.        .




                                           April    7,   1971


Hon. James L. Slider,      Chairman                                   Opinion   No.    M- 831
State   Affairs  Committee
House of Representatives                                          Re:       Validity      of House Bill
State   Capitol                                                             442 of the 62nd Legisla-
Austin,    Texas  78711                                                     ture,    R.S.    1971,   prohibiting
                                                                            members,      employees     and
                                                                            agents     of the State       Board
                                                                            of Insurance       from receiving
                                                                            any compensation         from an
                                                                            insurer     doing    business     in
                                                                            Texas within       six years
                                                                            after    leaving     his position
Dear     Mr.   Slider:                                                      with the State.

           Your request   for an opinion    asks                          whether the provisions
of House Bill   442 of the 62nd Legislature,                              Regular Session,    1971,
are valid,    The Bill  amends Article   1.09-3                           of the Texas   Insurance
Code to read as follows:

                "Article        1.09-3.

                 "(a)    All members of the State         Board of In-
         surance,      Commissioner     of Insurance,     and all    em-
         ployees      and agents    of the State     Board of Insurance
         shall    be subject     to the code of ethics        and the
         standard      of conduct     imposed    by Chapter   100, Acts
         of the Fifty-fifth         Legislature,     Regular   Session,
         1957.

                 "(b)     I n addition     to the code of ethics         and
         standard      of conduct      imposed     by Subsection     (a) of
         this    Article,      no person     subject    to Subsection       (a)
         may receive,        within    six years     after   leaving    his
         position      or job with the Board,           compensat;on     from
         any insurer        doing   business     in this   state.

                Section        19 of      Article        I of   the     Constitution      of    Texas
reads:

                "Sec.   lg.    No citizen of this   State     shall   be
         deprived     of life,   liberty, property,    privileges       or
         immunities,      or in any manner disfranchised,         except

                                               -4025-
Hon.   James      L.   Slider,     page    2      (M-831)



       by   the    due    course     of   the    law    of     the   land .‘I

              The liberty       of contract        which includes      the ccrrespcndir,:
right    to accept      a contract      proposed,      is a constitut~ionai      right
protected     by the orcvisions          of Section        lo of Article    1 of the
Constitution      of Texas,       above    quoted.       In St. Louis     Southwestern
RY. co.     v. Griffin,      1.06 Tex.     477,    171 S.W. 703     (lgiq the Supreme
Court stated:

             “The        citizen   has the liberty                of contract     as
       a natural         right   which is beyond               the power of the
       government          to take from him .                  .     (at p. 704).

             We are aware that the freedom              of contract      may’be    limited
where there    are visible      reasons     of public     policy    for    the limitation
and the right      to contract     while    protected     by Section       19 of Article
I is not an absolute        right    and is subject        to reasonable       regulation
in the interest       of public    welfare.       International       Brotherhood       v.
Huval,    140 Tex. 21, 166 S.W .2d 10’1 (ir?rimri,i?ge                v. Home Life      &
A-c.
-      Ins.  Co.,    246 S.W.2d 666   (Tex.Civ.App.       1931,    no   writ!-

               It is therefore   our             opinion   that   the prohibitions       contained
in this     Bill  are violative    of            an individual’s     constitutional       right
of contract      which is protected               by Section     19 of Article      I: of the
Constitution      of Texas.

            You are accordingly     advised   that   the provisicns       -f
House Bill    442 of the 62nd Legislature,       Regular    Session,    lr71,
are unconstitutional,     being  in viclation      of Section     19 zi’ Artile
i of the Constitution     of Texas,

                                   SUMMARY
                                         --~-
              House Biil,       442 of the 62nd Legislature,            R .S.
       1971 I   wherein      it  would   prohibit     all   members,    agents
       and employees        of the State       Board of Insurance        from
       receiving      compensation       from any insurer       witnir     six
       years    after    terminating       their   official    positio-      cw:th
       the State      violates     Section      19 of Article     I of the
       Constitution        of Texas.

                                               Very    truly     yours,

                                               CRAWFORD C. MARTIN
                                               Attorney General of              Texas




                                               First         Assistant
                                            -4026-
Hon.   James   L.    Slider,      page   3    (M-831)




Prepared    by John Reeves
Assistant    Attorney General

APPROVED:
OPINION COMMITTEE

Kerns Taylor,        Chairman
W. E. Allen,        Co-Chairman
Jay Floyd
James Quick
Wardlow Lane
Ivan Williams

MEADE F. GRIFFIN
Staff Legal Assistant

ALFRED WALKER
Executive Assistant




                                         -4027-