Texas Attorney General Opinion: JM-1082 Page: 1 of 4
The following text was automatically extracted from the image on this page using optical character recognition software:
THE ATTORNEY GENERAL
Jn Mrrox August 7, 1989
Honorable Carl Parker Opinion No. JM-1082
Education Committee Re: Whether the board of trustees
Texas State Senate of a school district may enter
P. 0. Box 12069 into a loan contract with its
Austin, Texas 78711 depository bank if a trustee is a
bank employee (reconsideration of
Attorney General Opinion JM-583
Dear Senator Parker:
You ask whether the board of trustees of a school
district may enter into a loan contract with its depository
bank, and take subsequent action concerning the loan, if a
board member is employed by the bank. Attorney General
Opinion JM-583 (1986), in addressing a similar question,
implied that such loan contracts were barred by the common
law conflict of interest doctrine, which invalidates any
contract between a governmental body and another entity if a
member of the governmental body has a direct or indirect
pecuniary interest in it. Attorney General Opinion JM-583
at 4, 7 (1986); see Meyers v. Walker, 276 S.W. 305 (Tex.
Civ. App. - Eastland 1925, no writ); Attorney General
Opinions JM-424 (1986); H-916 (1976). However, Attorney
General Opinion JM-583 did not consider whether chapter 171
of the Local Government Code applied to such loan transac-
tions. Your question requires us to reconsider the
implication in Attorney General Opinion JM-583 that common
law conflict of interest rules govern a school district's
loan contract with its depository bank.
Our prior opinion dealt with section 23.75 of the
Education Code, which modifies the common law by allowing a
school district to enter into a depository contract with a
bank in which a trustee is financially interested as a
stockholder, officer, director, or employee. We concluded
that section 23.75 was a special statute applicable to
school district depository contracts and that it excepted
such contracts from chapter 171 of the Local Government
Code, a general provision regulating conflicts of interest
of local public officials as a class. Thus, a school
Here’s what’s next.
This text can be searched. Note: Results may vary based on the legibility of text within the document.
Tools / Downloads
Get a copy of this page or view the extracted text.
Citing and Sharing
Basic information for referencing this web page. We also provide extended guidance on usage rights, references, copying or embedding.
Reference the current page of this Text.
Texas. Attorney-General's Office. Texas Attorney General Opinion: JM-1082, text, 1989; (texashistory.unt.edu/ark:/67531/metapth273520/m1/1/: accessed September 18, 2018), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; crediting UNT Libraries Government Documents Department.