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Official Opinion 93-1

Official Opinion 93-1

January 20, 1993
To: 

Commissioner

Department of Community Affairs

Re: 

An RDC board member may not also serve as a board member of a non-profit corporation created by the RDC, pursuant to O.C.G.A. § 50-8-35(f)(1)

This is in response to your request for my official opinion whether a board member of a Regional Development Center ("RDC") may also serve as a board member of a non-profit corporation created by the RDC, pursuant to O.C.G.A. § 50-8-35(f)(1), during the period that a contract exists between the two entities.

As you know, the General Assembly recently enacted legislation governing conflicts of interest in contract administration pertaining to contracts administered by an RDC.  O.C.G.A. § 50-8-60 et seq. Among other things, the new law strictly prohibits a member of a board of an RDC or non-profit corporation "that plays a role in determining center or non-profit corporation contracts" from serving on the board of the entity contracting with the center or non-profit corporation, during the period of any [*2]  such contract.  OCGA § 50-8-61.  In pertinent part, O.C.G.A. § 50-8-61 provides:

When a center or non-profit corporation administers a contract for the purposes of this chapter, no . . . member of a board . . . of the center or non-profit corporation that plays a role in determining center or non-profit corporation contracts shall also serve, during the period of any such contract, as a board member . . . of the entity contracting with the center or non-profit corporation . . ."

Thus, pursuant to O.C.G.A. § 50-8-61, an RDC board member, to the extent he or she plays a role in determining center or non-profit corporation contracts, may not also serve as a board member of the entity contracting with the RDC or non-profit corporation during the period of any such contract.

The prohibitions of O.C.G.A. § 50-8-61 are subject to only one exception.  O.C.G.A. § 50-8-61 expressly provides that an employee of an RDC, is not precluded from "serving without compensation, as an officer of a non-profit corporation for the purposes of executing loan transactions." A similar exception to the conflict of interest prohibitions of this section is not provided for a board member of an RDC who [*3]  also serves as a board member of a non-profit corporation created by an RDC to administer federal or state revolving loan programs or loan packaging programs.  Had the General Assembly intended to create such an exception, it could have done so, but it did not.

Therefore, it is my official opinion that an RDC board member may not also serve as a board member of a non-profit corporation created by the RDC, pursuant to O.C.G.A. § 50-8-35(f)(1), during the period that a contract exists between the two entities.

Prepared by:

GRACE EVANS LEWIS,

Senior Assistant Attorney General