Chapter 428

2006 -- S 2799 SUBSTITUTE A

Enacted 07/07/06

A N A C T

RELATING TO PUBLIC OFFICES AND EMPLOYEES -- PUBLIC ACCOUNTABILITY AND REFORM

Introduced By: Senator J. Michael Lenihan

Date Introduced: February 14, 2006

It is enacted by the General Assembly as follows:

     SECTION 1. Legislative intent:

     It is a priority of this legislature to ensure that Rhode Island citizens have the utmost

confidence in state government. In order to promote public confidence and to provide open and

honest government it is the further intent of this legislature to support transparency and

accountability in all aspects of government activity and to promote the highest standards of

ethical performance and accountability.

     SECTION 2. This act shall be known and may be cited as the "Public Accountability and

Reform Act of 2006".

     SECTION 3. Sections 17-27-2 and 17-27-3 of the General Laws in Chapter 17-27

entitled "Reporting of Political Contributions by State Vendors" are hereby amended to read as

follows:

17-27-2. Affidavits required. -- In connection with contracts for goods or services to be

provided at a cost of five thousand dollars ($5,000) or more between a state vendor and a state

agency, whether written or unwritten, the state vendor shall execute, under oath, an affidavit

concerning reportable contributions pursuant to chapter 25 of this title. If the state vendor has,

within the twenty-four (24) months preceding the date of the contract, contributed an aggregate

amount in excess of two hundred fifty dollars ($250) within a calendar year to any general

officer, any candidate for a general office, any member of the general assembly or candidate for

the general assembly, or any political party; the state vendor shall file the affidavit with the board

of elections and shall list the name of the general officer, member of the general assembly or

candidate or political party, the amount and date of each contribution made during the preceding

twenty-four (24) months and the total gross amount, in dollars, of contracts entered into between

the state vendor and all state agencies during that period of time.

17-27-3. Filing of affidavits. -- (a) The affidavit required by section 17-27-2 shall be

filed, together with a copy of the contract or a written summary of the principal terms of the

contract, with the board of elections. If the contract is in writing, then the affidavit shall be filed

within sixty (60) days of the execution of the contract; if the contract is not in writing, then the

affidavit shall be filed within sixty (60) days of the date when the state vendor first is notified that

they have reached the five thousand dollar ($5,000) threshold established by section 17-27-2.

      (b) Notwithstanding the provisions of subsection (a) of this section, any state vendor

who has a reasonable belief that it would be required to make two (2) or more filings in any

calendar year pursuant to this section will be deemed to have satisfied its obligations under this

section if it files a notice certifying that belief with the board of elections and subsequently files

an affidavit meeting the requirements of this section on or before July 31 with respect to the

preceding six (6) months ending on June 30 and on or before January 31 for the six (6) month

period of the preceding year ending December 31.

      (c) Parent, affiliate, or subsidiary entities of a state vendor which are required to report

pursuant to this chapter may do so in the form of a consolidated report which contains the

required information for both the vendor, its parent, subsidiary, or affiliated entity. All affidavits

filed by state vendors pursuant to this chapter shall be public documents.

(d) The board of elections shall maintain on its website a report of all vendors submitting

affidavits as required under this chapter which report shall include: the name of the vendor, a

summary description of the vendor contract, if written, or the services performed or goods

purchased and their cost, and the amount of reportable contributions pursuant to chapter 25 of this

title.

     SECTION 4. Sections 22-10-9 and 22-10-10 of the General Laws in Chapter 22-10

entitled "Lobbying" are hereby amended to read as follows:

22-10-9. Financial reports. -- (a) (1) Every person that engages any person to act as a

lobbyist concerning legislative matters, and the lobbyist, shall individually file with the secretary

of state a complete and itemized report of all expenditures made for the purpose of lobbying,

including, but not limited to, advertising expenses and all compensation paid to the lobbyists for

lobbying., and all campaign contributions in excess of one hundred dollars ($100) to state and

municipal elected officials and state political action committees. The report shall also include any

expenditure, gift, or honorarium of twenty-five dollars ($25.00) or more for each occurrence

concerning any legislative or executive official paid or incurred by the person who engages the

lobbyist and the lobbyist. The report shall include the names of the individuals receiving or in

whose behalf the expenditures have been made, and the reason, date, and place of the

expenditures.

      (2) Any function to which the entire membership of the general assembly, or of either

chamber or of any legally constituted legislative committee or commission within the general

assembly, is invited, which is sponsored by any person, corporation, or association having

engaged any person to act as a lobbyist, or by any lobbyist, shall be deemed a lobbying activity,

and any funds expended or incurred for that function shall be set forth in the financial report.

      (3) The initial report shall be filed by the person, corporation, or association having

engaged any person to act as a lobbyist and by the lobbyist at the time of their initial registration,

and updated reports shall be filed with the secretary of state by the fifteenth (15th) day of each

month thereafter, beginning in March until the final adjournment of the general assembly. A final

report shall be filed no later than thirty (30) days after the final adjournment; provided, however,

in the year 2005, the first updated report filed under this subsection shall be filed by June 15th.

      (4) All reports shall be on a form prescribed by the secretary of state, and the reports

shall be open for public inspection.

      (5) In the event no compensation has been paid or received, and no expenses have been

paid or incurred, an annual statement to that effect may be filed with the secretary of state in lieu

of the report form.

      (b) During any special session of the general assembly, every person, corporation, or

association that engages any person to act as a lobbyist, and every lobbyist so engaged, shall

register within twenty-four (24) hours of the commencement of the session. The initial financial

reports shall be filed within twenty-four (24) hours after the date of the employment for the

special session, and updated reports shall be filed every fourteen (14) days thereafter. The final

report shall be filed no later than seven (7) days after the date of adjournment.

      (c) Not later than January 15 of each year, every lobbyist and every individual, firm,

business, corporation, association, partnership, or other group which employed a lobbyist or

engaged any person to act as a lobbyist or who was required to register with the office of

secretary of state during the preceding year pursuant to section 22-10-6 shall file with the

secretary of state a complete and detailed report of all money or anything of value which in the

aggregate exceeds two hundred fifty dollars ($250) provided or promised to any major state

decision-maker within the preceding calendar year. "Money" and "anything of value" in this

subsection and in subsection (d) shall mean any fee, salary, commission, expense allowance,

forbearance, forgiveness, royalty, rent, capital gain, gift, loan, reward, favors or services,

gratuities or special discounts, or any other form of recompense that constitutes income under the

Federal Internal Revenue Code.

      (d) Not later than January 15 of each year, every individual, firm, business, corporation,

association, partnership or other group specified in subsection (c) shall provide an exact copy of

the report required in subsection (c) to the Rhode Island ethics commission and to any major state

decision-maker to whom it provided or promised money or anything of value which in the

aggregate exceeds two hundred fifty dollars ($250) within the preceding calendar year.

22-10-10. Duties and powers of the secretary of state. -- The secretary of state shall

have authority to perform any duties that are necessary to implement the provisions of this

chapter. Without limiting the generality of the foregoing, the secretary of state is authorized and

empowered to:

      (1) Develop forms for the making of the required financial reports.

      (2) Develop one register for legislative lobbyists and one register for limited activity

lobbyists.

      (3) Adopt rules and regulations to carry out the purposes of this chapter.

      (4) Prepare and make available for public inspection through the office of the secretary

of state summaries of all reports.

      (5) Prepare and publish a manual for all persons, corporations, or associations which

engage any person as a lobbyist and for all lobbyists which sets forth the requirements of this

chapter. and conduct an annual education program for lobbyists to review the requirements of this

chapter and chapter 139 of title 42 regarding lobbying activities and construction on codes of

ethics and conflicts of interest.

      (6) Ascertain whether any person, corporation, association, or lobbyist has failed to

register or file reports or has filed an incomplete or inaccurate report; and the secretary may, for

good cause shown, extend the dates upon which reports are required to be filed.

      (7) Conduct investigations and/or hearings relative to alleged violations of this chapter

either on his or her own initiative or upon receipt of a verified written complaint, which

complaint shall, upon pain and penalty of perjury, be based upon actual knowledge and not

merely on information and belief. Upon completion of the investigation, if the secretary of state

has reason to believe that a violation has occurred, the secretary may convene a hearing for the

purpose of taking evidence and receiving testimony regarding the alleged violation. At this

hearing, the person alleged to have committed the violation shall be afforded the opportunity to

present evidence and offer testimony in his or her defense. Upon completion of the hearing, if the

secretary of state determines by a preponderance of the evidence that a violation has occurred, the

secretary shall order the lobbyist or person engaging a lobbyist to file any report or amended

report that is necessary to immediately correct the violation. If the secretary determines by clear

and convincing evidence that the violation was intentional and that the violator failed to comply

when given notice of the deficiency, then he or she may impose an administrative penalty as

provided in section 22-10-11(a). Any determination and/or administrative penalty imposed by the

secretary of state may be appealed by the aggrieved party to superior court pursuant to the

provisions of chapter 35 of title 42. If the secretary of state determines that the nature of the

violation was of such seriousness and willfulness as to warrant a criminal complaint, he or she

may refer the violation to the attorney general for prosecution as provided for in section 22-10-

11(b).

      (8) Administer oaths.

(9) Prepare and publish annually by March first (1st), a report on lobbying in Rhode

Island to be submitted to the governor, the speaker of the house, the house majority leader, the

house minority leader, the senate president, the senate majority leader, the senate minority leader,

and members of the ethics commission. The annual report shall include information on lobbying

activities as provided in sections 22-10-4, 22-10-5, 22-10-9, 42-139-3, 42-139-4, 42-139-5, and

42-139-6. The report shall be made available electronically on the secretary of state's website.

     SECTION 5. Sections 36-14-8, 36-14-16 and 36-14-17 of the General Laws in

Chapter 36-14 entitled "Code of Ethics" are hereby amended to read as follows:

36-14-8. Rhode Island ethics commission -- Establishment -- Members -- Vacancies -

- Quorum -- Compensation and quarters. -- (a) There is hereby established an independent and

nonpartisan Rhode Island ethics commission composed of nine (9) members appointed by the

governor. The president of the senate, the minority leader of the senate, the speaker of the house

of representatives, the majority leader of the house of representatives, and the minority leader of

the house of representatives shall, within twenty (20) days of July 21, 1992, each submit to the

governor a list of names of at least five (5) individuals. The governor shall, within forty (40) days

of July 21, 1992, appoint one individual from each of the lists so submitted and four (4)

individuals without regard to the lists submitted by the legislative leaders.

      (b) Members of the commission shall serve for terms of five (5) years, except that, of the

members first appointed:

      (1) The individual appointed from the list submitted by the majority leader of the house

of representatives shall serve for one year;

      (2) The individuals appointed from the lists submitted by the minority leader of the

senate and one of the individuals appointed by the governor without regard to the lists submitted

by the legislative leaders shall serve for two (2) years;

      (3) The individual appointed from the list submitted by the minority leader of the house

of representatives and one of the individuals appointed by the governor without regard to the lists

submitted by the legislative leaders shall serve for three (3) years;

      (4) The individual appointed from the list submitted by the president of the senate and

one of the individuals appointed from the list submitted by the minority leader of the house of

representatives shall serve for four (4) years; and

      (5) The individual appointed from the list submitted by the speaker of the house of

representatives and one of the individuals appointed from the list submitted by the minority leader

of the senate shall serve for five (5) years.

      (c) No member shall be appointed for more than one full five (5) year term; provided,

however, that each member shall continue to serve until his or her successor is appointed and

qualified; and, provided further, that if, at the time of the expiration of any member's term, that

member is actively engaged in the adjudication of a complaint, he or she shall continue to serve in

that capacity until the commission has completed its responsibilities with respect to that

complaint.

      (d) The governor shall, at the time of the initial appointments to the commission,

designate one member to act as chairperson of the commission for a period of one year and

another to act as vice chairperson of the commission for a period of one year. Thereafter, the

commission shall elect a chairperson and a vice chairperson. The vice chairperson shall act as

chairperson in the absence of the chairperson or in the event of a vacancy in that position.

      (e) Any vacancy on the commission, occurring for any reason prior to the expiration of

the term, shall be filled for the unexpired term by the appointing authority in the same manner as

the original appointment within thirty (30) days of the vacancy occurring.

      (f) No individual, while a member or employee of the commission, including any legal

counsel engaged by the commission, shall:

      (1) Hold or campaign for any other public office;

      (2) Hold office in any political party or political committee;

      (3) Participate in or contribute to any political campaign;

      (4) Directly or indirectly attempt to influence any decision by a governmental body,

other than as the duly authorized representative of the commission on a matter within the

jurisdiction of the commission;

      (5) Have held elective public office or have been a candidate for elective public office

for a one year period prior to appointment.

(6) Have any equity interest or ownership interest in, or be employed by a business entity

that derives any of its revenue or income by engaging in lobbying, as defined in chapter 22-10

and chapter 42-139.

      (g) The governor shall declare vacant the position on the commission of any member

who takes part in activities prohibited by subsection (f) of this section. An individual appointed to

fill a vacancy occurring other than by the expiration of a term of office shall be appointed for the

unexpired term of the member he or she succeeds, and is eligible for appointment to one full five-

year term thereafter. Any vacancy occurring on the commission shall be filled within thirty (30)

days in the manner in which that position was originally filled.

      (h) For any action to be taken under the terms of this chapter by the full commission,

five (5) members of the commission shall constitute a quorum.

      (i) Commission members shall not be compensated for attendance at meetings of the

commission or of any investigating committee or adjudicative panel of the commission.

      (j) All departments and agencies of the state or of any city or town or political

subdivision within this state shall furnish such advice or information documentary or otherwise,

to the commission and its agents as is deemed necessary or desirable by the commission to

facilitate the purposes of this chapter.

      (k) The director of administration is hereby authorized and directed to provide suitable

quarters for the commission.

      (l) When commission members act in good faith within the scope of their authority and

in their official capacities they shall be afforded protection against civil liability as provided in

section 9-1-31.1.

36-14-16. Financial statement to be filed. -- (a) On or before the last Friday in April of

each year, the following officials and employees subject to this code of ethics shall file with the

commission a financial statement complying with the requirements of this chapter.

      (1) All state elected officials;

      (2) All state appointed officials;

      (3) All state appointed officials and employees who hold a major decision-making

position in a state agency;

      (4) All municipal elected officials; and

      (5) All municipal appointed officials whose official duties and responsibilities include

exercising decision-making authority over the expenditure of more than fifty thousand dollars

($50,000) in public funds in any fiscal or calendar year, and expressly including solicitors and

assistant solicitors, police chiefs, fire chiefs, superintendents of schools, principals,

superintendents and administrators of charter schools, board members of charter schools,

principals, superintendents and administrators of state schools, board members of state schools,

building inspectors, members of planning boards, zoning boards, licensing boards and tax appeal

boards. This subsection shall also include all municipal appointed officials whose official duties

and responsibilities include nominating, appointing or hiring any persons that will receive

compensation of more than fifty thousand dollars ($50,000) in public funds in any fiscal or

calendar year.

      (b) In the case of state and municipal appointed officials on and after January 1, 1988,

the appointee shall file the financial statement within thirty (30) days after the date of his or her

appointment or the date he or she qualifies for the office; provided, however, that in the case of

the appointment of officials that require senate confirmation, the appointee shall file the financial

statement with the appropriate senate committee prior to the institution of those confirmation

proceedings.

      (c) Within thirty (30) days after the filing deadline, every person who is a candidate for

an office as an elected officer, except those candidates for moderator and clerk of a voting district

of the cities and towns, shall file the financial statement as required by this chapter. Filings of

candidates for general office shall include information as required in subdivision 36-14-17 (b)(2).

The commission shall grant an extension for good cause shown of not more than fifteen (15)

days, provided a request for the extension is received prior to the filing deadline for the financial

statement.

      (d) Except as otherwise provided in this chapter, at least thirty (30) days before the

deadline date for the filing of a financial statement by each individual required to file, the

commission shall mail to the individual a copy of the financial statement form. In the case of

candidates other than those covered by subsection (f) of this section, the forms shall be mailed

within ten (10) days after the filing deadline date. In the case of appointed officers covered by this

section, the forms shall be mailed within seven (7) days after the date of the appointment.

      (e) If a person has filed a financial statement as required by one subsection of this

section covering the preceding calendar year, he or she is not required to file a financial statement

as required by another subsection if, before the deadline for filing under the other subsection, he

or she notifies the commission in writing that he or she has already filed a financial statement

under the subsection specified.

      (f) A person required to file a financial statement under subsection (a) of this section

may request the commission to grant an extension of time of not more than sixty (60) days for

filing the statement. The commission shall grant the extension of not more than sixty (60) days if

the request is received prior to the filing deadline or if a timely filing or request for extension is

prevented because of physical or mental incapacity. Not more than one extension may be given to

a person in one year except for good cause shown.

      (g) The deadline for filing any statement required by this section is 5:00 P.M. of the last

day designated in the pertinent subsection of this section for filing the statement. When the last

day of filing falls on a Saturday or Sunday or an official state holiday, the deadline for filing is

extended to 5:00 P.M. of the next day which is not a Saturday or Sunday or holiday. Any

statement required by any provision of this section to be filed within a specified time period shall

be deemed to be timely filed if it is placed in the United States post office or in the hands of a

common or contract carrier properly addressed to the appropriate authority within the time limits

applicable to the statement. The postmark or receipt mark (if received by a common or contract

carrier) will be prima facie evidence of the date that the statement was deposited with the post

office or carrier. The person filing the statement may show by competent evidence that the actual

date of posting was to the contrary.

36-14-17. Content of financial statement. -- (a) The financial statement required herein

shall be on a form prescribed by the commission and shall include the account of the financial

activity of the person required to file the statement by this chapter, the financial activity of his or

her spouse (if not estranged), and any dependent children for the preceding calendar year.

      (b) The account of financial activity referred to in subsection (a) of this section shall

consist of:

      (1) If he or she or any person enumerated in subsection (a) of this section or a business

entity in which he or she or any person enumerated as aforesaid held a ten percent (10%) or

greater equity interest or five thousand dollars ($5,000) or greater cash value interest at any time

during the calendar year for which the statement is required has done business with a state or

municipal agency or a business which is subject to direct regulation greater than of a de minimus

nature by a state or municipal agency, and if so, the date and nature of the business;

      (2) A list of all sources of occupational income identified by employer or, if self

employed, by the nature of occupation or profession, and if income was received from a state or

municipal agency, the name and address of the agency and the nature of the services rendered;

however, general officers, as defined in section 17-2-1, shall list all sources and amounts of

income in excess of two hundred dollars ($200) according to the following categories:

(i) not more than $1000

(ii) greater than $1000 but no more than $10,000

(iii) greater than $10,000 but no more than $25,000

(iv) greater than $25,000 but no more than $50,000

(v) greater than $50,000 but no more than $100,000

(vi) greater than $100,000 but no more than $200,000

(vii) greater than $200,000 but no more than $500,000

(viii) greater than $500,000 but no more than $1,000,000

(ix) greater than $1,000,000

      (3) A listing of all real property in which a financial interest was held; however, this

section shall not apply to real property used exclusively as his or her principal residence;

      (4) Identification of any interested person from whom the person or his or her spouse (if

not estranged) or any dependent child received a gift or contribution of money or property in

excess of one hundred dollars ($100) in value or a series of gifts or contributions of money or

property, the total of which exceeds one hundred dollars ($100) in value received from the same

source, and a description of each gift or contributions, except those received from persons related

to the person at any time within the third degree of consanguinity or affinity and campaign

contributions which were reported as required by law, for purposes of this subsection, "interested

person", means a person or a representative of a person or business that has a direct financial

interest in a decision that the person subject to the Code of Ethics is authorized to make, or to

participate in the making of, as part of his or her official duties;

      (5) Identification of the source of all income received as beneficiary of a trust and

identification of each asset, if known to the beneficiary, from which income was received by the

beneficiary in excess of one thousand dollars ($1,000);

      (6) A list of all boards of directors of which the person is a member and executive

positions which he or she holds in any business entity, stating the name and address of each

business entity;

      (7) The name and address of any business entity in which he or she or any person

enumerated in subsection (a) of this section held a ten percent (10%) or greater equity interest or

five thousand dollars ($5,000) or greater cash value interest in at any time during the calendar

year for which the statement is required; and

      (8) (i) Identification of any person, business entity, financial institution or other

organization to whom the person was indebted at any time during the calendar year for which the

statement is required in an amount in excess of one thousand dollars ($1,000) other than:

      (A) Any person related to the person at any time within the third degree of consanguinity

or affinity; or

      (B) Any transactions involving credit cards; or

      (C) Any indebtedness to a financial institution, licensed and regulated by any state or by

the United States, which is secured solely by a mortgage of record on real property used

exclusively as the principal residence of the person required to file the statement.

      (ii) This section does not require the reporting of the amount or amounts of the

indebtedness or the payment record of the loans.

      (c) The financial statement shall be sworn to under oath.

     SECTION 6. Chapter 36-14 of the General Laws entitled "Code of Ethics" is hereby

amended by adding thereto the following section:

36-14-10.1. Continuing ethics education -- The commission shall periodically provide a

continuing education program on the Rhode Island code of ethics and related laws for major state

decision-makers. The program shall be provided at least twice annually and shall consist of

continuing education units as established by commission rule and which may be offered through

an interactive web-based format. The commission shall provide participants with certificates

showing the date and number of continuing education units completed.

     SECTION 7. Section 42-139-6 of the General Laws in Chapter 42-139 entitled

"Executive Branch and Public Corporation Lobbying" is hereby amended to read as follows:

42-139-6. Financial reports. -- (a) (1) Every person, corporation, or association that

engages any person to act as a lobbyist concerning executive or public corporation matters, and

the lobbyist, shall individually file with the secretary of state a complete and detailed report of all

compensation paid to the lobbyist for lobbying, and all campaign contributions in excess of one

hundred dollars ($100) or more to state and municipal elected officials and state political action

committees. The report shall include including the total amount expended for lobbying purposes,

and an itemization of any expenditure, gift, or honorarium of twenty-five dollars ($25.00) or more

for each occurrence paid or incurred by the person, corporation, or association or lobbyist for the

specific purpose of promoting or opposing in any manner action by members of the executive

branch or of public corporations. These reports shall include the names of the persons receiving

or in whose behalf the expenditures have been made, and the reason, time, and place of the

expenditures.

      (2) The initial report shall be filed by the person, corporation, or association having

engaged any person to act as a lobbyist and by the lobbyist at the time of their initial registration,

and updated reports shall be filed with the secretary of state semi-annually. The updated reports

shall be filed no later than thirty (30) days after the end of each reporting period, and shall include

expenditures for the period from January 1 through June 30, and July through December 31,

respectively.

      (3) All reports shall be on a form prescribed by the secretary of state, and the reports

shall be open for public inspection.

      (4) In the event no compensation has been paid or received, and no expenses have been

paid or incurred, an annual statement to that effect may be filed with the secretary of state in lieu

of the report form.

     SECTION 8. This act shall take effect upon passage.

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LC01892/SUB A/2

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