Knowledgebase-Differential Tax Rates and Questions from the Charter Commission


Information Product

Title:Differential Tax Rates and Questions from the Charter Commission
Summary:MTAS was asked whether differential tax rates within taxing districts and special services districts authorized under the Charter Government Unification Act would violate the Tennessee Constitution and several other questions by the Charter Commission.
Original Author:Hemsley, Sid
Co-Author:
Product Create Date:01/17/96
Last Reviewed on::05/31/2017
Subject:Metropolitan government; Metropolitan government--Charters; Tax rates--Differential rates
Type:Legal Opinion
Legal Opinion:

Reference Documents:

Text of Document: January 17, 1996

Members of the charter commission for the unification of the governments your city and county under the Charter Government Unification Act [TCA title 7, chapter 21], have several questions related to unification of those governments. I have addressed those questions one by one through section B of the fax you sent me reflecting those questions. However, before doing that, I have raised and generally answered the question of whether differential tax rates with respect to taxing districts and special districts are illegal.

GENERAL--DIFFERENTIAL TAX RATES

Would differential tax rates within taxing districts and special services districts authorized under the Charter Government Unification Act violate article II, sections 28 and 29 of the Tennessee Constitution?


Probably not.

The Nashville-Davidson County Metropolitan Government charter was challenged on a number of grounds in Frazer v. Carr, 360 S.W.2d 449 (Tenn. 1962), including the ground that the differential tax rate between the urban services district and the general services district violated article II. sections 28 and 29 of the Tennessee Constitution. Section 28 contains the equal and uniform taxation requirement, and section 29 provides that the state can authorized counties and municipalities to impose taxes for "county and corporation purposes respectively in such manner as shall be prescribed by law."

The Tennessee Supreme Court rejected that challenge for what seems to be both practical and legal reasons. With respect to the former, the Court thought that if the charter had not provided for differential tax rates the charter would not have passed, thus ending a desirable development in government. With respect to the latter, it pointed to article XI, section 9 of the Tennessee Constitution, which permits the General Assembly to provide for the consolidation of counties and municipalities:

The Metropolitan government is but a consolidation of the county and city governments. Article II, Section 29 of the Constitution empowers the General Assembly to impose taxes for county and corporation purposes respectively. Since the metropolitan government is but a consolidation of the functions of each, there seems to be no logical course of reasoning whereby the metropolitan government is not authorized to levy taxes sufficient for county purposes in Davidson County, and a different tax rate sufficient for the municipal corporation of Nashville. The needs and services of the two are different, thereby requiring a different tax rate.

The Court conceded that the governments of the City of Nashville and of Davidson County were abolished with the adoption of the metropolitan government charter, yet somehow there separateness was preserved for the purposes of article 2, sections 28 and 29 of the Tennessee Constitution.

I see no reason why Frazer would not apply to the consolidation of governments under the Unified Charter Government Act.

The Tennessee Supreme Court has held in a number of cases that tax rates are required to be equal within a municipality or county. [See, for example, Jones v. Memphis, 101 Tenn. 188, 47 S.W. 138 (1898); American Bemberg Corporation et al. V. City of Elizabethton, 175 S.W.2d 535 (1943)] However, it has also held that it is within the power of the General Assembly to create taxing districts with differential tax rates, because:

The provisions of section 28, art. 2, of the Constitution requiring equality and uniformity of taxation throughout the State do not prevent local taxation for local purposes. Such provisions do not demand equality and uniformity as between different localities in the matter of local taxation. Such local taxes must merely be equal and uniform in the district to which they apply. [H.L. Quinn v. J.T. Hester, 135 Tenn. 373 (1916)]

In the same case, the Court continued that "It [article 2, sec. 28] does require that there shall be uniformity of valuation and assessment of property for purposes of taxation, and that the tax levy for any given purpose shall be uniform throughout the territory to which it is applied."

Those cases apparently stand for the proposition that the particular tax in question [rather than taxes as a whole] must be uniform and equal throughout the territory in which the tax applies, which may not be the entire larger political entity. In other words, if a local government has within its boundaries special districts and/or taxing districts established, or authorized to be established under statute, and those special districts or taxing districts levy a tax for some authorized purpose, it satisfies article II, sections 28 and 29 of the Tennessee Constitution that the taxes are uniform and equal in the particular special district or taxing district.

QUESTIONS ASKED BY COMMITTEE MEMBERS OF THE CHARTER COMMISSION

Question:

The enabling legislation codified as TCA 7-21-101 et seq. does not specifically authorize the creation of an urban and general services tax district. Does this hinder our ability to set up these districts with different tax rates in view of the state constitution?

Probably not.

Obviously, anyone who wants to consolidate a city and county government incorporating an urban and general services districts on the Nashville-Davidson County model would prefer to point to legislation expressly authorizing urban and general services districts. Such districts are expressly established in the Metropolitan Government Charter Act [TCA 7-2-108], but the Charter Government Unification Act [CGUA] neither expressly requires their creation nor expressly authorizes their creation in the unified government charter. However, several provisions in the CGUA appear to contemplate city and county consolidations incorporating such districts. [As we shall see in subsequent questions, what is not clear is whether such districts can be created in the charter.]

- The CGUA is "remedial" and is to be "liberally construed" to achieve its purposes. Such general provisions should not be short-changed; they are important tools that permit the courts to give legislation a broad reading. [TCA 7-21-103]

- The CGUA authorizes taxing districts and service districts:

(1) The unified charter is to provide for a "determination of the proportionate responsibility for the existing bonded indebtedness, contract obligations and pension obligations of the county and any unified municipality, and shall provide for the creation and establishment of such taxing districts as are necessary and appropriate to fairly allocate such obligations." [TCA 7-21-206(r)]

(2) The legislative body [of the unified government] "may create and establish such taxing districts as in its judgment are necessary and appropriate to allocate such taxes" [taxes levied by unified government]. [TCA 7-21-403(e)]

(3) Legislative body of unified government may establish "special service districts," and "All tax levies in special service districts shall be made with due regard for services rendered in such special service districts." [TCA 7-21-404]

- Taxing districts and special districts by their nature contemplate differential taxation.

- (1) CGUA contemplates differential taxes.

(2) Gives unified governments the general authority to levy taxes, then further provides that

When [My emphasis] the amount of authorized tax shall depend upon the population and/or area of the entire county, without regard to the exclusion of population or area which is or may have been within the boundaries of municipalities within the county, then the entire population and the total area of the county in which such unified government is established shall be determinative of the authorized levy.

The "When" in that statute anticipate bases for a tax levy other than county-wide population or area.

Question

Nashville and Davidson County became a metropolitan government under provisions of TCA, title 7 which specifically requires the establishment of a "three member urban council, whose sole function shall be a mandatory obligation to levy a property tax...of urban services...." In your opinion is it necessary for the proposed unified government of our city and county to set up such a structure or can the legislative body set two different tax rates?

Answer

It appears that the "legislative branch" [My emphasis] of the unified government can establish special service districts "as in its judgment may be necessary or appropriate for the exercise within such district of any one (1) or more of the public corporation rights or powers of the unified government not then being exercised for the benefit for all citizens of the county." [TCA 7-21-404] In addition, taxing districts are authorized to be established by the "legislative body." [My emphasis.] [TCA 7-21-403(e)]

However, apparently the charter itself must provide for any taxing district that addresses the distribution of bonded indebtedness, contract obligations, and pension obligations of the governments incorporated into the unified government:

The charter [My emphasis.] shall provide for a determination of the proportionate responsibility for the existing bonded indebtedness, contract obligations and pension obligations of the county and any unified municipality, and shall provide for the creation and establishment of such taxing districts as are necessary and appropriate to fairly distribute such obligations. [TCA 7-21-206(r)]

Question

One proposal that the Budget and Taxation Committee has discussed is setting up a "core taxing district whose boundaries will be frozen at the existing city boundaries at the time of the unification. This core district would retain the expenditures [responsibilities?] for existing city debt and pension liabilities and a tax rate would be set accordingly. Initially, this district would be the same as the urban services district, but if urban services district lines were expanded, the old city debt and pension cost would not be reallocated. The committee has received comments that, while Metro Davidson, which was created by statute providing for urban and general service districts, the proposed "core" district could not serve as an additional district with a different tax rate because of state constitutional provisions. Please comment.

Answer

A core taxing district coterminous with the existing city boundaries is authorized by the CGUA. TCA 7-21-206(r) requires a taxing district/s be established in the unified charter to take care of the existing bonded indebtedness, contractual obligations, and pension fund responsibilities of the county and city. Special service districts are authorized to be established and expanded by the legislative body of the unified government. There appears nothing on the face of the CGUA that prohibits the boundaries of the taxing district and the special service district to be coterminous. I likewise doubt that the expansion of the special service district would create a differential taxation problem within the meaning of article II, section 28 or 29 of the Tennessee Constitution. The reason is that under the CGUA special service districts are apples, the taxing districts oranges. TCA 7-21-404 provides that "All tax levies in special service districts shall be made with due regard for services rendered in such special service districts." However, TCA 7-21-604(r) speaks of a "taxing district" to proportionally allocate existing bonded indebtedness, contractual obligations and pension obligations. Those categories of accumulated debt appear to me to smack of obligations for services rendered by the former units of government in the unified government.

Question

Also, relative to the expansion of an urban services district, please comment on any legal ramifications of the decisions to (1) allow property owners initiative for inclusion in the service area verses (2) the expansion of the service district by ordinance of the legislative body without request of the of the property owner.

I doubt that special service districts can be expanded by initiative or referendum, or by any other method inconsistent with TCA 7-21-404.

Under TCA 7-21-404 special services districts are to be established by the "legislative branch of the unified government" to provide services in a particular area of the unified government that are not available to all citizens of the county. Arguably, that statute is not the exclusive method for establishing and expanding an urban services district on the Nashville-Davidson County or similar model, and that provisions for the establishment and expansion of such districts can be included in the unified charter.

I am not sure that argument is a good one. The obvious function of an urban services district, at least on the Nashville-Davidson County model, is to provide services to residents inside that district that are not generally available to all residents of the county. Within that narrow framework, an urban services district would be a special services district and could be established and expanded only by the unified government legislative body--after unification. Generally, where a statute sets out the method for doing of an act, that method is the exclusive method by which the act can be done. In addition, I think the power granted by the General Assembly to the legislative body of the unified government in TCA 7-21-404 is legislative power. I doubt the courts would hold that the unified charter could limit a grant by the General Assembly of legislative power

I am not sure the General Assembly meant the Charter Government Unification Act to be read so narrowly. However, presumably it was aware that it expressly provided for the establishment and expansion of an urban services district under in the Metropolitan Government Charter. [TCA 7-2-108] It could have done the same thing in the CGUA, or it could have expressly authorized the establishment and expansion of an urban services district in that Act in a manner suitable to the charter commission. Instead, it chose to be entirely silent on the creation of such a district, and authorized the creation of "special service districts" by the legislative body of the unified government to provide services not generally available to all residents of the county. In addition, it mandated the creation in the charter of taxing districts "as are necessary and appropriate" to take care of the bonded indebtedness, contractual obligations, and pension obligations of the county and cities in the unified government, and authorized the legislative body of the unified government to create other taxing districts.

June 10, 1996


The County Charter Commission has the following question: Would a property tax freeze for three years in the proposed Charter Government Unification Act charter for the governments of your city and county be legally binding? In my opinion, the answer is probably no.

The statutory authority for the proposed charter government unification act charter for the governments of your city and county is Tennessee Code Annotated, title 7, chapter 21. The taxing authority for governments unified under that statutory authority is Tennessee Code Annotated, section 7-21-403, subsection (a) of which provides that:

Any unified government created and established pursuant to this chapter shall be authorized and empowered, through its legislative branch, to levy every tax which a county or municipality is now authorized to levy or may hereafter be authorized to levy. [Emphasis is mine.]

The power to tax is a state power that resides in the Tennessee General Assembly. Under the Tennessee Constitution, art. II, sec. 29, the General Assembly can delegate that power to counties and municipalities. It was said in Memphis Union Station Co. v. Memphis, 161 Tenn. 203, 30 S.W.2d 249 (1930), that "The power of a municipal corporation to impose taxes is dependent upon legislative authority, and that authority may be enlarged, restricted, or entirely withheld according to the will of the Legislature." [At 242.] [Also see O'Conner v. City of Memphis, 74 Tenn. (6 Lea) 739 (1881); Chattanooga v. Raulston, 117 Tenn. 569, 97 S.W. 456 (1906); Louisville & N. R.R. v. County Court, 33 Tenn. 636 (1854); McLean v. State, 55 Tenn. 22 (1873); Winston v. Tennessee & P. R.R., 60 Tenn. 60 (1873); Wallace v. County Court, 3 Shannon’s Cases 542 (1875); Edmonson v. Walker, 137 Tenn. 569, 195 S.W. 168 (1917); Davidson County v. Kilpatrick, 150 Tenn. 546, 266 S.W. 107 (1924).] It has also been held that, "The legislature alone has the right to determine all questions relative to time, method, nature, purpose and extent in respect to the imposition of taxes, including the subjects on which the power may be exercised." [See Sears, Roebuck & Co. v. Woods, 708 S.W.2d 374, 383 (Tenn. 1986).]

The legislative intent of Tennessee Code Annotated, section 7-21-403(a) appears clear enough to me: the legislative branch of the unified government is to have the authority to levy "every" tax the unifying city and county can now levy. Every tax the city and county can now levy includes the property tax, without limitation on the amount. An argument can be made that the statute's broad authority applies only to the kind of taxes that the unified government's legislative body can levy, and that the tax freeze would apply only to the time and amount of taxes. That appears to me a strained reading of that statute. Under the rules of statutory construction pertaining to tax statutes (and most legislation in general) legislative intent is to be ascertained primarily from the natural and ordinary meaning of the language used, without forced or subtle construction that would limit or extend the meaning of the statute. [See Carson Creek Vacation Resorts v. Dept. Of Revenue, 685 S.W.2d 1 (Tenn. 1993); Wilson v. Johnson County, 879 S.W.2d 807 (Tenn. 1994)]. It seems to me a forced and subtle construction to so narrowly read that statute to permit the charter to include a three year tax freeze.

Moreover, other provisions of Tennessee Code Annotated, section 7-21-402, read together, suggest that statute reflects that the intent of the General Assembly was to delegate to governments unified under the Charter Government Unification Act the same unlimited property-taxing power it has given to other municipalities. Subsection (b) provides that city and county taxes in place prior to unification continue "unabated" to the unified government. Subsection (c) provides that the act of unification does not affect any county tax in place "unless and until specific action with respect thereto is taken by the legislative body of the unified government." The strong implication of that entire section seems to be that whatever taxing powers the city and county had before unification are to remain in place after unification.

Such a tax freeze would also usurp the governmental and legislative powers of the General Assembly. In Menefee Crushed Stone Co. v. Taylor, 760 S.W.2d 223 (Tenn. App. 1988) the General Assembly passed a public act authorizing counties to impose a severance tax. The act also provided that, "This act shall not become effective for the imposition of a tax within any county of this state unless it is approved by a two-thirds (2/3) vote of the county legislative body." Holding that act illegal, the Court reasoned that:

The power to make laws is conferred upon the legislative branch of government and that power 'cannot be delegated by that department to any other body or authority.' [Citation omitted.] '[T]he Legislature cannot delegate the exercise of its discretion as to what the law shall be....' [Citation omitted.]....Whether a general law becomes effective cannot be placed in the hands of counties or municipalities to determine what the general law will be. Only the legislature can say what the law will be.

If the Legislature itself cannot confer upon its counties the power to decide what the general tax law will be, neither the cities and counties, nor the voters of cities and counties, can take it upon themselves to determine what it will be. Tennessee Code Annotated, section 7-21-403(a) deposits the unified government's power to tax in the legislative body of that government. A tax freeze for three years written into the charter of that government would give the voters left-handed power to temporarily suspend the tax law passed by the General Assembly.

It is true that imposing or raising the sales tax requires the support of a majority of voters in a referendum. But that kind of local approval should not be confused with the kind of local approval at issue in the proposed tax freeze. In one respect the laws are similar: both are complete; no local approval of those laws is required to make them operational. However, the effect of the proposed tax freeze subjects the latter law to a temporary suspension for three years. In that respect it is closely akin to the severance tax law that required local approval in Menefee Crushed Stone .

A charter-imposed tax freeze may also contravene Tennessee Code Annotated, section 67-5-103(b). That statute provides that:

All existing limitations and restrictions, whether restrictive as to total dollar amount or restrictive as to specific uses or a combination of the two (2), whether imposed by general or private act, or home rule charter, upon the maximum rate or amount of any county, municipality or metropolitan government and ad valorem tax levy, are hereby repealed effective January 1, 1973.

That provision can be read two ways:

1. It applies only to limitations and restrictions in effect on January 1, 1973, and the General Assembly could generally or individually authorize municipalities to reimpose such limitations.

2. It applies to limitations and restrictions in effect on January 1, 1973, and to any future limitations and restrictions, and any individual reimposition through private act charter amendment would contravene that general law.

MTAS has given that statute the first reading for many years. In fact, the MTAS Municipal Handbook, page 24, says, "but reimposing such a limitation by a subsequent charter provision is not prohibited." But upon revisiting that statute to answer your question, I have concluded that MTAS may have been wrong, at least with respect to individual reimposition by private act charter amendments, and that the second reading is more likely the correct one.

However, that issue probably does not have to be resolved with respect to the Charter Government Unification Act charter. Even if it assumed that the limitations and restrictions could be reimposed by a subsequent charter provision, that assumption leads nowhere. A government unified under the Charter Government Unification Act has a charter similar to a municipal home rule charter in that its adoption or amendment requires no approval by the General Assembly. But the legal foundation of such a government is the act itself, and the charter, or any amendment to the charter, would have to conform to that act, a part of which is Tennessee Code Annotated, section 7-21-403. The General Assembly could undoubtedly amend the Charter Government Unification Act to directly contain, or authorize the charter to contain, a three year tax freeze, but it has not done so.
It is unquestionably the law that the tax laws pertaining to local governments must conform to the general law where that is the intention of the General Assembly. [See Memphis Union Station, cited above, and Nichols v. Tullahoma Open Door, Inc., 640 S.W.2d 13 (Tenn. App. 1982).] I think Tennessee Code Annotated, section 7-21-403, reflects the intention of the General Assembly that the taxing power of the unified government be equal to the taxing power of your city and county, and that such equality does not contemplate a temporary tax freeze.

Sincerely,



Sidney D. Hemsley
Senior Law Consultant

SDH/


June 20, 1996

Here are MTAS'es collective comments on the charter commission's monumental effort to draft a charter under the Charter Government Unification Act. Those who did all that work ought to get a medal.

Many provisions in the charter we considered legally sound raised questions in the minds of one or more MTAS staff who reviewed the charter about how they would work. For that reason, you will find two kinds of questions: legal and practical.

Because we had too little time to thoroughly research questions of either kind, we often had to be satisfied with cursory researching or kicking around some of them. We will be glad to do a better job on any question in which you are particularly concerned.

GENERAL COMMENTS

1. The charter is afflicted with the redundancy problem that afflicts most charters in Tennessee. We decided not to make a list of all redundancies, only to cite several examples. Most of the redundancies in the charter could probably be unified (no pun intended) in one place in the charter.

A. Sections 2.02.B and 8.J both provide for an independent audit.

B. Sections 2.02.C and 8.05 both provide for purchasing.

C. Sections 2.02.C and 8.06 both provide for the sale of surplus property.

D. Sections 2.02.I, 3.04.E, and 11 all deal with boards and commissions.

E. Sections 2.07 and 7.11 both deal with ouster of elected officials.

F. Section 3.03.B and 7.07 both deal with term limits.

2. The charter contains scores of "the said this," and "the said that." That kind of language adds nothing to the charter.

3. Many of the numbers in sections cross-referencing the reader to a subsequent section are out of phase; we probably did not catch all of them.

4. The charter sometimes uses the terms "municipality," when it means unified government, "chief executive officer," when it means mayor, "council" when it means commission, and similar inappropriate terms that reflect the old city and county, or old city and county officers. Those terms should be ironed out of the charter.

SPECIFIC COMMENTS

Section 1.03: Because the unified government has the authority granted to it in the Charter Government Unification Act and other general laws, we doubt this provision is useful; however it probably does no harm.

Section 2.H: While there probably nothing illegal in this provision, we wonder if it does not make it unduly cumbersome for the commission to use public hearings. It suggests that the only time the commission can hold a public hearing is if a super majority approves. Generally, local government bodies hold "public hearings" for legislative and even administrative purposes without resort to a super majority or to the use of the subpoena. We suggest consideration be given to changing this provision to require a super majority only if subpoenas are to be issued.

Section 2.03: A suggestion was made that consideration be given to non-partisan elections and to staggered terms. School board elections are non-partisan and staggered. It was noted that the same polices that support non-partisan and staggered elections for school boards support non-partisan and staggered elections for municipal governing bodies.

Section 2.03.A.1: There is no "County General Election" in 1997, the county general elections being the general state elections in August and November of even-numbered years. If the terms of office are to be four years, the election date will end up being in odd-numbered years. We doubt that reflects the intention of the charter commission. If the first election is to be held in 1997, the charter will have to provide for some kind of transitional terms of office.

Section 2.03.B: Section 7.06 cited in that provision should read Section 7.07.

Section 2.03.E.3: Is there any reason the commission is to adopt rules as are necessary to establish procedures for arriving at a majority vote only in the cases of electing commissioners or filling vacancies in the office of commissioner? Several places in the charter contain majority vote provisions, and they contain no procedure for arriving at a majority vote.
Section 2.03.I: We are confused on the question of whether the boards under Section 2.02.I fall under the purview of the provisions of Section 11 related to boards.

Section 2.07: Is there any reason the grounds for the removal of commissioners stated in this section are different than the grounds for removal stated in Section 3.03.C pertinent to the mayor?

Section 2.08: This section appears to conflict with the first sentence of the second paragraph of Section 7.08 with respect to filling vacant offices of commissioners.

Section 2.09.A.9: The phrase "Paragraph 10" should read "Paragraph 9."

Section 2.09.B.2: Approval upon two "readings" might be inappropriate language because it suggests ordinances are actually required to be read. In addition, it does not require an separation of time between "readings." We suggest language along the lines of, ".... each ordinance shall be passed on two (2) separate days by a majority of the members of the commission."

Section 2.09.B.4 and 4.09: Consideration should be given to changing the phrase "fines" to "civil penalties." Apparently local ordinance violations will be civil offenses.

Section 2.09.C: The need for emergency ordinances was questioned. Those in this charter appear especially cumbersome, and not well suited to addressing actual emergencies.

Section 2.11: This section makes no sense.

Section 3.03: We are not sure whether the age threshold for mayor violates general state law. Tennessee Code Annotated, section 6-53-109 permits municipalities to establish age qualifications for their governing bodies, but the maximum age they are authorized to set is 21. The statute does not apply to Metro. governments, but the unified government is not a Metro. government. However, it may or may not be a "municipality" within the meaning of that statute.

Section 3.03.A: We think we understand the intent of the last clause relative to changing the salary of the mayor, but it is not clear on its face.

Section 3.03.B and C: Section 7.06 should read 7.07, and section 7.08 should read 7.09.

Section 3.04.E.3: How long does the commission have to designate a member to fill any commission committee created by it before the mayor can make the appointment?

Section 3.05.D: Who decides whether the civil service board assists in the formulation of specific qualifications for each department director. The mayor? The civil service board? This provision potentially permits the civil service board to interfere with the mayor's appointments.

Section 3.05.D.2.b: There are minimum years practice or experience qualifications for the law director, and the director of the department of law enforcement, but none for the director of the department of finance.

Section 3.05.D.4:

1. There are minimum years experience qualifications for the law director, none for the director of the department of fire. The same is true with respect to educational requirements. Is there a reason for the difference?

2. In addition, this provision creates problems for the mayor. The limits on the mayor's power of appointment with respect to appointees' qualifications ought to be clear.

Section 3.05.E.1.I: Was putting responsibility for risk management in the department of law deliberate? Most of the time risk management is under the department of finance or other department.

Section 3.05.E.1.l: This provision gives the law department the duty to "Perform all other duties assigned." Then in the next breath that provision shifts to requests to hire outside attorneys. Should not these be separate items?

Section 3.05.E.1.n: Are secretaries, etc. in the law department to serve at the will of the law director?

Section 3.05.E.2: Someplace in the duties of the department of finance there should be explicit authority for the department to receive and disburse money.

Section 3.05.E.3.F: We think giving department heads a "seat and a voice" in the commission may create problems for the mayor. Department heads and other city employees are always at the call of the commission for the purpose of gathering information, but to officially give them a seat and a voice in the commission gives them unusual opportunity to do an end run around the mayor. The mayor's only option if he does not like the end run is to fire them.

Section 4.02: In the last clause the term "judicial office" should probably read "term of office" or "judicial term," or something similar.

Section 4.09: See comment on 2.09.B.4.

Section 4.09: State court judges are required to be elected for a term of eight years. We wonder that if the local ordinance court issues its process in the name of the state rather than the unified government, defendants might be given a ground to argue that the local ordinance court is a state court.

Section 4.10.A: References to “municipal court” and “city” should probably be changed to “local ordinance court” and “unified government.”

Section 4.13: We question whether it is wise for the judge to appoint the clerk and deputy clerks of the local ordinance court. Under that arrangement, the local ordinance judge in effect becomes a department head.

Section 4.15: Section 7.10 should read Section 7.09.

Section 5.01.C: This provision gives the board of education the authority to redraw election districts. However, under Tennessee Code Annotated, section 49-2-201(a)(1), that authority expressly resides in the local governing body.

Section 5.01.D: The last sentence prohibits a member of the commission or any other elected public official or employee of the board of education from appointment or election to the board of education. That prohibition, at least with respect to employees, appears to have been superseded by Public Acts 1996, Chapter 678.

Section 5.04.D: The minimum age requirement may not be legal. Tennessee Code Annotated, section 49-2-301 establishes the requirements for school superintendents; no age limit is included. [However, from a practical standpoint, it is highly unlikely that anyone under 25 would meet those requirements.]

Section 7.02: Under Section 5.01.B elections for members of the board of education are non-partisan. For that reason, it might be wise to note that exception in Section 7.02.

Section 7.03:

1. The last word in that section, "law," should be changed to "general law."
Section 7.08: In the second sentence of the first paragraph, the word "mayors" should read "mayor's."

2. In the first and second sentences of the first paragraph, should not the phrase "next state or unified Government Election" read "next general state or Unified Government Election"?

Section 7.08:

1. It would probably be better if the second sentence in the second paragraph were moved to the end of the first paragraph.

2. In the first sentence of the second paragraph should not the phrase "next state or county's general election" read "next general state or unified government election"?

3. In the second sentence of the same paragraph, should not the term "general metropolitan election" read "unified government election"?

Section 7.08: The conflict between this section and Section 2.08 was noted above.
Section 7.09:

1. In the last sentence of the second paragraph, "One of the signers of each paper shall make an oath before an officer competent to administer oaths that the statements made therein are true as he/she believes, and that each signature is genuine." That puts the burden of the oath on a "signer." The burden should be on whoever is circulating the petition.

2. Forty percent of the votes cast in the last election for the particular person being recalled will be too low a threshold in some cases; the 40% should be 40% of the total votes cast in the last election.

Section 7.10:

1. What if the commission does not appoint a person to fill the vacancy within 30 days?

2. Include as a reason for a vacancy to arise the failure to attend X number of meetings.

Section 7.12: The reference at the end to Tennessee Code Annotated, section 8-47-101 et seq. [The Ouster Law] in the context of this section completely escapes us.

Section 7.13:

1. There is considerable objection to the passage of ordinances by initiative and referendum, particularly where, as in Section 7.15, the ordinance cannot be amended except by vote of the people.

2. The term "next state or county general election" should read "next general state or unified government election."

3. The second option under this section should be labeled "B" because the first option is labeled "A."

Section 8.01.A: The commission should be given the authority to change the fiscal year.

Section 8.01.D: It was suggested that there should be two budgets: one for the urban services district, and one for the general services district.

Section 8.01.E.2: With mutual cooperation, the mayor and a minority of the commission can stiff-arm the commission's budget and "enact" the mayor's budget.

Section 8.01.G: There is no provision for an override by the commission.

Section 8.02.B:

1. The last sentence providing for a tax refund for services not rendered within 18 months could be a can of worms for the unified government. There might be some very good reasons why the services were not rendered as expected, but this provision does not take that possibility into account.

2. In addition, the refund of property taxes not paid under protest is generally illegal. We are not sure whether tax refunds of the type contemplated under this section are legal.

Section 8.03.A: It was suggested that this provision permit the commission to set the tax due and delinquency dates by ordinance.

Section 8.05: Neither here nor elsewhere in the charter are there any competitive bidding requirements. It may be that in the absence of such requirements, the Municipal Purchasing Law [ Tennessee Code Annotated, section 6-56-301, and/or any county purchasing law containing such requirements might apply to the purchase of unified government goods and services.

Section 9.02: What is meant by the term "civil office" in the first paragraph?

Section 9.02.A: There appears to be some confusion with respect to who is and who is not a member of the classified service in the law department. See comment above on Section 3.05.E.1.n.

Section 9.03.B.4: The phrase "in sympathy with the application of merit principles to public employment," is lofty sounding, but probably does not mean very much. However, it could engender endless debate about whether someone is or is not in sympathy with merit principles.

Section 9.03.C: There are only vague education and experience standards for the director of civil service.

Section 9.03.F.11: We cannot figure out what this section means.

Section 9.05.A.2:

1. This provision prohibits employees in the classified and unclassified service to, "Use official authority or influence for the purpose of interfering with or affecting the result of an election or a nomination for office." It is questionable whether the government can
prohibit an employee from using "influence," or even "official influence" for the purpose of affecting (not interfering with) the result of an election or a nomination for office.

2. There should probably be an "or" between the words "Government" and "seeking" in the first sentence.

Section 9.05.B: This section is probably superseded by Public Acts 1996, Chapter 678 with respect to any office, except the office of commissioner in the unified government.
Section 10.03 et seq.: This and several following sections have ordinance citations at their ends. These do not belong in the charter.

Section 10.06.E: Arguably, utility systems cannot borrow money from persons to whom they provide services. The method of financing extension is treated as a loan to the utility system. We know this is probably done regularly in the state, but is still legally questionable.

Section 10.06.F. We are not sure whether the Local Government Public Obligations Law [Tennessee Code Annotated, section 9-21-101 et seq.] is the exclusive statutory authority for governments to issue bonds and notes. If it is, the provision permitting the government to issue bonds and notes without elector or taxpayer approval may not be legal in some instances with respect to general obligation bonds. [See Tennessee Code Annotated, section 9-21-207 et seq.].

Section 13.01:

1. We doubt that the unified government can supplement salaries set by general law.
2. The word "impeded" should probably be "impede."

Section 13.08: The citation of Article 12.06 is wrong; we do not know what it should be.

Section 14.10.A: This section may be broader than intended by the charter commission. It can be read to cover any officer appointed to fill an appointive office as well as an officer elected to, or appointed to fill, an elective office.

Section 15.04:

1. With respect to Paragraph 1, we doubt that the adoption of the charter can repeal private acts pertinent to the city and the county, or render them "of no force and effect" after 12 months. However, the charter is the product of general law, and for that reason private acts, to the extent they are inconsistent with the charter, would probably be superseded by the charter.

2. The same thing is probably true with respect to ordinances.

Section 15.09: The three year property tax freeze is probably illegal. [See attached letter from Sid Hemsley, MTAS, June 10, 1996.]

Let us know if we can help you further in the unified charter development.

Sincerely,

Sidney D. Hemsley
Senior Law Consultant

SDH/

Please remember that these legal opinions were written based on the facts of a given city at a certain time. The laws referenced in any opinion may have changed or may not be applicable to your city or circumstances.

Always consult with your city attorney or an MTAS consultant before taking any action based on information contained in this database.