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Municipal Technical Advisory Service (MTAS)

Interest of Officer in Municipal Contracts Summary

Reference Number: MTAS-2048
Reviewed Date: 12/21/2021

No one holding a municipal office, elected or appointed, can contract with the municipality for any work that is to be paid for out of the treasury. That same person cannot also hold or have any direct interest in such a contract. Direct interest is defined as any business in which the official is the sole proprietor, a partner, or the person who has the controlling interest. Controlling interest means the person with the ownership or control of the largest number of outstanding shares owned by any individual or corporation.

No municipal officer can be indirectly interested in any contract with the municipality unless the officer publicly acknowledges his interest. “Indirectly interested” is defined as any contract in which the officer is interested, but not directly. It includes contracts where the officer is directly interested, but is the sole supplier of goods or services in a municipality.

The T.C.A. citation for this topic is T.C.A. § 6-54-107.