STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6135

March 17, 1983

INCOMPATIBILITY:

Offices of member of Board of Trustee of Michigan State University and Director of Department of Licensing and Regulation

The offices of member of the Board of Trustees of Michigan State University and Director of Department of Licensing and Regulation are incompatible and may not be simultaneously occupied.

Mrs. Elizabeth P Howe

Director

Department of Licensing and Regulation

320 N. Washington Square

Lansing, Michigan

As member of the Board of Trustees of Michigan State University and Director of the Department of Licensing and Regulation, you have requested my opinion on the question whether those two offices are compatible or incompatible under Michigan law.

Two acts passed in the last ten years bear directly on your question. As stated in their respective titles, they are:

and

Section 2 of 1978 PA 566, supra, provides:

Incompatible offices are defined in 1978 PA 566, supra, Sec. 1(b), as follows:

The first two statutory standards of incompatibility restate the common law. OAG, 1979-1980, No 5626, p 537, 541-542 (January 16, 1980). The third standard of incompatibility changed the common law by providing that incompatibility occurs when a breach of duty results from performance of other duties. The common law had, instead, based incompatibility on the nature of each public position ⁽¹⁾ and the potential for conflict which was inherent in the duties and responsibilities of each position.

As previous opinions have concluded, abstaining from a matter does not prevent incompatibility from arising under 1976 PA 566, Sec. 1(b)(iii), supra, because abstention to avoid incompatibility would constitute a breach of duty. OAG, 1979-1980, No 5626, supra at 544-545. See also, OAG, 1979-1980, No 5835, p 1131 (December 30, 1980); and OAG, 1981-1982, No 5955, P 311 (August 12, 1981).

1978 PA 566, supra, Sec. 3, is specifically concerned with membership on a governing board of a university. It provides:

Thus, while subsection (1) may appear to remove the matter from the scope of 1978 PA 566, Sec. 2, supra, subsection (5) does not 'allow or sanction specific actions . . . which would result in a breach of duty.' Furthermore, subsection (4) does not 'allow or sanction activity constituting a confict of interest prohibited by the . . . laws of this state.' ⁽²⁾

The second public act which bears upon your question is 1973 PA 196, supra. It must be considered in view of the proscription in 1978 PA 566. Sec. 3(4), supra, prohibiting activity which violates other Michigan law. In defining prohibited conflicts of interest, 1973 PA 196, supra, Sec. 2(6), as amended, provides:

As a member of the Board of Trustees of Michigan State University, there is no question that you are a public officer, and as the Director of the Department of Licensing and Regulation, you are a 'public officer' under 1973 PA 196, supra, Sec. 1(c). Thus, section 2(6) is applicable to your question.

The Board of Ethics was created by 1973 PA 196, supra. Section 5(e) of that Act provides that 'the board shall . . . issue and publish advisory opinions . . .' concerning ethical conduct of public officers. That Board has said that no actual impairment of independence of judgment or action is required by 1973 PA 196, Sec. 2(6), supra. In re Zink, 79-EA-17, p 6. Thus, the standard of 1973 PA 196, Sec. 2(6), supar, is comparable to the common law standard. Under the common law, positions were considered incompatible even though the conflict of duties may arise only on rare occasions. It is the existence of conflicting powers, not the remoteness of their exercise, which is controlling. Northway v Sheridan, 111 Mich 18; 69 NW 82 (1896); Attorney General, ex rel Moreland v Common Council of City of Detroit, 112 Mich 145, 172-173; 70 NW 450 (1897); and Weza v Auditor General, 297 Mich 686, 689; 298 NW 368 (1941).

With this background, we must analyze the two offices you now hold--member of the Board of Trustees of Michigan State University and Director of the Department of Licensing and Regulation--in order to determine whether they are compatible.

Const 1963, art 8, Sec. 5, provides, in relevant part:

Furthermore, Const 1963, art 8, Sec. 4 requires the Legislature to appropriate money to maintain Michigan State University.

The statutory powers and duties of the Board of Trustees are more specifically enumerated in 1909 PA 269 as amended; MCLA 390.101 et seq; MSA 15.1121 et seq. Although the authority of the Board of Trustees within the educational sphere is constitutional in nature, it may, nevertheless, be affected by the police power of the State. See, Branum v Board of Regents of University of Michigan, 5 Mich App 134; 145 NW2d 860 (1966), app dis per stip 379 Mich 753 (1967).

The Department of Licensing and Regulation was created by the Executive Organization Act of 1965, 1965 PA 380, Secs. 325-331; MCLA 16.425-16.431; MSA 3.29(325)-3.29(331). Although subsequent changes have been made in the organization of the Department, the Director continues as head of the Department. 1965 PA 380, supra, Sec. 326.

The Public Health Code, 1978 PA 368, as amended; MCLA 333.1101 et seq; MSA 14.15(1101) et seq, creates the Michigan Board of Medicine, 1978 PA 368, supra, Sec. 17021; the Michigan Board of Nursing, 1978 PA 368, supra, Sec. 17221; and the Michigan Board of Osteopathic Medicine and Surgery, 1978 PA 368, supra, Sec. 17521, within the Department of Licensing and Regulation.

By virtue of 1978 PA 368, supra, Sec. 16126, the Director of the Department of Licensing and Regulation is an ex officio member without vote of the Board of Medicine, the Board of Nursing, and the Board of Osteopathic Medicine and Surgery.

The Board of Medicine, the Board of Nursing, and the Board of Osteopathic Medicine and Surgery are authorized by the Legislature to establish standards for the education and training of individuals to be licensed and may accredit training programs in hospitals, schools, colleges, universities, and institutions offering training programs meeting educational standards. Michigan State University's Colleges of Human Medicine, Osteopathic Medicine, and Nursing offer programs of study which qualify university graduates for careers in those areas if they meet the standards established by the appropriate state licensing boards. Accreditation may be withdrawn for failure to meet standards subject to an opportunity for a hearing. 1978 PA 368, supra, Sec. 16148.

As an ex officio member of the Board of Medicine, of the Board of Nursing, and of the Board of Osteopathic Medicine and Surgery, the Director of the Department of Licensing and Regulation may participate fully in the discussions relating to the educational standards necessary for approval of university or college education programs for the licensing of professionals by the respective boards and in any hearing involving an educational institution. 1978 PA 368, Sec. 16148(2), supra.

The Department has a direct management relationship to said boards. 1978 PA 38, supra, Sec. 16141 states:

1980 PA 299; MCLA 339.101 et seq; MSA 18.425(101) et seq, Sec. 2002 establishes a Board of Architects, a Board of Professional Engineers, and a Board of Land Surveyors. Each board has been created within the Department of Licensing and Regulation. 1980 PA 299, supra, Sec. 307. Again, Michigan State University offers programs of study which qualify university graduates for careers in those areas if they meet the standards established by the respective licensing board.

Applicants for licensure to practice architecture, professional engineering, or land surveying must meet educational requirements which shall be acceptable to the respective licensing board as set forth in 1980 PA 299, supra, Sec. 2004. Any university or college aggrieved with the educational standards adopted by any of the respective boards may petition the Department in writing for a review of that decision. 1980 PA 299, supra, Sec. 520. In such event, the Department of Licensing and Regulation and the appropriate board may re-investigate the school, institution or person and the curriculum of the school, institution or program. 1980 PA 299, supra, Secs. 520-521. Reading these sections together, it is abundantly clear that the Director of the Department of Licensing and Regulation may pass upon any petition of Michigan State University as it relates to courses and standards of the educational program of the University relating to architecture, professional engineering and land surveying in the event one were filed. Thus, the Director of the Department will become involved in the administrative decisions impacting the university in the event of such appellate review.

It should also be noted that the budget and staffing of personnel of the respective boards is subject to the supervision and control of the Director of the Department of Licensing and Regulation. 1978 PA 368, supra, Sec. 16148; 1980 PA 299, supra, Secs. 208-211.

The relationship between the Director of the Department of Licensing and Regulation and the aforesaid licensing boards and their actions is, indeed, pervasive.

The State Board of Ethics had occasion to pass upon an analogous situation in In re Shillinglaw, 76-EA-8, which involved a professor and chairperson of the Department of Osteopathic Medicine at Michigan State University who was simultaneously serving as Executive Secretary to the Board of Osteopathic Registration and Examination, the predecessor of the present Board. If found a conflict of interest in violation of 1973 PA 296, Sec. 2(6), supra, in the event that the two positions were held simultaneously. For its conclusion, the Board of Ethics relied upon the possible impairment of independence of judgment or action in the performance of the official duties as Executive Secretary, on the one hand, and professor and chairperson of the department of the university on the other.

The Director of the Department of Licensing and Regulation, as an ex officio member of each licensing board, may participate in the discussion and consideration of the appropriate educational standards that universities or colleges must maintain in order to qualify their graduates for licensure. In addition, the Director may participate in the review of any decision that is made. As to the boards licensing architects, professional engineers and land surveyors, the Director of the Department of Licensing and Regulation is required to serve in a review capacity of decisions made relative to the educational courses required of colleges and universities. The possible conflict of interest is more compelling here than in Shillinglaw in that the Director of the Department of Licensing and Regulation, in considering standards or in reviewing standards, would be faced with the possibility of making decisions contrary to the positions maintained by Michigan State University.

I am convinced that if you were to hold both offices you would make every effort to remain objective in your role as Director of the Department of Licensing and Regulation. Nevertheless, the public is entitled to the judgment of each of these offices, free from any possible impairment of independent judgment due to dual involvement.

It is manifest that the offices of Director of the Department of Licensing and Regulation and member of the Board of Trustees of Michigan State University, when occupied by the same person, result in a kinship-like relationship between the office of Director of the Department of Licensing and Regulation and the office of member of the Board of Trustees of Michigan State University. The simultaneous occupation of these offices involves the potential for the impairment of independence of judgment or action and is, therefore, a violation of 1973 PA 196, Sec. 2(6), supra.

It should also be noted that the Executive Organization Act of 1965, 1965 PA 380, as amended; MCLA 16.101 et seq; MSA 3.29(1) et seq, Sec. 8(b), provides:

OAG, 1965-1966, No 4479A, p 262, 281 (May 2, 1966), considered the question concerning the activities which may be pursued by a director of a principal department in light of 1965 PA 380, Sec. 8(b), supra, and the opinion concluded:

Thus, 1965 PA 380, Sec. 8(b), supra, requires a total commitment to the duties and responsibilities of the office of director of a department, or of a commission, or a board, except that a director may engage in personal activities for his or her own account so long as such dealings do not conflict with performance of official duties. All other activity is proscribed by the statute.

The foregoing statute, 1965 PA 380, Sec. 8(b), supra, impacts your position as Director of the Department of Licensing and Regulation in view of your service as a member of the Board of Trustees of Michigan State University, and as such, proscribes your activities as member of the Board of Trustees of Michigan State University.

While it is not essential to the opinion, it must be observed that both Michigan State University and the Department of Licensing and Regulation receive appropriations from the Legislature.

In previous opinions it has been recognized that where two public bodies may be competing for the same tax revenues, one person may not be a member of both govering bodies. See, 2 OAG, 1955-1956, No 2675, p 405 (July 16, 1956); 2 OAG, 1957-1958, No 3218, p 128 (May 14, 1958); OAG, 1963-1964, No 4307, p 420 (June 30, 1964); and OAG, 1969-1970, No 4671, p 51 (May 14, 1969). Admittedly, said opinions are based upon the common law, and under 1978 PA 566, Sec. 1(b)(iii), supra, an actual conflict is proscribed. OAG, 1979-1980, No 5626, supra.

It should be noted that during the past year, four Executive Orders were issued to cut the State's budget and further cuts are under consideration. In his State of the State Address, Governor Blanchard detailed the effects of Michigan's fiscal crisis:

It is my opinion, therefore, that the offices of member of the Board of Trustees of Michigan State University and Director of the Department of Licensing and Regulation are incompatible and may not be simultaneously occupied.

Frank J. Kelley

Attorney General