Advisory Opinion No. 98-41

Re: Ellicott Wright

A. QUESTION PRESENTED

The Petitioner, a Jamestown Town Councilor, a municipal elected position, requests an advisory opinion as to whether he may participate in discussions and votes regarding proposed legislation that would create a Land Bank in the Town of Jamestown, to be funded by taxes levied on real estate sales in the town and to be charged with the power to purchase parcels of undeveloped land, whether the Petitioner both owns land that would be subject to such a tax and land that would be eligible for purchase by the Land Bank.

B. SUMMARY

It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a Jamestown Town Councilor, a municipal elected position, may participate in discussions and votes regarding proposed legislation that would create a Land Bank in the Town of Jamestown. Except for a limited number of exceptions, all owners of real property in the Town of Jamestown would be affected by the imposition of a tax on the sale of real estate. Because the Petitioner would be affected to no greater or lesser extent than the entire body of real estate owners in the town, the Code of Ethics provides a specific exception allowing for his participation in discussions and votes about a Land. Bank. See R.I. Gen. Laws § 36-14-7(b). That exception does not apply to the Petitioner in his status as the owner of real estate that would be eligible for purchase by the Land Bank as the class of persons in that category is narrow and limited. However, the real estate owned by the Petitioner that would be eligible for purchase by the Land Bank is valued in the millions of dollars. Given that projections are that the Land Bank likely will accumulate only $50,000 to $150,000 per year in tax receipts depending on a vote that would be taken by the Jamestown electorate, a purchase of the Petitioner's property by the Land Bank is too remote to prohibit his participation and vote regarding the creation of the Land Bank.

C. DISCUSSION

1. Facts

The Petitioner is a member of the Jamestown Town Council, a municipal elected position. The Town Council currently has before it proposed legislation that it may refer, by vote, to the General Assembly and that, if enacted, would create a Land Bank for the Town of Jamestown. The Land Bank would be funded by taxes levied on purchases of real estate in the town. A Land Bank Commission, to be appointed by the Town Council, would have the authority to use the pool of money accumulated by the tax levies to purchase undeveloped land in the town. Projections are that the Land Bank likely would accumulate $50,000 to $150,000 per year from the taxes levied, with the amount to be determined by the Jamestown electorate. Jamestown has a Home Rule Charter so that any legislation enacted by the General Assembly to this end would have to be approved at a general or special election in the town.

The Petitioner, as a joint owner with his siblings, has substantial real estate holdings in the town, including at least two large parcels of undeveloped land that would be eligible for purchase by the Land Bank. At least one of the parcels has been on the market, for sale, for 5-6 years. The parcels are valued at more than a million dollars each. While the parcels are the type that would be of interest to the Land Bank Commission, the funds available for purchasing parcels of their size and value would not be available for a number of years.

2. Analysis

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 discussions and votes regarding proposed legislation that would create a Land Bank in the Town of Jamestown. Except for a limited number of exceptions, including foreclosures, transfers through wills and bankruptcies, and for those with low/moderate incomes, all owners of real property in the Town of Jamestown would be affected by the imposition of a tax on the sale of real estate. The amount of the tax would be based on a percentage of the purchase price of the property. Because the Petitioner would be affected to no greater or lesser extend that the entire body of real estate owners in the town, the Code of Ethics provides a specific exception allowing for his participation in discussions and votes about a Land Bank. See R.I. Gen. Laws § 36-14-7(b). Section 7(b) provides that a public official does not have an interest in substantial conflict with the proper discharge of his or her public duties if any benefit accrues to him or her (or a relative or business associate) to no greater extent than any other similarly situated member of a significant and definable class of persons. A tax levy that would affect all property owners in a community clearly falls within this exception.

The exception does not apply, however, to the Petitioner in his status as the owner of real estate that would be eligible for purchase by the Land Bank. The class of persons in that category is narrow and limited, rather than the sort of significant class contemplated by section 7(b). However, the real estate owned by the Petitioner that would be eligible for purchase by the Land Bank is valued in the millions of dollars. Given that the Land Bank likely will accumulate only $50,000 to $150,000 per year in tax receipts, a likely purchase of the Petitioner's property at any time in the foreseeable future is extremely remote, if not impossible. While the fact that the land in which the Petitioner has an ownership interest has been on the market for 5-6 years seems to indicate that there is no immediate need for him and his siblings to sell the land, a potential benefit to him through the purchase of these parcels likely could not occur for at least 10 to 20 years. Such a potential benefit is too remote to prohibit his participation and vote regarding the creation of the Land Bank.

Whether or not the Petitioner, as a member of the Town Council, may participate in future matters regarding the Land Bank, assuming he remains a member of the Town Council, is not addressed in this opinion.

Code Citations:

36-14-5(a)

36-14-7(a)

36-14-7(b)

Related Advisory Opinions:

96-63

96-6

95-25

Keywords:

Property interest

Financial interest