§ 14-234. Public officers or employees benefiting from
public contracts; exceptions.
(a) (1) 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.
(2) 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.
(3) 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) As used in this section, the term "public officer"
means an individual who is elected or appointed to
serve or represent a public agency, other than an
employee or independent contractor of a public
agency.
(2) A public officer or employee is involved in
administering a contract if he or she oversees the
performance of the contract or has authority to
make decisions regarding the contract or to
interpret the contract.
(3) 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, unless the contract is
approved under an exception to this section under
which the public officer is allowed to benefit and
is prohibited from voting.
(4) 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.
(5) A public officer or employee is not involved in
making or administering a contract solely because
of 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 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) An interest in property conveyed by an officer or
employee of a public agency under a judgment,
including a consent judgment, entered by a superior
court judge in a condemnation proceeding initiated
by the public agency.
(3) Any employment relationship between a public agency
and the spouse of a public officer of the agency.
(4) Remuneration from a public agency for services,
facilities, or supplies furnished directly to needy
individuals by a public 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.
(b1)No public officer who 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 to influence any
other person who is involved in making or administering the
contract.
(c) through (d) Repealed by 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 appointed to fill an elective
office of a village, town, or city having a population of no
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 county within which there is located no
village, town, or city with a population of more 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 city board of education in a city having a population of no
more than 15,000 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 15,000 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 15,000
according to the most recent official federal census, and (vi)
any member of the board of directors of a public hospital if all
of the following apply:
(1) The undertaking or contract 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, 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 twelve
thousand five hundred dollars ($12,500) for
medically related services and twenty-five thousand
dollars ($25,000) for other goods or services
within a 12-month period.
(2) The official entering into the contract with the
unit or agency does not participate in any way or
vote.
(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.
(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) of this section does not apply to
contracts that are subject to Article 8 of Chapter 143 of the
General Statutes, Public Building Contracts.
(d3)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(h) are met.
(d5)This section does not apply to a public hospital subject
to G.S. 131E-14.2 or a public hospital authority subject to G.S.
131E-21.
(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 chair 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. (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.)