Bill Text: IL HB3378 | 2017-2018 | 100th General Assembly | Engrossed


Bill Title: 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.

Spectrum: Slight Partisan Bill (Democrat 2-1)

Status: (Introduced) 2017-04-26 - Added Co-Sponsor Rep. Tony McCombie [HB3378 Detail]

Download: Illinois-2017-HB3378-Engrossed.html



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1 AN ACT concerning education.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The School Code is amended by changing Section
510-9 as follows:
6 (105 ILCS 5/10-9) (from Ch. 122, par. 10-9)
7 Sec. 10-9. Interest of board member in contracts.
8 (a) No school board member shall be interested, directly or
9indirectly, in his own name or in the name of any other person,
10association, trust or corporation, in any contract, work or
11business of the district or in the sale of any article,
12whenever the expense, price or consideration of the contract,
13work, business or sale is paid either from the treasury or by
14any assessment levied by any statute or ordinance. A school
15board member shall not be deemed interested if the board member
16is an employee of a business that is involved in the
17transaction of business with the school district, provided that
18the board member has no financial interests other than as an
19employee. No school board member shall be interested, directly
20or indirectly, in the purchase of any property which (1)
21belongs to the district, or (2) is sold for taxes or
22assessments, or (3) is sold by virtue of legal process at the
23suit of the district.

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1 (b) However, any board member may provide materials,
2merchandise, property, services or labor, if:
3 A. the contract is with a person, firm, partnership,
4 association, corporation or cooperative association in
5 which the board member has less than a 7 1/2% share in the
6 ownership; and
7 B. such interested board member publicly discloses the
8 nature and extent of his interest prior to or during
9 deliberations concerning the proposed award of the
10 contract; and
11 C. such interested board member abstains from voting on
12 the award of the contract, though he shall be considered
13 present for the purposes of establishing a quorum; and
14 D. such contract is approved by a majority vote of
15 those board members presently holding office; and
16 E. the contract is awarded after sealed bids to the
17 lowest responsible bidder if the amount of the contract
18 exceeds $1500, or awarded without bidding if the amount of
19 the contract is less than $1500; and
20 F. the award of the contract would not cause the
21 aggregate amount of all such contracts so awarded to the
22 same person, firm, association, partnership, corporation
23 or cooperative association in the same fiscal year to
24 exceed $25,000.
25 (c) In addition to the above exemption, any board member
26may provide materials, merchandise, property, services or

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1labor if:
2 A. the award of the contract is approved by a majority
3 vote of the board provided that any such interested member
4 shall abstain from voting; and
5 B. the amount of the contract does not exceed $1,000;
6 and
7 C. the award of the contract would not cause the
8 aggregate amount of all such contracts so awarded to the
9 same person, firm, association, partnership, corporation,
10 or cooperative association in the same fiscal year to
11 exceed $2,000, except with respect to a board member of a
12 school district in which the materials, merchandise,
13 property, services, or labor to be provided under the
14 contract are not available from any other person, firm,
15 association, partnership, corporation, or cooperative
16 association in the district, in which event the award of
17 the contract shall not cause the aggregate amount of all
18 contracts so awarded to that same person, firm,
19 association, partnership, or cooperative association in
20 the same fiscal year to exceed $5,000; and
21 D. such interested member publicly discloses the
22 nature and extent of his interest prior to or during
23 deliberations concerning the proposed award of the
24 contract; and
25 E. such interested member abstains from voting on the
26 award of the contract, though he shall be considered

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1 present for the purposes of establishing a quorum.
2 (c-5) In addition to the exemptions in subsection (c) of
3this Section, any board member may provide materials,
4merchandise, property, services, or labor if:
5 A. the contract is with a person, firm, partnership,
6 association, corporation, or cooperative association in
7 which the interested board member has less than a 1% share
8 in the ownership;
9 B. the award of the contract is approved by a majority
10 vote of the board, provided that any interested board
11 member shall abstain from voting;
12 C. the interested board member publicly discloses the
13 nature and extent of his or her interest before or during
14 deliberations concerning the proposed award of the
15 contract; and
16 D. the interested board member abstains from voting on
17 the award of the contract, though he or she shall be
18 considered present for purposes of establishing a quorum.
19 (d) In addition to exemptions otherwise authorized by this
20Section, any board member may purchase for use as the board
21member's primary place of residence a house constructed by the
22district's vocational education students on the same basis that
23any other person would be entitled to purchase the property.
24The sale of the house by the district must comply with the
25requirements set forth in Section 5-22 of The School Code.
26 (e) A contract for the procurement of public utility

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1services by a district with a public utility company is not
2barred by this Section by one or more members of the board
3being an officer or employee of the public utility company or
4holding an ownership interest of no more than 7 1/2% in the
5public utility company, or holding an ownership interest of any
6size if the school district has a population of less than 7,500
7and the public utility's rates are approved by the Illinois
8Commerce Commission. An elected or appointed member of the
9board having such an interest shall be deemed not to have a
10prohibited interest under this Section.
11 (e-5) For the purposes of this Section, a board member
12shall not be deemed interested if he or she is an employee of a
13company or owns or holds an interest of 1% or less in the board
14member's individual name in a company, or both; that company is
15involved in the transaction of business with the district; and
16that company's stock is traded on a nationally-recognized
17securities market, provided that the interested member: (i)
18publicly discloses the fact that he or she is an employee or
19holds an interest of 1% or less in the company, as applicable,
20before deliberation of the proposed award of the contract; (ii)
21refrains from evaluating, recommending, approving,
22deliberating, or otherwise participating in negotiation,
23approval, or both, of the contract, work, or business; (iii)
24abstains from voting on the award of the contract, provided
25that he or she shall be considered present for purposes of
26establishing a quorum; and (iv) the contract is approved by a

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1majority vote of those members currently holding office.
2 A board member shall not be deemed interested if the board
3member owns or holds an interest of 1% or less, not in the
4board member's individual name but through a mutual fund or
5exchange-traded fund, in a company; that company is involved in
6the transaction of business with the school district; and that
7company's stock is traded on a nationally-recognized
8securities market.
9 (f) Nothing contained in this Section, including the
10restrictions set forth in subsections (b), (c), (c-5), (d), and
11(e), and (e-5) shall preclude a contract of deposit of monies,
12loans or other financial services by a school district with a
13local bank or local savings and loan association, regardless of
14whether a member or members of the governing body of the school
15district are interested in such bank or savings and loan
16association as an officer or employee or as a holder of less
17than 7 1/2% of the total ownership interest. A member or
18members holding such an interest in such a contract shall not
19be deemed to be holding a prohibited interest for purposes of
20this Act. Such interested member or members of the governing
21body must publicly state the nature and extent of their
22interest during deliberations concerning the proposed award of
23such a contract, but shall not participate in any further
24deliberations concerning the proposed award. Such interested
25member or members shall not vote on such a proposed award. Any
26member or members abstaining from participation in

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1deliberations and voting under this Section may be considered
2present for purposes of establishing a quorum. Award of such a
3contract shall require approval by a majority vote of those
4members presently holding office. Consideration and award of
5any such contract in which a member or members are interested
6may only be made at a regularly scheduled public meeting of the
7governing body of the school district.
8 (g) Any school board member who violates this Section is
9guilty of a Class 4 felony and in addition thereto any office
10held by such person so convicted shall become vacant and shall
11be so declared as part of the judgment of the court.
12 (h) Any ownership interest of a school board member in a
13firm, partnership, association, or corporation involved in the
14transaction of business with the board member's school district
15prior to the effective date of this amendatory Act of the 100th
16General Assembly, which ownership interest and transaction or
17transactions would have complied with the provisions of this
18Section as amended to include subsections (c-5) and (e-5),
19shall not constitute a violation of this Section.
20(Source: P.A. 96-998, eff. 7-2-10.)
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