Local Authorities (Members' Interests) Act 1968

1: Short Title
This Act may be cited as the Local Authorities (Members' Interests) Act 1968.
2: Interpretation
1: In this Act, unless the context otherwise requires,— contract contractor incorporated company Companies Act 1993 Industrial and Provident Societies Act 1908 local authority
a: every local authority or public body of any of the classes for the time being specified in Part 1
b: every local authority or public body for the time being referred to in Part 2 partner subcontract subcontractor
2: For the purposes of this Act, a company shall be deemed to control another company if it owns 50% or more of the issued capital of that other company or is able to control the exercise of 50% or more of the total voting powers exercisable by all the members of that other company.
3: The Governor-General may from time to time, by Order in Council, amend Schedule 1
4: An order under this section is secondary legislation ( see Part 3 1954 No 49 s 2 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 2(1) incorporated company amended 1 July 1997 section 2(1) Companies Act Repeal Act 1993 Section 2(1) partner inserted 13 October 2007 section 4(1) Relationships (Statutory References) Act 2005 Section 2(4) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
3: Disqualifying contracts between local authorities and their members
1: Except as provided in subsection (3), no person shall be capable of being elected as or appointed to be or of being a member of a local authority or of any committee of a local authority, if the total of all payments made or to be made by or on behalf of the local authority in respect of all contracts made by it in which that person is concerned or interested exceeds $25,000
2: For the purposes of subsection (1), a member of a local authority or of a committee thereof shall be deemed to be concerned or interested in a contract made by a local authority with an incorporated company, if—
a: the member or his spouse or partner
b: the member or his spouse or partner
c: the member or his spouse or partner or
d: the member or his spouse or partner provided that nothing in this subsection shall apply with respect to the spouse or partner
i: the member and his spouse or partner
ii: in any case to which paragraph (a) applies, the member did not know and had no reasonable opportunity of knowing that his spouse or partner
iii: in any case to which paragraph (b) or paragraph (c) or paragraph (d) or partner any of those paragraphs
2A: For the purposes of subsection (1), a member of a local authority or of a committee thereof shall be deemed to be concerned or interested in a contract made by the local authority in which his spouse or partner provided that nothing in this subsection shall apply with respect to the spouse or partner
a: the member and his spouse or partner
b: the member did not know and had no reasonable opportunity of knowing that his spouse or partner
3: Notwithstanding anything in subsection (1),—
a: no person shall be disqualified under this section by virtue of his being concerned or interested in any contract made in any special case with the prior approval of the Auditor-General Auditor-General
aa: a person shall be deemed not to have been disqualified by virtue of his being concerned or interested in any contract made in any special case where, on the application of the local authority, the subsequent approval of the Auditor-General Auditor-General
i: there is a sufficient special reason why prior approval was not obtained under paragraph (a); and
ii: prior approval would have been obtained under paragraph (a) if that approval had been sought:
ab: no person shall be disqualified under this section by virtue of his being concerned or interested in any contract made on behalf of the local authority by an employee or committee of the local authority (unless the member of the local authority is a member of that committee) acting under delegated authority, where it is verified in writing to the Auditor-General Auditor-General
b: where a person is concerned or interested in any contract solely by reason of being concerned or interested in any subcontract relating thereto, the provisions of this section shall, with the necessary modifications, apply to him as if references in this section to the amount payable by or on behalf of the local authority in respect of a contract were references to the amount payable by or on behalf of the contractor in respect of the subcontract:
c: in assessing under this section the amount of any payment made or to be made by or on behalf of the local authority in respect of any contract, no account shall be taken of any sum paid or to be paid as a refund of a deposit:
d: an interest in—
i: any loan raised by the local authority, whether on security or otherwise; or
ii: any payments made or to be made in respect of advertisements inserted by the local authority in any newspaper; or
iii: any lease granted or agreed to be granted to the local authority; or
iv: any payment received by way of compensation under the Public Works Act 1981
v: any advance made by the local authority under the Rural Housing Act 1939
vi: any advance made or guarantee given by the local authority under Part 32
vii: any contract for the supply of goods or services made during a state of emergency declared, or a transition period for which notice is given, under the Civil Defence Emergency Management Act 2002 shall not constitute a disqualification under this section:
e:
f: no person shall be disqualified under this section by virtue of his being concerned or interested in any contract made before his election or appointment, if before that election or appointment his obligation in respect of the contract had been performed and the amount to be paid by or on behalf of the local authority in respect of the contract had been fixed; and any payment made thereafter by or on behalf of the local authority in respect of the contract shall not operate to disqualify that person for continuing to hold office or be taken into account for the purpose of calculating the amount that may be lawfully paid to him as a member of the local authority or, as the case may be, of a committee thereof in the same financial year in respect of any contract or contracts:
g: no person shall be disqualified under this section by virtue of his being concerned or interested in any contract, whether of a continuing nature or otherwise, made before his election or appointment and in respect of which his obligations have not been performed before that election or appointment, where the amount to be paid by or on behalf of the local authority in respect of the performance of the contract has been fixed in that contract subject to such amendments and additions as may be provided for in the contract, or, where the amount to be paid by or on behalf of the local authority in respect of the performance of the contract is not ascertainable until the contract has been performed, if—
i: the contract is for a continuous period not exceeding 12 months from the date on which the contract is made; or
ii: the contract is for a continuous period exceeding 12 months from the date on which the contract is made and that person has, with the consent of the local authority, relinquished that contract before acting as a member and within 1 month after the date of his election or appointment, as the case may be;— and any payment made thereafter by or on behalf of the local authority in respect of the contract shall not operate to disqualify that person for continuing to hold office or be taken into account for the purpose of calculating the amount that may be lawfully paid to him as a member of the local authority or, as the case may be, of a committee thereof in the same financial year in respect of any contract or contracts:
h: no person shall be disqualified under this section by virtue of his being concerned or interested in any contract as an administrator or a trustee of any estate or trust in which he is not a beneficiary, or as the manager appointed under the Protection of Personal and Property Rights Act 1988
i: no person shall be disqualified under this section by virtue of his being concerned or interested in any agreement entered into pursuant to section 81 of the Noxious Plants Act 1978
j: no person who is a member of a community board is disqualified under this section by virtue of that person or that person's spouse or partner
i: the contract, except for any preliminary work associated with it, is to be performed wholly outside the area under the jurisdiction of the community board of which that person is a member; and
ii: the contract is one in which the community board has no jurisdiction or control or which has not been reported on to the territorial authority by the community board; and
iii: neither that person nor that person's spouse or partner
3A: Nothing in subsection (3)﻿(j)﻿(iii) applies with respect to the spouse or partner or partner
4: For the purposes of subsection (3)﻿(j), territorial authority Local Government Act 2002 1954 No 49 s 3; 1962 No 80 s 2; 1963 No 98 s 2 Section 3(1) substituted 5 November 1982 Local Authorities (Members' Interests) Amendment Act 1982 Section 3(2) substituted 26 October 1971 Local Authorities (Members' Interests) Amendment Act 1971 Section 3(2)﻿(a) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 3(2)﻿(b) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 3(2)﻿(c) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 3(2)﻿(c) amended 8 November 1974 Local Authorities (Members' Interests) Amendment Act 1974 Section 3(2)﻿(d) added 8 November 1974 Local Authorities (Members' Interests) Amendment Act 1974 Section 3(2)﻿(d) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 3(2) proviso amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 3(2) proviso paragraph (i) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 3(2) proviso paragraph (ii) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 3(2) proviso paragraph (iii) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 3(2) proviso paragraph (iii) amended 8 November 1974 Local Authorities (Members' Interests) Amendment Act 1974 Section 3(2) proviso paragraph (iii) amended 8 November 1974 Local Authorities (Members' Interests) Amendment Act 1974 Section 3(2A) inserted 26 October 1971 Local Authorities (Members' Interests) Amendment Act 1971 Section 3(2A) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 3(2A) proviso amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 3(2A) proviso paragraph (a) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 3(2A) proviso paragraph (b) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 3(3)﻿(a) amended 1 July 2001 section 52 Public Audit Act 2001 Section 3(3)﻿(aa) inserted 5 November 1982 Local Authorities (Members' Interests) Amendment Act 1982 Section 3(3)﻿(aa) amended 1 July 2001 section 52 Public Audit Act 2001 Section 3(3)﻿(ab) inserted 26 October 1971 Local Authorities (Members' Interests) Amendment Act 1971 Section 3(3)﻿(ab) paragraph number substituted 5 November 1982 Local Authorities (Members' Interests) Amendment Act 1982 Section 3(3)﻿(ab) amended 1 July 2001 section 52 Public Audit Act 2001 Section 3(3)﻿(d)﻿(iv) amended 1 February 1982 section 248(1) Public Works Act 1981 Section 3(3)﻿(d)﻿(vi) amended 1 April 1980 section 8(3) Local Government Amendment Act 1979 Section 3(3)﻿(d)﻿(vii) replaced 29 November 2016 section 42 Civil Defence Emergency Management Amendment Act 2016 Section 3(3)﻿(e) repealed 5 November 1982 Local Authorities (Members' Interests) Amendment Act 1982 Section 3(3)﻿(h) amended 1 October 1988 section 117(3) Protection of Personal and Property Rights Act 1988 Section 3(3)﻿(i) amended 1 April 1979 Noxious Plants Act 1978 Section 3(3)﻿(j) substituted 1 July 2003 section 262 Local Government Act 2002 Section 3(3)﻿(j) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 3(3)﻿(j)﻿(iii) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 3(3A) inserted 1 July 2003 section 262 Local Government Act 2002 Section 3(3A) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 3(4) substituted 1 July 2003 section 262 Local Government Act 2002
4: Extraordinary vacancy created and person affected disqualified for re-election or reappointment
1: If any person, while holding office as a member of any local authority or of a committee thereof, becomes incapable of continuing to hold office under section 3
2: Every person whose office is vacated pursuant to subsection (1) shall thereby be disqualified for being elected or appointed as a member of the local authority or committee, as the case may be, until the next general or ordinary election or appointment, as the case may be, of members thereof.
3: An order under this section is secondary legislation ( see Part 3 1954 No 49 s 4 The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 4(3) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
5: Penalty for acting unlawfully
Every person commits an offence who does any act as a member of any local authority or of a committee thereof while incapacitated under section 3 1954 No 49 s 5 Section 5 amended 1 July 2013 section 413 Criminal Procedure Act 2011
6: Member of local authority or committee not to discuss or vote on question in which he has pecuniary interest
1: A member of a local authority or of a committee thereof shall not vote on or take part in the discussion of any matter before the governing body of that local authority or before that committee in which he has, directly or indirectly, any pecuniary interest, other than an interest in common with the public.
1A: Nothing in subsection (1) shall apply in any case where a member of a local authority or a committee of the local authority has been elected by or appointed to represent any activity, industry, business, organisation, or group of persons and his pecuniary interest is not different in kind from the interests of other persons in the activity, industry, business, organisation, or group by which the member is elected or in respect of which he is appointed.
2: For the purposes of subsection (1), where an incorporated company has, directly or indirectly, a pecuniary interest in a matter before the governing body of a local authority or before a committee thereof, a member of the local authority or, as the case may be, of the committee shall be deemed to have a pecuniary interest in the matter, if—
a: the member or his spouse or partner
b: the member or his spouse or partner
c: the member or his spouse or partner or partner or
d: the member or his spouse or partner
2A: Where the spouse or partner
2B: Nothing in subsection (2) or subsection (2A) shall apply with respect to the spouse or partner or partner
3: Nothing in subsection (1) shall apply with respect to any of the following matters:
a: any payment to or for the benefit of a member where it is legally payable and the amount or maximum amount or the rate or maximum rate of the payment has already been fixed; or
b: any contract of insurance insuring members against personal accident; or
c: an election or appointment of a member of the local authority to any office, notwithstanding that any remuneration or allowance is or may be payable in respect of that office; or
d: any formal resolution to seal or otherwise complete any contract or document in accordance with a resolution already adopted; or
e: the preparation, recommendation, approval, or review of a district plan under the Resource Management Act 1991
ea: the preparation, recommendation, approval, or review of general schemes under the Soil Conservation and Rivers Control Act 1941
eb: the preparation, recommendation, approval, or review of reports as to the effect or likely effect on the environment of any public work or proposed public work within the meaning of the Public Works Act 1981
f: any matter in which, in the opinion of the Auditor-General Auditor-General his or her
4: Notwithstanding anything in subsection (1), the Auditor-General his or her him or her Auditor-General
5: Any person who under subsection (1) is prohibited from voting on or taking part in the discussion of any matter at any meeting at which he is present shall, when the matter is raised before the local authority or committee of which he is a member, declare to the meeting that he has a pecuniary interest in the matter, and the fact of the disclosure of interest and of the abstention from discussion and voting shall be recorded in the minutes of the meeting. Any such record in the minutes of the meeting shall be prima facie evidence of its contents, in the event of any question arising as to whether a member made a disclosure of interest and abstained from discussion and voting.
6: Notwithstanding anything in subsection (1), a member of any of the following bodies:
a: the University Grants Committee:
b: the Council of Massey University:
c: the Council of the University of Auckland:
d: the Council of the University of Canterbury:
e: the Council of the University of Otago:
f: the Council of the University of Waikato:
g: the Council of the Victoria University of Wellington:
gg:
h: the Council of Lincoln University
i:
j:
k: shall be entitled to take part in the discussion before that body, or any committee thereof, of any matter that directly or indirectly affects his salary or allowances, but shall not be entitled to vote thereon. 1954 No 49 s 5A(1); 1957 No 60 s 2(1); 1961 No 54 s 14(3); 1965 No 94 s 2; 1966 No 10 s 2(8) Section 6(1A) inserted 5 November 1982 Local Authorities (Members' Interests) Amendment Act 1982 Section 6(2) substituted 26 October 1971 Local Authorities (Members' Interests) Amendment Act 1971 Section 6(2)﻿(a) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 6(2)﻿(b) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 6(2)﻿(c) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 6(2)﻿(c) amended 8 November 1974 Local Authorities (Members' Interests) Amendment Act 1974 Section 6(2)﻿(d) added 8 November 1974 Local Authorities (Members' Interests) Amendment Act 1974 Section 6(2)﻿(d) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 6(2A) inserted 26 October 1971 Local Authorities (Members' Interests) Amendment Act 1971 Section 6(2A) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 6(2B) inserted 26 October 1971 Local Authorities (Members' Interests) Amendment Act 1971 Section 6(2B) amended 13 October 2007 section 4(2) Relationships (Statutory References) Act 2005 Section 6(3)﻿(a) substituted 13 December 1979 Local Authorities (Members' Interests) Amendment Act 1979 Section 6(3)﻿(e) amended 1 October 1991 section 373(1) Resource Management Act 1991 Section 6(3)﻿(ea) inserted 8 November 1974 Local Authorities (Members' Interests) Amendment Act 1974 Section 6(3)﻿(eb) inserted 8 November 1974 Local Authorities (Members' Interests) Amendment Act 1974 Section 6(3)﻿(eb) amended 1 February 1982 section 248(1) Public Works Act 1981 Section 6(3)﻿(f) amended 1 July 2001 section 52 Public Audit Act 2001 Section 6(4) amended 1 July 2001 section 52 Public Audit Act 2001 Section 6(6)﻿(gg) repealed 23 July 1990 section 50(5) Education Amendment Act 1990 Section 6(6)﻿(h) amended 1 February 1982 section 248(1) Public Works Act 1981 Section 6(6)﻿(i) repealed 1 July 2017 section 197 Fire and Emergency New Zealand Act 2017 Section 6(6)﻿(j) repealed 1 July 2017 section 197 Fire and Emergency New Zealand Act 2017 Section 6(6)﻿(k) repealed 1 July 2017 section 197 Fire and Emergency New Zealand Act 2017
7: Penalty for discussing or voting when pecuniarily interested
1: Where any person does any act in contravention of or fails to comply with any provision of subsection (1) of section 6
2: It shall be a defence in proceedings for an offence against subsection (1) if the defendant proves that when he took part in the discussion of, or, as the case may be, voted on, the matter before the local authority or committee he did not know and had no reasonable opportunity of knowing that he had a pecuniary interest in that matter other than an interest in common with the public.
3: On the conviction of any person under subsection (1), he shall be deemed to have been granted leave of absence from the local authority and from every committee thereof, and shall not be capable of acting as a member of the local authority or of any committee thereof—
a: if no appeal is lodged against the conviction, until the time for lodging an appeal against the conviction has expired:
b: if an appeal is lodged against the conviction, until the appeal is determined.
4: Where the period of leave of absence of any member has expired pursuant to subsection (3) and the conviction has not been quashed or set aside,—
a: the office of the member shall be vacated; and
b: the vacancy shall be deemed an extraordinary vacancy, and shall be dealt with in the manner (if any) provided by law for dealing with extraordinary or casual vacancies in the membership of that local authority or committee. If no provision exists for dealing with extraordinary or casual vacancies, the vacancy may be dealt with in such manner as the Governor-General, by Order in Council, prescribes.
5: An order under this section is secondary legislation ( see Part 3 1954 No 49 s 5(2); 1957 No 60 s 2(1) The following table is small in size and has 3 columns that are grouped under the heading Legislation Act 2019 requirements for secondary legislation made under this section. Legislation Act 2019 requirements for secondary legislation made under this section Publication PCO must publish it on the legislation website and notify it in the Gazette LA19 s 69(1)﻿(c) Presentation The Minister must present it to the House of Representatives LA19 s 114 cl 32(1)﻿(a) Disallowance It may be disallowed by the House of Representatives LA19 ss 115 116 This note is not part of the Act. Section 7(1) amended 1 July 2013 section 413 Criminal Procedure Act 2011 Section 7(5) inserted 28 October 2021 section 3 Secondary Legislation Act 2021
8: Auditor-General The Auditor-General his or her he or she 1954 No 49 s 6 Section 8 heading amended 1 July 2001 section 52 Public Audit Act 2001 Section 8 amended 1 July 2001 section 52 Public Audit Act 2001
9: Repeals, revocations, and amendment
1: The enactments specified in Schedule 2
2: The orders specified in Schedule 3
3:
4: Any provisions in any enactment restraining the members of any local authority or of a committee thereof from contracting with the local authority, either wholly or beyond certain limits, or disqualifying as members of the local authority or of any such committee any persons so contracting, and all provisions incidental to any such first-mentioned provisions, shall, except so far as that enactment expressly provides to the contrary, be read subject to the provisions of this Act. Section 9(3) repealed 1 December 1978 section 4(8)﻿(h) New Zealand National Airways Corporation Dissolution Act 1978