§ 14-234. Public officers or employees benefiting from public contracts; exceptions.
§ 14‑234. Publicofficers or employees benefiting from public contracts; exceptions.
(a) (1) Nopublic officer or employee who is involved in making or administering acontract on behalf of a public agency may derive a direct benefit from thecontract except as provided in this section, or as otherwise allowed by law.
(2) A public officer oremployee who will derive a direct benefit from a contract with the publicagency he or she serves, but who is not involved in making or administering thecontract, shall not attempt to influence any other person who is involved inmaking or administering the contract.
(3) No public officer oremployee may solicit or receive any gift, reward, or promise of reward inexchange for recommending, influencing, or attempting to influence the award ofa contract by the public agency he or she serves.
(a1) For purposes of thissection:
(1) As used in thissection, the term "public officer" means an individual who is electedor appointed to serve or represent a public agency, other than an employee orindependent contractor of a public agency.
(2) A public officer oremployee is involved in administering a contract if he or she oversees theperformance of the contract or has authority to make decisions regarding thecontract or to interpret the contract.
(3) A public officer oremployee is involved in making a contract if he or she participates in thedevelopment of specifications or terms or in the preparation or award of thecontract. 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 thecontract, whether or not the public officer actually participates in thataction, unless the contract is approved under an exception to this sectionunder which the public officer is allowed to benefit and is prohibited fromvoting.
(4) A public officer oremployee derives a direct benefit from a contract if the person or his or herspouse: (i) has more than a ten percent (10%) ownership or other interest in anentity that is a party to the contract; (ii) derives any income or commissiondirectly from the contract; or (iii) acquires property under the contract.
(5) A public officer oremployee is not involved in making or administering a contract solely becauseof the performance of ministerial duties related to the contract.
(b) Subdivision (a)(1)of this section does not apply to any of the following:
(1) Any contract betweena public agency and a bank, banking institution, savings and loan association,or with a public utility regulated under the provisions of Chapter 62 of theGeneral Statutes.
(2) An interest inproperty conveyed by an officer or employee of a public agency under ajudgment, including a consent judgment, entered by a superior court judge in acondemnation proceeding initiated by the public agency.
(3) Any employmentrelationship between a public agency and the spouse of a public officer of theagency.
(4) Remuneration from apublic agency for services, facilities, or supplies furnished directly to needyindividuals by a public officer or employee of the agency under any program ofdirect public assistance being rendered under the laws of this State or theUnited States to needy persons administered in whole or in part by the agencyif: (i) the programs of public assistance to needy persons are open to generalparticipation on a nondiscriminatory basis to the practitioners of any givenprofession, professions or occupation; (ii) neither the agency nor any of itsemployees or agents, have control over who, among licensed or qualifiedproviders, shall be selected by the beneficiaries of the assistance; (iii) theremuneration for the services, facilities or supplies are in the same amount aswould be paid to any other provider; and (iv) although the public officer oremployee may participate in making determinations of eligibility of needypersons to receive the assistance, he or she takes no part in approving his orher own bill or claim for remuneration.
(b1) No public officerwho will derive a direct benefit from a contract entered into under subsection(b) of this section may deliberate or vote on the contract or attempt toinfluence any other person who is involved in making or administering thecontract.
(c) through (d) Repealedby Session Laws 2001‑409, s. 1, effective July 1, 2002.
(d1) Subdivision (a)(1)of this section does not apply to (i) any elected official or person appointedto fill an elective office of a village, town, or city having a population ofno more than 15,000 according to the most recent official federal census, (ii)any elected official or person appointed to fill an elective office of a countywithin which there is located no village, town, or city with a population ofmore than 15,000 according to the most recent official federal census, (iii)any elected official or person appointed to fill an elective office on a cityboard of education in a city having a population of no more than 15,000according to the most recent official federal census, (iv) any elected officialor person appointed to fill an elective office as a member of a county board ofeducation in a county within which there is located no village, town or citywith a population of more than 15,000 according to the most recent officialfederal census, (v) any physician, pharmacist, dentist, optometrist,veterinarian, or nurse appointed to a county social services board, localhealth board, or area mental health, developmental disabilities, and substanceabuse board serving one or more counties within which there is located novillage, town, or city with a population of more than 15,000 according to themost recent official federal census, and (vi) any member of the board ofdirectors of a public hospital if all of the following apply:
(1) The undertaking orcontract or series of undertakings or 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, andsubstance abuse board, or public hospital and one of its officials is approvedby specific resolution of the governing body adopted in an open and publicmeeting, and recorded in its minutes and the amount does not exceed twentythousand dollars ($20,000) for medically related services and forty thousanddollars ($40,000) for other goods or services within a 12‑month period.
(2) The officialentering into the contract with the unit or agency does not participate in anyway or vote.
(3) The total annualamount of contracts with each official, shall be specifically noted in theaudited annual financial statement of the village, town, city, or county.
(4) The governing boardof any village, town, city, county, county social services board, county orcity board of education, local health board, area mental health, developmentaldisabilities, and substance abuse board, or public hospital which contractswith any of the officials of their governmental unit shall post in aconspicuous place in its village, town, or city hall, or courthouse, as the casemay be, a list of all such officials with whom such contracts have been made,briefly describing the subject matter of the undertakings or contracts andshowing their total amounts; this list shall cover the preceding 12 months andshall be brought up‑to‑date at least quarterly.
(d2) Subsection (d1) ofthis section does not apply to contracts that are subject to Article 8 ofChapter 143 of the General Statutes, Public Building Contracts.
(d3) Subsection (a) ofthis section does not apply to an application for or the receipt of a grantunder the Agriculture Cost Share Program for Nonpoint Source Pollution Controlcreated pursuant to Part 9 of Article 21 of Chapter 143 of the General Statutesor the Community Conservation Assistance Program created pursuant to Part 11 ofArticle 21 of Chapter 143 of the General Statutes by a member of the Soil andWater Conservation Commission if the requirements of G.S. 139‑4(e) aremet, and does not apply to a district supervisor of a soil and waterconservation district if the requirements of G.S. 139‑8(b) are met.
(d4) Subsection (a) ofthis section does not apply to an application for, or the receipt of a grant orother financial assistance from, the Tobacco Trust Fund created under Article75 of Chapter 143 of the General Statutes by a member of the Tobacco Trust FundCommission or an entity in which a member of the Commission has an interestprovided that the requirements of G.S. 143‑717(h) are met.
(d5) This section doesnot apply to a public hospital subject to G.S. 131E‑14.2 or a publichospital authority subject to G.S. 131E‑21.
(d6) This section doesnot apply to employment contracts between the State Board of Education and itschief executive officer.
(e) Anyone violatingthis section shall be guilty of a Class 1 misdemeanor.
(f) A contract enteredinto in violation of this section is void. A contract that is void under thissection 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 publicagency that is a party to the contract may request approval to continuecontracts 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 approvalfrom the chair of the Local Government Commission.
(2) All other publicagencies may request approval from the State Director of the Budget.
Approval of continuation ofcontracts under this subsection shall be given for the minimum period necessaryto protect the public health or welfare. (1825, c. 1269, P.R.; 1826, c. 29; R.C., c. 34, s.38; Code, s. 1011; Rev., s. 3572; C.S., s. 4388; 1929, c. 19, s. 1; 1969, c.1027; 1975, c. 409; 1977, cc. 240, 761; 1979, c. 720; 1981, c. 103, ss. 1, 2,5; 1983, c. 544, ss. 1, 2; 1985, c. 190; 1987, c. 570; 1989, c. 231; 1991 (Reg.Sess., 1992), c. 1030, s. 5; 1993, c. 539, s. 145; 1994, Ex. Sess., c. 24, s.14(c); 1995, c. 519, s. 4; 2000‑147, s. 6; 2001‑409, s. 1; 2001‑487,ss. 44(a), 44(b), 45; 2002‑159, s. 28; 2006‑78, s. 2; 2009‑2,s. 2; 2009‑226, s. 1.)