HD31 - Report of the Joint Subcommittee Studying the State and Local Government Conflict of Interest Act

Executive Summary:

House Joint Resolution 31 (Appendix A), agreed to during the 2002 Session of the General Assembly, established a joint subcommittee to study the State and Local Government Conflict of Interest Act (the Act). Specifically, the charge of the joint subcommittee was to review (i) the definitions of "personal interest in a contract" and "personal interest in a transaction," (ii) the requirements for filing disclosure statements, (iii) rules regarding the disqualification of officials from participating in a transaction when a conflict exists, and (iv) any other areas of confusion or inconsistency in terms of the Act's application. There also was consensus among the joint subcommittee members that the lack of a recent review of the Act coupled with the continuing evolution of the operations of state and local government necessitated the inclusion of a wide range of issues pertaining to the proper application of the Act.

Suggestions and recommendations for possible amendments were encouraged from all interested parties. The Local Government Attorneys Association presented a series of issues cited by its membership as being areas of confusion or problematic or inconsistent application of the Act. These issues and the suggested resolutions greatly assisted the joint subcommittee in its work.

After receiving input from interested parties and its own deliberations, the joint subcommittee unanimously voted to recommend the following amendments to the State and Local Government Conflict of Interest Act:

1. Add a cross-reference to Article 6 of the Virginia Public Procurement Act (Ethics in Public Contracting) at §§ 2.2-3100 and 2.2-3105 of the Act.

2. Amend the definition of "personal interest" to explicitly include an option for ownership of business or property as a personal interest.

3. Amend the definition of the term "business" to include governmental employers.

4. Amend the Act to adequately address related business entities in determining the existence of a personal interest.

5. Amend § 2.2-3112 to require an officer to disclose that a party to a transaction is a client of the officer's firm, and as long as the officer does not personally represent or provide services to the client, the officer may participate in the transaction.

6. Amend the definition of "personal interest in a transaction" to clarify that representation includes providing services to a client.

7. Amend the policy statement contained in § 2.2-3100 to be less sweeping.

8. Amend §§ 2.2-3114 and 2.2-3115 to provide that disclosures of personal interests be included in the minutes of the meeting at which the disclosure is made and to require officials to orally disclose the interest during each pertinent meeting in which discussed.

9. Authorize localities to require all public officers and employees to disclose when they receive any gift and to set a dollar amount on gifts that may be accepted.

10. Amend the term "group" as used in § 2.2-3112 A 1 to consist of more than two people.

11. Amend § 2.2-3112 A 1 to explicitly prohibit the attendance of an officer at closed meetings where a matter in which the officer has a personal interest is discussed and to prohibit discussion of the matter at any time with other officers or employees.

12. Amend §§ 2.2-3114 and 2.2-3115 to require more specificity in the disclosure or declaration of interests that the officer or employee has in businesses or real property. Such disclosure or declaration should require the full name of the business or address or parcel number of real estate.

13. Amend § 2.2-3121 to clarify that when a local government officer requests a written opinion from an attorney for the Commonwealth or a state government officer requests a written opinion from the Attorney General under the Act, such written opinion is a public document subject to disclosure upon request. Also, provide that certain requests for an opinion from the attorney for the Commonwealth or the Attorney General be in writing.

The recommendations were included in a legislative draft introduced as House Bill 1546. The General Assembly passed the bill and the Governor signed it into law to become effective July 1, 2003.