Advisory Opinion No. 2017-12 Rhode Island Ethics Commission Advisory Opinion No. 2017-12 Approved: April 4, 2017 Re: Representative Michael W. Chippendale QUESTION PRESENTED: The Petitioner, a legislator serving in the Rhode Island House of Representatives, a state elected position, requests an advisory opinion regarding whether he may participate in legislation authorizing the Town of Foster to enact a new tax freeze ordinance for the elderly and disabled, given that he is a disabled resident of the Town of Foster who is grandfathered into the Town’s prior tax freeze ordinance. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a legislator serving in the Rhode Island House of Representatives, a state elected position, may participate in legislation authorizing the Town of Foster to enact a new tax freeze ordinance for the elderly and disabled because it is not reasonably foreseeable that the Petitioner will be financially impacted by the legislation. The Petitioner is a member of the Rhode Island House of Representatives, representing the Towns of Foster, Glocester and Coventry, who resides in the Town of Foster (“Foster” or “the Town”). In 1974, Foster enacted an ordinance to stabilize or “freeze” the tax rates of homes owned by residents who are either sixty-five (65) or over, or who are totally disabled (“the original Tax Freeze Ordinance”). Municipal ordinances such as this are relatively common across Rhode Island, but each must be specifically authorized though legislation passed by the General Assembly. Foster’s original Tax Freeze Ordinance became effective after the 1974 passage of such legislation. The Petitioner states that, as a disabled resident of Foster, he has applied for and received a tax exemption through the original Tax Freeze Ordinance for the past seven years. In recent years, amid concerns over an aging population and declining tax revenue, the Foster Town Council began exploring the possibility of ending, narrowing or limiting its original Tax Freeze Ordinance. In 2016, the Town Council voted to amend its original Tax Freeze Ordinance to prohibit any new applications after December 31, 2016, while continuing to honor any previously approved exemptions. The Town Council then approved a separate Tax Freeze Ordinance (“new Tax Freeze Ordinance”) applicable to new applications which would, among other things: (1) raise the eligibility age for seniors to sixty-seven (67) years of age; and (2) cap the tax exemption for both seniors and disabled persons to a maximum savings of Five Hundred Dollars ($500) per year until the person reaches the age of seventy-seven (77), at which time the cap increases to One Thousand Dollars ($1,000) per year. After being approved by the Town Council, the amended original Tax Freeze Ordinance and the new Tax Freeze Ordinance were put before the Town’s electors and ratified at a Financial Town Meeting held on July 26, 2016. Because the new Tax Freeze Ordinance cannot take effect without the passage of special legislation in the General Assembly, the Town Council passed a resolution on August 25, 2016, requesting that Foster’s Representative and Senator in the General Assembly each introduce the new Tax Freeze Ordinance as legislation in the General Assembly. On January 27, 2017, the Petitioner introduced House Bill 2017 – H5272 entitled, “Foster – Exemption of elderly and disabled persons,” which would authorize Foster to enact the new Tax Freeze Ordinance. The Petitioner represents that the normal protocol would be for him, as the legislation’s sponsor in the House of Representatives, to help move the legislation through committee and to the House floor, explaining the legislation to other Representatives and answering whatever questions arise. The Petitioner states that municipal legislation such as this, having already been approved by a town council and electors, would generally pass in the House of Representatives with no opposition. Given that the Petitioner receives a grandfathered tax exemption through Foster’s original Tax Freeze Ordinance, he asks whether the Code of Ethics limits or prohibits his participation in the House of Representatives’ consideration and passage of legislation to authorize Foster’s new Tax Freeze Ordinance. A public official, such as the Petitioner, may not participate in any matter in which he has an interest, financial or otherwise, which is in substantial conflict with the proper discharge of his duties in the public interest. R.I. Gen. Laws § 36-14-5(a). A substantial conflict of interest occurs if the public official has reason to believe or expect that he or any family member or business associate, or any business by which he is employed, will derive a direct monetary gain or suffer a direct monetary loss by reason of his official activity. Section 36-14-7(a). A public official has a reason to believe or expect a conflict of interest exists when it is “reasonably foreseeable.” Commission Regulation 36-14-7001. Additionally, the Petitioner may not use his office for pecuniary gain, other than as provided by law, for himself, a family member, employer, business associate, or a business that he represents. Section 36-14-5(d). The Ethics Commission has issued numerous advisory opinions in the past concerning whether a person subject to the Code of Ethics may participate in decision-making relative to a municipal tax freeze ordinance that would provide him with a financial benefit. Nearly all of these opinions concerned the application of the Code’s “class exception,” which authorizes a public official to participate in a matter that financially impacts him or her if such impact is due solely to membership in a group or class of persons who are all impacted in the same manner. Section 36-14-7(b). See A.O. 2005-22 (member of Exeter Town Council may vote on senior tax freeze ordinance for which he and his spouse would qualify, given that ordinance applies equally to some 250-300 residents); A.O. 2002-27 (Exeter Town Council member may participate in Town Council’s decision to enact a senior tax freeze ordinance that applies to 350 residential homeowners in the Town); A.O. 2002-10 and 2002-11 (East Greenwich Town Council members over age 65 may participate and vote on a proposed tax freeze ordinance that would affect 660 homeowners). Compare A.O. 99-82 (declining to apply the class exception to a proposed elderly and disabled tax freeze ordinance where the class of eligible recipients was deemed too small). In the instant matter, we need not undertake a class exception analysis because, unlike the petitioners in the aforementioned advisory opinions, the instant Petitioner is not financially impacted by the tax freeze legislation he has introduced in the General Assembly. The Petitioner’s legislation relates only to the Town’s enactment of the new Tax Freeze Ordinance that applies to new tax exemption criteria going forward. It has no impact whatsoever on the Town’s prior decision to continue honoring preexisting tax exemptions made under the original Tax Freeze Ordinance. Accordingly, regardless of whether the proposed legislation passes or fails, or whether the new Tax Freeze Ordinance is ever formally implemented, the Petitioner’s existing tax exemption will remain unchanged. Based on the above, it is the opinion of the Rhode Island Ethics Commission that the Code of Ethics does not prohibit the Petitioner from participating in the House of Representatives’ decision-making relative to legislation authorizing the Town of Foster to enact a new Tax Freeze Ordinance for the elderly and disabled, given that it is not reasonably foreseeable that the Petitioner would be financially impacted by the legislation. This Advisory Opinion is strictly limited to the facts stated herein and relates only to the application of the Rhode Island Code of Ethics. Under the Code of Ethics, advisory opinions are based on the representations made by, or on behalf of, a public official or employee and are not adversarial or investigative proceedings. Finally, this Commission offers no opinion on the effect that any other statute, regulation, ordinance, constitutional provision, charter provision, or canon of professional ethics may have on this situation. Code Citations: § 36-14-5(a) § 36-14-5(d) § 36-14-7(a) § 36-14-7(b) Commission Regulation 36-14-7001 Related Advisory Opinions: A.O. 2005-22 A.O. 2002-27 A.O. 2002-11 A.O. 2002-10 A.O. 99-82 Keywords: Class exception Financial Interest