CEO 79-82 -- December 20, 1979

CONFLICT OF INTEREST

CITY COMMISSIONER AND COUNTY COMMISSIONER ENGAGING IN REAL ESTATE BUSINESS TOGETHER

To: (Name withheld at the person's request.)

Prepared by: Phil Claypool

SUMMARY:

Neither the Code of Ethics nor the Sunshine Amendment prohibits a city commissioner from forming a corporation with two county commissioners for the purpose of selling real estate, so long as those officials do not in any way do business with either the city or the county and do not undertake to assist any person or entity in obtaining a variance, special exception or zoning change on which the city commission or county commission must take action. Although s. 112.313(7)(a), F. S., prohibits a public officer from being employed by or having a contractual relationship with a business which is subject to the regulation of his agency, the public bodies on which the subject commission members serve govern the real estate sales business only in the sense that an occupational license would be required; however, under s. 205.022(1), F. S., occupational licenses are authorized by the Legislature to be levied as a tax, rather than as part of a regulatory scheme. The only other possible conflict would occur if the real estate firm purchases a parcel of property for the purpose of subdividing it and would need to have the property rezoned and platted. Whatever conflict might exist under these circumstances, however, would be based on the real estate firm's activities as owner and developer of land, not on the fact of the partnership between the three public officials. The potential development of land does raise an issue under s. 112.313(7)(a), but any determination based on such circumstances would depend on the extent of and means by which the city and county regulate land development within their boundaries. Therefore, it is not possible at this point to answer the question of whether one of the subject officials would be prohibited from partnership in a real estate firm which owned and developed land within the city or county.

QUESTION:

Does the Code of Ethics for Public Officers and Employees or the Sunshine Amendment to the Florida Constitution prohibit a city commissioner from forming a corporation with two county commissioners for the purpose of selling real estate?

Your question is answered in the negative.

In your letter of inquiry you advise that ____, a member of the Hendry County Commission, presently holds a registered real estate broker-salesman license under the laws of the state. You further advise that ____, a member of the county commission, and ____, a member of the Clewiston City commission, are in the process of obtaining their real estate licenses in order to enable them to sell real estate. You further advise that these officials wish to form a corporation for the purpose of engaging in the sale of real estate; they would engage in the purchase and resale, as well as the straight sale, of real property to others, earning a profit or commission on such sales.

You advise that the officials will not buy or sell or in any way do business with either the city or the county. Nor would they undertake to assist any person or any entity in obtaining a variance, special exception, or zoning change on which the city commission or county commission would have to take action.

The Code of Ethics for Public Officers and Employees provides in relevant part:

CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP. -- No public officer or employee of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, an agency of which he is an officer or employee . . . nor shall an officer or employee of an agency have or hold any employment or contractual relationship that will create a continuing or frequently recurring conflict between his private interests and the performance of his public duties or that would impede the full and faithful discharge of his public duties. [Section 112.313(7)(a), F. S.]

This provision prohibits a public officer from being employed by or having a contractual relationship with a business entity which is subject to the regulation of his agency.

You advise that the public bodies on which the subject commission members serve do not in any way govern the real estate sales business in which they will be engaged, with the single exception that an occupational license would be required. We are of the opinion that the requirement of such occupational license does not constitute regulation within the meaning of the above-quoted provision of the Code of Ethics. Occupational licenses are authorized by the Legislature to be levied by local government entities as a tax, rather than as part of a regulatory scheme, real estate brokers and salesmen being regulated by the Florida Real Estate Commission pursuant to Ch. 475, F. S. See s. 205.022(1), F. S., which distinguishes between regulatory authority over occupations and professions and the occupational license tax authorized under Ch. 205, F. S.

The only other possible conflict which you foresee would occur if the real estate firm purchases a parcel of property for the purpose of subdividing it and would need to have the property rezoned and platted as a requirement of subdividing under Florida law. Should the property lie within the county only, you advise, then the zoning and platting approval would come before the board of county commissioners; if the property lies within the municipal limits of the City of Clewiston, the matter would come before the city commission. We are of the opinion that whatever conflict might exist under these circumstances would be based on the real estate firm's activities as owner and developer of land and not on the fact of the partnership between the three public officials. The fact that the real estate firm might be involved in the development of land does raise an issue under s. 112.313(7)(a), above, regarding the possibility of regulation by the city or the county and regarding the possibility of a frequently recurring conflict of interest. However, we do not have sufficient information regarding the extent and means by which the city and county may regulate land development within their boundaries. Therefore, we are unable to answer the question of whether one of the subject officials would be prohibited from partnership in a real estate firm which owned and developed land within the city or county.

There is no provision of the Sunshine Amendment to the Constitution (s. 8, Art. II) which would apply to the situation you have described. Accordingly, we find that neither the Code of Ethics for Public Officers and Employees nor the Sunshine Amendment to the Constitution prohibits a city commissioner from forming a corporation with two county commissioners for the purpose of selling real estate.