BGAA. Conflict of Interest Disclosure (BP)

Substantial Interest Affidavit and Abstention

For the purpose of this policy, a member of the Board of Regents is considered a “local public official.” Local Gov’t Code 171.001(1), Gov’t Code 573.001(3)

If a local public official or a person related to a local public official in the first degree by either affinity or consanguinity has a substantial interest in a business entity or in real property, the local public official before a vote or decision on any matter involving the business entity or the real property, shall file an affidavit with the official Board record keeper stating the nature and the 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. Local Gov’t Code 171.004

The Board may contract with a business in which a Regent has a substantial interest if the Regent follows the disclosure and abstention procedure set out above. Atty. Gen Op. JM-424 (1986)

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

A person has a “substantial interest” in a business entity if any of the following is the case:

The persons 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.
  3. 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.

The local public official is considered to have a substantial interest if a person related in the first degree by either affinity or consanguinity to the local public official, as determined under Government Code, Chapter, 573, Subchapter B, has a substantial interest as defined above. Local Gov’t Code 171.002

The Board shall take a separate vote on any budget item specifically dedicated to a contract with a business entity in which a Regent has a substantial interest. The affected Regent shall not participate in that separate vote, but may vote on a final budget if he or she filed the affidavit and the matter in which he or she is concerned has been resolved. Local Gov’t Code 171.005

Except as provided above, the local public official shall not knowingly:

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

Local Gov’t Code 171.003

Conflicts Disclosure Statement

For the purpose of this section, a ‘local government officer” means a member of the governing body of a College District; a director, superintendent, administrator, president, or other person designated as the executive officer of the College District; an employee of a College District who has the authority to approve contracts on behalf of the College District, including a person designated as the representative of the College District for the purposes of Chapter 271, and with respect to whom the College District has, in accordance with Local Government Code 176.005, extended the requirements of Local Government Code 176.003 and 176.004. Local Gov’t Code 176.001(4)

“Family member” shall mean a person related to another person within the first degree by consanguinity or affinity, as described by Subchapter B, Chapter 573, Government Code, except that the term does not include a person who is considered to be related to another person by affinity only as described by Government Code 573.024(b). Local Gov’t Code 176.001(2)

A local government official and officer shall file the required conflicts disclosure statement, as adopted by the Texas Ethics Commission, with respect to an applicable vendor if the vendor enters into a contract with the College District or the College District is considering entering into a contract with the vendor; and the vendor:

  1. Has an employment or other business relationship with the local government official or officer or a family member of the officer that results in the officer or family member receiving taxable income, other than investment income, that exceeds $2,500 during the 12-month period preceding the date that the officer becomes aware that a contract has been executed or the College District is considering entering into a contract with the person; or
  2. Has given the local government officer or a family member of the officer one or more gifts that have an aggregate value of more than $250 in the 12-month period preceding the date the officer becomes aware that such a contract has been executed; or the College District is considering entering into a contract with the vendor.

A local government officer is not required to file a conflicts disclosure statement in relation to a gift accepted by the officer or a family member of the officer if the gift is:

  1. Given by a family member of the person accepting the gift
  2. A political contribution as defined by Title 15, Election Code;
  3. Food, lodging, transportation, or entertainment accepted as a guest.

A local government officer shall file the conflicts disclosure statement with the records administration of the College District not later than 5:00 p.m. on the seventh business day after the date on which the officer becomes aware of the facts that require the filing of the statement.

A local government officer commits a Class C misdemeanor if the officer knowingly violates this law. It is an exception to the application of the penalty that the local government officer file the required conflicts disclosure statement not later than the seventh business day after receiving notice from the College District of the alleged violation. Local Gov’t Code 176.003-.004

In this section, a “public servant” means a person who is elected, appointed, employed or designated, even if not yet qualified for or having assumed the duties of office, as: 1) a candidate for nomination or election to public office, or 2) an officer of government. Gov’t Code 553.001

If a public servant has a legal or equitable interest in any property that is to be acquired with public funds, and has actual notice of the acquisition or intended acquisition of the property, the public servant shall file an affidavit as follows:

  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 public servant 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 public servant and the public office title or job designation 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.
    5. Include an acknowledgement of the same type required for recording a deed in the deed records of a county.

Gov’t Code 553.002, 553.003

A public servant who fails to file the affidavit when required is presumed to have the intent to commit an offense. An offense under this section is a Class A misdemeanor. Gov’t Code 553.003

Date Issued: March 10, 2005
Revision Issued: November 15, 2012
Approved: Board of Regents

 


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