GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

H	1 

HOUSE BILL 282*

Short Title:  Estab. State Ethics Act.	(Public)
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Sponsors: Representatives Colton, Gray, Morgan, Wilmoth; Hensley, Kuczmarski, Luebke, B. Miller, and Stamey.
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Referred to:  Ethics.
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February 25, 1993

A BILL TO BE ENTITLED
AN ACT TO ESTABLISH A STATE ETHICS COMMISSION, TO ESTABLISH ETHICAL STANDARDS FOR PUBLIC OFFICERS AND PUBLIC EMPLOYEES, TO REQUIRE PUBLIC DISCLOSURE OF ECONOMIC INTERESTS, TO MAKE CONFORMING CHANGES, TO MAKE AN APPROPRIATION THEREFOR, AND TO MAKE PERMANENT THE REQUIREMENT THAT NONPROFIT ENTITIES RECEIVING STATE FUNDS ADOPT A CONFLICTS OF INTEREST POLICY.
The General Assembly of North Carolina enacts:
Section 1.  The General Statutes are amended by adding a new Chapter to read:
"Chapter 138A.
"State Ethics Act.
"ARTICLE 1.
"General Provisions.
"§ 138A-1.  Title.
This Chapter shall be known and may be cited as the 'State Ethics Act.'
"§ 138A-2.  Definitions.
The following definitions apply in this Chapter:
(1)	Business. – Any of the following, whether or not for profit:
a.	Association,
b.	Corporation,
c.	Enterprise,
d.	Joint venture,
e.	Organization,
f.	Partnership,
g.	Proprietorship,
h.	Trust, or
i.	Every other business interest, including ownership or use of land for income.
(2)	Business With Which Associated. – A business of which the public servant or any member of the public servant's immediate family is:
a.	A director, employee, officer, owner, or partner; or
b.	A holder, either individually or collectively, of securities (i) worth ten thousand dollars ($10,000) or more at fair market value as of December 31 of the preceding year; or (ii) constituting five percent (5%) or more of the outstanding stock of the business.  For purposes of this sub-subdivision, the term 'business' shall not include a widely held investment fund, including but not limited to a mutual fund, regulated investment company, or pension or deferred compensation plan, if:
1.	The public servant or a member of the public servant's immediate family neither exercises nor has the ability to exercise control over the financial interests held by the fund; and
2.	The fund is publicly traded, or the fund's assets are widely diversified.
(3)	Commission. – The State Ethics Commission.
(4)	Compensation. – Any money, thing of value, or economic benefit conferred on or received by any person in return for services rendered or to be rendered by that person or another.  This term does not include campaign contributions properly received and, if applicable, reported as required by Article 22A of Chapter 163 of the General Statutes.
(5)	Contract. – Any agreement including, but not limited to, sales and conveyances of real and personal property and agreements for the performance of services.
(6)	Employing Entity. – Any of the following bodies of State government, a unit of 'local government' or a 'public authority' as they are defined in G.S. 159-7(b), or any combination of them, or of which the public servant is a member, or over which the public servant exercises supervision: agencies, authorities, boards, commissions, committees, councils, departments, offices, institutions and their subdivisions, including, but not limited to, boards of education, boards of county commissioners, city councils, constitutional officers of the State, the North Carolina House of Representatives, and the North Carolina Senate.
(7)	Immediate Family. – An unemancipated child residing in the household of the public servant and the public servant's spouse, if not legally separated.
(8)	Official Action. – Any decision, including, but not limited to, administration, approval, disapproval, decision, preparation, recommendation, the rendering of advice, and investigation, made or contemplated in any proceeding, application, submission, request for a ruling or other determination, contract, claim, controversy, investigation, charge, or rule making.
(9)	Participate. – To take part in, to influence, or to attempt to influence.
(10)	Pecuniary Interest. – Any of the following:
a.	Owning, either individually or collectively, a legal or equitable interest exceeding ten thousand dollars ($10,000) or five percent (5%), whichever is less, of any business.
b.	Receiving, either individually or collectively, during the preceding calendar year compensation that is or will be required to be included as taxable income on federal income tax returns of the public servant, the public servant's immediate family, or a business with which associated in an aggregate amount of five thousand dollars ($5,000) from any business or combination of businesses.  A pecuniary interest exists in any client or customer who pays fees or commissions, either individually or collectively, of five thousand dollars ($5,000) or more in the preceding 12 months to the public servant, the public servant's immediate family, or a business with which associated.
c.	Receiving, either individually or collectively and directly or indirectly, in the preceding 12 months, gifts or honoraria having an unknown value or having an aggregate value of five hundred dollars ($500.00) or more from any person.  A pecuniary interest does not exist under this sub-subdivision by reason of (i) a gift or bequest received as the result of the death of the donor; (ii) a gift from an immediate family member; or (iii) acting as a trustee of a trust for the benefit of another.
d.	Holding the position of associate, director, officer, partner, or proprietor of any business, irrespective of the amount of compensation received.
(11)	Public Servants. – All elected and appointed public officers, including members and officers of the House of Representatives and the Senate, and public employees, whether full or part time, of an employing entity.  The term does not include the following individuals when serving in the designated capacity:
a.	Judges and justices of the General Court of Justice, and
b.	Members of boards, committees, commissions, or councils having solely advisory powers and not exercising any executive, quasi-judicial, or quasi-legislative powers.
(12)	Vested Trust. – A trust, annuity, or other funds held by a trustee or other third party for the benefit of the public servant or a member of the public servant's immediate family.  A vested trust shall not include a widely held investment fund, including but not limited to a mutual fund, regulated investment company, or pension or deferred compensation plan, if:
a.	The public servant or a member of the public servant's immediate family neither exercises nor has the ability to exercise control over the financial interests held by the fund; and
b.	The fund is publicly traded, or the fund's assets are widely diversified.
"ARTICLE 2.
"Ethical Standards For Public Servants.
"§ 138A-10.  Use of public position for private gain.
(a)	A public servant may not knowingly and intentionally use the public servant's public position for the private gain of the public servant or of a member of the public servant's immediate family.  The performance of usual and customary duties associated with the public position or the advancement of public policy goals or constituent services, without compensation, shall not constitute the use of public position for private gain.
(b)	A public servant shall not mention or permit another person to mention the public servant's public position in commercial advertising.
"§ 138A-11.  Gifts.
(a)	A public servant may not solicit any gift unless the solicitation is for a charitable purpose with no resulting direct pecuniary benefit conferred upon the public servant, the public servant's immediate family, or a business with which associated.
(b)	A public servant may not solicit for a charitable purpose any gift from any other public servant whose position is subordinate to the soliciting public servant.  This subsection shall not apply to solicitations for the State Employees Combined Campaign or to other charities for which payroll deductions are authorized under G.S. 143-3.3(i) and (j).
(c)	No public servant subject to this Chapter may knowingly accept any gift, directly or indirectly, from a lobbyist as defined in G.S. 120-47.1, or a person whom the public servant knows or has reason to know:
(1)	Is doing or is seeking to do business of any kind with the public servant's employing entity;
(2)	Is engaged in activities that are regulated or controlled by the public servant's employing entity; or
(3)	Has financial interests that may be substantially and materially affected, in a manner distinguishable from the public generally, by the performance or nonperformance of the public servant's official duties.
(d)	This section shall not apply to any of the following gifts:
(1)	Meals and beverages;
(2)	Ceremonial gifts or awards that have insignificant monetary value;
(3)	Unsolicited gifts of nominal value or trivial items of informational value;
(4)	Reasonable expenses for food, travel, and lodging of the public servant for a meeting at which the public servant participates in a panel or speaking engagement at the meeting;
(5)	Gifts of tickets or free admission extended to a public servant to attend athletic, charitable, cultural, or political events, if the gift or admission is a courtesy or ceremony customarily extended to public servants generally;
(6)	Political contributions properly received and reported as required under Article 22A of Chapter 163 of the General Statutes;
(7)	Gifts from relatives by blood or marriage, or a member of the same household; or
(8)	Honoraria or other compensation subject to G.S. 138A-12.
(e)	The Governor or the Governor's designee may, in the name of the State, accept and receive gifts from any public or private source.  Any gift so obtained shall become the property of the State and shall, within 30 days of its receipt, be registered with the Commission.
"§ 138A-12.  Honoraria and other compensation.
A public servant shall not accept an honorarium or other compensation from a source other than the employing entity for conducting any activity where:
(1)	The employing entity reimburses the public servant for travel, subsistence, and registration expenses;
(2)	The employing entity's work time or resources are used; or
(3)	The activity would be considered official duty or would bear a reasonably close relationship to the public servant's official duties.
An outside source may reimburse the employing entity for actual expenses incurred by a public servant in conducting an activity within the duties of the public servant; or may pay a fee to the employing entity, in lieu of an honorarium, for the services of the public servant.
"§ 138A-13.  Participation in official actions.
(a)	Except as permitted by subsection (c) of this section and notwithstanding any other law, no public servant acting in that capacity, who is authorized to perform an official act requiring the exercise of discretion, knowingly shall participate in an official action by the employing entity of the public servant if the public servant, a member of the public servant's immediate family, or a business with which associated has a pecuniary interest in or a reasonably foreseeable benefit from the matter under consideration, which would impair the public servant's independence of judgment or from which it could reasonably be inferred that the interest or benefit would influence the public servant's participation in the official action.  A potential benefit includes a detriment to a business competitor of the public servant, a member of the public servant's immediate family, or a business with which associated.
(b)	A public servant described by subsection (a) of this section shall abstain from participation in the official action.  The public servant shall submit in writing the reasons for the abstention to the employing entity.  The abstention shall be recorded in the employing entity's minutes.
(c)	A public servant may participate in an official action under any of the following circumstances:
(1)	The only pecuniary interest or reasonably foreseeable benefit that accrues to the public servant, the public servant's immediate family, or business with which associated as a member of a profession, occupation, or large class, is no greater than that which could reasonably be foreseen to accrue to all members of that profession, occupation, or large class.
(2)	Where an official action affects or would affect the public servant's compensation and allowances as a public servant.
(3)	Before the public servant participated in the official action, the public servant requested and received a written advisory opinion from the Commission that authorized the participation.
(4)	Before participating in an official action, a public servant made full written disclosure to the public servant's employing entity which then made a written determination that the interest or benefit would neither impair the public servant's independence of judgment nor influence the public servant's participation in the official action.  The employing entity shall file a copy of that written determination with the Commission.
(5)	When action is ministerial only and does not require the exercise of discretion.
(6)	When a public body records in its minutes that it cannot obtain a quorum in order to take the official action because members are disqualified from acting under this section.
(7)	When a public servant notifies, in writing, the State Ethics Commission that the public servant or someone whom the public servant appoints to act in the public servant's stead or both, are the only individuals having legal authority to take an official action.
"§ 138A-14.  Representation before employing entities.
(a)	No public servant nor associate, employee, partner, or spouse of the public servant shall represent another person before the public servant's employing entity, except in the course of the public servant's official duties.
(b)	No former public servant shall represent any person other than the State, the public servant's former employing entity, or a charitable or nonprofit organization in a matter before the public servant's former employing entity for a period of one year after the former public servant's service in the public position has ceased.  This subsection shall apply only to public servants who held office or were employed on or after January 1, 1994.
(c)	No former public servant shall represent another person in connection with any official action in which the public servant personally and substantially participated as a public servant for a period of five years after the former public servant's service in the public position has ceased.  This subsection shall apply only to public servants who held office or were employed on or after January 1, 1994.
(d)	This section shall not apply to the following:
(1)	Purely ministerial matters that do not require discretion on the part of the employing entity.
(2)	Representation of the public servant or former public servant in that individual's personal capacity.
"§ 138A-15.  Employment and supervision of members of public servants' extended family.
No public servant, in an employing entity, shall occupy a position which has influence over the employment, appointment, promotion, transfer, or supervision of any member of the public servant's extended family.  For purposes of this section, 'extended family' means the public servant's:
(1) 	Spouse, parent, child, sibling, grandparent, grandchild;
(2)	The step-, half-, and in-law- relationships as appropriate to subdivision (1) of this section;
(3)	Others living in the same household as the public servant; and
(4)	Any other person so closely identified with the public servant as would reasonably suggest, because of the relationship between the public servant and the person, that personnel difficulties might arise within the individual work unit of the employing entity, or that the public's confidence in the fair and equal treatment of applicants for public employment and of public employees would be compromised.
"ARTICLE 3.
"State Ethics Commission.
"§ 138A-20.  State Ethics Commission established.
There is established a State Ethics Commission composed of nine members.
"§ 138A-21.  Membership.
(a)	The membership of the Commission shall be appointed as follows:
(1)	The Governor shall appoint the Chair and four other members, no three or more of whom shall be members of the same political party.
(2)	The General Assembly, in accordance with G.S. 120-121, shall appoint four members: two, no more than one of whom is a member of the same political party, upon the recommendation of the Speaker of the House of Representatives and two, no more than one of whom is a member of the same political party, upon the recommendation of the President Pro Tempore of the Senate.
(b)	Members of the Commission shall serve terms of four years, but no person shall be appointed to more than one full four-year term.
(c)	A person appointed to fill a vacancy shall qualify in the same manner as a person appointed for a full term.  The Governor shall fill any vacancies in appointments made by the Governor.  A vacancy in an appointment by the General Assembly shall be filled in accordance with G.S. 120-122.  A person appointed to fill a vacancy occurring other than by the expiration of a term of office shall be appointed for the unexpired term of the member which the new appointee succeeds, and is eligible for appointment to one full four-year term.
(d)	No member or employee of the Commission shall:
(1)	Hold or be a candidate for any other office or place of trust or profit under the United States, or this or another state;
(2)	Hold office in any political party; or
(3)	Participate in or contribute to the political campaign of any candidate for political office.
(e)	The Commission shall elect a vice-chair who shall act as the chair in the chair's absence or a vacancy in that position.
(f)	Members of the Commission shall receive no compensation but shall be reimbursed for subsistence, travel, and convention registration fees as provided under G.S. 138-5, 138-6, or 138-7, as applicable.
"§ 138A-22.  Meetings and quorum.
The Commission shall meet at least quarterly and at other times as called by its chair; in the case of a vacancy in the Chair, by the Vice-Chair; or by five of its members.  Five members of the Commission constitute a quorum.
"§ 138A-23.  Staff and offices.
The Commission may employ professional and clerical staff, including an Executive Director.  The Commission shall be located within the Department of Administration, but shall exercise all of its powers, including the power to employ, direct, and supervise all personnel, independently of the Secretary of Administration and, notwithstanding any other law, is subject to the direction and supervision of the Secretary of Administration only with respect to the management functions of coordinating and reporting.
"§ 138A-24.  Powers and duties.
In addition to other powers and duties specified in this Chapter, the Commission shall:
(1)	Conduct a continuing study of governmental ethics in North Carolina, and propose changes to the General Assembly in the government process and in the law as are conducive to promoting and continuing high ethical behavior in governmental officers and employees.
(2)	Adopt rules to implement the provisions of this Chapter, including those establishing ethical standards and guidelines to be employed and adhered to by public servants in attending to and performing their duties.
(3)	Investigate alleged violations under G.S. 138A-25.
(4)	Render advisory opinions under G.S. 138A-27.
(5)	Institute a civil action against a public servant or former public servant under G.S. 138A-26(b).
(6)	Receive and review statements of economic interests filed with the Commission for potential conflicts of interest.
"§ 138A-25.  Investigations by the Commission.
(a)	Institution of Proceedings. – On its own motion, or in response to a signed and sworn complaint of any individual filed with the Commission, the Commission shall make a preliminary inquiry into any alleged violation:
(1)	Of this Chapter, or of the rules adopted in accordance with G.S. 138A-24; or
(2)	Of the criminal law by a public servant in the performance of that individual's official duties.
(b)	Complaint. –
(1)	A complaint filed under this Chapter shall state the nature of the violation, the date the alleged violation occurred, and either (i) that the contents of the complaint are within the knowledge of the individual verifying the complaint, or (ii) the basis upon which the individual verifying the complaint believes the allegations to be true.
(2)	Any individual who verifies a complaint knowing the allegations in the complaint to be untrue may be prosecuted for perjury under G.S. 14-209.
(3)	The filing of and the allegations in the verified complaint shall be confidential and shall not be disclosed except as provided in this section.  Upon presentation of a copy of a verified complaint, the Commission may verify that it is a true copy.
(4)	The Commission shall send a copy by certified mail, return receipt requested, of the complaint to the public servant who is the subject of the complaint within 30 days of the filing.
(c)	Dismissal of Complaint. – If the Commission determines at the end of its preliminary inquiry that:  (i) the complaint does not allege facts sufficient to constitute a violation of this Chapter, or (ii) the evidence is insufficient to substantiate the claim, the Commission shall dismiss the complaint and provide written notice of the dismissal to the individual who filed the complaint and the public servant.  Upon presentation of a copy of a written notice of dismissal, the Commission may verify that it is a true copy.
(d)	Notice and Hearing. – If the Commission determines to proceed with an investigation into the conduct of an individual, the complaint shall no longer be confidential and may be disclosed.  At this time, the Commission shall provide written notice to the individual who filed the complaint and the public servant as to the fact of the investigation and the charges against the public servant.  The notice shall contain the time and place for a hearing on the matter, which shall begin no less than 30 days and no more than 90 days after the date of the notice.  At any hearing held by the Commission:
(1)	Oral evidence shall be taken only on oath or affirmation.
(2)	The hearing shall be open to the public.
(3)	The public servant being investigated shall have the right to present evidence, call and examine witnesses, cross-examine witnesses, introduce exhibits, and be represented by counsel.
(4)	Admissibility of evidence shall be governed by the rules of evidence applicable in the superior court.
(e)	Subpoenas. – The Commission may issue subpoenas to compel the attendance of witnesses or the production of documents, books, or other records. The Commission may apply to the superior court to compel obedience to the subpoenas of the Commission. Notwithstanding any other law, every State agency, local governmental agency, and units and subdivisions thereof shall make available to the Commission any documents, records, data, statements, or other information, except tax returns or information relating to tax returns, which the Commission designates as being necessary for the exercise of its powers and duties.
(f)	Settlement of Investigations. – The parties may meet by mutual consent before the hearing to discuss the possibility of settlement of the investigation or the stipulation of any issues, facts, or matters of law.  Any proposed settlement of the investigation is subject to the approval of the Commission.
(g)	Disposition of Investigations. – The Commission shall dispose of the matter in one or more of the following ways:
(1)	If the Commission finds substantial evidence of a violation of a criminal statute, the Commission may refer the matter to the Attorney General for possible prosecution through appropriate channels.
(2)	If the Commission finds that the alleged violation is not established by clear and convincing evidence, the Commission shall dismiss the complaint.
(3)	If the Commission finds that the alleged violation is established by clear and convincing evidence, the Commission shall:
a.	Issue a public admonishment to the public servant and notify the employing entity, if applicable;
b.	Refer the matter to the employing entity that appointed or employed the public servant, or of which the public servant is a member, for appropriate action, which may include censure, expulsion, or termination of an appointment or employment; or
c.	Both.
(h)	Findings and Record. – The Commission shall document its disposition of the investigation by filing an order that includes the Commission's findings of facts.  In all matters the Chair of the Commission shall ensure that a complete record is made and preserved.
(i)	Authority of Employing Entity. – Any action or failure to act by the Commission under this Chapter, except G.S. 138A-27, shall not limit any authority of the applicable employing entity to discipline the public servant.
"§ 138A-26.  Additional remedies; civil action for damages.
(a)	In addition to any other remedies provided by law, upon a determination that a public servant or former public servant has violated this Chapter by substantially influencing an action taken by the public servant's employing entity, that employing entity may void the action on any terms that the interests of the State and innocent third persons require.
(b)	The Commission may bring a civil action against any public servant or former public servant who has acted to the economic advantage of the public servant in violation of this Chapter and may recover on behalf of the State damages in the amount of the economic advantage or five hundred dollars ($500.00), whichever is greater.
"§ 138A-27.  Advisory opinions.
At the request of any public servant, the Commission shall render advisory opinions on specific questions involving governmental ethics.  Reliance upon a requested written advisory opinion on a specific matter shall immunize the public servant, on that matter, from:
(1)	Investigation by the Commission;
(2)	Suit from the Commission, under G.S. 138A-26(b); and
(3)	Any adverse action by the employing entity.
The Commission shall publish its advisory opinions, edited as necessary to protect the identities of the individuals requesting opinions, at least once a year.
"ARTICLE 4.
"Public Disclosure Of Economic Interests.
"§ 138A-30.  Statement of economic interest; filing required.
(a)	Every public servant subject to this Article, who is appointed, including one appointed to fill a vacancy in elective office, or employed, shall file a statement of economic interest within 30 days of the initial appointment or employment and no later than January 31 every year thereafter in one of the following offices, as applicable:
(1)	The State Ethics Commission, in the case of a State officer or employee;
(2)	The clerk of the municipality in the case of a municipal officer or employee; or
(3)	The clerk of the board of commissioners in the county of residence, in the case of a county officer or employee, or any other covered officer not mentioned in subdivisions (1) and (2) of this subsection.
(b)	Every candidate for nomination or election to a public office subject to this Article shall file a statement of economic interest as specified in this Article within 10 days of the filing deadline for that office.  Every candidate elected during the term of office shall file a statement of economic interest by January 31 every subsequent year.
(c)	A candidate for the Council of State, State Senate, State House, or an office of a county subject to G.S. 138A-33, shall file the statement of economic interest at the same place and in the same manner as the notice of candidacy for that office is required to be filed under G.S. 163-106.  A person who is nominated under G.S. 163-114 after the primary and before the general election, and a person who qualifies under G.S. 163-122 as an independent candidate in a general election, shall file a statement of economic interest with the county board of elections of each county in the senatorial or representative district. A person nominated under 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 under that section.  A person seeking to have write-in votes counted for himself or herself in a general election shall file a statement of economic interest at the same time the candidate files a declaration of intent under G.S. 163-123.  A candidate of a new party chosen by convention shall file a statement of economic interest at the same time that the president of the convention certifies the names of its candidates to the State Board of Elections under G.S. 163-98.
(d)	This subsection shall apply only to offices filled by election of the people in cities, as defined in G.S. 160A-1(2) and subject to G.S. 138A-33, and in special districts, subject to G.S. 138A-33.  A candidate for an office shall file the statement of economic interest in the same place and in the same manner as the notice of candidacy required to be filed under G.S. 163-291, in the case of partisan primary elections, and G.S. 163-294.2, in the case of nonpartisan municipal elections.  A person nominated under 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 who seeks to be nominated by petition under G.S. 163-296 shall file the statement of economic interest with the petition filed under that section.  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 under that section.  A person seeking to have write-in votes counted for himself or herself in a general election shall file a statement of economic interest at the same time the candidate files a declaration of intent under G.S. 163-123.
(e)	The State Board of Elections and the county board of elections shall provide for notification of the economic-interest-statement requirements of this Article to be given to any candidate filing for nomination or election to those offices subject to this Article at the time of the filing of candidacy with the board.
(f)	Once the candidate is certified as elected, the Chair of the State or county board of elections with which a statement of economic interest is filed shall forward a certified copy of the statement to the following office, as applicable:
(1)	The State Ethics Commission, in the case of an office which is elected on a statewide basis;
(2)	The clerk of the board of commissioners in the county of residence, in the case of a county office;
(3)	The clerk of the municipality in the case of a municipal officer.
"§ 138A-31.  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 where filed.
"§ 138A-32.  Contents of statement.
Any statement of economic interest filed under this Article shall be on a form prescribed by the Commission and sworn to by the public servant.  The form shall include, but not be limited to, the following information about the public servant and the public servant's immediate family:
(1)	The name, occupation, nature of business, and type of clients served;
(2)	The name and address of any business with which associated as of the date of the filing of the statement;
(3)	Any business listed under subdivision (2) of this section which the public servant knows or has reason to believe does business with or is regulated by the public servant's employing entity;
(4)	The character and location of all real estate, other than the personal residence of the public servant or of a member of the public servant's immediate family, that:
a.	Is located within North Carolina,
b.	Has a fair market value of ten thousand dollars ($10,000) or more, and
c.	Of which the public servant or any member of the public servant's immediate family has any beneficial interest, including an option to buy or lease for 10 or more years; provided, however, if the public servant's personal residence is a part of a larger tract, the land on which the personal residence and that part of the surrounding land used for residential purposes by the family need not be listed.
(5)	The name and address of each creditor to whom the public servant or a member of the immediate family owes more than ten thousand dollars ($10,000), except for debts secured by lien upon the personal residence;
(6)	The name of each vested trust in which the public servant or a member of the immediate family has a financial interest in excess of ten thousand dollars ($10,000);
(7)	For professional persons and associations, a list of classifications of business clients which classes were charged or paid more than five thousand dollars ($5,000) or more during the previous calendar year; however, individual clients need not be identified, but the type of business of the client or class of the client and a description of the nature of the services rendered must be listed.
"§ 138A-33.  Public servants to whom the Article is applicable.
Notwithstanding any other law, only the following public servants are subject to this Article:
(1)	The Governor, the Lieutenant Governor, and other members of the Council of State.
(2)	The heads of all principal departments of State government who are appointed by the Governor.
(3)	The chief deputy or chief administrative assistant of:
a.	The heads of all principal State departments who are appointed by the Governor; and
b.	The members of the Council of State.
(4)	Members of the General Assembly.
(5)	The members of all State executive branch authorities, boards, commissions, and councils, except members of those authorities, boards, commissions, and councils that perform solely advisory functions.
(6)	Any other public servants of the State not covered otherwise by this section who exercise substantial discretionary or supervisory authority as designated by rule of the Commission.
(7)	In any county having a population of more than 25,000 persons according to the last federal decennial census, members of the county board of commissioners, the county manager, heads of departments of county government, and any county employee who exercises substantial discretionary or supervisory authority as designated by rule of the Commission.
(8)	In any municipality having a population of more than 7,500 persons according to the last federal decennial census, members of the city council, the city manager, and any municipal employee who exercises substantial discretionary or supervisory authority as designated by rule of the Commission.
(9)	Members of local boards of education.
(10)	Members of any board, commission, committee, or council of any municipality having a population of more than 7,500 persons according to the last federal decennial census or county having a population of more than 25,000 persons according to the last federal decennial census, of any combination of any municipalities or of any counties, or of any combination of one or more municipalities and one or more counties, unless the board, commission, committee, or council exercises advisory functions only and does not exercise quasi-legislative, quasi-judicial, or executive functions.
(11)	Notwithstanding any other law, for The University of North Carolina, only members of the Board of Governors, the president, the vice-presidents, the chancellors, the vice-chancellors, and the members of the boards of trustees of the constituent institutions.
(12)	Notwithstanding any other law, for the Department of Community Colleges, only members of the State Board of Community Colleges, the President of the North Carolina Community College System, the president or chief administrative officer of each community college, and members of the boards of trustees of each community college.
(13)	A member of a 'public authority' or of a 'unit of local government' as they are defined in G.S. 159-7(b), if not otherwise covered in subdivisions (7) through (10) of this section, whose appropriations in its last annual budget were five hundred thousand dollars ($500,000) or more.
"ARTICLE 5.
"Violation Consequences.
"§ 138A-40.  Violation consequences.
(a)	Violation of this Chapter by any public servant is grounds for disciplinary action.  No criminal penalty shall attach for any violation of this Chapter, except perjury under G.S. 138A-25 and G.S. 138A-20.
(b)	Nothing in this Chapter affects the power of the State to prosecute any person for any violation of the criminal law.
(c)	The State Ethics Commission may seek to enjoin violations of G.S. 138A-14."
Sec. 2.  G.S. 53-92 reads as rewritten:
"§ 53-92.  Appointment of Commissioner of Banks; State Banking Commission.
On or before April 1, 1983, and quadrennially thereafter, the Governor shall appoint a Commissioner of Banks subject to confirmation by the General Assembly by joint resolution. The name of the Commissioner of Banks shall be submitted to the General Assembly on or before February 1, of the year in which the term of his office begins. The term of office for the Commissioner of Banks shall be four years. In case of a vacancy in the office of Commissioner of Banks for any reason prior to the expiration of his term of office, the name of his successor shall be submitted by the Governor to the General Assembly, not later than four weeks after the vacancy arises. If a vacancy arises in the office when the General Assembly is not in session, the Commissioner of Banks shall be appointed by the Governor to serve on an interim basis pending confirmation by the General Assembly.
The State Banking Commission, which has heretofore been created, shall consist of the State Treasurer, who shall serve as an ex officio member thereof, 12 members appointed by the Governor, and two members appointed by the General Assembly under G.S. 120-121, one of whom shall be appointed upon the recommendation of the President of the Senate and one of whom shall be appointed upon the recommendation of the Speaker of the House of Representatives. The Governor shall appoint five practical bankers and seven persons selected primarily as representatives of the borrowing public. The person appointed by the General Assembly upon the recommendation of the President of the Senate shall be a practical banker. The person appointed by the General Assembly upon the recommendation of the Speaker of the House shall be a person selected primarily as a representative of the borrowing public. The persons selected primarily as representatives of the borrowing public shall not be employees or directors of any financial institution nor shall they have any interest in any regulated financial institution other than as a result of being a depositor or borrower. Under this section, no person shall be considered to have an interest in a financial institution whose interest in any financial institution does not exceed one-half of one percent (1/2 of 1%) of the capital stock of that financial institution. These members of the Commission shall be selected so as to fully represent the consumer, industrial, manufacturing, professional, business and farming interests of the State. No person shall serve on the Commission for more than two complete consecutive terms. As the terms of office of the appointive members of the Commission expire, their successors shall be appointed by the person appointing them, for terms of four years each. Any vacancy occurring in the membership of the Commission shall be filled by the appropriate appointing officer for the unexpired term, except that vacancies among members appointed by the General Assembly shall be filled in accordance with G.S. 120-122. The appointed members of the Commission shall receive as compensation for their services the same per diem and expenses as is paid to the members of the Advisory Budget Commission.  This compensation shall be paid from the fees collected from the examination of banks as provided by law.
The Banking Commission shall meet at such time or times, and not less than once every three months, as the Commission shall, by resolution, prescribe, and the Commission may be convened in special session at the call of the Governor, or upon the request of the Commissioner of Banks. The State Treasurer shall be chairman of the said Commission.
No member of said Commission shall divulge or make use of any information coming into his possession as a result of his service on such Commission, and shall not give out any information with reference to any facts coming into his possession by reason of his services on such Commission in connection with the condition of any State banking institution, unless such information shall be required of him at any hearing at which he is duly subpoenaed, or when required by order of a court of competent jurisdiction.
A quorum shall consist of a majority of the total membership of the Banking Commission. A majority vote of the members qualified with respect to a matter under review present at that meeting shall constitute valid action of the Banking Commission. The State Treasurer and all disqualified members who are present shall be counted to determine whether a quorum is present at a meeting.
The Commissioner of Banks shall act as the executive officer of the Banking Commission, but the Commission shall provide, by rules and regulations, for hearings before the Commission upon any matter or thing which may arise in connection with the banking laws of this State upon the request of any person interested therein, and review any action taken or done by the Commissioner of Banks.
The Banking Commission is hereby vested with full power and authority to supervise, direct and review the exercise by the Commissioner of Banks of all powers, duties, and functions now vested in or exercised by the Commissioner of Banks under the banking laws of this State; any party to a proceeding before the Banking Commission may, within 20 days after final order of said Commission and by written notice to the Commissioner of Banks, appeal to the Superior Court of Wake County for a final determination of any question of law which may be involved. The cause shall be entitled 'State of North Carolina on Relation of the Banking Commission against (here insert name of appellant).' It shall be placed on the civil issue docket of such court and shall have precedence over other civil actions. In the event of an appeal the Commissioner shall certify the record to the Clerk of Superior Court of Wake County within 15 days thereafter."
Sec. 3.  Article 14 of Chapter 120 of the General Statutes is repealed.
Sec. 4.  G.S. 120-123 is amended by adding a new subdivision to read:
"(59)  The State Ethics Commission as established in G.S. 138A-20."
Sec. 5.  G.S. 143-8 reads as rewritten:
"§ 143-8.  Reporting of legislative and judicial expenditures and financial needs. 
On or before the first day of September, biennially, in the even-numbered years the Legislative Administrative Officer shall furnish the Director a detailed statement of expenditures of the General Assembly for the current fiscal biennium, and an estimate of its financial needs, itemized in accordance with the budget classification adopted by the Director and approved and certified by the President pro tempore of the Senate and the Speaker of the House for each year of the ensuing biennium, beginning with the first day of July thereafter.  The Administrative Officer of the Courts shall furnish the Director a detailed statement of expenditures of the judiciary, and for each year of the current fiscal biennium an estimate of its financial needs as provided by law, itemized in accordance with the budget classification adopted by the Director and approved and certified by the Chief Justice for each year of the ensuing biennium, beginning with the first day of July thereafter.  On or before the first day of September, biennially, in the even-numbered years, the Chair of the State Ethics Commission shall furnish the Director a detailed statement of expenditures of the State Ethics Commission for the current fiscal biennium, and an estimate of its financial needs, itemized in accordance with the budget classification adopted by the Director and approved and certified by the Commission's Chair for each year of the ensuing biennium, beginning with the first day of July thereafter.  The Director shall include these estimates and accompanying explanations in the budget submitted with such recommendations as the Director may desire to make in reference thereto."
Sec. 6. Article 1 of Chapter 143 of the General Statutes is amended by adding a new section to read as follows:
"§ 143-31.6.  Private nonprofit entities receiving State funds, conflicts of interest policy.
Each private, nonprofit entity eligible to receive State funds, either by General Assembly appropriation, or by grant, loan, or other allocation from a State agency, before funds may be disbursed to the entity, shall file with the disbursing agency a notarized copy of that entity's policy addressing conflicts of interest that may arise involving the entity's management employees and the members of its board of directors or other governing body.  The policy shall address situations where any of these individuals may directly or indirectly benefit, except as the entity's employees or members of the board or other governing body, from the entity's disbursing of State funds, and shall include actions to be taken by the entity or the individual, or both, to avoid conflicts of interest and the appearance of impropriety."
Sec. 7.  G.S. 143-318.18 reads as rewritten:
"§ 143-318.18.  Exceptions.
This Article does not apply to:
(1)	Grand and petit juries.
(2)	Any public body that is specifically authorized or directed by law to meet in executive or confidential session, to the extent of the authorization or direction.
(3)	The Judicial Standards Commission.
(4)	Repealed by Session Laws 1991, c. 694, s. 9.
 		(4b)	A conference committee of the General Assembly.
(4c)	A caucus by members of the General Assembly; however, no member of the General Assembly shall participate in a caucus which is called for the purpose of evading or subverting this Article.
(5)	Law enforcement agencies.
(6)	A public body authorized to investigate, examine, or determine the character and other qualifications of applicants for professional or occupational licenses or certificates or to take disciplinary actions against persons holding such licenses or certificates, (i) while preparing, approving, administering, or grading examinations or (ii) while meeting with respect to an individual applicant for or holder of such a license or certificate.  This exception does not amend, repeal, or supersede any other statute that requires a public hearing or other practice and procedure in a proceeding before such a public body.
(7)	Any public body subject to the Executive Budget Act (G.S. 143-1 et seq.) and exercising quasi-judicial functions, during a meeting or session held solely for the purpose of making a decision in an adjudicatory action or proceeding.
(8)	The boards of trustees of endowment funds authorized by G.S. 116-36 or G.S. 116-238.
(9)	Repealed by Session Laws 1991, c. 694, s. 9.
(10)	The Board of Awards.
(11)	The General Court of Justice.
(12)	The State Ethics Commission."
Sec. 8.  Part 3 of Article 6 of Chapter 143 of the General Statutes is repealed.
Sec. 9.  A new subsection is added to G.S. 150B-1 to read as follows:
"( g)	Exemption of State Ethics Commission. – Except for G.S. 150B-21.20A and Article 4 of this Chapter, no other provision of this Chapter applies to the State Ethics Commission."
Sec. 10.  Part 4 of Article 2A of Chapter 150B of the General Statutes is amended by adding the following section:
"§ 150B-21.20A.  Publication of rules, standards and guidelines, and advisory opinions of State Ethics Commission.
Notwithstanding any other law, the Codifier of Rules shall publish unedited the rules, and advisory opinions issued by the State Ethics Commission under Chapter 138A of the General Statutes in the North Carolina Register as they are received from the State Ethics Commission.
Notwithstanding any other law, the Codifier of Rules shall publish unedited, in the North Carolina Administrative Code, the rules as codified and issued by the State Ethics Commission under Chapter 138A of the General Statutes.  The State Ethics Commission shall consult with the Codifier of Rules on the form and codification of its rules."
Sec. 11.  G.S. 153A-43 reads as rewritten:
"§ 153A-43.  Quorum.
A majority of the membership of the board of commissioners constitutes a quorum. The number required for a quorum is not affected by vacancies. If a member has withdrawn from a meeting without being excused by majority vote of the remaining members present, he shall be counted as present for the purposes of determining whether a quorum is present. The board may compel the attendance of an absent member by ordering the sheriff to take the member into custody.  A member who is present and is prohibited from participation under Chapter 138A of the General Statutes shall not be counted as present for the purposes of determining whether a quorum is present, unless the board of commissioners cannot obtain a quorum in order to take official action because members are prohibited from acting under Chapter 138A of the General Statutes."
Sec. 12.  G.S. 153A-44 reads as rewritten:
"§ 153A-44.  Members excused from voting. 
The board may excuse a member from voting, but only upon questions involving his own financial interest or his official conduct.  The board shall excuse a member from voting when the member has a pecuniary interest in the action and is prohibited from participation under Chapter 138A of the General Statutes."
Sec. 13.  G.S. 160A-74 reads as rewritten:
"§ 160A-74.  Quorum.
A majority of the actual membership of the council plus the mayor, excluding vacant seats, shall constitute a quorum. A member who has withdrawn from a meeting without being excused by majority vote of the remaining members present shall be counted as present for purposes of determining whether or not a quorum is present.  A member who is present and who is prohibited from participation under Chapter 138A of the General Statutes shall not be counted as present for purposes of determining the presence of a quorum, unless the council cannot obtain a quorum in order to take official action because members are disqualified from acting under Chapter 138A of the General Statutes."
Sec. 14.  G.S. 160A-75 reads as rewritten:
"§ 160A-75.  Voting.
No member shall be excused from voting except upon matters involving the consideration of his own financial interest or official conduct.  The council shall excuse a member who has a pecuniary interest in the action and is prohibited from participation under Chapter 138A of the General Statutes.  In all other cases, a failure to vote by a member who is physically present in the council chamber, or who has withdrawn without being excused by a majority vote of the remaining members present, shall be recorded as an affirmative vote. 
An affirmative vote equal to a majority of all the members of the council not excused from voting on the question in issue (including the mayor's vote in case of an equal division) shall be required to adopt an ordinance, take any action having the effect of an ordinance, authorize or commit the expenditure of public funds, or make, ratify, or authorize any contract on behalf of the city. In addition, no ordinance nor any action having the effect of any ordinance may be finally adopted on the date on which it is introduced except by an affirmative vote equal to or greater than two thirds of all the actual membership of the council, excluding vacant seats (not including the mayor unless he has the right to vote on all questions before the council).  For purposes of this section, an ordinance shall be deemed to have been introduced on the date the subject matter is first voted on by the council."
Sec. 15.  Notwithstanding G.S. 138A-21 contained in Section 1 of this act, the Governor shall initially appoint two members for two-year terms and three members for four-year terms, and the Speaker of the House of Representatives and President Pro Tempore of the Senate, each, shall recommend to the General Assembly for initial appointment one member for a two-year term and one member for a four-year term.
Sec. 16.  (a)	The authority, powers, duties and functions, records, personnel, property, unexpended balances of appropriations, allocations, or other funds, including the functions of budgeting and purchasing, of the North Carolina Board of Ethics of the Office of the Governor is transferred to the State Ethics Commission created in Section 1 of this act.  Any disputes arising out of this transfer shall be resolved by the Director of the Budget.
(b)	There is appropriated from the General Fund to the Department of Administration for the 1993-94 fiscal year the sum of one hundred twenty-three thousand two hundred dollars ($123,200); and for the 1994-95 fiscal year the sum of one hundred ninety-seven thousand three hundred dollars ($197,300) to fund the State Ethics Commission created in Section 1 of this act.
Sec. 17.  Section 16 of this act becomes effective on July 1, 1993.  The remaining sections become effective on January 1, 1994, except that the initial statements of economic interest required under Article 4 of Chapter 138A of the General Statutes shall be filed not later than September 1, 1994.