HB 1388 - AS AMENDED BY THE SENATE

21Mar2024... 0693h

05/22/2024   2022s

2024 SESSION

24-2500

08/05

HOUSE BILL 1388

AN ACT relative to ethical standards for members of the general court.

SPONSORS: Rep. Sheehan, Hills. 43

COMMITTEE: Legislative Administration

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AMENDED ANALYSIS

This bill defines "special interest" and "organization" for the purposes of determining the ethical duties of members of the general court and makes provisions for the recusal of members of the general court for conflicts of interest.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

21Mar2024... 0693h

05/22/2024   2022s 24-2500

08/05

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twenty Four

AN ACT relative to ethical standards for members of the general court.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1  Findings; Purpose.  The general court hereby finds:

I.  That part II, article 7 of the New Hampshire constitution states:  "No member of the general court shall take fees, be of counsel, or act as advocate, in any cause before either branch of the Legislature; and upon due proof thereof, such member shall forfeit his seat in the Legislature."

II.  That the general court has adopted principles of public service including the principle requiring "independent, objective judgment in performing a legislator's duties and deciding all matters on the merits free from conflicts of interest and both real and apparent improper influences."

III.  That the New Hampshire general court, consistent with RSA 14-B:3, has adopted guidelines prohibiting legislators from engaging in certain activities.

IV.  That in order to comply with New Hampshire's constitutional requirements, to satisfy statutory requirements, and to maintain the confidence of the New Hampshire citizenry in official legislative activities, recusal from voting on any legislation when there is a conflict of interest is sometimes required.

2  Conflicts of Interest.  Amend the chapter title of RSA 14-C to read as follows:

GIFTS, HONORARIUMS, AND EXPENSE REIMBURSEMENTS REQUIREMENTS 

FOR LEGISLATORS AND LEGISLATIVE EMPLOYEES

AND CONFLICTS OF INTEREST FOR LEGISLATORS

3  New Sections; Recusal for Conflicts of Interest.  Amend RSA 14-C by inserting after section 4 the following new sections:

14-C:4-a  Recusal for Conflicts of Interest.

I. A legislator shall recuse themselves from participation in any official legislative activity pertaining to legislation when:

(a)  The legislator has a conflict of interest with the subject of the legislation as defined in RSA 14-B:1, I; and

(b) The legislator or a member of the legislator's household could reasonably be expected to incur a direct and substantial financial benefit or detriment as a result of the outcome of the legislative activity.

II. A legislator shall recuse themselves from participation in any official legislative activity pertaining to the specific legislation that causes a conflict when the legislator or a member of the legislator’s household satisfies all of the following:

(a)  Receives financial remuneration from an organization;

(b) Holds a position to exercise substantial influence over the affairs of the organization; and

(c) The organization has lobbied, testified, or otherwise attempted to influence the outcome of the official legislative activity.

14-C:4-b  Exceptions to Recusal for Conflicts of Interest.  A legislator shall not be required to recuse themselves from participation in any official legislative activity regarding preparation, review, or approval or disapproval of the state budget or general revenue bills.

14-C:4-c  Persons Having Substantial Influence.  Those persons who hold any of the following powers, responsibilities, or interest having substantial influence over the affairs of the organization may include, but are not limited to, the following:

I.  Voting members of the governing body;

II.  Presidents, chief executive officers, or chief operating officers;?and

III.  Treasurers and chief financial officers.

14-C:4-d  Facts and Circumstances Tending to Show Substantial Influence.  Whether a person holds a position to exercise substantial influence over the affairs of the organization shall be determined based on the totality of the circumstances.  Facts and circumstances tending to show that a person has substantial influence over the affairs of an organization include, but are not limited to, the following:

I.  The person founded the organization;

II.  The person is a substantial contributor to the organization;  

III.  The person's compensation is primarily based on revenues derived from activities of the organization, or of a particular department or function of the organization, that the person controls;

IV.  The person has or shares authority to control or determine a substantial portion of the organization's capital expenditures, operating budget, or compensation for employees;

V.  The person manages a discrete segment or activity of the organization that represents a substantial portion of the activities, assets, income, or expenses of the organization, as compared to the organization as a whole;

VI.  The person owns a controlling interest (measured by either vote or value) in a corporation, partnership, or trust or other entity.

14-C:4-e  Facts and Circumstances Tending to Show No Substantial Influence.?  Facts and circumstances tending to show that a person does not have substantial influence over the affairs of an organization include, but are not limited to, the following:

I.  The person has taken a bona fide vow of poverty as an employee, agent, or on behalf, of a religious organization;

II.  The person is a contractor (such as an attorney, accountant, or investment manager or advisor) whose sole relationship to the organization is providing professional advice (without having decision-making authority or a title of authority within the organization) with respect to transactions from which the contractor will not economically benefit either directly or indirectly (aside from customary fees received for the professional advice rendered);

III.  The direct supervisor of the individual does not hold a position to exercise substantial influence over the affairs of the non-governmental organization, business, or person;

IV.  The person does not engage in any management decisions affecting the organization as a whole or a discrete segment or activity of the organization that represents a substantial portion of the activities, assets, income, or expenses of the non-governmental organization, business, or person, as compared to the organization as a whole; or

V.  Any preferential treatment a person receives based on the size of that person's contribution is also offered to all other donors making a comparable contribution as part of a solicitation intended to attract a substantial number of contributions.

4  New Paragraph; Legislative Ethics; Definition; Organization.  Amend RSA 14-B:1 by inserting after paragraph III the following new paragraph:

III-a.  “Organization” shall be construed broadly to mean any business, corporation, whether for profit, non-profit, not-for-profit, social welfare organization, or natural person.  “Organization” shall not include the United States of America, the state of New Hampshire, a county within the state of New Hampshire, or any political subdivision within the state of New Hampshire.

5  Legislative Ethics; Definition; Special of Interest.  Amend RSA 14-B:1, V to read as follows:

V.  "Special interest" means any financial or non-financial personal interest in the outcome of a matter that is the subject of official activity, distinct from and greater than the interests of the public at large.

(a)  A financial interest exists where a legislator or household member, or a person or organization, whether nonprofit or for profit, by which the legislator is employed, or from which the legislator receives compensation, to act as the person's or organization's agent or advocate, could stand to gain or lose anything of material value as a result of the official activity.

(b)  A non-financial personal interest exists where a legislator or household member has a responsibility for the welfare of an organization, whether nonprofit or for profit, by virtue of holding a position with a fiduciary responsibility, such as a board member, trustee, or director.

(c)  A legislator's or household member's ownership of securities of a publicly traded corporation shall not be construed to constitute a "special interest" in matters that may affect the corporation unless the legislator or household member serves as an officer, board member, trustee or director of the corporation or owns more than one percent of the outstanding securities of the corporation.

6  Effective Date.  This act shall take effect January 1, 2025.