HB2729 - 541R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 38-502, Arizona Revised Statutes, is amended to read:

START_STATUTE38-502. Definitions

In this article, unless the context otherwise requires:

1. "Compensation" means money, a tangible thing of value or a financial benefit.

2. "Employee" means all persons who are not public officers and who are employed on a full‑time, part‑time or contract basis by an incorporated city or town, a political subdivision or the state or any of its departments, commissions, agencies, bodies or boards for remuneration.

3. "Make known" means the filing of a paper which that is signed by a public officer or employee and which that fully discloses a substantial interest or the filing of a copy of the official minutes of a public agency which that fully discloses a substantial interest. The filing shall be in the special file established pursuant to section 38‑509.

4. "Official records" means the minutes or papers, records and documents maintained by a public agency for the specific purpose of receiving disclosures of substantial interests required to be made known by this article.

5. "Political subdivision" means all political subdivisions of the state and county, including all school districts.

6. "Public agency" means:

(a) All courts.

(b) Any department, agency, board, commission, institution, instrumentality or legislative or administrative body of the state, a county, an incorporated town or city and any other political subdivision.

7. "Public competitive bidding" means the method of purchasing prescribed by title 41, chapter 23, or procedures substantially equivalent to such method of purchasing, or as provided by local charter or ordinance.

8. "Public officer" means all elected and appointed officers of a public agency established by charter, ordinance, resolution, state constitution or statute.

9. "Relative" means the spouse, child, child's child, parent, grandparent, brother or sister of the whole or half blood and their spouses and the parent, brother, sister or child of a spouse.

10. "Remote interest" means:

(a) That of a nonsalaried officer of a nonprofit corporation.

(b) That of a landlord or tenant of the contracting party.

(d) That of a member of a nonprofit cooperative marketing association.

(e) The ownership of less than three percent of the shares of a corporation for profit, provided the total annual income from dividends, including the value of stock dividends, from the corporation does not exceed five percent of the total annual income of such officer or employee and any other payments made to him such officer or employee by the corporation do not exceed five percent of his the officer's or employee's total annual income.

(f) That of a public officer or employee in being reimbursed for his the officer's or employee's actual and necessary expenses incurred in the performance of an official duty.

(g) That of a recipient of public services generally provided by the incorporated city or town, political subdivision or state department, commission, agency, body or board of which he the recipient is a public officer or employee, on the same terms and conditions as if he the recipient were not an officer or employee.

(h) That of a public school board member when the relative involved is not a dependent, as defined in section 43‑1001, or a spouse.

(i) That of a public officer or employee, or that of a relative of a public officer or employee, unless the contract or decision involved would confer a direct economic benefit or detriment on the officer, the employee or his the officer's or employee's relative, of any of the following:

(i) Another political subdivision.

(ii) A public agency of another political subdivision.

(iii) A public agency except if it is the same governmental entity.

(j) That of a member of a trade, business, occupation, profession or class of persons consisting of at least ten fifty members which that is no greater than the interest of the other members of that trade, business, occupation, profession or class of persons and that is de minimis.

(k) That of a relative who is an employee of any business entity or governmental entity that employs at least twenty‑five employees within this state and who, in the capacity as an employee, does not assert control or decision‑making authority over the entity's management or budget decisions.

(l) The ownership of any publicly traded investments that are held in an account or fund, including a mutual fund, that is managed by one or more qualified investment professionals who are not employed or controlled by the officer or employee and that the officer or employee owns shares or interest together with other investors.

(m) The direct or indirect OWNERSHIP INTEREST of a public officer or employee in real property valued at $1,000 or less.

11. "Substantial interest" means any nonspeculative pecuniary or proprietary interest, either direct or indirect, other than a remote interest. END_STATUTE

Sec. 2. Section 38-503, Arizona Revised Statutes, is amended to read:

START_STATUTE38-503. Conflict of interest; exemptions; employment prohibition

A. Any public officer or employee of a public agency 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 on or otherwise participating in any manner as an officer or employee in such contract, sale or purchase.

B. Any public officer or employee who has, or whose relative has, a substantial interest in any decision of a public agency shall make known such interest in the official records of such public agency and shall refrain from participating in any manner as an officer or employee in such decision.

C. Notwithstanding the provisions of subsections A and B of this section, no public officer or employee of a public agency shall supply to such public agency any equipment, material, supplies or services, unless pursuant to an award or contract let after public competitive bidding, except that:

1. A school district governing board may purchase, as provided in sections 15‑213 and 15‑323, supplies, materials and equipment from a school board member.

2. Political subdivisions other than school districts may purchase through their governing bodies, without using public competitive bidding procedures, supplies, materials and equipment not exceeding three hundred dollars $300 in cost in any single transaction, not to exceed a total of one thousand dollars $1,000 annually, from a member of the governing body if the policy for such purchases is approved annually.

D. Notwithstanding subsections A and B of this section and as provided in sections 15‑421 and 15‑1441, the governing board of a school district or a community college district may not employ a person who is a member of the governing board or who is the spouse of a member of the governing board.

E. A public officer or EMPLOYEE may not require an EMPLOYEE to perform an act in violation of this section. A public officer or employee may not on government time assist in:

1. A political party or CANDIDATE activity.

2. Campaigning.

3. Political fund-raising. END_STATUTE

Sec. 3. Short title

This act may be cited as the "Eliminate Public Corruption Act".