of officers and employees, § 14.04.
State law�re€ereizc�--CanfLict ofinterest, V.T.C.A., Local�Government�Cpde §�I71.001 et
seq. � .
� '-..�w. ... ��
Should a board or co ission member cease to meet the qu ' cations prescribed in section
2-61 or 2-62; %f applicable,: or..vho suc� �ember•�e convictec� of a�'�s����� ���r�u��� h::s•term of
sex-v�ce, such fa�7ure or conviction, as the case may be, shall be cause far remavai.
(Code I966, § 1-23}
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human services committee, § 11-61 et seq.; park and recreation board, § 22-1; development
review commzttee, § 34-6; board of adjustment, § 35-41 et seq.s historzc Iandmark commission,
§ 35-23G et seq. "
Supp. No. 21 ��g.
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ATTOR�T�,� �En���L oF "I'E��s
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Answers to the most frequently asked questions about
the Texas Conflict of Interest Laws
._ 1 ' 1 1 .
1. What conflict of interest laws apply to local public officials in Texas? ................................ 1
2. Do conflict of interest laws apply to persons appointed to local boards and
commissions (e.g., planning and zoning commission members}? ......................................... 1
3. Do canflict�of'interest•laws app�ly�to inembers of purely advisary coin7nittees that are
established by the local entity? ..................... ......... ......$.. .......,,. .......,.- ....,,,.. ..,,........�..... 2
4. What types of issues are covered by Texas conflict of interest laws? ................................... 2
5.
6.
7.
8.
9.
What is the definition of a"business entity" for purposes of the conflict of interest laws? .. 2
What is considered a"substantial interest99 in a business entity (such that it would
amount to a potential conflict of interest)�7 ... ......... ................... ......... ......... ......... ....:... 3
Is the fact that a local official is employed by a business entity sufficient to create
apotential conflict? ....... ........... ........................... . . ........ ,......,.. ..,.._.. .,...,... ...............,.. 3
What is the test for conflict of interest regarding a business entity? ...................�,...,......,.....,. 3
May an indirect benefit from a contract with a business constitute a possible conflict
ofinterest? ........... ......... ............................... ........ ............... .......... ... ........ ......,............ 4 .
10. What is considered a"substantial interest" in real property (such that it would amount
to a potential conflict of interest)? ................ .................t.. ......... ..,...... .....,.., .......,..,......, 4
11. What is the test for conflict of interest regarding real property? ........................................... 5
12. Might the part-time or summer job of an official's child create a conflict of interest? ........ 5
13. May a local official disc.uss or vote on an item if the effect of t11e vote on the official's
business or property interest is na different than its effect on the general public? .....:.......... 6
14. What actions must a local official take if the offic'ial has a conflict of interest under .
chapter171? ........................:............... ......... .............. ... .. ........ ......... ......... .................. 6
15. 1VIay a local official deliberate about an issue with which the official has a conflict
of interest if the official abstains from votins on the issue? .................................................. 6
16. May a local entity separate out an item from a budget to allow the official with the
conflict to vote on the budget? ............ ......... ......... ......... ......... ......... ......... .................. 7
17. What may a local entity do if a rnajority of the members of the governmental body�
have a conflict of interest regarding an item to be cansidered? ............................................. 7
18. May a home rule city pravide further conflict of interest liinifia�io•n5 uai its city�ofticials�
andemployees? ......................... ........... ....... ......... ............. . ........... .. ............................ 7
19. Are there state statutes that provide stricter canflict of interest restrictions for particular
situatians or foi• cer-tain publrc officials or that contain additional reporting requirements?. 7
20. Are there special conflict oi interest provisions that apply to the selection of a lacal
depository? .......................................:............. ......... .........r.,. .....,..,....� .,. � ...... .................. 8
21. Are there special conflict of interest laws that apply ta judges?... ..,..� ... ......... .................. 8
22. Are there special conflict of interest la�vs that apply to lawyers (e.g., city attorneys)? ........ 9
23. If an official's vote on a contract violates the conflict of interest laws, is the contract
illegaland void? . ........ .......�. .,....,....... ..,... -,........... ... ... ......,.. ....... .,....... .....,.,......... 9
24. Must a local of�cial be removed from office if the official violates the conflict
ofinterest laws? ........... ......... .....,.... ...,......, ....... ........,.. .,,.e..,,.,,. .............. .,..........�..... 9
25. May a person be charged with a crirne if tlie afficial violates the conflict of interest laws? 10
26: Does the conflict of interest law apply to directors af an ecanomic development
corporation? ....... .......... ... ..... . ......�......... ,..... . ... ...,....,,.. ...,�. ..,.,.,.. ........ .............,.. 10
27. Do the conflict of interest laws apply to board members of a municipal utility district?.... 11
28. "Do the cori'flict'°of Srite'rest iaws appiy to �melnbers of a local gaverning body who have
a direct, personal matter pending before the governing bady? ............................................ 11
SampleAffidavit ......... ......... ......... .... ...... �.............. ...,.... ......,...,. .......,, ........ ,...,........,..
.
1 1 ' � � �' *
Every tirne a local public official participates in contracting with llis or her governmental entity
or owns real property that may be affected by that entity's actions, the offic�ai must cansider
whether his ar her discussion, decision or vote an an item wi11 vialate either Texas canflict of
interest laws or local conflict of interest provisions. Public officials need to be aware of the
applicable standards for determrning when such a conflict of interest may exist and how such
conflicts must be handled. The following questians and answers provide a lay person's
explanation of the general conflict of interest laws that apply to Texas local officials. This
handbaok pravides general guidance on the issues raised in this area. While the Local
Govemment section of the Office of the Attorney General is available to answer general
questions abaut this article from local officials, local officials should consult vvith their legal
COL111Se"1 regarding fhe application o'f the law to the facts of each particular situation.
l. zat conflict of inte�•est lr�ws r�pply to local prcblrc officials in Terrrs?
The gei�eral conflict of interest laws for Texas city and county officials, as well as officials of
other TeYas political subdivisions, is faund in chapter 171 of the Local Government Code.'
Chapter 171 establishes the standard for determining when a local official has a conflict of
interest that would affect his or her ability to discuss, decide ar vote an a particular item.2
Chapter 171 conflict of interest provisions apply to all lacal public offcials.' Within a
governmental unit, "Iocal public officials" are defined ta include:
1. elected officials such as the members of the city council ar county commissioners
(whetiher paad' or unpard}; and '
2. appointed officials (,pa'rd or unpaid) who exercise. responsibilities that are mare than .
advisory 7n nature.4
It should be nated that other state and federal laws, as well as local provisions, may be applicable
to officials ii� a particular srtu��tion.� Whether a law is applicable depends on the� activity tha� the
official is undertaking. Ufficials should wark with their own legal counsel to deterrnine �vhether
their activities are sub�ect to any such additional provisions.
2.. Do ca'zflict of inter°est laws apply to per•sorzs appoi�tted to ZocaC boards and comraiissions
(e.g., plarznirzg arzd zonzn� comniissio�: members)?
Chapter 17l conflict of interest laws appiy to persons appointed ta local boards and cornmissians
if the board or commission exercises powers that are more than advisory in nature.5 Far
example, members of a city�s planning and zoning corrimission would likely be sub�ject to
chapter 171 canflict af interest provisions. Accordingly, the ability of such officials to discuss or
vote on an rtern would potentially be Iimited by these laws if tlie official is considered to have a
conflict of interest on the issue.
' TEX. I,OC. GOv'T CdDI� Alvtvt�. §§ 171.001 —.010 (West 2008).
� Id. § 171.002.
3 Id. §171.d01(1}.
a Id
5 Id.
2012 Texas Conflrct of Interesi Laws IvFade Easy s Office of ihe ,4ttorney Ge1�e��al
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3. Do coJzfl'rct of itzter•est lccws apply fo r7ze��ber°s of pcn•ely rrrlvisory cornnzitfees tl�cct rn�e
establislz.ed by tlze local entity?
No, chapter 171 conflict of interest pravisions appIy anly ta an officer wha exercises
responsibilities beyand those that are advisary in nattrre.b Whether an officer exeY•cises sLtch
responsibilities depends on the autharrty vested in him or her by law and not necessarily on the
title of a committee ta vvhich he oi- she belongs.
A city may adopt other additronal provisions defning and prohibiting conflicts of interest.'
4. What types of isscces rrrRe caver°ed by Texrrs conflict of dnter•est laws?
Texas conflict af interest statutes da not address every conceivable conflict that may arise for a
local .affic.ial.. ,In, fact, .,cha�.ter ,.] 7,1 c.onflict laws are .gener.ally..fi.nan.cial rn nature and cover two
main types of conflicts: $
1. Bus'rness entity conflicts: Conflrcts due to a local off�cial's substantial financial interest
in a 66business entity" that has an issue before his ar her governmental unit,9 ar
2. Real property conflicts: Conflicts due ta a Iocal afficial's substantial financial 'rnterest in
"real property" that vvould be affected by hrs or her govenamental zinit's action.'o
5. iat is tlze definrtiar� of a"bccsiness entity"far.perrPoses of th.e confCicf of inter•est
laws?
For purposes af Texas canflict of interest laws, a"business ent'rty" means:
a sole praprietarship, partnership, firm, corporation, holding company, joint-stock
cornpany, rece�vership, trust, or any other entity recognized by law.'Z
Governmental entities such as cities or schaol districts are not cansidered business entities."
Accord'rngly, if the issue befare a city council involves a gavernmental entity, an officiai's
relatianship vvith ti�at entrty would not subject that official ta chapter 171 conflict of rnterest
laws. However, an economic development carporation is a bus°rness entity, sa an official with a
substantial inter•est in the corporation wauld have ta compiy wrth chapter 171.14
6 Id
' Id. § 171.007.
$ A]ess commonly seen conflict is covered in section i71.003, which prahibits an official from acting either as a
surety for businesses doin� business with the governmental entity or as a surety on bands involving public
officials.
9 Id. § 171.062(a}.
'o Id § 171.002(b).
'2 T�x. Loc. Gov'T CoDE ANN. § 171.001(2) (West 2008).
" Tex. Att'y Gen. Op. Nos. DM-267 (1993); GA-31 (2003).
14 Tex. Att'y Gen. Op. No. JC-547 (20d2}.
2QI2 Teaas Conflict af Interest Laws Made Easy • Offce of the,4ttarney Geraer•al
6. W/rtct is co'zszcler°etl a"strbsircrztircl iizter�est" in a biisr.riess eritity (suclz flzrrt it woa�ld
arnou�zt to a potential conflict of zrzterest)?
There are four �vays that a person cauld be deemed to have a"substantial interest" in a business
entity that would raise a potential conflict of intei•est. A person has a substantial interest in a
business entity if the person has a(n):
�•'1': Stoek 7Triex�°�st: Ii d�e��of�Ci'a1 o�v[zs 10 pei-cent-or more of the �to�ta�l �vo�ting stock�or shares
of the business entity;15
2. Other ownership interest: If the offcial owns either 10 percent ar tnore, ar $15,000 or
more, of the fair mai°ket value of the business entity;16
3. Incame interest: If the official received more than 10 percent of his ar her gross income
far.the�pre`��3us�yea..from:�he.husfness.ent:i.t3;" �
4. Close family member with any of the above interests: If a close relative af the Iocal
official has any of the above types of interest in a business entity. A local off�cial is
consYdered to have the same interest in a business entity that 11is or her close relatives
have in that business entity. In this context, clase relatives of an official would include
persons who are related to the official within the first degree by consanguinity (blood) or
affinity (marriage).'� Such relatives would include an official's father, father-in-law,
mother, mother-in-law, daughter, daughter-in-law, son, son-in-la�v and t11e spouse af the
., official.
7 Is t/ze fact tlrat a local officzal is employecl by a bccsiness entity suffzcient ta cr°eate a
potential conflict?
: - * - • • `� r , � . _ � - _ , � . • , r � • • •" • • .
� � � . „ � - • • �-� • - � � �_ _ * ' � , � - • _.
. � � � * - � • • -
. � � � ,,� a �,
State law provides a two-part test for ascertaininb whether a local official has a conflict of
interest regarding a business entity that would prevent the official from participating in a vote or
discussion on that item.`g Ta determine whether a conflict exists that would prevent that
official's participation in a vote or a discussion, one should apply the following two-step
analysis:
l. Step one (substantial interest analysis}: First, the official must determine if he or she
received more th�an 1U perceni ofhis or fier gross incame in tfie previous year froin that
business entity or if he ar she owns 10 percent ar mare of the voting stock or shares of
the business entity ar has some other substantial ownership interest in the business
eniity.z0 (See Question 6, part 2, above.) If the official has such an interest or a close
15 TEX. LoC. GOV'T ConE ArrN. § 171.OQ2(a�(1),(West 2008),
' 6 Id
" r�t § 17i.00z(a)(z).
,s Id. § 17i.oaz(��.
'g Id. § 171.004.
20 Id. § 171.002(a)(2}.
2012 Texas Co»flict af Interest Laws Made Easy • Of�ce of t17e Atto�•�aey General
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relative of the offcial has such an interest,Z' the official must consider the second part of
the test for determining if a conflict of interest exists.
2. Step twa (special economic effect analysis): The official must determine whether the
action that the local entity is considering would have a special econornic effect on the
business entity that is distinguishable from its general effect on the public.ZZ
If it� is deteg-c��7nea •that��he •�ff cial has a substantial i�ntere�t in the business entity and it is likely
that the action would have a special econornic effect on the business entity that is distinguishable
from its effect on the general public,2' a conflict of interest would exist. If a conflict of interest
exists, the official is prevented from discussing or voting on an issue involving that business
entity.'-4
9. - Ma3�.rin a�rlra��st,.�beneft from a conir�act wrtJi �a bacsirxess canstiticte a possible conflict of
ii2fe��est?
In certain situations, an indirect benefit that a local afficial may receive regarding a business
entity may be sufficient to constitute a conflzct of interest. For example, the Dallas Court af
Appeals concluded that the defnit�on of "substantial interest" did not distin�uish between funds
received directly from a business entity and funds received indirectly. Whether a particular
interest is a"substantial interest" is a questian of fact.ZS
10. rct �zs •ronsr.dered•cz "sccbstantirrl inter•est" iri �•e�l pr°oper°ty (stcclz tlzut it woulct unzotcnt
to a potential conflict of inter•est)?
There are .trvo .ways that a person could be deemed ta,� have a"substantial interest" in real
property (such that it would amount ta a potential conflict of interest}.26 A person has a
substantial interest in real properiy if he ar she has:
1. A$2,500 ownership interest in the real property: If the official has a legal ar equitable
ovvnership interest in real property wortll $2,500 ar more'-' or
2. A clase family member with a$2,500 ownei-ship 'rnterest in the real property: If a
close relative af the local official lzas a legal or equitable ownership interest in real
properiy warth $2,500 or more then the official is considered to have the same interest in
the piece of real properiy that his or her close relative has in the real property. Tn this
context, close relatives of an official would include persons who are related ta the official
within the first degree by consanguinity (blood) ar affinity (marriage).23 Such relatives
wauld include an official's father, father-in-law, mother, mother-in-law, daughter,
daughter-in-law, san, son-in-law and the spause of the official.
Z' Id. § 171.002(c}.
22 ra. § i71.004(a)(i).
a� Ici.
z4 Id. § 171.004(a).
25 Dallas Cozmty Fload Control Dist. No. 1 v. Crass, 773 S.W.2d 49, 55 (Tex. App.—Dallas 1989, na writ).
zG TEX. LOC. GOV'T CODE ANN. � 171.002(b�-(C) (West 2008�.
a7 Id.
zg Id. § 171 A02(c}.
2012 Texas Conflict of Interest Laws Made Easy • Of�ce of ihe Atior•ney Gene�•al
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/ / R .;R • � / //�
State law provides a two-part test for ascertaining whether a local official has a conflict of
interest re�arding real property that would prevent the official from participating in a vote or
CI15CL15S10%1 on that item.29 To determine whether a conflict exists that vvould prevent that
official's participation in a voie ar discussion, one should apply the following two-step analysis:
1: ��Substant�ia�°37ii�erest��an�a�lysis: The offcial' must detenrriile �if�tlle�of�cial~has a legal or
equitable ownership interest in real property worth $2,500 ar more. If the official has
such an interest or a close relative of the official has slich an interest,30 the official must
consider the second part of the test for determining if a conflict af interest exists.
2. Special economic effect analysis: The official must determine whether it is reasonably
fareseeable that the action the local entity is considering would have a special ecanomic
effect on the value of the property that is distinguishable from its general effect on the
public 31
If it is determined that the official has a substantial interest in the real property and it is
reasonably foreseeable that the actian would have a special economic effect on the value af the
properiy that is distinguishable from its effect on the general public,3'- a conflict of interest would
exist. If a conflict of interest exists, the official is prevented from discussing or voting on an
issue involving that business entity.33
The fact that an acfion wauld a�fect property physically close to an official's own praperty does
not, in and of itself, establish a conflict of interest that �vould prevent an afficial from discussing
or vating on that item. The afficial must consider whether the proposed governmental action
vvould have a special econoiiiic e�fect an the value of liis or her awn property that is
distin�uishable from its effect on the general public.'4 Por example, if a zaning, variance or
platting request would have a special economic effect an a city official's own property or the real
praperty of a close relative af the official, the offcial could not participate in the discussion ar
vote an that matter.
. ,� ,�; , R�� � . , � � . ,
If a local afficial's child worked at a job that constituted more than 10 percent of the child's
incoine for the previous year, that might create a patential conflict of interest for the parent. If
the child had such an interest, the parent could not vote an or discuss local governmental
business that would have a special ecanoinic effect an the child's employer.35
29 Id. § 171.004.
3o Id. § 171.002(c).
31 Id. § 171.004(a}(2).
3' Id.
J3 Id. § 171.004(a).
�4 Id. § 171.004(a)(2); Tex
3� Tex. Att'y Gen. Op. No.
Att'y Gen. Op. No. GA-796 (2010).
JC=63 (1999}.
2b 12 Texas Canflict of Interest Laws Made Easy • Office of the ftttorney Gene�-al
5
13. May rc local official discccss o�• vote orz rrrz itenz if tlze effect of tlze vote on tlae offrczal's
bccsiness or praperty interest is rzo different tlzcuz rts effect on tlae gener•al paiblic?
Yes, an official rnay discuss and vote on an item if there is no distinguishable difference between
the item's effect on the local afficial and its effect on the general public.36 For example, a city
inay be considering the adoption of a setback requirement that would apply to all residential lats.
Such a requirement arguably would not impact a city official's properiy in a rnog•e significant
manirer� tham•it �would impact� t�e �properiy �a� r,tlier�°m+embers of the general public. In sucli a
situation, the official could fully participate in the discussion and vote. Of course, if the
official's propert�i would be specially enhanced by a change in the setback requirement, then it
would be rnore likely to present a conflict of interest issue far the afficial.
l4. W/�c�t actzaris must a local official take if tlze official lzas a coriflict af interest under
� ��-clzupter 171?
If a local official has a conflict of interest under the two-part test af chapter 171, the affcial must
take three actions:
1. File an affidavrt: The official must file an affidavit with the lacal unit's official record
keeper stating the nature and extent af the official's interest in the matter." This affidavit
must be filed before any vote ar decision an the matter is rnade by the entity.'g A sample
canflict of interest affidavit is attached at the end of this article;
2. Abstain from discussion on the item: The official must abstain from discussions or
other proceedings regarding the item;39 anc�
3. Abstain from voting on the item:40 T�e offeial must not vote on the itern.
R R I' R/' P' / I /
' /' r' / / / / • /
No, a local official rnay not discuss an issue with �vhich he or she has a conflict of interest even
if he or she abstains from voting an the item.41 The statute prohibits ccfurther participatiori" in a
matter if a conflict exists.42 If a conflict of interest exists, the afficial must file the required
affidavit and abstain from both discussing and voting on the item.43 -
The attorney general has opined that a mernber of a governmental body does not "participate in a
matter" for purposes of the conflict of interest laws by merely attending an executive session on
the matter and remaining silent during the deliberations 44 However, it may be wise, the apinion
noted, for the interested public afficer ta refrain from attending open ar closed meetings that
address the matter in which he or she is interested. .�
36 TEX. LoC. GOv'T CoDE Arrtv. § 171.004 (West 2008).
3T Id. § 171.004(a)-(b).
38 Id. § 171.004(a).
39 JCZ�.
40 jd
4' Id.
az Id
43 Id. § 171.004(a)-(b}.
44 Tex. Att'y Gen. Op. Na. GA-334 (2005}.
2012 Texas Conflic4 of Interest Laws Made Easy • Off ce of the,4ttoJ-rrey Geraer•al
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16. May a local entity sepaYrrte ocit cuz itern fronz a budget ta allow tl7e official witlt tlze
conf7ict to vate orz tlie ba�dget?
Yes, a governing body of a local entity shall take a separate vote on any budget item involving a
business entity in which a local official has a sttbstantial interest.46 The remaining officials
withaut a conflict may separately discuss and vate an the item involving that business entity.
The official with the conflict may then vote on the final averall budget once the matter for which
there�•was��a con�ti°ct�is �Y°eso�ve�d:°' T�he°oiiicfalwvit�i��he�con�lict rnust also have filed the required
affidavit with the afficial record keeper regarding the conflict.4s .
17. What may a local entrty do if a nzajority of tlze men�6ers of the governnzeratal body lzave
a cortflici of interest regardirxg an itenz to be considered?
Chap.ter ] 71 c�nfl%cx af..intexest laws dc�:,not.prev.e.nt.disc.Liss:io.n or voting on the item if a majority
of the members of a governrnental body have similar conflicts of interest on the same item.49
However, prior to any deliberations on the matter, each of the members of the governmental
body with a conflict must have filed the required affidavit notinb their interest in the item.so
18. May a Izame racle city provide ficr•tlzer co'zflict af interest limittctiorzs ari its cdty offrcials
and employees?
Yes, a home rule city (a city with a population of 5,000 or mare that has adopted a city charter)
may prav�ide •�fur�her -and more restrictive conflict of interest limitations on its officials and
ernployees.sl Such restrictions may be cantained in a city ordinance, city policy or within the
city charter. Far exarnple, some cities have ethics ordinances or city charter provisions that
prevent their..c,ify oificia.ls from discussing or voting on items if the official has any financial
interest in the item.
19. Are there state statutes tlirct provide stricter canflict of iriterest restr•ictians for
particular sitccations ar fo�• certairz pzcblic officials ar tlrat contain additional
reporti�zg requirements?
Yes, there are certain state statutes that provide stricter canflict of interest restrictions in
particular areas. For example, there are conflict of interest statutes within chapter 312 of the Tax
Code that cornpletely prohibit a local entity's governing body from approving a tax abatement if
a member of that body avvns the praperty that is the subject of the tax abatement.s� If a local
official has some type af interest in the item before the governing body, the officgal will want to
visit with local counsel as to whether the interest constitutes a chapter 171 conflict of intexest or
presents a canflict pursuant to same other state law.
Chapter 176 of the Local Government Code requires inembers of the governing body and
executive officers of local government entities to file a conflicts disclosure statement relating ta a
persan that the governmental entity has contracted with or is considei•ing contracting with if the
a6 TEX. LOC. GOV'T CODE ANN. § 171.005(a} (West 2008).
47 rd. § i7i.00s(�).
-0� Id. § 171.004(b).
4� ' Id. § 171.004(c).
so Id
S' Id. § 171.007(b); Tex. Att'y Gen. Op. No. GA-68 (2003).
�2 TEX. Tax ConE Atvt�r. § 312.204(d) (West 2008).
2012 Teaas Conflict of Interest Lavvs Made Basy • Offace of the,4ttar•ney Genea�al
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Chapter 171 of the Local Government Code daes not contain special coilflict of interest laws that
apply to judges. However, judges are subject to the Code of Judicial Conduct.60 In basic terms,
these rules require that judges avoid actions that would suggest even the appearance of
impropriety.61 They also prohibit judges from having any financial interest in any aspect of a
case that they handle as judges. Furthermore, Article V, Section 11 of the Texas Constitution
prahibits a judge from presidirig over any case where he or she may have either a direct personal
or pecuniary interest. Additionally, a judge may nat preside over any case where he or she rs
s3 TEx. LoC. GOv'T CODE ANN. 5 176.003 (West 2008). See also Tex. Att'y Gen. Op. No. GA-446 (2006).
s4 TEX. LOC. Gov'T CoDE A1vN. § 176.006 (West Supp. 20i 1).
ss Id §§ I76.003(b}, 176.009 (West 2003).
56 Tex. Att'y Gen. Op. Nos. V-640 (1943); WW-957 (1960).
57 TEx. Gov'T CODE ANN. § 404.0211 (state agencies) (West 2005}; �x. LOC. GOv'T CODE ANN. § 131.903
(other political subdivisions} (�Vest 2008}.
Ss TEx. Loc. Gav°r covE ANrr § 13 i.9a�(a}�z} (wesc Zoos}.
59 1� § 171.004. �
bo TEx. CODE JUD. CONDUCT, reprinted in T�X. GOv'T CODE ANN., tit. 2, subtit. G app. B(West 2005 & Supp.
2010).
61 TEX. CODEJUD. CONDUCT, Canon 2(West 2005).
2012 Texas Conflict af Interest Laws Made E.asy • Offace of the Atto�•ney Gener•aC
8
related to either party by affnity or consanguinity.bZ For further information on the conflict of
interest provisions that apply to judges, cantact the State Commission on Judicial Conduct. The
staff af the Commission can be reached at (512) 463-5533 or (877) 228-5750. If the judge is a
lawyer, the judge �vould alsa be subject to the canans of ethics applicable to Iavvyers as described
in the following question.
R' R R 'II I' I ` /
Lawyers are subject to a special canons of ethics, the Texas Disciplinary Rules of Professianal
Conduct, as a part of therr state licensing as attorne.ys.63 In basic terrns, these rules require that a
lawyer advise his or her clients of any potential canflict of interest that the lawyer may have in
his representation of a client. The lawyer must also avoid any action that would compromise the
interests of his or her client.64 For further informatian on the conflict of interest provisions that
apply.:ta.�laauyers,-..co�4act t.he� Stat� :Bar•:of �"eYas. The staff of:the �State Bar�can be reached at
(512) 427-1463 or (800) 204-2222.
23, If an of�ci`cl's vote on rc cont'"QCP VlOIQleS fIZB C011fZ1C1� Of Z/1PB7°2SC ZCtYVS' is tlie carztr•act
iClegal and vozd?
Not automatically and not necessarily. It is impartant to note that the term "void99 is not the same
thing as the term "voidable." The law says that an action taken in vialation of the conflict of
interest laws is voidable, meanin� that it could be declared void by a court but that the action is
not void autoniati�aliy. If a°court•��nds��that an official's vote or°o�theraction�on a�lnatter violatea
the canflict of interest laws, the violation would nat render the ultimate action or contract
voidable unless it would not have passed without the vote of the official who violated the conflict
of interest law.6s �
24. Must-a local offciecl be r�en�ovecl fi•om office �rf•flze affficial vialcrtes the canflict of
interest laws?
State law does not provide for an automatic removal of a local official from office due to an
alleged or proven violatzon af a`conflict of intei•est law.66 However, if such a violation is proven,
it may be used as the basis for a reinoval of a member of a governing body for misconduci under
state law or other statutary ar city charter criteria that allow a local official to be removed for
cause.67
bZ TEx. CONST. art. V� 11; City of Oak Cliff v. State, 79 S.W. 1068, 1069 (Tex. 1904}; Tex. Att'y Gen. Op, No.
DM-109 (1992).
63 TEX. DISCTPLINARY R. PROF'L CoNDucT 1.01 - 9.01, repririted in TsX. Gov'T CoDE AtJ1v. tit. 2, subtitl.e. G app.
A (West 2005 & Supp. 2011).
ea Id I.06 - 1.09.
�s TEx. LOC. GOv'T CoDEANN. � 171.006 (West 2008); Tex. Att'y Gen. (7p. No. JC-155 at 3(1999).
66 �Ex. Loc. Gov°r coDE aNN § i7r.00� (west 2008}.
G7 Jd. §§ 21.025, ZZ.a%%.
2012 Texas Conflict of Interest Laws Made Easy • Office of the ttltorney General
9
25. Mrcy a per°son be cltrarged wrtla a crime rf tlte offzcial vialates tlze co�zflict of interest
laws?
Yes, chapter 171 of the Local Government Code provides four situations in which a public
official may be prasecuted for his ar her actions or inaction regarding a conflict of interest.63
Specifcally, a local afficial can be prosecuted for:
1: Failure°��°3[�+ii'e°�'I1 E�f:�f]f,��'Vlt N'O�1Tlb'a `C011�f1ict: Faili�'� to fle'an affidavitwith t11e
offcial record keeper noting the official's substantial interest in an item if such a filing is
required by Local Government Code sectian 171.004;bg
2. Participating in Discussions Regardrng an Item for Which There is a Conflict:
Discussing or otherwise participating on an item if such participation is prohibited under
Local Government Code section 171.004 due to a conflict of interest on that item;'o
3. Serving as a Surety for Certain Businesses: Acting as a surety for any business entity
that has work, business or a contract of any amount with the local entity;" or
4. Serving as a Surety for Local Official Bonds: Acting as a surety an any offic�al bond
that is required for an official of a governmen.tal body af the lacal entity.'Z
Violation af any of the above four items can be prosecuted as a class A misderneanar" and is
punishable by a fine not to eaceed $4,000 and/or up to one year in jail.74 Whether to prosecute
an alleged vialation of the canflict of interest laws is subject to the prosecutorial d�scretion af the
local district attorney or prosecutin� crimirial county attorney. The attorney general does nat
have original jurisdictian to prasecute violations af canflict of interest laws by public officials.
26. Does� t�ie conflict of ir2ter°est lrcw apply to director•s of rzn econo�zic development
corporation?
Chapter 171 of the Local Government Code does not apply to the directors of an economic
developrnent corporation created under the Development Carporation Act of 1979 because such
corparations are not considered to be governmental entities.'S However, state laws governing
corparations may have their own provisions governing certain conflicts. For instance, state law
governin� nonprof�t corporations prahibits Ioans being made by the corparation ta its director.76
"If a loan is made to a director, the directors vvho vote for making the laan and any officers
participating in mak�ng the Ioan `shall be jointly and severally liable ta the corporation for the
amount of such laan until repayment thereaf.""' A corparation's board members should also
check the carporate bylaws for any discussion of board canflicts.
6� Id. § 171.003.
6� rd. § 17i.003(a>(i).
�a Id.
" r�t. § i71.003�a)�Z).
7Z Id. § 171.00(a)(3).
'� Id. § 1i1.003(b).
'-0 TEx. PEN. CoDE Arrrr. § 12.21 (West 2011).
75 Tex. Att'y Gen. Op. Na. JC-338 (2001}.
7� TEX. BUS. ORGS. CODE ANN. 5 22.225(a) (West Supp. 2011).
77 Id. § 22.225(b); Tex. Att'y Gen. Op. No. JC-338 (2001).
2012 Texas Conflict of Interest Laws Made Easy • Office of the Attorney Ge�7e��al
10
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�� Tex. Att'y Gen. Op. No. JC-184 (2000}.
79 Itl.
so I�
$' Tex. Att'y Gen. Op. No. JC-294 (2000); Hager v. State ex rel. TeVaz�lt, 446 S.W.2d 43, 49 (Tex. Civ.
App.—Beaumont 1969, writ ref d n.r.e.).
82 Tex. Att'y Gen. Op. No. JC-294 (2000).
2012 Texas Conflict of Interest Laws Made Easy • Off CE Of IF1E AL�Ol"t1Ey GE1101"Cl,
11
',.. � � l.. ! ��
��� �� i�� � � •.. s .....
� � ;
I, _ _ , as a rnember of the
(Narne}
������ a , make this affidavit
(governing body, baard, coinmission)
. � - -# �- � . - - � � *
I have a substantial interest in a business entity pr real praperty that rnay receive a special
eco�am�c effect,�ay a•vo�e or d�eisio�°� caf-�he m��_ , and the
(��verning bady, board, commrssian)
ecanamic effect on my busir�ess entity ar real property is drstinguishable from its• effect on the
general public: What const`rtt:���;� a`.`�subs�tantial� interest;" cLbusiness ent'rty°," "real p�-operty" and a
"special economic effect" are tenps defined in chapter 171 af the Texas Local Gavernment Code.
The business entity or real properiy is'(iianze�address of barsiness ar deseriptiorz ofpraperty)�
The nature ofmy substantial rnterest in th�s business entity ar real property is:
❑ an ownership interest of 10 percent or more af the voting stack or shares af the
business �i�tity;
❑ an ovvnership interest of 10 percent ar $ I S,Q00 or mare of the fair market value af
the business entity;
❑ funds received frorn the bus�ness entity exceed 10 percent af (my, his,
her} gross:incarrse far the �xevi.ous year,,
❑ real praperty is °rnvolved and n M� (I, he, she) have/has an equitable ar
legai ow��ersliip with a fair �narket value af at least $2500;
2Q 12 Texas Co�flict n.f Tnf�a°es� i..ae�vs,.Made Eas.y. � Offrce.�of the _4 ttc�rney �.er.aa',�rl•
12
■ , �- • s - . -� • - - •-_ -- • � . � � •r� •
,.- . • -. . •.- •
� . _ _ ' � - .� � - .r•' - �. � _ .
.r.elativ.e..has in .the item.
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��`'i����ttza°� c�f ���a��li� ��t"�c.i�l
'I"itic
BEFORE ME, the u��c2caw�i����d ���#17�.�r�•it�y tt�is c��i�� ��e�-�csa���I�" �.pPeared
_� . e� ___ _� i���� by oath swore that the facts herein above
'�•I����e ��i"�bfi����t�
�i�tcd �a'c: ta-��� �i�cP ��r������,i ��� tl�� �-��st c�1` l���l���.r ��t�R�r�jl�c��� car ���ie�
��u���� ic� �E��d s���ss�����7�� �e��s�-e r��� t�r� i��%s i�te ��tr�� �%'_ .._...� , �0
Notary Public in and for the State of Texas
I • � .
20i2 T'���s �vr�fl°zct.caf:G�t�r:est,���eass 1�?Iad��sy. r• ��`���.of tla�.4t.�aa-t���a ��ra�r:�l ::.
i3
s;\legal\our documents\miscellaneous\13\ais ethies- 83rd leg 111813.doc
1 • �' ' <�
AGENDA DATE: November 18, 2013
DEPARTMENTe Legal Department
CA: Anita Burgess, City Attorney
SUBJECT: Receive a report and hold a discussion regarding legislation enacted in the g3`d
Texas Legislative Session relating to matters impacting the ethical obligations of municipal
elected officials.
BACKGROUND: The Chair of the City Council Ethics Committee requested that City Staff
t.���ciate tl��; �;�t�����ittee with regard to legislation enacted in the 83`d Texas Legislative Session
relating to ethical obligations of municipal elected officials. The Omnibus Ethics legislation
promised for 2013 was vetoed by the governor, so there is little to report. Staff daes believe it
would be helpful for the Committee to be aware of the changes made to the Open Meetings Act
and the Public Information Act since these are laws impact elected officials daily. Information
relating to these changes is included in the Committee's backup materials.
�,
� � ,w=��, .
� � �.���r.
a � �_W
Anita Bur
gess, City Attorney
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���� €� � t��^�� , ��- � ,�� June 19, 2013
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�vi�1a .'ie. .. r "J .4e....�i':: .m ...>.. ..._ wr�f�.%o�- 4e .�:+ �e�. weec,. 4.r �4�;
The Texas Legislature adjourned sine die on May 27, ending the 83rd Regular Legislative Session. June 16
marked the end of Governor Perry's veto period, meaning that all legislation from the 83rd Regular Legislative
Session has now run its course. During the session, legislators enacted several reforms to Texas campaign finance
and lobby laws that may impact your activities.
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SB 219 had other provisions in the bill that could have proven beneficial to candidates, officeholders, and lobbyists
alike. Among those provisions was one aimed at removing the stigma associated with a technical filing error. That
provision would have removed any reference in the law to a"complaint," terming it instead an "inquiry," and would
have created a three-tier system to resolve those inquiries. Other notable provisions included changes to lobbyist
disclosure and registration requirements, updating the political advertising disclosures for the Internet age, and
defining candidate or measure-related "robo-calls" as political advertising.
�,�:�, � : � .� :�
:_ � �� � � « �;� �u, - �.
�. - -
���;�a`��� � t���u�
This session, the Legislature updated Utilities Code Chapter 55, regulating Automated Dial Announcing Devices
(ADADs), which are used to make so-called "robo-calls." Chapter 55 already provided certain restrictions on
making robo-calls, including requirements for message length, disclosure, and prohibited hours of operation. This
law applied only to "telephone solicitation or collection" calls, making it not clearly applicable to political calls.
However, the Public Utilities Commission long ago adopted rules defining a telephone solicitation as an unsolicited
telephone call. This session, the Legislature inserted that definition into the statute itself, making it clear that if you
make a robo-call the recipient has not asked to receive, you must comply with the various regulations in Chapter 55.
I� �,Y��";��a�y � ����°;
While many changes to the lobby laws died as a result of the Ethics Commission sunset bill's veto, two important
changes did become law.
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addressed, we encourage you to engage counsel oFyour choiw IFyou would like [o be removed from our mailing Ilst, please conlatl us at either unsubscribe�lockelord com or Locke Lord LLP,
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�O 2013 Locke Lord LLP
Public Law, Governmental & Public Affairs Practice ��,������� ����� uic tu y
.. , t`i.i..,
Registration
Many Texas lobbyists perform paid work for campaigns. Rep. Charlie Geren and Sen. Kevin Eltife passed a bill, HB
1422, that requires lobbyists to disclose certain information about that campaign work on their lobby registration
statement. Going forward, lobby registration statements will include a place where lobbyists must report each
person who, out of campaign or PAC funds, compensates or reimburses the lobbyist (or an agent on behalf of the
lobbyist) for any services.
Joint Expenditures
Several sessions ago, the Legislature specifically allowed lobbyists to split expenditures with other registered
lobbyists, and stated that the reportable amount of a split expenditure was the amount paid by each lobbyist.
As written, the law said that if you split an expenditure with a non-lobbyist, the portion paid by the non-lobbyist
would not be a lobby expenditure. While lobby expenditures are generally exempted from the ban on gifts and
the bribery laws and are not reported by the recipient, non-lobby expenditures enjoy no such protections. This
change ensures the non-lobbyist portion of expenditures, as long as it is reported by a lobbyist, enjoys the same
protections as the expenditures made directly by a lobbyist.
��,��';,��,..� �.,�Nsl"��d"d�.�::��R�'��9 a�ti;w'��,�`Bi�(�"`,,�
Fur�dr�rs�ng sria T�xt R?�ss��es
Earlier this ye�r, �h� Ethics �amrnis�i�n adcspt�d Ethics �dvis�ry C?pir�iarr 510. This opinian allovv�d, u�sd�r limit�d
circurnstan�es, prslitical c�mmitt��s t� s�licit a�rci ��c�pt pcalitical crsnYrrbution� mad� �ria text messag�. Any p�rson
interest�d in pur��ing this type af fundraisirr� shc�uld carrsult I�gal �aun��l ab�u� eh� restricti�ns and r�qulremerrt�
tc� �ng�g� ie� such an a�tivi�y.
Software Upgrades
The Texas Ethics Commission received an appropriation of over $3,000,000 to upgrade its software for campaign
finance filers, lobbyists, and personal financial statement filers. The Ethics Commission is currently in the bidding
process for the new software. As part of the process, the Ethics Commission is examining the current campaign
finance reporting forms, and may create a new, streamlined form for all campaign finance reports.
In late May, the Ethics Commission held a workshop, open to the public, to discuss the new forms. Partofthe revision
of forms includes the potential to add new reporting requirements, such as specifically listing all expenditures
incurred but not yet paid, as well as a cash basis accounting system for political contributions maintained. At this
point, the Ethics Commission has not taken any formal action, but those changes are possible in the months ahead.
Definition of Political Advertising
Years ago, the Ethics Commission adopted a rule that specifically exempted emails from being considered political
advertising. The practical effect of this rule is that e-mails do not need the political advertising disclaimer. In each
of the past few legislative sessions, the Legislature has considered, but not acted on, making a change to the law
that would include emails as political advertising. We expect the Ethics Commission to propose a rule at its next
meeting making some campaign-related emails political advertising.
��0��nvk°,° �. �w�'�� ia¢, ��,.Qu-'n'��'�
Locke Lord has experience working with campaign finance laws and regulations, ranging everywhere from local and
state wide political campaigns to groups providing pure issue advertising. The firm currently represents political
campaigns, political committees, and prominent consultants and lobbyists. In addition to working with our clients
to comply with the campaign finance laws, Locke Lord also monitors activities at the Texas Ethics Commission
to keep our clients updated on proposed rules. During the legislative session, Locke Lord monitors campaign
finance legislation, letting our clients know of potential statutory changes they may wish to comment on. For more
information on the matters discussed in this Locke Lord QuickStudy, please contact one of the authors:
Robert D. Miller � 512-305-4867 ��......��.,..°;�,_�...�� o�e.:��,���.��;
James E. Davis � 512-305-470$ �;c��,r w`����� r�,.� ra ;,�,� �:a
Gardner Pate � 512-305-4$56 � o�a�,���s����s�.��o�a:s,,��.;�o
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Closer look at ethics reform bills failing in the TX Legislature Page 1 of 2
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Home > Closer look at ethics reform bills failing in the TX Legislature
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By mnino
Created 06/05/2013 - 7:51am
Wednesday, June 5, 2013 - 7:51am
AUSTIN, TEXAS (KVEO NEWSCENTER 23) — It was set up to be the session of
"Sunlight", but the 83rd Legislature largely failed to pass major ethics reform. Alana
Rocha, with the Texas Tribune, takes a closer look.
There was good reason to think lawmakers this session might finally be ready to update
the ethics laws that govern them. Forty plus freshman came in, ready to make good on
campaign promises to get the part-time legislature to be more transparent.
"There's been a couple of decades where we haven't made any changes and so maybe
this is the beginning much needed changes in our disclosure and our ethics forms."
It was a bipartisan effort that garnered the support of more senior members, too. "I think
people will feel like, by the time this session ends," It didn't take long for that feeling to
fade, "I just know that when I was trying to make some changes on there, the resistance
was coming from mostly elected officials."
Rep. Giovanni Capriglione, for one, proposed legislation that would require elected
officials to disclose their business contracts with government entities. "For every business
association that's in 11A, please list those that have government contracts, with some
exceptions - specifically that there's a$10,000 minimum.'
When the bill itself failed to make it onto the House calendar, Capriglione tacked a
watered down version of it onto the ethics commission bill, and faced tough questioning. "I
just want to make sure I understand this - You think it's a good compromise? I think it is,
yes. Okay, so less transparency is good. No."
Capriglione's amendment was ultimately adopted by a slim margin, only to be stripped off
the bill in conference committee along with several other measures. One of those would've
forced lawmakers to put their financial disclosure forms online. "I can remember talking to
Senators on the floor about that bill, some of us talking about voting against the bill if for
no other reason than that one thing."
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The few amendments that stayed on the ethics bill would require people posting political
ads online to disclose who's paying for them, and force railroad commissioners to resign if
they run for another office. "This was a session of missed opportunities, it's difficult to work
on those topics and really make changes."
There are always future opportunities, lawmakers say. In 2015, they'll be returning to the
Capitol with the results of one ethics bill they could get passed, an interim study on the
state's disclosure laws.
News S��t�wid� #�'�;�vv�
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Videoconferencing Under the Open Meetings Act
Does the Open Meetings Act (Act) allow a city council to hold a meeting by videoconference
call?
Yes, if certain conditions are met. See TEx. GOV'T CODE § 551.127. Prior to legislation passed
in 2013, the Act generally required that a quorum be present in one physical location in order for
a governmental body to meet by videoconference. In an effort to modernize the Act to reflect the
use of Internet-based communication technology, the legislature passed House Bill 2414
(Button/Deuell) and Senate Bill 984 (Ellis/Perry) during the 83rd Regular Legislative Session.
Both bills amend the existing section in the Act that allows for videoconferencing. House Bill
2414 is effective immediately. Senate Bi11984 is not effective until September 1, 20] 3.
An attorney with the �'exas Legislative Council (TLC) has indicated to League staff that, once
effective, both bills will be printed. In other words, TLC will not work to reconcile the two bills.
Instead, city attorneys will have to look to the rules of statutory construction in order to make
sense of the bills. Those rules provide that, as a general matter, "if amendments to the same
statute are enacted at the same session of the legislature, one amendment without reference to
another, the amendments shall be hartnonized, if possible, so that effect may be given to each. If
the amendments are irreconcilable, the latest in date of enactment prevails." Id. § 311.025(b).
The TLC attorney confirmed with League staff that House Bill 2414 was enacted later than
Senate Bill 984. That means that in the case of an irreconcilable conflict House Bill 2414 will
control.
The most substantial difference between the bills appears to be in Section 55l .127(c). Both bills
expand the ability of a governmental body to use videoconferencing by eliminating the
requirement that a quorum be present in one physical location. However, House Bill 2414
eliminates this requirement as to any governmental body, and Senate Bill 984 eliminates this
requirement only as to governmental bodies that extend into three or more counties.
Following are the amendments to Subsection (c) from House Bi112414:
(c) A meeting of a[s�a�] governmental body [ej�—s�-��a�������i-����t-��a�
�=��������,��t-1��c�=����i-�;-e�����] may be held by videoconference call only if_
(11 �l�c �;�v�t;r�r�,�sii:_�l laca�l`Y ����ke� �vailable tc� tl�� ����1�1a� �t 1�<�s1. cr��e�
suitable phvsical ����c�� _ml�cat�d in or within a�����as�r7����1� distance of the
�c..��_€a�al�ic R��i����.��t�i1� `s1` at���,. �f the �c�v��'t�r3�unt�;l �c����' tt��t ts �,s���i ���ei w�%l�
e�i�i�,�ac����n�"��-����:�. t;tlt���7�sci�t_.�il�r�t �zr'c�vic��� �t�� 3��c�i� w�aic� vit���a��ii�,�l�v, �s t�+��l ��� «�
�:�4�a��cr�� �nci inicrc,�r�li�ar�� ��� �v�liclt � �n�rnh�i� �7f kl�c�., ��Li1�is�. c���� �ar�av��e l��1it��C�t�v
c�r` tstl����eursc ���ir��.,� ��<�r�i�e;i��<�t� ria_tl��. �a��c�tin '
��c: ���ca��l��r �+i` i17e�cyv��•n���csr7i�al 1���� i�sa`t;sic�i��� �cav��° 1��, r����.�i�� a€�
���-c:�c�.��i ��i if��t1 ��1�ysic;�1 ���<t��; �ttc�
,�-��, ��r�� tnt����t���• c-�t����c 1��.ilalic ���'�:��cnt �t tl��r1 �?I�ys�c~�i1 ����� is �arc�vicls�,ci tlt�
onnortunitv to uarticin�te in the meet�n� hv means of a_v_sci����.c���ference call in
the same manner as a ners�n who is nhvsically nresent �t a„_meetin� af the
�,c�t��r•i�r������fil bodv that is not conducted by vii��c�c�r�i�L�•�a�ce call ������t�=i-t��#=
�-���r�r��t����`����c�'�_...__wr� � . ��-�y������y��-�°�-�-�����-1�=;���`����
������.
Following are the amendments to Subsection (c) from Senate Bill 984:
(c) A meeting of a state governmental body or a governmental body that extends
into three or more counties may be held by videoconference call only if the
�����n��cr; [�����`-�����.����1�����,� of the governmental body Ea�•�;�idin�e�- ����
���e�tia� is physically present at one location of the meeting tf��� a� Q��r� tcr t���
}�tr(��ic �r.i�~�«�e ��?c��� T��t'ti���;� �i`t�sc ������tin�;.
Some attorneys believe the bills irreconcilably conflict, but League staff believes the bills can be
harmonized. The next two questions explain how the statute should operate after both bills are
effective and reconciled with existing law. -
What are the procedures that a governmental body must follow to meet by videoconference
if a quorum will be in one physical location?
l. The meeting notice must specify where the quorum of the governmental body will be
physically present and the intent to have a quorum present. See TEx. GOV'T CODE §
551.127(d); Senate Bill 984 § 1(e).
2. The video and audio feed of a remote councilmember or employee must be broadcast live
at the meeting. See House Bill 2414 § 2(a-1).
3. Each portion of the meeting held by videoconference call that is required to be open to
the public must be visible and audible to the public at the location where the quorum is
present. See TEX. GOV'T CODE § 551.127(�.
4. The location where the yuorum is present, and each remote location from which a
member of the governmental body participates, must have two-way audio and video
communication with each other location during the entire meeting. Each participant's
face in the videoconference call, while speaking, must be clearly visible and audible to
each other participant and, during the open portion of the meeting, to the members of the
public in attendance at the location where a yuorum is present, and at any other location
of the meeting that is open to the public. See Senate Bill § 1(h); House Bill 2414 § 2(h).
5. The audio and video signals perceptible by members of the public at each location of the
meeting must meet or exceed minimum standards established by Texas Department of
Information Resources (DIR) rules. See TEX. GOV'T CODE § 551.127(i).
6. The audio and video signals perceptible by members of the public at the location where
the quorum is present and, any other location open to the public, must be of sufficient
quality so that members of the public at each location can observe the demeanor and hear
the voice of each participant iri the open portion of the meeting. See House Bill 2414 §
2G).
7. If a problem occurs that causes a meeting to no longer be visible and audible to the public
at the location where a quorum is present, the meeting must be recessed until the problem
is resolved. If the problem is not resolved in six hours or less, the meeting must be
adjourned. See Senate Bill 984 § 1(�.
The governmental body must make at least an audio recording of the meeting, and the
recording must be made available to the public. See TEx. Gov'T CODE § 551.127(g).
The special videoconference requirements set out above are in addition to reyuirements that
otherwise apply to meetings under the Act.
What are the procedures that a governmental body must follow to meet by videoconference
if a quorurn will not be in one physical location?
1. The meeting notice must specify the physical space, described in 2, below, and specify
the intent to have the presiding officer physically present at the physical space. See TEx.
Gov'T CoDE § 551.127(d); Senate Bill 984 § 1(e); House Bi112414 § 2(e).
2. The governmental body must make available to the public at least one suitable physical
space in, or close to, the city that is equipped with videoconference equipment that
provides an audio and video display, as well as a camera and microphone, by which a
member of the public can provide testimony or otherwise participate in the meeting. See
Senate Bill 984 § 1(e), House Bill 2414 § 2(c)(1).
3. The member of the governmental body presiding over the meeting must be present at the
physical space described in 2, above, and the location must be open to the public. See
Senate Bi11984 § 1(c),(e); House Bi112414 § 2(c)(2).
4. Any member of the public present at the physical space described in 2, above, must be
provided the opportunity to participate in the meeting by means of a videoconference call
in the same manner as a person who is physically present at a meeting of the
governmental body that is not conducted by videoconference call. See House Bill 2414 §
2(c)(3).
5. Each portion of the meeting held by videoconference call that is required to be open to
the public must be visible and audible to the public. See Senate Bill 984 § 1(fl.
6. The video and audio feed of a remote councilmember or employee must broadcast live at
the meeting. See House Bi112414 § 2(a-1).
7. The physical location described in 2, above, and each remote location from which a
member participates, must have two-way audio and video communication with each
member who is participating by videoconference call during the entire meeting. Each
participant's face in the videoconference call, while speaking, must be clearly visible and
audible to each other participant and, during the open portion of the meeting, to the
members of the public in attendance at the physical location described in 2, above, and at
any other location of the meeting that may be open to the public. See Senate Bill 984 §
l (h); House Bi112414 § 2(h).
8. The audio and video signals perceptible by members of the public at each location of the
meeting must meet or exceed minimum standards established by DIR rules. See TEx.
GOV'T CODC § SS l .127(i).
9. The audio and video signals perceptible by members of the public at each location of the
meeting that is open to the public, and each remote location, are of sufficient quality so
that members of the public at each location can observe the demeanor and hear the voice
of each participant in the open portion of the meeting. See House Bill 24l 4§ 2(j).
10. If a problem occurs that causes the meeting to no longer be visible and audible to the
public at the physical space described in 2, above, the meeting must be recessed until the
problem is resolved. If the problem is not resolved in six hours or less, the meeting must
be adjourned. See Senate Bill 984 § 1(fl.
11. The governmental body must make at least an audio recording of the meeting, and the
recording must be made available to the public. See TEx. Gov'T CoDE § SS l.127(g,.
The special videoconference requirements set out above are in addition to reyuirements that
otherwise apply to meetings under the Act.
Do Skype or similar platforms meet the requirements for videoconferencing under the Act?
Under prior law, and the law as recently amended, DIR is responsible for establishing the
minimum standards for the audio and video signals related to videoconferencing. Id. §
551.127(i); 1 TEX. ADMIN. CODE. Ch. 209. While DIR has verbally confirmed that Skype is
acceptable, there is no widely-available written guidance from DIR regarding which Internet-
based communication technologies meet those standards. DIR has indicated to League staff that
they expect to make few, if any, revisions to their rules in response to Senate Bill 984 and House
Bill 2414. They do, however, plan to release guidelines or FAQs related to videoconferencing in
the next two to three months.
Any DIR rule changes will be published in the Texas Register, available at
http://www.sos.state.tx.us/texreg/index.shtml. DIR videoconferencing guidelines or FAQs will
be posted in the agency's document library, available at
http://www.sos. state.tx.us/texreg/index.shtm 1.
If a member of the city council participates in a meeting by videoconference call is the
councilmember counted for purposes of a quorum?
Yes. The Act expressly provides that a member of a governmental body who participates
remotely in a meeting by means of a videoconference call must be counted present at the meeting
for all purposes. TEx. Gov'T CoDE § 551.127 (a-2).
May a member of the public testify at a meeting by videoconference call even when the
entire council is physically present at its regular meeting location?
Yes. The Act provides that "[w]ithout regard to whether a member of the governmental body is
participating in a meeting from a remote location by videoconference call, a governmental body
may allow a member of the public to testify at a meeting from a remote location by
videoconference call." Id. § 551.127(k). The Act does not expressly require any special notice
of this type of remote participation by a member of the public.
Is a videoconference call the sarne thing as a telephone conference call?
No. The Act makes it clear that a videoconference call and a telephone conference call are
alternative types of communication. See e.g., id. § SS l.129 (authorizing a governmental body to
use a telephone conference call, videoconference call, or communications over the Internet to
conduct certain consultations).
The Act defines a"videoconference call" to mean "a communication conducted between two or
more persons in which one or more of the participants communicate with the other participants
through duplex audio and video signals transmitted over a telephone network, a data network, or
the Internet." Id. § SS1.001(7). The phrase "telephone conference call" is not defined in the
Act, and there appears to be no reported case or opinion addressing its meaning. Nonetheless,
one primary difference between a telephone conference and a video conference call is that a
telephone conference call involves only audio communication.
When may a city council hold a meeting by telephone conference?
Like most governmental bodies, a city council may hold a meeting by telephone conference call
only if (1) an emergency or public necessity exists; and (2) the convening at one location of a
quorum of the governmental body is difficult or impossible. Id. § 551.125(a); see also Tex.
Att'y Gen. Op. Nos. GA-0908 (2012), JC-352 (2001).
May a city council ever consult with its attorney at a meeting by telephone conference or
videoconference?
Yes. Section SS l.129 of the Act authorizes a governmental body to "use a telephone conference
call, video conference call, or communications over the Internet to conduct a public consultation
with its attorney in an open meeting of the governmental body or a private consultation with its
attorney in a closed meeting of the governmental body." TEx. Gov'T CODE § 551.129. This
Section only applies to a consultation with an attorney who is not an employee of the city. Id. §
551.129(d). An attorney who receives compensation for legal services performed, from which
employment taxes are deducted by the governmental body, is an employee of the city for
purposes of Section SS l.129. Id. § 551.129(e).
If the attorney is an employee of the city, the city council may meet with the attorney by
videoconference under the Section 551.127 procedures described above.
S.B. 1297 (Watson/Branch) — Electronrc Communications: in regard to the Open Meetings
Act, this bill: (1) pravides that a communication or exchange of information between members
of a governmental body about public business ar public policy over which the governmental
body has supervision or cantrol does not canstitute a meeting ar deliberation for purposes af the
Act if: (a) the communication is in writing; (b) the writing is posted to an online message board
of similar Internet application that is viewable and searchable by the public; and (c) the
communication is displayed in real time and displayed on the online message board or similar
Internet application for no less than 30 days after the communicatian is first pasted; (2) allows a
governmental body to have only one online message board or Internet application as described in
(1), above, and requires that it be owned ar controlled by the governmental bady, prominently
displayed on the body's primary Internet web page, and no more than ane click away from the
body's primary Internet web page; (3) allows the online message board or Internet application
described in (1}, above, to be used only by: (a) meinbers of the governmental body; or (b) staff
members of the body who have received speciiic authorization from a member of the body, and
wha include their name and title in the post; (4) requires a governmental body that removes from
the online message board ar Internet application described in (1), above, a communication that
has been posted for at least 30 days to maintain the posting for a period of six years, and provides
that such information is public information under the Act; and (5) prohibits a governmental body
from voting ar taking any actian required to be taken at a meeting by posting a communication
on an online message board or similar Internet application. (Effective September 1, 2013.}
S.B. 1368 (Davis/Alvarado) — Public Information Act: provides that: (1) in addition to the
definition in current law, "public informatian" means information that is written, produced,
collected, assembled, or maintained under a law or ordinance or in connection with the
transaction of afficial business 66for a governmental body and the governmental body: (a) owns
the information; (b) has a right of access to the information; or (c) spends or contributes public
money for the purpose of writing, producing, collecting, assembling, or maintaining the
information;" (2) in addition to the definition in current law, 66public information" means
information that is written, produced, collected, assembled, or maintained undei• a law or
ordinance or in connection with the transaction of official business 66by an individual officer or
employee of a governmental body in the officer's or employee's afiicial capacity and the
information pertains to afficial business of the governmental body;" (3) information is in
connection with the transaction of official business if the information is created by, transmitted
to, received by, or maintained by an officer or employee of the governmental body in the
ofiicer's or employee's official capacity, or by a person or entity performing official business or
a governmental function on behalf of a governmental body, and pertains to official business of
the governmental body; (4) the definition of 66public inforination" applies to and includes any
electronic communication created, transmitted, received, or maintained on any device if the
communication is in connection with the transaction of official business; (5) in addition to
definitions in current law, the media on which public information is recorded include and device
that can store an electronic signal any physical material on which information may be recorded;
(6) in addition to definitions in current law, the general forms in which the media containing
public information exist include email, Internet posting, text message, instant message, other
electronic communication; and (7) "official business" means any matter over which a
governmental body has any authority, administrative duties, or advisory duties. (Effective
September 1, 2013.)
s:Uegal\our documents\miscellaneous\l3\ais ethics- travel 111813.doc
_ 1' I' �
AGENDA DATE: November 18, 2013
DEPARTMENT: Legal Department
CA: Anita Burgess, City Attorney
SUBJECT: Receive a report and hold a discussion regarding City Council travel policies.
��,�,�`I�£�.Tt�il�iD: The City Council adopted a policy regarding the payment of City Council
travel expenses by Ordinance 2006-273. The Ordinance incorpo�ates the administrative
procedures by which City Council members shall abide with regard to travel on behalf of the
City. The Ordinance requires the filing of an expense report upon return from any business trip,
and specifies what constitutes reimbursable expenses. A copy of Ordinance 2006-273 is
attached. Staff is prepared to discuss the provisions of the Ordinance and to make any changes
the Committee may desire to recommend to the City Council.
.� � �.� � �, � � �
t �=t � .� S
Anita Burgess, City Attorney
y S:10ur pocumenis\Ordinances1061CouncilTravelOrdinancc.dce
OR.DINANCE NO. �t��' %' r�,�
AN ORDINANCE OF TI-IE CITY OF DENTON, TEXAS ADOPTING A POLTCY
REGARDING THE PAYMENT OF CITY COUNCIL TRAVEL EXPENSES;
ESTABLISHING A BUDGET FOR CITY COUNCIL TRAVEL EXPENSES; AND
DECLARING AN EFFECTNE DATE.
WHEREAS, the Assistant City Manager for the City of Denton has presented a policy
(the "Policy") and budget for fiscal year 2006-2007 (the "Budget") regarding the payment of
City Council travel expenses which are attached hereto and made a part hereof by reference as
Attachments A and B, respectively; and
WHEREAS, the City of Denton's Audit/Finance Committee has reviewed and
recommended approva] of the Policy and Budget; and
WHEREAS, the City Council desires to adopt the Policy and Budget as an official policy
and budget for the payment of City Council travel expenses; NOW, THEREFORE,
THE COUNCIL OF TI�E CITY OF DENTON HEREBY ORDAINS;
SECTION 1. The Policy and Budget are hereby approved.
SECTION 2. In future years, the Budget will be provided as a part oE the annual City of
Denton Budget.
SECTION 3. This Ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the �`� day of�����? �?��___ , 2006.
;.
._ ._
���: R. �;�G�ZL, MAYOR
ATTEST:
JENNIFER WAL�"�:1�.�. CITY SECRETARY
:
�}'�F��J"1f3� AS i`f� LEGAL ��� �.I�:
EDWIN M. SN�Y�CI�,.d���'Y ��`C��N.�;"�
:
ATTACHMENT A
+��� �� ������ PAGE 1 OF 7
vlli.TrYlAllMiNiCTRA7'�VF. PR(lC'.F.niTRF,/ADMi1VISTRATNE DIRECTIVE
SECTION: ACCOUNTING REFERENCE NUMBER:
suarECT: REIMBURSEMENT OF CITY COUNCIL EXPENSES �NIT�- E�CT1ve nnTE:
10/O1/06
_ _ __ __ .
TTTLE: TRAVEL EXPENSES LAST REVISION DATE:
10/Ol/O6
,�I�ili�i�`�'��L T`P�1� ��t����iJ�T��S:
The City of Denton will pay reasonable expenses, which are incurred in the course of City-related
business ��a�el. Th� ��ty ��s t�v� c�b�e�ta►�e� �i��n� paying tr�v��--r�C�t�d �x��r�s��: �t� '�+� provad�
Council rra������rs suf��i�z�� fi�n�� �� �x���t� �usiness on beh�lf cafi tl�� ��t� an� {�� to s��`�,�uard �it�
funds by paying only reasonable and necessary expenses. This administrative directive outlines what
constitutes a reasonable and necessary expense.
Council members are responsible for insuring that travel expenditures comply with this administrative
directive and for the thorough review and approval of aIl documents necessary for the travel
tr�r�������r�. Ct�t�ncil ���aa�a��r� �a�ve the discretion to in������i�a�t nac��r� restrK�tir�� �ar�c�dures a���/or
�a�i�ii�ti��s for tl��ir ind�vid��i tr�v�l. The purpose ��' tl�e r��ir��i docurnent�ti�n �s to �rc�vide
sufficient evidence to anyone, who reviews the travel transaction, that pub(ic funds were expended in
compliance with this administrative directive.
Council members traveling on behalf of the City of Denton are expected to utilize services and
accommodations appropriate for the business to be conducted. Council members are expected to travel
and conduct business in reasonable comfort and exercise good judgment in distinguishing between
comfort and extravagance.
I, ,�,����•�v�l �� �a�reMci %c�r 'T`���v�] �r� C�it� B��sin��s. The City will pay travel and registration fee
expenses required for City business or to enhance the knowledge of the individual for the benefit
of the City.
ACCT/POLICY/COUNCIL
PAGE 2 OF 7
POLICY/ADMI1vISTRATTVE PROCEDURE/ADMI1vISTRATIVE DIRECTIVE
T1TLE: TRAVEL EXPENSES � REFERENCE NUMBER:
A. Travel Advance Request Form: An advance for estimated travel expenses may be requested.
The Travel Advance Request Form must be signed by both the requesting Council member
and the Mayor or City Manager. The form must include the purpose of the trip, the
destination (city and state), and the departure/return dates and times. Travel Advance
Request Forms should not be submitted sooner than two to three weeks prior to the trip.
Following a trip, Council members must account for their travel advance by completing and
submitting an Expense Report Form to Accounts Payable within twenty (20) working days of
their return date. Unused travel advance money must be reimbursed to the City and
supporting documentation (receipt) attached to the Expense Report Form. Travel out of the
country will be allowed a reasonable extension to allow for the correct exchange rate
calculation.
B. Expense Report Form: An Expense Report Form must be completed for all travel. The form
must include the purpose of the trip, the destination (city and state), and the departure/return
dates and times. All receipts and supporting documents must be attached to the Expense
Report Form. Receipts should be affixed in date order to an 8 1/Z x 1 l sheet of paper and
attached to the Expense Report Form, and then forwarded to Accounts Payable after bein�
reviewed and signed by the Mayor or City Manager.
II. T��im�a�ar��i�1c� �����s��. The City will pay a Council member's actual expenses as authorized
within this administrative directive. I��mi�c�d__ r��iC��� ����st �� �'a��d��l 1��" ��1 ���n��•
l�ecc��r�t� n�u�t �a€� ��t �f�en���.�c� cv�'�oern ��� ��ra�i+�� ���d z��t,����i_ti�� +�.r�drt �rc� ��%t�1���1����
r���� F�ilr�i�c tt� s�xby�it i���3�r+� r�.�c�i a�fs �iii �•����� i:f�tr�e �p�nrs�s nc�_��-r��ir��Ucars�%��.
Council members should use the most economical means available when using City funds.
A. Meals:
]. Travel-related meals will be reimbursed if an overnight stay is required or if multiple trips
are required during two or more consecutive days.
2. The City will not pay for meals for individuals who are not employed by the City of
Denton except with the written approval of the Mayor or City Manager stating the business
purpose of the meal. If an exception is granted, an itemized rneal receipt with attendee
names must be attached to the Expense Report Form.
3. The Ciry will pay for meals at scheduled seminars, training sessions, and other meetings,
� but will not reimburse for meals elsewhere if the meal cost was included in the conference
fee. A conference itinerary/schedule must be included as supporting documentation. The
City will not pay for social or recreational conference functions that are separate ticketed
events not included in the base conferenee registration fee without prior written approval of
the Mayor or City Manager.
ACCT/POLICY/COUNCIL
POLICY/ADMINISTRATIVE PROCEDURE/ADMIIYISTRATIVE DIRECTIVE ��
TtTLE: TRAVEL EXPENSES
PAGE 3 OP 7
REFERENCE NUMBER:
B. Entertainment: The Ciry of Denton will not reimburse Council members for entertainment
unless it is necessary for the purpose of the trip. Written approval from the Mayor or City
Manager stating the business purpose must be attached to the Expense Report Form.
C. Alcoholic Beverages:
reimbursed.
D. Transportation:
Under no circumstances will the cost of alcoholic beverages be
1. First-Class Accommodations: Council members may choose to travel first-class, but the
City will only pay coach or tourist class fares.
2. Commercial Airlines: The City of Denton will pay for coach roundtrip airfare. Council
members are expected to take advantage of discou�nts whenever possible. However,
Council members are not required to fly at unusual times just to qualify for discounts.
Council members may retain frequent flyer miles and similar travel awards; however,
he/she shall not pay a higher price for the fare in order to obtain frequent flyer miles.
3. Private Air Carriers and Charters: Council members shall not use private airplanes or
charters without approval of the Mayor or City Manager. Cost savings or emergency
schedule requirements must be shown and included with the Mayor or City Manager's
written approval.
4. Vehicle Rental: When renting vehicles, the Council member's personal auto insurance is
the primary source of coverage in the event of an accident. The appropriate size of the
rental vehicle should depend on such factors as the number of passengers, and the
amounc of luggage and/or equipment being carried.
5. Taxi: The City will reimburse Council member's taxi fares for required transportation.
When possible, a receipt must be attached to the Expense Report Form.
6. Personal Vehicles: Council members may use their personal vehicle for out-of-town
travel or same day (in-town) travel. A.mileage log or other supporting documentation.
musi be attached to the Expense Report Form. The City of Denton will pay the Internal
Revenue Service mileage reimbursement rate in effect at the time of travel. When a
Council member's travel destination is rnore than 30� miles from the point of departure
(one-way), the City will not reimburse the Council member for expenses, such as
lodging, meals and incidentals, while in transit, which exceed the cost of a 21-day
advance round-trip coach airfare.
a. Personal car travel reimbursement is limited to the lesser of either the cost of making
the trip by 21-day advance coach airfare or mileage reimbursement. Appendix A is
ACCT/POIICY/COUNCIL
POLICY/ADMI1vISTRATIVE PROCEDURE/ADMIr1ISTRATIVE DIRECTIVE
TITLE: TRAVEL EXPENSES
PAGE 4 OF 7
REF6RENCE NUMBER:
._._ _ — -_ _
provided to help calculate the least expensive travel method, which is the amount that
will be reimbursed.
b. 'T��� �ity w��l �ay f�� any a����i�n,�l ��ty-r�late� n�il��c at the d�stin�atran. A
sa�ile��e log �.A��a�a���ciix F�� �� �t���r �u��r�i��� �a�u�n�nl�ti�z� must be �tt�ci��� to the
Expense Report Form.
c. '����e �it� will pay for �a�� d�y or �rz-�t��rn +�"i#y-r�l�,t� z�lea��. Same day or in-
tc��rt i�avel events may zx�cl�d� �ity-rclat�,� c�rer�a�ni�s �r�� rec��i�ons, transportation
and mobility meetings/committees, and NTCOG meetings. A mileage log (Appendix
B) or other supporting documentation must be attached to the Expense Report Form.
d. The City will pay for parking expenses, including airport parking (at the general or
�c�r°tz�i�� �raa•%ing r�t�). �r�t` �.ir�v�; �ar�e����, �up�a-�i�,� ��ac�ir�e�xt,�ti�n must be
atc��h�� �t� C��e Ezp��tise ���c�� lk�arn� �nci ��i� �e �l��irr� t"rc�� th� ai�rt°s website.
Mileage reimbursement to the airport will be calculated from the Council member's
point of departure.
e. If a Council member is driving a personal vehicle outside of the City and has car
failure, the City will pay the expense of towing the vehicle to the nearest garage,
ov��- �n� a�crv°� �e ��t�n�i� rr���b��-'� �����c�a�tal �r��in� insur,����� c+�ve���, Th�
+�c�ur�cil x�a��r�iaer �nz�st ��a� ��c �11 r���i�s. T'�� t�win� ix�v�a�c� ��tc� ir��r�����
dc�cum�ntai��n, r�f3e�ti�,� a���u��# �Qv�r��, mu�t �� �it�����ci t.� f�e ����r��� l�;�p�r�
Form.
E. Ac��ra�rtc�c�,�tions: 'T��e �'i�y �vill pay actual �����ses for ���t�ls, motels, or c�ti��r lod�ir��.
�aty ��ai�neil mernt��r`� a�r� �a�t exempt from ��tel taxes, �n� will be reimbursc� for ����fi
taxes.
°1��� +�ity �i�I ���y ��a z�c�re ���� tl�� crast +af a �in�i� r���p�n�.y �-t�rarn, Tf � �t�un�il irt�z���c.�-
����res a ra��rn with ������ar�� ^�rl�� i� a�c�t a� +��t������� t�r �rf�cia! caf ihe �it� �r �ritc� :�� ���t
t��av�%ing �r� +�ity bu�kn��s, and ti�� rt���a� c�ast is l�i�t��r fli,�z� ti�,� sir���� ������� r�t�, tt�� ��il
must be adjusted for [he difference in Cost.
F. Telephone: The City realizes that while out-of-town on City business there are personal
����tters t���t �n��t � �tt�rad�d; t1z�r�i`�r�, the �it� �ill �r�y th� �a�i of +���e p�:t°s���I �����ai�� call
e�c� +��� {�c�t �e� �����d �(} i��i���t���. "i'k�e C��y will i-ciar��,�urs� C�a�n�z! m��t�b�rs� fc�r all
%usis��ss c��8s. ,l��1 }�l�c��� c�lls r��x�t b� dc��un7�n�ed �s t� w�����er ��r�t���t s�r t�u�zness i�a
r�a��r�. It i� r��c�niit��nded Lhat +��sa��l�il ��n��a�.�� ���lr�hase prepaic� c�ll�rtg �arc�s, �1�ici� are
l�s� ��cper�s�ve ttt�n l��tel long dista��ce rat�s. �z�tc:rrae� �.onnection f��.� i��cur��€i for ba�s��ess
purposes will be reimbursed, if approved by the Mayor or City Manager.
ACCC/POLICY/COUNCIL
FOLICY/ADMINISTRATIVE PROCEDURE/ADMIIVISTRATIVE DIRECTIVE
TtT�.E: TRAVEL EXPENSES
PAGE 5 OF 7
REFERENCE NUMBER:
G. IncidentaI Expenses: The City of Denton wiIl not pay for dry cleaning, shoe shining,
haircuts, magazines and books, tickets to the theater, sports events, or other such incidental
expenses, Incidental expenses covered include: fees and tips given to porters, baggage
carriers, bellhops, hotel maids, stewards or stewardesses and others on ships, hotel servants
in foreign countries, and transportation between places of lodgings or business and places
where meals are taken.
H. Travel on Behalf of Other Agencies: With the approval of the Mayor or City Manager,
Council members may be authorized travel on behalf of vther organizations. In unusual
circumstances, the Mayor or City Manager is authorized to approve an advance of City
funds for travel expenses incurred on such trips. The same guidelines outlined in this
administrative directive must be followed.
III. �1t��er A�tl�n�•�zati�r�l���r�•c�v�I�, ��p��s� R��aort Form �����rt��ral ��sr ���r�cil ra�e���rs will be
�h� I+�a��r c�r �i�� N�a��a�er. ����n�� i��}��ari Form ap�r�v�l for t��.� 1`v'I�yerr wil� t�� the City
Manager.
ACCT/POLICY/COUNCIL
PAGE 6 OF 7
POLICY/ADNIINISTRATIVE PROCEDURE/ADMII�IISTRATIVE DIRECTIVE {�c�ntutued;
. �m. �.�_m.., m_ _
f T]TLE: TRAVEL EXPENSES REFERENCE NUMSER:
AIRLINES
Airfare*
Airport Parking
Transportation
To/From Airport
Other
Total Cost
APPENDIX A
PERSONAL VEHICLE
miles @
Destination Parking
Additional Lodging
AdditionaI' Meals
Total Cost
cents =
Lesser of above columns is the maximum reimbursement when choosing to drive to a destination versus
flying. '
*A 21-day advance shall be used for airfare cost unless there are extenuating circumstances. A brief
explanation of these circumstances must be provided below. A price quote must be attached to this
form in order to obtain reimbursement. This quote may be obtained via the Internet web page of ihe
appropriate major airline.
ACCT/POLICY/COUNCiL
POLICY/ADMINISTRATIVE PROCEDURE/ADMIIVYSTRATIVE DIRECTIVE
TrrLE: TRAVEL EXPENSES
APPENDIX B
MILEAGE LOG
��
REFERENCE NUM$ER:
�
__ _ _
__ TOTAL
BEGINNING ENDING TRIP DESTINATION -
DATE ODOMETER ODOMETER NIILEAGE FROM/TO
__ _ _ _ .._ ._m--x __ . _ _._. __
0
0
�
�
Q
a
0
a
a
. �
a
TOTAL MILEAGE FOR REIMBURSEMENT
Miles X .445 cents =
ACCT/POLiCY1COUNCIL
�
ATTACHMENT B
CITI( OF DENTON
CITY COUNCIL TRAVEL
FY 2006-07 PROPOSED BUDGET
Overnight Mileage Total
Travel ReimbursemenE Budget"
Mayo� $7,110 $2,670 $9,780
Mayor Pro-Tem $7,110 $2,670 $9,78a
Council Members (5) $14,220 '* $2,670 _ $16,890
T�TAL S2$,440 �i�,�'i� �3�,��+�
' Represents a 10% reduction from the original proposed budget of $40,500.
"' $2,844 for each Council Member. Council Members may, if needed, transfer their
balance to another Council Membe�.
1 '1 �' �' ! � 1
January 31, 2013
Whethe�^ a general puNpose committee may accept political contributions by text message.
(f10 -576)
The Texas Ethics Coir�nission ("comrriission'� has been asked about the permissi`bility of accepting political
contributions by text message using two proposed methods. � The requestor of tYvs apinion is a general-purpose
co � ee that intends to contract with a third pariy ta initiate a text message cantn`bution campaign far political
contnbutions to fund its activities under Texas law. The issues raised by the requestor involve compliance with
reporting and recordkeeping requirements and the prohi`bition on political contt7butions from carporations.
The requestor outlines the procedures by which political contri`butions are made by text inessage.2 In essence, a
person who uses a wireless (ie. cellular) telephone service may make a contribution to an organizatian by using
their telephone to send a text message ta a desi�ated five- or spc-digit number, which is termed a"corrunon
short code." Comman short codes are leased from a wireless industry trade association called CTIA — The
Wireless Assaciation. A party, such as a charity or political committee, who wishes to interact with wireless
telephone users, may register a common short code. In some cases, a wireless telephone user may also use a
"lceyword99 in conjunction with a comman short code ta designate a specific contnbution amount or a specific
recipient.;
The requestor explains that there are generally fa�r separate parties involved 'm the processing and collection of
contn`butians via text message:
1. Content providers (such as a charitable organization or a political co ' ee) ta whom
contnbutions are given;
2. Application providers, which convert te� messages received through comanon short codes into
data that can be interpreted and used by content providers;
3. Connection aggregatars ("aggregators'�, which are � that link content providers, wireless
service providers, application providers, and wireless consumers; and
4. Wireless service providers, which are wireless companies that provide cellular telephone service
to w'rreless consumers,4
The requestor states that, as descr�bed in a Federal Election Co ' sion (FEC} opinion, an agg�regator can
provide ser'vices to a political commnittee ta process palitical contri�utions.s In the proposed methods, the
wireless user would send a keyword by text message to the political coin�nittee's designated common short
code. The aggregator would receive the message and then send a text message to the contributor requesting that
the cont�butor respand (again by text) to (1) confirin their intent to make the contnbution to the political
committee, and (2) certify their eligibility to make a contribution under applicable law.6 Upon completion af this
process (called the 66Op��TLZ99 process), a pre-determined charge (the amount ofthe intended cont�bution) would
appear on the next wireless bill associated with that wireless user's telephone number. The wireless
subscnber�would be required to pay the charged amount to their wireless service provider. However, due to the
lag time associated with wffeless billing cycles, the political comrnittee and the aggregator would enter into an
agreement (the "factoring" arrangement described in more detail below), by which the aggregator would first
advance to the political corrnnittee a portion of the total opt-in contnbutions received by the aggregator over a
designated period oftime (known as the "fictored99 payment), less a fee owed to the aggregator.�
Subsequently, after the wireless subscriber pays the telephone bill, the wireless service provider wauld transfer
the contrbuted funds, less a transaction fee, to the aggregator. After the aggregator receives payment from the
wireless service provider, the aggregator would transfer the remaining amount awed to the political corrirnittee
(known as the "trailing payment'�. This trailing payment would essentially consist of the amount af the
contribution confirmed by the wireless user and paid to the wireless subscn�er's account, less the amount
already advanced to the committee by the aggregator and the transaction fees charged by the aggregator and the
wireless service provider. The requestar states that wireless service providers l�ave limited contributions by text
message to $10 or $20 per text message.
Under the first proposed method, the aggregatar would provide to the palitical corrrunittee the ten-digit telephone
number associated with each contnbutian, the amount and date of each contn`bution, and the fact that the
contnbutar mdicated their agreement to have the contribution charged ta their wireless bill and indicated their
eliglbility to cantnbute. However, the aggregatar wauld not provide contriibutors' names and addresses to the
political committee. The aggregator wauld also keep a"r�ulning, real-time tall}�' of the dalla.r amaunt of
contributions made via text message fram a particular telephane nwnber, and the political committee wauld have
"real-time secure access to the [aggregator's] gateway where the tally of contributions will be maintained,
allowing [the political committee] to identify [telephone] numbers that are associated with conm�utions and will
display the aggregate amount contributed from each telephone number." The requestor states that, through this
gateway, it can block contri�butions from any telephone number for any reason (for example, the political
committee can block further contrbutions from a telephone number once the contributions from that telephone
number exceed $50 m a reporting period).
The secand proposed method wauld proceed as the first, but with additional steps added so that the campaign
treasurer of the political coirnnittee would be able to collect additional identifying inforn�ation from text inessage
contnbutors. The additional identifying infon�nation would pennit the contributians ir�ade by te� message to be
aggregated with cantributions made by other means by the same contributor. Under this second method, after
the contributor responds affrnrjatively to confmn the contribution and the contributor's eligibility to conmbute, the
application provider (or third party aggregator, as suggested by the requestor) would send a series of text
messages requestmg required information, such as the contributor's name, address, and accupation. The
contributor could then submit the additional information by reply text messages. Alternatively, the contributor
could subirjit the additianal infarn�ation by completing a form on the application pravider's website (a link to the
webform would be provided by the application provider via. te� message). The application provider would then
provide the 'contributors' information to the political commnittee.
�' � � •� � � ''•�� � '.�
The first issue is whether the campaign treasurer of the political committee would be m compliance with the
reporting and recordkeeping requirements of Title 15 of the Election Code by (1) monitoring incoming text
cont�butions to block any contributions that would aggregate m excess of $50 from any smgle telephone number
m a reporting period and (2) reporting the total of all accepted contributions by text message as unitemized
contributions.
Section 254.001 of the Election Code requires a campaign t�easurer of a general purpose corrnnittee to maintain
a record of all reportable activity, which must contain the information that is necessary for filing required reports.
Elec. Code §§ 254.001(b), (c). The information must be maintained for at least two years begituvng on the filing
deadline for the report containing the information m the record. Id. § 254.001(d). The campaign treasurer must
also file periodic campaign finance reports tha.t disclose, m part, the political contributions accepted by the
coirn7uttee. ld. § 254.031(a). Each campaign finance report must also include the amount of political
contributions from each person that m the aggregate exceed $50 and that are accepted during the reporting
period by the comrnittee required to file the report, the full name and address of the person makmg the
contnbutions, and the dates of the contributions. Id. § 254.031(a)(1). A report rnust also include the total
amount or a specific listing of the political contributions of $50 or less accepted during the reporting period. Id. §
254.031(a)(5). In addition, a report filed for a general-purpose committee must include the principal occupation
of each person from whom political contributions that in the aggregate exceed $50 are accepted during the
reportmg period. Id. § 254.151(6).y
We previously considered the issue of anonymous political contributions in Ethics Advisory Opinion No. 207.
Ethics Advisory Opinion No. 207 (1994). We held that a filer, including the campaign treasurer of a political
committee, must know the name of each contributor and the amount of each contriibution, regardless of the
amount, in order to report the required informa.tion because of (1) the requirement to itemize political
contnbutions if they singly or in the aggregate exceed $50 within a reporting period and (2) the prohibition
against acceptance of political contributions from corporations and labor organizations. Id. Thus, we determined
that a political comanittee could not accept anonymous political contr�utions. Id.
Under the first proposed method, a general-purpose committee would accept political contt-iibutions from
sources that are identified to the conunittee's campaign treasurer only by a telephone number. The telephone
number mformation would not suf�'iciently identify the sources of the political contri`butions made by text message
or allow the campaign �reasurer to deternlme whether itemization of the contributions is required. t� Therefore,
the carnpaign treasurer would be unable to comply with the title 15 recordkeepmg and reporting requirements.
Under the second proposed method, the campaign treasurer collects additional identifyit�g infonnation from te�
message conmbutors such that the contributions made by text message can be aggregated with other
contributions made by the same contributor. If the campaign treasurer is able to obtain the name, address, and
occupation information for all ofthe conttYbutions made by text message, as proposed by the requestor, and
properly report the contriibutions, then the campaign treasurer would be in compliance with these recordkeeping
and reporting requirements.
Corporate Contribution Pro'bifion
The'reques�or alsa asks whether certain payments iriade by an mcorporated aggregator to the political comrnittee
would constitute political contributions by the aggregator to the political coiYnnittee. According to the requestor's
proposal, the political committee would enter into a contract with the aggregator that includes a"factoring
agreement."1 i Under the stipulated facts, the aggregator would require contractual pravisions in its agreement
with the political co ' ee designed to protect against overpayments through its �actoring arrangement (for
e�mple, to account for the possi�ility of cont�i`butors refusmg to pay the charges on their wireless bills). First, the
aggregator would determme the amount of the factored payment based on certain variables in the ordinary
caurse of business, including perceived risk on liabilities associated with text message programs, and the
availability of fiulds. The aggregator may also include additional safeguards, such as reserving the right to suspend
or terinmate the payments at any time, require the political committee to provide a security deposit to guard
against overpayments, or require that the political coirn�nittee repay a factored payment in the event that a
wireless telephone subscn�er refuses to pay for a contribution. Under this agreement, the agg�egator would first
advance a portion of the total opt-ins received by the aggregator over a designated period of time, less a fee
owed to the agg�egator. The initial portion paid by the aggregator to the co ' ee up-front is referred to as a
`Y`actored" payment. Factored payments could, for example, be made on a weekly basis. Once the wireless
telephone subscr�`ber pays their wireless telephane bill, the wireless service provider would remit payment to the
aggregator (less its transaction fee). The aggregator would then transfer the remaining balance due to the political
ca 'ttee as a"trailing paytnent,,' which would represent the rest of the contribution amount (less the
aggxegator's own transaction fee and the amount already advanced as a factored payment). A trailing payment
could be made, for example, within 10 days of receiving payment from the wireless service provider. The
aggregatar would not establish a segregated account for the trailing payments, but wauld make the payments to
the political comrnittee from its general corporate treasuty funds.
Under the stipulated facts, the aggregator would require contractual provisions in its agreement with the political
committee designed to pratect against overpayments through its factoring arrangement (for exarnple, to account
for the possibility of contnbutors refusing to pay the charges on their wireless bills), First, the aggregator would
determine the amount of the factored payment based on certain variables in the ordinary course of busmess,
mcluding perceived risk on liabilities associated with text message programs, and the availability of funds. The
aggregator may also include additional safegua.rds, such as reserving the right to suspend or terminate the
payrnents at any time, require the political committee to provide a security deposit to guard against
overpayments, or require that the political corrnnittee repay a factored payment in the event that a wireless
telephone subscr�ber refuses to pay for a contr�bution, � Z These additional cont�ols on the factored payments are
intended to prevent the factored payments from being excessive. The requestor notes that this factaring
arrangement would be performed in return for consideration m the form of the aggregator's transaction fee
deducted from the contri�ution amount.
The requestor asks whether the factored payments from the aggregator ta the political comtnittee, made in
accordance with the descr�ed factoring agreement and made as part of the aggregator's usual and narmal
business, would constitute political contributions to the political corrunittee. A contribution is a direct or indirect
transfer of money, goods, services, or any other thir�g of value and 'mcludes an agreement made or other
obligation mcurred, whether legally enforceable or not, ta ir�ake a transfer. Elec. Code § 251.001(2). The term
inchides a loan or extension of credit and a guarantee of a loan or extension of credit, but does not include a loan
iriade in the due course of business by a corporation that is legally engaged in the business of lending money and
that has conducted the busmess continuously for more than one year before the loan is made. Id. A political
contnbution is a campai� contnbution or an officeholder contrfbution. Id. § 251.001(5). A campaign
contnbutiori is a contribution to a candidate or political committee that is offered or given with the intent that it be
used in connection with a carnpaign for elective office or on a measure. Id, § 251.001(3). An officeholder
contnbution is a cantribution to an officeholder or political comrnittee that is o$'ered or given with the mtent that it
be used to defray expenses that are mcurred by the afficeholder in performing a duty or engagmg in an activity in
connection with the office and are not reimbursable with public money. Id. § 251.001(4}.
We have previously held that, in order to avoid making a prolu�ited political con�ribution to a candidate, a
corporation must ensure that the terms of any transaction with the candidate reflect the usual and normal practice
of the industry and be typical of the tern�s the commercial party offers to its political and non-political customers.
See Ethics Advisary Opmion Nos. 398 (1998) and 143 (1993). The same standard applies m considering
whether a corporation makes a prolubited political cantri`bution to a political committee such as the requestor of
this opinian., -�
The requestor has stipulated that the factored payments from the aggregator to the political co 'ttee would be
undertaken pursuant to the aggregator's usual and normal busmess practice. We cannot determme in an advisory
opinion what the usua.l and normal business practice is in the text message industry. However, if the tern�s of the
factoring agreement between the aggregatar and the political committee reflect the usual and normal practice of
the industry and are typical of the terms of agreements offered by the aggregator ta other political and non-
political customers, then the factored payments made in accordance with that agreement would not constitute
political contnbutions by the aggregator to the political committee. Thus, the political committee would not be
prohibited from accepting the factored payments from the aggregator.
, ,�
A general purpase convnittee may accept political contributions by text message ifthe carrunittee's campaign
treasurer is able to obtain the contr�butor inforrnation necessary ta comply with the reporting requirements of
Title 15 of the Election Code. A general-purpose corrnnittee wauld not be prohibited from accepting certain
factored payments descnbed 'm this opinion from a cannection aggregator if the terms af the factoring agreement
between the aggregator and the political committee reflect the usual and norn�al practice of the industry and are
typical of the terms of agreements offered by the aggregator to other political and non-political custamers.
1 The two methods are based on fundraising methods that have been approved by the Federal Election Commission (FEC) as
compliant with federal campaign finance law. See FEC Advisory Opinions 2012-30 (2012) and 2012-17 (2012). Federal law does
not compel a particular conclusion in this case.
2 The requestor asks us to consider his request based on certain factual suppositions that were considered in several FEC
advisory opinions that have addressed the issue ofpolitical contributions by text message. Our opinion is based solely on the
facts as presented by the requestor and, where necessary, facts stated ui FEC advisoty opinions that the requestor has
incorporated into his request.
3 A commonly cited example provided by the requestor is the use of text messaging by the Red Cross to raise charitable
contributions for earthquake relief efforts in Haiti in 2010. Wireless telephone users were able to send a text message containing
the keyword "HAITI" to the short code "90999" to �r�ake a$10 contribution per te�ct message. See, e.g., FEC Advisory Opinion
2012-30, at n.l (2012).
4 Several FEC advisory opinions have included background informatian regarding text messaging contributions. See, e.g., FEC
Advisory Opinions 2612-26 (2012) and 2010-23 (2d10)..
�' . , � ! . . 1 1
6 For e�rnple, the contributor could Ue required to affirm that they are nat a corporation and that they are using their own
funds ta rnake a contribution,
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