ASSEMBLY SUBSTITUTE FOR

 

ASSEMBLY COMMITTEE SUBSTITUTE FOR

ASSEMBLY, Nos. 16 and 2102

 

STATE OF NEW JERSEY

 

 

ADOPTED MAY 22, 1997

 

 

Sponsored by Assemblymen LANCE, RUSSO, MORAN, DORIA, BLEE and LeFEVRE

 

 

An Act concerning the Executive Commission on Ethical Standards and the Joint Legislative Committee on Ethical Standards and the filing of financial disclosure statements and the disposition of certain interests by certain State officers and employees and certain special State officers and employees, and amending and supplementing P.L.1971, c.182.

 

      Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

      1. Section 10 of P.L.1971, c.182 (C.52:13D-21) is amended to read as follows:

      10. [(a)] a. The Executive Commission on Ethical Standards created pursuant to P.L.1967, [chapter] c. 229 and continued and established pursuant to P.L.1971, c.182 is continued and established in but not of the Department of Law and Public Safety and shall [constitute the first commission under this act] be independent of any supervision or control by the department or any board or office thereof.

      [(b)] b. The commission shall be composed of [seven] nine members: five Executive Branch members and four public members appointed by the Governor. The Executive Branch members shall be appointed from among State officers and employees serving in the Executive Branch. [Each member] Executive Branch members shall serve at the pleasure of the Governor during the term of office of the Governor appointing [him and until his successor is appointed and qualified] them. The public members shall be appointed by the Governor with the advice and consent of the Senate, except that a public member shall not be a legislative agent or lobbyist as those terms are defined in section 3 of P.L.1971, c.183 (C.52:13C-20) or a representative of an entity subject to significant regulation by the State. No more than two public members shall be affiliated with the same political party. The Governor shall designate one member to serve as chairman and one member to serve as vice-chairman of the commission, both to serve at the pleasure of the Governor. The public members of the commission shall serve for terms of four years and until the appointment and qualification of their successors, but of the first members appointed, one shall serve for a term of one year, one for a term of two years, one for a term of three years, and one for a term of four years. Upon taking the oath of office at the beginning of a Governor's first term of office, the Secretary of State shall be an ex officio member of the commission and shall serve until the appointment of the first Executive Branch member by the Governor. The Governor may appoint the Secretary of State to be a regular Executive Branch member of the commission.

      Vacancies in the membership of the commission shall be filled in the same manner as the original appointments but, in the case of public members, for the unexpired term only. None of the public members shall be State officers or employees or special State officers or employees, except by reason of their service on the commission.

      [(c) Each member ] c. Members of the [said] commission shall serve without compensation, but public members shall be entitled to be reimbursed for all actual and necessary expenses incurred in the performance of [his] their duties.

      [(d)] d. The Attorney General shall act as legal adviser and counsel to the [said] commission. He shall upon request advise the commission in the rendering of advisory opinions by the commission, in the approval and review of codes of ethics adopted by State agencies in the Executive Branch [and], in the recommendation of revisions in codes of ethics or legislation relating to the conduct of State officers [and] or employees or special State officers or employees in the Executive Branch, and in the performance of any of its other duties under P.L.1971, c.182, as amended and supplemented.

      [(e)] e. The [said] commission [may], within the limits of funds appropriated or otherwise made available to it for the purpose, may employ such other professional, technical, clerical or other assistants, excepting legal counsel, and incur such expenses as may be necessary for the performance of its duties.

      [(f)] f. The [said] commission, in order to perform its duties pursuant to the provisions of this act, shall have the power to conduct investigations, hold hearings, compel the attendance of witnesses and the production before it of such books and papers as it may deem necessary, proper and relevant to the matter under investigation. The members of the [said] commission and the persons appointed by the commission for such purpose are hereby empowered to administer oaths and examine witnesses under oath.

      [(g)] g. The [said] commission is authorized to render advisory opinions as to whether a given set of facts and circumstances would, in its opinion, constitute a violation of the provisions of this act [or of], a code of ethics promulgated pursuant to the provisions of this act, or an executive order in which the Governor has granted the commission jurisdiction. Advisory opinions shall be filed with the commission and shall be public records, but no opinion so filed shall contain the name or other identifying information of the person or persons who requested or who are the subject of the opinion. The commission is also authorized to develop educational materials and procedures to assist any State officer or employee or any special State officer or employee in understanding and complying with the obligations of that State officer or employee or special State officer or employee under P.L.1971, c.182, as amended and supplemented.

      [(h)] h. The [said] commission shall have jurisdiction to initiate, receive, hear and review complaints regarding violations, by any State officer or employee or special State officer or employee in the Executive Branch, of the provisions of this act [or], of any code of ethics promulgated pursuant to the provisions of this act, or of any executive order in which the Governor has granted the commission jurisdiction. Any complaint regarding a violation of a code of ethics may be referred by the commission for disposition in accordance with subsection d. of section 12[(d)] of this act (C.52:13D-23).

      [(i)] i. The commission shall prepare and publish, prior to May 1 in each year, an annual report to the Governor and the Legislature which describes its activities during the preceding year.

      j. The commission shall conduct an ethics orientation program for the following officers and employees within 30 days of commencement of their duties: the head of a principal department, the assistant or deputy heads of a principal department, including an assistant commissioner or deputy commissioner, as well as any officer or employee of a principal department having responsibilities for ethics matters. Attendance by these officials and employees shall be mandatory.

      k. The commission shall require a State officer or employee or special State officer or employee in the Executive Branch to provide a written delegation of decision-making responsibility to another appropriate officer or employee whenever the commission determines that the potential exists for ethical violations in regard to certain matters.

      l. Any State officer or employee or special State officer or employee in the Executive Branch found [guilty by the commission of violating] by the commission to have violated any provision of this act [or of], a code of ethics promulgated pursuant to the provisions of this act, or an executive order in which the Governor has granted the commission jurisdiction shall be fined not less than [$100.00] $500 nor more than [$500.00] $5,000, which penalty may be collected in a summary proceeding pursuant to [the Penalty Enforcement Law (N.J.S.2A:58-1)] "the penalty enforcement law," N.J.S.2A:58-1 et seq., may be reprimanded and ordered to pay restitution where appropriate, and may be suspended from [his] office or employment by order of the commission for a period of not in excess of [1] one year. If the commission finds that the conduct of such officer or employee, given the nature and frequency of the conduct and the functions and responsibilities of the officer or employee, evidences a careless disregard of the provisions of P.L.1971, c.182, as amended and supplemented, a code of ethics promulgated pursuant to the provisions of that act, or an executive order in which the Governor has granted the commission jurisdiction, it may order such person removed from the person's office or employment and may further bar such person from holding any public office or employment in this State in any capacity whatsoever for a period not exceeding two years from the date on which the person was found to have violated any provision of P.L.1971, c.182, as amended and supplemented, a code of ethics promulgated pursuant to the provisions of that act, or an executive order in which the Governor has granted the commission jurisdiction. If the commission finds that the conduct of such officer or employee constitutes a willful and continuous disregard of the provisions of this act [or of], a code of ethics promulgated pursuant to the provisions of this act, or an executive order in which the Governor has granted the commission jurisdiction, it may order such person removed from [his] the person's office or employment and may further bar such person from holding any public office or employment in this State in any capacity whatsoever for a period of not exceeding [5] five years from the date on which [he] the person was found [guilty by the commission] to have violated any provision of P.L.1971, c.182, as amended and supplemented, a code of ethics promulgated pursuant to the provisions of that act, or an executive order in which the Governor has granted the commission jurisdiction.

      m. The commission shall have the primary responsibility for assuring the proper administration and implementation of P.L.1971, c.182, as amended and supplemented, and shall have the power to perform the acts necessary and convenient to administering and implementing that act. The commission in its discretion may provide for the extension of any filing period provided in that act. The commission shall set appropriate conditions for an extension of time during the period of the extension. The commission may from time to time delegate matters within its jurisdiction to its chief administrative officer. A delegation shall remain in effect until removed or modified by the commission. Delegations involving advisory opinions rendered pursuant to subsection g. of section 10 of P.L.1971, c.182 (C.52:13D-21) shall only be made subject to commission review.

(cf: P.L.1971, c.182, s.10)

 

      2. Section 11 of P.L.1971, c.182 (C.52:13D-22) is amended to read as follows:

      11. [(a)] a. The Joint Legislative Committee on Ethical Standards created pursuant to the provisions of P.L.1967, [chapter] c.229, [as] and continued and established pursuant to P.L.1971, c.182, is continued and established in the Legislative Branch of State Government with the addition of the public members as set forth in this section.

      [(b)] b. The joint committee shall be composed of 12 members as follows: four members of the Senate appointed by the President thereof, no more than two of whom shall be of the same political party; four members of the General Assembly, appointed by the Speaker thereof, no more than two of whom shall be of the same political party; and four public members, one appointed by the President of the Senate, one appointed by the Speaker of the General Assembly, one appointed by the Minority Leader of the Senate and one appointed by the Minority Leader of the General Assembly. No public member shall be a lobbyist or legislative agent as defined by the "Legislative Activities Disclosure Act of 1971," P.L.1971, c.183 (C.52:13C-18 et seq.), a full-time State employee or an officer or director of any entity which is required to file a statement with the Election Law Enforcement Commission, and no former lobbyist or legislative agent shall be eligible to serve as a public member for one year following the cessation of all activity by that person as a legislative agent or lobbyist. The legislative members shall serve until the end of the two-year legislative term during which the members are appointed. The public members shall serve for terms of two years and until the appointment and qualification of their successors. The terms of the public members shall run from the second Tuesday in January of an even-numbered year to the second Tuesday in January of the next even-numbered year, regardless of the original date of appointment. Notwithstanding the terms of the public members as established in this section, the public members first appointed shall serve from their initial appointments, all of which shall be made not later than the 60th day following the effective date of this act, until the second Tuesday in January of the next even-numbered year. Vacancies in the membership of the joint committee shall be filled in the same manner as the original appointments, but for the unexpired term only. Public members of the joint committee shall serve without compensation, but shall be entitled to be reimbursed for all actual and necessary expenses incurred in the performance of their duties.

      [(c)] c. The joint committee shall organize as soon as may be practicable after the appointment of its members, by the selection of a chairman and vice chairman from among its membership and the appointment of a secretary, who need not be a member of the joint committee.

      [(d) ] d. The Legislative Counsel in the Office of Legislative Services shall act as legal adviser to the joint committee. He shall, upon request, assist and advise the joint committee in the rendering of advisory opinions by the joint committee, in the approval and review of codes of ethics adopted by State agencies in the Legislative Branch, and in the recommendation of revisions in codes of ethics or legislation relating to the conduct of members of the Legislature or State officers and employees in the Legislative Branch.

      [(e)] e. The joint committee may, within the limits of funds appropriated or otherwise available to it for the purpose, employ other professional, technical, clerical or other assistants, excepting legal counsel, and incur expenses as may be necessary to the performance of its duties.

      [(f)] f. The joint committee shall have all the powers granted pursuant to chapter 13 of Title 52 of the Revised Statutes.

      [(g)] g. The joint committee is authorized to render advisory opinions as to whether a given set of facts and circumstances would, in its opinion, constitute a violation of the provisions of this act, of a code of ethics promulgated pursuant to the provisions of this act or of any rule of either or both Houses which gives the joint committee jurisdiction and the authority to investigate a matter.

      [(h)] h. The joint committee shall have jurisdiction to initiate, receive, hear and review complaints regarding violations of the provisions of this act or of a code of ethics promulgated pursuant to the provisions of this act. It shall further have such jurisdiction as to enforcement of the rules of either or both Houses of the Legislature governing the conduct of the members or employees thereof as those rules may confer upon the joint committee. A complaint regarding a violation of a code of ethics promulgated pursuant to the provisions of this act may be referred by the joint committee for disposition in accordance with subsection [12(d)] 12d. of this act.

      [(i)] i. Any State officer or employee or special State officer or employee in the Legislative Branch found guilty by the joint committee of violating any provisions of this act, of a code of ethics promulgated pursuant to the provisions of this act or of any rule of either or both Houses which gives the joint committee jurisdiction and the authority to investigate a matter shall be fined not less than $500.00 nor more than [$1,500.00] $5,000.00, which penalty may be collected in a summary proceeding pursuant to "the penalty enforcement law" (N.J.S.2A:58-1 et seq.), [and] may be reprimanded and ordered to pay restitution where appropriate, and may be suspended from his office or employment by order of the joint committee for a period not in excess of [1] one year. If the joint committee finds that the conduct of such officer or employee, given the nature and frequency of the conduct and the functions and responsibilities of the officer or employee, evidences a careless disregard of the provisions of P.L.1971, c.182, as amended and supplemented or a code of ethics promulgated pursuant to the provisions of that act, it may order such person removed from the person's office or employment and may further bar such person from holding any public office or employment in this State in any capacity whatsoever for a period not exceeding two years from the date on which the person was found to have violated any provision of P.L.1971, c.182, as amended and supplemented or a code of ethics promulgated pursuant to the provisions of that act. If the joint committee finds that the conduct of such officer or employee constitutes a willful and continuous disregard of the provisions of this act, of a code of ethics promulgated pursuant to the provisions of this act or of any rule of either or both Houses which gives the joint committee jurisdiction and the authority to investigate a matter, it may order such person removed from his office or employment and may further bar such person from holding any public office or employment in this State in any capacity whatsoever for a period of not exceeding 5 years from the date on which he was found guilty by the joint committee.

      [(j)] j. A member of the Legislature who shall be found guilty by the joint committee of violating the provisions of this act, of a code of ethics promulgated pursuant to the provisions of this act or of any rule of either or both Houses which gives the joint committee jurisdiction and the authority to investigate a matter shall be fined not less than $500.00 nor more than [$1,500.00] $5,000.00, which penalty may be collected in a summary proceeding pursuant to "the penalty enforcement law" (N.J.S.2A:58-1 et seq.), and shall be subject to such further action as may be determined by the House of which he is a member. In such cases the joint committee shall report its findings to the appropriate House and shall recommend to the House such further action as the joint committee deems appropriate, but it shall be the sole responsibility of the House to determine what further action, if any, shall be taken against such member.

(cf: P.L.1991, c.505, s.1)

 

      3. Section 12 of P.L.1971, c.182 (C.52:13D-23) is amended to read as follows:

      12. [(a)] a. The head of each State agency, or the principal officer in charge of a division, board, bureau, commission or other instrumentality within a department of State Government designated by the head of such department for the purposes hereinafter set forth, shall within six months from the date of enactment, promulgate a code of ethics to govern and guide the conduct of the members of the Legislature, the State officers and employees or the special State officers and employees in the agency to which said code is applicable. Such code shall conform to the general standards hereinafter set forth in this section, but it shall be formulated with respect to the particular needs and problems of the agency to which said code is to apply. Notwithstanding any other provisions of this section, the New Jersey members to any interstate agency to which New Jersey is a party and the officers and employees of any State agency which fails to promulgate a code of ethics shall be deemed to be subject to a code of ethics the provisions of which shall be paragraphs (1) through (6) of subsection [(e)] e. of this section.

      [(b)] b. A code of ethics formulated pursuant to this section to govern and guide the conduct of the State officers and employees or the special State officers and employees in any State agency in the Executive Branch, or any portion of such a code, shall not be effective unless it has first been approved by the Executive Commission on Ethical Standards. When a proposed code is submitted to the [said] commission it shall be accompanied by an opinion of the Attorney General as to its compliance with the provisions of this act and any other applicable provision of law. Nothing contained herein shall prevent officers of State agencies in the Executive Branch from consulting with the Attorney General or with the Executive Commission on Ethical Standards at any time in connection with the preparation or revision of such codes of ethics.

      [(c)] c. A code of ethics formulated pursuant to this section to govern and guide the conduct of the members of the Legislature, State officers and employees or special State officers and employees in any State agency in the Legislative Branch, or any portion of such code, shall not be effective unless it has first been approved by the Legislature by concurrent resolution. When a proposed code is submitted to the Legislature for approval it shall be accompanied by an opinion of the chief counsel as to its compliance with the provisions of this act and any other applicable provisions of law. Nothing contained herein shall prevent officers of State agencies in the Legislative Branch from consulting with the Chief Legislative Counsel or the Joint Legislative Committee on Ethical Standards at any time in connection with the preparation or revision of such codes of ethics.

      [(d)] d. Violations of a code of ethics promulgated pursuant to this section shall be cause for removal, suspension, demotion or other disciplinary action by the State officer or agency having the power of removal or discipline. When a person who is in the classified civil service is charged with a violation of such a code of ethics, the procedure leading to such removal or discipline shall be governed by any applicable provisions of the Civil Service Law and the Rules of the Department of [Civil Service] Personnel. No action for removal or discipline shall be taken under this subsection except upon the referral or with the approval of the Executive Commission on Ethical Standards or the Joint Legislative Committee on Ethical Standards, whichever is authorized to exercise jurisdiction with respect to the complaint upon which such action for removal or discipline is to be taken.

      [(e)] e. A code of ethics for officers and employees of a State agency shall conform to the following general standards:

      (1) No State officer or employee or special State officer or employee should have any interest, financial or otherwise, direct or indirect, or engage in any business or transaction or professional activity, which is in substantial conflict with the proper discharge of his duties in the public interest.

      (2) No State officer or employee or special State officer or employee should engage in any particular business, profession, trade or occupation which is subject to licensing or regulation by a specific agency of State Government without promptly filing notice of such activity with the Executive Commission on Ethical Standards, if he is an officer or employee in the Executive Branch, or with the Joint Legislative Committee on Ethical Standards, if he is an officer or employee in the Legislative Branch. A State officer or employee or a special State officer or employee who possesses a license issued by a State agency which entitles the officer or employee to engage in a particular business, profession, trade or occupation shall file notice of that fact with the Executive Commission or the Joint Committee, as appropriate.

      (3) No State officer or employee or special State officer or employee should use or attempt to use his official position, or direct, authorize or knowingly permit another to use an official position, to secure unwarranted privileges or advantages for [himself or others] any person.

      (4) No State officer or employee or special State officer or employee should act in his official capacity in any matter wherein he has a direct or indirect personal financial interest that might reasonably be expected to impair his objectivity or independence of judgment.

      (5) No State officer or employee or special State officer or employee should undertake any employment or service, whether compensated or not, which might reasonably be expected to impair his objectivity and independence of judgment in the exercise of his official duties.

      (6) No State officer or employee or special State officer or employee should accept any gift, favor, service or other thing of value under circumstances from which it might be reasonably inferred that such gift, service or other thing of value was given or offered for the purpose of influencing him in the discharge of his official duties.

      (7) No State officer or employee or special State officer or employee should knowingly act in any way that might reasonably be expected to create an impression or suspicion among the public having knowledge of his acts that he may be engaged in conduct violative of his trust as a State officer or employee or special State officer or employee.

      (8) Rules of conduct adopted pursuant to these principles should recognize that under our democratic form of government public officials and employees should be drawn from all of our society, that citizens who serve in government cannot and should not be expected to be without any personal interest in the decisions and policies of government; that citizens who are government officials and employees have a right to private interests of a personal, financial and economic nature; that standards of conduct should separate those conflicts of interest which are unavoidable in a free society from those conflicts of interest which are substantial and material, or which bring government into disrepute.

      [(f)] f. The code of ethics for members of the Legislature shall conform to subsection [(e)] e. hereof as nearly as may be possible.

(cf: P.L.1987, c.432, s.6)

 

      4. Section 2 of P.L.1971, c.182 (C.52:13D-13) is amended to read as follows:

      2. As used in this act, and unless a different meaning clearly appears from the context, the following terms shall have the following meanings:

      a. "State agency" means any of the principal departments in the Executive Branch of the State Government, and any division, board, bureau, office, commission or other instrumentality within or created by such department, the Legislature of the State and any office, board, bureau or commission within or created by the Legislative Branch, and, to the extent consistent with law, any interstate agency to which New Jersey is a party and any independent State authority, commission, instrumentality or agency. A county or municipality shall not be deemed an agency or instrumentality of the State.

      b. "State officer or employee" means any person, other than a special State officer or employee (1) holding an office or employment in a State agency, excluding an interstate agency, other than a member of the Legislature or (2) appointed as a New Jersey member to an interstate agency.

      c. "Member of the Legislature" means any person elected to serve in the General Assembly or the Senate.

      d. "Head of a State agency" means (1) in the case of the Executive Branch of government, except with respect to interstate agencies, the department head or, if the agency is not assigned to a department, the Governor, and (2) in the case of the Legislative Branch, the chief presiding officer of each House of the Legislature.

      e. "Special State officer or employee" means (1) any person holding an office or employment in a State agency, excluding an interstate agency, for which office or employment no compensation is authorized or provided by law, or no compensation other than a sum in reimbursement of expenses, whether payable per diem or per annum, is authorized or provided by law; (2) any person, not a member of the Legislature, holding a part-time elective or appointive office or employment in a State agency, excluding an interstate agency, or (3) any person appointed as a New Jersey member to an interstate agency the duties of which membership are not full-time.

      f. "Person" means any natural person, association [or], corporation or other business organization.

      g. "Interest" means (1) the ownership or control of more than 10% of the profits or assets of a firm, association, or partnership, or more than 10% of the stock in a corporation for profit other than a professional service corporation organized under the "Professional Service Corporation Act," P.L.1969, c.232 (C.14A:17-1 et seq.); or (2) the ownership or control of more than 1% of the profits of a firm, association, or partnership, or more than 1% of the stock in any corporation, which is the holder of, or an applicant for, a casino license or in any holding or intermediary company with respect thereto, as defined by the "Casino Control Act," P.L.1977, c.110 (C.5:12-1 et seq.). The provisions of this act governing the conduct of individuals are applicable to shareholders, associates or professional employees of a professional service corporation regardless of the extent or amount of their shareholder interest in such a corporation.

      h. "Commission" means the Executive Commission on Ethical Standards.

      i. "Cause, proceeding, application or other matter" means a specific cause, proceeding or matter and does not mean or include determinations of general applicability or the preparation or review of legislation which is no longer pending before the Legislature or the Governor.

      j. "Dependent child" means a child for whom the State officer or employee or special State officer or employee or the spouse of the State officer or employee or special State officer or employee claims federal or State tax status as a dependent.

      [i.] k. "Member of the immediate family" of any person means the person's spouse, child, parent or sibling residing in the same household.

      l. "Financial disclosure statement" means a disclosure form required to be filed with the commission by certain persons pursuant to P.L.1971, c.182 (C.52:13D-12 et seq.), as amended and supplemented, or by executive order of the Governor.

      m. "Filing employee" means any person holding any of the following offices in the Executive Branch of State government, together with any offices added to such list by executive order:

      (1) the Governor;

      (2) the head of each principal department where such head is a single executive;

      (3) the assistant or deputy heads of each principal department, including all assistant and deputy commissioners of such department;

      (4) the head and assistant heads of a division of each principal department, or any person exercising substantially similar authority for: (a) any board or commission which is organized as in but not of a principal department, or (b) any independent authority;

      (5) the executive or administrative head and assistant heads of: (a) any board or commission which is organized as in but not of a principal department or (b) any independent authority;

      (6) the following members of the staff of the Office of the Governor:

      (a) Chief of Staff;

      (b) Chief Counsel to the Governor;

      (c) Chief, Office of Policy and Planning;

      (d) Director of Communications;

      (e) Executive Assistant to the Governor and any deputy and the principal administrative assistant to any of the foregoing members of the staff of the Office of the Governor;

      (7) members of the State Board of Agriculture;

      (8) members of the State Board of Education;

      (9) members of the Board of Public Utilities;

      (10) members of the State Parole Board; and

      (11) presidents of the State colleges and universities.

      "Filing employee" also means any person holding an office not specified above, but which is functionally equivalent to any of those offices. Functional equivalence shall be determined by the Chief Counsel to the Governor, the head of each principal department, the head of each agency, board or commission in but not of a principal department or the head of each independent authority, as appropriate, in consultation with the commission.

      In addition to the filing employees listed above, the Governor, by executive order, may designate which members of the staff of the Office of the Governor are "filing employees" for the purpose of P.L.1971, c.182, as amended and supplemented, except that the Chief of Staff, the Chief, Office of Policy and Planning and the Director of Communications shall be "filing employees" for the purposes of that act unless those positions or their equivalents are abolished.

      n. "Filing officer" means:

      (1) the members of the following boards, commissions, independent authorities and public corporations, or their successor organizations together with any offices or bodies added to such list by executive order:

      (a) Agriculture Development Committee;

      (b) Atlantic City Convention Center Authority;

      (c) Capital City Redevelopment Corporation;

      (d) Casino Reinvestment Development Authority;

      (e) Commission on Higher Education;

      (f) Council on Affordable Housing;

      (g) Educational Facilities Authority;

      (h) Election Law Enforcement Commission;

      (i) Executive Commission on Ethical Standards;

      (j) Hackensack Meadowlands Development Commission;

      (k) Hazardous Waste Facilities Siting Commission;

      (l) Health Care Administration Board;

      (m) Health Care Facilities Financing Authority;

      (n) Local Finance Board;

      (o) Merit System Board;

      (p) New Jersey Building Authority;

      (q) New Jersey Commission on Science and Technology;

      (r) New Jersey Economic Development Authority;

      (s) New Jersey Highway Authority;

      (t) New Jersey Historic Trust;

      (u) New Jersey Housing and Mortgage Finance Agency;

      (v) New Jersey Low-Level Radioactive Waste Disposal Facility Siting Board;

      (w) New Jersey Natural Lands Trust;

      (x) New Jersey Public Broadcasting Authority;

      (y) New Jersey Racing Commission;

      (z) New Jersey Real Estate Commission;

      (aa) New Jersey Redevelopment Authority;

      (bb) New Jersey Sports and Exposition Authority;

      (cc) New Jersey State Council on the Arts;

      (dd) New Jersey Transit Corporation;

      (ee) New Jersey Transportation Trust Fund Authority;

      (ff) New Jersey Turnpike Authority;

      (gg) New Jersey Urban Enterprise Zone Authority;

      (hh) New Jersey Water Supply Authority;

      (ii) North Jersey District Water Supply Commission;

      (jj) Passaic Valley Sewerage Commissioners;

      (kk) Pinelands Commission;

      (ll) Public Employment Relations Commission;

      (mm) School Ethics Commission;

      (nn) Shell Fisheries Council;

      (oo) South Jersey Food Distribution Authority;

      (pp) South Jersey Transportation Authority;

      (qq) State Athletic Control Board;

      (rr) State Lottery Commission;

      (ss) State Planning Commission;

      (tt) Tidelands Resource Council;

      (uu) Wastewater Treatment Trust; and

      (vv) Wetlands Mitigation Council;

      (2) individuals appointed as a New Jersey member to the following interstate agencies:

      (a) Atlantic States Marine Fisheries Commission;

      (b) Clean Ocean and Shore Trust Committee;

      (c) Delaware River and Bay Authority;

      (d) Delaware River Basin Commission;

      (e) Delaware River Joint Toll Bridge Commission;

      (f) Delaware River Port Authority;

      (g) Delaware Valley Regional Planning Commission;

      (h) Interstate Sanitation Commission;

      (i) Northeast Interstate Low Level Radioactive Waste Commission;

      (j) Palisades Interstate Park Commission;

      (k) Port Authority of New York and New Jersey;

      (l) Port Authority Trans-Hudson Corporation;

      (m) South Jersey Port Corporation; and

      (n) Waterfront Commission of New York Harbor.

      o. "Government instrumentality" means any federal entity, the Legislative, Judicial and Executive Branches of State government, including any office, department, division, bureau, board, commission, council, authority or agency therein and any county, municipality, school board, district, public authority, public agency or other political subdivision or public body in the State.

      p. "Income" means all income from whatever source derived.

      q. "Relative" means a son, daughter, grandson, granddaughter, father, mother, grandfather, grandmother, great-grandfather, great-grandmother, brother, sister, nephew, niece, uncle or aunt. Relatives by adoption, half-blood, marriage or remarriage shall be treated as relatives of the whole kinship.

      r. "Asset" means property of any kind, real or personal, tangible or intangible.

      s. "Interest in a closely held business entity" means any ownership or control of any profits or assets of such business entity.

      t. "Doing business" with any government instrumentality means business or commercial transactions involving the sale, conveyance or rental of any estate, goods or services, and does not include compliance with regulatory procedures.

 (cf: P.L.1987, c.432, s.2)

 

      5. (New section) Every filing employee and filing officer, as such terms are defined in subsections m. and n. of section 2 of P.L.1971, c.182 (C.52:13D-13), shall file not later than May 15 in each calendar year, a current sworn and duly notarized financial disclosure statement with the commission. Each statement shall include the following information:

      a. the name and position of the filing employee or filing officer;

      b. any occupation, trade, business or profession engaged in by the filing employee or filing officer and the employee's or officer's spouse and dependent children;

      c. (1) (a) a list of all assets having a value of more than $1,000, both tangible and intangible, in which a direct or indirect interest is held by the filing employee or filing officer or the employee's or officer's spouse or dependent children, valued as of the statement date, except that when the value cannot be determined as of that date, a separate valuation date shall be specified for the particular asset. Where stocks and bonds are involved, there shall be included the name of the company, mutual fund, holding company or government agency issuing them, except that whenever such interest exists through ownership in a mutual fund or holding company, the individual stocks held by such mutual fund or holding company need not be listed, and whenever such interest exists through a beneficial interest in a trust, the stocks and bonds held in such trust shall be listed only if the filing employee or filing officer has knowledge or what stocks and bonds are so held. Where more than 10 percent of the stock of a corporation is held, the percentage of ownership shall be stated;

      (b) a list of assets consisting of any direct or indirect interest, whether vested or contingent, in any contract made or executed by a government instrumentality; and

      (c) a list of assets consisting of real estate interests, including the location, size, general nature and acquisition date of any real property in New Jersey in which any direct, indirect, vested or contingent interest is held, together with the names of all individuals or entities who share a direct or indirect interest therein and the name of any government instrumentality that is a tenant of such property or that has before it an application, complaint or proceeding directly affecting such property.

      (2) Assets of a filing employee and the employee's spouse shall be listed according to the following value categories:

      (a) greater than $1,000, but not more than $5,000;

      (b) greater than $5,000, but not more than $10,000;

      (c) greater than $10,000, but not more than $20,000;

      (d) greater than $20,000, but not more than $40,000;

      (e) greater than $40,000, but not more than $80,000;

      (f) greater than $80,000, but not more than $120,000;

      (g) greater than $120,000, but not more than $160,000;

      (h) greater than $160,000, but not more than $200,000;

      (i) greater than $200,000, but not more than $240,000;

      (j) greater than $240,000, but not more than $280,000;

      (k) greater than $280,000, but not more than $320,000;

      (l) greater than $320,000, but not more than $360,000;

      (m) greater than $400,000.

      The value of assets of a filing employee's dependent children or of a filing officer and the officer's spouse and dependent children need not be disclosed unless specifically requested by the Governor or the commission;

      d. A list of all liabilities of the filing employee or filing officer and the employee's or officer's spouse and dependent children, valued, as applicable, by category in the same manner as required by subsection c. above, except liabilities which are:

      (1) less than $10,000 and owed to a relative, as defined in subsection q. of section 2 of P.L.1971, c.182 (C.52:13D-13);

      (2) less than $l,000 and owed to any other person;

      (3) loans secured to purchase a personal motor vehicle, household furniture or appliances where the loan did not exceed the purchase price of the item and the outstanding balance did not exceed $10,000 as of the close of the preceding calendar year; and

      (4) revolving charge accounts where the outstanding liability does not exceed $10,000 as of the close of the preceding calendar year;

      e. A list of all former liabilities of the filing employee or filing officer and the employee's or officer's spouse and dependent children which have been forgiven by the creditor within 12 months of the statement date. For each such forgiven liability so listed, the name of the creditor to whom such liability was owed shall be stated;

      f. a list of all sources of income of the filing employee or filing officer and the employee's or officer's spouse and dependent children, including all compensated employment of whatever nature, all directorships or other fiduciary positions for which compensation has or will be claimed, all capital gains including a description of the individual sources of such gains, all contractual arrangements producing or expected to produce income, and honoraria, lecture fees and other miscellaneous sources of income including, but not limited to interest, dividends, royalties and rents. Statements filed before July 1 of any year shall disclose sources of income for the preceding calendar year. Statements filed after July 1 of any year shall provide this information for the twelve-month period immediately preceding the filing date. The amount of such income received shall be listed and valued by category in the same manner as assets as set forth in subsection c. of this section. The amount of income of a filing employee's dependent children or of a filing officer and the officer's spouse and dependent children need not be disclosed unless specifically requested by the Governor or the commission. Sources of income that are not required to be reported are:

      (1) cash gifts in an aggregated amount of less than $100 received during the preceding 12 months from a person;

      (2) non-cash gifts with an aggregated fair market value of less than $200 received during the preceding 12 months from a person; and

      (3) gifts with an aggregated cash or fair market value of less than $3,000 received during the preceding 12 months from a relative;

      g. A list of any offices, trusteeships, directorships or positions of any nature, whether compensated or uncompensated, held by the filing employee or filing officer or the employee's or officer's spouse or dependent children and the name of the firm, corporation, association, partnership, business or other entity with which the position is held. If any listed firm, corporation, association, partnership or business does business with or is licensed, regulated or inspected by a State agency or does business with a casino license holder or applicant, the State agency, casino or applicant must be identified;

      h. A list of entities that do business with any government instrumentalities in which the filing employee or filing officer or the employee's or officer's spouse has an interest, as defined in subsection g. of section 2 of P.L.1971, c.182 (C.52:13D-13).

 

      6. (New section) Each statement shall contain a certification by the filing employee or filing officer that the employee or officer has read the statement, that to the best of the employee's or officer's knowledge and belief it is true, correct and complete and that the employee or officer has not transferred and will not transfer any asset, interest or property for the purpose of concealing it from disclosure while retaining an equitable interest therein.

 

      7. (New section) a. Within 120 days from the effective date of this act, each filing employee and filing officer who has not already done so shall file the original signed statement required herein with the commission. The statement shall contain a certification in lieu of oath and shall be notarized. In furtherance of its duties under the "New Jersey Conflicts of Interest Law," P.L.1971, c.182 (C.52:13D-12 et seq.) and pursuant to this act, the commission shall review each statement to determine its internal conformity with the provisions of this act and other applicable provisions of the law. Upon accepting such statement for filing, the commission shall file and maintain a copy of it for public inspection and copying in accordance with the procedures set forth in P.L.1963, c.73 (C.47:1A-1 et seq.).

      b. Each prospective filing employee and filing officer shall, before assuming the office to which the employee or officer has been appointed, satisfy the filing requirements of this act.

      c. Updated statements shall be filed on the May 15 next succeeding the submission of the original statement and each May 15 thereafter.

 

      8. (New section) The commission shall keep the approved statements on file for so long as the person submitting such statements is a filing employee or filing officer of this State, and for five years thereafter.

 

      9. (New section) a. A filing employee or filing officer shall not be permitted to maintain or retain any interest in any closely held business entity doing business with a government instrumentality except as provided in subsections c. and d. below.

      b. After the effective date of P.L. , c. (C. )(now pending before the Legislature as this bill), a State agency shall not hire a filing employee, and no person shall be appointed as a filing officer, who holds any interest in any closely held business entity doing business with a government instrumentality except as provided in subsections c. and d. below. An individual seeking employment in or appointment to such a position shall not divest a covered asset in a manner otherwise prohibited by this act for the purpose of satisfying the provisions of this act. A filing employee or filing officer shall not obtain any prohibited interest in a closely held business entity during the filing employee's or filing officer's tenure.

      c. The provisions of subsections a. and b. shall not apply to any purchase, sale, contract, or agreement with a government instrumentality, other than a State agency, which is made or awarded after public notice and competitive bidding as provided by the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.), or similar public bidding laws or regulations, provided that any such purchase, sale, contract or agreement, including a change in orders and amendments thereto, shall receive the prior approval of the commission.

      d. The provisions of this section may be waived in whole or in part by the commission if, in the judgment of the commission, the filing employee's or filing officer's interest in a closely held business entity doing business with a government instrumentality will not interfere with the responsibilities of the filing employee or filing officer and will not give rise to a present or potential conflict of interest or a present or potential appearance of a conflict of interest.

      e. A filing employee or filing officer may only maintain an interest in a closely held business entity covered by this section while and until the commission makes a final determination on the status of such interest. A person seeking employment or appointment in a State agency shall disclose to the commission the person's interest, and the interest of the person's spouse, in any such business entity as soon as practicable, and the commission shall render a determination no later than 30 days after receiving such disclosure, or at its next regularly scheduled meeting, whichever shall occur later.

 

      10. (New section) The commission shall review all financial disclosure statements as they may from time to time be submitted by filing employees and filing officers to determine whether the covered persons have obtained ownership or interest in any assets that give rise to a present or potential conflict of interest, or a present or potential appearance of a conflict of interest, within the meaning of this act.

 

      11. (New section) Each filing employee or filing officer shall amend the employee's or officer's financial disclosure statement within 30 days of gaining knowledge of: a. the acquisition by the employee or officer or the spouse thereof of any interest in any closely held business entity; or b. the commencement of any business activity covered by the provisions of this act.

 

      12. (New section) Any filing employee or filing officer subject to this act who acquires an interest prohibited under this act by way of inheritance, bequest or similar circumstances beyond the employee's or officer's control shall follow the procedures for disclosure and disposition set forth in sections 11 and 13 of this act. The commission may adopt rules and regulations governing the disposition of such interests pending compliance with the procedures for disclosure and disposition set forth in this act. These rules and regulations may provide a reasonable period of time for divestiture of an interest, considering the nature of the filing employee's or filing officer's duties and the nature and marketability of the interest.

 

      13. (New section) All required divestiture shall be subject to the following conditions:

      a. ownership or control of the asset may not be transferred to a member of the filing employee's or filing officer's immediate family; and

      b. the terms and conditions of any conveyance of ownership and control of the asset shall not contain any provisions regarding the return of the asset to the filing employee or filing officer subsequent to the employee's or officer's State service.

 

      14. (New section) Whenever the Executive Commission on Ethical Standards permits a blind trust to be utilized by a filing employee or filing officer, the trust shall contain the following characteristics:

      a. the trust shall not contain investments or assets in which the holder's ownership right or interest is required to be recorded in a public office or those assets whose permanency makes transfer by the trustee improbable or impractical; these investments or assets would include, but not be limited to, businesses, real estate, security interests in personal property and mortgages;

      b. the trust shall contain a clear statement of its purpose, namely, to remove from the grantor control and knowledge of investment of trust assets so that conflicts between the grantor's responsibilities and duties as a filing officer or employee and the filing officer's or employee's private business or financial interests will be eliminated;

      c. the trust shall be irrevocable, and shall be terminated only upon the death of the filing officer or employee or upon termination from State office or employment, whichever shall first occur;

      d. the trustee shall be directed not to disclose to the grantor any information about any of the assets in the trust;

      e. the trustee shall be required either to: prepare and file the grantor's personal income tax returns, withholding from distribution of the trust's net income amounts sufficient to pay the grantor's tax; and further to participate in the audit of the grantor's returns during the period of the trust with authority to compromise the grantor's tax liability; or submit to the grantor, for income tax purposes, a certification of income paid without identifying the assets producing such income;

      f. among its other powers, the trustee shall have authority to determine whether any of the assets originally transferred to the trustee are to be sold and, if so, when;

      g. a provision shall be included in the trust agreement prohibiting the trustee from investing the trust property in corporations or businesses which it knows do a significant amount of business with the State of New Jersey or from knowingly making any investment in a corporation, business or venture over which the grantor has regulatory or supervisory authority by virtue of the grantor's position as a filing officer or employee;

      h. the grantor shall retain no control over the trustee nor shall the grantor be permitted to make any recommendations or suggestions as to the trust property;

      i. the trustee shall be a commercial trustee and not a natural person;

      j. the principal benefit to be retained by the grantor shall be the right to receive income from the assets transferred to the trust;

      k. the trust shall not become effective until submitted and approved by the Executive Commission on Ethical Standards; and

      l. the trust agreement shall provide that the trustee will give the Executive Commission on Ethical Standards access to any records or information related to the trust which is necessary for the performance of the commission's duties.

 

      15. (New section) A copy of the executed blind trust agreement shall be filed with the Executive Commission on Ethical Standards and with the head of the department in which the filing officer or employee holds office or employment. Attached to such copy shall be a brief statement outlining the business or financial interests from which the filing officer or employee seeks removal and the actual or potential conflicts of interest, or appearance of such conflicts, which are sought to be avoided by use of the trust agreement.

 

      16. (New section) It shall be a crime of the third degree for a public servant to:

      a. knowingly make, or cause or permit another public servant to make, a false entry in, or false alteration of, any record, document or thing belonging to, or received or kept by, the government for information or record, or required by law to be kept by others for information of the government;

      b. make, present, offer for filing, or use any record, document or thing, or cause or permit another public servant to do so, knowing it to be false, and with purpose that it be taken as a genuine part of information or records referred to in subsection a. of this section; or

      c. purposely and unlawfully destroy, conceal, remove, mutilate, or otherwise impair the verity or availability of any such record, document or thing, or purposely and unlawfully cause or permit another public servant to do so.

 

      17. (New section) The first annual report submitted by the Executive Commission on Ethical Standards to the Governor and the Legislature, pursuant to subsection i. of section 10 of P.L.1971, c.182 (C.52:13D-21), shall include the commission's recommendations as to whether legislation should be enacted which prohibits the spouse or other family member of a State officer or employee or of a special State officer or employee from holding employment in an industry over which the officer or employee has regulatory responsibility.

 

      18. This act shall take effect immediately, but any increased penalty shall apply only to violations occurring on and after the effective date.

 

 

STATEMENT

 

      This Assembly substitute, which amends and supplements the "New Jersey Conflicts of Interest Law", revises the membership, powers, and duties of the Executive Commission on Ethical Standards; requires various public officers and employees to disclose certain financial information; and prohibits those officers and employees from holding certain interests.

      Specifically, the substitute:

      1) Expands the membership of the commission from seven to nine members, all of whom are to be appointed by the Governor; and of those members, five shall be Executive Branch officers or employees and four shall be public members, appointed with the advice and consent of the Senate;

      2) Empowers the commission to issue advisory opinions on possible violations of executive orders and to implement and enforce any executive order with respect to which the Governor has granted jurisdiction over such implementation and enforcement;

      3) Directs the commission to establish and conduct an ethics orientation for high-level State officers and certain employees, attendance to which shall be mandatory, and to develop educational materials and procedures to assist State employees and officers in complying with the employees' or officers' obligations under the conflicts law;

      4) Requires each "filing employee", including the Governor and the Governor's executive staff and the head and deputy heads of each principal department in the Executive Branch, and each "filing officer", including the members of enumerated State boards, commissions, authorities and public corporations, to file with the commission on May 15 of each year a sworn financial disclosure statement that lists: (a) all assets worth more than $1,000, listed by category of value, in which the filing employee or officer or the spouse or dependent children thereof hold an interest; (b) liabilities of the filing employee or officer and those of the employee or officer's spouse and dependent children, also by category of value over $1,000; (c) sources of income; (d) business management positions; and (e) interests in entities that do business with a federal, State or local government entity;

      5) Prohibits a filing employee or filing officer from retaining or acquiring ownership or control of the profits or assets of a closely held business entity doing business with a federal, State or local government agency and bars the employment or appointment of someone as a filing employee or filing officer who holds such an interest;

      6) Provides that a State officer or employee or a special State officer or employee who possesses a license issued by a State agency which entitles the officer or employee to engage in a particular business, profession, trade or occupation shall file notice of that fact with the commission;

      7) Revises the civil penalty for violation of the conflicts law, with the amount of the minimum penalty increasing from $100 to $500 and that of the maximum penalty increasing from $500 to $5,000;

      8) Makes the tampering with public records by a public servant a crime of the third degree; and

      9) Provides that if the commission finds that a person's conduct evidences a careless disregard for the provisions of the conflicts law or a related code of ethics or executive order, it may order the person removed from office or employment in any capacity for up to two years.

 

 

                             

Reconstitutes Executive Commission on Ethical Standards with public members; requires certain public officers and employees to file financial disclosure statements and dispose of certain prohibited interests.