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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. 6615

March 17, 1989

STATE HOUSING DEVELOPMENT: AUTHORITY

Mortgage loan to legislator

CONFLICT OF INTEREST:

Legislator securing mortgage loan from state housing development authority

CONSTITUTIONAL LAW:

Const 1963, art 4, Sec. 10--interest of legislator in mortgage loan of state housing development authority

A member of the Legislature may apply for and obtain a mortgage loan from the Michigan State Housing Development Authority.

Terrence R. Duvernay

Executive Director

Michigan State Housing Development Authority

Plaza One, Fourth Floor

Lansing, MI 48909

You have requested my opinion on whether it is permissible for the Michigan State Housing Development Authority to make a mortgage loan to a state legislator in view of MCL 15.301 et seq; MSA 4.1700(21) et seq.

Const 1963, art 4, Sec. 10, provides:

"No member of the legislature nor any state officer shall be interested directly or indirectly in any contract with the state or any political subdivision thereof which shall cause a substantial conflict of interest. The legislature shall further implement this provision by appropriate legislation."

The Legislature implemented Const 1963, art 4, Sec. 10, by enacting MCL 15.301 et seq; MSA 4.1700(21) et seq.

MCL 15.302; MSA 4.1700(22) provides:

"No member of the legislature, herein referred to as a 'legislator,' nor any state officer shall be interested directly or indirectly in any contract with the state or any political subdivision thereof which shall cause a substantial conflict of interest."

MCL 15.304; MSA 4.1700(24), provides, in pertinent part:

"The word 'interested' as used in section 2 refers to a pecuniary interest if there is a conflict of interest on the part of a legislator or state officer in respect to a contract with the state or a political subdivision thereof, in order to come within the prohibitions of this act, his personal interest must be of such substance as to induce action on his part in promoting the contract for his own personal benefit."

OAG, 1983-1984, No 6211, p 246 (March 21, 1984) considered Const 1963, act 4, Sec. 10 and MCL 15.304(b)(iv); MSA 4.1700(24)(b)(iv) in the context of a question relating to possible conflict of interest of a member of the governing body of a state university in a contract between another state university and a corporation in which the member had a 50% stock ownership. The opinion concluded that where the state officer has no duty to act on behalf of the particular contracting state university there was no substantial conflict of interest because neither Const 1963, art 4, Sec. 10 nor MCL 15.304(b)(iv); MSA 4.1700(24)(b)(iv) precluded the state officer from having an interest in a contract with a state university upon whose governing body the state officer did not serve.

In Letter Opinion of the Attorney General (Rep. Teola P. Hunter, March 25, 1986), OAG, 1983-1984, No 6211, supra, was relied upon to conclude that a member of the Legislature doing business under an assumed name who entered into a contract with the Department of Social Services was not in a substantial conflict of interest because, as a legislator, she was under no duty to act for the Department of Social Services in entering into a contract for day care services.

A legislator desiring to secure a mortgage from the Michigan State Housing Development Authority has no duty to act for the Authority in granting the mortgage loan.

As was stated in the Letter Opinion to Representative Hunter, supra:

"Contracts can, of course, only be entered into by state agencies with funds appropriated by the Legislature for that purpose. Sound public policy in my opinion, therefore, requires that any legislator financially interested in a contract with a state agency disclose that interest when voting upon appropriations for that agency."

It is my opinion, therefore, that a state legislator may apply for and obtain a mortgage loan from the Michigan State Housing Development Authority.

Frank J. Kelley

Attorney General


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