Contracting With Government

2/22/2018

Conflict of Interest

Definitions

Local and state governments need to contract with private entities for a range of goods and services. Public officials sometimes own interests in businesses that provide such goods and services. As a result, some government contracts could wind up providing personal financial benefits to legislators.

Ethics rules prohibit public officials from engaging in conduct that could reasonably appear to place personal interests above the public good. Most states have enacted legislation that provides direction on how public officials should or should not contract with governmental entities.

Some states prohibit legislators from entering into contracts with the government altogether. Laws may extend the prohibition to a legislator’s family and associated businesses. Other states may permit government contracts when appropriate disclosures are made and proper procedures are followed.

This survey provides a 50-state comparison of ethics rules regarding contracts between a state and members of its legislature. Rules regarding employment contracts are excluded from this list, but may be found on the survey on dual employment. Procurement contracts are the focus of this survey, although the referenced laws may also apply to other forms of contracts.

This table is intended to provide general information and does not necessarily address all aspects of this topic. Because the facts of each situation may vary, this information may need to be supplemented by consulting legal advisors. All content is up to date through 7/27/2021.

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Restrictions on Legislators Contracting with Government
State	Statutes and Rules
Alabama	Unless exempt pursuant to Alabama competitive bid laws or otherwise permitted by law, no public official or public employee, or a member of the household of the public employee or the public official, and no business with which the person is associated shall enter into any contract to provide goods or services which is to be paid in whole or in part out of state, county, or municipal funds unless the contract has been awarded through a process of competitive bidding and a copy of the contract is filed with the commission. All such contract awards shall be made as a result of original bid takings, and no awards from negotiations after bidding shall be allowed. A copy of each contract, regardless of the amount, entered into by a public official, public employee, a member of the household of the public employee or the public official, and any business with which the person is associated shall be filed with the commission within 10 days after the contract has been entered into. Ala. Code § 36-25-11.
Alaska	A legislator or legislative employee, or a member of the immediate family of a legislator or legislative employee, may not be a party to or have an interest in a state contract or lease unless let under the State Procurement Code or under similar procedures, or the total annual amount of the state contract or lease is $5,000 or less, or is a standardized contract developed under publicly established guidelines generally available to the public at large, members of a profession, occupation, or group. A person has an interest in a state contract or lease under this section if the person receives direct or indirect financial benefits. A legislator or legislative employee who participates in, or who knows or reasonably should know that a family member is participating in, a state contract or lease that has an annual value of $5,000 or more shall disclose the participation. Alaska Stat. Ann. § 24.60.040.
Arizona	Any public officer or employee who has, or whose relative has, a substantial interest in any contract, sale, purchase or service to such public agency shall make known that interest in the official records of such public agency and shall refrain from voting upon or otherwise participating in any manner as an officer or employee in such contract, sale or purchase. Ariz. Rev. Stat. Ann. § 38-503.
Arkansas	Contracts between a member of the general assembly, his or her spouse or any associated business, and the state shall be subject to review by the Legislative Council or the Joint Budget Committee and approval by the Ethics Commission. Review and approval shall depend upon whether an improper conflict of interest exists between the member and the agency. Ark. Code Ann. § 19-11-264.
California	Members of the legislature shall not be financially interested in any contract made by them in their official capacity or by any body or board of which they are members. Cal. Gov't Code § 1090. What may or may not constitute a "financial interest" is defined at Cal. Gov't Code § 1091.5.
Colorado	Members of the general assembly shall not be interested in any contract made by them in their official capacity or by any body of which they are members. Extends to six months after a member leaves office. Exemption applies if a member discloses the personal interest and recuses him or herself. Colo. Rev. Stat. Ann. § 24-18-201.
Connecticut	No public official or employee's immediate family or an associated business shall enter into any contract with the state, valued at $100 or more, unless awarded through an open and public process, including prior public offer and subsequent public disclosure of all proposals considered and the contract awarded. Conn. Gen. Stat. Ann. § 1-84.
Delaware	No general prohibition against legislators contracting with the state. The only apparent specific law on the issue prohibits members or officers of any department of government from being interested in any contract for the furnishing of stationary, printing, paper and fuel used in the legislature or other departments of government. De. Const., Art. 15, § 8. General conflict of interest provisions may apply.
District of Columbia	Shall not use official position or title, or personally and substantially participate in any contract in a manner known to have a direct and predictable effect on financial interests or the financial interests of a closely affiliated person. D.C. Code Ann. § 1-1162.23.
Florida	No public official in his or her official capacity shall directly or indirectly purchase, rent, or lease any realty, goods, or services for his or her own agency from any business entity of which the officer or employee or a spouse or child thereof, has a material interest. Shall not, in a private capacity, rent, lease, or sell any goods or services to any political subdivision or agency of the state, if an officer or employee of that subdivision (i.e. no contracts with the legislature). Excludes contracts entered into prior to qualification for elective office. Also excludes contracts if completed under proper bidding procedures. Fla. Stat. Ann. § 112.313.
Georgia	No full-time public official with state-wide powers to transact any business with any agency. Includes associated businesses and family members and their associated businesses. Exemptions: transactions pursuant to competitive bids, transactions not over $250 or $9000 in the aggregate per year. Ga. Code Ann. § 45-10-22. A few additional exemptions to the rule are listed at Ga. Code Ann. § 45-10-25.
Guam	No statutes specifically address public officials contracting with the government. Refer to general provisions on conflicts of interest.
Hawaii	Legislators shall not abuse their official position to secure or grant unwarranted contracts. Haw. Rev. Stat. Ann. § 84-13. A state agency shall not enter into any contract to procure or dispose of goods or services, or for construction, with a legislator, employee, or business in which a legislator or employee has a controlling interest, if the value is over $10,000. Exceptions: competitive bidding procedures, notice given to the state ethics commission at least 10 days before the contract is awarded. Haw. Rev. Stat. Ann. § 84-15.
Idaho	No public servant having any discretionary function to perform in connection with contracts, purchases, payments, claims or other pecuniary transactions of the government shall solicit, accept or agree to accept any pecuniary benefit from any person known to be interested in or likely to become interested in any such contract, purchase, payment, claim or transaction. Idaho Code Ann. § 18-1356 & 18-1359. Exceptions if there are less than 3 suppliers within a 15 mile radius, and the contract is the lowest competitive bid, and the public servant nor any relative takes part in the preparation of the contract or bid specifications or its approval, and full disclosure is made. Idaho Code Ann. § 18-1361.
Illinois	No person holding any office of this State may be financially interested in any contract or the performance of any work in the making or letting of which such officer may be called upon to act or vote. Exceptions for procurement contracts if: Public disclosure, abstains from voting, less than a 7.5% interest in the contracting business or association, such contract is approved by a majority vote of those members presently holding office, contract is awarded after sealed bids to the lowest responsible bidder if over $1,500, and the award would not exceed $25,000 in aggregate per year. 50 Ill. Comp. Stat. Ann. 105/3.
Indiana	No statutes specifically address public officials contracting with the government. Refer to general provisions on conflicts of interest.
Iowa	A member of the general assembly shall not sell, in any one occurrence, any goods or services valued over $2,000 to any state agency unless pursuant to an award or contract let after public notice and competitive bidding. Iowa Code Ann. § 68B.3. Prohibition on public officials being interested in any contract for the construction, reconstruction, improvement, or maintenance of any highway, bridge, or culvert, or the furnishing of materials therefor. Iowa Code Ann. § 314.2.
Kansas	Legislators substantially involved, in their official capacity, in the preparation or making of a contract may not contract with any person or business in which the legislator is employed or has a substantial interest. Applies also to businesses associated with immediate family. A legislator my not be interested financially in any contract with the state if the contract was authorized during the legislator's term, unless a disclosure statement is properly filed. Exempts competitive bidding contracts or contracts for property or services at a rate fixed by law. Kan. Stat. Ann. § 46-233.
Kentucky	A legislator shall not intentionally enter into any contract valued at $100 or more, subject to exceptions. Exceptions: if legislator or spouse's interest in a contractor-business is less than 5%, if the contract is let after public notice and competitive bidding, contract terms are available on similar terms to members of the legislator's business, occupation, or profession, or agreements are entered into prior to the legislator becoming a candidate. Ky. Rev. Stat. Ann. § 6.737.
Louisiana	After being elected, no contracts with state government allowed. No legislator or family member may submit bids or be interested in any contract involving the legislator's agency. La. Stat. Ann. § 42:1113.
Maine	A legislator or member of the legislator's immediate family shall not have a direct financial interest or an interest through a close economic associate in any contract with the State, unless awarded through competitive bidding or is exempt from competitive bidding under state law. Me. Rev. Stat. tit. 1, § 1014.
Maryland	General prohibition on contracts that may result in a conflict of interest. Md. Gen. Provis. § 5-501.
Massachusetts	May not have a financial interest in a contract made by a state agency or in which the state or an agency is an interested party. Exceptions: ownership is less than 1% of a corporation; the interest in a contract is less than 10% of all interests in the contract, and the contract is made through competitive bidding, and disclosure of the interest is properly made. Mass. Gen. Laws Ann. ch. 268A, § 7.
Michigan	No member of the legislature shall be interested in any contract with the state or any political subdivision which shall cause a substantial conflict of interest. Mi. Const. Art. 4, § 10 & Mich. Comp. Laws Ann. § 15.302. There is no substantial conflict of interest if: contract is with a corporation in which the legislator owns 1% or less of the total outstanding stock or $25,000 or less; if the legislator is an employee of the contractor and the contractor is a professional LLC organized under Michigan law; provided that the legislator does not solicit the contract, takes no part in negotiations, and doesn't represent either party in the transaction. Mich. Comp. Laws Ann. § 15.304.
Minnesota	No statutes specifically address public officials contracting with the government. Refer to general provisions on conflicts of interest.
Mississippi	No public servant shall be interested in any contract with the state, or any district, county, city, or town, authorized by any law passed or order made by any board of which he or she may have been a member. May not be a contractor, subcontractor, or vendor with the governmental entity of which he or she is a member. Exception: if lowest bidder after competitive bidding. Other exceptions at Miss. Code. Ann. § 25-4-105.
Missouri	No elected official serving in an administrative capacity shall perform any duties for compensation other than compensation provided for official duties, including contracts, if in excess of $500 per transaction or $5,000 per year. Excludes transactions made pursuant to an award on a contract let or sale made after public notice and competitive bidding, provided that the bid or offer was the lowest received. Mo. Ann. Stat. § 105.454.
Montana	Members of the legislature may not be interested in any contract made by them in their official capacity or by any body of which they are members if they are directly involved with the contract. Does not apply if: "interest" is a minority interest in a corporation; contracts awarded based on competitive procurement procedures; merchandise sold to the highest bidder at public auctions; investments or deposits in financial institutions that are in the business of loaning or receiving money; a contract with an interested party if, because of geographic restrictions, a local government could not otherwise reasonably afford itself of the subject of the contract. Mont. Code Ann. § 2-2-201.
Nebraska	No public official or immediate family member or associated business shall enter into a contract valued at $2,000 or more, unless awarded through open and public process. Neb. Rev. Stat. Ann. § 49-14,102.
Nevada	A legislator shall not become a named contractor or subcontractor under any contract paid for by money appropriated by the legislature, or be interested in any such contract. Exceptions: contract to sell any item, commodity, service or capital improvement if supply is limited, contracting process is open and competitive, legislator did not take part in developing the plans or specifications for the sale or contract, and will not personally be involved in opening, considering or accepting any bids for the sale or contract. Nev. Rev. Stat. Ann. § 218A.970.
New Hampshire	No person holding a public office shall, by contract or otherwise, except by open competitive bidding, buy real estate, sell or buy goods, commodities, or other personal property of a value in excess of $200 at any one sale to or from the state or political subdivision under which he holds his public office. N.H. Rev. Stat. Ann. § 95:1.
New Jersey	No member of the Legislature shall act as officer or agent for a State agency for the transaction of any business with himself or with a corporation, company, association or firm in the pecuniary profits of which he has an interest. Ownership or control of 10% or less of the stock of a corporation shall not be deemed an interest. N.J. Stat. Ann. § 52:13D-20.
New Mexico	No legislator shall be interested in any contract with the state or any municipality thereof which was authorized by any law passed during such term. N.M. Const. art. IV, § 28 & N.M. Stat. Ann. § 10-16-9. The prohibition extends to family members. Exception: the legislator has disclosed the substantial interest and the contract is awarded under procurement procedures. N.M. Stat. Ann. § 10-16-9.
New York	No member of the legislature shall shall sell any goods or services having a value over $25 to any state agency, or contract for or provide such goods or services with or to any private entity where the power to contract, appoint or retain on behalf of such private entity is exercised, by a state agency or officer thereof. Excludes goods or services contracts after public notice and competitive bidding. Also excludes the publication of resolutions, advertisements or other legal propositions or notices in newspapers designated pursuant to law for such purpose and for which the rates are fixed pursuant to law. N.Y. Pub. Off. Law § 73.
North Carolina	No public officer involved in making or administering a contract on behalf of a public agency may derive a direct benefit from the contract. Administering a contract involves oversight of performance or authority to make decisions regarding the contract. Recusal may remove a legislator from "administering." Applies to spouses and a business if he or she has ownership over 10% or derives any income or commission directly from the contract, or acquires property under the contract. Excludes ministerial duties related to the contract. N.C. Gen. Stat. Ann. § 14-234.
North Dakota	No statutes specifically address public officials contracting with the government. Refer to general provisions on conflicts of interest.
Ohio	No public official shall authorize, or employ the authority or influence of the public official's office, to secure authorization of any public contract in which the public official, a member of the public official's family, or any of the public official's business associates has an interest. Shall not have an interest in the profits or benefits of a public contract entered into by or for the use of the political subdivision or governmental agency or instrumentality with which the public official is connected or have an interest in the profits or benefits of a public contract that is not let by competitive bidding if required by law and that involves more than one hundred fifty dollars. Ohio Rev. Code Ann. § 2921.42.
Oklahoma	No member of the Legislature shall be interested in any contract with the State authorized by law passed during the term for which he shall have been elected. Okla. Const. art. V, § 23 & Okla. Stat. Ann. tit. 21, § 344.
Oregon	A public official may not have a direct beneficial interest in a public contract. Does not apply if the public official did not participate in the authorization of the contract. Or. Rev. Stat. Ann. § 244.047.
Pennsylvania	No legislator shall participate as principal in any transaction involving the Commonwealth. Includes spouse, children, or any businesses with which they have substantial personal economic interest. 46 Pa. Stat. Ann. § 143.5.
Puerto Rico	No person shall accept or maintain contractual or business relations with a public servant or member of his or her family that has the effect of impairing the official's independent performance of duties. 3 L.P.R.A. § 1756.
Rhode Island	No statutes specifically address public officials contracting with the government. Refer to general provisions on conflicts of interest.
South Carolina	A public official may not have an economic interest in a contract with the State or its political subdivisions if the public official is authorized to perform an official function relating to the contract. Official function means writing or preparing the contract specifications, acceptance of bids, award of the contract, or other action on the preparation or award of the contract. Excludes contracts awarded through a process of public notice and competitive bids if the public official, public member, or public employee has not performed an official function regarding the contract. S.C. Code Ann. § 8-13-775.
South Dakota	No legislator shall be interested in any contract with the state or any municipality thereof which was authorized by any law passed during such term. S.D. Const. art. III, § 12 & S.D. Codified Laws § 3-16-7.
Tennessee	If a public official has the duty to vote for, let out, overlook, or in any manner superintend any work or any contract in which any state subdivision may be interested, that public official shall not be directly interested in the contract. Directly interested means any personal or business interest if a controlling interest in the business. Shall not have an indirect interest in any such contract, unless the interest is publically disclosed. Tenn. Code Ann. § 12-4-101.
Texas	No senator or representative shall be interested in any contract with the State authorized by any law passed during the term for which he was elected. nor shall any member of the Legislature be interested, either directly or indirectly, in any contract with the State, or any county thereof, authorized by any law passed during the term for which he was elected. Tex. Const. art. III, § 18.
Utah	A legislator, member of his household, or client shall not be a party to or have an interest in the profits or benefits of a state contract when the state contract is the direct result of a bill sponsored by the legislator unless the contract is let in compliance with state procurement policies and is open to the general public. Utah Code Ann. § 36-19-1.
Vermont	No statutes specifically address public officials contracting with the government. Refer to general provisions on conflicts of interest.
Virginia	No state officer shall have a personal interest in a contract with the governmental agency of which he is an officer or employee, other than his own contract of employment. Shall also not have a personal interest in a contract with any other governmental agency, subject to exceptions. Exceptions for other agency contracts: if awarded as a result of competitive bidding or negotiation or is awarded after finding that competitive bidding or negotiation is contrary to the public interest. Some other limited exceptions apply to employment, educational and research contracts. Va. Code Ann. § 2.2-3106.
Washington	No state officer may be beneficially interested in a contract, sale, lease, purchase, or grant that may be made by, through, or is under the supervision of the officer, or accept any compensation from any other person beneficially interested in the contract, sale, lease, purchase, or grant. Wash. Rev. Code Ann. § 42.52.030.
West Virginia	No member of the legislature shall be interested in any contract with the state authorized by law passed during the term for which he shall have been elected. W. Va. Const. art. VI, § 15.
Wisconsin	No public officer may have a private pecuniary interest in a public contract that a public officer required by law to participate in an official capacity. Does not apply if: contracts aggregate less than or equal to $15,000, other narrow circumstances. Wis. Stat. Ann. § 946.13.
Wyoming	It is unlawful for any person holding any office of this state to become in any manner interested in any contract or the performance of any work in the making or letting of which the officer may be called upon to act or vote. Exceptions: if he or she discloses the nature and extent thereof to all the contracting parties concerned and shall abstain from considerations and votes related, and do not attempt to influence the contract. Wyo. Stat. Ann. § 16-6-118.
Virgin Islands	No territorial officer or employee shall be financially interested in any contract made or negotiated by him in his official capacity, or by any public agency of which he is a member. Shall also not be a purchaser at any sale or a vendor at any purchase made by him in his official capacity. 3 V.I.C. § 1102. No interest in a contract with a public agency of which he or she is a member if he or she only has a remote interest and that interest is disclosed, and the public agency authorizes or otherwise approves of the contract in good faith. 3 V.I.C. § 1104.