House File 730 - Introduced HOUSE FILE 730 BY COMMITTEE ON LOCAL GOVERNMENT (SUCCESSOR TO HF 178) (COMPANION TO SF 283 BY COMMITTEE ON LOCAL GOVERNMENT) A BILL FOR An Act relating to conflicts of interest in certain government 1 public contracts. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1729HV (2) 88 ec/rn

H.F. 730 Section 1. Section 279.7A, Code 2019, is amended to read as 1 follows: 2 279.7A Interest in public contracts prohibited —— exceptions. 3 1. A member of the board of directors of a school 4 corporation shall not have an interest, direct or indirect, in 5 a contract for the purchase of goods, including materials and 6 profits, and the performance of services for the director’s 7 school corporation. A contract entered into in violation of 8 this section is void. 9 2. This section does not apply to contracts for the 10 purchase of goods or services which benefit a director, or 11 to compensation for part-time or temporary employment which 12 benefits a director, if the benefit to the director does not 13 exceed two six thousand five hundred dollars in a fiscal year, 14 and contracts made by a school board, upon competitive bid in 15 writing, publicly invited and opened. 16 3. This section does not apply to a contract that is a 17 bond, note, or other obligation of a school corporation if the 18 contract is not acquired directly from the school corporation, 19 but is acquired in a transaction with a third party, who may 20 or may not be the original underwriter, purchaser, or obligee 21 of the contract, or to a contract in which a director has an 22 interest solely by reason of employment if the contract is made 23 by competitive bid in writing, publicly invited and opened, or 24 if the remuneration of employment will not be directly affected 25 as a result of the contract and the duties of employment do not 26 directly involve the procurement or preparation of any part of 27 the contract. 28 4. The competitive bid qualification of this section 29 does not apply to a contract for professional services not 30 customarily awarded by competitive bid. 31 Sec. 2. Section 331.342, subsection 2, paragraph j, Code 32 2019, is amended to read as follows: 33 j. Contracts not otherwise permitted by this section , for 34 the purchase of goods or services by a county, which benefit a 35 -1- LSB 1729HV (2) 88 ec/rn 1/ 3

H.F. 730 county officer or employee, if the purchases benefiting that 1 officer or employee do not exceed a cumulative total purchase 2 price of one six thousand five hundred dollars in a fiscal 3 year. 4 Sec. 3. Section 362.5, subsection 3, paragraph j, Code 2019, 5 is amended to read as follows: 6 j. Contracts not otherwise permitted by this section , for 7 the purchase of goods or services by a city having a population 8 of more than two thousand five hundred, which benefit a city 9 officer or employee, if the purchases benefiting that officer 10 or employee do not exceed a cumulative total purchase price of 11 one six thousand five hundred dollars in a fiscal year. 12 Sec. 4. Section 362.5, subsection 3, paragraph k, Code 2019, 13 is amended by striking the paragraph. 14 EXPLANATION 15 The inclusion of this explanation does not constitute agreement with 16 the explanation’s substance by the members of the general assembly. 17 Current Code provisions generally restrict school board 18 members and city and county officers and employees from 19 entering into contracts with the applicable governmental entity 20 or having an interest, direct or indirect, in a contract with 21 the entity. The prohibition does not, however, apply to 22 contracts if purchases benefiting the individual do not exceed 23 specified value thresholds in a fiscal year. The current 24 thresholds are $2,500 for school board members, $1,500 for 25 county officers or employees, $1,500 for officers or employees 26 of a city with a population of more than 2,500, and $2,500 for 27 officers or employees of a city with a population of 2,500 or 28 less. This bill increases all such contract threshold amounts 29 to $6,000. 30 By operation of law, the threshold amount changes in the bill 31 also apply to other provisions governing school board members 32 and provisions governing certain school organizations and clubs 33 under Code section 298A.15, port authorities under Code chapter 34 28J, regional transit districts under Code chapter 28M, and 35 -2- LSB 1729HV (2) 88 ec/rn 2/ 3

H.F. 730 county enterprise commissions under Code section 331.471. 1 -3- LSB 1729HV (2) 88 ec/rn 3/ 3