GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

H	1 

HOUSE BILL 964

Short Title:  Code of Legislative Ethics Revision.	(Public)

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Sponsors: Representatives Howard; Aldridge, Allred, Arnold, Baker, Barbee, Berry, Black, Bowie, Brown, Buchanan, Cansler, Capps, Carpenter, Clary, Culp, Davis, Decker, Dockham, Earle, Easterling, Eddins, Esposito, Gamble, Gardner, Grady, Gulley, Hall, Hardy, Hiatt, Hill, Hurley, Ives, Jarrell, Jeffus, Justus, Kiser, Luebke, McAllister, McComas, McCombs, McCrary, Mitchell, Morgan, Morris, Preston, Rayfield, Reynolds, Russell, Sexton, Sherrill, Shubert, Starnes, Tallent, Thompson, Warner, Watson, Weatherly, C. Wilson, G. Wilson, and Wood.

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Referred to:  Ethics.

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April 16, 1997

A BILL TO BE ENTITLED
AN ACT TO REVISE AND STRENGTHEN THE SYSTEM OF LEGISLATIVE ETHICS.
The General Assembly of North Carolina enacts:
Section 1.  Part 1 of Article 14 of Chapter 120 of the General Statutes reads as rewritten:
"Part 1.  Code of Legislative Ethics.
"§ 120-85.  Definitions.
As used in this Article, unless the context clearly requires otherwise:
(1)	 ” ‘Associated business' means any enterprise, incorporated or otherwise, doing business in the State of which the person filing an economic interest statement required under Part II of this Article, or any member of the person's immediate household is a director, officer, owner, partner, or employee, or of which the person filing an economic interest statement required under Part II of this Article, and the person's immediate household, either singularly or collectively, is a holder of securities worth five thousand dollars ($5,000) or more at fair market value as of December 31 of the preceding year, or constituting five percent (5%) or more of the outstanding stock of such enterprise.
(2)	‘Immediate household' means the legislator, the legislator's spouse, and all dependent children of the legislator.
(2a)	‘Legislator' means any person who has been elected or appointed to the General Assembly and who has or has not yet taken the oath of office. For purposes of this Article, a legislator shall be deemed elected on the day following the general election held for that office.
	(2b)	‘State agency' includes a State department, institution, commission, committee, board, division, bureau, officer, or official; or a nonprofit corporation that has received State funding during the then current or immediately preceding fiscal year.
(3)	‘Vested trust' as set forth in G.S. 120-96(4) means any trust, annuity or other funds held by a trustee or other third party for the benefit of the person filing the statement of economic interest required by Part 2 of this Article or the member of that person's immediate household.
"§ 120-86.  Bribery, etc.
(a)	No person shall offer or give to a legislator or a member of a legislator's immediate household, or to a business with which the legislator is associated, and no legislator shall solicit or receive, anything of monetary value, including a gift, favor or service or a promise of future employment, based on any understanding that such legislator's vote, official actions or judgment would be influenced thereby, or where it could reasonably be inferred that the thing of value would influence the legislator in the discharge of the legislator's duties.
(b)	It shall be unlawful for the partner, client, customer, or employer of a legislator or the agent of that partner, client, customer, or employer, directly or indirectly, to threaten economically that legislator with the intent to influence the legislator in the discharge of his or her legislative duties.
(c)	It shall be unethical for a legislator to contact the partner, client, customer, or employer of another legislator if the purpose of the contact is to cause the partner, client, customer, or employer to threaten economically, directly or indirectly, that legislator with the intent to influence that legislator in the discharge of his or her legislative duties.
	”	"§ 120-86A.  General standards of conduct.
(a)	A legislator shall not directly or indirectly:
(1)	Use or attempt to use his or her influence as a legislator in any manner which involves substantial conflict between the legislator's personal interest and the legislator's duties in the public interest.
(2)	Engage in sexual harassment.  For purposes of this subsection, ‘sexual harassment' includes sexual advances, requests for sexual favors, sexually motivated physical contact or other verbal or physical conduct or communication of a sexual nature when:
a.	Submission to that conduct or communication is made a term or condition, either explicitly or implicitly, of obtaining employment, or public or constituent services, or the legislator's vote or official action;
b.	Submission to or rejection of that conduct or communication by an individual is used as a factor in decisions affecting that individual's employment or provisions to that individual of constituent or public services; or
c.	That conduct or communication has the purpose or effect of substantially interfering with an individual's employment or public or constituent services, or creating an intimidating, hostile, or offensive employment or public or constituent services environment.
	For the purposes of this subdivision, ‘employment' means only employment with a State, federal, or local governmental agency.
(3)	Use his or her official position or office to obtain financial gain for the legislator or legislator's immediate household or associated business.
	(4)	Use or attempt to use the legislative office to secure or create privileges, exemptions, advantages, or treatment for the legislator or others in contravention of the public interest at large.
(5)	Use State resources including any person, money, or property under the legislator's official control or direction or in the legislator, custody for:
a.	The private benefit or gain of the legislator, except on an incidental and infrequent basis.  This sub-subdivision shall not prohibit:
1.	The use of public resources to benefit another person as part of the legislator's official duties;
2.	For the legislator's benefit if the cost to the State is so small as to be insignificant or negligible and does not interfere with the legislator's official duties.
b.	Any partisan political campaign activity, except for elections to constitutional or party offices within the General Assembly.
(6)	Use the legislator's official stationery, or a facsimile thereof, to solicit a vote or a contribution for the legislator's or another person's campaign for election or reelection to public office, or use the great seal of the State on campaign stationery or campaign literature. A legislator may use a facsimile of the legislator's official stationery or of the great seal of the State in soliciting campaign contributions or thanking contributors to the legislator's or another person's political campaign if it is paid for by other than State funds and if it bears a clear disclaimer that indicates the stationery was not printed or mailed at State expense.  For the purposes of this subdivision, ‘official legislative stationery' means the stationery which is issued by the Legislative Services Office to the legislator for use as a member of the General Assembly or of its legislative committees or commissions.
(7)	While in discharge of legislative duties, become intoxicated by the use of alcoholic beverages or any controlled substance defined in G.S. 90-87(5).
(8)	Accept any compensation in consideration for an appearance, speech, or writing unless the appearance, speech, or writing is unrelated to his position as a legislator; however, a legislator may accept prepaid transportation, food, and lodging for out-of-state travel associated with the legislator's duties or reimbursement for actual expenses incurred in connection with that travel.
(9)	Accept compensation, other than that provided by law for members of the General Assembly, for influencing or attempting to influence legislative action through direct oral or written communication with another legislator, or to solicit other persons to influence legislative action. This subsection shall not apply to a limited liability company, partnership, or a professional corporation in which a legislator has a membership or an interest of any kind, if the legislator does not share directly or indirectly in the fee resulting from the representation by another member, owner, associate or employee of the limited liability company, partnership or corporation.
(10)	Solicit, receive, accept, or agree to accept anything of value from a lobbyist or the employer of a lobbyist.
(b)	The provisions of subdivision (a)(8), (9), or (10) of this section do not preclude a legislator from accepting ceremonial gifts and awards of a nominal value, acceptance of personal hospitality in connection with a normal social function, or political contributions if these favors are not offered with the understanding that the legislator will be influenced in the discharge of the legislator's duties or could be reasonably believed to so influence the legislator.
"§ 120-86B.  Certain contracts with State agencies.  
A legislator, or any member of the legislator's immediate household, or a business of which the legislator or the legislator's immediate household owns, collectively or individually, five percent (5%) or more of the outstanding stock shall not contract for a value of one hundred dollars ($100.00) or more per transaction with a State agency or as a subcontractor with a contractor on a contract with a State agency, except for:
(1)	Contracts, agreements, sales, or purchases made or let after public notice and competitive bidding; or
(2)	Contracts, agreements, sales, or purchases available on similar terms to members of the legislator's business, occupation, or profession.
"§ 120-86C.  Certain leases or sales of real property with State agency.
A legislator, any member of the legislator's immediate household, or any business of which the legislator or his immediate household, individually or collectively, owns or controls five percent (5%) or more of the outstanding stock of the enterprise shall not lease or sell a facility, a building, or other real property to a State agency.  This section does not apply to sales or leases made pursuant to the State's power of eminent domain or any contract existing prior to the convening of the 1999 General Assembly.
"§ 120-86D.  Influencing State agencies.  
(a)	A legislator shall not, for compensation, appear before a State agency as an expert witness.
(b)	A legislator may not, for compensation, represent or engage in negotiations on behalf of a client before or with a State agency in proceedings related to the following matters:
(1)	Contracting for the conveyance of an interest in real property, or the purchase, sale, rental, or lease of goods or services from a State agency;
(2)	Rate making;
(3)	Adoption, amendment, or repeal of any administrative rule;
(4)	Obtaining grants of money or loans;
(5)	Certifying, licensing, or permitting, but not including matters related to drivers licenses; or
(6)	Any proceeding before the Utilities Commission.
Absent an express or implied threat of legislative reprisal, nothing in this Article shall prevent a legislator from contracting a State agency on behalf of any person.
(c)	A legislator shall not, for compensation, represent the State or any State agency.
(d)	A legislator-attorney shall not, for compensation, maintain for another person an action for money damages against the State in which the State is a defendant or against a State agency in which the agency is a defendant, or against any person who is defended by the State under Article 31A of Chapter 143 of the General Statutes.  This does not apply to:
(1)	Workers' compensation claims; or
(2)	Unemployment compensation cases.
(e)	A legislator shall not enter into any express or implied agreement to receive compensation for services to be rendered in relation to any case, proceeding, application, or other matter before any State agency in which the legislator's compensation is dependent or contingent upon any action by the agency.
(f)	Except as specifically provided by subsections (c), (d), and (e) of this section, a legislator otherwise properly licensed may represent any person in judicial proceedings and may contract for contingency fees for that representation.
(g)	Nothing in this section shall prohibit:
(1)	A legislator from continuing to represent a person before any State agency on any case, action, or proceeding filed and pending before that agency as of the date of the legislator's election to the General Assembly; or
(2)	A legislator's partner or business associate from representing any individual for compensation.
"§ 120-86E.  Employment of members of legislator's immediate family.
(a)	A member of a legislator's immediate family shall not be employed or appointed to an office or position in the legislative branch of State government; provided that a member of the legislator's immediate family may be employed as that legislator's secretary or committee clerk.
(b)	A legislator shall not advocate or cause the employment, appointment, promotion, transfer, or advancement of a member of the legislator's immediate family to an office or position in the executive branch of State government.
(c)	For the purposes of this section, ‘immediate family' means the spouse, parents, siblings, children, grandparents, grandchildren, and the step-, half-, and in-law relationships of those listed.
"§ 120-87.  Disclosure of confidential information.
No legislator shall use or disclose confidential information gained in the course of or by reason of his or her official position or activities in any way that could result in financial gain for the legislator, a business with which the legislator is associated or a member of his or her immediate household or any other person. 
"§ 120-88. When legislator to disqualify himself or herself or submit question to Legislative Ethics Committee.
	(a) A legislator shall not participate in the discussion of a question in committee or on the floor of the General Assembly, vote, or make an official decision on any matter from which the legislator or the legislator's household or associated business of the legislator or the legislator's immediate household will derive a direct monetary gain or suffer a direct monetary loss.  If such a gain would be derived or such a loss suffered, the relevant legislator shall excuse himself or herself from participation and action in the manner provided by the rules of the applicable legislative chamber.
(b)	Notwithstanding the provisions of subsection (a) of this section, a legislator may participate in discussions, vote, or make decisions on legislation if:
(1)	The legislation affects the legislator's salary, benefits, and allowances provided by law;
(2)	The gain or loss which accrues to the legislator, a member of the legislator's immediate household, or the associated business of the legislator or a member of his immediate household is no greater than the gain or loss which accrues generally to other members of the business, profession, occupation, or group.
(c)	If the legislator has a material doubt as to whether he should act, he may submit the question to the Legislative Ethics Committee for an advisory opinion in accordance with G.S. 120-104.
"§ 120-88A.  Violations of this Part.
A violation of G.S. 120-86(a)	or (b) shall be punished as a Class F felony.  A violation of any other provision in this Part is not a crime but is punishable under G.S. 120-103.  Nothing in this Part shall prohibit a criminal prosecution under any other provision of law."
Section 2.  Part 2 of Article 14 of Chapter 120 reads as rewritten:
"Part 2. Statement of Economic Interest.
"§ 120-89.  Statement of economic interest by certain candidates; filing required.
Every person who files as a candidate for nomination or election to a seat in either house of the General Assembly  or as Lieutenant Governor shall file a statement of economic interest as specified in this Article within 10 days of the filing deadline for the office he seeks.
"§ 120-90.  Place and manner of filing.
The statement of economic interest shall cover the preceding calendar year and shall be filed at the same place, and in the same manner, as the notice of candidacy which a candidate seeking party nomination for the office of State Senator, State Representative, or Lieutenant Governor is required to file under the provisions of G.S. 163-106. 
"§ 120-91:  Repealed by Session Laws 1987 (Reg. Sess., 1988), c. 1028, s. 3.
"§ 120-92.  Filing by candidates not nominated in primary elections.
A person who is nominated pursuant to the provisions of G.S. 163-114 after the primary and before the general election, and a person who qualifies pursuant to the provisions of G.S. 163-122 as an independent candidate in a general election shall file with the county board of elections of each county in the senatorial or representative district a statement of economic interest. A person nominated pursuant to G.S. 163-114 shall file the statement within three days following his nomination, or not later than the day preceding the general election, whichever occurs first. A person seeking to qualify as an independent candidate under G.S. 163-122 shall file the statement of economic interest with the petition filed pursuant to that section. A person who is nominated by party convention of a new political party shall file a statement of economic interest with the county board of elections within 10 days of the certification with the State Board of Elections of the new parties' candidates required by G.S. 163-98.
"§ 120-93. Boards of elections to notify candidates of economic-interest-statement requirements.
Each county board of elections shall provide for notification of the economic-interest-statement requirements of G.S. 120-89, 120-96, and 120-98 to be given to any candidate filing for nomination or election to the General Assembly at the time of his or her filing in the particular county. The State Board of Elections shall provide for notification of the economic interest statement requirements to candidates nominated by party convention of a new political party of G.S. 120-92.
"§ 120-93.1.  Certification of statements of economic interest.
The chairman of the county board of elections shall forward a certified copy of each candidate's statement of economic interest, within 10 days after its filing, to the board of elections in each other county in the district the candidate seeks to represent. The chairman of the county board of elections with which a statement of economic interest is filed shall forward a certified copy of the statement to the Legislative Services Office once the candidate is certified as elected to the General Assembly.  The Executive Director-Secretary of the State Board of Elections shall forward a certified copy of the statement of the candidate who is certified as elected as Lieutenant Governor to the Legislative Services Office.
"§ 120-94.  Statements of economic interest are public records.
The statements of economic interest are public records and shall be made available for inspection and copying by any person during normal business hours at the office of the various county boards of election where the statements or copies thereof are filed and at the Legislative Library after certified copies are forwarded to the Legislative Services Office.  The Legislative Librarian shall attach to the statement of economic interest of any legislator designated in the filing:  any lobbyist registration statement filed pursuant to G.S. 120-47.2, or any list of authorized official liaison personnel filed pursuant to G.S. 120-47.8.  If a county board of elections of a county does not keep an office open during normal business hours each day, that board shall deliver a copy of all statements of economic interest filed with it to the clerk of superior court of the county, and the statements shall be available for inspection and copying by any person during normal business hours at that clerk's office.
"§ 120-95:  Repealed by Session Laws 1987 (Reg. Sess., 1988), c. 1028, s. 3.
"§ 120-96.  Contents of statement.
Any statement of economic interest filed under this Article shall be on a form prescribed by the Committee, and the person filing the statement shall supply the following information:
(1)	The identity, by name, of any associated business of the legislator or any member of the legislator's immediate household;
(2)	The character and location of all real estate of a fair market value in excess of five thousand dollars ($5,000), other than the person's personal residence (curtilage), in the State in which the person, or a member of the person's immediate household, has any beneficial interest, including an option to buy and a lease for 10 years or over;
(3)	The type of each creditor to whom the person or a member of the person's immediate household, owes money, except indebtedness secured by lien upon the person's personal residence only, in excess of five thousand dollars ($5,000);
(4)	The name of each ‘vested trust' in which the person or a member of the person's immediate household has a financial interest in excess of five thousand dollars ($5,000) and the nature of such interest;
(5)	The name and nature of the person and the person's immediate household member's respective business or profession or employer and the types of customers and types of clientele served;
(6)	A list of the legislator's associated businesses that do business with the State, and a brief description of the nature of such business; and
(7)	In the case of professional persons and associations, a list of classifications of business clients which classes were charged or paid two thousand five hundred dollars ($2,500) or more during the previous calendar year for professional services rendered by the person and his or her firm or partnership. This list need not include the name of the client but shall list the type of the business of each such client or class of client, and brief description of the nature of the services rendered.
"§ 120-97:  Repealed by Session Laws 1987 (Reg. Sess., 1988), c. 1028, s.
"§ 120-98.  Penalty for failure to file.
(a)	If a candidate does not file the statement of economic interest within the time required by this Article, the board of elections in which the statement is required to be filed shall immediately notify the candidate by registered mail, restricted delivery to addressee only, that, if the statement is not received within 15 days, the candidate shall not be certified as the nominee of his party. If the statement is not received within 15 days of notification, the board of elections authorized to certify a candidate as nominee to the office shall not certify the candidate as nominee under any circumstances, regardless of the number of candidates for the nomination and regardless of the number of votes the candidate receives in the primary. A vacancy thus created on a party's ticket shall be considered a vacancy for the purposes of G.S. 163-114, and shall be filled according to the procedures set out in G.S. 163-114.
(b)	Repealed by Session Laws 1987 (Reg. Sess., 1988), c. 1028, s. 5."
Section 3.  G.S. 120-106 is repealed.
Section 4.  G.S. 120-47.2 reads as rewritten:
"§ 120-47.2.  Registration procedure.
(a)	A lobbyist shall file a registration statement with the Secretary of State before engaging in any lobbying.  A separate registration statement is required for each lobbyist's principal.
(b)	The form of the registration shall be prescribed by the Secretary of State and shall include the registrant's full name, firm, and complete address; the registrant's place of business; the full name and complete address of each person by whom the registrant is employed or retained; the name of any legislator, as defined in G.S. 120-85(2a):
(1)	Who is a member of or has any interest of any kind in a limited liability company, partnership, or professional corporation in which the registrant is also a member, director, officer, owner, partner, or employee; or
(2)	With whom the registrant is a member of the immediate household, as defined in G.S. 120-85(2); and
a general description of the matters on which the registrant expects to act as a lobbyist.
(c)	Each lobbyist shall register again with the Secretary of State no later than 10 days after any change in the information supplied in his last registration under subsection (b).  Each supplementary registration shall include a complete statement of the information that has changed.
(d)	Within 20 days after the convening of each session of the General Assembly, the Secretary of State shall furnish each member of the General Assembly and the State Legislative Library a list of all persons who have registered as lobbyists and whom they represent.  A supplemental list shall be furnished periodically each 20 days thereafter as the session progresses.
(e)	Each registration statement required under this Article shall be effective from the date of filing until January 1 of the following odd-numbered year.  The lobbyist shall file a new registration statement after that date, and the applicable fee shall be due and payable.
(f)	A lobbyist, who is required to report the name of a legislator under subsection (b) of this section, shall file a certified copy of the filed lobbyist registration statement with the Legislative Library within 10 days of registering as a lobbyist."
Section 5.  G.S. 120-47.8 reads as rewritten:
"§ 120-47.8.  Persons exempted from provisions of Article.
The provisions of this Article shall not be construed to apply to any of the following:
(1)	An individual, not acting as a lobbyist, solely engaged in expressing a personal opinion on legislative matters to his own legislative delegation or other members of the General Assembly.
	(2)	A person appearing before a legislative committee at the invitation or request of the committee or a member thereof and who engages in no further activities as a lobbyist in connection with that or any other legislative matter.
(3)	a.	A duly elected or appointed official or employee of the State, the United States, a county, municipality, school district or other governmental agency, when appearing solely in connection with matters pertaining to his office and public duties.
b.	Notwithstanding the persons exempted in this Article, the Governor, Council of State, and all appointed heads of State departments, agencies and institutions, shall designate all authorized official legislative liaison personnel and shall file and maintain current lists of designated legislative liaison personnel with the Secretary of State and shall likewise file with the Secretary of State a full and accurate accounting of all money expended on lobbying, other than the salaries of regular full-time employees, at the same times lobbyists are required to file expense reports under G.S. 120-47.6.  The officer designating an authorized official legislative liaison, who is also a member of a legislator's immediate household as that term is defined by G.S. 120-85(2), shall file a certified copy of the list of authorized official liaison personnel in the Legislative Library, within 10 days of the filing of the list with the Secretary of State.  The officer shall specify in writing the legislator whose immediate household includes the authorized official legislative liaison.
(4)	A person performing professional services in drafting bills or in advising and rendering opinions to clients, or to legislators on behalf of clients, as to the construction and effect of proposed or pending legislation where the professional services are not otherwise, directly or indirectly, connected with legislative action.
(5)	A person who owns, publishes or is employed by any news medium while engaged in the acquisition or dissemination of news on behalf of the news medium.
(6)	Repealed by Session Laws 1991, c. 740, s. 1.1.
(7)	Members of the General Assembly.
(8)	A person responding to inquiries from a member of the General Assembly or a legislative employee, and who engages in no further activities as a lobbyist in connection with that or any other legislative matter.
(9)	An individual giving facts or recommendations pertaining to legislative matters to his own legislative delegation only."
Section 6.  G.S. 120-86B, 120-86C, and 120-86D, contained in Section 1 of this act, become effective November 3, 1998.  The rest of this act becomes effective October 1, 1997.