Chapter 138A.

State Government Ethics Act.

Article 1.

General Provisions.

§ 138A‑1.  Title.

This Chapter shall be known and may be cited as the "State Government Ethics Act". (2006‑201, s. 1.)

 

§ 138A‑2.  Purpose.

The purpose of this Chapter is to ensure that elected and appointed State agency officials exercise their authority honestly and fairly, free from impropriety, threats, favoritism, and undue influence. To this end, it is the intent of the General Assembly in this Chapter to ensure that standards of ethical conduct and standards regarding conflicts of interest are clearly established for elected and appointed State agency officials, that the State continually educates these officials on matters of ethical conduct and conflicts of interest, that potential and actual conflicts of interests are identified and resolved, and that violations of standards of ethical conduct and conflicts of interest are investigated and properly addressed. (2006‑201, s. 1.)

 

§ 138A‑3.  Definitions.

The following definitions apply in this Chapter:

(1)       Board. – Any State board, commission, council, committee, task force, authority, or similar public body, however denominated, created by statute or executive order, as determined and designated by the Commission, except for those public bodies that have only advisory authority.

(2)       Business. – Any of the following organized for profit:

a.         Association.

b.         Business trust.

c.         Corporation.

d.         Enterprise.

e.         Joint venture.

f.          Organization.

g.         Partnership.

h.         Proprietorship.

i.          Vested trust.

j.          Every other business interest, including ownership or use of land for income.

(3)       Business with which associated. – A business in which the person or any member of the person's immediate family does any of the following:

a.         Is an employee.

b.         Holds a position as a director, officer, partner, proprietor, or member or manager of a limited liability company, irrespective of the amount of compensation received or the amount of the interest owned.

c.         Owns a legal, equitable, or beneficial interest of ten thousand dollars ($10,000) or more in the business or five percent (5%) of the business, whichever is less, other than as a trustee on a deed of trust.

For purposes of this subdivision, the term "business' shall not include a widely held investment fund, including a mutual fund, regulated investment company, or pension or deferred compensation plan, if all of the following apply:

a.         The person or a member of the person's immediate family neither exercises nor has the ability to exercise control over the financial interests held by the fund.

b.         The fund is publicly traded, or the fund's assets are widely diversified.

(4)       Commission. – The State Ethics Commission.

(5)       Committee. – The Legislative Ethics Committee as created in Part 3 of Article 14 of Chapter 120 of the General Statutes.

(6)       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, reported as required by Article 22A of Chapter 163 of the General Statutes.

(7)       Confidential information. – Information defined as confidential by the law.

(8)       Constitutional officers of the State. – Officers whose offices are established by Article III of the North Carolina Constitution.

(9)       Contract. – Any agreement, including sales and conveyances of real and personal property, and agreements for the performance of services.

(10)     Covered person. – A legislator, public servant, or judicial officer, as identified by the Commission under G.S. 138A‑11.

(11)     Economic interest. – Matters involving a business with which associated or a nonprofit corporation or organization with which associated.

(12)     Employing entity. – For public servants, any of the following bodies of State government of which the public servant is an employee or a member, or over which the public servant exercises supervision: agencies, authorities, boards, commissions, committees, councils, departments, offices, institutions and their subdivisions, and constitutional offices of the State. For legislators, it is the house of which the legislator is a member. For legislative employees, it is the authority that hired the individual. For judicial employees, it is the Chief Justice.

(13)     Extended family. – Spouse, lineal descendant, lineal ascendant, sibling, spouse's lineal ascendant, spouse's lineal descendant, spouse's sibling, and the spouse of any of these persons.

(14)     Filing person. – A person required to file a statement of economic interest under G.S. 138A‑22.

(15)     Gift. – Anything of monetary value given or received without valuable consideration by or from a lobbyist, lobbyist principal, or a person described under G.S. 138A‑32(d)(1), (2), or (3). The following shall not be considered gifts under this subdivision:

a.         Anything for which fair market value, or face value if shown, is paid by the covered person or legislative employee.

b.         Commercially available loans made on terms not more favorable than generally available to the general public in the normal course of business if not made for the purpose of lobbying.

c.         Contractual arrangements or commercial relationships or arrangements made in the normal course of business if not made for the purpose of lobbying.

d.         Academic or athletic scholarships based on the same criteria as applied to the public.

e.         Campaign contributions properly received and reported as required under Article 22A of Chapter 163 of the General Statutes.

(16)     Honorarium. – Payment for services for which fees are not legally or traditionally required.

(17)     Immediate family. – An unemancipated child of the covered person residing in the household and the covered person's spouse, if not legally separated. A member of a covered person's extended family shall also be considered a member of the immediate family if actually residing in the covered person's household.

(18)     Judicial employee. – The director and assistant director of the Administrative Office of the Courts and any other person, designated by the Chief Justice, employed in the Judicial Department whose annual compensation from the State is sixty thousand dollars ($60,000) or more.

(19)     Judicial officer. – Justice or judge of the General Court of Justice, district attorney, clerk of court, or any person elected or appointed to any of these positions prior to taking office.

(20)     Legislative action. – As the term is defined in G.S. 120C‑100.

(21)     Legislative employee. – As the term is defined in G.S. 120C‑100.

(22)     Legislator. – A member or presiding officer of the General Assembly, or a person elected or appointed a member or presiding officer of the General Assembly before taking office.

(23)     Lobbying. – As the term is defined in G.S. 120C‑100.

(24)     Nonprofit corporation or organization with which associated. –

Any public or private enterprise, incorporated or otherwise, that is organized or operating in the State primarily for religious, charitable, scientific, literary, public health and safety, or educational purposes and of which the person or any member of the person's immediate family is a director, officer, governing board member, employee, or independent contractor as of December 31 of the preceding year.

(25)     Official action. – Any decision, including administration, approval, disapproval, 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.

(26)     Participate. – To take part in, influence, or attempt to influence, including acting through an agent or proxy.

(27)     Person. – Any individual, firm, partnership, committee, association, corporation, business, or any other organization or group of persons acting together.

(28)     Political party. – Either of the two largest political parties in the State based on statewide voter registration at the applicable time.

(29)     Public event. – Any of the following:

a.         For legislators and legislative employees:

1.         An organized gathering of persons open to the general public to which all legislators or legislative employees are invited to attend.

2.         An organized gathering of a person to which a legislator or legislative employee is invited along with the entire membership of the House of Representatives, Senate, a committee, a standing subcommittee, a county legislative delegation, a municipal legislative delegation, a joint committee, a joint commission, or a recognized legislative caucus with regular meetings other than meetings with one or more lobbyists, and one of the following apply:

I.          At least 10 individuals associated with the person actually attend, other than the legislator or legislative employee, or the immediate family of the legislator or legislative employee.

II.        All shareholders, employees, board members, officers, members, or subscribers of the person located in North Carolina are notified and invited to attend.

III.       The person is a governmental body and the gathering is subject to the open meetings law.

b.         For public servants:

1.         An organized gathering of individuals open to the general public to which at least 10 public servants are invited to attend.

2.         An organized gathering of a governmental body, the gathering of which is subject to the open meetings law, and to which at least 10 public servants are invited to attend.

3.         An organized gathering of a person to which at least 10 public servants are invited to attend and to which at least 10 individuals, other than the public servant, or the public servant's immediate family, actually attend, or to which all shareholders, employees, board members, officers, members, or subscribers of the person who are located in a specific North Carolina office or county are notified and invited to attend.

(30)     Public servants. – All of the following:

a.         Constitutional officers of the State and persons elected or appointed as constitutional officers of the State prior to taking office.

b.         Employees of the Office of the Governor.

c.         Heads of all principal State departments, as set forth in G.S. 143B‑6, who are appointed by the Governor.

d.         The chief deputy and chief administrative assistant of each person designated under sub‑subdivision a. or c. of this subdivision.

e.         Confidential assistants and secretaries as defined in G.S. 126‑5(c)(2), to persons designated under sub‑subdivision a., c., or d. of this subdivision.

f.          Employees in exempt positions designated in accordance with G.S. 126‑5(d)(1), (2), or (2a) and confidential secretaries to these individuals.

g.         Any other employees or appointees in the principal State departments as may be designated by the Governor to the extent that the designation does not conflict with the State Personnel Act.

h.         Judicial employees.

i.          All voting members of boards, including ex officio members and members serving by executive, legislative, or judicial branch appointment.

j.          For The University of North Carolina, the voting members of the Board of Governors of The University of North Carolina, the president, the vice‑presidents, and the chancellors, the vice‑chancellors, and voting members of the boards of trustees of the constituent institutions.

k.         For the Community College System, the voting members of the State Board of Community Colleges, the President and the chief financial officer of the Community College System, the president, chief financial officer, and chief administrative officer of each community college, and voting members of the boards of trustees of each community college.

l.          Members of the Commission.

m.        Persons under contract with the State working in or against a position included under this subdivision.

(31)     Vested trust. – A trust, annuity, or other funds held by a trustee or other third party for the benefit of the covered person or a member of the covered person's immediate family. A vested trust shall not include a widely held investment fund, including a mutual fund, regulated investment company, or pension or deferred compensation plan, if:

a.         The covered person or a member of the covered person'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. (2006‑201, s. 1.)

 

§ 138A‑4.  Application to Lieutenant Governor.

For purposes of this Chapter, the Lieutenant Governor shall be considered a legislator when carrying out the Lieutenant Governor's duties under Sec. 13 of Article II of the Constitution, and a public servant for all other purposes. (2006‑201, s. 1.)

 

§ 138A-5.  Reserved for future codification purposes.

 

Article 2.

State Ethics Commission.

§ 138A‑6.  State Ethics Commission established.

There is established the State Ethics Commission. (2006‑201, s. 1.)

 

§ 138A‑7.  Membership.

(a)       The Commission shall consist of eight members. Four members shall be appointed by the Governor, of whom no more than two shall be of the same political party. Four members shall be appointed by the General Assembly, two upon the recommendation of the Speaker of the House of Representatives, neither of whom shall be of the same political party, and two upon the recommendation of the President Pro Tempore of the Senate, neither of whom shall be of the same political party. Members shall serve for four‑year terms, beginning January 1, 2007, except for the initial terms that shall be as follows:

(1)       Two members appointed by the Governor shall serve an initial term of one year.

(2)       Two members appointed by the General Assembly, one upon the recommendation of the Speaker of the House of Representatives and one upon the recommendation of the President Pro Tempore of the Senate, shall serve initial terms of two years.

(3)       Two members appointed by the Governor shall serve initial terms of three years.

(4)       Two members appointed by the General Assembly, one upon the recommendation of the Speaker of the House of Representatives and one member upon the recommendation of the President Pro Tempore of the Senate, shall serve initial terms of four years.

(b)       Members shall be removed from the Commission only for misfeasance, malfeasance, or nonfeasance. Members appointed by the Governor may be removed by the Governor. Members appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives shall be removed by the Governor upon the recommendation of the Speaker. Members appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate shall be removed by the Governor upon the recommendation of the President Pro Tempore.

(c)       Vacancies in appointments made by the Governor shall be filled by the Governor for the remainder of any unfulfilled term. Vacancies in appointments made by the General Assembly shall be filled in accordance with G.S. 120‑122 for the remainder of any unfulfilled term.

(d)       No member while serving on the Commission or employee while employed by the Commission shall:

(1)       Hold or be a candidate for any other office or place of trust or profit under the United States, the State, or a political subdivision of the State.

(2)       Hold office in any political party above the precinct level.

(3)       Participate in or contribute to the political campaign of any covered person or any candidate for a public office as a covered person over which the Commission would have jurisdiction or authority.

(4)       Otherwise be an employee of the State, a community college, or a local school system, or serve as a member of any other State board.

(e)       The Governor shall annually appoint a member of the Commission to serve as chair of the Commission. The Commission shall elect a vice‑chair annually from its membership. The vice‑chair shall act as the chair in the chair's absence or if there is a vacancy in that position.

(f)        Members of the Commission shall receive no compensation for service on the Commission but shall be reimbursed for subsistence, travel, and convention registration fees as provided under G.S. 138‑5 or 138‑7, as applicable. (2006‑201, s. 1.)

 

§ 138A‑8.  Meetings and quorum.

The Commission shall meet at least quarterly and at other times as called by its chair or by four of its members. In the case of a vacancy in the chair, meetings may be called by the vice‑chair. Five members of the Commission constitute a quorum. (2006‑201, s. 1.)

 

§ 138A‑9.  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 for administrative purposes only, but shall exercise all of its powers, including the power to employ, direct, and supervise all personnel, independently of the Secretary of Administration, and is subject to the direction and supervision of the Secretary of Administration only with respect to the management functions of coordinating and reporting. (2006‑201, s. 1.)

 

§ 138A‑10.  Powers and duties.

(a)       In addition to other powers and duties specified in this Chapter, the Commission shall:

(1)       Provide reasonable assistance to covered persons in complying with this Chapter.

(2)       Develop readily understandable forms, policies, and procedures to accomplish the purposes of the Chapter.

(3)       Identify and publish the following:

a.         A list of nonadvisory boards.

b.         The names of persons subject to this Chapter as covered persons and legislative employees under G.S. 138A‑11.

(4)       Receive and review all statements of economic interests filed with the Commission by prospective and actual covered persons and evaluate whether (i) the statements conform to the law and the rules of the Commission, and (ii) the financial interests and other information reported reveals actual or potential conflicts of interest.

(5)       Conduct inquiries of alleged violations against judicial officers, legislators, and legislative employees in accordance with G.S. 138A‑12.

(6)       Conduct inquiries into alleged violations against public servants in accordance with G.S. 138A‑12.

(7)       Render advisory opinions in accordance with G.S. 138A‑13 and G.S. 120C‑102.

(8)       Initiate and maintain oversight of ethics educational programs for public servants and their staffs, and legislators and legislative employees, consistent with G.S. 138A‑14.

(9)       Conduct a continuing study of governmental ethics in the State and propose changes to the General Assembly in the government process and the law as are conducive to promoting and continuing high ethical behavior by governmental officers and employees.

(10)     Adopt procedures and guidelines to implement this Chapter.

(11)     Report annually to the General Assembly and the Governor on the Commission's activities and generally on the subject of public disclosure, ethics, and conflicts of interest, including recommendations for administrative and legislative action, as the Commission deems appropriate.

(12)     Publish annually statistics on complaints filed with or considered by the Commission, including the number of complaints filed, the number of complaints referred under G.S. 138A‑12(b), the number of complaints dismissed under G.S. 138A‑12(c)(4), the number of complaints dismissed under G.S. 138A‑12(f), the number of complaints referred for criminal prosecution under G.S. 138A‑12, the number of complaints dismissed under G.S. 138A‑12(h), the number of complaints referred for appropriate action under G.S. 138A‑12(h) or G.S. 138A‑12(k)(3), and the number of complaints pending action by the Commission.

(13)     Perform other duties as may be necessary to accomplish the purposes of this Chapter.

(b)       The Commission may authorize the Executive Director and other staff of the Commission to evaluate statements of economic interest on behalf of the Commission as authorized under subdivision (a)(4) of this section. (2006‑201, s. 1.)

 

§ 138A‑11.  Identify and publish names of covered persons and legislative employees.

The Commission shall identify and publish at least quarterly a listing of the names and positions of all persons subject to this Chapter as covered persons or legislative employees. The Commission shall also identify and publish at least annually a listing of all boards to which this Chapter applies. This listing may be published electronically on a public Internet Web site maintained by the Commission. (2006‑201, s. 1.)

 

§ 138A‑12.  Inquiries by the Commission.

(a)       Jurisdiction. – The Commission may receive complaints alleging unethical conduct by covered persons and legislative employees and shall conduct inquiries of complaints alleging unethical conduct by covered persons and legislative employees, as set forth in this section.

(b)       Institution of Proceedings. – On its own motion, in response to a signed and sworn complaint of any individual filed with the Commission, or upon the written request of any public servant or any person responsible for the hiring, appointing, or supervising of a public servant, the Commission shall conduct an inquiry into any of the following:

(1)       The application or alleged violation of this Chapter.

(2)       For legislators, the application of alleged violations of Part 1 of Article 14 of Chapter 120 of the General Statutes.

(3)       An alleged violation of the criminal law by a covered person in the performance of that individual's official duties.

(4)       An alleged violation of G.S. 126‑14.

Allegations of violations of the Code of Judicial Conduct shall be referred to the Judicial Standards Commission without investigation.

(c)       Complaint. –

(1)       A sworn complaint filed under this Chapter shall state the name, address, and telephone number of the person filing the complaint, the name and job title or appointive position of the person against whom the complaint is filed, and a concise statement of the nature of the complaint and specific facts indicating that a violation of this Chapter or Chapter 120 of the General Statutes has occurred, 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)       Except as provided in subsection (d) of this section, a complaint filed under this Chapter must be filed within two years of the date the complainant knew or should have known of the conduct upon which the complaint is based.

(3)       The Commission may decline to accept, refer, or conduct an inquiry into any complaint that does not meet all of the requirements set forth in subdivision (1) of this subsection, or the Commission may, in its sole discretion, request additional information to be provided by the complainant within a specified period of time of no less than seven business days.

(4)       In addition to subdivision (3) of this subsection, the Commission may decline to accept, refer, or conduct an inquiry into a complaint if it determines that any of the following apply:

a.         The complaint is frivolous or brought in bad faith.

b.         The individuals and conduct complained of have already been the subject of a prior complaint.

c.         The conduct complained of is primarily a matter more appropriately and adequately addressed and handled by other federal, State, or local agencies or authorities, including law enforcement authorities. If other agencies or authorities are conducting an investigation of the same actions or conduct involved in a complaint filed under this section, the Commission may stay its complaint inquiry pending final resolution of the other investigation.

(5)       The Commission shall send a copy of the complaint to the covered person or legislative employee who is the subject of the complaint and the employing entity, within 30 days of the filing.

(d)       Conduct of Inquiry of Complaints by the Commission. – The Commission shall conduct an inquiry into all complaints properly before the Commission in a timely manner. The Commission shall initiate an inquiry into a complaint within 60 days of the filing of the complaint. The Commission is authorized to initiate inquiries upon request of any member of the Commission if there is reason to believe that a covered person or legislative employee has or may have violated this Chapter. Commission‑initiated complaint inquiries under this section shall be initiated within two years of the date the Commission knew of the conduct upon which the complaint is based, except when the conduct is material to the continuing conduct of the duties in office. In determining whether there is reason to believe that a violation has or may have occurred, a member of the Commission may take general notice of available information even if not formally provided to the Commission in the form of a complaint. The Commission may utilize the services of a hired investigator when conducting inquiries.

(e)       Covered Person and Legislative Employees Cooperation With Inquiry. – Covered persons and legislative employees shall promptly and fully cooperate with the Commission in any Commission‑related inquiry. Failure to cooperate fully with the Commission in any inquiry shall be grounds for sanctions as set forth in G.S. 138A‑45.

(f)        Dismissal of Complaint After Preliminary Inquiry. – If the Commission determines at the end of its preliminary inquiry that (i) the individual who is the subject of the complaint is not a covered person or legislative employee subject to the Commission's jurisdiction and authority under this Chapter, or (ii) the complaint does not allege facts sufficient to constitute a violation of this Chapter, the Commission shall dismiss the complaint.

(g)       Commission Inquiries. – If at the end of its preliminary inquiry, the Commission determines to proceed with further inquiry into the conduct of a covered person or legislative employee, the Commission shall provide written notice to the individual who filed the complaint and the covered person or legislative employee as to the fact of the inquiry and the charges against the covered person or legislative employee. The covered person or legislative employee shall be given an opportunity to file a written response with the Commission.

(h)       Action on Inquiries. – The Commission shall conduct inquiries into complaints to the extent necessary to either dismiss the complaint for lack of probable cause of a violation under this section, or:

(1)       For public servants, decide to proceed with a hearing under subsection (i) of this section.

(2)       For legislators, except the Lieutenant Governor, refer the complaint to the Committee.

(3)       For judicial officers, refer the complaint to the Judicial Standards Commission for complaints against justices and judges, to the senior resident superior court judge of the district or county for complaints against district attorneys, or to the chief district court judge for the district or county for complaints against clerks of court.

(4)       For legislative employees, refer the complaint to the employing entity.

(i)        Hearing. –

(1)       The Commission shall give full and fair consideration to all complaints received against a public servant. If the Commission determines that the complaint cannot be resolved without a hearing, or if the public servant requests a hearing, a hearing shall be held.

(2)       The Commission shall send a notice of the hearing to the complainant, and 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.

(3)       The Commission shall make available to the public servant prior to a hearing all relevant information collected by the Commission in connection with its investigation of a complaint.

(4)       At any hearing held by the Commission:

a.         Oral evidence shall be taken only on oath or affirmation.

b.         The hearing shall be held in closed session unless the public servant requests that the hearing be held in open session. In any event, the deliberations by the Commission on a complaint may be held in closed session.

c.         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.

(j)        Settlement of Inquiries. – The public servant who is the subject of the complaint and the staff of the Commission may meet by mutual consent before the hearing to discuss the possibility of settlement of the inquiry or the stipulation of any issues, facts, or matters of law. Any proposed settlement of the inquiry is subject to the approval of the Commission.

(k)       Disposition of Inquiries. – After hearing, the Commission shall dispose of the matter in one or more of the following ways:

(1)       If the Commission finds substantial evidence of an alleged violation of a criminal statute, the Commission shall refer the matter to the Attorney General for investigation and referral to the district attorney for possible prosecution.

(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 of this Chapter is established by clear and convincing evidence, the Commission shall do one or more of the following:

a.         Issue a private admonishment to the public servant and notify the employing entity, if applicable. Such notification shall be treated as part of the personnel record of the public servant.

b.         Refer the matter for appropriate action to the Governor and the employing entity that appointed or employed the public servant or of which the public servant is a member.

c.         Refer the matter for appropriate action to the Chief Justice for judicial employees.

d.         Refer the matter to the Principal Clerks of the House of Representatives and Senate of the General Assembly for constitutional officers of the State.

e.         Refer the matter for appropriate action to the principal clerk of the house of the General Assembly that elected the public servant for members of the Board of Governors.

(l)        Notice of Dismissal. – Upon the dismissal of a complaint under this section, the Commission shall provide written notice of the dismissal to the individual who filed the complaint and the person against whom the complaint was filed. The Commission shall forward copies of complaints and notices of dismissal of complaints against legislators to the Committee, against legislative employees to the employing entity for legislative employees, and against judicial officers to the Judicial Standards Commission for complaints against justices and judges, and the senior resident superior court judge of the district or county for complaints against district attorneys, or the chief district court judge of the district or county for complaints against clerks of court.

(m)      Reports and Records. – The Commission shall render the results of its inquiry in writing. When a matter is referred under subdivision (h)(2) and (3), or subsection (k) of this section, the Commission's report shall consist of the complaint, response, and detailed results of its inquiry in support of the Commission's finding of a violation under this Chapter.

(n)       Confidentiality. – Complaints and responses filed with the Commission and reports and other investigative documents and records of the Commission connected to an inquiry under this section shall be confidential and not matters of public record, except when the covered person or legislative employee under inquiry requests in writing that the records and findings be made public prior to the time the employing entity imposes public sanctions. At such time as public sanctions are imposed on a covered person, the complaint, response, and Commission's report to the employing entity shall be made public.

(o)       Recommendations of Sanctions. – After referring a matter under subsection (k) of this section, if requested by the entity to which the matter was referred, the Commission may recommend sanctions or issue rulings as it deems necessary or appropriate to protect the public interest and ensure compliance with this Chapter. In recommending appropriate sanctions, the Commission may consider the following factors:

(1)       The public servant's prior experience in an agency or on a board and prior opportunities to learn the ethical standards for a public servant as set forth in Article 4 of this Chapter, including those dealing with conflicts of interest.

(2)       The number of ethics violations.

(3)       The severity of the ethics violations.

(4)       Whether the ethics violations involve the public servant's financial interests or arise from an appearance of conflict of interest.

(5)       Whether the ethics violations were inadvertent or intentional.

(6)       Whether the public servant knew or should have known that the improper conduct was a violation of this Chapter.

(7)       Whether the public servant has previously been advised or warned by the Commission.

(8)       Whether the conduct or situation giving rise to the ethics violation was pointed out to the public servant in the Commission's Statement of Economic Interest evaluation letter issued under G.S. 138A‑24(e).

(9)       The public servant's motivation or reason for the improper conduct or action, including whether the action was for personal financial gain versus protection of the public interest.

In making recommendations under this subsection, if the Commission determines, after proper review and investigation, that sanctions are appropriate, the Commission may recommend any action it deems necessary to properly address and rectify any violation of this Chapter by a public servant, including removal of the public servant from the public servant's State position. Nothing in this subsection is intended, and shall not be construed, to give the Commission any independent civil, criminal, or administrative investigative or enforcement authority over covered persons, or other State employees or appointees.

(p)       Authority of Employing Entity. – Any action or failure to act by the Commission under this Chapter, except G.S. 138A‑13, shall not limit any authority of any of the applicable employing entities to discipline the covered person or legislative employee.

(q)       Continuing Jurisdiction. – The Commission shall have continuing jurisdiction to investigate possible criminal violations of this Chapter for a period of one year following the date a person, who was formerly a public servant or legislative employee, ceases to be a public servant or legislative employee for any investigation that commenced prior to the date the public servant or legislative employee ceases to be a public servant or legislative employee.

(r)        Subpoena Authority. – The Commission may petition the Superior Court of Wake County for the approval to issue subpoenas and subpoenas duces tecum as necessary to conduct investigations of alleged violations of this Chapter. The court shall authorize subpoenas under this subsection when the court determines the subpoenas are necessary for the enforcement of this Chapter. Subpoenas issued under this subsection shall be enforceable by the court through contempt powers. Venue shall be with the Superior Court of Wake County for any person covered by this Chapter, and personal jurisdiction may be asserted under G.S. 1‑75.4.

(s)       Reports. – The number of complaints referred under this section shall be reported under G.S. 138A‑10(a)(12).

(t)        Concurrent Jurisdiction. – Nothing in this section shall limit the jurisdiction of the Committee or the Judicial Standards Commission with regards to legislative or judicial misconduct, and jurisdiction under this section shall be concurrent with the jurisdiction of the Committee and the Judicial Standards Commission. (2006‑201, s. 1.)

 

§ 138A‑13.  Advisory Opinions.

(a)       At the request of any public servant or legislative employee, any individual who is responsible for the supervision or appointment of a person who is a public servant or legislative employee, legal counsel for any public servant, any ethics liaison under G.S. 138A‑14, or any member of the Commission, the Commission shall render Advisory Opinions on specific questions involving the meaning and application of this Chapter and the public servant's or legislative employee's compliance therewith. The request shall be in writing, electronic or otherwise, and relate prospectively to real or reasonably anticipated fact settings or circumstances. On its own motion, the Commission may render advisory opinions on specific questions involving the meaning and application of this Chapter. The Commission shall issue Advisory Opinions having prospective application only. Reliance upon a requested written Advisory Opinions on a specific matter shall immunize the public servant or legislative employee, on that matter, from both of the following:

(1)       Investigation by the Commission.

(2)       Any adverse action by the employing entity.

(b)       At the request of a legislator, the Commission shall render recommended Advisory Opinions on specific questions involving the meaning and application of this Chapter and Part 1 of Article 14 of Chapter 120 of the General Statutes, and the legislator's compliance therewith. The request shall be in writing, electronic or otherwise, and relate prospectively to real or reasonably anticipated fact settings or circumstances. The Commission shall issue Advisory Opinions having prospective application only. Until action is taken by the Committee under G.S. 120‑104, reliance upon a requested written Advisory Opinions on a specific matter shall immunize the legislator, on that matter, from both of the following:

(1)       Investigation by the Committee or Commission.

(2)       Any adverse action by the house of which the legislator is a member.

Any Advisory Opinions issued to a legislator under this subsection shall immediately be delivered to the chairs of the Committee. Except for the Lieutenant Governor, the immunity granted under this subsection shall not apply after the time the Committee modifies or overturns the advisory opinion of the Commission in accordance with G.S. 120‑104.

(c)       Staff to the Commission may issue Advisory Opinions under procedures adopted by the Commission.

(d)       The Commission shall publish its Advisory Opinions at least once a year. These advisory opinions shall be edited for publication purposes as necessary to protect the identities of the individuals requesting opinions.

(e)       Except as provided under subsection (d) of this section, requests for Advisory Opinions, and Advisory Opinions issued under this section, are confidential and not public records.

(f)        This section shall not apply to judicial officers. (2006‑201, s. 1.)

 

§ 138A‑14.  Ethics education program.

(a)       The Commission shall develop and implement an ethics education and awareness program designed to instill in all covered persons and their immediate staffs, and legislative employees, a keen and continuing awareness of their ethical obligations and a sensitivity to situations that might result in real or potential conflicts of interest or appearances of conflicts of interest.

(b)       The Commission shall make basic ethics education and awareness presentations to all public servants and their immediate staffs, upon their election, appointment, or employment, and shall offer periodic refresher presentations as the Commission deems appropriate. Every public servant and the immediate staff of every public servant shall participate in an ethics presentation approved by the Commission within six months of the person's election, reelection, appointment, or employment, and shall attend refresher ethics education presentations at least every two years thereafter in a manner as the Commission deems appropriate.

(c)       The Commission, jointly with the Committee, shall make basic ethics education and awareness presentations to all legislators and legislative employees upon their election, reelection, appointment, or employment and shall offer periodic refresher presentations as the Commission and the Committee deem appropriate. Every legislator and legislative employee shall participate in an ethics presentation approved by the Commission and Committee within three months of the person's election, reelection, appointment, or employment in a manner as the Commission and Committee deem appropriate.

(d)       Upon request, the Commission shall assist each agency in developing in‑house education programs and procedures necessary or desirable to meet the agency's particular needs for ethics education, conflict identification, and conflict avoidance.

(e)       Each agency head shall designate an ethics liaison who shall maintain active communication with the Commission on all agency ethical issues. The ethics liaison shall continuously assess and advise the Commission of any issues or conduct which might reasonably be expected to result in a conflict of interest and seek advice and rulings from the Commission as to their appropriate resolution.

(f)        The Commission shall publish a newsletter containing summaries of the Commission's opinions, policies, procedures, and interpretive bulletins as issued from time to time. The newsletter shall be distributed to all covered persons and legislative employees. Publication under this subsection may be done electronically.

(g)       The Commission shall assemble and maintain a collection of relevant State laws, rules, and regulations that set forth ethical standards applicable to covered persons. This collection shall be made available electronically as resource material to public servants, and ethics liaisons, upon request.

(h)       As used in this section, "immediate staff" means those individuals who report directly to the public servant.

(i)        This section shall not apply to judicial officers. (2006‑201, s. 1.)

 

§ 138A‑15.  Duties of heads of State agencies.

(a)       The head of each State agency, including the chair of each board subject to this Chapter, shall take an active role in furthering ethics in public service and ensuring compliance with this Chapter. The head of each State agency and the chair of each board shall make a conscientious, good‑faith effort to assist public servants within the agency or on the board in monitoring their personal, financial, and professional affairs to avoid taking any action that results in a conflict of interest or the appearance of a conflict.

(b)       The head of each State agency, including the chair of each board subject to this Chapter, shall maintain familiarity with and stay knowledgeable of the reports, opinions, newsletters, and other communications from the Commission regarding ethics in general and the interpretation and enforcement of this Chapter. The head of each State agency and the chair of each board shall also maintain familiarity with and stay knowledgeable of the Commission's reports, evaluations, opinions, or findings regarding individual public servants in that person's agency or on that person's board, or under that person's supervision or control, including all reports, evaluations, opinions, or findings pertaining to actual or potential conflicts of interest.

(c)       When an actual or potential conflict of interest is cited by the Commission under G.S. 138A‑24(e) with regard to a public servant sitting on a board, the conflict shall be recorded in the minutes of the applicable board and duly brought to the attention of the membership by the board's chair as often as necessary to remind all members of the conflict and to help ensure compliance with this Chapter.

(d)       The head of each State agency, including the chair of each board subject to this Chapter, shall periodically remind public servants under that person's authority of the public servant's duties to the public under the ethical standards and rules of conduct in this Chapter, including the duty of each public servant to continually monitor, evaluate, and manage the public servant's personal, financial, and professional affairs to ensure the absence of conflicts of interest or appearances of conflict.

(e)       At the beginning of any meeting of a board, the chair shall remind all members of their duty to avoid conflicts of interest and appearances of conflict under this Chapter. The chair also shall inquire as to whether there is any known conflict of interest or appearance of conflict with respect to any matters coming before the board at that time.

(f)        The head of each State agency, including the chair of each board subject to this Chapter, shall ensure that legal counsel employed by or assigned to their agency or board are familiar with the provisions of this Chapter, including the Ethical Standards for Covered Persons set forth in Article 4 of this Chapter, and are available to advise public servants on the ethical considerations involved in carrying out their public duties in the best interest of the public. Legal counsel so engaged may consult with the Commission, seek the Commission's assistance or advice, and refer public servants and others to the Commission as appropriate.

(g)       Taking into consideration the individual autonomy, needs, and circumstances of each agency and board, the head of each State agency, including the chair of each board subject to this Chapter, shall consider the need for the development and implementation of in‑house educational programs, procedures, or policies tailored to meet the agency's or board's particular needs for ethics education, conflict identification, and conflict avoidance. This includes the periodic presentation to all agency heads, their chief deputies or assistants, other public servants under their supervision or control, and members of boards, of the basic ethics education and awareness presentation outlined in G.S. 138A‑14 and any other workshop or seminar program the agency head or board chair deems necessary in implementing this Chapter. Agency heads and board chairs may request reasonable assistance from the Commission in complying with the requirements of this subsection.

(h)       As soon as reasonably practicable after the designation, hiring, or promotion of their chief deputies, assistants, or other public servants under their supervision or control, or learning of the appointment or election of other public servants to a board covered under this Chapter, all agency heads and board chairs shall (i) notify the Commission of such designation, hiring, promotion, appointment, or election and (ii) provide these public servants with copies of this Chapter and all applicable financial disclosure forms, if these materials and forms have not been previously provided to these public servants in connection with their designation, hiring, promotion, appointment, or election. In order to avoid duplication of effort, agency heads and board chairs shall coordinate this effort with the Commission's staff. (2006‑201, s. 1.)

 

§§ 138A-16 through 138A-20.  Reserved for future codification purposes.

 

§ 138A‑17: Reserved for future codification purposes.

 

§ 138A‑18: Reserved for future codification purposes.

 

§ 138A‑19: Reserved for future codification purposes.

 

§ 138A‑20: Reserved for future codification purposes.

 

Article 3.

Public Disclosure of Economic Interests.

§ 138A‑21.  Purpose.

The purpose of disclosure of the financial and personal interests by covered persons is to assist covered persons and those persons who appoint, elect, hire, supervise, or advise them identify and avoid conflicts of interest and potential conflicts of interest between the covered person's private interests and the covered person's public duties. It is critical to this process that current and prospective covered persons examine, evaluate, and disclose those personal and financial interests that could be or cause a conflict of interest or potential conflict of interest between the covered person's private interests and the covered person's public duties. Covered persons must take an active, thorough, and conscientious role in the disclosure and review process, including having a complete knowledge of how the covered person's public position or duties might impact the covered person's private interests. Covered persons have an affirmative duty to provide any and all information that a reasonable person would conclude is necessary to carry out the purposes of this Chapter and to fully disclose any conflict of interest or potential conflict of interest between the covered person's public and private interests, but the disclosure, review, and evaluation process is not intended to result in the disclosure of unnecessary or irrelevant personal information. (2006‑201, s. 1.)

 

§ 138A‑22.  Statement of economic interest; filing required.

(a)       Every covered person subject to this Chapter who is elected, appointed, or employed, including one appointed to fill a vacancy in elective office, except for public servants included under G.S. 138A‑3(30)b., e., f., or g. whose annual compensation from the State is less than sixty thousand dollars ($60,000), shall file a statement of economic interest with the Commission prior to the covered person's initial appointment, election, or employment and no later than March 15 t h of every year thereafter, except as otherwise filed under subsection (d) of this section. A prospective covered person required to file a statement under this Chapter shall not be appointed, employed, or receive a certificate of election, prior to submission by the Commission of the Commission's evaluation of the statement in accordance with this Article. The requirement for an annual filing under this subsection also shall apply to covered persons whose terms have expired but who continue to serve until the person's replacement is appointed. Once a statement of economic interest is properly completed and filed under this Article, the statement of economic interest does not need to be supplemented or refiled prior to the next due date set forth in this subsection.

(b)       Notwithstanding subsection (a) of this section, persons hired by, and appointees of, constitutional officers of the State may file a statement of economic interest within 30 days after their appointments or employment when the appointment or employment is made during the first 60 days of the constitutional officer's initial term in that constitutional office.

(c)       Notwithstanding subsection (a) of this section, public servants, under G.S. 138A‑3(30)j. and k., who have submitted a statement of economic interest under subsection (a) of this section, may be hired, appointed, or elected provisionally prior to submission by the Commission of the Commission's evaluation of the statement in accordance with this Article, subject to dismissal or removal based on the Commission's evaluation.

(d)       A candidate for an office subject to this Article 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, within 10 days of the filing deadline for the office the candidate seeks. 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 unaffiliated 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 the person's nomination, or not later than the day preceding the general election, whichever occurs first. A person seeking to qualify as an unaffiliated 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 the person 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.

(e)       The State Board of Elections shall provide for notification of the statement of economic interest 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.

(f)        Within 10 days of the filing deadline for office of a covered person, the executive director of the State Board of Elections shall send to the State Ethics Commission a list of the names and addresses of each candidate who have filed as a candidate for office as a covered person. A county board of election shall forward any statements of economic interest filed with the board under this section to the State Board of Elections. The executive director of the State Board of Elections shall forward a certified copy of the statements of economic interest to the Commission for evaluation upon its filing with the State Board of Elections under this section.

(g)       The Commission shall issue forms to be used for the statement of economic interest and shall revise the forms from time to time as necessary to carry out the purposes of this Chapter. Except as otherwise set forth in this section and in G.S. 138A‑15(h), upon notification by the employing entity, the Commission shall furnish to all other covered persons the appropriate forms needed to comply with this Article. (2006‑201, s. 1.)

 

§ 138A‑23.  Statements of economic interest as public records.

The statements of economic interest filed by prospective public servants under this Article for appointed or employed positions and written evaluations by the Commission of these statements are not public records until the prospective public servant is appointed or employed by the State. All other statements of economic interest and all other written evaluations by the Commission of those statements are public records. (2006‑201, s. 1.)

 

§ 138A‑24.  Contents of statement.

(a)       Any statement of economic interest filed under this Article shall be on a form prescribed by the Commission and sworn to by the filing person. Answers must be provided to all questions. The form shall include the following information about the filing person and the filing person's immediate family:

(1)       The name, home address, occupation, employer, and business of the person.

(2)       A list of each asset and liability included in this subdivision of whatever nature (including legal, equitable, or beneficial interest) with a value of at least ten thousand dollars ($10,000) owned by the filing person and the filing person's immediate family. This list shall include the following:

a.         All real estate located in the State owned wholly or in part by the filing person or the filing person's immediate family, including descriptions adequate to determine the location by city and county of each parcel.

b.         Real estate that is currently leased or rented to or from the State.

c.         Personal property sold to or bought from the State within the preceding two years.

d.         Personal property currently leased or rented to or from the State.

e.         The name of each publicly owned company.

f.          The name of each nonpublicly owned company or business entity, including interests in partnerships, limited partnerships, joint ventures, limited liability companies, limited liability partnerships, and closely held corporations.

g.         For each company or business entity listed under sub‑subdivision f. of this subdivision, if known, a list of any other companies or business entities in which the company or business entity owns securities or equity interests exceeding a value of ten thousand dollars ($10,000).

h.         A list of all nonpublicly owned businesses of which the person is an officer, employee, director, partner, owner, or member or manager of a limited liability company.

i.          For any company or business entity listed under sub‑subdivisions f., g., and h. of this subdivision, if known, any company or business entity that has any material business dealings, contracts, or other involvement with the State, or is regulated by the State, including a brief description of the business activity.

j.          For a vested trust created, established, or controlled by the filing person of which the filing person or the members of the filing person's immediate family are the beneficiaries, the name and address of the trustee, a description of the trust, and the filing person's relationship to the trust.

k.         A list of all liabilities, excluding indebtedness on the filing person's personal residence, by type of creditor and debtor.

l.          A list of any public or private enterprise, incorporated or otherwise, that is organized or operating in the State primarily for religious, charitable, scientific, literary, public health and safety, or educational purposes and of which the person or any member of the person's immediate family is a director, officer, governing board member, employee, or independent contractor as of December 31 of the preceding year, including a list of which of those nonprofit corporations or organizations do business with the State or receive State funds, if known, and a brief description of the nature of the business, or which with due diligence could reasonably be known.

(3)       A list of each source (not specific amounts) of income of more than five thousand dollars ($5,000) received during the previous year by business or industry type, including salary or wages, professional fees, honoraria, interest, dividends, capital gains, and business income.

(4)       If the filing person is a practicing attorney, an indication of whether the filing person, or the law firm with which the filing person is affiliated, earned legal fees during the past year in excess of ten thousand dollars ($10,000) from any of the following categories of legal representation:

a.         Administrative law.

b.         Admiralty law.

c.         Corporate law.

d.         Criminal law.

e.         Decedents' estates law.

f.          Environmental law.

g.         Insurance law.

h.         Labor law.

i.          Local government law.

j.          Negligence or other tort litigation law.

k.         Real property law.

l.          Securities law.

m.        Taxation law.

n.         Utilities regulation law.

(5)       Except for a filing person in compliance under subdivision (4) of this subsection, if the filing person is a licensed professional or provides consulting services, either individually or as a member of a professional association, a list of categories of business and the nature of services rendered, for which payment for services were charged or paid during the past year in excess of ten thousand dollars ($10,000).

(6)       An indication of whether the filing person, the filing person's employer, a member of the filing person's immediate family, or the immediate family member's employer is licensed or regulated by, or has a business relationship with, the board or employing entity with which the filing person is or will be associated. This subdivision does not apply to a legislator or a judicial officer.

(7)       A list of the public servant's or the public servant's immediate family's memberships or other affiliations with, including offices held in, societies, organizations, or advocacy groups, pertaining to subject matter areas over which the public servant's agency or board may have jurisdiction. This subdivision does not apply to a legislator, a judicial officer, or that person's immediate family.

(8)       A list of all things of monetary value greater than two hundred dollars ($200.00) given and received without valuable consideration and under circumstances that a reasonable person would conclude that the thing was given for the purpose of lobbying, if such things where given by a person not required to report under Chapter 120C of the General Statutes, or from the person's extended family. The list shall include only those things received during the 12 months preceding the reporting period under subsection (d) of this section, and shall include the source of those things. The list required by this subdivision shall not apply to things of monetary value received by the filing person prior to the time the person filed or was nominated as a candidate for office, as described in G.S. 138A‑22, or was appointed or employed as a covered person.

(9)       A list of any felony convictions of the filing person.

(10)     Any other information that is necessary either to carry out the purposes of this Chapter or to fully disclose any conflict of interest or potential conflict of interest. If the filing person believes a potential for conflict exists, the filing person has a duty to inquire of the Commission as to that potential conflict. If a filing person is uncertain of whether particular information is necessary, then the filing person shall consult the Commission for guidance.

(b)       The Supreme Court, the Committee, constitutional officers of the State, heads of principal departments, the Board of Governors of The University of North Carolina, the State Board of Community Colleges, other boards, and the appointing authority or employing entity may require a filing person to file supplemental information in conjunction with the filing of that person's statement of economic interest. These supplemental filings requirements shall be filed with the Commission and included on the forms to be filed with the Commission. The Commission shall evaluate the supplemental forms as part of the statement of economic interest. The failure to file supplemental forms shall be subject to the provisions of G.S. 138A‑25.

(c)       Each statement of economic interest shall contain sworn certification by the filing person that the filing person has read the statement and that, to the best of the filing person's knowledge and belief, the statement is true, correct, and complete. The filing person's sworn certification also shall provide that the filing person has not transferred, and will not transfer, any asset, interest, or other property for the purpose of concealing it from disclosure while retaining an equitable interest therein.

(d)       All information provided in the statement of economic interest shall be current as of the last day of December of the year preceding the date the statement of economic interest was due.

(e)       The Commission shall prepare a written evaluation of each statement of economic interest relative to conflicts of interest and potential conflicts of interest. The Commission shall submit the evaluation to all of the following:

(1)       The filing person who submitted the statement.

(2)       The head of the agency in which the filing person serves.

(3)       The Governor for gubernatorial appointees and employees in agencies under the Governor's authority.

(4)       The Chief Justice for judicial officers and judicial employees.

(5)       The appointing or hiring authority for those public servants not under the Governor's authority.

(6)       The State Board of Elections for those filing persons who are elected.

(7)       The Committee, together with a copy of the statement of economic interest, for legislators. (2006‑201, s. 1.)

 

§ 138A‑25.  Failure to file.

(a)       Within 30 days after the date due under G.S. 138A‑22, the Commission shall notify persons who have failed to file or persons whose statement has been deemed incomplete. For a person currently serving as a covered person, the Commission shall notify the person that if the statement of economic interest is not filed or completed within 30 days of receipt of the notice of failure to file or complete, the filing person shall be subject to a fine as provided for in this section.

(b)       Any filing person who fails to file or complete a statement of economic interest within 30 days of the receipt of the notice, required under subsection (a) of this section, shall be subject to a fine of two hundred fifty dollars ($250.00), to be imposed by the Commission.

(c)       Failure by any filing person to file or complete a statement of economic interest within 60 days of the receipt of the notice, required under subsection (a) of this section, shall be deemed to be a violation of this Chapter and shall be grounds for disciplinary action under G.S. 138A‑45. (2006‑201, s. 1.)

 

§ 138A‑26.  Concealing or failing to disclose material information.

A filing person who knowingly conceals or knowingly fails to disclose information that is required to be disclosed on a statement of economic interest under this Article shall be guilty of a Class 1 misdemeanor and shall be subject to disciplinary action under G.S. 138A‑45. (2006‑201, s. 1.)

 

§ 138A‑27.  Penalty for false information.

A filing person who provides false information on a statement of economic interest as required under this Article knowing that the information is false is guilty of a Class H felony and shall be subject to disciplinary action under G.S. 138A‑45. (2006‑201, s. 1.)

 

§§ 138A-28 through 138A-30.  Reserved for future codification purposes.

 

§ 138A‑30: Reserved for future codification purposes.

 

Article 4.

Ethical Standards for Covered Persons.

§ 138A‑31.  Use of public position for private gain.

(a)       Except as permitted under G.S. 138A‑38, a covered person or legislative employee shall not knowingly use the covered person's or legislative employee's public position in an official action or legislative action that will result in financial benefit, direct or indirect, to the covered person or legislative employee, a member of the covered person's or legislative employee's extended family, or business with which the covered person or legislative employee is associated. This subsection shall not apply to financial or other benefits derived by a covered person or legislative employee that the covered person or legislative employee would enjoy to an extent no greater than that which other citizens of the State would or could enjoy, or that are so remote, tenuous, insignificant, or speculative that a reasonable person would conclude under the circumstances that the covered person's or legislative employee's ability to protect the public interest and perform the covered person's or legislative employee's official duties would not be compromised.

(b)       A covered person shall not mention or permit another person to mention the covered person's public position in nongovernmental advertising that advances the private interest of the covered person or others. The prohibition in this subsection shall not apply to political advertising, news stories, news articles, the inclusion of a covered person's position in a directory or biographical listing, or the charitable solicitation for a nonprofit business entity qualifying under 26 U.S.C. § 501(c)(3). Disclosure of a covered person's position to an existing or prospective customer, supplier, or client is not considered advertising for purposes of this subsection when the disclosure could reasonably be considered material by the customer, supplier, or client.

(c)       Notwithstanding G.S. 163‑278.16A, no covered person shall use or permit the use of State funds for any advertisement or public service announcement in a newspaper, on radio, television, magazines, or billboards, that contains that covered person's name, picture, or voice, except in case of State or national emergency and only if the announcement is reasonably necessary to the covered person's official function. This subsection shall not apply to fund‑raising on behalf of and aired on public radio or public television. (2006‑201, s. 1.)

 

§ 138A‑32.  Gifts.

(a)       A covered person or a legislative employee shall not knowingly, directly or indirectly, ask, accept, demand, exact, solicit, seek, assign, receive, or agree to receive anything of value for the covered person or legislative employee, or for another person, in return for being influenced in the discharge of the covered person's or legislative employee's official responsibilities, other than that which is received by the covered person or the legislative employee from the State for acting in the covered person's or legislative employee's official capacity.

(b)       A covered person may not solicit for a charitable purpose any gift from any subordinate State employee. This subsection shall not apply to generic written solicitations to all members of a class of subordinates. Nothing in this subsection shall prohibit a covered person from serving as the honorary head of the State Employees Combined Campaign.

(c)       No public servant, legislator, or legislative employee shall knowingly accept a gift, directly or indirectly, from a lobbyist or lobbyist principal as defined in G.S. 120C‑100.

(d)       No public servant shall knowingly accept a gift, directly or indirectly, from a person whom the public servant knows or has reason to know any of the following:

(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.

(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.

(e)       Subsections (c) and (d) of this section shall not apply to any of the following:

(1)       Food and beverages for immediate consumption in connection with public events.

(2)       Informational materials relevant to the duties of the covered person or legislative employee.

(3)       Reasonable actual expenditures of the covered person or legislative employee for food, beverages, registration, travel, lodging, other incidental items of nominal value, and entertainment, in connection with (i) a covered person's or legislative employee's attendance at an educational meeting for purposes primarily related to the public duties and responsibilities of the covered person or legislative employee, or in order for the covered person or legislative employee to participate as a speaker or member of a panel; (ii) a legislator's or legislative employee's attendance and participation in meetings of a state, regional, national, or international legislative organization of which the General Assembly is a member or that the legislator or legislative employee is a member or participant of by virtue of that person's public position, or as a member of a board, agency, or committee of such organization; or (iii) a public servant's attendance and participation in meetings as a member of a board, agency, or committee of a state, regional, national, or international legislative organization of which the public servant's agency is a member or the public servant is a member by virtue of that person's public position, provided the following conditions are met:

a.         The reasonable actual expenditures shall be made by a lobbyist's principal, and not a lobbyist.

b.         Any educational meeting must be attended by at least 10 or more participants, have a formal agenda, and notice of the meeting has been given at least 10 days in advance.

c.         Any food, beverages, or entertainment must be provided to all attendees or defined groups of 10 or more attendees.

d.         Any entertainment must be incidental to the principal agenda of the educational meeting.

(4)       A plaque or similar nonmonetary memento recognizing individual services in a field or specialty or to a charitable cause.

(5)       Gifts accepted on behalf of the State for the benefit of the State.

(6)       Anything generally made available or distributed to the general public or all other State employees by lobbyists or lobbyist's principals.

(7)       Gifts from the covered person's or legislative employee's extended family, or a member of the same household of the covered person or legislative employee.

(8)       Gifts given to a public servant not otherwise subject to an exception under this subsection, where the gift is food and beverages, transportation, lodging, entertainment or related expenses associated with the public business of industry recruitment, promotion of international trade, or the promotion of travel and tourism, and the public servant is responsible for conducting the business on behalf of the State, provided all the following conditions apply:

a.         The public servant did not solicit the gift, and the public servant did not accept the gift in exchange for the performance of the public servant's official duties.

b.         The public servant reports electronically to the Commission within 30 days of receipt of the gift or of the date set for disclosure of public records under G.S. 132‑6(d), if applicable. The report shall include a description and value of the gift and a description how the gift contributed to the public business of industry recruitment, promotion of international trade, or the promotion of travel and tourism. This report shall be posted to the Commission's public Web site.

c.         A tangible gift, other than food or beverages, not otherwise subject to an exception under this subsection shall be turned over as State property to the Department of Commerce within 30 days of receipt, except as permitted under subsection (f) of this section.

(9)       Gifts of personal property valued at less than one hundred dollars ($100.00) given to a public servant in the commission of the public servant's official duties if the gift is given to the public servant as a personal gift in another country as part of an overseas trade mission, and the giving and receiving of such personal gifts is considered a customary protocol in the other country.

(10)     Gifts given or received as part of a business, civic, religious, fraternal, personal, or commercial relationship not related to the person's public service or position and made under circumstances that a reasonable person would conclude that the gift was not given for the purpose of lobbying.

(f)        A prohibited gift that would constitute an expense appropriate for reimbursement by the public servant's employing entity if it had been incurred by the public servant personally shall be considered a gift accepted by or donated to the State, provided the public servant has been approved by the public servant's employing entity to accept or receive such things of value on behalf of the State. The fact that the employing entity's reimbursement rate for the type of expense is less than the value of a particular gift shall not render the gift prohibited.

(g)       A prohibited gift shall be declined, returned, paid for at fair market value, or donated immediately to charity or the State.

(h)       A covered person or legislative employee shall not accept an honorarium from a source other than the employing entity for conducting any activity where any of the following apply:

(1)       The employing entity reimburses the covered person or legislative employee for travel, subsistence, and registration expenses.

(2)       The employing entity's work time or resources are used.

(3)       The activity would be considered official duty or would bear a reasonably close relationship to the covered person's or legislative employee's official duties.

An outside source may reimburse the employing entity for actual expenses incurred by a covered person or legislative employee in conducting an activity within the duties of the covered person or legislative employee, or may pay a fee to the employing entity, in lieu of an honorarium, for the services of the covered person or legislative employee. An honorarium permissible under this subsection shall not be considered a gift for purposes of subsection (c) of this section.

(i)        Acceptance or solicitation of a gift in compliance with this section without corrupt intent shall not constitute a violation of the statutes related to bribery under G.S. 14‑217, 14‑218, or 120‑86. (2006‑201, s. 1.)

 

§ 138A‑33.  Other compensation.

A public servant or legislative employee shall not solicit or receive personal financial gain, other than that received by the public servant or legislative employee from the State, or with the approval of the employing entity, for acting in the public servant's or legislative employee's official capacity, or for advice or assistance given in the course of carrying out the public servant's or legislative employee's duties. (2006‑201, s. 1.)

 

§ 138A‑34.  Use of information for private gain.

A public servant or legislative employee shall not use or disclose nonpublic information gained in the course of, or by reason of, the public servant's or legislative employee's official responsibilities in a way that would affect a personal financial interest of the public servant or legislative employee, a member of the public servant's or legislative employee's extended family, or a person with whom or business with which the public servant or legislative employee is associated. A public servant or legislative employee shall not improperly use or improperly disclose any confidential information. (2006‑201, s. 1.)

 

§ 138A‑35.  Other rules of conduct.

(a)       A public servant shall make a due and diligent effort before taking any action, including voting or participating in discussions with other public servants on a board on which the public servant also serves, to determine whether the public servant has a conflict of interest. If the public servant is unable to determine whether or not a conflict of interest may exist, the public servant has a duty to inquire of the Commission as to that conflict.

(b)       A public servant shall continually monitor, evaluate, and manage the public servant's personal, financial, and professional affairs to ensure the absence of conflicts of interest.

(c)       A public servant shall obey all other civil laws, administrative requirements, and criminal statutes governing conduct of State government applicable to appointees and employees. (2006‑201, s. 1.)

 

§ 138A‑36.  Public servant participation in official actions.

(a)       Except as permitted by subsection (d) of this section and under G.S. 138A‑38, no public servant acting in that capacity, authorized to perform an official action requiring the exercise of discretion, shall knowingly participate in an official action by the employing entity if the public servant, a member of the public servant's extended family, or a business with which the public servant is associated, has an economic 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 (i) the public servant, (ii) a member of the public servant's extended family, or (iii) a business with which the public servant is associated.

(b)       A public servant described in subsection (a) of this section shall abstain from taking any verbal or written action in furtherance of the official action. The public servant shall submit in writing to the employing entity the reasons for the abstention. When the employing entity is a board, the abstention shall be recorded in the employing entity's minutes.

(c)       A public servant shall take appropriate steps, under the particular circumstances and considering the type of proceeding involved, to remove himself or herself to the extent necessary, to protect the public interest and comply with this Chapter, from any proceeding in which the public servant's impartiality might reasonably be questioned due to the public servant's familial, personal, or financial relationship with a participant in the proceeding. A participant includes (i) an owner, shareholder, partner, member or manager of a limited liability company, employee, agent, officer, or director of a business, organization, or group involved in the proceeding, or (ii) an organization or group that has petitioned for rule making or has some specific, unique, and substantial interest in the proceeding. Proceedings include quasi‑judicial proceedings and quasi‑legislative proceedings. A personal relationship includes one in a leadership or policy‑making position in a business, organization, or group.

(d)       If a public servant is uncertain whether the relationship described in subsection (c) of this section justifies removing the public servant from the proceeding under subsection (c) of this section, the public servant shall disclose the relationship to the person presiding over the proceeding and seek appropriate guidance. The presiding officer, in consultation with legal counsel if necessary, shall then determine the extent to which the public servant will be permitted to participate. If the affected public servant is the person presiding, then the vice‑chair or any other substitute presiding officer shall make the determination. A good‑faith determination under this subsection of the allowable degree of participation by a public servant is presumptively valid and only subject to review under G.S. 138A‑12 upon a clear and convincing showing of mistake, fraud, abuse of discretion, or willful disregard of this Chapter. (2006‑201, s. 1.)

 

§ 138A‑37.  Legislator participation in official actions.

(a)       Except as permitted under G.S. 138A‑38, no legislator shall knowingly participate in a legislative action if the legislator, a member of the legislator's extended family, the legislator's client, or a business with which the legislator is associated, has an economic interest in, or may reasonably and foreseeably benefit from the action, and if after considering whether the legislator's judgment would be substantially influenced by the interest and considering the need for the legislator's particular contribution, including special knowledge of the subject matter to the effective functioning of the legislature, the legislator concludes that an actual economic interest does exist which would impair the legislator's independence of judgment. A potential benefit includes a detriment to a business competitor of (i) the legislator, (ii) a member of the legislator's extended family, or (iii) a business with which the legislator is associated. The legislator shall submit in writing to the principal clerk of the house of which the legislator is a member the reasons for the abstention from participation in the legislative matter.

(b)       If the legislator has a material doubt as to whether the legislator should act, the legislator may submit the question for an Advisory Opinions to the State Ethics Commission in accordance with G.S. 138A‑13 or the Legislative Ethics Committee in accordance with G.S. 120‑104. (2006‑201, s. 1.)

 

§ 138A‑38.  Permitted participation exception.

Notwithstanding G.S. 138A‑36 and G.S. 138A‑37, a covered person may participate in an official action or legislative action under any of the following circumstances except as specifically limited:

(1)       The only interest or reasonably foreseeable benefit that accrues to the covered person, the covered person's extended family, or business with which the covered person is associated as a member of a profession, occupation, or general class is no greater than that which could reasonably be foreseen to accrue to all members of that profession, occupation, or general class.

(2)       When an official or legislative action affects or would affect the covered person's compensation and allowances as a covered person.

(3)       Before the covered person participated in the official or legislative action, the covered person requested and received from the Commission or Committee a written Advisory Opinions that authorized the participation. In authorizing the participation under this subdivision, the Commission or Committee shall consider the need for the legislator's particular contribution, such as special knowledge of the subject matter, to the effective functioning of the General Assembly.

(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 or legislative body records in its minutes that it cannot obtain a quorum in order to take the official or legislative action because the covered person is disqualified from acting under G.S. 130‑36, G.S. 138A‑37, or this section, the covered person may be counted for purposes of a quorum, but shall otherwise abstain from taking any further action.

(7)       When a public servant notifies the Commission in writing that the public servant judicial employee, 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, and the public servant discloses in writing the circumstances and nature of the conflict of interest. (2006‑201, s. 1.)

 

§ 138A‑39.  Disqualification to serve.

(a)       Within 30 days of notice of the Commission's determination that a public servant has a disqualifying conflict of interest, the public servant shall eliminate the interest that constitutes the disqualifying conflict of interest or resign from the public position.

(b)       Failure by a public servant to comply with subsection (a) of this section is a violation of this Chapter for purposes of G.S. 138A‑45.

(c)       A decision under this section shall be considered a final decision for contested case purposes under Article 3 of Chapter 150B of the General Statutes.

(d)       As used in this section, a disqualifying conflict of interest is a conflict of interest of such significance that the conflict of interest would prevent a public servant from fulfilling a substantial function or portion of the public servant's public duties. (2006‑201, s. 1.)

 

§ 138A‑40.  Employment and supervision of members of covered person's extended family.

A covered person or legislative employee shall not cause the employment, appointment, promotion, transfer, or advancement of an extended family member of the covered person to a State office, or a position to which the covered person supervises or manages, except for positions at the General Assembly as permitted by the Legislative Services Commission. A public servant or legislative employee shall not supervise, manage, or participate in an action relating to the discipline of a member of the public servant's extended family, except as specifically authorized by the public servant's or legislative employee's employing entity. (2006‑201, s. 1.)

 

§ 138A‑41.  Other ethics standards.

Nothing in this Chapter shall prevent the Supreme Court, the Committee, the Legislative Services Commission, constitutional officers of the State, heads of principal departments, the Board of Governors of The University of North Carolina, the State Board of Community Colleges, or other boards from adopting additional or supplemental ethics standards applicable to that public agency's operations. (2006‑201, s. 1.)

 

§ 138A-42.  Reserved for future codification purposes.

 

§ 138A-43.  Reserved for future codification purposes.

 

§ 138A-44.  Reserved for future codification purposes.

 

Article 5.