HB 6574 — AN ACT CONCERNING REVISIONS TO THE STATE CODES OF ETHICS.

438 (a) (1) All state-wide elected officers, members of the General Assembly, department heads and their deputies, members or directors of each quasi-public agency, members of the Investment Advisory Council and such members of the Executive Department and such employees of quasi-public agencies as the Governor shall require, shall file electronically with the Office of State Ethics using the software created by the office, under penalty of false statement, a statement of financial interests for the preceding calendar year [with the Office of State Ethics] on or before the May first next in any year in which they hold such an office or position.

(2) Each state agency, department, board and commission shall develop and implement, in cooperation with the Office of State Ethics, anethicsstatement asit relatesto themissionoftheagency,department, boardPublic orAct commission.No.

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6574 board or commission.

(o) If (1) any person (A) is doing business with or seeking to do business with the department or agency in which a public official or state employee is employed, or (B) is engaged in activities which are directly regulated by such department or agency, and (2) such person or sHB6574a /representative Fileof No.such person gives to such public official or state employee anything [of value which is subject to the reporting requirements pursuant to subsection (e) of section 1-96] having a value of more than ten dollars, such person or representative shall, not later than ten days thereafter, give such recipient and the executive head of the recipient's department or agency a written report stating the name of the donor, a description of the item or items given, the value of such items and the cumulative value of all items given to such recipient during that calendar year.

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438 a representative of such person gives to such public official or state employee anything [of value which is subject to the reporting requirements pursuant to subsection (e) of section 1-96] having a value of more than ten dollars, such person or representative shall, not later than ten days thereafter, give such recipient and the executive head of the recipient's department or agency a written report stating the name of the donor, a description of the item or items given, the value of such items and the cumulative value of all items given to such recipient during that calendar year.

[and are] Such positions shall be designated as such by the agency concerned, in consultation with the OfficeofStateEthics,[inconsultationwiththeagencyconcerned]except thatPublic suchAct provisionsNo. shall not apply to members or former members of the boards or commissions who serve ex officio, who are required by statute to represent the regulated industry or who are permitted by statute to have a past or present affiliation with the regulated industry.

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6574 that such provisions shall not apply to members or former members of the boards or commissions who serve ex officio, who are required by statute to represent the regulated industry or who are permitted by statute to have a past or present affiliation with the regulated industry.

As used in this subsection, "agency" means the Health sHB6574Systems /Planning FileUnit No.of the Office of Health Strategy, the Connecticut Siting Council, the Department of Banking, the Insurance Department, the Department of Emergency Services and Public Protection, the office within the Department of Consumer Protection that carries out the duties and responsibilities of sections 30-2 to 30-68m, inclusive, the Public Utilities Regulatory Authority, including the Office of Consumer Counsel, and the Department of Consumer Protection and the term "employment"means professionalservicesor other servicesrenderedas an employee or as an independent contractor.

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438 Systems Planning Unit of the Office of Health Strategy, the Connecticut Siting Council, the Department of Banking, the Insurance Department, the Department of Emergency Services and Public Protection, the office within the Department of Consumer Protection that carries out the duties and responsibilities of sections 30-2 to 30-68m, inclusive, the Public Utilities Regulatory Authority, including the Office of Consumer Counsel, and the Department of Consumer Protection and the term "employment"means professionalservicesor other servicesrenderedas an employee or as an independent contractor.

(2) No former public official or state employee who held such a position in the executive branch shall, within one year after leaving an agency, accept employment with a business subject to regulation bythat agency.Public Act No.

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6574 agency.

(d) The provisions of subsection (e) of this section apply to (1) present or former Department of Consumer Protection public officials or state employees who hold or formerly held positions which involve significant decision-making or supervisory responsibility and [are] designated as such by the department, in consultation with the Office of StateEthics,[inconsultationwiththeagencyconcerned,]and(2)present or former public officials or state employees of other agencies who hold or formerly held positions which involve significant decision-making or supervisory responsibility concerning the regulation or investigation of (A) any business entity (i) engaged in Indian gaming operations in the state, and (ii) in which a federally-recognized Indian tribe in the state owns a controlling interest, or (B) a governmental agency of a federally- recognized Indian tribe engaged in Indian gaming operations in the state, which positions are designated as such by the agency concerned, sHB6574in /consultation Filewith No.the Office of State Ethics.

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438 in consultation with the Office of State Ethics.

If the department or agency concerned creates such a position after its annual submission under this subsection, the Commissioner of Consumer Protection or the head of such agency, as applicable, or their designees,Public shallAct submitNo. the designation of the newly created position not later than thirty days after the creation of such position.

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6574 designees, shall submit the designation of the newly created position not later than thirty days after the creation of such position.

sHB6574(3) /As Fileused No.in this subsection, "employment" means professional services or other services rendered as an employee or as an independent contractor.

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438 (3) As used in this subsection, "employment" means professional services or other services rendered as an employee or as an independent contractor.

(1) Use the authority provided [to the person] under the contract, or anyPublic confidentialAct informationNo. acquired in the performance of the contract, to obtain financial gain for the [person] consultant or independent contractor, an employee of the [person] consultant or independent contractor or a member of the immediate family of any such [person] consultant, independent contractor or employee;

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6574 any confidential information acquired in the performance of the contract, to obtain financial gain for the [person] consultant or independent contractor, an employee of the [person] consultant or independent contractor or a member of the immediate family of any such [person] consultant, independent contractor or employee;

(a) Notwithstanding the provisions of sections 1-84, as amended by this act, 1-84a, 1-85 and 1-86, a public official or state employee of a sHB6574public /institution Fileof No.higher education whose employment is derived from such official's or employee's status as a student at such institution shall not be subject to the provisions of said sections, if (1) such institution has adopted written policies and procedures to regulate student conduct concerning conflicts of interest relating to student holding of public office or state employment, and (2) such policies and procedures have been approved by the Citizen's Ethics Advisory Board in accordance with subsection (b) of this section.

438Public 12Act sHB6574 File No.

43821-164 public13 institution of higher19 educationSubstitute whoseHouse employmentBill isNo. derived from such official's or employee's status as a student at such institution shall not be subject to the provisions of said sections, if (1) such institution has adopted written policies and procedures to regulate student conduct concerning conflicts of interest relating to student holding of public office or state employment, and (2) such policies and procedures have been approved by the Citizen's Ethics Advisory Board in accordance with subsection (b) of this section.

6574 Sec.

Subdivision (7) of section 1-91 of the general statutes is repealedrepealedandthefollowing andthefollowing issubstituted inlieuthereof(EffectiveOctober 1, 2021):

(E) Goods or services (i) that are provided to a state agency or quasi- public agency (I) for use on state or quasi-public agency property, or (II) that support an event or the participation by a public official or state employee at an event, and (ii) that facilitate state or quasi-public agency sHB6574action /or Filefunctions. No.

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438 action or functions.

(G)Public AAct rebate,No. discount or promotional item available to the general public;

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6574 (G) A rebate, discount or promotional item available to the general public;

For the purposes of such limit, (i) a reception sHB6574hosted /by Filea lobbyist who is an individual shall be deemed to have also been hosted by thebusiness organization which he owns or is employed by, and (ii) a reception hosted by a business organization shall be deemed to have also been hosted by all owners and employees of the Public Act No.

43821-164 1415 sHB6574of File19 Substitute House Bill No.

4386574 hosted by a lobbyist who is an individual shall be deemed to have also been hosted by thebusiness organization which he owns or is employed by, and (ii) a reception hosted by a business organization shall be deemed to have also been hosted by all owners and employees of the business organization who are lobbyists.

sHB6574or /Public FileAct No.

43821-164 1516 sHB6574of File19 Substitute House Bill No.

4386574 or (Q) Training that is provided by a vendor for a product purchased by a state or quasi-public agency that is offered to all customers of such vendor.

Subsection (b) of section 1-93 of the general statutes is repealed andthefollowing isissubstituted substitutedin inlieuthereof(EffectiveOctoberlieuthereof(EffectiveOctober 1, 2021):

At such hearing the board shall have the same powers as the Office of State Ethics under subsection (a) of this section and the respondent shall have the right to be represented by legal counsel, to compel attendance of witnesses and theproductionofbooks,documents,recordsandpapersandtotheproductionofbooks, documents,recordsandpapersandto examine and cross-examine witnesses.

The judge trial referee shall, while engaged in the dischargePublic ofAct the duties as provided in this subsection, have the same sHB6574 / File No.

43821-164 1617 sHB6574of File19 Substitute House Bill No.

4386574 discharge of the duties as provided in this subsection, have the same authority as is provided in section 51-35 over witnesses who refuse to obey a subpoena or to testify with respect to any matter upon which such witness may be lawfully interrogated, and may commit any such witness for contempt for a period no longer than thirty days.

Sections 1-80b to 1-80d, inclusive, 1-82b and 1-89a of the generalPublic statutesAct areNo. repealed.

(Effective21-164 October18 1,of 2021)19 sHB6574Substitute /House FileBill No.

4386574 17general sHB6574statutes Fileare No.repealed.

438(Effective ThisOctober act1, shall2021) takeApproved effectJuly as12, follows2021 andPublic shallAct amendNo. the following sections:

Section21-164 119 Octoberof 1,19 2021 1-79(5) Sec.

2 July 1, 2021 1-79(12) Sec.

3 October 1, 2021 1-79 Sec.

4 October 1, 2021 1-81(c) Sec.

5 October 1, 2021 1-81(g) Sec.

6 October 1, 2021 1-82(b) Sec.

7 October 1, 2021 1-83(a) Sec.

8 October 1, 2021 1-84(o) Sec.

9 October 1, 2021 1-84b(c) to (e) Sec.

10 October 1, 2021 1-86e Sec.

11 October 1, 2021 1-90a(a) Sec.

12 October 1, 2021 1-91(7) Sec.

13 October 1, 2021 1-93(b) Sec.

14 October 1, 2021 1-97(b) Sec.

15 October 1, 2021 Repealer section Statement of Legislative Commissioners:

In Section 9(d), references to "Commissioner of Consumer Protection" and "department" were added for consistency.

GAE Joint Favorable Subst.

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438 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

None Municipal Impact:

None Explanation The bill, which makes numerous revisions to the state codes of ethics, has no fiscal impact on the state or municipalities.

The Out Years State Impact:

None Municipal Impact:

None sHB6574 / File No.

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438 OLR Bill Analysis sHB 6574 AN ACT CONCERNING REVISIONS TO THE STATE CODES OF ETHICS.

SUMMARY This bill makes numerous changes to the state codes of ethics for public officials and lobbyists by:

1.

adding the Paid Family and Medical Leave Insurance Authority to the list of quasi-public agencies subject to the ethics code for public officials (§ 2);

2.

defining confidential information for the law’s purposes as similarly defined in regulations (§ 3);

3.

authorizing the Office of State Ethics (OSE) ethics enforcement officer (whom the bill specifies must belong to the Connecticut bar) to represent the office in certain matters before the Superior Court (§§ 4 & 5);

4.

requiring public officials and state employees who must file statements of financial interests with OSE to file them electronically using software the office creates (§ 7, see BACKGROUND);

5.

exempting certain gifts from the codes' gift prohibition (§§ 1 & 12) and clarifying who must report certain expenditures to a beneficiary public official or state employee (§ 8);

6.

requiring certain state regulatory agencies, in consultation with OSE, to annually submit a statement designating the agency positions which are subject to the public officials code's revolving door provisions (§ 9);

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438 7.

extending the prohibited activities that apply to state-hired consultants and independent contractors to include persons they employ (§ 10);

8.

exempting students serving as public officials from certain code provisions (§ 11);

9.

extending the Citizen's Ethics Advisory Board's (CEAB) deadline for final hearing decisions on violations (§§ 6 & 13);

and 10.

clarifying that both individuals employing lobbyists and those employed as lobbyists are subject to the Code of Ethics for Lobbyists' prohibition on contingency fee lobbying (§ 14).

The bill repeals several obsolete provisions related to the 2005 transfer of OSE from the State Ethics Commission and extending deadlines for probable cause hearings in the same year.

It also repeals a requirement that OSE conduct annual conferences on ethical issues (§ 15).

Finally, the bill makes numerous technical and conforming changes.

EFFECTIVE DATE:

October 1, 2021, except the provision defining the Paid Family and Medical Leave Insurance Authority as a quasi- public agency is effective July 1, 2021.

§§ 1, 3, 8 & 11-12 — STATE ETHICS CODES Gift Exemption (§§ 1 & 12) The State Codes of Ethics generally prohibit public officials and state employees from accepting gifts (generally anything of value exceeding $10) from restricted donors (e.g., registered lobbyists and prequalified state contractors).

It similarly prohibits restricted donors from making these gifts.

However, existing law establishes several exemptions from these prohibitions, including one for gifts received from certain members of the individual's or his or her spouse's family.

The bill additionally exempts gifts received from the individual's or spouse's grandparent.

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438 Confidential Information (§ 3) TheCodeofEthics forPublicOfficialsgenerallyprohibitscurrentand former public officials and state employees, as well as state consultants andindependent contractors,fromusing, for financialgain,confidential information they acquire in performing their duties.

“Confidential information” is currently defined in OSE's regulations but not in state law (Conn.

Agencies Reg.

§ 1-81-15).

Thebillcodifiesthedefinitioninstatelaw withminorchanges.Under the bill, confidential information is any information possessed by the state, a state employee, or a public official, whatever its form, that is (1) prohibited from disclosure to the general public under any state or federal law, or (2) permissibly nondisclosable under the Freedom of Information Act, and the appropriate agency, state employee, or public official has decided not to disclose it to the general public.

Notice of Certain Donations (§ 8) The bill clarifies that a person who gives anything valued at more than $10 to a public official or state employee (either directly or through a representative) must comply with certain reporting requirements if the person is (1) doing business with, or seeking to do business with, the official’s or employee’s employing department or agency or (2) engaged in activities that the department or agency directly regulates.

Under the reporting requirements, the donor must give the recipient’s department or agency a written report within 10 days stating (1) the donor’s name, (2) a description of the item or items given and their value, and (3) the cumulative value of all items given to the individual during the calendar year.

The Code of Ethics for Lobbyists contains an identical reporting requirement (CGS § 1-97(d)).

College Student Exemption (§ 11) The bill extends, in part, the exemption from certain provisions of the Code of Ethics for Public Officials that applies to student employees of a state collegeor university to also applytostudentswho serve aspublic officials by virtue of their student status at a state college or university sHB6574 / File No.

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438 (e.g., a student member of the board of trustees).

This includes exemptions from the code’s provisions on prohibited activities, disclosure or use of confidential information, and conflicts of interest.

As under current law for student employees, the above exemptions are valid only if the student's institution has (1) adopted related written policies and procedures and (2) the policies and procedures have been approved by CEAB.

The law requires institutions to submit (1) their policies and procedures to the board triennially and (2) any significant revisions within 30 days of their adoption.

Under existing law, student employees are additionally exempt from (1) restrictions on certain expense-paid travel provided by prospective employers and (2) a requirement to wait one year before accepting certain post-employment opportunities (CGS §§ 1-79(5)(R) and 1- 84b(h)).

§§ 9 & 10 — PROHIBITED ACTIVITIES UNDER THE ETHICS CODE Positions Subject to Revolving Door Provisions (§ 9) The Code of Ethics for Public Officials generally prohibits public officials and state employees in certain regulatory agencies who hold positions with significant decision-making or supervisory responsibilities from accepting employment for one year after leaving state service with a business subject to regulation by their former agency.

(The prohibition is two years for certain employment in the gaming industry.) Under current law, covered positions are designated by OSE, in consultation with the applicable agency, and adopted as regulations by CEAB.

By November 1, 2021, and at least annually from then on, the bill instead requires the heads of certain executive branch regulatory agencies or their designees to electronically submit to OSE designations of all existing positions that are subject to these restrictions.

They must do so in a manner CEAB prescribes.

As under current law, they must make these designations in consultation with OSE.

Under the bill, the agency head or designee must submit any newly sHB6574 / File No.

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438 created positions that are subject to these provisions, but not included in the annual submission to OSE, within 30 days after the position’s creation.

OSE must prepare a list of all designated positions and post it on its website.

As under current law, the designation requirement applies to the Office of Health Strategy's Health Systems Planning Unit;

Connecticut Siting Council;

Department of Banking;

Insurance Department;

Department of Emergency Services and Public Protection;

the Public Utilities Regulatory Authority, including the Office of Consumer Counsel;

and the Department of Consumer Protection.

Consultants and Independent Contractors (§ 10) The Code of Ethics for Public Officials prohibits state agency consultants and independent contractors from engaging in certain unethical bidding or contracting practices.

The bill extends these prohibitions to cover individuals employed by these consultants and independent contractors.

In doing so,it prohibitsthese individuals from the following:

1.

using their contractual authority, or any confidential information acquired in performing the contract, to obtain financial gain for themselves, immediate family members, or their employees and immediate family members;

2.

accepting another state contract that impairs their judgment on the existing contract;

or 3.

accepting anything of value based on an understanding that it would influence their action on behalf of the state.

Current law similarly prohibits a person from giving anything of value to a consultant or independent contractor hired by the state based on an understanding that it would influence the consultant's or independent contractor's actions.

The bill extends this prohibition to giving anything of value to a consultant's or independent contractor's employee under these circumstances.

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438 The bill subjects violators of the above prohibitions to existing law's penalties for violating the Code of Ethics for Public Officials.

By law, OSE may impose a civil penalty of up to $10,000 per violation.

Additionally, a person who intentionally violates the code is guilty of a class A misdemeanor, punishable by up to one year in prison, a fine of up to $2,000, or both, for a first violation (or a class D felony if the violator derived a financial benefit of at least $1,000 from the violation) and a class D felony for subsequent violations.

A class D felony is punishable by up to five years in prison, a fine of up to $5,000, or both.

The bill also makes violators liable to the state for damages equal to the amount of the financial advantage.

CEAB must immediately inform the attorney general of the violation (CGS §§ 1-88 and -89).

§§ 4-6 & 13 — OFFICE OF STATE ETHICS & CITIZEN'S ETHICS ADVISORY BOARD Ethics Enforcement Officer (§§ 4 & 5) The bill authorizes OSE’s ethics enforcement officer (whom the bill specifies must be a member of the Connecticut bar) to represent the office before the Superior Court in an appeal of any ruling or finding arising under the ethics codes for public officials, lobbyists, and state contractors as long as CEAB is not a party in the appeal (e.g., enforcing a subpoena).

Under existing law, OSE's legal division (which is separate from the enforcement division) represents CEAB in all matters in which the board is a party (e.g., appeals of final decisions) unless the board requests the attorney general's assistance (CGS § 1-81(f)).

Complaint Procedures and Time Limits (§§ 6 & 13) Thebillextendsthedeadline,from15to45daysafterapublichearing on a State Codes of Ethics violation, by which CEAB must publish its finding and a memorandum explaining the reasons for the finding (i.e., its final decision).

BACKGROUND Statements of Financial Interest (SFI) By law, a person must file an SFI if he or she is, among other things, sHB6574 / File No.

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438 a (1) statewide elected officer, legislator, department head or deputy department head, member or director of a quasi-public agency, or member of the Investment Advisory Council;

(2) member of the Executive Department designated by the governor;

or (3) quasi-public agency employee designated by the governor.

The SFIs must be filed annually by May 1.

Additionally, filers who leave their positionor office must file a final SFI that coverstheir activitiesfromthemostrecent filing through their departure.

They must do so within 60 days after being notified by OSE.

COMMITTEE ACTION Government Administration and Elections Committee Joint Favorable Substitute Yea 18 Nay 0 (03/29/2021) sHB6574 / File No.

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