Do Dallas planning and zoning commissioners have to follow conflict-of-interest rules?

Plain-English summary

A House committee chair asked the Attorney General two questions about the conflict-of-interest rules for zoning officials in Dallas. The first was whether members of the City of Dallas Planning and Zoning Commission count as "local public officials" under chapter 171 of the Local Government Code. The second was how far the statute's phrase "matter involving the business entity" reaches: does it cover only the business whose own request is being voted on, or also a firm hired to represent (or to oppose) that business before the commission?

On the first question, the office said yes. Chapter 171 applies to a "local public official," which the statute defines to include an appointed officer of a municipality "who exercises responsibilities beyond those that are advisory in nature." The Dallas commission cleared that bar. Dallas had adopted an ordinance, allowed by section 211.006(f), requiring a three-fourths vote of the entire City Council to overrule the commission's recommendation that a zoning change be denied. That supermajority requirement gave the commission's denials real legal weight, so its members did more than advise. The office added that a member is subject to chapter 171 in all of his or her commission acts, not only when making the specific zoning recommendation.

On the second question, the office read the statute broadly. Section 171.004(a) makes a member file a disclosure affidavit, and abstain in defined circumstances, when the member has a "substantial interest" in a business entity and a commission action will have a "special economic effect" on that entity distinguishable from the effect on the public. The statute does not require the business entity to have a direct interest in the matter; it only asks whether the action will specially affect that entity economically. So the rule reaches a firm that is paid to represent a party with business before the commission, and likewise a firm paid to represent the opposing side, whenever a commission action would have a special economic effect on that firm. Whether a particular action actually has such an effect is a fact question the office could not resolve. A member who knowingly fails to file the required affidavit commits a criminal offense.

Currency note

This opinion was issued in 1994. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Chapter 171 of the Local Government Code and the zoning provisions in sections 211.006 and 211.007 have been amended since 1994, including the dollar and percentage thresholds for a "substantial interest." The section numbers and figures here describe the law as it stood then. Read this page for the office's reasoning on who is a local public official and how broadly the affidavit rule reaches, and verify the current chapter 171 thresholds before relying on any specific number.

What the opinion meant for those who asked

For Dallas zoning commissioners: The opinion concluded they were local public officials under chapter 171 and had to follow its conflict-of-interest rules in all of their commission work. Where a member had a substantial interest in a business entity that a commission action would specially affect economically, the member had to file a disclosure affidavit and, in the defined circumstances, abstain.

For zoning applicants, opponents, and the firms they hire: The opinion treated the affidavit rule as reaching beyond the applicant itself. If a member had a substantial interest in a firm hired to represent a party (on either side of a matter before the commission), and a commission action would have a special economic effect on that firm, the member's disclosure-and-abstention duties applied.

On the fact-specific economic-effect question: The opinion declined to decide whether any particular action would have a special economic effect on a given business entity. That was a fact question outside the opinion process.

Common questions

Are Dallas planning and zoning commissioners "local public officials"?
Yes. The office concluded they exercise responsibilities beyond the advisory, because a Dallas ordinance required a three-fourths City Council vote to overrule the commission's recommendation to deny a zoning change, so they fall under chapter 171.

Does chapter 171 apply only when they vote on zoning recommendations?
No. The office concluded a commission member is subject to chapter 171 in all of his or her acts as a member, not just when making the specific recommendation under section 211.006(f).

Does the conflict rule cover a firm hired to lobby for or against an applicant?
Yes, potentially. The office read section 171.004(a) to reach a business entity that represents a party with an interest before the commission, on either side, if a commission action would have a special economic effect on that firm and the member has a substantial interest in it.

What counts as a "substantial interest"?
Under section 171.002(a), owning ten percent or more of a business entity's voting stock or shares, or owning ten percent or more (or $5,000 or more) of its fair market value, or receiving funds from it that exceed ten percent of the member's gross income for the previous year.

What happens if a member does not file the required affidavit?
A local public official who knowingly fails to file the affidavit commits a criminal offense under section 171.003.

Background and statutory framework

The opinion turns on two pieces of the Local Government Code. Sections 211.006 and 211.007 set up municipal zoning. Under section 211.007, a home-rule city appoints a zoning commission that recommends districts and regulations and reports to the governing body, and under section 211.006(f), the governing body may by ordinance require a supermajority, an affirmative vote of at least three-fourths of all its members, to overrule the commission's recommendation that a proposed change be denied. Dallas had adopted such an ordinance. Chapter 171 governs conflicts of interest of "local public officials," defined in section 171.001(1) to include an appointed municipal officer "who exercises responsibilities beyond those that are advisory in nature." Because the three-fourths-override ordinance gave the commission's denials more than advisory force, the office concluded its members met that definition and were covered by chapter 171 in all of their acts.

The second question concerned section 171.004(a), which requires a local public official with a substantial interest in a business entity (or real property) to file an affidavit before a vote or decision "on any matter involving the business entity," and to abstain if the action will have a "special economic effect on the business entity that is distinguishable from the effect on the public." The office stressed that the provision is broadly written: it does not require the business entity to have a direct interest in the matter, only that the action specially affect it economically, and chapter 171's definition of "business entity" (section 171.001(2)) sweeps in any entity recognized by law. From that, the office concluded the affidavit duty extends to a business entity that represents a party with an interest in a matter before the commission, whether that party supports or opposes the request, when a commission action would specially affect the representing firm. Whether any particular action would have that effect was a fact question the office said it could not decide (see Attorney General Opinion DM-279 (1993)). A knowing failure to file the affidavit is a criminal offense (section 171.003).

Citations

Statutory provisions discussed:

• Local Gov't Code § 171.001(1) (definition of "local public official"; responsibilities beyond advisory) and § 171.001(2) (definition of "business entity")
• Local Gov't Code § 171.002(a) ("substantial interest" thresholds: ten percent ownership, $5,000 fair market value, or ten percent of gross income)
• Local Gov't Code § 171.003 (criminal offense for knowing failure to file affidavit)
• Local Gov't Code § 171.004(a) (disclosure affidavit and abstention; "matter involving the business entity"; "special economic effect")
• Local Gov't Code § 211.006(f) (three-fourths-vote ordinance to overrule a denial recommendation)
• Local Gov't Code § 211.007 (zoning commission; reports to the governing body)

Attorney General opinion discussed:

• Attorney General Opinion DM-279 (1993)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0309
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1994/dm0309.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

December 6, 1994

Honorable Fred Hill
Chair
Committee on Urban Affairs
Texas House of Representatives
Austin, Texas 78768-2910

Opinion No. DM-309

Re: Whether the members of the City of Dallas Planning and Zoning Commission are "local public officials" under chapter 171 of the Local Government Code and related questions (RQ-689)

Dear Representative Hill:

You ask whether members of the City of Dallas Planning and Zoning Commission (the "commission") are "local public officials" under chapter 171 of the Local Government Code. Specifically, you ask if the members are "local public officials" for purposes of chapter 171

when they make recommendations on proposed changes to zoning regulations or boundaries in accordance with Section 211.007(b) of the [Local Government] Code in light of the fact that Dallas has adopted an ordinance in conjunction with Section 211.006(f) of the Local Government Code that requires an affirmative vote of at least three-fourths of the entire City Council to overrule a recommendation of denial by the commission.

Section 211.007 of the Local Government Code provides in pertinent part:

(a) To exercise the powers authorized by this subchapter, the governing body of a home-rule municipality shall, and the governing body of a general-law municipality may, appoint a zoning commission. The commission shall recommend boundaries for the original zoning districts and appropriate zoning regulations for each district. If the municipality has a municipal planning commission at the time of implementation of this subchapter, the governing body may appoint that commission to serve as the zoning commission.

(b) The zoning commission shall make a preliminary report and hold public hearings on that report before submitting a final report to the governing body. The governing body may not hold a public hearing until it receives the final report of the zoning commission unless the governing body by ordinance provides that a public hearing is to be held, after the notice required by Section 211.006(a), jointly with a public hearing required to be held by the zoning commission. In either case, the governing body may not take action on the matter until it receives the final report of the zoning commission.

Local Gov't Code § 211.007. Section 211.006(f) provides as follows:

(f) The governing body by ordinance may provide that the affirmative vote of at least three-fourths of all its members is required to overrule a recommendation of the municipality's zoning commission that a proposed change to a regulation or boundary be denied.

Id. § 211.006.

Chapter 171 of the Local Government Code governs conflicts of interest on the part of "local public officials." "Local public official" is defined as follows:

"Local public official" means a member of the governing body or another officer, whether elected, appointed, paid, or unpaid, of any district (including a school district), county, municipality, precinct, central appraisal district, transit authority or district, or other local governmental entity who exercises responsibilities beyond those that are advisory in nature.

Id. § 171.001(1). In light of the information you have provided, it is clear that a member of the commission exercises responsibilities beyond those that are advisory in nature. Thus, we conclude that a commission member is a "local public official" under the foregoing definition and therefore subject to the requirements of chapter 171. We further note that a commission member is subject to chapter 171 not just when he or she makes a recommendation specified in section 211.006(f). Rather, all of his or her acts as a commission member are subject to chapter 171.

Next you ask, "Does the term 'involving the business entity' used in Section 171.004(a) refer only to the business entity whose request is the subject matter of the vote or decision, or does it also include a business entity that is paid to represent the entity whose request is the subject matter of the vote or decision?" In a related question, you ask, "Does the term 'involving the business entity' used in Section 171.004(a) include a business entity that is paid to represent a person or group opposing the business entity whose request is the subject matter of the vote or decision?" We conclude that the term "business entity" includes any business entity that represents a party with an interest in a matter before the commission for the following reasons.

Section 171.004 provides in pertinent part:

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

(1) in the case of a substantial interest in a business entity the action on the matter will have a special economic effect on the business entity that is distinguishable from the effect on the public; or

(2) in the case of a substantial interest in real property, it is reasonably foreseeable that an action on the matter will have a special economic effect on the value of the property, distinguishable from its effect on the public.

(c) If a local public official is required to file and does file an affidavit under Subsection (a), the official is not required to abstain from further participation in the matter requiring the affidavit if a majority of the members of the governmental entity of which the official is a member is composed of persons who are likewise required to file and who do file affidavits of similar interests on the same official action.

Section 171.004(a)(1) requires a commission member to file an affidavit if he or she has a substantial interest in a business entity[1] and the action on the matter will have a special economic effect on the business entity. Id. § 171.004(a)(1). Section 171.004(a)(1) is broadly written and does not require that the business entity have a direct interest in the matter. It only requires that the action on the matter have a special economic effect on the business entity. Furthermore, chapter 171 does not confine the term "business entity" to only those business entities with a direct interest in an action. See id. § 171.001(2) ("'Business entity' means a sole proprietorship, partnership, firm, corporation, holding company, joint-stock company, receivership, trust, or any other entity recognized by law."). We believe that section 171.004(a)(1) extends to an action of the commission that will have a special economic effect on a business entity that represents an entity or person with an interest in a matter before the commission. Whether or not a particular action will have a special economic effect on a business entity that represents an entity or person with an interest in a matter before the commission is a question of fact and is therefore beyond the purview of the opinion process. See Attorney General Opinion DM-279 (1993) at 7. A local public official commits a criminal offense if he or she knowingly fails to file an affidavit stating the nature and extent of his or her substantial interest in a business entity on which a vote or decision will have a special economic effect, as required by section 171.004. See Local Gov't Code § 171.003.

SUMMARY

A member of the City of Dallas Planning and Zoning Commission (the "commission") is a "local public official" subject to the requirements of chapter 171 of the Local Government Code. Section 171.004(a)(1) extends to an action of the commission that will have a special economic effect on a business entity that represents an entity or person with an interest in a matter before the commission.

DAN MORALES
Attorney General of Texas

JORGE VEGA
First Assistant Attorney General

DREW T. DURHAM
Deputy Attorney General for Criminal Justice

JAVIER AGUILAR
Special Assistant Attorney General

RENEA HICKS
State Solicitor

SARAH J. SHIRLEY
Chair, Opinion Committee

Prepared by Mary R. Crouter
Assistant Attorney General

[1] A person has a "substantial interest in a business entity" if (i) the person owns ten percent or more of the voting stock or shares of the business entity or owns either ten percent or more or $5,000 or more of the fair market value of the business entity or (ii) funds received by the person from the business entity exceed ten percent of the person's gross income for the previous year. See Local Gov't Code § 171.002(a).