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 A parent of a child who is an officer or director, or has an ownership interest of
10% of more, in a party to a contract, where the parent knows of the child’s
interest.

“Non-interests”
Government Code section 1091.5 describes a number of situations in which a board
member will be deemed non-interested in a contract, thus allowing the entire board to
vote on that contract. Examples of “non-interests” include, but are not limited to:
 Reimbursement of an officer’s actual and necessary expenses incurred in the
performance of official duties;
 A recipient of public services generally provided by the public body or board of
which he or she is a member, on the same terms and conditions as if he or she
were not a member of the body or board;
 An officer who owns less than 3% of a corporation’s for-profit shares, provided
that the total annual income to the officer from dividends and any other payments
from the corporation does not exceed 5% of his or her total annual income;
 Interests of the spouse of an officer or employee of a public agency, in the
spouse’s employment or office holding, if the spouse’s employment has existed for
one year prior to the public official’s election or employment;
 Interests of a non-salaried member of a nonprofit corporation, provided that the
interest is disclosed to the board at the time the contract is first considered, and is
noted in official records;
 Interests of a non-compensated officer of a nonprofit, tax-exempt corporation,
which, as one of its primary purposes, supports the functions of the body or board,
provided that this interest is noted in its official records.

Contractors and Consultants
A contractor or consultant may be subject to Government Code section 1090 when
they engage in or advise on public contracting on behalf of the public entity, meaning
they have prepared or assisted with any portion of the preparation of a request for
proposals, request for qualifications, or any other solicitation regarding a subsequent
or additional contract with the agency. However, there is no violation of Government
Code section 1090 when the following conditions are met:

o The contractor or consultant participated in the planning, discussions, or
drawing of plans or specifications during an initial stage of a project;
o Their participation was limited to conceptual, preliminary, or initial plans or
specifications; and,
o All bidders or proposers for any subsequent contract have access to the same
information, including all conceptual, preliminary, or initial plans or
specifications.

Statutory language can be incorporated into the initial contract to help avoid Section
1090 issues.

Guide to Effective Governance 19