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.

If a Trustee is required to file and does file an affidavit, that Trustee shall not be required to abstain from further participation in the matter or matters requiring such an affidavit if a majority of the Trustees are likewise required to file and do file affidavits of similar interests on the same official action.

Local Gov't Code 171.004

1. Participate in a vote or decision on a matter involving a business entity or real property in which the Trustee has a substantial interest if it is reasonably foreseeable that an action on the matter would have a special economic effect on the business entity that is distinguishable from the effect on the public or will have a special economic effect on the value of the property, distinguishable from its effect on the public.
2. Act as surety for a business entity that has a contract, work, or business with the District.
3. Act as surety on any official bond required of an officer of the District.

Local Gov't Code 171.003

1. The person owns at least:
   1. Ten percent of the voting stock or shares of the business entity, or
   2. Either ten percent or $15,000 of the fair market value of the business entity.
2. Funds received by the person from the business entity exceed ten percent of the person's gross income for the previous year.

A person has a substantial interest in real property if the interest is an equitable or legal ownership with a fair market value of $2,500 or more.

If a person related in the first degree by either affinity or consanguinity to the Trustee, as determined under Gov't Code, Ch. 573, Subch. B [see DBE], has a substantial interest, as defined above, the Trustee is considered to have a substantial interest.

Local Gov't Code 171.002

1. A Trustee shall not intentionally or knowingly offer, confer, agree to confer, solicit, accept, or agree to accept a benefit:
   1. As consideration for the Trustee's decision, opinion, recommendation, vote, or other exercise of official discretion.
   2. As consideration for a violation of a duty imposed on the Trustee by law.
   3. That is a political contribution as defined by Title 15 of the Election Code or an expenditure made and reported as a lobbying expense in accordance with Gov't Code, Ch. 305, if the benefit was offered, conferred, solicited, accepted, or agreed to pursuant to an express agreement to take or withhold a specific exercise of official discretion, if such exercise of official discretion would not have been taken or withheld but for the benefit.

   "Benefit" means anything reasonably regarded as pecuniary gain or pecuniary advantage, including benefit to any other person in whose welfare the Trustee has a direct and substantial interest. Penal Code 36.01, Subd. 3; 36.02

2. A Trustee shall not, with intent to obtain a benefit or with intent to harm or defraud another, intentionally or knowingly violate a law relating to the office or misuse District property, services, personnel, or any other thing of value, belonging to the District, that has come into his custody by virtue of his office. Penal Code 39.02(a)

   "Law relating to the office" means a law that specifically applies to a person acting in the capacity of a public servant and that directly or indirectly imposes a duty on the public servant or governs the conduct of the public servant. Penal Code 39.01(1)

3. A Trustee who is a stockholder, officer, director, or employee of a bank that has bid to become a depository for the District shall not vote on the awarding of a depository contract to said bank. Education Code 45.204

   If a Trustee has a substantial interest in a bank with which the District is considering entering into a loan or other transaction besides a depository contract, then the Trustee must comply with the affidavit and abstention requirements. Atty. Gen. Op. JM-1082 (1989); Local Gov't Code 171.004

4. One person may not occupy two legally incompatible offices. Offices are legally incompatible when the faithful and independent exercise of one would necessarily interfere with the faithful and independent exercise of the other. A person may not serve in one branch of government while exercising any powers properly attached to either of the other branches of government. Texas Constitution, Art. II, Sec. 1; State v. Martin, 51 S.W.2d 815 (Tex. Civ. App., 1932) Thomas v. Abernathy County Line ISD, 290 S.W. 15 (Tex. Comm. App. 1927); Turner v. Trinity ISD, 700 S.W.2d 1 (Tex. Ct. App., 1983); Atty. Gen. Op. JM-634 (1987)

5. A Trustee commits a Class B misdemeanor offense if the Trustee receives any commission or rebate on any textbooks used in the schools with which the Trustee is associated. Education Code 31.152

6. A Trustee who exercises discretion in connection with contracts, purchases, payments, claims, or other pecuniary transactions shall not solicit, accept, or agree to accept any benefit from a person the Trustee knows is interested in or likely to become interested in any such transactions of the District. Penal Code 36.08(d)

7. No person shall be employed in the District who is related to a member of the Board by blood (consanguinity) within the third degree, or by marriage (affinity) within the second degree. Gov't Code, Ch. 573, Subch. B [See DBE]

   The Board shall not hire as an independent contractor for personal services an individual who is related to a Trustee within a prohibited degree. Atty. Gen. Op. DM-76 (1992)

1. The affidavit shall be filed with the county clerk(s) of the county or counties in which the property is located and of the county in which the Trustee or candidate resides within ten days before the date on which the property is to be acquired by purchase or condemnation.
2. The affidavit must:
   1. State the name of the Trustee or candidate and the public office held or sought.
   2. Fully describe the property.
   3. Fully describe the nature, type, and amount of interest in the property, including the percentage of ownership interest and the date the interest was acquired.
   4. Include a verification of the truth of the information in the affidavit. [See BBFA (EXHIBIT)]
   5. Include an acknowledgment of the same type required for recording a deed in the deed records of a county.

Gov't Code 553.001, 553.002, 553.003

NOTE: See also CAB for requirements when federal funds are involved.

This online presentation of your college district's policy concerning the stated subject material is an electronic representation of TASB's record of the college district's currently adopted policy manual. It does not reflect updating activities in progess nor is it a legally binding document. Please contact the office of the President or Chancellor for the official, legally binding generation of this and the other policies that pertain to your college district.