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Code of Ethics Required

Reference Number: MTAS-505
Tennessee Code Annotated
Reviewed Date: December 17, 2012
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T.C.A. § 8-17-103 requires municipalities to adopt a code of ethics by ordinance. The ordinance restrictions must apply to boards, commissions, authorities, corporations, and other entities created or appointed by the municipality, except the school board. The school board adopts its own code, and it may use a model provided by the Tennessee School Board Association.

The act charges the UT Municipal Technical Advisory Service (MTAS) with developing model ethical standards for municipalities. Municipalities are not required to adopt the MTAS model, but if they do not, they must send a copy of the ordinance they adopt to the Tennessee Ethics Commission. Municipalities that adopt the MTAS model must simply notify the commission in writing that the MTAS model was adopted, along with the date of adoption. (See the proposed MTAS model ordinance provisions).

The act also affects entities created by interlocal agreement under the state’s general Interlocal Cooperation Act (T.C.A. §§ 12-9-101 et seq,) or otherwise. These entities must adopt an ethics code. Rather than requiring the ethics provisions to be enacted by the governing boards of these entities, however, the act requires the agreement itself to be amended to include the ethics standards. Therefore, municipalities participating in interlocal agreements should take steps to ensure that the agreement is amended to include ethical standards. The accompanying model code of ethics provisions can be used for this purpose.

The act requires local ethics standards to include two restrictions: (1) rules setting limits on and/or providing for reasonable and systematic disclosure of gifts or other things of value received by officials or employees that affect or appear to affect their discretion, and (2) rules requiring reasonable and systematic disclosure by officials and employees of personal interests that affect or appear to affect their discretion. In the MTAS model, we have combined these two restrictions with other ethics provisions that municipalities have commonly adopted. These model provisions are meant to replace the existing provisions in the municipality’s code of ordinances or simply to be added as a new chapter if the code has no similar provisions.

In the first footnote in the proposed model, we note several state statutes that establish ethical provisions for municipal officials and employees. We include these references along with the ethical restrictions in the proposed ordinance provisions so that municipal officials and employees can consult one source to determine most of the ethical restrictions that apply to them.

As noted, many municipalities already have ordinances that prohibit the city’s officials and employees from accepting any gift or thing of value that could be interpreted as an attempt to influence the officer’s or employee’s actions with respect to city business. Many have ordinances prohibiting officials and employees from using their positions for personal gain. Many municipalities also have adopted ethics regulations by personnel policy or as part of an employee handbook. Some have ordinances requiring disclosure of personal interests that could affect their decisions.

The question probably will arise whether municipalities can simply send the Ethics Commission a copy of their existing ordinances that prohibit gifts, using a position for personal gain, etc., and thus satisfy this new law. In most cases this will not be adequate. Although most cities already have ordinances that are more restrictive on receiving gifts and other things of value than those required by the act, most do not meet the disclosure requirement of personal interests. This is perhaps because there is a state law requiring these disclosures for elected officials (T.C.A. §§ 8-50-501 et seq.) and municipal officials have seen no need to expand on this law.

The ethics act uses the future imperative “shall adopt” in requiring local governments to enact these ethics provisions. It has no provision recognizing that existing ordinances or policies might be adequate. And, as noted above, most existing ordinances do not require disclosure of personal interests in addition to that already required under state law. For these reasons — and possible ouster for failing to do so — most municipalities would be better advised to adopt either the MTAS model or their own ordinance.

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