CC Resolution No. 5593 . RESOLUTION N0. 5593 . ~
A RESOLUTION OF THE CITY COUNCIL OF TtiE CITY
OF CUPERTINO AMENDING RESOLUTION NO. 4396
REGARDING THli CONFLICT OF INTEREST
CODE OF THE CITY OF CUPERTINO FOR OFFICIALS
AND DESIGNATED EMPLOYEES
, RESOLVED, by the City Council of the City of Cupertino,
as follows:
' 1. Amendment
~ That that Code entitled, "Conflict of Interest Code of
the City of Cupertino for Officials and Designated Employees"
is hereby amended, approved, and adopted as set forth in
Enhibit "A", attached hereto and by this reference made a
' part hereof.
2. Effective Date
The effective date of the amendments to this Code shall
j be thirty (30) days after adoption of this resolution by the
City Council.
3. Filing of Resolution
The Clerk is herby directed to file a copy of this reso-
lution with her office and to make it available to members of
the general public.
~ PASSED AND ADOPTED at a regular meeting of the City of
I Cupertino this 6th day of April , 1981, by the following
~ vote:
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Vote Members of the City Council
AYES: Gatto, Johnson, Plungy, Sparks, Rogers
NOES: None
ABSENT: None
ABSTAIN: None
App ov .
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yor, City of upp~rtino
/
ATTE
City Clerk
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II CONFLICT OF INTEREST CODE -
I~ OF THE CITY OF CUPERTINO
, For Officials and Designated Emplovees
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~ Section 1.00 - Authority. These amendments to the
Conflict of Interest Code of the City of Cu~ertino for
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~I Officials and Designated Employees are adopted by the City ,
I!, Council of the City of Cupertino pursuant to, and in
implementation of Government Code Sections 87300 and 8730?
' of the State of California, Nothing contained herein is
' intended to modify or abridge the provisions of the Political
Reform Act of 197A (Government Code Section 81000 et. seq,).
The provisions of this code are additional to Government
Code Section 81000 and other laws pertaining to conflicts
of interest. Except as otherwise indicated, the definitions
of said act and regulations adopted pursuant thereto are
incorporated herein and the code shall be interpreted in a
manner consistent therewith.
Section 1.01 - Severability. If any article, section,
subsection, paragraph, subparagraph, sentence, clause, or
phrase of this Code is for any reason held to be invalid,
unconstitutional or unenforceable, such decision shall not
affect the validity of the remaining portions of this Code.
The City Council of the City of Cupertino declares that it
would have adopted these amendments, and each article, section,
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subsection, paraqraph, subparagraph, sentence, clause, and
phrase thereof, irrespective of the fact that any one or
more of such portions of these amendments be declared invalid,
unconstitutional, or unenforceable.
Section 1.02 - Effective Date. These amendments
to this Code shall take affect thirty (30) days after their
approval by the City Council of the City of Cupertino.
I Section 1.03 - Definitions. As used in this Code, unless
the context otherwise clearly implies, the following words
and terms shall have the meanings set forth herein.
a) Business entity. "Business entity" means a1y
organization or enterprise operated by profit, including but
not limited to a proprietorship, partnership, firm, business
trust, joint venture, syndicate, corporation or association.
b) Consultant. "Consultant" means a position
established by contract with the City of Cupertino pursuant
to which contract information, advice, recommendation or
counsel is provided to the City of Cupertino, provided,
however, that "consultant" shall not include a position in
which the person providing such information, advice, recom- •
mendation or counsel:
(1) conducts research and arrives at conclusions
with respect to his or her rendition of information,
advice, recommendation or counsel independent of the
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I~ control and direction of the City of Cupertino or of
any local agency official, other than normal contract
monitoring; and
(2) possesses no authority with respect to any
City of Cupertino municipal decision beyond the rendi-
tion of information, advice, recommendation or counsel.
, c) CountY. "County" means the County of Santa
Clara, in which this local agency is located,
d) Designated employee. "Designated employee"
means (i) a natural person holding, or representing a
business entity which holds, a designated position, (ii) a
member, salaried or unsalaried, of any board, commission,
or committee holding a designated position, or (iii) a
consultant to (i) or (ii).
e) Designated positions. The positions listed in
Exhibit "A" attached to this Cocle are designated positions.
Officials and employees holding these positions are deemed
to make, or participate in the making of, decisions which
may foreseeably have a material effect on a financial interest.
f) Disclosure statements. "Disclosure statements"
means statements disclosing reportable interests required,
by Sections 2.00 and 2.01 to be filed by designated employees.
g) Reportable interests. "Reportable interests"
means investments, interests in real property and income
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required to be disclosed by designated employees which have
some relationship, direct or indirect, to the official
duties and responsibilities of such employees. "Reportable
I interests" as to any particular designated employee means '
I those categories of such interests assigned, by Exhibit "A",
li attached hereto, to the designated position held by such
I employee. "Reportable interests" as Co any particular
employee are deemed by said assignments to be affected
foreseeably and materially by any decision made or
participated in by the designated employee by virtue of his
or her position and have some relationship, direct or
indirect, to the official duties and responsibilities of such
position.
h) Incorporated definitions. Except as otherwise
indicated, the definitions contained in the Political Reform
Act of 1974 (Gov. C. Sec. 81000, et seq.) and Regulations
adopted pursuant thereto are incorporated into this Code.
Section 2.00 - Disclosure Statements. Each designated
employee shall file an initial statement and annual state-
ments thereafter disclosing those reportable interests in the
category or categories of real property, investments, and
income, as set forth in Exhibit "B", which are assigned by
Exhibit "A" hereof to the designated position held by such
employee. Such statements shall be filed at the place
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specified in Section 3.00(a) and at the times specified in
Section 3.00 (c),(d),(e), and/or (f), and shall be on the
j form specified in Section 4.00. The initial statement shall
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disclose interests in real property and investments, and
each annual statement thereafter shall disclose interests
in real property, investments and income.
Section 2.01 - Termination Statements. Each designated
employee shall file a disclosure statement within thirty (30)
days after leaving a designated position, disclosing reportable
investme~ts, interests in real property, and income held
at any time during the period between the closing date of
the last statement required to be filed and the date of
leaving such position, Such statements shall be filed at
the place specified in Section 3.00(a) and shall be on the
form specified in Section 4.00.
Section 3.00 - Place and Time of Filinq.
a) All persons holding designated positions who
are required to submit a statement of financial interest
shall file the original with the City Clerk of the City of
Cupertino.
b) The Clerk of the City of Cupertino shall make
and return a copy of said statement and forward the original
to the City Council.
c) All persons holding designated positions who
are required to submit statements of financial interest shall
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~I shall submit an initial statement within thirty (30) days
I~ after the effective date of this Code, disclosing interests
held on the effective date of this Code. The first state-
II ment filed by a designated employee shall disclose any
reportable investments and interests in real property.
(d) Probationary or certified employees appointed,
promoted, or transferred to designated positions shall file
' initial statements within thirty (30) days after date of
employment, disclosing interests held on the date of
employment. The first statement filed by a designated
employee shall disclose any reportable investments and
interests in real property,
(e) All other persons appointed, promoted, or
transferred to designated positions shall file initial
statements not more than thirty (30) days after assuming
the position, disclosinq reportable interests held on the
date of assuming office. Persons already occupying a
position subsequently added to the categories of designated
positions by an amendment to this Code shall file initial
statements within thirty (30) days after the effective date
of the amendment, disclosing reportable interests held on the
effective date of the amendment.
The first statement filed by a designated employee shall
diaclose any reportable investments and interests in real
property.
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(f) An annual disclosure statement shall be filed
no later than April lst of each year by each designated
employee, disclosing investments, interests in real property
i and income held or received at any time during the previous
i calendar year or since the date the designated employee
assumed such position if during the calendar year:
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(g) A designated employee who is required to file
' a statement of financial interest with any other agency,
which is within the same territorial jurisdiction, may
comply with the provisions of this Code by filing a
duplicate copy of the statement filed with the other agency
in lieu of an entirely separate document, provided that
each duplicate copy filed in place of an original is signed
and verified by the designated employee as if it were an
original.
Section 4.00 - Contents of Disclosure Statements.
Disclosure statements shall be made on forms supplied by the
Clerk of the City of Cupertino and prescribed by the Fair
Political Practices Commission. Disclosure statements shall
contain the following information:
(a) Contents of Investment and Real Property Reports. ,
When an investment, or an interest in real property, is
required to be reported by Exhibit "B", the statement shall
contain:
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(1) A statement of the nature of the invest-
ment or interest;
(2) The name of the business entity in which
' each investment is held, and a general description '
of the business activity in which the business is
engaged;
~ (3) The address or other •
I precise location of
~ the real property;
(4) A statement whether the fair market value
of the investment or interest in real property
exceeds One Thousand Dollars ($1,000) but does not
exceed Ten Thousand Dollars ($10,000), whether it
exceeds Ten Thousand Dollars ($10,000) but does not
exceed One Hundred Thousand Dollars ($100,000), or
whether it exceeds One Hundred Thousand Dollars
($100,000);
(5) In the case of a statement filed under
Sections 2.00 and 2.01 of this Code, if the investment or
interest in real property was partially or wholly
acquired or disposed of during the period covered by
the statement, the date of acquisition or disposal;
(6) For purposes of disclosure under this
section, "interest in real property" does not include
the principal residence of the filer.
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(b) Contents of Personal Income and Business
Entity Income Reports.
tl) When income is required to be reported by
~ Exhibit "B", the statement shall contain, except as
I provided in subsection (2):
a. The name and address of each source of
• income aggregating two hundred fifty
dollars ($250) or more in value, or
' twenty-five dollars ($25) or more in
value if the income was a gift, and a
general description of the business
activity, if any, of each source;
b. A statement whether the aggregate value
of income from each source, or in the
case of a loan, the highest amount owed
to each source, was at least two hundzed
fifty dollars ($250) but did not exceed
one thousand dollars ($1,000), whether it
was in excess of one thousand dollars
($1,000) but was not greater than ten
thousand dollars ($L0,000), or whether
it was greater than ten thousand dollars
($10,000);
c. A description of the consideration, if any,
for which the income was received;
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d. In the case of a gift, the amount and the
date on which the gift was received;
e. In the case of a loan, the annual interest
rate and the security, if any, given for
the loan.
(Z) When income of a business entity, including
~ incoms of a sole proprietorship, is required to be
, reported under this code, the statement shall contain:
a. The name, address, and a general description
of the business activity of the business
entity;
b• In the case of a business entity which
provides legal or brokerage services, the
name of every person who paid fees to the
business entity if the filer's pro rata
share of fees from such person was equal to
or greater than one thousand dollars
($1,000);
c• In the case of a business entity not
covered by subparagraph b., the name of
every person from whom the business entity
received payments if the filer's pro rata
share of gross receipts from such person
was equal to or greater than ten thousand
dollars ($10,000) during a calendar year.
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Section 5.00 - Disqualification. All persons holding
designated positions must disqualify themselves from making
or participating in the making of any decisions in which
~ they have a reportable financial interest, when it is
reasonably forseeable that such interest may be "materially
i affected" by the decision. No persons holding designated
positions shall be required to disqualify himself with respect
' to any matter which could not be legalLy acted upon or
decided without his participation.
a) "Materially Affected" - Standard of Determination.
The financial effect of a governmental decision on a financial
interest of a person holding a designated position is
material if, at the time, the person holding a designated
position makes or participates in the making of a decision,
in light of all the circumstances and facts known at the time
of the decision, that person knows, or has reason to know,
that the existence of the financial interest might interfere
with that person's performance of his or her duties in an
impartial manner free from bias.
b) Circumstances to be Considered. In determining
the existence of a material effect upon a financial interest,
the person holding a designated position shall consider
relevant factors, including but not limited to the following:
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(1) In the case of any real property in which
that person has a direct or indirect interest worth
' more than One Thousand Dollars ($1,000): (A) whether '
the effect of the decision will be to increase the
income-producing potential of the real property by
' One Hundred Dollars ($100) or a five percent (58)
~ , per month, whichever is less; and (B) whether the
effect of the decision will be to increase the fair
market value of the real property by One Thousan
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Dollars ($1,000) or more by five percent (5~) whichever
is greater.
(2) In the case of a business entity in which
that person has a direct or indirect investment worth
more than One Thousand Dollars (51,000), or in the
case of that person who is a director, officer, partner,
trustee, employee, or holds any position of management
in a business entity: (A) whether the effect will be
to increase or decrease the annualized gross revenue
of the business entity by one percent (1$) or more
or the annual net income of the business entity by
five percent (5~) or more; and (B) whether the effect
of the decision will be to increase or decrease the
assets or liabilities of the business entity by
Fifty Thousand Dollars ($50,000) or more, or by five
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percent (58) of its current assets or liabilities,
whichever is less,
(3) In the case of a source of income of that
person (other than a loan by a commercial lending
I institution in the regular course of business on
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terms available to the public without regard to
official status) aggregating Two Hundred Fifty Dollars
~I ($250) or more in value provided to, received by or
promised to that person within twelve (12) months
- prior to the time when the decision is made: (A)
whether, if the source of income is a business entity,
the decision will affect such business entity in the
manner described in subsection (2) above; (B) whether
the governmental decision will directly affect the
amount of income to be received by that person; and
(C) whether there is a nexus between the governmental
decision and the purpose for which that person receives
income. The specific dollar or percentage amounts
set forth in this subsection do not constitute either
absolute maximum or minimum levels, but are merely
intended to provide guidance and should be considered
along with other relevant factors in determining whether
a financial interest may interfere with that person's
exercise of his or her duties in rendering a decision.
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' For purposes of this Section 5.00, indirect
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investment or interest means any investment or interest owned
by the spouse or dependent child of a designated employee,
by an agent on behalf of a designated employee, or by a '
business entity or trust in which the designated employee,
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i the designated employee's spouse, agents, and dependent
children own directly, indirectly, or beneficially a ten
, (108) percent interest or greater.
I Section 6.00 - Penalties. Any person holding a
designated position who violates any of the reporting or
disclosure provisions of this Code is guilty of a misdemeanor
punishable as provided in Section 91000 of the Government
Code and is also subject to any and all civil penalties as
prescribed in Section 91004 and 91013 of the Government
Code. The above described penalties are in addition to any
' other penalties as may be prescribed by law.
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EXHIBIT "A"
DESIGNATED POSITIOi~S
and
APPLICABLE REPORTABLE INTERST CATEGORIES
REPORTABLE ItJTEREST
DESIGNATED POSITIONS* CATEGORIES
Commissions
, Architectural and Site Approval Commissioners A through H
' Cable T.V. Advisory Committee Members A through H
' Employees
' Assistant City Attorney A through H
Assistant City Enqineer A through H
' Assistant Civil Engineer g
Assistant Director of Planning A through H
Associate Planner g
Assistant to the City Manager A through H
' Building Inspection I B, D, E, F, G& H
' Building Inspection II B, D, E, F, G& H
Building Official B D E F G& H
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City Attorney A through H
Code Enforcement Officer D, E, F, G& H
Consultant A through H
Deputy City Attorney A through H
Deputy Treasurer A through H
Director of Finance A through H
Director of Parks and Recreation A through H
Director of Planning and Development A through H
Director of Public Works - City Engineer A through H
Electrical Inspector B, D, E, F, G& H
Enqineering Technician g
Home Rehabilitation Counselor A through H
Public Works Inspector g
Public Works Superintendent B, D, E, F, G& H
Purchasing Officer A through H
Senior Engineering Technician g
, Senior Planning Technician g
Traffic Engineer g
' Traffic Technician g
, Treasurer A through H
Water Systems Supervisor g
II *or as hereafter may be reclassified
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EXHIBIT "B"
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CONFLICT OF INTEREST DISCLOSURE CATEGORIES ~
I, Znterests in Real Property. (Category B)
Each person assigned this category on Exhibit "A"
I of this Code shall disclose all reportable interests in
real property. Interests in real property are reportable
if:
A. The real property to which the interest pertains
is located in part or in whole (a) within the boundaries of
the City of Cupertino, (b) within two miles of the boundaries
of the City of Cupertino, or (c) within two miles of any
land located outside of the boundaries of the City of
Cupertino which is owned or used by the City of Cupertino.
B. The fair market value of the interest of the
designated employee or his or her spouse or his or her
dependent children is qreater than One Thousand Dollars
($1,000); and
C. The interest is either (a) a leasehold, bene-
ficial or ownership interest owned directly, indirectly or
beneficially by the designated employee, or his or her spouse,
or his or her dependent children, provided, however, that a
leasehold interest does not include a lessee's interest in a
lease on real property which expires within 10 years of
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the first day of the period covered by the desiqnated
. employee's disclosure statement; (b) an option to acquire
such an interest in real property owned directly, indirectly
~ or beneficially by the designated employee, or his or her
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spouse, or his or her dependent cliildren; or (c) an interest
~ or option held by a business entity or trust in which the
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designated employee, or his or her spouse, or his or her
' dependent children owns directly, indirectly or beneficially
a ten percent interest or greater.
D. An interest in real property which is used
principally as the residence of the designated employee
making the filing is not a reportable interest.
II. Investments. (Categories A,C, & H)
Each person assigned this category in Exhibit "A" of
this Code shall disclose all reportable investments in business
entities. Investments are reportable if:
A. The business entity, including parent corpora-
tions, subsidiary corporations or otherwise related business
entities (a) has an interest in real property located in
part or in whole within the boundaries of the City of Cupertino,
within two miles of land o~aned or used by the City of Cupertino,
or (b) does business or plans to do business within the
boundaries of the City of Cupertino, or (c} has done business
within the boundaries of the City of Cupertino at any time during
Exhibit B-2
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the two years prior to the time that the disclosure state-
ment of the designated employee is filed; and
B. The fair market value of the investment of the
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i designated employee or his or her spouse or his or her ~
dependent children is greater than One Thousand Dollars
I ($1,000); and
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' C. The investment either (a) is owned directly,
,
' indirectly or beneficially by the designated employee, or
his or her spouse, or his or her dependent children and
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, constitutes a financial interest in or security issued by
the business entity, including but not limited to common
stock, preferred stock, rights, warrants, options, debt
instruments and any partnership or other ownership interest;
or (b) is held by any business entity, mutual fund, or trust
in which the designated employee, or his or her spouse, or
his or her dependent children owns, directly, indirectly or
beneficially, a ten percent (10$) interest or greater and
constitutes a financial interest in, or security issued by,
a business entity qualifying under paragraph *3 above.
The term "investment" does not include a time
or demand deposit in a financial institution, shares in a
credit union, any insurance policy, interest in a diversified
mutual fund registered with the Securities and Exchange
Commission under the Investment Company Act of 1940 or a
Exhibit B-3
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I common trust fund which is created pursuant to Section 1564
of the Financial Code of California, or any other bond or
debt instrument issued by any government or goverrunent
i ~ agency. ~
I III. Sources of Income. (Categories D, E, F, G, & H)
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i Each person assigned this category in Exhibit "A"
j of this Code shall disclose all sources of reportable inCome.
Sources of income are reportable if;
I; A. The source of income, other than a gift, was
either (a) a business entity located or doing business
as described in Cate or II A• b an individual e'
q Y , , ( ) r siding
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, within the City of Cupertino or (c) a nonprofit association
or corporation having its principal place of business
' within the City of Cupertino.
' B. Either (a) the aggregate amount of income
' received by the designated employee or his or her spouse
from the source during the period covered by the disclosure
statement was Two Hundred Fifty Dollars ($250) or more in
value, or (b) if the income was a gift received by the
designated employee or his or her spouse from the source
during the period covered by the disclosure statement, the
value of the gift was Twenty-Five Dollars ($25) or more; and
C. The income was either received by (a) the
designated employee or his or her spouse, or (b) received
Exhibit B-4
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; by any business entity or trust in which the designated
employee or his or her spouse owns, directly, indirectly,
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! or beneficially, a ten percent (10~) interest or greater,
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provided however, that in the event that the income is ~
received by a business entity described in this subparagraph
(bj, the value, for the purpose of Paragraph B, of the income
J relates to the prorata share of the designated employee'or
his or her spouse in the income of the business entity or
trust.
Income includes, except to the extent excluded
by this subsection; income of any nature from any source,
including but not limited to any salary, wage, advance,
dividend, interest, rent, proceeds from any sale, gift
(including any gift of food or beverage), loan, foregive-
ness or payment of indebtedness received by the filer,
reimbursement for expenses, per diem, or contribution to
an insurance or pension program paid by any person other
than an employer, and including any community property
interest in income of a spouse. Income also includes an
outstanding loan. Income does not include: (1) campaign
contributions required to be reported under Chapter 4
, (commencing with Section 84100) of Title 9 of the Government
Code of the State of California; (2} salary and reimbursement
for expenses or per diem received from a state, local, or
Exhibit B-5
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' federal government agency and reimbursement for travel expenses
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; and per diem received from bona fide educational, academic
i or charitable orqanization; (3) any devise or inheritance;
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(4) interest, dividends or premiums on a time or demand deposit
i in a financial institution, shares in a credit union or any
i insurance policy, or any bond or other debt instrument
issued by any government or government agency; (5) dividends,
interest or any other return on a security which is registered
, with theSecurities and Exchange Commission of the United States
Government; (6) redemption of a mutual fund; (7) alimony or
child support payments; (8) any loan or loans from a
commercial lending institution which are made in the lender's
regular course of business on terms available to members
, of the public without regard to official status if used
to purchase the principal residence of filer or if the
balance owed does not exceed ten thousand dollars ($10,000);
(9) any loan from an individual's spouse, child, parent,
grandparent, grandchild, brother, sister, parent-in-la4~,
brother-in-la~a, sister-in-law, nephew, niece, uncle, aunt,
or first cousin or the spouse of any such person, provided
that a loan from any such person shall be considered income
if the lender is acting as an agent or intermediary for any
, person not covered by this paragraph (9); (10) any indebted-
ness created as a part of a retail installment or credit
Exhibit B-6
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card transaction if made in the lender's regular course of
( business on terms available to members of the public without
regard to official status, so long as the balance owed to '
the creditor does not exceed ten thousand dollars ($10,000); '
II and payments received under a defined benefit pension plan
~ii qualified under Internal Revenue Code Section 401(a).
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Exhibit S-7 •