BILL REQ. #:  H-1245.1 

Read first time 02/13/13.   Referred to Committee on Government Operations & Elections.

     AN ACT Relating to ethical standards for public officers and agencies; and amending RCW 42.23.020, 42.23.030, 42.23.040, 42.23.050, and 42.23.070.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 42.23.020 and 1961 c 268 s 3 are each amended to read as follows:
     ((For the purpose of chapter 268, Laws of 1961:)) The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Municipality" ((shall)) includes all counties, cities, towns, districts, and other municipal corporations and quasi municipal corporations organized under the laws of the state of Washington((;)).
     (2) "Municipal officer" and "officer" ((shall)) each include all elected and appointed officers of a municipality, together with all deputies and assistants of such an officer, and all persons exercising or undertaking to exercise any of the powers or functions of a municipal officer((;)).
     (3) "Contract" ((shall)) includes any contract, sale, lease, or purchase((;)).
     (4) "Contracting party" ((shall)) includes any person, partnership, association, cooperative, corporation, or other business entity which is a party to a contract with a municipality.
     (5) "Apparent conflict of interest" means the appearance of a private interest, actual or not, that a reasonable person would conclude based on the circumstances is likely to compromise the officer's or employee's judgment or is in conflict with the proper discharge of the officer's or employee's official duties.
     (6) "Beneficial interest" has the definition in RCW 42.52.010.
     (7) "Municipal employee" or "employee" means an individual who is employed by any department in any branch of municipal government.
     (8) "Participate" means to participate in municipal action or a proceeding personally and substantially as a municipal officer or municipal employee, through approval, disapproval, decision, recommendation, the rendering of advice, investigation, or otherwise but does not include preparation, consideration, or enactment of legislation or the performance of legislative duties.
     (9)(a) "Transaction involving the municipality" means a proceeding, application, submission, request for a ruling or other determination, contract, claim, case, or other similar matter that the municipal officer, municipal employee, or former municipal officer or municipal employee in question believes, or has reason to believe:
     (i) Is, or will be, the subject of municipal action; or
     (ii) Is one to which the municipality is or will be a party; or
     (iii) Is one in which the municipality has a direct and substantial proprietary interest.
     (b) "Transaction involving the municipality" does not include: Preparation, consideration, or enactment of legislation, including appropriation of moneys in a budget, or the performance of legislative duties by an officer or employee; or a claim, case, lawsuit, or similar matter if the officer or employee did not participate in the underlying transaction involving the municipality that is the basis for the claim, case, or lawsuit.

Sec. 2   RCW 42.23.030 and 2007 c 298 s 1 are each amended to read as follows:
     (1) No municipal officer or municipal employee shall be beneficially interested, directly or indirectly, in any contract which may be made by, through, or under the supervision of such officer or employee, in whole or in part, or which may be made for the benefit of his or her office or position, 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))) (a) 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))) (b) The designation of public depositaries for municipal funds;
     (((3))) (c) 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))) (d) The designation of a school director as clerk or as both clerk and purchasing agent of a school district;
     (((5))) (e) The employment of any person by a municipality for unskilled day labor at wages not exceeding 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))) (f)(i) The letting of any other contract in which the total amount received under the contract or contracts by the municipal officer or the municipal officer's business does not exceed one thousand five hundred dollars in any calendar month.
     (((b))) (ii) 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 amount of such contract or contracts authorized in this subsection (((6))) (1)(f) may exceed one thousand five hundred dollars in any calendar month but shall not exceed eighteen thousand dollars in any calendar year.
     (((c)(i))) (iii)(A) In the case of a particular officer of a rural public hospital district, as defined in RCW 70.44.460, the total amount of such contract or contracts authorized in this subsection (((6))) (1)(f) may exceed one thousand five hundred dollars in any calendar month, but shall not exceed twenty-four thousand dollars in any calendar year.
     (((ii))) (B) At the beginning of each calendar year, beginning with the 2006 calendar year, the legislative authority of the rural public hospital district shall increase the calendar year limitation described in this subsection (((6)(c))) (1)(f)(iii) by an amount equal to the dollar amount for the previous calendar year multiplied by the change in the consumer price index as of the close of the twelve-month period ending December 31st of that previous calendar year. If the new dollar amount established under this subsection is not a multiple of ten dollars, the increase shall be rounded to the next lowest multiple of ten dollars. As used in this subsection, "consumer price index" means the consumer price index compiled by the bureau of labor statistics, United States department of labor for the state of Washington. If the bureau of labor statistics develops more than one consumer price index for areas within the state, the index covering the greatest number of people, covering areas exclusively within the boundaries of the state, and including all items shall be used.
     (((d))) (iv) The exceptions provided in this subsection (((6))) (1)(f) do not apply to:
     (((i))) (A) A sale or lease by the municipality as the seller or lessor;
     (((ii))) (B) 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; or
     (((iii))) (C) Contracts for legal services, except for reimbursement of expenditures.
     (((e))) (v) The municipality shall maintain a list of all contracts that are awarded under this subsection (((6))) (1)(f). The list must be made available for public inspection and copying;
     (((7))) (g) 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 and the superior court in the county where the property is situated 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))) (h) The letting of any employment contract for the driving of a school bus in a second-class school district if the terms of such contract are commensurate with the pay plan or collective bargaining agreement operating in the district;
     (((9))) (i) The letting of an employment contract as a substitute teacher or substitute educational aide to an officer of a second-class school district that has two hundred or fewer full-time equivalent students, if the terms of the contract are commensurate with the pay plan or collective bargaining agreement operating in the district 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))) (j) The letting of any employment 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. This exception applies only if the terms of the contract 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;
     (((11))) (k) 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 and the terms of the contract 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;
     (((12))) (l) The authorization, approval, or ratification of any employment contract with the spouse of a public hospital district commissioner if: (((a))) (i) The spouse was employed by the public hospital district before the date the commissioner was initially elected; (((b))) (ii) the terms of the contract are commensurate with the pay plan or collective bargaining agreement operating in the district for similar employees; (((c))) (iii) 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 (((d))) (iv) and the commissioner does not vote on the authorization, approval, or ratification of the contract or any conditions in the contract.
     (2) 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.
     (3) Except as otherwise provided in subsection (1) of this section, no municipal officer or municipal employee may participate in a transaction involving the municipality in his or her official capacity with a contracting party of which the officer or employee is an officer, agent, employee, or member, or in which the officer or employee has a beneficial interest.

Sec. 3   RCW 42.23.040 and 1999 c 261 s 3 are each amended to read as follows:
     (1) A municipal officer or municipal employee is not interested in a contract, within the meaning of RCW 42.23.030, if the officer or employee has only a remote interest in the contract and the extent of the interest is disclosed to the governing body of the municipality of which the officer is an officer, or the employee is an employee, 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)) any officer having ((the)) a remote interest.      (2) As used in this section, "remote interest" means:
     (((1))) (a) That of a nonsalaried officer of a nonprofit corporation;
     (((2))) (b) 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))) (c) That of a landlord or tenant of a contracting party;
     (((4))) (d) That of a holder of less than one percent of the shares of a corporation or cooperative which is a contracting party.
     (3) None of the provisions of this section are applicable to any officer or employee interested in a contract, even if the officer's or employee's interest is only remote, if the officer or employee influences or attempts to influence any other officer or employee of the municipality ((of which he or she is an officer)) to enter into the contract.

Sec. 4   RCW 42.23.050 and 1999 c 261 s 4 are each amended to read as follows:
     Any contract made in violation of the provisions of this 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 or employee violating the provisions of this chapter is liable to the municipality of which he or she is an officer or employee for a penalty in the amount of five hundred dollars, in addition to such other civil or criminal liability or penalty as may otherwise be imposed upon the officer or employee by law.
     In addition to all other penalties, civil or criminal, the violation by any officer of the provisions of this chapter may be grounds for forfeiture of his or her office.

Sec. 5   RCW 42.23.070 and 1994 c 154 s 121 are each amended to read as follows:
     (1) No municipal officer or municipal employee may use his or her position to secure special privileges or exemptions for himself, herself, or others.
     (2) No municipal officer or employee may, directly or indirectly, give or receive or agree to receive any compensation, gift, reward, or gratuity from a source except the employing municipality, for a matter connected with or related to the officer's or employee's services as such an officer or employee unless otherwise provided for by law.
     (3) No municipal officer or municipal employee may accept employment or engage in business or professional activity that the officer or employee might reasonably expect would require or induce him or her by reason of his or her ((official)) position to disclose confidential information acquired by reason of his or her ((official)) position.
     (4) No municipal officer or municipal employee may disclose confidential information gained by reason of the officer's or employee's position, nor may the officer or employee otherwise use such information for his or her personal gain or benefit.
     (5) No municipal officer or municipal employee may accept employment, paid or unpaid, or engage in any business or professional activity in a supervisory capacity of any kind that is an apparent conflict of interest.