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Contracting with Government: Laws for Legislators
September 2008
At least 40 states have statutory provisions that restrict legislators from contracting with government. These laws may extend to a legislator's family and businesses in which he or she has a controlling interest. In other states—Arkansas, Delaware, Illinois, New Hampshire, North Carolina, North Dakota, Oregon, Tennessee, Vermont and Wyoming, general conflict of interest provisions may limit this practice or require legislators to disclose any interests in contracts that could compromise their independence in a legislative decision. (In Arkansas, Senate Rule 24.06 prohibits senators from having a financial interest with any state agency unless awarded through competitive bidding). At least 32 states require legislators to disclose information about such arrangements, either on financial disclosure forms or separate statements.
Laws that ban or restrict legislators from entering into contracts can be broken down in the following categories:
Some states limit more than one type of contract. For all categories, exceptions exist. The most common exception is that legislators can bid on contracts if they are awarded by sealed, competitive bidding. More detailed information is in the 50-state charts: Statutory Restrictions on Legislators Contracting with Government and Disclosure Requirements and Contracting with Government: State Breakdown by Category.
Contracts with state agencies: Thirty-three states and one chamber have total bans or have restrictions with exceptions: Alabama, Alaska, Arizona, Arkansas Senate by Rule, California, Connecticut, Georgia, Hawaii, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Texas, Virginia and Wisconsin. Most of these states generally prohibit legislators and often family members, from entering into contracts with the state unless the contract is awarded by sealed, competitive bidding. Sometimes a dollar amount is specified in law:
Contracts with local governments: At least 13 states—Alabama, California, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, Oklahoma, Rhode Island, South Dakota and Virginia—specifically restrict legislators from entering into certain contracts with local governments. Some of the states have exceptions that include the number of years a legislator has been out of office, a limitation on the dollar amount or the contract awarded by sealed competitive bidding.
Contracts with or by the legislature: At least 10 states restrict legislators from entering into certain contracts with the legislature or certain contracts made by or for the legislature. These states are: Colorado, Florida, Idaho, Louisiana, Massachusetts, Mississippi, Ohio, Pennsylvania, Texas and Virginia. In Louisiana, legislators, their immediate family members and entities in which the legislator has a controlling interest cannot enter into contracts involving the legislature regardless of the method by which the contract is awarded. Colorado exempts these types of contracts if they are awarded through sealed competitive bidding.
Contracts legislators enter into because of their official capacity or would supervise: At least nine states forbid legislators from having an interest in a contract that they are authorized to enter into in their official capacity, or that they will supervise. These states are: California, Colorado, Idaho, Montana, Nevada, Pennsylvania, South Dakota, Washington and West Virginia. There are exceptions to this law in some of these states.
Contracts authorized or funded during a legislator's term: At least eight states restrict legislators from entering into contracts if the contract was funded or authorized during the legislator's term. The "cooling off" period ranges from six months to two years. The states are: Kansas, Mississippi, Montana, New Mexico, Oklahoma, South Carolina, South Dakota and Utah. In Kansas, former legislators, who wish to contract with the state have to disclose the details of the contract.
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