GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2001
S	1
SENATE BILL 922
     

 
Short Title:	Conflict of Interest.	()	
Sponsors:	Senator Clodfelter.	
Referred to:	Judiciary I.	
April 5, 2001

A BILL TO BE ENTITLED
AN ACT to amend the laws regarding conflicts of interest.

The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 14‑234 reads as rewritten:
"§ 14‑234.  Public officers or employees benefiting from public contracts; exceptions.
(a)	No public officer or employee who is involved in making or administering a contract on behalf of a public agency may derive a direct benefit from the contract except as provided in this section, or as otherwise allowed by law. A public officer or employee who will derive a direct benefit from a contract with the public agency he or she serves, but who is not involved in making or administering the contract, shall not attempt to influence any other person who is involved in making or administering the contract. No public officer or employee may solicit or receive any gift, reward, or promise of reward in exchange for recommending, influencing, or attempting to influence the award of a contract by the public agency he or she serves.
(a1)	For purposes of this section:
(1)	A public officer or employee is involved in making a contract if he or she participates in the development of specifications or terms or in the preparation or award of the contract. A public officer is also involved in making a contract if the board, commission, or other body of which he or she is a member takes action on the contract, whether or not the public officer actually participates in that action.
(2)	A public officer or employee derives a direct benefit from a contract if the person or his or her spouse:  (i) has more than a ten percent (10%) ownership or other interest in an entity that is a party to the contract; (ii) derives any income or commission directly from the contract; or (iii) acquires property under the contract.
(b)	Exceptions. This section does not apply to any of the following:
(1)	Any contract between a public agency and a bank, banking institution, savings and loan association, or with a public utility regulated under the provisions of Chapter 62 of the General Statutes.
(2)	Real property conveyed by an officer or employee of a public agency under a court order in a condemnation proceeding initiated by the public agency.
(3)	Remuneration from a public agency for services, facilities, or supplies furnished directly to needy individuals by an officer or employee of the agency under any program of direct public assistance being rendered under the laws of this State or the United States to needy persons administered in whole or in part by the agency if:  (i) the programs of public assistance to needy persons are open to general participation on a nondiscriminatory basis to the practitioners of any given profession, professions or occupation; (ii) neither the agency nor any of its employees or agents, have control over who, among licensed or qualified providers, shall be selected by the beneficiaries of the assistance, (iii) the remuneration for  the services, facilities or supplies are in the same amount as would be paid to any other provider; and (iv) although the public officer or employee may participate in making determinations of eligibility of needy persons to receive the assistance, he or she takes no part in approving his or her own bill or claim for remuneration.
No public officer who will derive a direct benefit from a contract entered into under this subsection may deliberate or vote on the contract.
			
(d1)	The first sentence of subsection (a) does not apply to (i) any elected official or person appointed to fill an elective office of a village, town, or city having a population of no more than 7,500 according to the most recent official federal census, (ii) any elected official or person appointed to fill an elective office of a county within which there is located no village, town, or city with a population of more than 7,500 according to the most recent official federal census, (iii) any elected official or person appointed to fill an elective office on a city board of education in a city having a population of no more than 7,500 according to the most recent official federal census, (iv) any elected official or person appointed to fill an elective office as a member of a county board of education in a county within which there is located no village, town or city with a population of more than 7,500 according to the most recent official federal census, (v) any physician, pharmacist, dentist, optometrist, veterinarian, or nurse appointed to a county social services board, local health board, or area mental health, developmental disabilities, and substance abuse board serving one or more counties within which there is located no village, town, or city with a population of more than 7,500 according to the most recent official federal census, and (vi) any member of the board of directors of a public hospital if:
(1)	The contract or series of contracts between the village, town, city, county, county social services board, county or city board of education, local health board or area mental health, developmental disabilities, and substance abuse board, or public hospital and one of its officials is approved by specific resolution of the governing body adopted in an open and public meeting, and recorded in its minutes and the amount does not exceed ten thousand dollars ($10,000) for medically related services and fifteen thousand dollars ($15,000) for other goods or services within a 12‑month period; and
(2)	The official entering into the contract with the unit or agency does not participate in any way or vote; and
(3)	The total annual amount of contracts with each official, shall be specifically noted in the audited annual financial statement of the village, town, city, or county; and
(4)	The governing board of any village, town, city, county, county social services board, county or city board of education, local health board, area mental health, developmental disabilities, and substance abuse board, or public hospital which contracts with any of the officials of their governmental unit shall post in a conspicuous place in its village, town, or city hall, or courthouse, as the case may be, a list of all such officials with whom such contracts have been made, briefly describing the subject matter of the undertakings or contracts and showing their total amounts; this list shall cover the preceding 12 months and shall be brought up‑to‑date at least quarterly.
(d2)	Subsection (d1) does not apply to contracts that are subject to Article 8 of Chapter 143 of the General Statutes, Public Building Contracts.
(d3)	The first sentence of subsection (a) of this section does not apply to an application for or the receipt of a grant under the Agriculture Cost Share Program for Nonpoint Source Pollution Control created pursuant to G.S. 143‑215.74 by a member of the Soil and Water Conservation Commission if the requirements of G.S. 139‑4(e) are met, and does not apply to a district supervisor of a soil and water conservation district if the requirements of G.S. 139‑8(b) are met.
(d4)	Subsection (a) of this section does not apply to an application for, or the receipt of a grant or other financial assistance from, the Tobacco Trust Fund created under Article 75 of Chapter 143 of the General Statutes by a member of the Tobacco Trust Fund Commission or an entity in which a member of the Commission has an interest provided that the requirements of G.S. 143‑717(g) are met.
(e)	Anyone violating this section shall be guilty of a Class 1 misdemeanor.
(f)	A contract entered into in violation of this section is void. A contract that is void under this section may continue in effect until an alternative can be arranged when:  (i) immediate termination would result in harm to the public health or welfare, and (ii) the continuation is approved as provided in this subsection. A public agency that is a party to the contract may request approval to continue contracts under this subsection as follows:
(1)	Local governments, as defined in G.S. 159-7(15), public authorities, as defined in G.S. 159-7(10), local school administrative units, and community colleges may request approval from the chairman of the Local Government Commission.
(2)	All other public agencies may request approval from the State Director of the Budget.
Approval of continuation of contracts under this subsection shall be given for the minimum period necessary to protect the public health or welfare."
SECTION 2.  G.S. 14‑236 is repealed.
SECTION 3.  G.S. 14‑237 is repealed.
SECTION 4.  G.S. 115C‑48(a) reads as rewritten:
"(a)	Members of local boards of education are criminally liable for certain conduct as provided in G.S. 14-234."
SECTION 5.  G.S. 115D‑26 reads as rewritten:
"§ 115D‑26.  Conflict of interest.
All local trustees and employees of community colleges covered under this Chapter must adhere to the conflict of interest provisions found in G.S. 14-234."
SECTION 6.  G.S. 153A‑44 reads as rewritten:
"§ 153A‑44.  Members excused from voting.
The board may excuse a member from voting, but only upon questions involving the member's own financial interest or official conduct, or on matters on which the member is prohibited from voting under G.S. 14-234. (For purposes of this section, the question of the compensation and allowances of members of the board does not involve a member's own financial interest or official conduct.)"
SECTION 7.  G.S. 160A‑75 reads as rewritten:
"§ 160A‑75.  Voting.
No member shall be excused from voting except upon matters involving the consideration of the member's own financial interest or official conduct, or on matters on which the member is prohibited from voting under G.S. 14-234. In all other cases, a failure to vote by a member who is physically present in the council chamber, or who has withdrawn without being excused by a majority vote of the remaining members present, shall be recorded as an affirmative vote. The question of the compensation and allowances of members of the council is not a matter involving a member's own financial interest or official conduct.
An affirmative vote equal to a majority of all the members of the council not excused from voting on the question in issue (including the mayor's vote in case of an equal division) shall be required to adopt an ordinance, take any action having the effect of an ordinance, authorize or commit the expenditure of public funds, or make, ratify, or authorize any contract on behalf of the city. In addition, no ordinance nor any action having the effect of any ordinance may be finally adopted on the date on which it is introduced except by an affirmative vote equal to or greater than two thirds of all the actual membership of the council, excluding vacant seats (not including the mayor unless he has the right to vote on all questions before the council). For purposes of this section, an ordinance shall be deemed to have been introduced on the date the subject matter is first voted on by the council."
SECTION 8.  This act becomes effective December 1, 2001, and applies to offenses committed on or after that date.  Prosecutions for offenses committed before the effective date of this act are not abated or affected by this act, and the statutes that would be applicable but for this act remain applicable to those prosecutions.