STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6906

June 25, 1996

CONFLICT OF INTEREST:

Application of 1968 PA 317 to members of county boards of commissioners, city councils and township boards

CONFLICT OF INTEREST:

1968 PA 317 as the sole law regarding conflicts of interest arising out of public contracts involving public servants

CONFLICT OF INTEREST:

The extent to which 1968 PA 317 supersedes sections 30 and 31 of 1851 PA 156

1968 PA 317 applies to members of county boards of commissioners, city councils, township boards, and members of any other public bodies that county boards of commissioners, city councils and township boards may establish by law.

The Legislature intended that 1968 PA 317 constitute the sole law regarding conflicts of interest arising out of public contracts involving public servants.

1968 PA 317 supersedes section 30 of 1851 PA 156 to the extent that section 30 deals with conflicts of interest arising out of public contracts, and 1968 PA 317 only supersedes section 31 of 1851 PA 156 to the extent that section 31 could penalize a county commissioner for a conflict of interest arising out of a public contract.

Honorable Allen Lowe

State Representative

The Capitol

Lansing, Michigan 48913

You have asked three questions regarding the statute governing conflicts of interest arising out of contracts between public servants and public entities, 1968 PA 317, MCL 15.321 et seq; MSA 4.1700(51) et seq. Section 2 of 1968 PA 317 generally prohibits public servants from being interested in, soliciting, negotiating or approving contracts with the public entity they serve. Sections 3, 3a and 4 of the statute then create some exceptions to that general rule.

You first ask whether 1968 PA 317 applies to members of county boards of commissioners, city councils, township boards, and members of any other public bodies that county boards of commissioners, city councils and township boards may establish by law. Section 1(a) of 1968 PA 317 defines "public servant" as follows:

Section 1(b) of 1968 PA 317, in turn, defines "public entity" as follows:

These definitions are very broad, and clearly cover officers and employees of all public bodies, with the exception of members of the Legislature and state officers who fall within the purview of Const 1963, art 4, s 10, and its implementing legislation, 1968 PA 318, MCL 15.301 et seq; MSA 4.1700(21) et seq. Accordingly, both the courts of this state and this office have applied 1968 PA 317 to various local officials. See, e.g., Van Buren Twp v Ackron, 63 Mich App 600; 234 NW2d 722 (1975); OAG, 1979-1980, No 5685, p 703 (April 9, 1980); OAG, 1985-1986, No 6276, p 26 (March 1, 1985); OAG, 1989-1990, No 6563, p 27 (January 26, 1989).

It is my opinion, therefore, in answer to your first question, that 1968 PA 317 applies to members of county boards of commissioners, city councils, township boards, and members of any other public bodies that county boards of commissioners, city councils and township boards may establish by law. ⁽¹⁾

You next ask whether the Legislature intended that 1968 PA 317 constitute the sole law regarding conflicts of interest arising out of public contracts involving public servants. The answer to your second question is found in section 8 of 1968 PA 317, which states:

Thus, the Legislature has clearly stated its intent that 1968 PA 317 "shall constitute the sole law in this state and shall supersede all other acts in respect to conflicts of interest relative to public contracts involving public servants."

It is my opinion, therefore, in answer to your second question, that the Legislature intended that 1968 PA 317 constitute the sole law regarding conflicts of interest arising out of public contracts involving public servants.

Your third question is whether 1968 PA 317 supersedes sections 30 and 31 of the statute governing county boards of commissioners, 1851 PA 156, MCL 46.1 et seq; MSA 5.321 et seq. Since section 30 of 1851 PA 156 is specifically mentioned in section 8 of 1968 PA 317, the effect of that section on section 30 will be addressed first.

As noted above, section 8 of 1968 PA 317 specifies that the act supersedes "subsection (3) of section 30 of Act No. 156 of the Public Acts of 1851." When 1968 PA 317 was enacted, subsection (3) of section 30 of 1851 PA 156 provided:

The answer to your question is further complicated, however, by the fact that, seven years after the passage of 1968 PA 317, the Legislature amended section 30 of 1851 PA 156 by 1975 PA 206. By this amendment, the Legislative eliminated every subsection of section 30 except subsection (3), which then became the whole of section 30. Thus, the Legislature rewrote section 30 to include only the language that was supposedly superseded by 1968 PA 317. Arguably, this change may evidence a legislative intent that section 30 be a viable provision as to contractual conflicts of interest involving county commissioners.

Unfortunately, the legislative history of 1975 PA 206 provides little guidance as to the Legislature's intent in eliminating all of section 30 of 1851 PA 156 except that portion already superseded by 1968 PA 317. As 1975 PA 206 was originally introduced (as HB 4811), and as it originally passed the House of Representatives, it only amended section 11 of 1851 PA 156 and added section 11b to that statute. 1975 Journal of the House 844. HB 4811 was amended in the Senate to include language amending section 30. 1975 Journal of the Senate 1777, 1791, 1830. The only legislative analysis of HB 4811 was written prior to the amendments made in the Senate, and merely discusses the addition of section 11b, allowing county boards of commissioners to enter into installment contracts for the purchase of land, property or equipment. House Legislative Analysis, HB 4811, June 5, 1975. Thus, there is insufficient evidence of the Legislature's intent in amending section 30 of 1851 PA 156 to warrant a conclusion that the Legislature intended to render the superseded language of section 30(3) viable, contrary to the clear expression of legislative intent found in section 8 of 1968 PA 317 that there be statewide uniformity in the statutory rules concerning contractual conflicts of interest involving public servants.

In addition, whatever the Legislature's purpose in leaving the language of subsection (3) of section 30 intact while eliminating the remainder of section 30, the fact remains that the Legislature made no changes whatsoever to the language of subsection (3). The Legislature has established numerous rules of statutory construction in MCL 8.3 et seq; MSA 2.212 et seq. In particular, MCL 8.3u; MSA 2.212(21) reads as follows:

Thus, since the language of subsection (3) of section 30 of 1851 PA 156 remained unchanged by 1975 PA 206, section 30, as it now exists, should not be considered a new enactment. Since section 30 is merely a continuation of section 30(3) as it existed at the time of the enactment of 1968 PA 317, that statute supersedes section 30 just as it superseded section 30(3).

It should also be noted that, in addition to covering conflicts of interest arising out of public contracts, section 30 of 1851 PA 156 covers conflicts of interest arising out of "other business transaction[s]." In expressly indicating the Legislature's intent that 1968 PA 317 supersede what is now section 30 of 1851 PA 156, section 8 of 1968 PA 317 states generally that the act supersedes "all other acts in respect to conflicts of interest relative to public contracts." (Emphasis added.) Thus, there is a question whether 1968 PA 317 supersedes section 30 completely, or only to the extent that section 30 governs conflicts of interest arising out of contracts.

The rules of statutory construction governing implied repeals of statutes is helpful in analyzing this situation. Generally, the courts of this state are reluctant to find that a statute has been repealed by implication, but will do so in two instances: (1) when a subsequent legislative act conflicts with a prior act; or (2) when a subsequent act is intended to occupy the entire field covered by a prior act. House Speaker v State Administrative Bd, 441 Mich 547, 561-563; 495 NW2d 539 (1993). Applying a similar standard to determine whether the Legislature intended that 1968 PA 317 supersede section 30 of 1851 PA 156 in its entirety requires that we examine whether the two statutes conflict with regard to non-contractual conflicts of interest and whether 1968 PA 317 occupies the entire field covered by section 30 of 1851 PA 156.

As 1968 PA 317 was originally written, it clearly applied only to conflicts of interest arising out of public contracts. Through 1982 PA 207, however, the Legislature added subsection (2) to section 3 of 1968 PA 317 to read, ⁽²⁾ in pertinent part, as follows:

In a Letter Opinion of the Attorney General to Senator Robert Young dated August 12, 1982, this office noted that the addition of the reference to "governmental decisions" in section 3(2) might have violated the title-object clause of Const 1963, art 4, s 24, since the title of 1968 PA 317 only referred to contracts and not to other governmental decisions. Subsequently, the Legislature passed 1984 PA 81, which amended the title of 1968 PA 317 to read: "[a]n act relating to the conduct of public servants in respect to governmental decisions and contracts with public entities." (Emphasis added.)

Do these amendments to 1968 PA 317 indicate that the act covers both contractual and non-contractual conflicts of interest? The answer is no, since 1968 PA 317 still contains no language prohibiting conflicts of interest arising out of non-contractual decisions. Since section 30 of 1851 PA 156 does expressly prohibit members of the county board of commissioners from being directly or indirectly interested in "business transactions" other than contracts, the two acts are not really in conflict on this issue.

Thus, 1968 PA 317 conflicts with section 30 of 1851 PA 156 only to the extent that both deal with conflicts of interest arising out of public contracts. In addition, despite the reference to "governmental decisions" in the title and section 3(3) of 1968 PA 317, section 8 of the act contains no reference to "governmental decision" and says only that the act constitutes the sole law of this state with respect to conflicts of interest regarding public contracts. Accordingly, there is no basis to infer a legislative intent that 1968 PA 317 occupy the entire field of non-contractual conflicts of interest. Therefore, 1968 PA 317 does not supersede section 30 of 1851 PA 156 to the extent that section 30 covers non-contractual conflicts of interest.

You have also asked whether 1968 PA 317 supersedes section 31 of 1851 PA 156. Section 31(1) ⁽³⁾ provides, in pertinent part, as follows:

Research has failed to reveal any authority applying section 31(1) to violations of the conflict of interest prohibitions of section 30. Nonetheless, section 31(1) could apply to violations of section 30, if section 30 is construed as imposing a duty to avoid conflicts of interest. To the extent that section 31 could penalize a county commissioner for a conflict of interest arising out of a public contract, 1968 PA 317 supersedes section 31. Otherwise, section 31 remains a viable provision unaffected by 1968 PA 317.

It is my opinion, therefore, in answer to your third question, that 1968 PA 317 supersedes section 30 of 1851 PA 156 to the extent that section 30 deals with conflicts of interest arising out of public contracts, and that 1968 PA 317 only supersedes section 31 of 1851 PA 156 to the extent that section 31 could penalize a county commissioner for a conflict of interest arising out of a public contract.

Frank J. Kelley

Attorney General