If voters approve Proposition 6 this November, the state will appropriate $2 billion from its Rainy Day Fund to a new water infrastructure bank.
The bank – technically, the State Water Implementation Fund for Texas (SWIFT) – will be put under the control of the Texas Water Development Board (TWDB) but subject to advisory oversight by a new committee comprised of high-ranking elected officials. That committee could exert tremendous influence on SWIFT’s operations – and it could test state constitutional provisions that prohibit elected officials from holding multiple offices.
The wording of Proposition 6, as it will appear on the ballot, is simple. Voters must check a “yes” or “no” box for “[t]he constitutional amendment providing for the creation of the State Water Implementation Fund for Texas and the State Water Implementation Revenue Fund for Texas to assist in the financing of priority projects in the state water plan to ensure the availability of adequate water resources.”
The amendment itself is set forth in S.J.R. 1, which the legislature passed in May. It would add Sections 49-d-12 and 49-d-13 to the Texas Constitution. Section 49-d-12 would create SWIFT. Section 49-d-13 would create a related fund – the State Water Implementation Review Fund for Texas (SWIRFT). (In coming days, the Energy Center will release a white paper that explains the new water infrastructure financing scheme and that discusses the relationship between SWIFT and SWIRFT.)
Sections 49-d-12 and 49-d-13 are both meant to be general. See § 49-d-12(j) (“This section being intended only to establish a basic framework and not to be a comprehensive treatment of the [SWIFT], there is hereby reposed in the legislature full power to implement and effectuate the design and objects of this section, including the power to delegate such duties, responsibilities, functions, and authority to the [TWDB] or that board’s successor in function as the legislature believes necessary.”) See also § 49-d-13(j) (offering identical language but for SWIRFT).
New Advisory Committee
Sections 49-d-12 and 49-d-13 do not create or even refer to an advisory committee. But H.B. 4, which establishes detailed parameters for both funds, would, upon the passage of Proposition 6, add Section 15.438 to the Texas Water Code. That section would create the SWIFT Advisory Committee, comprised of seven members, who would have to be appointed as soon as practicable after the November 5 election:
- The comptroller or her designee;
- A member of the Senate Committee on Finance, appointed by the lieutenant governor;
- A member of the Senate Committee on Natural Resources, appointed by the lieutenant governor;
- A member of the senate (with no particular committee requirements), appointed by the lieutenant governor;
- A member of the House Appropriations Committee, appointed by the speaker;
- A member of the House Natural Resources Committee, appointed by the speaker; and
- A member of the house (with no particular committee requirements), appointed by the speaker.
H.B. 4 does not create a similar advisory committee for SWIRFT. (Even apart from the committee oversight, for reasons beyond the scope of this blog post, SWIFT is subject to tougher controls than SWIRFT.)
Role of Advisory Committee
The SWIFT Advisory Committee may “hold public hearings, formal meetings, or work sessions” (§ 15.438(e)) and “adopt rules, procedures, and policies” (§ 15.438(i)). It has only two mandates that it must follow. One is to semiannually “review the overall operation, function, and structure of the SWIFT.” (§ 15.438(h)). The other is to provide “comments and recommendations” on TWDB rulemakings related to disbursement of SWIFT funds and the prioritization of water infrastructure projects in regional water plans and in the State Water Plan.
While in title humbly “advisory,” the SWIFT committee could evolve into a powerful body that effectively manages the SWIFT fund. By statute, the committee may merely provide “comments” and “recommendations” on TWDB’s SWIFT rulemakings. But under that same statute the TWDB must give the “comments” and “recommendations” “full consideration.” (§ TWC 15.439(b)).
H.B. 4 does not explain what the TWDB must do to ensure that its “consideration” is “full.” The Texas Administrative Procedure Act (APA), however, already requires that a “[a] state agency shall consider fully all written and oral submissions about a proposed rule.” Tex. Gov’t Code § 2001.029.
The “full consideration” requirement in H.B. 4 could simply duplicate the “consider fully” requirement in the APA. Such a reading would naturally follow from the similarity in language but would run against the rule of construction that a statute should not be interpreted in such a way as to render any of its terms superfluous. E.g., Walker v. City of Georgetown, 86 S.W.3d 249 (Tex. App. 2002).
More practically, it seems unlikely that H.B. 4 – a long, detailed and salient piece of legislation, requiring years of effort, that passed almost unanimously – would go to the trouble of setting up an advisory committee whose input the TWDB was to give no greater weight than it would the comments of an interest group under the APA.
The fact is that the SWIFT Advisory Committee is structured so that it can play an extensive and intimate role in the management of SWIFT and the operationalizing of H.B. 4. That it is comprised primarily of legislators gives it that much more clout. The TWDB would probably find itself hard-pressed to reject (upon “full consideration,” of course) the comments and recommendations of a committee of representatives and senators (all tapped by the speaker and lieutenant governor) – especially when the same bill that crated that committee fired the existing TWDB board members and executive administrator because, according to press accounts, a single representative found them insufficiently responsive.
At what point, then, does the SWIFT Advisory Committee become “advisory” in name only? At what point do its comments and recommendations become not so much grist for the mill as directives to be heeded? These are somewhat slippery questions and do not lend themselves to clear-cut answers. All the same, the constitutionality of the SWIFT Advisory Committee could turn on them.
The Texas Constitution and Dual Office-Holding
The state constitution includes prohibitions against dual office-holding that could apply to the SWIFT Advisory Committee if a court found that a position on the committee amounted to a new office. The prohibitions include: (1) Article II, Section 1; (2) Article III, Section 18; (3) Article III, Section 19; and (4) Article XVI, Section 40.
To extent that legislators considered the issue, they probably did not intend for a committee seat to count as a new office. The Water Code Section establishing the committee states: “Service on the advisory committee by a member of the senate or house of representatives is considered legislative service for which the member is entitled to reimbursement and other benefits in the same manner and to the same extent as for other legislative service.”
Legislative intent is predictive but not determinative, however. Even if legislators viewed service on the committee as an extension of existing legislative responsibilities, that does not necessarily make it so.
The committee has advisory authority that could prove to be the practical equivalent of direct supervisory authority. Arguably, such supervisory authority could give committee members quasi-executive powers over (or within) the TWDB.
While legislators would not receive any compensation specifically for their service on the committee, they would use TWDB staff and resources in the course of performing their duties for the committee: Texas Water Code § 15.438(b) would (contingent on Proposition 6) assign two TWDB deputy executive administrators and a chief financial officer as staff support for the committee.
And the committee would be subject to sunset review. The Texas Sunset Act allows for review of scores of state entities but by its terms establishes an assessment process for state agencies. E.g., Tex. Gov’t. Code §§ 352.002(1), 325.0075. The fact that H.B. 4 adds the SWIFT Advisory Committee to the list of state agencies that have to go through the sunset process suggests that the committee is also expected to function either somewhat like an agency or as extension of the TWDB itself.
To further muddy the waters, agencies fall within the executive branch of state government. E.g., Barshop v. Medina County Underground Water Conservation Dist., 925 S.W.2d 618, 635 (Tex. 1996); City of Dallas v. Stewart, 361 S.W.3d 562, 573 (Tex. 2012).
This combination of factors – the advisory committee’s relationship with the TWDB, its ongoing day-to-day oversight, and its agency-like character – could give rise to arguments that a committee seat represents a new office, rather than an extension of an existing legislative office, and that it gives legislators quasi-executive powers.
Separation of Powers
Article II, Section 1 establishes the separation of powers in Texas government and prohibits a person from one branch of government from exercising “any power properly attached” to the other branches. In the 1970s, the Attorney General held that this prohibition forbid individuals from simultaneously holding positions in different branches of government.
In the last 20 years, the Attorney General has taken a more lax view and held that Section 1 should not be interpreted as a bar on dual office holding. Tex. Att’y Gen. Op. No. GA-0348 (2005) (finding that a person could serve as both a county commissioner and a municipal judge). See also Tex. Att’y Gen. Op. No. GA-216 (2000) (permitting a junior college trustee to serve as a municipal judge); Tex. Att’y Gen. Op. No. JM-519 (1986) (allowing a school board member to work as a constable).
The Attorney General has observed, however, that concerns about separation of powers are more pronounced at the state level than at the local level. E.g., Tex. Att’y Gen. Op. No. JM-213 (1984). While a string of Attorney General opinions allows local officials to hold positions in different branches of government, these opinions may not serve as the most reliable guide for analyzing the constitutional propriety of dual service on the state-level SWIFT Advisory Committee.
And even if the Attorney General were to apply the local-level precedent to the SWIFT Advisory Committee, his opinion offers persuasive but not precedential value. A court could well reach a different conclusion and adopt the construction of Article II, Section 1 that the Attorney General followed in the 1970s is sounder.
Ineligibility of Legislators for Other Offices
Article III, Section 18 provides: “No Senator or Representative shall, during the term for which he was elected, be eligible to … any office or place, the appointment to which may be made, in whole or in part, by either branch of the Legislature.”
Neither published case law nor, as best I could tell, attorney general opinions have construed the appointment clause in this section. The phrase “in whole or in part” appears to modify the “appointment” rather than “Legislature.” By that understanding, the appointment could be a multi-step process, with a legislature “branch” participating in all or in only a limited number of those steps; but an appointment would not be made by the full “branch” if made solely by the speaker or lieutenant governor. For that reason, Article III, Section 18 would not act as a constitutional barrier to the committee.
Ineligibility of Other Officers for the Legislature
Article III, Section 19 provides: “No judge of any court, Secretary of State, Attorney General, clerk of any court of record, or any person holding a lucrative office under the United States, or this State, or any foreign government shall during the term for which he is elected or appointed, be eligible to the Legislature.”
This section prohibits certain officials (i.e., judge) and persons holding “lucrative” government offices from concurrently serving in the legislature. To be “lucrative,” an office must provide compensation. The compensation need not be generous. E.g., Willis v. Potts, 377 S.W.2d 622 (Tex. 1964) (finding that a $10 per diem constituted compensation). Reimbursement for expenses is not considered compensation, however. Dawkins v. Meyer, 825 S.W.2d 444, 446, 35 Tex. Sup. Ct. J. 540 (Tex. 1992).
A seat on the SWIFT Advisory Committee would not be lucrative. It would not provide compensation or even reimbursements other than those that legislators can already claim through their legislative service. As a result, it would not implicate Section 19.
Holding More than One Office
The most relevant position is found at Article XVI, Section 40(d). It provides: “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.” (Note that Article XVI, Section 40(a) sets forth a less strict prohibition for office holders who are not legislators; it only bars the holding of two offices that both provide compensation.)
The Attorney General has distinguished between “any other office” and “position of profit.” The latter is similar to a “lucrative office” as described above. See also Tex. Att’y Gen. Op. No. GA-0386 (2005) (finding the presidency of a municipal management district to be lucrative) and Tex. Att’y Gen. Op. No. LO-90-55 (reaching the same conclusion for a salaried firefighter).
Any “other office,” meanwhile, need not be compensated. Tex. Att’y Gen. Op. No. JC-464 (2002) (concluding that an unpaid member of the Texas Department of Economic Development governing board could not concurrently serve in the legislature).
A position with the government is considered to be an “office” if it performs “sovereign function[s] of the government … largely independent of the control of others.” JC-464 (quoting Aldine Independent School Dist. v. Standley, 154 Tex. 547 (Tex. 1955)). “As essential element of an office [is] that its duties are continuing in nature and not intermittent.” Tex. Att’y Gen. Op. No JM-847 (1988) (finding that a legislator could serve as a special commissioner in a condemnation proceeding because a special commissioner is appointed for a single case and “their service lacks the elements of permanency and continuity.”).
The SWIFT Advisory Committee performs sovereign functions such as conducting hearings and overseeing the administration of public funds. Its members serve at the pleasure of the speaker, the lieutenant governor or the comptroller but otherwise have complete independence. They serve on the committee until removed or until the committee is terminated during its sunset review (which is scheduled for 2023).
A committee seat thus bears the hallmarks of an “office” under Article XVI, Section 40(d) – provided, of course, that the office is viewed as being distinct from the legislative office of its appointed member.
Constitutionality of SWIFT Advisory Committee
The theories about the potential unconstitutionality of the SWIFT Advisory Committee are merely that – theories that make for interesting conversation (and blog posts) but that will be meaningless unless brought forward in a legal forum.
Still, even if some office holder does request an Attorney General opinion, or some opponent of the new financing structure mounts a challenge against all legally vulnerable aspects of H.B. 4, the SWIFT Advisory Committee will probably emerge intact.
As if often the case, the law here is gray. That grayness favors the committee. Texas courts have to construe any constitutional provision that could restrict the rights of office holders against ineligibility. In re Annette Carlisle, 209 S.W.3d 93 (Tex. 2006) (finding that the reimbursements for meals that an Amarillo school board member could receive without having to submit receipts did not amount to compensation and make her ineligible under Section 19 to run for state representative.) That interpretive rule could prove the tiebreaker that tilts the law toward the committee.
The irony is that the constitution is already being amended through Proposition 6 to accommodate SWIFT. Legislators could have shielded the SWIFT Advisory Committee against charges of unconstitutional dual office-holding by including the committee in S.J.R. 1. Assuming Proposition 6 passes, such a move would have created a constitutional carveout to provisions like Article XVI, Section 40(d).
S.J.R. 1, at §§ 49-d-12(j) and 49-d-13(j), does reserve “full power” to the legislature “to implement and effectuate the design and objects” of implementing SWIFT and SWIRFT. But “full power” is not the same as unlimited, unspecified power to sidestep the constitutional provisions on dual office-holding.