Opinion 96-17

September 16, 1996

TOPIC: Waiver of private school tuition for judge's children, by virtue of judge's position as part-time instructor for extra-curricular activities.

DIGEST: The judge may request and accept a tuition waiver, so long as it is granted on the same terms as would be applicable to non-judges. The waiver should not be considered "compensation" for the judge's permitted part-time instruction at the school. The amount of the reduction need not be applied to the limit on honoraria set by Rule 66A.

REFERENCES: Illinois Supreme Court Rule 64A of the Code of Judicial Conduct, Canon 4 (145 Ill.2d R. 64); Illinois Supreme Court Rule 65C(4)(b) of the Code of Judicial Conduct, Canon 5 (145 Ill.2d R. 65); Illinois Supreme Court Rule 66 and 66A of the Code of Judicial Conduct, Canon 6 (145 Ill.2d R. 66); and Illinois Judicial Ethics Committee Opinion No. 96-11.

FACTS

The judge is a part-time instructor for an extracurricular activity at a private high school, for which he or she receives a modest cash honorarium that is well within the limit set by Rule 66A. The judge's teaching commitment meets all of the timing and certification requirements of Rule 64. One or more of the judge's children attend, or may attend, the school where the judge is an instructor. The school routinely provides tuition waivers to the children of faculty members. By virtue of his or her position as an instructor of extracurricular activities, the judge believes that he or she may qualify for a tuition waiver.

QUESTIONS

1. May the judge request, and accept if available, a tuition waiver conferred by virtue of the judge's position as an instructor of an extracurricular activity?

2. If the judge may accept a tuition waiver, must the amount or value of the reduction be applied to the limit on honoraria set by Rule 66A?

OPINIONS

Question 1

The judge's participation as an instructor of extracurricular activities is permitted by the Code of Judicial Conduct, so long as his or her involvement is consistent with Rule 64A. However, Rule 66 provides that a judge may not receive "compensation" for the extrajudicial activities permitted by the Code of Judicial Conduct. Thus, the judge may only accept a tuition waiver if it is not considered "compensation".

The committee believes that a private school tuition reduction should not be considered compensation to the judge. First, the committee notes that tuition reductions and waivers are not considered "income" for the purposes of federal or state income taxation. Other incidental, non-cash benefits that receive the same tax treatment include medical or accident insurance, on-the-premises meals, and library or facilities privileges. Although tax treatment is not dispositive for the purpose of interpreting a rule of the Illinois Supreme Court, it is significant that compensation is defined as a form of income, since it excludes royalties or "investment or interest income or other income that is unrelated to the work or services provided or performed." Rule 66 (emphasis added).

In any event, the committee does not believe that the intent of Rule 66 is to prevent judges from receiving incidental benefits, such as insurance coverage, attributable to permitted activities. The committee's conclusion in this regard is strengthened by the Rule's definition of compensation as "a thing of value paid by a person or entity to a judge." Rule 66 (emphasis added). The use of the active verb "paid", as opposed to, say, "received", indicates an intent to exclude intangible benefits or waivers.

Moreover, Rule 65C(4)(b) specifically permits a judge or a member of the judge's family to accept "a scholarship or fellowship awarded on the same terms applied to other applicants." See IJEC Opinion No. 96-11. It appears that the tuition benefit under consideration here is routinely awarded to all faculty members at the school. The committee believes that a waiver of tuition more closely resembles a scholarship than it does compensation. Thus, the judge may receive the tuition reduction so long as it is given on the same terms as are made available to non-judges.

The situation can also be analyzed in terms of the recipient of the benefits of the tuition waiver. Since the judge is under no legal obligation to provide his or her children with a private-school education, he or she would not be relieved of any duty with respect to his or her children by accepting a tuition waiver on their behalf, and would thus receive no direct benefit. The beneficiaries of the waiver would be his or her children, who would receive whatever advantage might flow from a parochial school education as opposed to a public education. The judge would receive no benefit from the waiver.

The committee also believes that the amount of any tuition reduction would, at a minimum, be treated as an honorarium pursuant to Rule 66A. Since a judge may accept a cash honorarium for teaching, the judge may obviously accept a non-cash benefit for the same activity.

Accordingly, it is the committee's opinion that the judge may apply for and accept tuition reductions for his or her children.

Question 2

The second question is whether the amount of a permitted tuition reduction must be applied to the limits on honoraria set by Rule 66A. The committee's primary interpretation of the Code, consistent with its analysis of "compensation", is that tuition reductions need not be considered honoraria, and therefore fall outside the limitations set by Rule 66A. The Code does not define honoraria, but it does refer to the "source of such payments". Rule 66 (emphasis added). Neither scholarships nor incidental, non-cash benefits are paid to the judge, so the committee does not think they should fall under the rubric of honoraria.

Finally, in the event that the tuition reduction is considered an honorarium, it would be necessary to consider how it should be valued.

It may well be difficult, if not impossible, to place an accurate actual value on a tuition waiver. A tuition waiver could be valued at the incremental cost of educating one student, at the scholarship value to a student with a similar family income, at the prorated average expense of the student to the school, etc. It may be impossible for the judge to obtain any of these valuations from the private school. This difficulty provides another reason to classify a tuition reduction as a scholarship rather than as an honorarium.

The committee is mindful that there is no direct precedent for this opinion. Neither the Courts Commission nor the Illinois Supreme Court have had occasion to apply Rule 66 in like circumstances, and no other state has a similar provision. The judge should, of course, disclose on his or her annual Declaration of Economic Interest the full extent of his or her financial relationship to the private school. Having done that, and having complied with the terms of Rule 64 with regard to the timing of instruction and certification by a supervising judge, the judge will have done all that he or she can do to comply with Rule 66.