HB3378 100TH GENERAL ASSEMBLY

LRB100 10299 MLM 20488 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB3378

Introduced , by Rep. Lou Lang

SYNOPSIS AS INTRODUCED:

105 ILCS 5/10-9

from Ch. 122, par. 10-9

Amends the School Code. In provisions concerning interest of board members in contracts, sets forth additional exemptions from the provisions if the board member maintains less than a 1% share in the ownership of the company with which the school district is attempting to contract and the board member discloses and recuses himself or herself from the deliberations. Sets forth provisions concerning when a board member shall be deemed interested.

A BILL FOR

AN ACT concerning education.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The School Code is amended by changing Section 10-9 as follows:

(105 ILCS 5/10-9) (from Ch. 122, par. 10-9)

Sec. 10-9. Interest of board member in contracts.

(a) No school board member shall be interested, directly or indirectly, in his own name or in the name of any other person, association, trust or corporation, in any contract, work or business of the district or in the sale of any article, whenever the expense, price or consideration of the contract, work, business or sale is paid either from the treasury or by any assessment levied by any statute or ordinance. A school board member shall not be deemed interested if the board member is an employee of a business that is involved in the transaction of business with the school district, provided that the board member has no financial interests other than as an employee. No school board member shall be interested, directly or indirectly, in the purchase of any property which (1) belongs to the district, or (2) is sold for taxes or assessments, or (3) is sold by virtue of legal process at the suit of the district.

(b) However, any board member may provide materials, merchandise, property, services or labor, if:

A. the contract is with a person, firm, partnership, association, corporation or cooperative association in which the board member has less than a 7 1/2% share in the ownership; and

B. such interested board member publicly discloses the nature and extent of his interest prior to or during deliberations concerning the proposed award of the contract; and

C. such interested board member abstains from voting on the award of the contract, though he shall be considered present for the purposes of establishing a quorum; and

D. such contract is approved by a majority vote of those board members presently holding office; and

E. the contract is awarded after sealed bids to the lowest responsible bidder if the amount of the contract exceeds $1500, or awarded without bidding if the amount of the contract is less than $1500; and

F. the award of the contract would not cause the aggregate amount of all such contracts so awarded to the same person, firm, association, partnership, corporation or cooperative association in the same fiscal year to exceed $25,000.

(c) In addition to the above exemption, any board member may provide materials, merchandise, property, services or labor if:

A. the award of the contract is approved by a majority vote of the board provided that any such interested member shall abstain from voting; and

B. the amount of the contract does not exceed $1,000; and

C. the award of the contract would not cause the aggregate amount of all such contracts so awarded to the same person, firm, association, partnership, corporation, or cooperative association in the same fiscal year to exceed $2,000, except with respect to a board member of a school district in which the materials, merchandise, property, services, or labor to be provided under the contract are not available from any other person, firm, association, partnership, corporation, or cooperative association in the district, in which event the award of the contract shall not cause the aggregate amount of all contracts so awarded to that same person, firm, association, partnership, or cooperative association in the same fiscal year to exceed $5,000; and

D. such interested member publicly discloses the nature and extent of his interest prior to or during deliberations concerning the proposed award of the contract; and

E. such interested member abstains from voting on the award of the contract, though he shall be considered present for the purposes of establishing a quorum.

(c-5) In addition to the exemptions in subsection (c) of this Section, any board member may provide materials, merchandise, property, services, or labor if:

A. the contract is with a person, firm, partnership, association, corporation, or cooperative association in which the interested board member has less than a 1% share in the ownership;

B. the award of the contract is approved by a majority vote of the board, provided that any interested board member shall abstain from voting;

C. the interested board member publicly discloses the nature and extent of his or her interest before or during deliberations concerning the proposed award of the contract; and

D. the interested board member abstains from voting on the award of the contract, though he or she shall be considered present for purposes of establishing a quorum.

(d) In addition to exemptions otherwise authorized by this Section, any board member may purchase for use as the board member's primary place of residence a house constructed by the district's vocational education students on the same basis that any other person would be entitled to purchase the property. The sale of the house by the district must comply with the requirements set forth in Section 5-22 of The School Code.

(e) A contract for the procurement of public utility services by a district with a public utility company is not barred by this Section by one or more members of the board being an officer or employee of the public utility company or holding an ownership interest of no more than 7 1/2% in the public utility company, or holding an ownership interest of any size if the school district has a population of less than 7,500 and the public utility's rates are approved by the Illinois Commerce Commission. An elected or appointed member of the board having such an interest shall be deemed not to have a prohibited interest under this Section.

(e-5) For the purposes of this Section, a board member shall not be deemed interested if he or she is an employee of a company or owns or holds an interest of 1% or less in the board member's individual name in a company, or both; that company is involved in the transaction of business with the district; and that company's stock is traded on a nationally-recognized securities market, provided that the interested member: (i) publicly discloses the fact that he or she is an employee or holds an interest of 1% or less in the company, as applicable, before deliberation of the proposed award of the contract; (ii) refrains from evaluating, recommending, approving, deliberating, or otherwise participating in negotiation, approval, or both, of the contract, work, or business; (iii) abstains from voting on the award of the contract, provided that he or she shall be considered present for purposes of establishing a quorum; and (iv) the contract is approved by a majority vote of those members currently holding office.

A board member shall not be deemed interested if the board member owns or holds an interest of 1% or less, not in the board member's individual name but through a mutual fund or exchange-traded fund, in a company; that company is involved in the transaction of business with the school district; and that company's stock is traded on a nationally-recognized securities market.

(f) Nothing contained in this Section, including the restrictions set forth in subsections (b), (c), (c-5), (d), and (e), and (e-5) shall preclude a contract of deposit of monies, loans or other financial services by a school district with a local bank or local savings and loan association, regardless of whether a member or members of the governing body of the school district are interested in such bank or savings and loan association as an officer or employee or as a holder of less than 7 1/2% of the total ownership interest. A member or members holding such an interest in such a contract shall not be deemed to be holding a prohibited interest for purposes of this Act. Such interested member or members of the governing body must publicly state the nature and extent of their interest during deliberations concerning the proposed award of such a contract, but shall not participate in any further deliberations concerning the proposed award. Such interested member or members shall not vote on such a proposed award. Any member or members abstaining from participation in deliberations and voting under this Section may be considered present for purposes of establishing a quorum. Award of such a contract shall require approval by a majority vote of those members presently holding office. Consideration and award of any such contract in which a member or members are interested may only be made at a regularly scheduled public meeting of the governing body of the school district.

(g) Any school board member who violates this Section is guilty of a Class 4 felony and in addition thereto any office held by such person so convicted shall become vacant and shall be so declared as part of the judgment of the court.

(h) Any ownership interest of a school board member in a firm, partnership, association, or corporation involved in the transaction of business with the board member's school district prior to the effective date of this amendatory Act of the 100th General Assembly, which ownership interest and transaction or transactions would have complied with the provisions of this Section as amended to include subsections (c-5) and (e-5), shall not constitute a violation of this Section.

(Source: P.A. 96-998, eff. 7-2-10.)