[First Reprint]

ASSEMBLY, No. 1848

 

STATE OF NEW JERSEY

 

INTRODUCED MAY 2, 1996

 

 

By Assemblyman ARNONE

 

 

An Act concerning penalties for ethics violations by local officials and amending P.L.1991, c.29.

 

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

 

    1. Section 3 of P.L.1991, c.29 (C.40A:9-22.3) is amended to read as follows:

    3. As used in this act:

    a. "Board" means the Local Finance Board in the Division of Local Government Services in the Department of Community Affairs;

    b. "Business organization" means any corporation, partnership, firm, enterprise, franchise, association, trust, sole proprietorship, union or other legal entity;

    c. "Governing body" means, in the case of a municipality, the commission, council, board or body, by whatever name it may be known, having charge of the finances of the municipality, and, in the case of a county, the board of chosen freeholders, or, in the case of a county having adopted the provisions of the "Optional County Charter Law," P.L.1972, c.154 (C.40:41A-1 et seq.), as defined in the form of government adopted by the county under that act;

    d. "Interest" means the ownership or control of more than 10% of the profits, assets or stock of a business organization but shall not include the control of assets in a nonprofit entity or labor union;

    e. "Local government agency" means any agency, board, governing body, including the chief executive officer, bureau, division, office, commission or other instrumentality within a county or municipality, and any independent local authority, including any entity created by more than one county or municipality, which performs functions other than of a purely advisory nature, but shall not include a school board;

     f. "Local government employee" means any person, whether compensated or not, whether part-time or full-time, employed by or serving on a local government agency who is not a local government officer, but shall not mean any employee of a school district;

    g. "Local government officer" means any person whether compensated or not, whether part-time or full-time: (1) elected to any office of a local government agency; (2) serving on a local government agency which has the authority to enact ordinances, approve development applications or grant zoning variances; (3) who is a member of an independent municipal, county or regional authority; [or] 1or1 (4) who is a managerial executive or confidential employee of a local government agency, as defined herein and in section 3 of the "New Jersey Employer-Employee Relations Act," P.L.1941, c.100 (C.34:13A-3), but shall not mean any employee of a school district or member of a school board; 1[or (5) who voluntarily serves on a continuing basis in the role of a confidential employee of, advisor to, or consultant for a local government officer and who provides direct advice to that local government officer of an economic or policy nature, including any advice impacting decisions on the operation and finances of a local government agency;]1

    h. "Local government officer or employee" means a local government officer or a local government employee;

    i. "Member of immediate family" means the spouse or dependent child of a local government officer or employee residing in the same household;

    j. "Managerial executive" means a person who formulates management policies and practices, and a person who is charged with the responsibility of directing the effectuation of such management policies and practices;

    k. "Confidential employee" means a local government employee whose functional responsibility or knowledge in connection with the issues involved in the collective negotiations process would make their membership in any appropriate negotiating unit incompatible with their official duties.

(cf: P.L.1991, c.29, s.3)

 

    2. Section 6 of P.L.1991, c.29 (C.40A:9-22.6) is amended to read as follows:

    6. a. Local government officers shall annually file a financial disclosure statement. All financial disclosure statements filed pursuant to this act shall include the following information which shall specify, where applicable, the name and address of each source and the local government officer's job title:

    (1) Each source of income, earned or unearned, exceeding [$2,000] $1,000 received by the local government officer or a member of his immediate family during the preceding calendar year. Individual client fees, customer receipts or commissions on transactions received through a business organization need not be separately reported as sources of income. If a publicly traded security is the source of income, the security need not be reported unless the local government officer or member of his immediate family has an interest in the business organization;

    (2) Each source of fees and honorariums having an aggregate amount exceeding [$250] $100 from any single source for personal appearances, speeches or writings received by the local government officer or a member of his immediate family during the preceding calendar year;

    (3) Each source of gifts, reimbursements or prepaid expenses having an aggregate value exceeding $400 from any single source, excluding relatives, received by the local government officer or a member of his immediate family during the preceding calendar year;

    (4) The name and address of all business organizations in which the local government officer or a member of his immediate family had an interest during the preceding calendar year; [and] 1and1

    (5) The address and brief description of all real property in the State in which the local government officer or a member of his immediate family held an interest during the preceding calendar year1[; and

    (6) The name and address of any person who voluntarily serves on a continuing basis in the role of a confidential employee of, advisor to, or consultant for the local government officer and who provides direct advice to the local government officer of an economic nature, including any area impacting decisions on the operations and finances of a local government agency ]1.

    b. The Local Finance Board shall prescribe a financial disclosure statement form for filing purposes. For counties and municipalities which have not established ethics boards, the board shall transmit sufficient copies of the forms to the municipal clerk in each municipality and the county clerk in each county for filing in accordance with this act. The municipal clerk shall make the forms available to the local government officers serving the municipality. The county clerk shall make the forms available to the local government officers serving the county.

    For counties and municipalities which have established ethics boards, the Local Finance Board shall transmit sufficient copies of the forms to the ethics boards for filing in accordance with this act. The ethics boards shall make the forms available to the local government officers within their jurisdiction.

    For local government officers serving the municipality, the original statement shall be filed with the municipal clerk in the municipality in which the local government officer serves. For local government officers serving the county, the original statement shall be filed with the county clerk in the county in which the local government officer serves. A copy of the statement shall be filed with the board. In counties or municipalities which have established ethics boards a copy of the statement shall also be filed with the ethics board having jurisdiction over the local government officer. Local government officers shall file the initial financial disclosure statement within 90 days following the effective date of this act. Thereafter, statements shall be filed on or before April 30th each year.

    1[After the filing deadline] On or before June 30 of each year1, the municipal clerk, county clerk, or local ethics board, as appropriate, shall file with the Local Finance Board, on a form provided by the Local Finance Board, a roster of those individuals deemed to be local government officers and whether or not the individual has filed the annual financial disclosure statement.

    c. All financial disclosure statements filed shall be public records. (cf: P.L.1991, c.29, s.6)

 

    1[3. Section 7 of P.L.1991, c.29 (C.40A:9-22.7) is amended to read as follows:

    7. 40A:9-22.7. Powers of Local Finance Board

    With respect to its responsibilities for the implementation of the provisions of this act, the Local Finance Board shall have the following powers:

    a. To initiate, receive, hear and review complaints and hold hearings with regard to possible violations of this act;

    b. To issue subpoenas for the production of documents and the attendance of witnesses with respect to its investigation of any complaint or to the holding of a hearing;

    c. To hear and determine any appeal of a decision made by a county or municipal ethics board;

    d. To forward to the county prosecutor or the Attorney General or other governmental body any information concerning violations of this act which may become the subject of criminal prosecution or which may warrant the institution of other legal proceedings by the Attorney General;

    e. To render advisory opinions as to whether a given set of facts and circumstances would constitute a violation of this act;

    f. To enforce the provisions of this act and to impose penalties for the violation thereof as are authorized by this act; [and]

    g. To adopt rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) and to do other things as are necessary to implement the purposes of this act; and

    h. To receive, hear and review requests for waivers of filing of a financial disclosure statement for local government officers serving under paragraph (5) of subsection g. of section 3 of P.L.1991, c.29 (C.40A:9-22.3) (now pending before the Legislature as this bill). Each request shall be submitted annually and at least 60 days prior to the deadline for filing annual financial disclosure statements or within 60 days following a new appointment of a local government officer serving in the capacity as defined under paragraph (5) of subsection g. of section 3 of P.L.1991, c.29 (C.40A:9-22.3) (now pending before the Legislature as this bill). A waiver request under this subsection shall be submitted to the Local Finance Board for approval irrespective of the existence of a county or municipal ethics board.

(cf: P.L.1991, c.29, s.7)]1

 

    1[4] 3.1 Section 9 of P.L.1991, c.29 (C.40A:9-22.9) is amended to read as follows:

    9. a. The Local Finance Board, upon receipt of a signed written complaint by any person alleging that the conduct of any local government officer or employee, not regulated by a county or municipal code of ethics, is in conflict with the provisions of this act, shall acknowledge receipt of the complaint within 30 days of receipt and initiate an investigation concerning the facts and circumstances set forth in the complaint. The board shall make a determination as to whether the complaint is within its jurisdiction or frivolous or without any reasonable factual basis.

    b. If the board shall conclude that the complaint is outside its jurisdiction, frivolous or without factual basis, it shall reduce that conclusion to writing and shall transmit a copy thereof to the complainant and to the local government officer or employee against whom the complaint was filed. Otherwise the board shall notify the local government officer or employee against whom the complaint was filed of the nature of the complaint and the facts and circumstances set forth therein.

    c. The officer or employee shall have the opportunity to present the board with any statement or information concerning the complaint which he wishes and for the board to obtain any further information or statements relevant to the investigation. Thereafter, 1[if]1 the board 1shall1 [determines that a reasonable doubt exists] 1[makes] make1 an initial determination as to whether the local government officer or employee is in conflict with the provisions of [this act] P.L.1991, c.29 (C.40A:9-22.1 et seq.) 1[, the board shall conduct a hearing in the manner prescribed by section 12 of [this act] of P.L.1991, c.29 (C.40A:9-22.12),]1 concerning the possible violation [and]. The determination concerning the possible violation shall include any other facts and circumstances which may have come to the attention of the board with respect to the conduct of the local government officer or employee. The board shall render a decision as to whether the conduct of the officer or employee is in conflict with the provisions of this act. This decision shall be made by no less than two-thirds of all members of the board.

    d. If the board determines, based upon the results of the investigation, that no violation of the "Local Government Ethics Law," P.L.1991, c.29 (C.40A:9-22.1 et seq.), has been committed by the local government employee or officer, the board shall issue a notice of dismissal to the individual and provide a copy to the complainant.

    e. If the board determines, based upon the results of the investigation, that a violation of the "Local Government Ethics Law," P.L.1991, c.29 (C.40A:9-22.1 et seq.), has been committed by the local government employee or officer, the board shall issue 1[an order] a notice of violation1 to the individual containing the nature of the violation, assessing a penalty, and advising the individual of his or her opportunity to request an administrative hearing. 1If the matter constitutes a contested case and the individual requests a hearing, such hearing shall be conducted in the manner prescribed by section 12 of P.L.1991, c.29 (C.40A:9-22.1 et seq.)1

    f. If the board determines that the officer or employee is in conflict with the provisions of this act, it may impose any penalties which it believes appropriate within the limitations of this act. A final decision of the board may be appealed in the same manner as any other final State agency decision.

(cf: P.L.1991, c.29, s.9)

 

    1[5.] 4.1 Section 10 of P.L.1991, c.29 (C.40A:9-22.10) is amended to read as follows:

    10. a. An appointed local government officer or employee found guilty by the Local Finance Board or a county or municipal ethics board of the violation of any provision of this act or of any code of ethics in effect pursuant to this act, shall be fined not less than $100.00 nor more than [$500.00] $1500.00 for each separate offense, which penalty may be collected in a summary proceeding pursuant to "the penalty enforcement law" (N.J.S.2A:58-1 et seq.). The board or a county or municipal ethics board shall report its findings to the office or agency having the power of removal or discipline of the appointed local government officer or employee and may recommend that further disciplinary action be taken.

    b. An elected local government officer or employee found guilty by the Local Finance Board or a county or municipal ethics board of the violation of any provision of this act or of any code of ethics in effect pursuant to this act, shall be fined not less than $100.00 nor more than [$500.00] $1500.00 for each separate offense, which penalty may be collected in a summary proceeding pursuant to "the penalty enforcement law" (N.J.S.2A:58-1 et seq.).

    c. (1) Upon receipt by the board of a written complaint that a local government officer has failed to file a financial disclosure form required under section 6 of P.L.1991, c.29 (C.40A:9-22.6) for a given calendar year, the board shall advise the local government officer of the failure to file and require that the financial disclosure form be filed within 30 days or that the board be otherwise provided with information verifying that the individual is not a local government officer. Failure of the local government officer to respond within the allotted time shall result in a fine of $100. The board shall then again notice the local government officer of the requirement to file, and failure to respond within the time limit established by the board to the second such notice shall result in a fine of $500, and a fine of $1,500 shall be imposed for any subsequent failures to respond. Fines imposed pursuant to this paragraph may be collected in a summary proceeding pursuant to "the penalty enforcement law" (N.J.S.2A:58-1 et seq.).

    (2) Upon a finding that an appointed local government officer has failed to timely file the financial disclosure form pursuant to the provisions of section 6 of P.L.1991, c.29 (C.40A:9-22.6) on two or more occasions, the board may make a recommendation for the removal of that appointed local officer to the officer or agency having the power of removal. Such recommendation from the board shall be considered sufficient cause for removal pursuant to section 11 of P.L.1991, c.29 (C.40A:9-22.11).

(cf: P.L.1991, c.29, s.10)

 

    1[6.] 5.1 This act shall take effect immediately.

 

 

                             

Increases penalties under "Local Government Ethics Law."