Senate Study Bill 1075

                                       SENATE FILE       
                                       BY  (PROPOSED COMMITTEE ON LOCAL
                                            GOVERNMENT BILL BY
                                            CHAIRPERSON GASKILL)


    Passed Senate,  Date               Passed House, Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act relating to conflicts of interest in public contracts.
  2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  3 TLSB 2228SC 80
  4 av/pj/5

PAG LIN

  1  1    Section 1.  Section 279.7A, Code 2003, is amended to read
  1  2 as follows:
  1  3    279.7A  INTEREST IN PUBLIC CONTRACTS PROHIBITED ==
  1  4 EXCEPTIONS.
  1  5    A member of the board of directors of a school corporation
  1  6 shall not have an interest, direct or indirect, in a contract
  1  7 for the purchase of goods, including materials and profits,
  1  8 and the performance of services for the director's school
  1  9 corporation.  A contract entered into in violation of this
  1 10 section is void.  This section does not apply to contracts for
  1 11 the purchase of goods or services which benefit a director, or
  1 12 to compensation for part=time or temporary employment which
  1 13 benefits a director, if the benefit to the director does not
  1 14 exceed two thousand five hundred dollars in a fiscal year, and
  1 15 contracts made by a school board, upon competitive bid in
  1 16 writing, publicly invited and opened.  This section does not
  1 17 apply to a contract that is a bond, note, or other obligation
  1 18 of a school corporation if the contract is not acquired
  1 19 directly from the school corporation, but is acquired in a
  1 20 transaction with a third party, who may or may not be the
  1 21 original underwriter, purchaser, or obligee of the contract,
  1 22 or to a contract in which a director has an interest solely by
  1 23 reason of employment if the contract is made by competitive
  1 24 bid in writing, publicly invited and opened, or if the
  1 25 remuneration of employment will not be directly affected as a
  1 26 result of the contract and the duties of employment do not
  1 27 directly involve the procurement or preparation of any part of
  1 28 the contract.  The competitive bid qualification of this
  1 29 section does not apply to a contract for professional services
  1 30 not customarily awarded by competitive bid.
  1 31    Sec. 2.  Section 331.342, subsection 4, Code 2003, is
  1 32 amended to read as follows:
  1 33    4.  Contracts in which a county officer or employee has an
  1 34 interest solely by reason of employment, or a stock interest
  1 35 of the kind described in subsection 8, or both, if the
  2  1 contracts are made by competitive bid, publicly invited and
  2  2 opened, and or if the remuneration of employment will not be
  2  3 directly affected as a result of the contract and the duties
  2  4 of employment do not directly involve the procurement or
  2  5 preparation of any part of the contract.  The competitive bid
  2  6 qualification of this subsection does not apply to a contract
  2  7 for professional services not customarily awarded by
  2  8 competitive bid.
  2  9    Sec. 3.  Section 331.342, Code 2003, is amended by adding
  2 10 the following new subsection:
  2 11    NEW SUBSECTION.  11.  A contract that is a bond, note, or
  2 12 other obligation of the county and the contract is not
  2 13 acquired directly from the county, but is acquired in a
  2 14 transaction with a third party, who may or may not be the
  2 15 original underwriter, purchaser, or obligee of the contract.
  2 16    Sec. 4.  Section 362.5, subsection 5, Code 2003, is amended
  2 17 to read as follows:
  2 18    5.  Contracts in which a city officer or employee has an
  2 19 interest solely by reason of employment, or a stock interest
  2 20 of the kind described in subsection 9, or both, if the
  2 21 contracts are made by competitive bid in writing, publicly
  2 22 invited and opened, or if the remuneration of employment will
  2 23 not be directly affected as a result of the contract and the
  2 24 duties of employment do not directly involve the procurement
  2 25 or preparation of any part of the contract.  The competitive
  2 26 bid qualification of this subsection does not apply to a
  2 27 contract is for professional services not customarily awarded
  2 28 by competitive bid, if the remuneration of employment will not
  2 29 be directly affected as a result of the contract, and if the
  2 30 duties of employment do not directly involve the procurement
  2 31 or preparation of any part of the contract.
  2 32    Sec. 4.  Section 362.5, Code 2003, is amended by adding the
  2 33 following new subsection:
  2 34    NEW SUBSECTION.  13.  A contract that is a bond, note, or
  2 35 other obligation of the city and the contract is not acquired
  3  1 directly from the city, but is acquired in a transaction with
  3  2 a third party who may or may not be the original underwriter,
  3  3 purchaser, or obligee of the contract.
  3  4                           EXPLANATION
  3  5    This bill relates to conflicts of interest in public
  3  6 contracts by persons who hold certain public offices or
  3  7 employment.  The bill provides that members of school boards,
  3  8 and city and county officers and employees are not prohibited
  3  9 from serving in that capacity because of an interest, direct
  3 10 or indirect, in certain contracts if the contracts are made by
  3 11 competitive bid, publicly invited and opened, or if the
  3 12 remuneration of employment for the person is not directly
  3 13 affected as a result of the contract and the duties of the
  3 14 person's employment do not directly involve the procurement or
  3 15 preparation of any part of the contract.
  3 16    The conflict of interest provisions also do not apply to
  3 17 contracts in which a member of a school board, or a city or
  3 18 county officer or employee has a direct or indirect interest,
  3 19 when the contracts are bonds, notes, or other obligations of
  3 20 the school corporation, county, or city that are not acquired
  3 21 directly from that body but instead are acquired in
  3 22 transactions with a third party, who may or may not be the
  3 23 original underwriter, purchaser, or obligee of the contract.
  3 24 LSB 2228SC 80
  3 25 av/pj/5