GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

H	1 

HOUSE BILL 1058

Short Title:  State Ethics Code.	(Public)
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Sponsors: Representatives Luebke and R. Hunter.
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Referred to:  Judiciary III.
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April 22, 1991

A BILL TO BE ENTITLED
AN ACT TO PROVIDE AN ETHICS CODE FOR PUBLIC OFFICERS AND EMPLOYEES.
The General Assembly of North Carolina enacts:
Section 1.  Chapter 128 of the General Statutes is amended to add a new Article to read:
"ARTICLE 5.
"Code of Ethics and Standard of Conduct
for Public Officers and Employees.
"§ 128-50.  Declaration of policy.
It is hereby declared to be the policy of the State that no officer or employee of a State agency or of a county, city, or other political subdivision of the State, shall have any interest, financial or otherwise, direct or indirect; engage in any business transaction or professional activity; or incur any obligation of any nature which is in substantial conflict with the proper discharge of his duties in the public interest.  To implement this policy and strengthen the faith and confidence of the people of the State in their government, there is enacted a code of ethics setting forth standards of conduct required of State, county, and city officers and employees, and of officers and employees of other political subdivisions of the State, in the performance of their official duties.  It is the intent of the General Assembly that this code shall serve not only as a guide for the official conduct of public servants in this State, but also as a basis for discipline of those who violate the provisions of this Article.
It is further declared to be the policy of the State that public officers and employees, State and local, are agents of the people and hold their positions for the benefit of the public.  They are bound to uphold the Constitution of the United States and the State Constitution and to perform efficiently and faithfully their duties under the laws of the federal, State, and local governments.  Such officers and employees are bound to observe, in their conduct, the highest standards of ethics consistent with this code regardless of personal considerations, recognizing that promoting the public interest and maintaining the respect of the people in their government must be of foremost concern.
"§ 128-51.  Definitions.
Unless provided otherwise or the context otherwise requires, the following definitions govern the construction of this Article:
(a)	The term 'officer or employee' includes any person employed, appointed, or elected to a position of the State or local government or to an agency thereof.  The term excludes members of the General Assembly.
(b)	The term 'agency' shall mean State and local government including all departments, agencies, boards, commissions, institutions, and authorities of the State or county, municipality or political subdivision thereof.
(c)	The term 'personal or financial interest' shall include:  (i)	the affairs of any person in the officer's or employee's immediate household; (ii) the affairs of any corporation, business, firm, or organization in which he is an officer, partner, director, or substantial owner or shareholder; (iii) any matter with the agency by any other person in which the officer or employee, or a person described in subdivisions (i) or (ii) has or anticipates a contract for the performance of work or other transaction for pecuniary gain with such person, arising out of or by reason of the matter with the agency; and (iv) any person with whom the officer or employee is negotiating or has an arrangement concerning prospective employment.
(d)	The term 'substantial owner or shareholder' shall mean ten percent (10%) or more of the stock of a corporation or ten percent (10%) or more of the ownership in the business.
(e)	The term 'person' shall include individuals as well as corporations, businesses, and organizations.
(f)	The term 'benefit' includes any gift, favor, gratuity, meal, alcoholic beverage, honorarium, entertainment, loan, service, business or professional opportunity or any other thing of monetary value.  There is excluded from the term advertising items or souvenirs of nominal value and customary gifts between employees or officers and their friends and relatives or the friends and relatives of their spouses, minor children, or members of their household, where it is clear that it is that relationship, rather than the position of the officer or employee concerned, that is the motivating factor for the gift.
"§ 128-52.  Gifts prohibited.
No officer or employee shall solicit or accept, any benefit from any person who (i)	has, or is seeking to obtain, contractual or other business or financial relationships with the officer's or employee's agency; or (ii) conducts operations or activities which are regulated by his agency; and (iii) the interests or activities may be affected by the performance or nonperformance of the duty of the officer or employee.  No officer or employee shall accept any benefit that could reasonably tend to influence him in the performance of his official duties, or because of any official act performed, except as otherwise provided by law for the discharge of official duty.
"§ 128-53.  Donations for government meetings prohibited.
No person including related industry associations, doing business with or regulated by the agency shall be solicited for or provide any benefit, including any food or drink, at conferences or meetings called for the primary purpose of conducting agency business.
"§ 128-54.  Restrictions on outside employment of present employees.
No officer or employee shall engage in any employment that is incompatible with the proper discharge of that officer's  or employee's official duties or impairs independence of judgment in the  performance of those duties.  No regularly employed officer or employee may be employed by, or contract to do business with any contracting party or company doing business with the particular agency which employs the officer or employee, except as authorized by the agency after determining no potential conflict of interest will exist.  Each agency shall regulate outside employment for the purpose of eliminating potential conflicts of interest.
"§ 128-55.  Contemplated official action.
No officer  or employee shall engage in any transaction in anticipation of a pecuniary benefit or intentionally aid another in such a transaction, in contemplation of official action by the officer, employee, or the agency with which he is associated.
"§ 128-56.  Policy against representing adverse claims.
No officer or employee shall represent outsiders in connection with claims, applications, or other matters or proceedings before the agency by which the official or employee is employed.
"§ 128-57.  Use of position or influence for private gain or unwarranted privileges prohibited.
No employee or officer shall use or attempt to use his official position or influence to secure unwarranted privileges or advantages for himself or others, or to otherwise use his position for private gain for himself or others or a company with which he is affiliated or has a personal or financial interest.
"§ 128-58.  Falsification of records or reports.
No officer or employee shall knowingly falsify or permit to be falsified, any public record or report or expense account.
"§ 128-59.  Participation in agency matters.
No officer or employee shall participate, either directly or indirectly, in any matter of the agency in which the officer or employee has a personal or financial interest.
"§ 128-60.  Disclosure of financial interest.
(a)	Each elected and appointed officer of the State and each employee serving in an exempt position designated pursuant to G.S. 126-5(d), shall file a disclosure statement annually on or before January 31 on forms to be prepared by the Secretary of State which statement shall be maintained as a public record by the Secretary of State.  The statement shall contain the same information as is now required by Executive Order Number 1, promulgated January 31, 1988.  The person filing a disclosure form shall list as specified, the assets, liabilities, and the sources of income of his or her spouse which are derived from the assets or income of the person filing, controlled by the person filing, or for which the person filing is jointly and severally liable.
(b)	Members of City Councils, Boards of County Commissioners, Boards of Adjustment, Planning Boards, Housing Authorities, and Redevelopment Authorities shall file annually by January 31 of each year a financial disclosure statement that shall include the following information:
(1)	A listing of all real estate holdings (including legal, equitable, beneficial, and contractual interests) in the city or county, including any extraterritorial jurisdiction, owned in whole or in part by the member or a member of his or her household;
(2)	A listing of all businesses, firms, corporations, and/or partnerships, of whatever nature, operating within the city or county for which the member or a member of his or her household has either a ten percent (10%) or greater ownership interest or an ownership interest valued at five thousand dollars ($5,000) or more; and
(3)	A listing of all employers and employees from which or to which the member or a member of his or her household paid or received pay of five thousand dollars ($5,000) or more in the previous year.
The city or county clerk shall maintain copies of all required financial statements available for public inspection during regular business hours.
"§ 128-61.  Disqualification from voting.
An officer or employee of an agency shall be excused from voting and participating in the discussion of any matter before an agency of which he is a member and in which he has a personal or financial interest.  The disqualification is expressly applicable to the participation in any matter, such as a grant approval, involving an organization or entity in which he is an officer or employee.  Notwithstanding any other provision of law, upon disqualification of officers or employees in accordance with this section, the remaining member or members shall have authority to act in the same manner as if the position(s)	were vacant.  This section shall not apply to members of Occupational Licensing Boards while engaged in rule-making activities.
"§ 128-62.  Giving of gratuities prohibited for official acts.
No person shall, except as otherwise provided by law for the discharge of official duty, knowingly offer to, agree to or give to or confer on any present or former employee any benefit for or because of any official act performed or with the intent to influence him in performing his duties.
"§ 128-63.  Employment of consultant with a potential conflict of interest prohibited.
No architectural or engineering firm shall be employed for a public building or public works project, in which any director, officer, employee, major creditor, or a substantial owner or shareholder of such firm, has any landholding, options to purchase land, or plans for development or construction which may be affected by the project.  Each firm submitting a proposal shall make known to the agency any interest it has that may be affected by the location or design of the proposed project.
"§ 128-64.  Fines and penalties.
(a)	Any person who knowingly violates any of the provisions of Article 5 shall be guilty of a misdemeanor.  In addition to any penalty provided, any such officer, member, or employee who shall knowingly violate any of the provisions of this Article may be fined, suspended, or removed from office or employment in the manner otherwise provided by law.  The fines, remedies, and penalties provided for in this Article are not exclusive and are not intended to preclude any others available or provided for by law.
(b)	An officer or employee shall not be prosecuted for a knowing violation of this Article if the alleged violation resulted from his good faith reliance on a written opinion of the Attorney General or local government attorney and the opinion was made after a full disclosure of the facts."
Sec. 2.  G.S. 14-235, 14-236, and 14-237 are hereby repealed.
Sec. 3.  G.S. 133-32 is repealed.
Sec. 4.  This act becomes effective July 1, 1991, except G.S. 128-60, which becomes effective January 1, 1992.