H.F. 178 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 13 not exceed two thousand five hundred dollars the allowable 14 threshold amount in a fiscal year, and contracts made by a 15 school board, upon competitive bid in writing, publicly invited 16 and opened. For purposes of this subsection, “allowable 17 threshold amount” means an amount, for a fiscal year, equal to 18 the greater of six thousand dollars or the amount, in dollars, 19 equal to one percentage point more than the allowable threshold 20 amount for the prior fiscal year. 21 3. This section does not apply to a contract that is a 22 bond, note, or other obligation of a school corporation if the 23 contract is not acquired directly from the school corporation, 24 but is acquired in a transaction with a third party, who may 25 or may not be the original underwriter, purchaser, or obligee 26 of the contract, or to a contract in which a director has an 27 interest solely by reason of employment if the contract is made 28 by competitive bid in writing, publicly invited and opened, or 29 if the remuneration of employment will not be directly affected 30 as a result of the contract and the duties of employment do not 31 directly involve the procurement or preparation of any part of 32 the contract. 33 4. The competitive bid qualification of this section 34 does not apply to a contract for professional services not 35 -1- LSB 1729YH (4) 88 ec/rn 1/ 3

H.F. 178 customarily awarded by competitive bid. 1 Sec. 2. Section 331.342, subsection 1, Code 2019, is amended 2 to read as follows: 3 1. As used in this section , “contract” : 4 a. “Allowable threshold amount” means an amount, for a 5 fiscal year, equal to the greater of six thousand dollars or 6 the amount, in dollars, equal to one percentage point more than 7 the allowable purchasing amount for the prior fiscal year. 8 b. “Contract” means a claim, account, or demand against 9 or agreement with a county, express or implied, other than a 10 contract to serve as an officer or employee of the county. 11 However, contracts subject to section 314.2 are not subject to 12 this section . 13 Sec. 3. Section 331.342, subsection 2, paragraph j, Code 14 2019, is amended to read as follows: 15 j. Contracts not otherwise permitted by this section , for 16 the purchase of goods or services by a county, which benefit 17 a county officer or employee, if the purchases benefiting 18 that officer or employee do not exceed a cumulative total 19 purchase price of one thousand five hundred dollars equal to 20 the allowable threshold amount in a fiscal year. 21 Sec. 4. Section 362.5, subsection 1, Code 2019, is amended 22 to read as follows: 23 1. When used in this section , “contract” : 24 a. “Allowable threshold amount” means an amount, for a 25 fiscal year, equal to the greater of six thousand dollars or 26 the amount, in dollars, equal to one percentage point more than 27 the allowable purchasing amount for the prior fiscal year. 28 b. “Contract” means any claim, account, or demand against or 29 agreement with a city, express or implied. 30 Sec. 5. Section 362.5, subsection 3, paragraph j, Code 2019, 31 is amended to read as follows: 32 j. Contracts not otherwise permitted by this section , for 33 the purchase of goods or services by a city having a population 34 of more than two thousand five hundred, which benefit a city 35 -2- LSB 1729YH (4) 88 ec/rn 2/ 3

H.F. 178 officer or employee, if the purchases benefiting that officer 1 or employee do not exceed a cumulative total purchase price 2 of one thousand five hundred dollars equal to the allowable 3 threshold amount in a fiscal year. 4 Sec. 6. Section 362.5, subsection 3, paragraph k, Code 2019, 5 is amended by striking the paragraph. 6 EXPLANATION 7 The inclusion of this explanation does not constitute agreement with 8 the explanation’s substance by the members of the general assembly. 9 Current Code provisions generally restrict school board 10 members and city and county officers and employees from 11 entering into contracts with the applicable governmental entity 12 or having an interest, direct or indirect, in a contract with 13 the entity. The prohibition does not, however, apply to 14 contracts if purchases benefiting the individual do not exceed 15 specified value thresholds in a fiscal year. The current 16 thresholds are $2,500 for school board members, $1,500 for 17 county officers or employees, $1,500 for officers or employees 18 of a city with a population of more than 2,500, and $2,500 for 19 officers or employees of a city with a population of 2,500 or 20 less. This bill increases all such contract threshold amounts 21 to an amount equal to the “allowable threshold amount” in a 22 fiscal year. The bill defines “allowable threshold amount” as 23 an amount, in a fiscal year, equal to the greater of $6,000 or 24 an amount equal to one percentage point more than the allowable 25 threshold amount for the prior fiscal year. 26 By operation of law, the threshold amount changes in the bill 27 also apply to other provisions governing school board members 28 and provisions governing certain school organizations and clubs 29 under Code section 298A.15, port authorities under Code chapter 30 28J, regional transit districts under Code chapter 28M, and 31 county enterprise commissions under Code section 331.471. 32 -3- LSB 1729YH (4) 88 ec/rn 3/ 3