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The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 5864 March 17, 1981 CONFLICT OF INTEREST: Temporary member of state site approval board employed by applicant for permit HAZARDOUS WASTE MANAGEMENT ACT: State Site Approval Board--Conflict of interest of temporary members PUBLIC OFFICERS AND EMPLOYEES: Conflict of interest State Ethics Act A temporary member of the State site approval board who is employed by the applicant for a hazardous waste disposal facility construction permit is in conflict of interest. Such member must resign and a new temporary member appointed so that a duly constituted nine member State site approval board may be convened. Dr. Howard A. Tanner Director Department of Natural Resources Box 30028 Lansing, Michigan You have requested my opinion on a matter of first impression involving the Hazardous Waste Management Act, 1979 PA 64; MCLA 299.501; et seq; MSA 13.30(1) et seq. Your question involves potential conflict of interest in the temporary membership of the site approval board. The board has ultimate authority in approving or denying the issuance of a construction permit for establishment of a hazardous waste disposal facility within a municipality. You state that the first site approval board under 1979 PA 64, supra, has been convened in Midland County to review an application by the Dow Chemical Company to establish a hazardous waste facility in the City of Midland. With respect to the four temporary members of the nine member site approval board, discussed infra, two appointments thereto have been made by the Midland City Council. The two remaining appointments have been made by the Midland County Board of Commissioners. I am advised that with respect to the two temporary members appointed by the City of Midland, one person is employed by Dow Chemical as an industrial hygienist. The other temporary city member, formerly employed by Dow Chemical, is a chemist for Samtest, Inc. I am advised that Samtest, Inc., performs for Dow Chemical certain chemical testing at various times, and that such testing constitutes approximately 10% of Samtest's business. As to the two temporary county members, one person is a member of the Midland County Board of Commissioners and is employed by the Michigan Division of Dow Chemical. The other county member is a former executive of Dow Chemical who retired in 1964 and who presently holds approximately 400 shares of stock in Dow Chemical. This individual receives a fixed amount pension from Dow Chemical under a pension plan administered by an insurance company. Thus, you inquire whether the four temporary members, in view of their past and present employment nexus with Dow Chemical, are in conflict of interest in performing their statutory duties on the site approval board. I. STATUTORY FRAMEWORK OF 1979 PA 64 1979 PA 64, supra, establishes a detailed procedure for review and approval of siting of hazardous waste disposal facilities, (1) and vests final authority of such approval or disapproval in a state board known as the site approval board. Under section 18(1) of the Act, it is provided that a hazardous waste disposal facility shall not be established without a construction permit from the Director of the Department of Natural Resources. Immediately following receipt of an application which complies with the requirements of section 18(2) of the Act, section 19 provides that the Director shall undertake a detailed review of the application. Where the Director has approved or has not rejected an application within 75 days after its receipt, the Director, through the chairperson (2) of the state site approval board, (3) infra, shall notify the permanent members of the board, and also notify the county and municipality 'in which the proposed disposal facility is to be located for their appointment [within 45 days of such notice] of the temporary positions to the [site approval] board.' 1979 PA 64, supra, Sec. 20(1)-(2). Section 17 of the Act provides for the establishment of a nine (9) member state site approval board. (4) The board is comprised of 5 permanent members and 4 temporary members. The five permanent members of the site approval board are appointed as follows: three state members are appointed, respectively, by the directors of the departments of Public Health, State Police, and Natural Resources, and each member so appointed shall not serve for more than two years; the remaining two permanent members are appointed by the Governor, with the advice and consent of the Senate, and their term shall be three years. 1979 PA 64, supra, Sec. 17(2)(a)-(b). The four temporary members of the site approval board are appointed, two each, by the governing body of the county, and municipality, in which the facility is proposed to be located, within 45 days after notification by the chairperson of the board. 1979 PA 64, Sec. 20(1)-(2), supra. The temporary members serve on the site approval board until the construction permit application for the particular project under consideration is approved or rejected, and is no longer subject to their review. 1979 PA 64, Sec. 17(1), supra, fn 4. The Act establishes a unique mechanism whereby a separate site approval board is convened in each municipality where approval is sought for a permit to construct a hazardous waste facility, and the board, after taking final action on such application, goes out of existence, its statutory mission accomplished. The affected local units are each authorized to appoint two temporary members to the board. Two temporary members shall be residents of the municipality in which the disposal facility is primarily proposed to be located, and are appointed by the governing body of such municipality. The remaining two temporary local members shall be residents of the county where the disposal facility is proposed to be located (one of whom shall be a resident of a municipality where the disposal facility is proposed to be located); both county members shall be appointed by the county board of commissioners. 1979 PA 64, supra, Sec. 17(2)(c)-(d). Following appointment of the temporary members by the county and municipal governing bodies, fulfilling the statutory scheme of state and local representation, the site approval board is deemed legally constituted: '[t]he board shall be created at that time. . . .' 1979 PA 64, Sec. 20(1)-(2), supra. Detailed review powers based on prescribed criteria concerning an application for a hazardous waste disposal facility are vested in the site approved board by section 20(6)-(7) of Act: '(6) The board shall deliberate the impact of the proposed disposal facility on the municipality in which it is to be located and make a final determination on the construction permit application. '(7) The board shall consider, at a minimum: (a) The risk and impact of accident during the transportation of hazardous waste. (b) The risk and impact of contamination of ground and surface water by leaching and runoff from the proposed disposal facility. (c) The risk of fires or explosions from improper storage and disposal methods. (d) The impact on the municipality where the proposed disposal facility is to be located in terms of the health, safety, cost, and consistency with local planning and existing development. The board also shall consider local ordinances, permits, or other requirements and their potential relationship to the proposed disposal facility. (e) The nature of the probably environmental impact, including the specification of the predictable adverse effects on the following: (i) The natural environment and ecology. (ii) Public health and safety. (iii) Scenic, historic, cultural, and recreational value. (iv) Water and air quality, and wildlife. (f) An evaluation of measures to mitigate adverse effects.' Based on the statutory minimum criteria the board considers under section 20(7), supra, of the Act in making its decision on a permit application, it is apparent that informed participation by the temporary board members is contemplated. The statutory criteria focus primarily upon the local effect and impact of establishing a facility within a municipality. While the five permanent members must be cognizant of the criteria in passing upon an application, it is the four temporary members who reside within the area proposed to be affected who must represent particular local concerns in the review process, and impart these local concerns to the permanent members. Following review of the application by the site approval board, section 21(1) of the Act provides: 'The board either shall approve or reject the construction permit application, and the director shall issue or deny the construction permit accordingly. . . . A local ordinance, permit requirement or other requirement shall not prohibit the construction of a disposal facility.' (5) See 1979 PA 64, Sec. 20(6), supra. 1979 PA 64, Sec. 17(4), supra, provides that 5 of the 9 members of the state site approval board constitute quorum, and 'the concurrence of 5 members of the board shall consitute a legal action of the board.' Therefore, while the four temporary members do not possess veto power over the ultimate decision of the board, the fact that four of the nine votes on the board are local in nature safeguards local participation in the review process, based on the minimum statutory criteria contained in section 20(7), supra. Thus, the action of the state site approval board in approving or denying the construction permit application, which action pre-empts local regulation under 1979 PA 64, Sec. 21(1), supra, is final and binding upon the Director and the state, and constitutes final action for purposes of judicial review. Const 1963, art 6, Sec. 28. II. CONST 1963, ART 4, Secs. 51 AND 52 1979 PA 64, supra, effectuates the provisions of Const 1963, art 4, Sec. 51: 'The public health and general welfare of the people of the state are hereby declared to be matters of primary public concern. The legislature shall pass suitable laws for the protection and promotion of the public health.' See Washtenaw County Heath Dept v T&M Chevrolet, Inc, 406 Mich 518, 524; 280 NW2d 822 (1979). The Act also effectuates Const 1963, art 4, Sec. 52: 'The conservation and development of the natural resources of the state are hereby declared to be of paramount public concern in the interest of the health, safety and general welfare of the people. The legislature shall provide for the protection of the air, water and other natural resources of the state from pollution, impairment and destruction.' In Ray v Mason County Drain Commissioner, 393 Mich 294, 306; 224 NW2d 883 (1975) the Court, per Justice Williams speaking for six justices, in discussing the Michigan Environmental Protection Act, 1970 PA 127, MCLA 691.1201 et seq; MSA 14.528(201) et seq, stated: 'But the EPA does more than give standing to the public and grant equitable powers to the circuit courts, it also imposes a duty on individuals and organizations both in the public and private sectors to prevent or minimize degradation of the environment which is caused or is likely to be caused by their activities. The EPA prohibits pollution, destruction, or impairment of the environment unless it can be shown that 'there is no feasible and prudent alternative' and that defendant's conduct 'is consistent with the promotion of public health, safety and welfare in light of the state's paramount concern for the protection of its natural resources . . ..' MCLA 691.1203; MSA 14.528(203).' 'The Legislature in establishing environmental rights set the parameters for the standard of environmental quality but did not attempt to set forth an elaborate scheme of detailed provisions designed to cover every conceivable type of environmental pollution or impairment. Rather the Legislature spoke as precisely as the subject matter permits and in its wisdom left to the courts the important task of giving substance to the standard by developing a common law of environmental quality.' [footnotes omitted.] See OAG, 1969-1970, No 4590, p 17, 30 (January 27, 1969) where it is stated that Const 1963, art 4, Sec. 52, supra, 'imposes upon the legislature a duty to protect the air, water and other resources of the state from the ravages of pollution and to this extent it prohibits the legislature from enacting any law which, if carried out, would violate the constitutionally declared policy.' Thus, the Legislature in 1979 PA 64, supra, has provided that the site approval board, a state board, acts on behalf of the State in protecting and promoting the public health and natural resources. III. CONFLICT OF INTEREST (A) PUBLIC POLICY It must be noted that State public policy has been expansively defined by the courts. In Groehn v Corporation and Securities Commission, 350 Mich 250, 263; 86 NW2d 291 (1957), it is stated that public policy: 'may be said to be the community common sense and common conscience, extended and applied throughout the State to matters of public morals, public health, public safety, public walfare, and the like. It is that general and well-settled public opinion relating to man's plain, palpable duty to his fellow men, having due regard to all the circumstances of each particular relation and situation.' In People ex rel Plugger v Township Board of Overyssel, 11 Mich 222 (1863), the Michigan Supreme Court held void, on public policy grounds, a contract of which the relators-contractors sought enforcement by mandamus. The Court stated with respect to the fiduciary duties of public officers: 'All public officers are agents, and their official powers are fiduciary. They are trusted with public functions for the good of the public; to protect, advance and promote its interest, and not their own. And, a greater necessity exists than in private life for removing from them every inducement to abuse the trust reposed in them, as the temptations to which they are sometimes exposed are stronger, and the risk of detection and exposure is less. A judge cannot hear and decide his own case, or one in which he is personally interested. He may decide it conscientiously and in accordance with law. But that is not enough. The law will not permit him to reap a personal advantage from an official act performed in favor of himself. For these reasons, we hold the contract we are asked to enforce by mandamus, void as against public policy . . .. [Citations omitted.] The public were entitled to their best judgment, unbiased by their private interests, and by accepting the [public] office they became bound to exercise such judgment, and to use their best exertions for the public good, regardless of their own. They had no right, while they continued in office, to place themselves in a position where their own interests would be hostile to those of the public.' 11 Mich 222, 225-227. [Emphasis supplied.] See OAG, 1967-1968, No 4646, p 253 (June 18, 1968). In Pyatt v Mayor & Council of Borough of Dunellen in Middlesex County, 9 NJ 548; 89 A2d 1 (1952), the Supreme Court of New Jersey, through Justice (now United States Supreme Court Justice) William J. Brennan, Jr. speaking for the unanimous Court, stated with respect to municipal action on certain ordinances where two of four councilmen voting in favor were in conflict of interest based on their employment by the corporate beneficiary of the ordinances: 'The ordinances must, in any event, be set aside upon the final ground urged by appellants, that is, that the affirmative votes by which they were adopted were infected with the taint of self-interest. The council deliberated as a quasi-judicial tribunal when deciding whether to pass the ordinances. The process calling for the exercise of discretion by the governing body according to the weight of conflicting public considerations is judicial in quality. Therefore, the ordinances are voidable if any one of the councilmen who participated as quasi-judges was at the time disqualified by reason of private interest at variance with the impartial performance of his public duty. . . . It is an ancient principle of Anglo-American justice that 'no man shall be a judge in his own cause'. Bonham's Case, 8 Co., 113 b, 118 a, 77 Eng. Rep. 646, 652 (K.B. 1610).' 89 A2d 1, 4. [Citations omitted.] The Supreme Court of Iowa in Wilson v Iowa City, 165 NW2d 813, 819-820 (1969), stated that where a vote is cast on official municipal action by a person in conflict of interest, '[t]he concurrence of an interested member in the action taken by the body taints it with illegality. The infection of the concurrence of the interested person spreads, so that the action of the whole body is voidable. This is the general rule. It is supported by a twofold reason, viz.: First, the participation of the disqualified member in the discussion may have influenced the opinion of the other members; and, secondly, such participation may cast suspicion on the impartiality of the decision. It being impossible to determine whether the virus of self-interest affected the result, it must needs be assumed that it dominated the body's deliberations, and that the judgment was its product.' 165 NW2d 813, 819-820, citing from Piggot v Borough of Hopewell, 22 NJ Super 106; 91 A2d 667, 670 (1952). Public officials, as decision-makers, 'must seek to avoid even the appearance of impropriety.' Abrahamson v Wendell, 76 Mich App 278, 281-282; 256 NW2d 613 (1977) (on rehearing). (B) PUBLIC POLICY--THE STATE ETHICS ACT, 1973 PA 196 1973 PA 196, as last amended by 1980 PA 481 (effective March 31, 1981), prescribes standards of conduct for public officers and employees, and creates a State Board of Ethics. (6) MCLA 15.341 et seq; MSA 4.1700(71) et seq. In pertinent part, amendatory 1980 PA 481 amended 1973 PA 196, supra, Sec. 1(c), to include within the act's ambit 'an elected or appointed official of this state or a political subdivision of this state.' Thus, the temporary members of the site approval board, who are appointed by political subdivisions of the state under 1979 PA 64, Sec. 20(2)(c)-(d), supra, are specifically declared to be 'public officers.' However, since the site approval board is a state board, exercising delegated state power pursuant to the mandate of Const 1963, art 4, Sec. 51 and 52, supra, all members of the board are subject to the state policy and ethical constraints imposed by 1973 PA 196, supra. Section 2 of 1973 PA 196, supra, contains the standards which the legislature has imposed upon public officers, public employees and members of state boards. In pertinent part, 1973 PA 196, Sec. 2, supra, provides: '(6) A public officer or employee shall not engage in or accept employment or render services for a private or public interest when that employment or service is incompatible or in conflict with the discharge of the officer or employee's official duties or when that employment may tend to impair his or her independence of judgment or action in the performance of official duties. '(7) A public officer or employee shall not participate in the negotiation of execution of contracts, making of loans, granting of subsidies, fixing of rates, issuance of permits or certificates, or other regulation or supervision relating to a business entity in which the public officer or employee has a financial or personal interest.' [Emphasis supplied.] Pursuant to section 1(d) of the act, it constitutes 'unethical conduct' for a public officer to violate the provisions of section 2. Thus, the public policy of the state, as contained in 1973 PA 196, Sec. 2(6)-(7), supra, declares it to be unethical conduct for a public officer, employee, or member of a state board to take official action on permits or other regulations relating to a business entity in which such officer has a pecuniary or personal interest. Based on the judicial statements of public policy with respect to conflict of interest, and the legislative proscription of unethical conduct set forth in the State Ethics Act, 1973 PA 196, supra, your question as to conflict of interest concerning the temporary members of the site approval board will be addressed. IV. APPLICATION OF AUTHORITIES TO TEMPORARY MEMBERS OF SITE APPROVAL BOARD Under 1973 PA 196, Sec. 2(7), supra, no public officer or public employee or state board member may 'participate in the . . . issuance of permits . . . or other regulation or supervision relating to a business entity' in which the person 'has a financial or personal interest.' Further, even 'the appearance of impropriety' must be scrupulously avoided. Abrahamson v Wendell, supra. By virtue of their employment nexus with the applicant, Dow Chemical Company, a fact which sets them apart from other members of the public, the two temporary members employed by Dow Chemical will be placed in a situation of conflict of interest in seeking to serve 'both masters.' See 1973 PA 196, Sec. 2(6)-(7), supra; Pyatt, supra; Wilson, supra. As to the other two temporary members who are former Dow employees, their interest may be viewed as indirect and, thus, these two members will not be placed in conflict of interest by their service on the board. Abstention by the two temporary members who are in conflict of interest from the final decision of the board will effectively limit the legislatively mandated input of the local municipalities through the four temporary positions accorded them in reviewing and passing upon the permit for the establishment of a hazardous waste disposal facility. Indeed, the Legislature has indicated that a duly-constituted site approval board 'shall be created' following the appointment of all four temporary members to the board. 1979 PA 64, Sec. 20(1)-(2), supra. Furthermore, abstention by the two temporary members who are in conflict of interest may result in a situation where the five permanent members of the board, without full local representation by four temporary members, may take legal action on the permit application and so bind the municipalities, contrary to the legislative requirement of a nine member board. Under the Rule of Necessity, disqualification of the two temporary members will not deprive the permit applicant of site approval board review and final action on its pending application. Eg, Bliss v Caille Brothers, Inc, 149 Mich 601, 609-610; 113 NW 317 (1907). Instead, the remedy for the violation of conflict of interest and ethical constraints of 1973 PA 196, Sec. 2(6)-(7), supra, is the resignation of the two temporary members in question, and the appointment of two new members by the Midland County Board of Commissioners, and the Midland City Council, respectively. 1979 PA 64, Sec. 17(2)(c)-(d), supra. Following such resignation and proper appointment, (7) a duly constituted nine member site approval board 'shall be created' which may legally proceed to pass upon the pending application, thereby impartially promoting and fully protecting the concerns of the local affected municipalities in the permit review process. It is fully anticipated that the two temporary members of the site approval board who are deemed to be in conflict of interest will resign their positions and facilitate the expeditious appointment of two new temporary members to the board. The opinion of the Attorney General commands the allegiance of all state agencies. Traverse City School District v Attorney General, 384 Mich 390; 185 NW2d 9 (1971); OAG, 1977-1978, No 5156, p 67, 76-77 (March 24, 1977). It is noted that if the state site approval board, as presently constituted, with the two temporary members in question taking part, were to make a final decision on the pending application, its action may be held void under one line of authority. Pyatt, supra; Wilson, supra; Baker v Marley, 8 NY2d 365; 208 NYS2d 449; 170 NE2d 900 (1960); Aldom v Borough of Roseland, 42 NJ Super 495; 127 A2d 190 (1956); Abrahamson v Wendell, supra; Barkey v Nick, 11 Mich App 381, 385; 161 NW2d 445 (1968). Other courts have held that the vote of a disqualified public officer does not vitiate official action where the tainted vote was not necessary to pass the issue, particularly where there are multiple votes, only one of which is illegal. These decisions hold such official action is voidable. Eways v Reading Parking Authority, 385 Pa 592; 124 A2d 92 (1956); Singewald v Minneapolis Gas Co, 274 Minn 556; 142 NW2d 739 (1966); Copple v City of Lincoln, 202 Neb 152; 274 NW2d 520 (1979). CONCLUSION It is, therefore, my opinion that two of the four temporary members of the site approval board, having a direct employment nexus with the permit applicant, Dow Chemical, are in conflict of interest. The participation of either of these two temporary members in the process of issuing such permit may result in rendering void or voidable the final decision of the site approval board. The two temporary members in question must resign and two new temporary members shall be appointed, thereby legally constituting a full nine member site approval board. Frank J. Kelley Attorney General (1)
'waste or a combination of waste and other discarded material including solid, liquid, semisolid, or contained gaseous material which because of its quality; concentration; or physical, chemical, or infectious characteristics may cause or significantly contribute to an increase in mortality or increase in serious irreversible illness or serious incapacitating, but reversible illness, or pose a substantial present or potential hazard to human health or the environment if improperly treated, stored, transported, disposed of, or otherwise managed. . . .'
The word 'disposal' is defined in 1979 PA 64, supra, Sec. 3(6) as:
'the incineration, long term storage, treatment, or the discharge, deposit, injection, dumping, spilling, leaking, or placing of a hazardous waste into or on land or water in a manner that the hazardous waste or a constituent of the hazardous waste enters the environment, is emitted into the air, or is discharged into water, including ground water.'
Finally, 1979 PA 64, Sec. 3(7) defines 'disposal facility' as:
'the location, equipment, or facility where hazardous wastes are disposed of, including a disposal facility associated with, within, or adjacent to facilities generating the waste.'
(2)
The chairperson of the site approval board, infra, who is the permanent board member from the Department of Natural Resources 'shall notify the local governing body of the municipality and county government of a construction permit application filed with the department, and shall instruct the municipality or county to appoint the necessary representatives to the board.' 1979 PA 64, supra, Sec. 17(3); see Sec. 17(2)(a) and Sec. 3(4)-(5).(3)
Id.(4)
1979 PA 64, supra, Sec. 17(1) pertinently provides that:'The site approval board shall be established to review and grant or deny final approval for each site construction permit application recommended for approval by the department. A separate board shall be established in each municipality in which a disposal facility is proposed to be located which is the subject of a construction permit application.' [Emphasis supplied.]
(5)
This language, in providing that a local ordinance permit requirement, or other requirement shall not prohibit construction of a disposal facility, indicates a legislative intent to pre-empt local regulation. People v Llewellyn, 401 Mich 314, 322-325; 257 NW2d 902 (1977), cert den, 435 US 1008 (1978). This fact of pre-emption heightens the importance of the role of the temporary municipal members of the site approval board.The critical factor of effective participation by the temporary members is further evinced by section 20(8) of the Act, which pertinently provides '[t]he board also shall to the fullest extent practicable integrate by stipulation the provisions of the local ordinances, permits or requirements.'
(6)
Amendatory 1980 PA 481 had its genesis in HB 5088. In OAG, 1979-1980, No 5736, p 862 (July 10, 1980), is was concluded that HB 5088 (and, thus amendatory 1980 PA 481) may not apply to state employees within the classified civil service, over whom the Civil Service Commission has constitutional authority pursuant to Const 1963, art 11, Sec. 5.(7)
In OAG, 1975-1976, No 4869, p 95 (June 4, 1975) to which is appended a letter opinion to Rep. Hollister dated February 3, 1975, it was concluded that no conflict of interest exists where the spouse of a member of a local board of education is employed by the same school district and the board member-spouse votes on contractual matters which have a direct impact on his or her spouse. OAG, 1979-1980, No 5520, p 233 (July 9, 1979) held a physician may vote on legislation relating to the legalization of Laetrile despite the fact that many of the legislator-physician's professional colleagues officially opposed legalization. In OAG, 1979-1980, No 5681, p 688 (April 1, 1980) it was held that a member of the legislature is not in conflict of interest when the legislator votes upon legislation in which his or her spouse may have some interest.
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