[Federal Register Volume 61, Number 18 (Friday, January 26, 1996)]
[Rules and Regulations]
[Pages 2398-2401]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-1161]
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SMALL BUSINESS ADMINISTRATION
13 CFR Part 105
Standards of Conduct and Other Employee Responsibilities
AGENCY: Small Business Administration.
ACTION: Final rule.
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SUMMARY: The Small Business Administration (SBA) amends its regulations
governing employee standards of conduct. This amendment repeals
provisions that are superseded by the Office of Government Ethics (OGE)
Uniform Standards of Conduct for Employees of the Executive Branch (5
CFR Part 2635); amends one provision by adding the Associate General
Counsel for General Law as an Assistant Standards of Conduct Counselor;
and renumbers the remaining provisions with several minor technical
amendments.
EFFECTIVE DATE: This rule is effective February 26, 1996.
FOR FURTHER INFORMATION CONTACT: Robinson S. Nunn, Chief Counsel for
Ethics, Office of the General Counsel, U.S. Small Business
Administration, 409 Third Street SW., Washington, D.C. 20416, (202)
205-6867, or Martin D. Teckler, Deputy General Counsel (202) 205-6642.
SUPPLEMENTARY INFORMATION: The Small Business Administration repeals
numerous provisions of its existing standards of conduct regulations at
13 CFR Part 105 as either superseded by the Office of Government
Ethics' (OGE) Uniform Standards of Ethical Conduct for Employees of the
Executive Branch (5 CFR Part 2635), eliminated by other regulatory
authority, or determined to be inappropriate for continued inclusion in
this part. SBA repeals the following sections of 13 CFR Part 105:
105.101 through 105.301; 105.401; 105.402; 105.405; 105.406 through
105.408; 105.501 through 105.505; 105.506 except paragraph (g)(1);
105.507 through 105.515; 105.518 through 105.521 and 105.901. The
remaining provisions of 13 CFR Part 105 are renumbered and renamed
``Standards of Conduct and Employee Restrictions and
Responsibilities.''
In place of SBA's former standards at 13 CFR Part 105, SBA issues a
residual cross reference provision at new 13 CFR section 105.101 to
refer to the uniform Standards of Conduct and financial disclosure
regulations for Executive Branch employees and SBA's Supplemental
Standards of Conduct regulation. Additionally, SBA reissues, in the new
13 CFR Part 105, several provisions regarding other employee
responsibilities.
Proposed changes to Part 105 were published in the Federal Register
on November 27, 1995 (60 FR 58260). The public was invited to comment
during a thirty day comment period. SBA received seven comments (all of
which concerned post-employment restrictions) during that time period.
SBA discusses the comments and SBA's response here.
Section 105.201, ``Definitions'': This section provides definitions
unique to SBA which are applicable throughout Part 105. The definition
of ``SBA Assistance'' (Sec. 105.201(e)) was proposed to be amended to
include all participating lenders, including banks, as recipients of
SBA Assistance. This proposal generated several comments, which noted
that SBA employees with specialized knowledge losing jobs due to
downsizing would now be precluded from employment with participating
lenders, and that such employment is often the only means available to
such employees to maintain a customary standard of living and make use
of education and skills. SBA employees commented that the SBA would be
unable to attract private sector employees to the SBA if they believe
that they will be unmarketable when they leave the government. In
addition, participants in SBA's financial programs commented that the
interpretation would deny them a qualified universe of potential
employees to the detriment of the delivery of SBA's programs.
As a result of these comments, and those relative to the other
sections contained in the proposal (discussed below), SBA has
determined that revision of the definition will be deferred. This final
rule therefore merely restates the existing definition of SBA
Assistance, and does not adopt the proposed change, pending further
review.
SBA also received three comments concerning Section 105.202,
``Employment of Former Employee by Person Previously the Recipient of
SBA Assistance''. This section, the first of two sections providing
restrictions relating to former SBA employees, was not changed by the
proposed rule, although the preamble to this section did not make that
fact completely clear. All of the comments were directed at the effect
on Sec. 105.202 of the addition of participating lenders as recipients
of SBA Assistance to the definition section of section 105.201(e).
All three commenters were concerned that agency employees losing
their employment as a result of an involuntary separation or those
otherwise seeking post-SBA employment would be unfairly denied
employment best suited for their specialized knowledge and education
and would be unable the maintain their lifestyles and support their
families by virtue of section 105.202. One of the commenters also
argued that 105.202 should not apply to Certified Development Companies
(CDC's), because they are not business enterprises receiving loans from
the agency and should therefore be exempt from this rule.
As set forth above, the proposed rule made no change to section
105.202 which is based upon section 13 of the Small Business Act. To
the extent all of these comments were directed at the addition of
participating lenders to the Sec. 105.201 definition of SBA Assistance,
that issue is addressed by the withdrawal of the proposal.
The same issue arises in connection with section 105.203 ``SBA
Assistance to Person Employing Former SBA Employee.'' This section is
based on the same provision of the Small Business Act as section
105.202. It prohibits SBA from providing assistance to any Person who
has as an employee, owner, partner, attorney, agent, owner of stock,
officer, director, creditor, or debtor, any individual who, within one
year prior to the request for such assistance, was an SBA employee,
without the prior approval of the SBA Standards of Conduct Counselor.
Additionally, this section sets forth the criteria to be used in
reviewing such applications for SBA Assistance.
SBA received one comment on this section to the effect that this
provision unfairly penalizes a business which hires a qualified former
SBA employee.
As discussed above, to the extent that the impact of this section
was proposed to be altered by adding Participating lenders as
recipients of Assistance, the provision is unaffected by this rule.
However, it is SBA's intent to revisit both sections 105.202 and
105.203 at a later point keeping in mind the comments received in this
rulemaking.
SBA received no other comments on this rule. For a detailed
description of the other changes made to this rule, please refer to
SBA's proposed rules, published at 60 FR 58260 (November 27, 1995).
[[Page 2399]]
Compliance With Executive Orders 12612, 12778 and 12866; the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq.; and the Paperwork Reduction Act,
44 U.S.C. ch. 35
SBA certifies that this rule will not be considered a significant
rule within the meaning of Executive Order 12866 and does not have a
significant economic impact on a substantial number of small entities
within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et
seq.
For purposes of Executive Order 12612, SBA certifies that this rule
does not have federalism implications. For purposes of Executive Order
12778, SBA certifies that this rule is drafted, to the extent
practicable, in accordance with the standards set forth in section 2 of
that Order.
For purposes of the Paperwork Reduction Act, SBA certifies that
this rule, if promulgated in final, will impose no new reporting or
recordkeeping requirements.
List of Subjects in 13 CFR Part 105
Conflict of interests.
For the reasons set forth above, part 105 of title 13, Code of
Federal Regulations, is revised to read as follows:
PART 105--STANDARDS OF CONDUCT AND EMPLOYEE RESTRICTIONS AND
RESPONSIBILITIES
Standards of Conduct
Sec.
105.101 Cross reference to employee ethical conduct standards and
financial disclosure regulations.
Restrictions and Responsibilities Related to SBA Employees and Former
Employees
105.201 Definitions.
105.202 Employment of former employee by person previously the
recipient of SBA Assistance.
105.203 SBA Assistance to person employing former SBA employee.
105.204 Assistance to SBA employees or members of their household.
105.205 Duty to report irregularities.
105.206 Applicable rules and directions.
105.207 Politically motivated activities with respect to the
Minority Small Business Program.
105.208 Penalties.
Restrictions on SBA Assistance to Other Individuals
105.301 Assistance to officers or employees of other Government
organizations.
105.302 Assistance to employees or members of quasi-Government
organizations.
Administrative Provisions
105.401 Standards of Conduct Committee.
105.402 Standards of Conduct Counselors.
105.403 Designated Agency Ethics Officials.
Authority: 5 U.S.C. 7301; 15 U.S.C. 634, 637(a)(18) and (a)(19),
642, and 645(a).
Standards of Conduct
Sec. 105.101 Cross-reference to employee ethical conduct standards
and financial disclosure regulations.
In addition to this Part, Small Business Administration (SBA)
employees should refer to the Uniform Standards of Ethical Conduct for
Executive Branch employees at 5 CFR Part 2635, the SBA Supplemental
Standards of Ethical Conduct at 5 CFR Chapter XLIV, and the Uniform
Financial Disclosure regulation for Executive Branch employees at 5 CFR
Part 2634.
Restrictions and Responsibilities Related to SBA Employees and Former
Employees
Sec. 105.201 Definitions.
(a) Employee means an officer or employee of the SBA regardless of
grade, status or place of employment, including employees on leave with
pay or on leave without pay other than those on extended military
leave. Unless stated otherwise. Employee shall include those within the
category of Special Government Employee.
(b) Special Government Employee means an officer or employee of
SBA, who is retained, appointed or employed to perform temporary duties
on a full-time or intermittent basis, with or without compensation, for
not to exceed 130 days during any period of 365 consecutive days.
(c) Person means an individual, a corporation, a company, an
association, a firm, a partnership, a society, a joint stock company,
or any other organization or institution.
(d) Household member means spouse and minor children of an
employee, all blood relations of the employee and any spouse who
resides in the same place of abode with the employee.
(e) SBA Assistance means financial, contractual, grant, managerial
or other aid, including size determinations, section 8(a)
participation, licensing, certification, and other eligibility
determinations made by SBA. The term also includes an express decision
to compromise or defer possible litigation or other adverse action.
Sec. 105.202 Employment of former employee by person previously the
recipient of SBA Assistance.
(a) No former employee, who occupied a position involving
discretion over, or who exercised discretion with respect to, the
granting or administration of SBA Assistance may occupy a position as
employee, partner, agent, attorney or other representative of a concern
which has received this SBA Assistance for a period of two years
following the date of granting or administering such SBA Assistance
if--
(1) The date of granting or administering such SBA Assistance was
within the period of the employee's term of employment; or
(2) The date of granting or administering such SBA Assistance was
within one year following the termination of such employment.
(b) Failure of a recipient of SBA Assistance to comply with these
provisions may result, in the discretion of SBA, in the requirement for
immediate repayment of SBA financial Assistance, the immediate
termination of other SBA Assistance involved or other appropriate
action.
Sec. 105.203 SBA Assistance to person employing former SBA employee.
(a) SBA will not provide SBA Assistance to any person who has, as
an employee, owner, partner, attorney, agent, owner of stock, officer,
director, creditor or debtor, any individual who, within one year prior
to the request for such SBA Assistance was an SBA employee, without the
prior approval of the SBA Standards of Conduct Counselor. The Standards
of Conduct Counselor will refer matters of a controversial nature to
the Standards of Conduct Committee for final decision; otherwise, his
or her decision is final.
(b) In reviewing requests for approval, the Standards of Conduct
Counselor will consider:
(1) The relationship of the former employee with the applicant
concern;
(2) The nature of the SBA Assistance requested;
(3) The position held by the former employee with SBA and its
relationship to the SBA Assistance requested; and
(4) Whether an apparent conflict of interest might exist if the SBA
Assistance were granted.
Sec. 105.204 Assistance to SBA employees or members of their
household.
Without the prior written approval of the Standards of Conduct
Committee, no SBA Assistance, other than Disaster loans under
subparagraphs (1) and (2) of section 7(b) of the Small Business Act,
shall be furnished to a person when the sole proprietor, partner,
officer, director or significant stockholder of the person is an SBA
employee or a household member.
Sec. 105.205 Duty to report irregularities.
Every employee shall immediately report to the SBA Inspector
General any
[[Page 2400]]
acts of malfeasance or misfeasance or other irregularities, either
actual or suspected, arising in connection with the performance by SBA
of any of its official functions.
Sec. 105.206 Applicable rules and directions.
Every employee shall follow all agency rules, regulations,
operating procedures, instructions and other proper directions in the
performance of his official functions.
Sec. 105.207 Politically motivated activities with respect to the
Minority Small Business Program.
(a) Any employee who has authority to take, direct others to take,
recommend, or approve any action with respect to any program or
activity conducted pursuant to section 8(a) or section 7(j) of the
Small Business Act, shall not, with respect to any such action,
exercise or threaten to exercise such authority on the basis of the
political activity or affiliation of any party. Employees shall
expeditiously report to the SBA Inspector General any such action for
which such employee's participation has been solicited or directed.
(b) Any employee who willfully and knowingly violates this section
shall be subject to disciplinary action, which may consist of
separation from service, reduction in grade, suspension, or reprimand.
(c) This section shall not apply to any action taken as a penalty
or other enforcement of a violation of any law, rule, or regulation
prohibiting or restricting political activity.
(d) The prohibitions in and remedial measures provided for under
this section with regard to such prohibitions, shall be in addition to,
and not in lieu of, any other prohibitions, measures or liabilities
that may arise under any other provision of law.
Sec. 105.208 Penalties.
Any employee guilty of violating any of the provisions in this Part
may be disciplined, including removal or suspension from SBA
employment.
Restrictions on SBA Assistance to Other Individuals
Sec. 105.301 Assistance to officers or employees of other Government
organizations.
(a) SBA must receive a written statement of no objection by the
pertinent Department or military service before it gives any SBA
Assistance, other than Disaster loans under subparagraphs (1) and (2)
of section 7(b) of the Small Business Act, to a person when its sole
proprietor, partner, officer, director or stockholder with a 10 percent
or more interest, or a household member, is an employee of another
Government Department or Agency having a grade of at least GS-13 or its
equivalent.
(b) The Standards of Conduct Committee must approve an SBA contract
with an entity if a sole proprietor, general partner, officer,
director, or stockholder with a 10 or more percent interest (or a
household member of such individuals) is an employee of a Government
Department or Agency. See also 48 CFR part 35, subpart 3.6.
(c) The Standards of Conduct Committee must approve SBA Assistance,
other than disaster loans under subparagraphs (1) and (2) of section
7(b) of the Small Business Act, to a person if its sole proprietor,
general partner, officer, director or stockholder with a 10 percent or
more interest (or a household member of such individual) is a member of
Congress or an appointed official or employee of the legislative or
judicial branch of the Government.
Sec. 105.302 Assistance to employees or members of quasi-Government
organizations.
(a) The Standards of Conduct Committee must approve SBA Assistance,
other than Disaster loans under subparagraphs (1) and (2) of section
7(b) of the Small Business Act, to a person if its sole proprietor,
general partner, officer, director or stockholder with a 10 percent or
more interest (or a household member) is a member or employee of a
Small Business Advisory Council or is a SCORE volunteer.
(b) In reviewing requests for approval, factors the Standards of
Conduct Committee may consider include whether the granting of the SBA
Assistance might result in or create the appearance of giving
preferential treatment, the loss of complete independence or
impartiality, or adversely affect the confidence of the public in the
integrity of the Government.
Administrative Provisions
Sec. 105.401 Standards of Conduct Committee.
(a) The Standards of Conduct Committee will:
(1) Advise and give direction to SBA management officials
concerning the administration of this Part and any other rules,
regulations or directives dealing with conflicts of interest and
ethical standards of SBA employees; and
(2) Make decisions on specific requests when its approval is
required.
(b) The Standards of Conduct Committee will consist of:
(1) The General Counsel or, in his or her absence, the Deputy
General Counsel or, in his or her absence, the Acting General Counsel
who shall act as Chairman of the Committee;
(2) The Associate Deputy Administrator for Management and
Administration, or in his or her absence, the Assistant Administrator
for Administration; and
(3) The Director of Human Resources, or in his or her absence, the
Deputy Director of Human Resources.
Sec. 105.402 Standards of Conduct Counselors.
(a) The SBA Standards of Conduct Counselor is the Deputy General
Counsel. The Associate General Counsel for General Law (AGC) is an
Assistant Standards of Conduct Counselor, and other Assistants may be
designated by the Standards of Conduct Counselor.
(b) The Standards of Conduct Counselors and Assistants:
(1) Provide general advice, assistance and guidance to employees
concerning this Part and the regulations referred to in Sec. 105.101;
(2) Monitor the Standards of Conduct Program within their assigned
areas and provide required reports thereon;
(3) Review Confidential Financial Disclosure Reports as required
under 5 CFR part 2634, subpart I, and provide an annual report on
compliance with filing requirements to the SBA Standards of Conduct
Counselor as of February 1 of each year; and
(4) Provide Outside Employment decisions pursuant to 5 CFR
5401.104.
(c) Each employee will be periodically informed of the name,
address and telephone number of the Assistant Standards of Conduct
Counselor to contact for advice and assistance.
(d) Employee requests for advice or rulings should be directed to
the appropriate Standards of Conduct Counselor for appropriate action.
Sec. 105.403 Designated Agency Ethics Officials.
(a) The Designated Agency Ethics Official, pursuant to the Ethics
in Government Act of 1978 (5 U.S.C. App.), is the Deputy General
Counsel. He or she may, in turn, appoint one or more Alternate
Designated Agency Ethics Officials. The Alternates will assist the
Designated Agency Ethics Official and act for him or her whenever
absent.
(b) The Designated Agency Ethics Official and Alternates administer
the program for Financial Disclosure Statements under 5 CFR 2634.201,
[[Page 2401]]
receive and evaluate these statements, and provide advice and counsel
regarding matters relating to the Ethics in Government Act of 1978 and
its implementing regulations. The duties and responsibilities of the
Designated Agency Ethics Official and Alternates are set forth in more
detail in 5 CFR 2638.203, which is promulgated and amended by the
Office of Government Ethics.
Dated: January 19, 1996.
Philip Lader,
Administrator.
[FR Doc. 96-1161 Filed 1-25-96; 8:45 am]
BILLING CODE 8025-01-P