Can a Texas legislator also be paid as president of a municipal management district?

TX AG Opinion GA-0386: Can a legislator also be the paid president of a management district?

Plain-English summary

This opinion is about the constitutional rule against a Texas legislator holding a second government-paid job. A municipal management district is a special-purpose entity created under Local Government Code chapter 375 to promote commerce, economic development, and public welfare in a municipality's commercial areas. The statute makes such a district "a governmental agency, a body politic and corporate, and a political subdivision of the state." The House Civil Practices Committee chair described a person employed as the district's president, who runs the district's day-to-day business, makes routine expenditures under a board-approved budget, draws a salary set by the board, participates in the employee benefits package, and can be fired by the board. The question: could that paid president also serve as a member of the Texas Legislature, and if so, be paid for both?

The Attorney General said no for an employee. Article XVI, section 40(d) of the Texas Constitution provides that "[n]o member of the Legislature of this State may hold any other office or position of profit under this State, or the United States, except as a notary public if qualified by law." A "position of profit" means salaried, nontemporary employment, and Texas authorities have long held that an employee of a political subdivision holds such a position "under this State." Because the district is a political subdivision and the president is its salaried, nontemporary employee, he holds a position of profit and cannot simultaneously sit in the Legislature. Along the way, the opinion cleaned up a conflict in older letter opinions: it expressly overruled Letter Opinion 90-55A (which had questioned whether a local employee holds a position "under this State") and reaffirmed Letter Opinion 90-55, which correctly applied the bar to a salaried municipal firefighter.

The independent-contractor question came out the other way. Several prior opinions hold that an independent contractor for a governmental entity does not hold a "position of profit under this State," so section 40(d) does not stop a legislator from doing paid contract work for a management district, or from being compensated for both. The opinion laid out the familiar control test for distinguishing an employee from an independent contractor (an employer controls the means and details of an employee's work, while a contractor controls only the means of reaching a result the hirer specifies), but stressed that whether a given person is genuinely an independent contractor turns on facts and contract terms that the opinion process cannot decide.

Currency note

This opinion was issued in 2005. 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.

Who this opinion affected (as of 2005)

State legislators: The opinion told them that taking a salaried, nontemporary job with a municipal management district (or any political subdivision) would violate article XVI, section 40(d)'s bar on holding another position of profit under the State while serving in the Legislature.

Municipal management districts and their boards: It told them that employing a sitting legislator as district president or in another salaried staff role was constitutionally barred, though contracting with a legislator as a genuine independent contractor was not.

People holding or seeking dual roles: For someone serving both as a district employee and a legislator, the opinion meant the two were incompatible; for an independent contractor, it meant the constitutional bar did not apply, subject to the role actually being contractor work and not disguised employment.

Common questions

Why can't a legislator be the paid employee-president of a management district?
Because article XVI, section 40(d) bars a legislator from holding any other "office or position of profit under this State." A salaried, nontemporary job with a political subdivision (which a management district is) is a position of profit, so the two roles cannot be held at once.

What is a "position of profit"?
The opinion defined it, drawing on prior opinions, as salaried nontemporary employment. Employees of political subdivisions (teachers, firefighters, transit-authority staff, an assistant county attorney) have been held to occupy such positions.

Can a legislator do contract work for a district instead?
Yes. The opinion concluded that an independent contractor for a governmental entity does not hold a position of profit under the State, so section 40(d) does not bar a legislator from being paid as a genuine independent contractor for a management district.

How do you tell an employee from an independent contractor?
By the right to control the work. An employer controls both the result and the means and details of an employee's work; a hirer of an independent contractor controls only the result, leaving the contractor to control the means and details. The opinion said this is a fact and contract question it could not resolve.

Did this opinion change earlier opinions?
Yes. It expressly overruled Letter Opinion 90-55A and reaffirmed Letter Opinion 90-55, which had correctly held that a salaried municipal firefighter held a position of profit barring simultaneous legislative service.

Background and statutory framework

A municipal management district is created under Local Government Code chapter 375 to promote employment, commerce, economic development, and public welfare in a municipality's commercial areas; it is "a governmental agency, a body politic and corporate, and a political subdivision of the state," and a unit of government for purposes of the Texas Tort Claims Act, governed by a board that may employ and dismiss staff and set their duties and compensation (Tex. Loc. Gov't Code Ann. §§ 375.001(b), 375.004(a)-(b), 375.021-.027, 375.061, 375.096(a)(1)-(2) (Vernon 1999); Tex. Civ. Prac. & Rem. Code Ann. ch. 101). Legislators are compensated under article III, section 24, so a compensated district president raises no question of uncompensated service under article XVI, section 40(b) (Tex. Const. art. III, § 24, art. XVI, § 40(b)).

Article XVI, section 40(d) provides that no member of the Legislature may hold "any other office or position of profit under this State, or the United States, except as a notary public if qualified by law" (Tex. Const. art. XVI, § 40(d)). A "position of profit" is salaried nontemporary employment, and local public officers and employees of political subdivisions hold positions "under this State" (Boyett v. Calvert, 467 S.W.2d 205 (Tex. Civ. App.-Austin 1971, writ ref'd n.r.e.); Willis v. Potts, 377 S.W.2d 622 (Tex. 1964); Wood v. Miller, 242 S.W. 573 (Ark. 1922)). The opinion overruled Letter Opinion 90-55A, which had relied on the Alaska decision Begich v. Jefferson, 441 P.2d 27 (Alaska 1968), and overlooked the Texas authorities, and it reaffirmed Letter Opinion 90-55 (Willis, 377 S.W.2d at 625; Boyett, 467 S.W.2d at 208-09).

An independent contractor "in the pursuit of an independent business, undertakes to do a specific piece of work for other persons, using his own means and methods, without submitting himself to their control in respect to all its details" (Pitchfork Land & Cattle Co. v. King, 346 S.W.2d 598 (Tex. 1961)). The test is the employer's right to control the details of the work, considering the independence of the worker's business, the obligation to furnish tools and materials, the right to control progress, the time of employment, and the method of payment (Newspapers, Inc. v. Love, 380 S.W.2d 582 (Tex. 1964); Limestone Prod. Distrib. v. McNamara, 71 S.W.3d 308 (Tex. 2002)). Because an independent contractor for a governmental entity does not hold a position of profit under the State, section 40(d) does not bar a legislator from contract work for a district; whether someone is truly a contractor is a fact and contract question outside the opinion process.

Citations

Constitution and statutes:

• Tex. Const. art. III, § 19, art. III, § 24, art. XVI, § 33, art. XVI, § 40(b), art. XVI, § 40(d)
• Tex. Loc. Gov't Code Ann. § 375.001(b), 375.004(a), 375.004(b), 375.021-.027, 375.061, 375.096(a)(1)-(2) (Vernon 1999)
• Tex. Civ. Prac. & Rem. Code Ann. ch. 101 (Texas Tort Claims Act)

Cases:

• Boyett v. Calvert, 467 S.W.2d 205 (Tex. Civ. App.-Austin 1971, writ ref'd n.r.e.)
• Willis v. Potts, 377 S.W.2d 622 (Tex. 1964)
• Wood v. Miller, 242 S.W. 573 (Ark. 1922)
• Begich v. Jefferson, 441 P.2d 27 (Alaska 1968)
• Pitchfork Land & Cattle Co. v. King, 346 S.W.2d 598 (Tex. 1961)
• Newspapers, Inc. v. Love, 380 S.W.2d 582 (Tex. 1964)
• Limestone Prod. Distrib. v. McNamara, 71 S.W.3d 308 (Tex. 2002)

Other authorities:

• Tex. Att'y Gen. Op. Nos. JC-0430 (2001), H-1304 (1978), V-371 (1947), GA-0057 (2003), GA-0127 (2003), GA-0292 (2005), V-303 (1947), V-1527 (1952)
• Tex. Att'y Gen. LO-90-55, LO-90-55A, LO-93-031, LO-95-022, LO-88-72, LO-88-73, LA-4 (1973)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0386
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2005/ga0386.pdf

Original opinion text

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

ATTORNEY GENERAL OF TEXAS

GREG ABBOTT

December 27, 2005

The Honorable Joe Nixon
Chair, Committee on Civil Practices
Texas House of Representatives
Post Office Box 2910
Austin, Texas 78768-2910

Opinion No. GA-0386

Re: Whether a legislator may simultaneously serve as president of a municipal management district operating under chapter 375, Local Government Code (RQ-0385-GA)

Dear Representative Nixon:

You ask whether the president of a municipal management district operating under Local Government Code chapter 375 may simultaneously serve as a member of the Texas Legislature.[1]

Local Government Code chapter 375 authorizes the creation of a municipal management district (a "district") "to promote, develop, encourage, and maintain employment, commerce, economic development, and the public welfare in the commercial areas of municipalities and metropolitan areas of this state." TEX. LOC. GOV'T CODE ANN. § 375.001(b) (Vernon 1999); see also id. §§ 375.021-.027 (creation of district). A district "is a governmental agency, a body politic and corporate, and a political subdivision of the state." Id. § 375.004(a). It is also "a unit of government for purposes of Chapter 101, Civil Practices and Remedies Code (Texas Tort Claims Act), and operations of a district are considered to be essential governmental functions and not proprietary functions for all purposes, including the application of the Texas Tort Claims Act." Id. § 375.004(b). A district is governed by a board of directors, see id. § 375.061, which may "employ all persons, firms, partnerships, or corporations considered necessary by the board for the conduct of the affairs of the district, . . . prescribe the duties, tenure, and compensation of each" and "dismiss employees." Id. § 375.096(a)(1)-(2).

The individual in question is employed as president of the district. See Request Letter, supra note 1, at 1. He handles the district's day-to-day business and makes routine expenditures under a budget and contracts approved by the board. See id. The board has set the qualifications for this position and determines the president's compensation. He participates in the district's employee benefits package. See id. at 1, 2. The board reviews his job performance and his employment is subject to termination by the board. See id. at 1.

You ask the following questions about this person's employment with the district:

            1. May the person employed and serving as president of a municipal management district operating under Chapter 375, Texas Local Government [Code] (the "District") simultaneously serve as a member of the Texas Legislature?

           2. If the answer is yes to question 1, may such person receive compensation for both positions?

           3. Alternatively, may a person working for the District as an independent contractor also serve as a member of the Texas Legislature and may he be compensated for both positions?

We will answer questions 1 and 2 together. Legislators are compensated pursuant to Texas Constitution article III, section 24 and you have informed us that the president of the district receives compensation for his work. The facts do not raise a question of serving without compensation. See generally TEX. CONST. art. XVI, § 40(b) (state employees or other individuals receiving all or part of compensation from state funds and who are not state officers may serve as members of local governmental bodies but may not receive a salary for such service).

Texas Constitution, article XVI, section 40, provides in part:

           No member of the Legislature of this State may hold any other office or position of profit under this State, or the United States, except as a notary public if qualified by law.

TEX. CONST. art. XVI, § 40(d).

A "position of profit" is "a salaried nontemporary employment." Tex. Att'y Gen. Op. Nos. JC-0430 (2001) at 1, H-1304 (1978) at 2. Based on the information you have provided, the president of the board holds a compensated nontemporary employment with the board. See Tex. Att'y Gen. Op. No. JC-0430 (2001) (assistant county attorney holds a position of profit under this state); Tex. Att'y Gen. LO-93-031 (teacher), LO-90-55 (municipal firefighter), LO-88-72 (employee of metropolitan rapid transit authority). See also Tex. Att'y Gen. Op. No. V-371 (1947) (service on jury does not constitute position of profit under this state).

The president holds his position of profit "under this State." It is well established that a local public officer holds an office "under this State." An elected city council member holds an "office or position of honor, trust, or profit, under this State." See Boyett v. Calvert, 467 S.W.2d 205, 208-09 (Tex. Civ. App.-Austin 1971, writ ref'd n.r.e.) (quoting former language of Texas Constitution article XVI, section 33). A member of a city council who receives compensation in addition to expenses holds a "lucrative office under . . . this State" within Texas Constitution article III, section 19. Willis v. Potts, 377 S.W.2d 622, 623 (Tex. 1964). See also Tex. Att'y Gen. Op. No. GA-0057 (2003) at 2 (city council member holds an office or position of trust under this state). Similarly, an employee of a political subdivision holds a "position of profit under this State." See Tex. Att'y Gen. Op. No. JC-0430 (2001) (assistant county attorney holds a position of profit under this state); Tex. Att'y Gen. LO-93-031 (teacher), LO-90-55 (municipal firefighter), LO-88-73 (employee of metropolitan rapid transit authority); Tex. Att'y Gen. LA-4 (1973) (teacher employed at a community college). See also Wood v. Miller, 242 S.W. 573, 575 (Ark. 1922) (civil office "under this state" means "under the laws of this state" or by virtue of authority conferred by state as sovereign).

Attorney General Letter Opinion 90-55 determined that a salaried municipal firefighter occupied a position of profit under this state, and that article XVI, section 40 barred him from simultaneously serving as a member of the legislature. See Tex. Att'y Gen. LO-90-55, at 2. Attorney General Letter Opinion 90-55A withdrew LO-90-55, stating that LO-90-55 did not fully consider the language "under this State." See Tex. Att'y Gen. LO-90-55A, at 1. Letter Opinion 90-55A then discussed Begich v. Jefferson, 441 P.2d 27 (Alaska 1968), a case interpreting the phrase "position of profit" in the Alaska constitution to mean "an appointive position on the state or federal levels of government." Id. Letter Opinion 90-55A overlooked the Texas authorities reading the phrase "under this State" as including local officers and employees. See Willis, 377 S.W.2d at 625; Boyett, 467 S.W.2d at 208-09. Although Letter Opinion 90-55A reaches no conclusion about the meaning of "under this State" it suggests a conclusion that is inconsistent with Texas law. Attorney General Letter Opinion 90-55A is expressly overruled. Attorney General Letter Opinion 90-55 correctly states the law.

We conclude that the president of the district holds a position of profit under this state and accordingly, Texas Constitution article XVI, section 40(d) bars him from serving as a member of the legislature at the same time.

You also ask whether a person working for the district as an independent contractor may also serve as a member of the Texas Legislature and may be compensated for both positions. An independent contractor, "in the pursuit of an independent business, undertakes to do a specific piece of work for other persons, using his own means and methods, without submitting himself to their control in respect to all its details." Pitchfork Land & Cattle Co. v. King, 346 S.W.2d 598, 602-03 (Tex. 1961). The standard test for determining whether one is acting in the capacity of an independent contractor measures the amount of control that the employer exerts or has a right to exert over the details of the work. Newspapers, Inc. v. Love, 380 S.W.2d 582, 591 (Tex. 1964). In the case of an employee, the employer controls not merely the end sought to be accomplished, but also the means and details of its accomplishment. Limestone Prod. Distrib. v. McNamara, 71 S.W.3d 308, 312 (Tex. 2002). A person who retains an independent contractor controls the end sought to be accomplished, while the independent contractor controls the means and details of accomplishing the work. Id. The right to control is measured by considering: "(1) the independent nature of the worker's business; (2) the worker's obligation to furnish necessary tools, supplies, and materials to perform the job; (3) the worker's right to control the progress of the work except about final results; (4) the time for which the worker is employed; and (5) the method of payment, whether by unit of time or by the job." Id. See Tex. Att'y Gen. Op. No. GA-0292 (2005) at 3-4.

This office has issued several opinions concluding that an independent contractor for a governmental entity does not hold a "position of profit under this State." Attorney General Letter Opinion LO-93-31 determined that a compensated school district employee held a "position of profit under this state" within Texas Constitution article XVI, section 40 so that a legislator could not be a school district employee, but it also determined that this constitutional prohibition did not apply to an independent contractor. See Tex. Att'y Gen. LO-93-31. See also Tex. Att'y Gen. Op. No. GA-0127 (2003) at 2 n.3 (under facts presented, umpire at school district baseball games is an independent contractor); Tex. Att'y Gen. LO-95-022 (Texas Constitution article XVI, section 40 does not prohibit a legislator from working as an independent contractor for a county government).

The conclusion that an independent contractor does not hold a "position of profit under this State" is consistent with prior attorney general opinions addressing the former version of Texas Constitution article XVI, section 33, which prohibited the state from paying a salary to anyone who at the same time held "any other office or position of honor, trust, or profit under this State." See TEX. CONST. art. XVI, § 33 interp. commentary (Vernon 1993). Attorney General Opinion V-303 (1947), construing the former language of Texas Constitution article XVI, section 33, determined that an independent contractor for a school district did not hold an "office or position of honor, trust, or profit" under this State. Tex. Att'y Gen. Op. No. V-303 (1947) at 5-6. See also Tex. Att'y Gen. Op. No. V-1527 (1952) (independent contractor does not hold an "office or position of honor, trust or profit" under Texas Constitution article XVI, section 33).

We conclude that article XVI, section 40(d) of the Texas Constitution does not prohibit a member of the Texas Legislature from also working for compensation as an independent contractor for a municipal management district. The determination that a person actually works as an independent contractor and not as an employee involves questions of fact and contract interpretation, which cannot be resolved in the opinion process. See Tex. Att'y Gen. Op. No. GA-0292 (2005) at 4; Tex. Att'y Gen. LO-95-022, LO-93-31.

                                   SUMMARY

                    Article XVI, section 40(d) of the Texas Constitution prohibits an employee of a municipal management district operating under Local Government chapter 375 from simultaneously serving as a member of the Texas Legislature. This constitutional provision does not prohibit an individual who works as an independent contractor for a municipal management district from simultaneously serving as a member of the legislature. Attorney General Letter Opinion 90-55A is overruled.

                                          Very truly yours,

GREG ABBOTT
Attorney General of Texas

BARRY R. McBEE
First Assistant Attorney General

NANCY S. FULLER
Chair, Opinion Committee

Susan L. Garrison
Assistant Attorney General, Opinion Committee

Footnotes

[1] Letter from Honorable Joe Nixon, Chair, Committee on Civil Practices, Texas House of Representatives, to Honorable Greg Abbott, Attorney General of Texas (Aug. 24, 2005) (on file with Opinion Committee, also available at http://www.oag.state.tx.us) [hereinafter Request Letter].