Can a member of a Tennessee economic development board personally benefit, including by selling land, from a deal involving a company the board helped recruit to the county?

Subject

Joint Economic and Community Development Boards, January 20, 2012

Plain-English summary

Tennessee counties form Joint Economic and Community Development Boards (JECDs) by interlocal agreement under Tenn. Code Ann. §§ 5-1-113 and 6-58-114(b). The boards bring together county and city officials to recruit businesses, coordinate development, and support local economic growth. Representative Hensley asked whether a JECD member of the Lawrence County board could lawfully benefit personally from board activity, and specifically whether the member could sell land to a company the board had recruited to the county.

The AG's answer turned on the conflict-of-interest framework in Tenn. Code Ann. § 12-4-101 and on Tennessee's broader common-law policy that public officials must not place themselves in a position where personal interest conflicts with public duty.

Direct interest in board-supervised contracts is forbidden. Under § 12-4-101(a)(1), a board member could not be directly interested in a contract the member had a duty to vote on, let out, look over, or supervise. "Directly interested" reached the member personally, plus any business in which the member was sole proprietor, partner, or holder of the controlling interest.

Indirect interest must be publicly disclosed. Under § 12-4-101(b), the member had to publicly disclose any indirect pecuniary interest in a contract the board had a duty to vote on, let out, look over, or supervise. "Indirectly interested" was read to mean a pecuniary interest that was not direct.

A private land sale to a recruited company. The AG concluded that, in the ordinary case, the board has no duty to vote on, let out, look over, or supervise a sale of land from a private individual to a privately-owned business. So § 12-4-101(a) does not prohibit a board member from selling land directly to a recruited company. The answer changed if the board was financing the sale, was a party to the contract, or had a supervisory role over the purchase.

Disclose when in doubt. Even when the technical conflict-of-interest statute does not apply, the AG strongly recommended public disclosure of any potential conflict when the board recruited a company and a member could benefit from a private land sale to that company. Tennessee's common-law policy resolved ambiguity in favor of disclosure.

The AG also flagged that the interlocal agreement creating a particular board, its bylaws, or its third-party contracts could impose stricter standards than § 12-4-101, and that whether a conflict existed in any particular case was fact-dependent.

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Tenn. Code Ann. § 12-4-101 has been amended since 2012. A board member facing a conflict question today should consult the current statute, the board's interlocal agreement, and current ethics counsel.

Background and statutory framework

Statutory authority for JECDs. Tenn. Code Ann. § 5-1-113 lets a county legislative body and one or more cities within the county enter into agreements to operate joint services. Tenn. Code Ann. § 6-58-114(b) requires every county to establish a joint economic and community development board through an interlocal agreement under § 5-1-113.

The direct-interest prohibition. Tenn. Code Ann. § 12-4-101(a)(1) makes it unlawful for any officer, committee member, director, or other person whose duty it is to vote on, let out, look over, or supervise any work or contract in which a county, state, development district, or other political subdivision may be interested, to be directly interested in that contract. The statute defines "directly interested" to mean a contract with the official personally or with a business in which the official is sole proprietor, partner, or controlling-interest holder.

The indirect-interest disclosure rule. Tenn. Code Ann. § 12-4-101(b) requires the same officials to publicly disclose any indirect pecuniary interest in the same kinds of contracts. The statute defines "indirectly interested" as an interest that is not direct, plus, by statutory definition, contracts in which the officer is the sole supplier of goods or services in a municipality or county.

Common-law backdrop. Tennessee follows the rule that public office is a trust and the duties of office must be exercised with fairness and impartiality. The good faith of the officer is irrelevant: the rule exists to prevent influence by anything other than the public good. See Op. Tenn. Att'y Gen. 85-036; Anderson v. City of Parsons (Kan. 1972); the recusal rule that Thomas Jefferson adopted as President of the Senate, quoted in Nevada Commission on Ethics v. Carrigan (2011).

Common questions

Q: My economic development board recruited Acme Corp. to the county. I own farmland Acme wants to buy. Can I sell?
A: Under the AG's analysis: if the board has no duty to vote on, let out, look over, or supervise the land sale itself, the direct-interest bar in § 12-4-101(a) does not apply. The cautious move is to publicly disclose on the record at a board meeting, recuse from any board vote tied to the recruitment, and check the board's interlocal agreement and bylaws for stricter rules.

Q: What if the board is the buyer, or is financing the deal?
A: Different answer. Then the board does have a duty to vote on, let out, look over, or supervise the contract, and the member's direct interest in selling the land would run into § 12-4-101(a)(1).

Q: What is the practical difference between "directly interested" and "indirectly interested"?
A: "Directly interested" reaches the member personally or a business the member controls. "Indirectly interested" picks up other pecuniary stakes the member has in the contract. Direct interest is a bar. Indirect interest is a disclosure obligation.

Q: Does an honest, good-faith deal cure the problem?
A: No. The rule exists to prevent influence regardless of good faith. The point is appearance and structural impartiality, not subjective intent.

Q: Do these rules apply to a county commissioner who serves on the JECD?
A: Yes, and additional rules may apply to county commissioners as members of the local governing body. The opinion focused on JECD members generally; a commissioner-member is subject to both sets of standards.

Citations and references

Statutes:

• Tenn. Code Ann. § 12-4-101(a)(1) (direct interest in public contracts)
• Tenn. Code Ann. § 12-4-101(b) (disclosure of indirect interest)
• Tenn. Code Ann. § 5-1-113 (interlocal agreements)
• Tenn. Code Ann. § 6-58-114(b) (JECD requirement)

Cases:

• Nevada Commission on Ethics v. Carrigan, 131 S. Ct. 2343 (2011)
• Anderson v. City of Parsons, 496 P.2d 1333 (Kan. 1972)
• Low v. Madison, 60 A.2d 774 (Conn. 1948)
• Housing Authority of the City of New Haven v. Dorsey, 320 A.2d 820 (Conn. 1973)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2012/op12-009.pdf

Original opinion text

Conflicts of Interest: Joint Economic and Community Development Boards
QUESTIONS
Lbl1. Does it violate any Tennessee law for a member of the Joint Economic and
Community Development Board of Lawrence County to benefit, directly or indirectly, from the
Board's actions?
Lbl2. Does Tennessee law permit a member of the Joint Economic and Community
Development Board of Lawrence County to sell real property to a business the Board recruited to
locate in the county?
OPINIONS
Lbl1. Tennessee public policy strongly proscribes government officials from placing
themselves in a position in which personal interest conflicts with public duty. This policy is
reflected in the conflict of interest provisions governing the award of public contracts at Tenn. Code
Ann. § 12-4-101. These provisions are applicable to members of the Lawrence County Joint
Economic and Community Development Board ("the Board"). Under subsection (a)(1) of this
statute, a Board member may not be a direct party to a contract that he or she has a duty as a Board
member to vote for, let out, overlook, or superintend. Furthermore, any business in which the Board
member has the controlling interest may not be a party to a contract that the Board member has a
duty to vote for, let out, overlook, or superintend. Under subsection (b) of this statute, a Board
member must publicly disclose any indirect pecuniary interest in a contract that the member has an
official duty to vote for, let out, overlook, or superintend. Board members also may be subject to
stricter conflict of interest standards established by the Interlocal Agreement creating the Board, any
policies or bylaws governing the Board's operation or any third party contract to which the Board is a
party. Accordingly, whether a conflict of interest exists and the appropriate mitigation of any such
conflict of interest will necessarily depend on the specific facts and circumstances surrounding the
transaction.
Lbl2. Under Tenn. Code Ann. § 12-4-101 the Board would have no duty to vote for, let
out, overlook, or superintend a sale of land from a private individual to a privately owned business.
Thus, Tenn. Code Ann. § 12-4-101(a) would not prohibit a Board member from entering into such a
contract. The answer might be different if the Board were financing the sale, were a party to the
contract, or played some other supervisory role in purchasing the land. By its terms, Tenn. Code
Page 2
Ann. § 12-4-101(b) requires a Board member to disclose an indirect pecuniary interest in a contract
that the Board has a duty to vote for, let out, overlook, or superintend. Such disclosure would
include a Board member benefiting by the sale of real property to an entity seeking such a contract.
If the Board has no such duty to vote for, let out, overlook or superintend the contract, then Tenn.
Code Ann. § 12-4-101(b) would not apply. Nonetheless, given Tennessee’s strong public policy
disfavoring conflicts between an official’s public duties and his or her personal interests, any doubt
should be resolved in favor of the Board member at least making a public disclosure of his or her
possible conflict of interest where the Board recruits a company to the countyand the Board member
may benefit from a sale of real property to the recruited company.
ANALYSIS
This opinion concerns the existence of potential conflicts of interest, and how to mitigate
such conflicts, for members of the Joint Economic and CommunityDevelopment Board of Lawrence
County, Tennessee. Tenn. Code Ann. § 5-1-113 authorizes the county commission and legislative
body of one or more cities within the county
to enter into any such agreements, compacts or contractual relations as may be
desirable or necessary for the purpose of permitting the county and the municipality
or municipalities to conduct, operate or maintain, either jointly or otherwise,
desirable and necessary services or functions, under such terms as may be agreed
upon by the county legislative body and the chief legislative bodyof the municipality
or the chief legislative bodies of the municipalities.
Tenn. Code Ann. § 5-1-113. Tenn. Code Ann. § 6-58-114(b) requires each countyto establish a joint
economic and community development board by an interlocal agreement under Tenn. Code Ann. §
5-1-113.
The Board under consideration was established by an interlocal agreement among Lawrence
County, Tennessee, and the cities of Lawrenceburg, Loretto, Ethridge, and St. Joseph, in accordance
with these statutes. See Laura J. Newcome, Independent Auditor’s Report on Joint Economic and
Community Development Board of Lawrence County, Tennessee (Dec. 16, 2010), at 4,
http://www.comptroller1.state.tn.us/ca/index.asp. The Board is charged with fostering
communication and facilitating economic and community development between and among
governmental entities, industry and private citizens. Id.
The question posed is whether a member of the Board may personally benefit, directly or
indirectly, from the Board’s activities. Both Tennessee and federal law have long recognized that
public officials have a responsibility to mitigate conflicts of interest between their public duties and
their personal interests. The United States Supreme Court has recentlyarticulated the historyof such
standards, citing among other examples Thomas Jefferson’s adoption of a recusal rule when he was
President of the United States Senate. This rule stated:
Ann. § 12-4-101(b) requires a Board member to disclose an indirect pecuniary interest in a contract
that the Board has a duty to vote for, let out, overlook, or superintend. Such disclosure would
include a Board member benefiting by the sale of real property to an entity seeking such a contract.
If the Board has no such duty to vote for, let out, overlook or superintend the contract, then Tenn.
Code Ann. § 12-4-101(b) would not apply. Nonetheless, given Tennessee's strong public policy
disfavoring conflicts between an official's public duties and his or her personal interests, any doubt
should be resolved in favor of the Board member at least making a public disclosure of his or her
possible conflict of interest where the Board recruits a company to the county and the Board member
This opinion concerns the existence of potential conflicts of interest, and how to mitigate
such conflicts, for members of the Joint Economic and Community Development Board of Lawrence
County, Tennessee. Tenn. Code Ann. § 5-1-113 authorizes the county commission and legislative
to enter into any such agreements, compacts or contractual relations as may be
desirable or necessary for the purpose of permitting the county and the municipality
or municipalities to conduct, operate or maintain, either jointly or otherwise,
desirable and necessary services or functions, under such terms as may be agreed
upon by the county legislative body and the chief legislative body of the municipality
Tenn. Code Ann. § 5-1-113. Tenn. Code Ann. § 6-58-114(b) requires each county to establish a joint
economic and community development board by an interlocal agreement under Tenn. Code Ann. §
5-1-113.
The Board under consideration was established by an interlocal agreement among Lawrence
County, Tennessee, and the cities of Lawrenceburg, Loretto, Ethridge, and St. Joseph, in accordance
with
these statutes. See Laura J. Newcome, Independent Auditor's Report on Joint Economic and
Community Development Board of Lawrence County, Tennessee (Dec. 16, 2010), at 4,
The Board is charged with fostering
communication and facilitating economic and community development between and among
The question posed is whether a member of the Board may personally benefit, directly or
indirectly, from the Board's activities. Both Tennessee and federal law have long recognized that
public officials have a responsibility to mitigate conflicts of interest between their public duties and
their personal interests. The United States Supreme Court has recently articulated the history of such
standards, citing among other examples Thomas Jefferson's adoption of a recusal rule when he was
Page 3
Where the private interests of a member are concerned in a bill or question, he is to
withdraw. And where such interest has appeared, his voice [is] disallowed, even
after a division. In a case so contrary not only to the laws of decency, but to the
fundamental principles of the social compact, which denies to any man to be a judge
in his own case, it is for the honor of the house that this rule, of immemorial
observance, should be strictly adhered to.
Nevada Commission on Ethics v. Carrigan, U.S., 131 S. Ct. 2343, 2348 (2011) (quoting A
Manual of Parliamentary Practice for the Use of the Senate of the United States 31 (1801)). The
Court further observed that a “number of States, by common-law rule, have long required recusal of
public officials with a conflict.” Id. at 2349.
Similarly Tennessee recognizes a strong common law policy that precludes public officials
from placing themselves in a position where their personal interests conflict with their public duties.
As this Office has observed:
At common law, “the essence of the offense [of having a conflict of interest]
was acting or appearing to act inconsistently with the best interest of the public…”
Note: Conflicts of Interests: State Government Employees, 47 Va. L.R. at 1048. In
Anderson v City of Parsons, 209 Kan. 337, 496 P.2d 1333 (1972), the common law
principle was described as not permitting the public officer “to place himself in a
position that will subject him to conflicting duties or cause him to act other than for
the best interests of the public.” Id. at 1337. This policy is not limited to a single
category of officers, but applies to all public officials. Low v. Madison, 135 Conn. 1,
60 A.2d 774 (1948); Housing Authority of the City of New Haven v. Dorsey, 164
Conn. 247, 320 A.2d 820 (1973), cert. denied 414 U.S. 1043.
The common law principle has been followed in several opinions of this
office. For example, this office has stated:
[t]here exists a strong public policy which opposes an official placing
himself in a position in which personal interest may conflict with
public duty…A public office is a trust conferred by the public. The
duties of that office must be exercised with fairness and impartiality.
The good faith of the officer is not a consideration, for the policy
exists to prevent an officer being influenced by anything other than
the public good.
Op. Att. Gen. 83-278 (August 15, 1983). See also, Op. Att. Gen. 78-088 (May 16,
1978).
Op. Tenn. Att’y Gen. 85-036, at 2 (February 14, 1985).
Where the private interests of a member are concerned in a bill or question, he is to
withdraw. And where such interest has appeared, his voice [is] disallowed, even
after a division. In a case so contrary not only to the laws of decency, but to the
fundamental principles of the social compact, which denies to any man to be a judge
in his own case, it is for the honor of the house that this rule, of immemorial
Nevada Commission on Ethics v. Carrigan, U.S. , 131 S. Ct. 2343, 2348 (2011) (quoting A
Manual of Parliamentary Practice for the Use of the Senate of the United States 31 (1801)). The
Court further observed that a "number of States, by common-law rule, have long required recusal of
public officials with a conflict." Id. at 2349.
Similarly Tennessee recognizes a strong common law policy that precludes public officials
from placing themselves in a position where their personal interests conflict with their public duties.
At common law, "the essence of the offense [of having a conflict of interest]
was acting or appearing to act inconsistently with the best interest of the public "
Note: Conflicts of Interests: State Government Employees, 47 Va. L.R. at 1048. In
Anderson v City of Parsons, 209 Kan. 337, 496 P.2d 1333 (1972), the common law
principle was described as not permitting the public officer "to place himself in a
position that will subject him to conflicting duties or cause him to act other than for
the best interests of the public." Id. at 1337. This policy is not limited to a single
category of officers, but applies to all public officials. Low v. Madison, 135 Conn. 1,
60 A.2d 774 (1948); Housing Authority of the City of New Haven v. Dorsey, 164
The common law principle has been followed in several opinions of this
[t]here exists a strong public policy which opposes an official placing
himself in a position in which personal interest may conflict with
public duty A public office is a trust conferred by the public. The
duties of that office must be exercised with fairness and impartiality.
The good faith of the officer is not a consideration, for the policy
exists to prevent an officer being influenced by anything other than
Op. Att. Gen. 83-278 (August 15, 1983). See also, Op. Att. Gen. 78-088 (May 16,
Op. Tenn. Att'y Gen. 85-036, at 2 (February 14, 1985).
Page 4
Thus, a public office is a trust conferred by the public. The duties of that office must be
exercised with fairness and impartiality. The good faith of the officer is not a consideration because
the policy exists to prevent an officer from being influenced by anything other than the public good.
Tennessee’s common law policy is reflected in the general conflict of interest standards for
public officials, including members of the Board, set forth at Tenn. Code Ann. § 12-4-101. This
statute addresses contracts that a State or local officer has a duty to let out or superintend. Under
subsection (a) of this statute, a State or local officer may not be directly interested in any contract
that he or she has an official duty to “vote for, let out, overlook, or in any manner to superintend.”
The statute provides in relevant part:
It is unlawful for any officer, committee member, director, or other person whose
duty it is to vote for, let out, overlook, or in any manner to superintend any work or
any contract in which any municipal corporation, county, state, development district,
utility district, human resource agency, or other political subdivision created by
statute shall or may be interested, to be directly interested in such contract. “Directly
interested” means any contract with the official personally or with any business in
which the official is the sole proprietor, a partner, or the person having the
controlling interest. “Controlling interest” includes the individual with the ownership
or control of the largest number of outstanding shares owned byanysingle individual
or corporation. This subdivision (a)(1) shall not be construed to prohibit any officer,
committeeperson, director, or any person, other than a member of a local governing
body of a county or municipality, from voting on the budget, appropriation
resolution, or tax rate resolution, or amendments thereto, unless the vote is on a
specific amendment to the budget or a specific appropriation or resolution in which
such person is directly interested.
Tenn. Code Ann. § 12-4-101(a)(1) (emphasis added). Under this provision, a Board member may
not be a direct party to a contract that he or she has a duty as a Board member to vote for, let out,
overlook, or superintend. In addition, any business in which the Board member has the controlling
interest may not be a party to a contract that the Board member has a duty to vote for, let out,
overlook, or superintend.
Tenn. Code Ann. § 12-4-101(b) further provides that a State or local officer must publicly
disclose any indirect interest in a contract that he or she has the official duty to vote for, let out,
overlook, or superintend. The statute includes any contract in which the officer is interested, but not
directly so. Subsection (b) provides:
It is unlawful for any officer, committee member, director, or other person whose
duty it is to vote for, let out, overlook, or in any manner to superintend any work or
any contract in which any municipal corporation, county, state, development district,
utility district, human resource agency, or other political subdivision created by
statute shall or may be interested, to be indirectly interested in any such contract
Thus, a public office is a trust conferred by the public. The duties of that office must be
exercised with fairness and impartiality. The good faith of the officer is not a consideration because
the policy exists to prevent an officer from being influenced by anything other than the public good.
Tennessee's common law policy is reflected in the general conflict of interest standards for
public officials, including members of the Board, set forth at Tenn. Code Ann. § 12-4-101. This
statute addresses contracts that a State or local officer has a duty to let out or superintend. Under
subsection (a) of this statute, a State or local officer may not be directly interested in any contract
that he or she has an official duty to "vote for, let out, overlook, or in any manner to superintend."
It is unlawful for any officer, committee member, director, or other person whose
duty it is to vote for, let out, overlook, or in any manner to superintend any work or
any contract in which any municipal corporation, county, state, development district,
utility district, human resource agency, or other political subdivision created by
statute shall or may be interested, to be directly interested in such contract. "Directly
interested" means any contract with the official personally or with any business in
which the official is the sole proprietor, a partner, or the person having the
controlling interest. "Controlling interest" includes the individual with the ownership
or control of the largest number of outstanding shares owned by any single individual
or corporation. This subdivision (a)(1) shall not be construed to prohibit any officer,
committeeperson, director, or any person, other than a member of a local governing
body of a county or municipality, from voting on the budget, appropriation
resolution, or tax rate resolution, or amendments thereto, unless the vote is on a
specific amendment to the budget or a specific appropriation or resolution in which
Tenn. Code Ann. § 12-4-101(a)(1) (emphasis added). Under this provision, a Board member may
not be a direct party to a contract that he or she has a duty as a Board member to vote for, let out,
overlook, or superintend. In addition, any business in which the Board member has the controlling
interest may not be a party to a contract that the Board member has a duty to vote for, let out,
Tenn. Code Ann. § 12-4-101(b) further provides that a State or local officer must publicly
disclose any indirect interest in a contract that he or she has the official duty to vote for, let out,
overlook, or superintend. The statute includes any contract in which the officer is interested, but not
It is unlawful for any officer, committee member, director, or other person whose
duty it is to vote for, let out, overlook, or in any manner to superintend any work or
any contract in which any municipal corporation, county, state, development district,
utility district, human resource agency, or other political subdivision created by
statute shall or may be interested, to be indirectly interested in any such contract
Page 5
unless the officer publicly acknowledges such officer’s interest. “Indirectly
interested” means any contract in which the officer is interested but not directly so,
but includes contracts where the officer is directly interested but is the sole supplier
of goods or services in a municipality or county.
Tenn. Code Ann. § 12-4-101(b) (emphasis added). This Office has confirmed that the term
“indirectly interested” refers to a pecuniary interest. Op. Tenn. Att’yGen. 09-175, at 3 (November 6,
2009) (citing Op. Tenn. Att’y Gen. U96-043 (June 4, 1996)). Thus, a Board member must disclose
any indirect interest in a contract that the member has an official duty to vote for, let out, overlook,
or superintend.
In addition, Board members may be subject to stricter conflict of interest standards
established by the Interlocal Agreement creating the Board, any policies or bylaws governing the
Board’s operation or any third party contract to which the Board is a party. This Office has obtained
a copy of the Interlocal Agreement creating the Board and has observed no stricter conflict of interest
standard in the Agreement itself.
In sum, the aforementioned standards govern what actions a public official must take where
his or her personal interests directly or indirectly conflict with his or her public duties. Whether a
conflict of interest does exist and the appropriate mitigation of any such conflict will depend on the
specific facts and circumstances surrounding the transaction.
This request also asks whether Tennessee’s laws would prohibit a Board member from
selling real property to a business that the Board recruited to locate in the county. Again, a definitive
answer to this question would depend on all the facts and circumstances of the transaction, especially
the Board’s exact role in the recruitment of the company and the land sale. See Op. Tenn. Att’yGen.
04-016 (February 5, 2004) (sale of county commissioner’s land to county). This Office assumes the
Board member is selling land directly to the company. Ordinarily, the Board would have no duty to
vote for, let out, overlook, or superintend a sale of land from a private individual to a privately
owned business. Thus, Tenn. Code Ann. § 12-4-101(a) would not prohibit a Board member from
entering into the contract. The answer might be different if the Board were financing the sale, were a
party to the contract, or played some other supervisory role in purchasing the land. See Op. Tenn.
Att’y Gen. 98-221 (November 25, 1998) (member of industrial development board owning land
within industrial park); Op. Tenn. Att’y Gen. U95-061 (July 13, 1995) (conflict of interest of
member of industrial development board).
This same analysis should be applied to determine whether, under Tenn. Code Ann. § 12-4-
101(b), the Board member must disclose his or her sale of real property to a company the Board
recruited to locate in the county. By its terms, Tenn. Code Ann. § 12-4-101(b) applies when a Board
member has a pecuniary interest in a contract that the Board has a duty to vote for, let out, overlook,
or superintend. Thus, if the company has a contract that the Board has a duty to vote for, let out,
overlook, or superintend, the Board member selling real propertyto that companyin connection with
this contract is required to publicly disclose this interest. If the Board has no such duty with regard
unless the officer publicly acknowledges such officer's interest. "Indirectly
interested" means any contract in which the officer is interested but not directly so,
but includes contracts where the officer is directly interested but is the sole supplier
Tenn. Code Ann. § 12-4-101(b) (emphasis added). This Office has confirmed that the term
"indirectly interested" refers to a pecuniary interest. Op. Tenn. Att'y Gen. 09-175, at 3 (November 6,
2009) (citing Op. Tenn. Att'y Gen. U96-043 (June 4, 1996)). Thus, a Board member must disclose
any indirect interest in a contract that the member has an official duty to vote for, let out, overlook,
In addition, Board members may be subject to stricter conflict of interest standards
established by the Interlocal Agreement creating the Board, any policies or bylaws governing the
Board's operation or any third party contract to which the Board is a party. This Office has obtained
a copy of the Interlocal Agreement creating the Board and has observed no stricter conflict of interest
In sum, the aforementioned standards govern what actions a public official must take where
conflict of interest does exist and the appropriate mitigation of any such conflict will depend on the
This request also asks whether Tennessee's laws would prohibit a Board member from
selling real property to a business that the Board recruited to locate in the county. Again, a definitive
answer to this question would depend on all the facts and circumstances of the transaction, especially
the Board's exact role in the recruitment of the company and the land sale. See Op. Tenn. Att'y Gen.
04-016 (February 5, 2004) (sale of county commissioner's land to county). This Office assumes the
Board member is selling land directly to the company. Ordinarily, the Board would have no duty to
vote for, let out, overlook, or superintend a sale of land from a private individual to a privately
entering into the contract. The answer might be different if the Board were financing the sale, were a
Att'y Gen. 98-221 (November 25, 1998) (member of industrial development board owning land
within industrial park); Op. Tenn. Att'y Gen. U95-061 (July 13, 1995) (conflict of interest of
This same analysis should be applied to determine whether, under Tenn. Code Ann. § 12-4-
101(b), the Board member must disclose his or her sale of real property to a company the Board
recruited to locate in the county. By its terms, Tenn. Code Ann. § 12-4-101(b) applies when a Board
member has a pecuniary interest in a contract that the Board has a duty to vote for, let out, overlook,
or superintend. Thus, if the company has a contract that the Board has a duty to vote for, let out,
overlook, or superintend, the Board member selling real property to that company in connection with
this contract is required to publicly disclose this interest. If the Board has no such duty with regard
Page 6
to the company locating in the county, Tenn. Code Ann. § 12-4-101(b) would not apply.
Nonetheless, given the strong Tennessee policy disfavoring conflicts between an official’s public
duties and his or her personal interests, any doubt should be resolved by the Board member at least
making a public disclosure of his or her possible conflict of interest where the Board recruits a
company to the county and the Board member may benefit from a sale of real property to the
company recruited.
ROBERT E. COOPER, JR.
Attorney General and Reporter
WILLIAM E. YOUNG
Solicitor General
ANN LOUISE VIX
Senior Counsel
Requested by:
The Honorable Joey Hensley, MD
State Representative
106 War Memorial Building
Nashville, Tennessee 37243
to the company locating in the county, Tenn. Code Ann. § 12-4-101(b) would not apply.
Nonetheless, given the strong Tennessee policy disfavoring conflicts between an official's public
duties and his or her personal interests, any doubt should be resolved by the Board member at least
making a public disclosure of his or her possible conflict of interest where the Board recruits a
company to the county and the Board member may benefit from a sale of real property to the