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
CONSTITUTIONAL LAW:
INCOMPATIBILITY:
LEGISLATURE:
PUBLIC OFFICES AND OFFICERS:
Legislator serving as director or officer of county agricultural society
Const 1963, art 4, � 8, does not prohibit a state legislator from simultaneously serving as a director or officer of a county nonprofit agricultural society established under the agricultural society act, 1855 PA 80.
The incompatible public offices act, 1978 PA 566, does not prohibit a state legislator from serving as a director or officer of a county nonprofit agricultural society established under the agricultural society act, 1855 PA 80.
Opinion No. 6983
May 28, 1998
Honorable Michael E. Nye
State Representative
The Capitol
Lansing, MI
You have asked two questions concerning whether a state legislator may simultaneously serve as a director or officer of a county nonprofit agricultural society.
Your first question asks whether Const 1963, art 4, � 8, prohibits a state legislator from simultaneously serving as a director or officer of a county nonprofit agricultural society established under the agricultural society act, 1855 PA 80.
In Const 1963, art 4, � 8, the people have provided:
No person holding any office, employment or position under the United States or this state or a political subdivision thereof, except notaries public and members of the armed forces reserve, may be a member of either house of the legislature.
This constitutional provision applies in the converse by prohibiting state legislators from simultaneously holding an office, employment or position under the federal, state or local government. See, OAG, 1987-1988, No 6440, p 96, 98 (June 2, 1987); OAG, 1981-1982, No 6075, p 672 (June 14, 1982).
Since Const 1963, art 4, � 8, expressly applies to state legislators, it must be determined whether serving as a director or officer of a county nonprofit agricultural society constitutes holding an "office, employment or position under the United States or this state or a political subdivision thereof." This analysis requires an examination of the statute creating agricultural societies.
The agricultural society act, 1855 PA 80, MCL 453.231 et seq; MSA 21.441 et seq, provides that any ten or more persons residing in a county, township, city or village or in any two contiguous entities, may establish and incorporate a local agricultural or horticultural society. Section 1. Pursuant to the articles of incorporation, the society's board of directors consisting of at least five members may be elected by the society's shareholders. Section 4. Society officers are elected by the corporation's board of directors. Id. The duties of the corporate society's directors and officers include management of the corporation's property and business so as to promote the interests of educational, agricultural, horticultural and mechanical arts. Id. Finally, an agricultural society may hold fairs, exhibitions, and may sell real estate. Sections 4 and 6.
According to information provided by your office, the county fair society implicated in your question is a nonprofit corporation. Although nonprofit corporations may be public entities for purposes of Const 1963, art 4, � 8, or the incompatible public offices act, 1978 PA 566, infra, an agricultural society formed under 1855 PA 80 "though it differs from the ordinary business corporation . . . is nevertheless to be classified as a private corporation." Ismon v Loder, 135 Mich 345, 350-51; 197 NW 769 (1904). In Ismon, the court specifically rejected the contention that an agricultural society was a public corporation. Id. at 350.
Although agricultural societies formed as nonprofit corporations may receive some public funding, this fact alone is insufficient to transform the society into a public entity. Regualos v Community Hospital, 140 Mich App 455, 461; 364 NW2d 723 (1985). For example, a nonprofit mental health care facility receiving 99.5% of its annual budget from public funds is not considered to be a public agency for purposes of the Governmental Immunity Act. Jackson v New Center Community Mental Health Services, 158 Mich App 25, 33-35; 404 NW2d 688 (1987). Similarly, a nonprofit corporation that is funded almost entirely through public sources does not thereby subject the nonprofit corporation to liability under 42 USC 1983. Adams v Vandemark, 855 F2d 312, 316 (CA 6, 1988), cert den 488 U S 1042 (1989). Accordingly, without more, a county agricultural society’s receipt of public funds in amounts far less than the public funding involved in Jackson and Adams, supra, is insufficient to transform the society into a public entity for purposes of Const 1963, art 4, � 8, or the incompatible public offices act, 1978 PA 566, infra.
Prior opinions of this office conclude that in order for a nonprofit corporation to constitute a public entity for purposes of Const 1963, art 4, � 8, or the incompatible offices act, a local governing body must possess significant control over the appointment and removal of the corporation's directors. See e.g., OAG, 1975-1976, No 5047 p 495 (June 11, 1976) (economic development corporation constitutes a public office for purposes of incompatible offices act); OAG, 1993-1994, No 6781, p 93 (January 7, 1994) (municipal health facility constitutes a public office for purposes of incompatible offices act); OAG, 1987-1988, No 6527, p 354 (June 28, 1988) (county waste planning committee constitutes a public office for purposes of Const 1963, art 4, � 8).
Unlike the entities analyzed in the above opinions, however, the agricultural society act contains no provision through which a local governing body may control the organization, operation, or membership of a local agricultural society. To the contrary, an agricultural society is more similar to the entity analyzed in OAG, 1995-1996, No 6860, p 69, 73 (July 19, 1995), which concluded that a nonprofit corporation that provided housing to teachers within a school district was not a public entity for purposes of the incompatible offices act. In fact, the entity examined in that opinion involved "a private corporation which happens to have been created by and which is currently run by persons who happen to be public officials." OAG, 1995-1996, No 6860, supra, at 72. It must, therefore, be concluded that serving as a director or officer of a county agricultural society does not constitute an "office, employment or position under the United States or this state or a political subdivision thereof" for purposes of Const 1963, art 4, � 8.
It is my opinion, therefore, in answer to your first question, that Const 1963, art 4, � 8, does not prohibit a state legislator from simultaneously serving as a director or officer of a county nonprofit agricultural society established under the agricultural society act, 1855 PA 80.
Your second question asks whether the incompatible public offices act, 1978 PA 566, prohibits a state legislator from simultaneously serving as a director or officer of a county nonprofit agricultural society established under the agricultural society act, 1855 PA 80.
The incompatible public offices act, 1978 PA 566, MCL 15.181 et seq; MSA 15.1120(121) et seq, generally prohibits individuals from serving two or more incompatible public offices. Section 2. Section 1(b) of the act defines incompatible public offices as follows:
"Incompatible offices" means public offices held by a public official which, when the official is performing the duties of any of the public offices held by the official, results in any of the following with respect to those offices held:
(i) The subordination of 1 public office to another.
(ii) The supervision of 1 public office by another.
(iii) A breach of duty of public office.
Similar to Const 1963, art 4, � 8, supra, the incompatible offices act implicates the simultaneous holding of two public offices. Section 1 of this act defines the term public offices to include the following:
(d) "Public employee" means an employee of this state, an employee of a city, village, township, or county of this state, or an employee of a department, board, agency, institution, commission, authority, division, council, college, university, school district, intermediate school district, special district, or other public entity of this state or of a city, village, township, or county in this state, but does
not include a person whose employment results from election or appointment.
(e) "Public officer" means a person who is elected or appointed to any of the following:
(i) An office established by the state constitution of 1963.
(ii) A public office of a city, village, township, or county in this state.
(iii) A department, board, agency, institution, commission, authority, division, council, college, university, school district, intermediate school district, special district, or other public entity of this state or a city, village, township, or county in this state.
Applying the authorities cited in response to your first question, it must be concluded that a local nonprofit agricultural society formed under the agricultural society act is not a public entity for purposes of the incompatible offices act. Similarly, a director or officer of a local nonprofit agricultural society is not a public officer or public employee for purposes of the incompatible public offices act.
It is my opinion, therefore, in answer to your second question, that the incompatible public offices act, 1978 PA 566, does not prohibit a state legislator from serving as a director or officer of a county nonprofit agricultural society established under the agricultural society act, 1855 PA 80.
FRANK J. KELLEY
Attorney General