[Federal Register Volume 60, Number 227 (Monday, November 27, 1995)]
[Proposed Rules]
[Pages 58259-58263]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-28513]
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SMALL BUSINESS ADMINISTRATION
13 CFR Part 105
Standards of Conduct and Other Employee Responsibilities
AGENCY: Small Business Administration.
ACTION: Proposed Rule.
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SUMMARY: The Small Business Administration (SBA) proposes to amend its
regulations governing employee standards of conduct. The proposed
amendment repeals provisions that are superseded by the Office of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 two provisions by
including participating lender status in the definition of SBA
Assistance and 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.
DATES: Comments must be received on or before December 27, 1995.
ADDRESSES: Please send comments to David R. Kohler, Regulatory Reform
Team Leader (105), Suite 13, U.S. Small Business Administration, 409
Third Street SW., Washington, DC 20416.
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, DC 20416, (202) 205-
6867, or Martin D. Teckler, Deputy General Counsel (202) 205-6642.
SUPPLEMENTARY INFORMATION: The Small Business Administration is
proposing to repeal numerous provisions of its existing standards of
conduct regulations at 13 CFR Part 105 which were superseded by the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 proposes to repeal 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 would
be renumbered and renamed ``Standards of Conduct and Employee
Restrictions and Responsibilities.''
In place of SBA's former standards at 13 CFR part 105, SBA would
issue a residual cross reference provision at new 13 CFR 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 would reissue, in
the new 13 CFR part 105, several provisions regarding other employee
responsibilities.
Section-by-Section Analysis.
Section 105.101 Cross Reference to Employee Ethical Conduct Standards
and Financial Disclosure Regulations.
This section will notify SBA employees that the Standards of
Ethical Conduct for Executive Branch employees are codified at 5 CFR
Part 2635, the uniform financial disclosure regulation for Executive
Branch employees is codified at 5 CFR Part 2634, and the Agency
Supplemental Standards of Conduct are to be codified at 5 CFR Chapter
XLIV.
Sec. 105.201 Definitions
This section provides definitions unique to SBA which are
applicable throughout this part. Some definitions have been deleted
from the former 13 CFR 105.201, as not needed for an understanding of
this part. The definition of ``SBA Assistance'' was amended to include
all participating lenders, including banks as recipients of SBA
Assistance.
Sec. 105.202 Employment of Former Employee by Person Previously the
Recipient of SBA Assistance
This section is the first of two sections which would provide
restrictions relating to former SBA employees. Section 105.202 is based
on a provision of the Small Business Act (15 U.S.C. 642) and sets forth
conditions under which only a former SBA employee who occupied a
position involving discretion or who exercised discretion with respect
to the granting of SBA Assistance or the administration of such
assistance, would be prohibited from accepting or retaining a position
as employee, partner, or otherwise, with a concern which has received
this specific SBA Assistance, for a period of two years following the
the granting or administration of such assistance. It is anticipated
that as was the case with former Sec. 105.403, this prohibition will
apply only to those SBA employees who had final discretionary authority
over the making or administration of specific SBA Assistance. It would
not apply to those whose responsibilities extended only to provision of
advice or recommendations on the granting or administering of
Assistance or performance of ministerial acts with respect to its
administration. Section 105.202 was formerly located at 13 CFR 105.403.
Sec. 105.203 SBA Assistance to Person Employing Former SBA Employee
This section is based on the same provision of the Small Business
Act as Sec. 105.202. It would prohibit 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. Section 105.203 was
formerly located at 13 CFR 105.404.
Sec. 105.204 Assistance to SBA Employees or Members of Their Household
This section explains that prior written approval of the Standards
of Conduct Committee is required before any SBA Assistance, other than
Disaster Loans, as defined in subparagraphs (1) and (2) of section 7(b)
of the Small Business Act, can be provided to a person whose sole
proprietor, partner, officer, director, or significant stockholder is
an SBA employee or a member of his or her household. Section 105.204
was formerly located at 13 CFR 105.506(g)(1).
Sec. 105.205 Duty to Report Irregularities
This section explains the requirement that employees report acts of
malfeasance or misfeasance to the Inspector General. This section was
formerly located at 13 CFR Sec. 105.516.
Sec. 105.206 Applicable Rules and Directions
This section explains the requirement that employees follow Agency
rules, regulations, operating procedures, instructions and other proper
directions in the performance of official functions. This section was
formerly located at 13 CFR 105.517.
Sec. 105.207 Politically Motivated Activities With Respect to the
Minority Small Business Program
This section sets forth prohibitions, on certain SBA employees, and
remedial measures for violations of those prohibitions with regard to
the programs or activities conducted pursuant to sections 8(a) and 7(j)
of the
[[Page 58261]]
Small Business Act. This section is based on sec. 8(a)(19) of the Small
Business Act (15 U.S.C. 637(a)(19)).
Paragraph (a) of Sec. 105.207 prohibits employees, who have
authority to take, direct others to take, recommend, or approve any
action with respect to transactions undertaken pursuant to section 7(j)
of the Small Business Act, from exercising or threatening to exercise
such authority on the basis of the political activity or affiliation of
any party. Furthermore, subsection (a) requires all employees to
``expeditiously report'' to SBA's Inspector General any such action for
which the employee's participation has been solicited or directed.
Paragraph (b) asserts that the penalty for violations of this
section may consist of separation from service, reduction in grade,
suspension, or reprimand and shall be imposed by the Administrator.
Paragraph (c) notes that this section does not apply to any action
taken as a penalty or other enforcement of a violation of any law,
rules, or regulations prohibiting or restricting political activity.
This section was formerly located at 13 CFR 105.522.
Sec. 105.208 Penalties
This section states that any employee found guilty of violating
these regulations may be subject to disciplinary action, including
dismissal or suspension from SBA employment. This provision was
formerly located at 13 CFR 105.701.
Sec. 105.301 Assistance to Officers or Employees of Other Government
Organizations
This section requires a prior written statement from the
appropriate department or military service before any SBA Assistance
may be granted to a person whose sole proprietor, general partner,
officer, director, or stockholder with a 10% or more interest is an
employee of another Government agency or department, having a grade of
GS-13 or its equivalent or higher, in the case of civilian employees,
or the rank of major or lieutenant commander, or its equivalent or
higher, in the case of military personnel.
Additionally, this section provides that, except in special
circumstances, approved by the Standards of Conduct Committee, SBA will
not enter into a contract with a person when its principal, or member
of his or her household, is an employee of a Government agency.
Finally, this section requires similar Standards of Conduct
Committee approval before granting SBA Assistance, other than Disaster
Loans, to persons whose principal, or member of their household, is a
member of Congress, an appointed official, or an employee of the
legislative or judicial branch of the Government. This provision was
formerly located at 13 CFR 105.601.
Sec. 105.302 Assistance to Employees or Members of Quasi-Government
Organizations
This section discusses the requirement of Standards of Conduct
Committee approval for SBA Assistance to members of employees of Small
Business Advisory Councils, SCORE volunteers, or members of their
household. This section was formerly located at 13 CFR 105.602.
Sec. 105.401 Standards of Conduct Committee
This section sets forth the functions and responsibilities of the
SBA Standards of Conduct Committee. The Committee's responsibilities
include advising and giving direction in the administration of
standards of conduct regulations and making decisions on specific
requests for guidance from Agency management, in connection with
matters related to standards of conduct.
This section also delineates the composition of the Standards of
Conduct Committee: the General Counsel or Deputy General Counsel in his
or her absence; the Associate Deputy Administrator for Management and
Administration or the Assistant Administrator for Administration, in
his or her absence; and the Director of Personnel or the Deputy
Director of Personnel in his or her absence.
This provision was formerly located at 13 CFR 105.801.
Sec. 105.402 Standards of Conduct Counselors
This section designates the Deputy General Counsel as SBA Standards
of Conduct Counselor and the Associate General Counsel for General Law
as an Assistant Standards of Conduct Counselor, and outlines the duties
and responsibilities of those positions. This provision was formerly
located at 13 CFR 105.402, except that the current Sec. 105.802 has
been amended to add the Associate General Counsel as an Assistant
Standards of Conduct Counselor and to delete Regional Standards of
Conduct Counselors. The section also amends the standards of conduct
Counselors' responsibilities for review of employees Confidential
Financial Disclosure Reports (Standard Form 450) instead of the
previous requirement to review Statements of Employment and Financial
Interests (SBA Form 703).
Sec. 105.403 Designated Agency Ethics Official
This section designates the Deputy General Counsel as SBA's
Designated Agency Ethics Official, authorizes the appointment of
Alternate Ethics Officials, and outlines the duties and
responsibilities for those positions. This provision was formerly
located at 13 CFR 105.403, except that the current section has been
amended to permit the appointment of more than one Alternate Agency
Ethics Official.
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 proposed rule will not be considered a
significant rule within the meaning of Executive Order 12866 and will
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
proposed rule would not have federalism implications.
For purposes of Executive Order 12778, SBA certifies that this
proposed 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 proposed rule, if promulgated in final, would impose no new
reporting or recordkeeping requirements.
List of Subjects in 13 CFR Part 105
Conflict of interest.
For the reasons set forth above, SBA is amending Title 13 of the
Code of Federal Regulations as follows:
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.
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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; 15 U.S.C. 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 his any spouse who
reside 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, participating lender status,
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 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, rules, or regulation
prohibiting or restricting political activity.
(d) The prohibitions of 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.
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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 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 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 in 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
Sec. 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 Officials, pursuant to the Ethics
in Government Act of 1978, is the Deputy General Counsel. He or she
may, in turn, appoint one or more an 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 Officials and Alternates
administer the program for Financial Disclosure Statements under 5 CFR
2634.201, 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 Officials and Alternates are set forth
in more detail in 5 CFR 2638.203, which is promulgated and amended by
the Office of Government Ethics.
Philip Lader,
Administrator.
[FR Doc. 95-28513 Filed 11-24-95; 8:45 am]
BILLING CODE 8025-01-P
