What makes someone a 'duly qualified elector' for serving on a Tennessee industrial development corporation board, and what happens if an ineligible member voted?

Plain-English summary

The Industrial Development Corporation Act, Tenn. Code Ann. §§ 7-53-101 to 316, allows municipalities to set up "public corporations" to finance industry, commerce, tourism, and housing projects. Section 7-53-301 requires that directors be "duly qualified electors of and taxpayers in the municipality." District Attorney General Matthew Stowe asked four questions about how that requirement worked in practice.

What does "duly qualified elector" mean? The AG read the phrase to mean a person legally qualified to vote in an election of the relevant municipality, drawing on Trammell v. Griffin (1918) and Halbert v. Shelby County Election Commission (2000). Both Tennessee Supreme Court decisions held that "voter" in similar provisions means someone who meets the legal qualifications, not necessarily someone who has registered. Registration is procedural; the qualifications are constitutional and statutory (citizenship, age, residency). Under that reading, an unregistered but otherwise qualified resident could serve, and the AG noted that "qualifications" statutes are liberally construed in favor of eligibility for office.

What happens to votes by an ineligible member? Generally, they stand. Tennessee has long applied the de facto officer doctrine to validate the official acts of improperly seated public officers, on grounds of public policy. Heard v. Elliott (1906) and Roberts v. Hart (1901) are early statements of the rule, and it has been reaffirmed many times since. So past board actions, like financing approvals or property transactions, are not retroactively void merely because a director turned out to lack the qualifications.

Can the board cure prior votes? The AG suggested that as a precaution, once the board's membership is corrected, the newly constituted board may review and ratify, confirm, modify, or reject the earlier actions. The de facto doctrine already protects them, but a clean ratification removes ambiguity.

Is the ineligible member criminally liable? No specific statute reaches this. The general office-disqualification statute (Tenn. Code Ann. § 8-18-101) lists disqualifications like infamous-crime convictions and unpaid debts to the state, with a Class C misdemeanor for taking office under those disqualifications (§ 8-18-102). Failing the "qualified elector" requirement under § 7-53-301 is not on that list. The remedy is a civil quo warranto action under § 29-35-101(1), typically initiated by the district attorney general.

Currency note

This opinion was issued in 2015. 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.

Common questions

Q: Did an IDC board member have to be a registered voter?
A: No, under the AG's reading. The director had to be legally qualified to vote in an election of the municipality, but registration was not a prerequisite. The Tennessee Supreme Court drew this distinction in Trammell and reaffirmed it in Halbert: registration regulates the exercise of the right; the underlying qualifications are what the "qualified elector" language captures.

Q: What did "municipality" mean for this purpose?
A: Tenn. Code Ann. § 7-53-101(10) defined "municipality" as "any county or incorporated city or town in this state with respect to which a[n industrial development] corporation may be organized and in which it is contemplated the corporation will function." So a director for a county-organized IDC needed to be qualified to vote in that county's elections.

Q: How did the AG approach the taxpayer prong?
A: The opinion focused on the elector prong but noted Tenn. Att'y Gen. Op. 99-142 (1999), which read the parallel taxpayer requirement in § 7-53-201 generously, satisfied if the person "pays some type of municipal tax to the municipality."

Q: What was the de facto officer doctrine doing in this opinion?
A: It validated the past acts of a defectively seated board member, so that third parties dealing with the IDC and the public did not have to live in uncertainty about whether prior board actions were void. The doctrine has limits; the AG cited Kidd v. McCanless (1956) for the proposition that the doctrine does not apply when the officer acts in bad faith and the public knows of the lack of authority.

Q: Was a quo warranto action the only remedy?
A: For removal, yes, in practice. Tennessee Code Ann. § 29-35-101(1) authorizes quo warranto against any person "unlawfully holds or exercises any public office or franchise within this state, or any office in any corporation created by the laws of this state." The district attorney general typically initiates the action under § 29-35-109.

Background and statutory framework

Tennessee's Industrial Development Corporation Act, enacted in 1955, lets municipalities create "public corporations" to finance economic development. The IDC's board is elected by the municipality's governing body, and directors serve six-year terms without compensation beyond expense reimbursement (§ 7-53-301).

The "duly qualified elector" requirement appears both at the formation stage (§ 7-53-201, for incorporators) and at the board stage (§ 7-53-301, for directors). Reading "elector" as "legally qualified to vote, registered or not," is consistent with how the Tennessee Supreme Court has read parallel language in city-charter office-qualification provisions.

The de facto officer doctrine and quo warranto procedure are general remedies in Tennessee's public-officer law and apply across many types of boards and commissions, not just IDC boards.

Citations and references

Statutes:

• Tenn. Code Ann. §§ 7-53-101 to -316 (Industrial Development Corporation Act)
• Tenn. Code Ann. § 7-53-101(10) (definition of municipality)
• Tenn. Code Ann. § 7-53-201 (incorporator qualifications)
• Tenn. Code Ann. § 7-53-301 (director qualifications)
• Tenn. Code Ann. §§ 8-18-101, -102 (general office disqualifications and Class C misdemeanor)
• Tenn. Code Ann. § 29-35-101(1), § 29-35-109 (quo warranto)
• Tenn. Code Ann. §§ 2-1-104(a)(23), 2-2-102 (registered/qualified voter definitions)

Cases:

• Trammell v. Griffin, 207 S.W. 726 (Tenn. 1918) (voter means legally qualified, not registered)
• Halbert v. Shelby Cnty. Elec. Comm'n, 31 S.W.3d 246 (Tenn. 2000) (resident voter means legally qualified)
• Kidd v. McCanless, 292 S.W.2d 40 (Tenn. 1956) (de facto doctrine limits)
• Heard v. Elliott, 92 S.W. 764 (Tenn. 1906) (de facto officer doctrine)
• County Clubs, Inc. v. City of Knoxville, 395 S.W.2d 789 (Tenn. 1965) (acts of de facto officers valid)
• State ex rel. Newsom v. Biggers, 911 S.W.2d 715 (Tenn. 1995) (accord)
• State ex rel. Roberts v. Hart, 61 S.W. 780 (Tenn. 1901) (acts of school board with ineligible members upheld)

Related AG opinions:

• Tenn. Att'y Gen. Op. 99-077 (Apr. 5, 1999) (qualified voter definition)
• Tenn. Att'y Gen. Op. 99-142 (July 27, 1999) (taxpayer requirement, parallel construction)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2015/op15-72.pdf

Original opinion text

STATE OF TENNESSEE
OFFICE OF THE ATTORNEY GENERAL
November 3, 2015

Opinion No. 15-72

Industrial Development Corporations, Qualifications of Directors Serving on Boards

Question 1

What is the meaning of the phrase "duly qualified electors of . . . the municipality" in Tenn. Code Ann. § 7-53-301?

Opinion 1

A "duly qualified elector of . . . the municipality" means a person qualified to vote in an election of the "municipality," as that term is defined in Tenn. Code Ann. § 7-53-101(10).

Question 2

If it is determined that an individual serving on the board of an industrial development corporation is not a "duly qualified elector of . . . the municipality," what effect does that have on votes cast by that board member?

Opinion 2

In most instances, improperly appointed members of boards are viewed as de facto officers. The acts of de facto officers are considered valid. Thus, the participation of an ineligible member on board votes does not render the actions of the board invalid.

Question 3

What is the appropriate action for the board of an industrial development corporation to take to correct the votes of a board member who was not a "duly qualified elector of . . . the municipality" at the time of the member's vote?

Opinion 3

As stated above, improperly appointed members of boards are generally viewed as de facto officers, and acts of such officers are considered valid. Nevertheless, as a precaution, the board, once all of its members are appropriately appointed, may wish to review the actions taken by the earlier board and vote to ratify, confirm, modify, or reject such actions.

Question 4

Does a board member of an industrial development corporation bear criminal responsibility if he or she votes on an issue before the board at a time when he or she is not a "duly qualified elector of . . . the municipality"?

Opinion 4

There is no specific statute that imposes criminal sanctions upon a board member lacking the qualifications to serve on an industrial development board. The board member, though, is subject to removal through a quo warranto action. Although this action is civil in nature, it is generally initiated by the district attorney general.

ANALYSIS

In 1955, the Tennessee General Assembly enacted the Industrial Development Corporation Act, which is currently codified at Tenn. Code Ann. §§ 7-53-101 to 316. This Act authorizes the formation of corporations in the municipalities of this state for the purpose of financing and developing projects deemed by the Act to promote industry, trade, commerce, tourism, recreation, agriculture, and housing construction. Tenn. Code Ann. § 7-53-102(a). Corporations organized under the Act are "public corporations" and expressly "declared to be performing a public function in behalf of the municipality with respect to which the corporation is organized and to be a public instrumentality of such municipality." Id.; Tenn. Code Ann. § 7-53-305(a)(1).

The powers of an industrial development corporation are vested in a board of directors who are elected by the governing body of the municipality. Tenn. Code Ann. § 7-53-301. A director generally serves a six-year term without compensation, except for reimbursement of actual expenses incurred in the performance of his or her duties. Id. Persons elected to the board of directors must be "duly qualified electors of . . . and taxpayers in the municipality." Id.

1. "[D]uly qualified elector" is not a defined term in the Act. When a statutory term is not defined in an Act, courts often look to Black's Law Dictionary for guidance. See, e.g., State v. Edmondson, 231 S.W.3d 925, 928 (Tenn. 2007); State v. Fitz, 19 S.W.3d 213, 216 (Tenn. 2000).

A "qualified elector" is defined as "[a] legal voter; a person who meets the voting requirements for age, residency, and registration and who has the present right to vote in an election. See VOTER." Black's Law Dictionary 558 (8th ed. 2004). "Voter," in turn, is defined as follows:

1. A person who engages in the act of voting. 2. A person who has the qualifications necessary for voting. – Also termed (in sense 2) legal voter; qualified voter.

registered voter. A person who is qualified to vote and whose name is recorded in the voting district where he or she resides.

Id. at 1608. In short, a "qualified elector" is a "qualified voter" or "legal voter," a person who has the qualifications to vote. As discussed below, this definition is consistent with Tennessee cases that have construed the term "voter."

In Trammell v. Griffin, 141 Tenn. 139, 207 S.W. 726 (1918), the Tennessee Supreme Court construed the term "voter" in the city of Jellico charter. The charter required a mayoral candidate to be a "voter in said city." The Court was asked to determine if "voter" meant "a person having the qualifications entitling him to vote, or . . . a person who has registered and thus lawfully evidenced his right to vote." Id. at 141, 207 S.W. at 726. The Court concluded that "[a]n inspection of our election and registration laws demonstrates that the word 'voter' is used in the sense of one who is qualified to vote, and not in the sense of a registered voter." Id. at 144-45, 207 S.W. at 727. In reaching this conclusion, the Court relied on the principle that "[t]he registration laws of the state do not prescribe qualifications of electors." Id. at 144 (quoting State v. Weaver, 122 Tenn. 198, 122 S.W. 465 (1909)). Registration laws pertain to the regulation of the exercise of the right to vote. Id. Accordingly, the Court determined:

So it is obvious, from the authorities quoted, that we cannot properly speak of registration as a qualification for voting in state and county elections. One qualified to vote in those elections is likewise a qualified voter in Jellico, provided he resides there, or owns property there. It follows that registration is not necessary to make one a "voter in said city."

Id.

In Halbert v. Shelby Cnty. Elec. Comm'n, 31 S.W.3d 246 (Tenn. 2000), the Court considered the meaning of the phrase "resident voter and taxpayer of the City of Memphis" in the Memphis City Schools Board of Education charter. The Court focused on the word "voter" because the appellant conceded that the candidate in question was a resident of the City of Memphis. Id. at 248. The Court turned to Black's Law Dictionary and observed that the word "voter" has more than one meaning:

The word has two meanings – a person who performs the act of voting, and a person who has the qualifications entitling him to vote. Its meaning depends on the connections in which it is used, and is not always equivalent to electors. In a limited sense a voter is a person having the legal right to vote, sometimes called a legal voter.

Id. (quoting Black's Law Dictionary 1576 (6th ed. 1990)).

In determining which definition of "voter" to apply, the Court observed that its decision in Trammell was consistent with decisions from other jurisdictions that had found the terms "qualified voter" and "legal voter" to mean a person qualified to vote. Id. at 248-49 (citations omitted). Accordingly, the Court held that the term "resident voter" as used in the School Board's charter provision establishing the eligibility requirements for service on the School Board requires the candidate to possess the legal qualifications to vote in the election if registered. Id. at 248-49. In so holding, the Court, as it did in Trammell, emphasized that registration laws do not affect the qualifications for voting.[1] Id. at 249.

Similar to the provisions in these cases, the Industrial Development Corporation Act provides that persons elected as directors of an industrial development board must be "duly qualified electors of . . . the municipality." Tenn. Code Ann. § 7-53-301. In other words, they must be "qualified voters" or "legal voters" of the municipality. Based on the cases above, this statutory requirement means that a person must be qualified to vote in an election of the "municipality"[2] in order to be eligible to serve as a director on the board of an industrial development corporation. The person, however, does not have to be registered to vote.

Furthermore, we note that in Trammell and Halbert, the Court logically focused on whether the persons involved in those cases were qualified to vote in the elections in which they were candidates. Directors of industrial development boards, however, are elected by the governing body of the municipality; they are not candidates in an election in which they vote. Consequently, we think the "qualified elector" requirement of Tenn. Code Ann. § 7-53-301 should be construed liberally.

[T]he right to hold office is a valuable one and its exercise should not be declared prohibited or curtailed except by plain provisions of law . . . Statutes imposing disqualifications are to be construed strictly, while those declaring qualifications are to receive a liberal construction. In consequence, ambiguities are to be resolved in favor of eligibility to office . . . .

Halbert, 31 S.W.3d at 249 (citation omitted). Accord 67 C.J.S. Officers § 23 (2015).

Accordingly, a person should be deemed to be a duly qualified elector of the municipality for the purposes of Tenn. Code Ann. § 7-53-301 if that person is qualified to vote in any election of the municipality.[3]

2. If an industrial development board member does not meet the definition of a "duly qualified elector of . . . the municipality," you ask the effect of votes cast by this member. In most instances, improperly appointed members of boards are viewed as de facto officers. The de facto doctrine is well established in Tennessee, particularly in matters involving public policy and necessity. Kidd v. McCanless, 200 Tenn. 273, 279, 292 S.W.2d 40, 43 (1956) (citation omitted).

An officer de facto is one whose acts, though not those of a lawful officer, the law, upon principles of policy and justice, will hold valid, so far as they involve the interests of the public and third persons, where the duties of office were exercised . . . under color of a known election or appointment, void because the officer was not eligible, or because there was a want of power in the electing or appointing body, or by reason of some defect or irregularity in its exercise, such ineligibility, want of power, or defect being unknown to the public. . . .

Heard v. Elliott, 116 Tenn. 150, 154-55, 92 S.W. 764, 765 (1906). Cf. Kidd, 200 Tenn. at 280, 292 S.W.2d at 43 (de facto doctrine not applied when person is not acting in good faith and public knows of lack of authority).

In sum, "the law validates the acts of 'de facto' officers as to the public and third persons on the ground, though not officers de jure, they are in fact officers whose acts, public policy requires, should be considered valid." County Clubs, Inc. v. City of Knoxville, 217 Tenn. 104, 113-14, 395 S.W.2d 789, 793 (1965). Accord State ex rel. Newsom v. Biggers, 911 S.W.2d 715, 718 (Tenn. 1995). Accordingly, the participation of an ineligible member on board votes does not render the actions of the board invalid. See State ex rel. Roberts v. Hart, 106 Tenn. 269, 271-72, 61 S.W. 780, 781 (1901) (school board found to be de facto body whose acts were not subject to collateral challenge even though two of three board members were ineligible for membership).

3. You next inquire about the appropriate action for the board of an industrial development corporation to take in order to correct votes of a board member who was not a "duly qualified elector of . . . the municipality." As discussed above, the actions of a board containing an ineligible board member are generally valid under the de facto doctrine. Nevertheless, as a precaution, the board, once all of its members are appropriately elected, may wish to review the actions taken by the earlier board and vote to ratify, confirm, modify, or reject such actions.

4. Finally, you ask whether a board member of an industrial development corporation bears criminal responsibility if he or she votes on an issue before the board at a time when he or she is not a "duly qualified elector of . . . the municipality." Under Tenn. Code Ann. § 8-18-102, a person commits a Class C misdemeanor if he or she takes office while under any of the disqualifications specified in Tenn. Code Ann. § 8-18-101. Holding office as a board member despite lacking the qualifications set forth in Tenn. Code Ann. § 7-53-301 is not subject to criminal redress under Tenn. Code Ann. §§ 8-18-101, -102. Thus, there is no specific statute that imposes criminal sanctions upon an individual lacking the qualifications to serve on a board of an industrial development corporation. Whether another criminal statute might apply would depend on the facts and circumstances surrounding the appointment of the board member and the votes cast by that person.

The board member, though, is subject to removal through a quo warranto action. Under Tenn. Code Ann. § 29-35-101(1), such an action lies against "any person [who] unlawfully holds or exercises any public office or franchise within this state, or any office in any corporation created by the laws of this state." Although civil in nature, a quo warranto action is generally initiated by the district attorney general. See Tenn. Code Ann. § 29-35-109.

HERBERT H. SLATERY III
Attorney General and Reporter

ANDRÉE SOPHIA BLUMSTEIN
Solicitor General

LAURA T. KIDWELL
Senior Counsel

Requested by:
The Honorable Matthew Stowe
District Attorney General
State of Tennessee, 24th Judicial District
100 Court Square, P.O. Box 627
Huntingdon, Tennessee 38344

[1] The Court also observed that the Tennessee Code defines the term "registered voter" as "a qualified voter who has fulfilled the registration requirements of this title" and "qualified voter" as "a United States citizen who is 18 years or older and who is a resident of Tennessee." Id. at 249 n.5 (citing Tenn. Code Ann. § 2-1-104(a)(23) (1994) and Tenn. Code Ann. § 2-2-102 (1994)). See also Tenn. Att'y Gen. Op. 99-077 (Apr. 5, 1999) (opining that the term "qualified voter" in Tenn. Code Ann. § 2-2-102 should be interpreted as a definition of those persons who are qualified to register in the State of Tennessee).

[2] "Municipality" is defined by the Act as "any county or incorporated city or town in this state with respect to which a[n industrial development] corporation may be organized and in which it is contemplated the corporation will function." Tenn. Code Ann. § 7-53-101(10).

[3] In Tenn. Att'y Gen. Op. 99-142 (July 27, 1999), we gave a similar construction to Tenn. Code Ann. § 7-53-201, which requires applicants for incorporation of an industrial development corporation to be "duly qualified electors of and taxpayers in the municipality." In that opinion, we found that a person met the taxpayer requirement if that person merely "pays some type of municipal tax to the municipality." (Emphasis original.)