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HomeMy WebLinkAbout01-504 FairchildThomas Fairchild, Borough Manager Borough of Towanda Administrative Office P.O. Box 229 724 Main Street Towanda, PA 18848 ADVICE OF COUNSEL January 10, 2001 01 -504 Re: Conflict; Public Official /Employee; Borough; Tax Collector; Using Interest Collected on Taxes to Buy Office Supplies Related to Tax Collecting Duties; Private Pecuniary Benefit. Dear Mr. Fairchild: This responds to your letter of December 6, 2000, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa. .S. §1101 et seq., presents any prohibition or restrictions upon a borough tax collector as to using a portion of the interest earned on taxes collected on behalf of taxing districts to purchase office supplies and equipment related to tax collecting duties. Facts: As Manager of the Borough of Towanda, you seek an advisory on behalf of Dixie Cabucci ( "Cabucci "), the Borough Tax Collector. Cabucci collects taxes for the following three taxing districts in her jurisdiction: Towanda Borough, Towanda Area School District, and Bradford County. Cabucci is aware that the interest earned on funds collected in the taxing districts belong to those districts. However, Cabucci would like to use a portion of the interest to purchase various office supplies and equipment related to her tax collecting duties. You state that after expenses would be deducted from the interest earnings, the balance would be paid over at the end of every fiscal year on a proportional basis. Act. You ask whether such actions by Cabucci would be prohibited under the Ethics Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. § §1107(10), (11), advisories are issued to the requestor Fairchild /Cabucci, 01 -504 January 10, 2001 Page 2 based upon the facts which the requestor has submitted. In issuing the advisory based upon the facts which the requestor has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts which have not been submitted. It is the burden of the requestor to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. § §1107(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. As Tax Collector for the Borough of Towanda, Dixie Cabucci ( "Cabucci ") is a public official as that term is defined in the Ethics Act, and hence Cabucci is subject to the provisions of that Act. Section 1103(a) of the Ethics Act provides: $1103. Restricted activities. (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. §1103(a). The following terms are defined in the Ethics Act as follows: $1102. Definitions. "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. The term does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated. "Authority of office or employment." The actual power provided by law, the exercise of which is necessary to the performance of duties and responsibilities unique to a particular public office or position of public employment. 65 Pa.C.S. §1102. In applying the above provisions of the Ethics Act to the instant matter, pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. As to whether the Ethics Act would prohibit Cabucci from using some of the interest earned on funds collected for the taxing districts to buy office supplies and equipment related to her tax collecting duties, the Commission has determined that if a Fairchild /Cabucci, 01 -504 January 10, 2001 Page 3 particular statutory enactment prohibits an official from receiving a financial benefit, then that official's receipt of such a prohibited benefit, through the authority of public office, would be contrary to Section 1103(a) of the Ethics Act. Hessinger, Order 931; Wasiela, Order 932; affirmed in part, RH & TVA/ v. SEC, 673 A.2d 1004 (Pa. Commw. Ct. 1996). In order to determine whether Carbucci would transgress the Ethics Act by engaging in the above - described conduct, the provisions of the Local Tax Collection Law, 72 P.S. §5511.1 et seq., must be reviewed. If the receipt of interest earned on funds collected for the taxing districts to purchase office equipment and supplies is not permitted by the Local Tax Collection Law, then a tax collector who receives such interest and uses same to purchase equipment and supplies in relation to her tax collection duties would be receiving a private pecuniary benefit contrary to Section 1103(a) of the Ethics Act. If the receipt of interest earned on funds collected for the taxing districts to purchase office equipment and supplies is not prohibited, then a tax collector who receives such interest would not be receiving a private pecuniary benefit and would not have a conflict under Section 1103 of the Ethics Act. The Local Tax Collection Law provides in pertinent part as follows: §5511.35. Compensation of tax collector in boroughs and townships of the second class (a) The tax collector in boroughs and townships of the second class shall receive compensation as provided for herein. (1) For the collection of county, institution district, borough taxes and township taxes in townships of the second class with three thousand or more residents, salary, wages or a commission on all such taxes are to be fixed by the respective taxing authorities levying such taxes, not exceeding five per centum of the amount collected. (2) For the collection of township taxes in townships of the second class with less than three thousand residents, salary, wages or a commission on all such taxes are to be fixed by the board of supervisors, not exceeding ten per centum of the amount collected. (3) In the case of school district taxes, the commission or compensation of the tax collector shall be determined by the board of school directors, and the total cost of such collection shall be reported annually to the Secretary of Education and shall be published in his report. (b) Notwithstanding the provisions of section 36.1 or subsection (a)(2), if a millage reduction adopted by the board of supervisors in townships of the second class with less than three thousand residents will decrease the amount of compensation received by a tax collector who is compensated on a commission basis, the board of supervisors may by ordinance at any time increase the commission to the level required to compensate the tax collector in an amount equal to the compensation that would have been received under the former commission prior to the millage decrease. Fairchild /Cabucci, 01 -504 January 10, 2001 Page 4 Id. at 5. (c) For the collection of county, institution district, school district, borough and township taxes, the tax collector shall be allowed by the respective taxing authorities, actual and needful expenditures for printing, postage, books, blanks and forms. 72 P.S. § 5511.35. The above quoted provision does not appear to allow a tax collector to receive the interest earned on funds collected for the taxing districts. Furthermore, as to the collection of taxes for the county, there does not appear to be any provision in the County Code, 16 P.S. §101 et seq., authorizing the conduct in question. Unless the receipt of interest earned on funds is provided for by law, a tax collector may not receive such a financial gain or private pecuniary benefit. This conclusion is in accord with Allen, Order 612 -R, wherein the Commission found that a borough and school district tax collector violated Section 3(a) of the Ethics Act by charging $10.00 fees from taxpayers who requested tax certifications. Since there was no provision in law for the charging of such fees, the receipt of such financial gain by the tax collector was determined to be compensation other than that provided by law. The tax collector appealed the Commission's order in Allen v. State Ethics Commission, 1790 C.D. 1988, wherein he argued that Section 3(a) of the Ethics Act was unconstitutionally vague and an ex post facto law. In a Memorandum Opinion issued April 20, 1989, Commonwealth Court rejected the tax collector's arguments and affirmed the Commission's decision finding a violation and ordering a cessation in charging for tax certifications. The Court stated: In the case at bar, Petitioner argues that because there is no specific statutory prohibition of tax certification fees, Section 3(a) of the Act does not convey sufficient warning that collection of such fees violates its provisions. We disagree. Section 3(a) clearly prohibits the use of public office to obtain financial gain which is not authorized in law. The case was remanded to the Commission for a determination of the net amount of restitution to be made by the tax collector. Restitution was computed and the case was closed after payment was made. See, also, Thee, Order 919; Grogan, Order 972. Based upon Section 1103(a) of the Ethics Act, the adjudications of the State Ethics Commission and the above court decisions, you may not use the interest earned on taxes collected to purchase office supplies and equipment. The propriety of the proposed conduct has only been addressed under the Ethics Act; the applicability of any other statute, code, ordinance, regulation or other code of conduct other than the Ethics Act has not been considered in that they do not involve an interpretation of the Ethics Act. Specifically not addressed herein is the applicability of the Local Tax Collection Law and the County Code. Conclusion: As Tax Collector for the Borough of Towanda, Dixie Cabucci ("Cabucci ") is a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §1101 et seq. The Ethics Act would prohibit Cabucci from receiving the interest earned on funds collected for the taxing districts to purchase various office supplies and equipment related to her tax collecting duties because she would be receiving a pecuniary benefit not provided for in law. Fairchild /Cabucci, 01 -504 January 10, 2001 Page 5 Such receipt of a private pecuniary benefit would be contrary to Section 1103(a) of the Ethics Act. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11), an Advice is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any other civil or criminal proceeding, provided the requestor has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. This letter is a public record and will be made available as such. Finally, if you disagree with this Advice or if you have any reason to challenge same, you may appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writing and must be actually received at the Commission within thirty (30) days of the date of this Advice pursuant to 51 Pa. Code §13.2(h ). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717 -787- 0806). Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Sincerely, Vincent J. Dopko Chief Counsel