AN
ACT Relating to municipal officers' interest in contracts; amending RCW
42.23.030, 42.23.040, 42.23.050, and 42.23.060; creating a new section; and
prescribing penalties.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
NEW
SECTION. Sec. 1. The
legislature finds that:
(1)
The current statutes pertaining to municipal officers' beneficial interest in
contracts are quite confusing and have resulted in some inadvertent violations
of the law.
(2)
The dollar thresholds for many of the exemptions have not been changed in over
thirty-five years, and the restrictions apply to the total amount of the
contract instead of the portion of the contract that pertains to the business
operated by the municipal officer.
(3)
The confusion existing over these current statutes discourages some
municipalities from accessing some efficiencies available to them.
Therefore,
it is the intent of the legislature to clarify the statutes pertaining to
municipal officers and contracts and to enact reasonable protections against
inappropriate conflicts of interest.
Sec.
2. RCW
42.23.030 and 1997 c 98 s 1 are each amended to read as follows:
No
municipal officer shall be beneficially interested, directly or indirectly, in
any contract which may be made by, through or under the supervision of such
officer, in whole or in part, or which may be made for the benefit of his or
her office, or accept, directly or indirectly, any compensation, gratuity or
reward in connection with such contract from any other person beneficially
interested therein. This section shall not apply in the following cases:
(1)
The furnishing of electrical, water or other utility services by a municipality
engaged in the business of furnishing such services, at the same rates and on
the same terms as are available to the public generally;
(2)
The designation of public depositaries for municipal funds;
(3)
The publication of legal notices required by law to be published by any
municipality, upon competitive bidding or at rates not higher than prescribed
by law for members of the general public;
(4)
The designation of a school director as clerk or as both clerk and purchasing
agent of a school district;
(5)
The employment of any person by a municipality((, other than a county with a
population of one hundred twenty-five thousand or more, a city of the first or
second class, an irrigation district encompassing in excess of fifty thousand
acres, or a first class school district,)) for unskilled day labor at wages
not exceeding ((one)) two hundred dollars in any calendar month.
The exception provided in this subsection does not apply to a county with a
population of one hundred twenty-five thousand or more, a city with a
population of more than one thousand five hundred, an irrigation district
encompassing more than fifty thousand acres, or a first class school district;
(6)(a)
The letting of any other contract (((except a sale or lease as seller or
lessor) by a municipality, other than a county with a population of one hundred
twenty-five thousand or more, a city with a population of ten thousand or more,
or an irrigation district encompassing in excess of fifty thousand acres:
PROVIDED, That)) in which the total ((volume of business
represented by such contract or contracts in which a particular officer is
interested, singly or in the aggregate, as measured by the dollar amount of the
municipality's liability thereunder, shall)) amount received under the
contract or contracts by the municipal officer or the municipal officer's
business does not exceed ((seven)) one thousand five hundred
((fifty)) dollars in any calendar month((: PROVIDED FURTHER, That)).
(b)
However, in the case of a particular officer of a second class city or
town, or a noncharter optional code city, or a member of any county fair board
in a county which has not established a county purchasing department pursuant
to RCW 36.32.240, the total ((volume)) amount of such contract or
contracts authorized in this subsection (6) may exceed ((seven)) one
thousand five hundred ((fifty)) dollars in any calendar month but
shall not exceed ((nine)) eighteen thousand dollars in any
calendar year((: PROVIDED FURTHER, That there shall be public disclosure by
having an available)).
(c)
The exceptions provided in this subsection (6) do not apply to a sale or lease
by the municipality as the seller or lessor. The exceptions provided in this
subsection (6) also do not apply to the letting of any contract by a county
with a population of one hundred twenty-five thousand or more, a city with a
population of ten thousand or more, or an irrigation district encompassing more
than fifty thousand acres.
(d)
The municipality shall maintain a list of ((such purchases or)) all
contracts((, and if the supplier or contractor is an official of the
municipality, he or she shall not vote on the authorization: PROVIDED FURTHER,
That in the case of a first class school district, there shall be notice of the
proposed contract by publication given in one or more newspapers of general
circulation within the district)) that are awarded under this subsection
(6). The list must be made available for public inspection and copying;
(7)
The leasing by a port district as lessor of port district property to a
municipal officer or to a contracting party in which a municipal officer may be
beneficially interested, if in addition to all other legal requirements, a
board of three disinterested appraisers((, who shall be appointed from
members of the American institute of real estate appraisers by the presiding
judge of)) and the superior court in the county where the property
is situated((, shall find and the court)) finds that all terms and
conditions of such lease are fair to the port district and are in the public
interest. The appraisers must be appointed from members of the American
Institute of Real Estate Appraisers by the presiding judge of the superior
court;
(8)
The letting of any employment contract for the driving of a school bus in a
second class school district((: PROVIDED, That)) if the terms of
such contract ((shall be)) are commensurate with the pay plan or
collective bargaining agreement operating in the district;
(9)
The letting of any employment contract to the spouse of an officer of a ((second
class school district in which less than two hundred full time equivalent
students are enrolled at the start of the school year as defined in RCW
28A.150.040, when such contract is solely for employment as a certificated or
classified employee of the school district, or the letting of any contract to
the spouse of an officer of a)) school district, when such contract is
solely for employment as a substitute teacher for the school district((:
PROVIDED, That)). This exception applies only if the terms of ((such))
the contract ((shall be)) are commensurate with the pay
plan or collective bargaining agreement applicable to all district employees
and the board of directors has found, consistent with the written policy under
RCW 28A.330.240, that there is a shortage of substitute teachers in the school
district;
(10)
The letting of any employment contract to the spouse of an officer of a school
district if the spouse was under contract as a certificated or classified
employee with the school district before the date in which the officer assumes
office((: PROVIDED, That)) and the terms of ((such)) the
contract ((shall be)) are commensurate with the pay plan or
collective bargaining agreement operating in the district. However, in a
second class school district that has less than two hundred full-time
equivalent students enrolled at the start of the school year as defined in RCW
28A.150.040, the spouse is not required to be under contract as a certificated
or classified employee before the date on which the officer assumes office;
(11)
The authorization, approval, or ratification of any employment contract with
the spouse of a public hospital district commissioner if: (a) The spouse was
employed by the public hospital district before the date the commissioner was
initially elected; (b) the terms of the contract are commensurate with the pay
plan or collective bargaining agreement operating in the district for similar
employees; (c) the interest of the commissioner is disclosed to the board of
commissioners and noted in the official minutes or similar records of the
public hospital district prior to the letting or continuation of the contract;
(([and])) and (d) and the commissioner does not vote on the
authorization, approval, or ratification of the contract or any conditions in
the contract.
A
municipal officer may not vote in the authorization, approval, or ratification
of a contract in which he or she is beneficially interested even though one of
the exemptions allowing the awarding of such a contract applies. The interest
of the municipal officer must be disclosed to the governing body of the
municipality and noted in the official minutes or similar records of the
municipality before the formation of the contract.
Sec.
3. RCW
42.23.040 and 1961 c 268 s 5 are each amended to read as follows:
A
municipal officer ((shall)) is not ((be deemed to be))
interested in a contract, within the meaning of RCW 42.23.030, if ((he))
the officer has only a remote interest in the contract and ((if))
the ((fact and)) extent of ((such)) the interest is
disclosed to the governing body of the municipality of which ((he)) the
officer is an officer and noted in the official minutes or similar records
of the municipality prior to the formation of the contract, and thereafter the
governing body authorizes, approves, or ratifies the contract in good faith by
a vote of its membership sufficient for the purpose without counting the vote
or votes of the officer having the remote interest. As used in this section
"remote interest" means:
(1)
That of a nonsalaried officer of a nonprofit corporation;
(2)
That of an employee or agent of a contracting party where the compensation of
such employee or agent consists entirely of fixed wages or salary;
(3)
That of a landlord or tenant of a contracting party;
(4)
That of a holder of less than one percent of the shares of a corporation or
cooperative which is a contracting party.
None
of the provisions of this section ((shall be)) are applicable to
any officer interested in a contract, ((though his)) even if the
officer's interest ((be)) is only remote, ((who)) if
the officer influences or attempts to influence any other officer of the
municipality of which he or she is an officer to enter into the
contract.
Sec.
4. RCW
42.23.050 and 1961 c 268 s 6 are each amended to read as follows:
Any
contract made in violation of the provisions of this ((act shall be)) chapter
is void and the performance thereof, in full or in part, by a contracting
party shall not be the basis of any claim against the municipality. Any
officer violating the provisions of this ((act shall be)) chapter is
liable to the municipality of which he or she is an officer for a
penalty in the amount of ((three)) five hundred dollars, in
addition to such other civil or criminal liability or penalty as may otherwise
be imposed upon ((him)) the officer by law.
In
addition to all other penalties, civil or criminal, the violation by any
officer of the provisions of this ((act shall work a)) chapter may be
grounds for forfeiture of his or her office.
Sec.
5. RCW
42.23.060 and 1961 c 268 s 16 are each amended to read as follows:
If any provision of this ((act)) chapter conflicts
with any provision of a city or county charter, or with any provision
of a city‑county charter, the ((city)) charter shall control if
it contains stricter requirements than this chapter. The provisions of this
chapter shall be considered as minimum standards to be enforced by
municipalities.
