Advisory Opinion No. 2018-35 Rhode Island Ethics Commission Advisory Opinion No. 2018-35 Approved: June 5, 2018 Re: Eugene B. Mihaly QUESTION PRESENTED: The Petitioner, a member of the Jamestown Town Council, a municipal elected position, requests an advisory opinion regarding whether he may participate in the Town Council’s discussion and decision-making relative to an increase in the amount of the tax exemption available for veterans, given that he is eligible for and receives the existing tax exemption. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a member of the Jamestown Town Council, a municipal elected position, may participate in the Town Council’s discussion and decision-making relative to an increase in the amount of the tax exemption available for veterans, notwithstanding that he is a veteran who is eligible for and receives the existing tax exemption. In accordance with the Code of Ethics’ class exception, the Petitioner would be affected by the amendments under discussion to no greater or lesser extent than the significant and definable class of all currently eligible veterans. The Petitioner is a member of the Jamestown Town Council (“Town Council”). He states that the Town Council is considering an amendment to an ordinance that would potentially increase the current $150 tax credit exemption (“tax credit”) available to veterans. The Petitioner states that he qualifies for and receives the existing veterans’ tax credit. However, he notes that he would be impacted by any increase in the tax credit, as would approximately 308 other Jamestown residents who are currently qualified for and receive the credit. Based on these representations, the Petitioner asks whether the Code of Ethics permits his participation in the Town Council’s discussions and voting relative to the ordinance amendment. Under the Code of Ethics, the Petitioner may not participate in the Town Council’s discussions or voting relative to any matters in which he has an interest, financial or otherwise, which is in substantial conflict with the proper discharge of his duties. R.I. Gen. Laws § 36-14-5(a). A substantial conflict of interest occurs if the Petitioner has reason to believe or expect that he or a family member, employer or business associate will derive a direct monetary gain or suffer a direct monetary loss by reason of his official activity. Section 36-14-7(a). Furthermore, 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). However, the above prohibitions contain a “class exception” which states that a public official will not have an interest in substantial conflict with his public duties if any benefit or detriment accrues to him or his family member, employer or business associate “as a member of a . . . group, or of any significant and definable class of persons within the . . . group, to no greater extent than any other similarly situated member of the . . . group, or the significant and definable class of persons within . . . group.” Section 36-14-7(b). Recently, the Ethics Commission issued Advisory Opinion 2017-41 allowing a Charlestown Town Council member to participate in the Town Council’s consideration of an increase in the amount of a tax credit available to veterans, notwithstanding that he was a veteran who was eligible for the existing tax credit. The Ethics Commission based its opinion on the fact that in accordance with the Code of Ethics’ class exception, the petitioner would be affected by the amendments under discussion to no greater or lesser extent than the significant and definable class of all 528 then eligible veterans. Similarly, the Ethics Commission has applied the 7(b) class exception to allow town council members who were over the age of 65 to participate and vote on ordinances to freeze the property taxes of residents who are over the age of 65. Similarly, the Ethics Commission has applied the class exception to allow town council members who were over the age of 65 to participate and vote on ordinances to freeze the property taxes of residents who are over the age of 65. 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 the 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); 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, the Petitioner is one of approximately 308 Jamestown residents who qualify for and receive the existing veterans’ tax credit. While the Petitioner would be financially impacted by a change in the amount of the tax credit, the Petitioner represents that he would be impacted to no greater or lesser extent than the approximately 308 other residents who are currently eligible for the credit. Under such circumstances, the Ethics Commission concludes that the class exception set forth in section 7(b) applies and the Petitioner may participate in discussions and voting relative to amending the ordinance in the ways described herein. In the event that that Town Council’s discussions veer into amending the ordinance in ways that impact the Petitioner individually, or as a member of a much smaller class or subclass of veterans, the Petitioner must either recuse from participation or seek additional guidance from the Ethics Commission. Upon such recusal, a statement of conflict of interest must be filed with the Town Council and the Ethics Commission pursuant to section 36-14-6. 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) § 36-14-6 § 36-14-7(a) § 36-14-7(b) Related Advisory Opinions: A.O. 2017-41 A.O. 2005-22 A.O. 2002-27 A.O. 99-82 Keywords: Class exception