March 20, 2001

Issued By: City Attorney’s Office

Whether members of a Tax Increment Finance Board are required to file Financial Disclosure Forms pursuant to Part G of the Ethics Code of the City of San Antonio.

The City Clerk’s Office has inquired whether members of Tax Increment Finance (TIF) Boards appointed by the City Council are required to file financial disclosure forms. The following facts are presented:

Chapter 311 of the Texas Tax Code provides for creation of a reinvestment zone to promote redevelopment of a designated area. To be designated as a reinvestment zone, the area must “substantially arrest or impair the sound growth of the municipality creating the zone [ ]” or must be “described in a petition [ ] submitted to the [City Council] by the owners of property constituting at least 50 percent of the appraised value of the property in the area [ ].” Tex. Tax Code §311.005 (1999). If the City designates the area, a board of directors is appointed and empowered to make recommendations to the City Council regarding implementation of a designated plan. The board may be comprised of between five (5) and 15 members, with each taxing unit, other than the City, appointing one (1) member and the City the remainder; if the area is created by petition, the board of directors is comprised of 9 members. The nine (9) members include representatives from any school district or county that levies taxes in the zone, the State senator and representative or his/her designee representing the area of the zone, and the remaining members appointed by the City creating the zone. Members appointed by the City must either be qualified voters of the City or be at least 18 years of age and own real property in the zone. However, “[a] member of the board of directors of a reinvestment zone is not a public official by virtue of that position [ ].” Tex. Tax Code §311.009(g)(1999).

Although not a public official, members appointed by the City Council are “city officials” as defined in Part A, Section 2 of the Ethics Code. Section 2 defines an “official” to include “members of all boards, commissions (except the Youth Commission whose members are minors), committees, and other bodies created by the City Council pursuant to federal or state law or City ordinance, including entities that may be advisory only in nature. . . .” Because the TIF reinvestment zone is created by the City Council pursuant to Chapter 311 of the Texas Tax Code, all members appointed to the Board by the City Council are City officials and are required not only to follow certain standards of conduct and but also to file certain forms.

One of the forms required to be filed is the Financial Disclosure Report. Pursuant to Part G, Section 1, “[b]efore initially accepting appointment or assuming the duties of office, and annually thereafter, the city officials defined in Section 2 of Part A, . . . are required to file with the City Clerk a complete sworn financial disclosure report [by March 1^st] .” Section 1 further provides that an individual who fails to file within the requisite time may file the report within 15 days of receiving notice of noncompliance. If, after the notice of noncompliance, the individual still fails to file the report, he/she may be removed from the board with one exception. Members of boards created by state law may only be removed for failing to file a report if allowed under the state law providing for creation of the board.

SUMMARY

Members of a Tax Increment Finance Board are not “public officials” pursuant to Chapter 311 of the Texas Tax Code. However, those members that are appointed by the City Council are “City officials” for the purposes of the Ethics Code of the City of San Antonio and therefore are required to file Financial Disclosure Reports pursuant to Part G, Section 1 of the Code.

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FRANK J. GARZA

City Attorney