HOUSE FILE 2201

BY  ISENHART and KELLEY

A BILL FOR

An Act relating to gifts, honoraria, and loans received from restricted donors and others.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I

ETHICS LAWS
    Section 1.  Section 68B.2, subsection 9, Code 2011, is amended to read as follows:
   9.  “Gift” means a rendering of anything of value, tangible or intangible, in return for which legal consideration of equal or greater value is not given and received.
    Sec. 2.  Section 68B.22, subsection 4, paragraph n, Code 2011, is amended to read as follows:
   n.  Gifts
 
with a value of one hundred dollars or less which are given to a public official or public employee for the public official’s or public employee’s wedding or twenty-fifth or fiftieth wedding anniversary.
    Sec. 3.  Section 68B.22, subsection 4, paragraph s, Code 2011, is amended to read as follows:
   s.  Gifts of food, beverage, and entertainment received at a function where every member of the general assembly has been invited to attend, when the function takes place during a regular session of the general assembly
 
on a day when both houses of the general assembly convene during a regular session and members receive a per diem pursuant to section 2.10. A sponsor of a function under this paragraph shall file a registration prior to the function taking place identifying the sponsor and the date, time, and location of the function. The registration shall be filed with the person or persons designated by the secretary of the senate and the chief clerk of the house and with the board. After a function takes place, the sponsor of the function shall file a report disclosing the total amount expended, including in-kind expenditures, on food, beverage, and entertainment for the function. The report shall be filed with the person or persons designated by the secretary of the senate and the chief clerk of the house and with the board within twenty-eight calendar days following the date of the function.

For purposes of this paragraph, entertainment includes free or reduced-price tickets to a scheduled event open to the general public if the general public may obtain the tickets on the same free or reduced-price basis.
    Sec. 4.  Section 68B.22, Code 2011, is amended by adding the following new subsections:
   NEW SUBSECTION.  9.  An official, state employee, candidate for state public office, or a member of the immediate family of an official, state employee, or candidate for state public office who receives a gift from a restricted donor that meets one of the exceptions provided in subsection 4 and that has a value of more than one hundred dollars shall submit a report disclosing the gift to the board in a manner required by the board. The report shall identify the gift, the restricted donor, the value of the gift, the date the gift was received, and any other information required by the board. The receipt of a gift meeting the criteria of subsection 4, paragraph  “a”, shall not be reported in the report required under this subsection.
   NEW SUBSECTION.  10.  A member of the general assembly, a legislative employee, or a member of the immediate family of a member of the general assembly or a legislative employee who receives a gift from a restricted donor that meets one of the exceptions provided in subsection 4 and that has a value of more than one hundred dollars shall submit a report disclosing the gift to the general assembly in a manner required by the senate or house of representatives or legislative council, as applicable. The report shall identify the gift, the restricted donor, the value of the gift, the date the gift was received, and any other information required by the senate or house of representatives. The receipt of a gift meeting the criteria of subsection 4, paragraph “a”, shall not be reported in the report required under this subsection.
    Sec. 5.  NEW SECTION.  68B.22A  Reporting of gifts and bequests received.
   1.  An agency of state government that receives a gift or bequest with a value of more than one hundred dollars shall report the gift or bequest to the board and the general assembly’s standing committees on government oversight. A foundation attached to or associated with an agency of state government that receives a gift or bequest that has a value of more than one hundred dollars and is intended to provide moneys for the funding of a gift to an official or state employee shall report the gift or bequest to the board and the general assembly’s standing committees on government oversight.
   2.  By January 31 of each year, the board shall submit to the fiscal services division of the legislative services agency a written report listing all gifts and bequests received during the previous calendar year with a value over one thousand dollars and the purpose for each such gift or bequest. The submission shall also include a listing of all gifts and bequests received by a department from a person if the cumulative value of all gifts and bequests received by the department from the person during the previous calendar year exceeds one thousand dollars, and the board shall include, if available, the purpose for each such gift or bequest.
   3.  The reports on gifts or bequests filed by the state board of regents and the Iowa state fair board pursuant to section 8.44 shall be deemed sufficient to comply with the requirements of this section.
    Sec. 6.  Section 68B.23, Code 2011, is amended by adding the following new subsections:
   NEW SUBSECTION.  3.  An official or state employee receiving honoraria as allowed under this section of an amount or with a value of more than one hundred dollars shall file a report disclosing the receipt of honoraria with the board in the manner provided in section 68B.22, subsection 9.
   NEW SUBSECTION.  4.  A member of the general assembly or a legislative employee receiving honoraria as allowed under this section of an amount or with a value of more than one hundred dollars shall file a report disclosing the receipt of honoraria with the senate or house of representatives or legislative council, as applicable, in the manner provided in section 68B.22, subsection 10.
    Sec. 7.  Section 68B.24, Code 2011, is amended to read as follows:
   68B.24  Loans —— receipt from lobbyists
 
restricted donors prohibited.
   1.  An official, member of the general assembly, state employee, legislative employee, or candidate for state office shall not, directly or indirectly, seek or accept a loan or series of loans from a person who is a lobbyist
 
restricted donor.
   2.  A lobbyist
 
restricted donor shall not, directly or indirectly, offer or make a loan or series of loans to an official, member of the general assembly, state employee, legislative employee, or candidate for state office. A lobbyist
 
restricted donor shall also not, directly or indirectly, join with one or more persons to offer or make a loan or series of loans to an official, member of the general assembly, state employee, legislative employee, or candidate for state office.
   3.  This section shall not apply to loans made in the ordinary course of business. For purposes of this section, a loan is “made in the ordinary course of business” when it is made by a person who is regularly engaged in a business that makes loans to members of the general public and the finance charges and other terms of the loan are the same or substantially similar to the finance charges and loan terms that are available to members of the general public.
    Sec. 8.  REPEAL.  Section 8.7, Code Supplement 2011, is repealed.

DIVISION II

CONFORMING AMENDMENTS
    Sec. 9.  Section 22.7, subsection 52, paragraph d, Code Supplement 2011, is amended to read as follows:
   d.  This subsection does not apply to a report filed with the ethics and campaign disclosure board pursuant to section 8.7
 
68B.22A.
    Sec. 10.  Section 68B.22, subsection 3, Code 2011, is amended to read as follows:
   3.  A restricted donor may give, and a public official, public employee, or candidate, or the person’s immediate family member, may accept an otherwise prohibited nonmonetary gift or a series of otherwise prohibited nonmonetary gifts and not be in violation of this section if the nonmonetary gift or series of nonmonetary gifts is donated within thirty days to a public body, the department of administrative services, or a bona fide educational or charitable organization, if no part of the net earnings of the educational or charitable organization inures to the benefit of any private stockholder or other individual. All such items donated to the department of administrative services shall be disposed of by assignment to state agencies for official use or by public sale. A person subject to section 8.7 that receives a gift pursuant
 
subject to this subsection
 
and section 68B.22A shall file a report pursuant to section 8.7
 
68B.22A.
    Sec. 11.  Section 68B.32, subsection 1, Code 2011, is amended to read as follows:
   1.  An Iowa ethics and campaign disclosure board is established as an independent agency. The board shall administer this chapter and set standards for, investigate complaints relating to, and monitor the ethics of officials, employees, lobbyists, and candidates for office in the executive branch of state government. The board shall administer and set standards for, investigate complaints relating to, and monitor the campaign finance practices of candidates for public office. The board shall administer and establish standards for, investigate complaints relating to, and monitor the reporting of gifts and bequests under section 8.7
 
68B.22A. The board shall consist of six members and shall be balanced as to political affiliation as provided in section 69.16. The members shall be appointed by the governor, subject to confirmation by the senate.
    Sec. 12.  Section 68B.32A, subsections 1, 2, 5, 6, 7, 9, 12, and 19, Code 2011, are amended to read as follows:
   1.  Adopt rules pursuant to chapter 17A and conduct hearings under sections 68B.32B and 68B.32C and chapter 17A, as necessary to carry out the purposes of this chapter, chapter 68A, and section 8.7
 
68B.22A.
   2.  Develop, prescribe, furnish, and distribute any forms necessary for the implementation of the procedures contained in this chapter, chapter 68A, and section 8.7
 
68B.22A for the filing of reports and statements by persons required to file the reports and statements under this chapter and chapter 68A.
   5.  Receive all registrations and reports that are required to be filed with the board under this chapter or section 8.7
 
68B.22A. The board, upon its own motion, may initiate action, conduct hearings, impose sanctions, and order administrative resolutions relating to reporting requirements under this chapter or section 8.7
 
68B.22A.
   6.  Prepare and publish a manual setting forth examples of approved uniform systems of accounts and approved methods of disclosure for use by persons required to file statements and reports under this chapter, chapter 68A, and section 8.7
 
68B.22A. The board shall also prepare and publish other educational materials, and any other reports or materials deemed appropriate by the board. The board shall annually provide all officials and state employees with notification of the contents of this chapter, chapter 68A, and section 8.7
 
68B.22A by distributing copies of educational materials to each agency of state government under the board’s jurisdiction.
   7.  Assure that the statements and reports which have been filed in accordance with this chapter, chapter 68A, and section 8.7
 
68B.22A are available for public inspection and copying during the regular office hours of the office in which they are filed and not later than by the end of the day during which a report or statement was received. Rules adopted relating to public inspection and copying of statements and reports may include a charge for any copying and mailing of the reports and statements, shall provide for the mailing of copies upon the request of any person and upon prior receipt of payment of the costs by the board, and shall prohibit the use of the information copied from reports and statements for any commercial purpose by any person.
   9.  Establish and impose penalties, and recommendations for punishment of persons who are subject to penalties of or punishment by the board or by other bodies, for the failure to comply with the requirements of this chapter, chapter 68A, or section 8.7
 
68B.22A.
   12.  Establish a procedure for requesting and issuing board advisory opinions to persons subject to the authority of the board under this chapter, chapter 68A, or section 8.7
 
68B.22A. Local officials and local employees may also seek an advisory opinion concerning the application of the applicable provisions of this chapter. Advice contained in board advisory opinions shall, if followed, constitute a defense to a complaint alleging a violation of this chapter, chapter 68A, section 8.7
 
68B.22A, or rules of the board that is based on the same facts and circumstances.
   19.  Impose penalties upon, or refer matters relating to, persons who provide false information to the board during a board investigation of a potential violation of this chapter, chapter 68A, section 8.7
 
68B.22A, or rules of the board. The board shall adopt rules to administer this subsection.
    Sec. 13.  Section 68B.32B, subsection 1, Code 2011, is amended to read as follows:
   1.  Any person may file a complaint alleging that a candidate, committee, person holding a state office in the executive branch of state government, employee of the executive branch of state government, or other person has committed a violation of chapter 68A or rules adopted by the board. Any person may file a complaint alleging that a person holding a state office in the executive branch of state government, an employee of the executive branch of state government, or a lobbyist or a client of a lobbyist of the executive branch of state government has committed a violation of this chapter or rules adopted by the board. Any person may file a complaint alleging a violation of section 8.7
 
68B.22A or rules adopted by the board. The board shall prescribe and provide forms for purposes of this subsection. A complaint must include the name and address of the complainant, a statement of the facts believed to be true that form the basis of the complaint, including the sources of information and approximate dates of the acts alleged, and a certification by the complainant under penalty of perjury that the facts stated to be true are true to the best of the complainant’s knowledge.
    Sec. 14.  Section 68B.32B, subsection 4, paragraph a, Code 2011, is amended to read as follows:
   a.  Facts that would establish a violation of a provision of this chapter, chapter 68A, section 8.7
 
68B.22A, or rules adopted by the board.
    Sec. 15.  Section 68B.32B, subsections 8 and 9, Code 2011, are amended to read as follows:
   8.  The purpose of an investigation by the board’s staff is to determine whether there is probable cause to believe that there has been a violation of this chapter, chapter 68A, section 8.7
 
68B.22A, or of rules adopted by the board. To facilitate the conduct of investigations, the board may issue and seek enforcement of subpoenas requiring the attendance and testimony of witnesses and subpoenas requiring the production of books, papers, records, and other real evidence relating to the matter under investigation. Upon the request of the board, an appropriate county attorney or the attorney general shall assist the staff of the board in its investigation.
   9.  If the board determines on the basis of an investigation by board staff that there is probable cause to believe the existence of facts that would establish a violation of this chapter, chapter 68A, section 8.7
 
68B.22A, or of rules adopted by the board, the board may issue a statement of charges and notice of a contested case proceeding to the complainant and to the person who is the subject of the complaint, in the manner provided for the issuance of statements of charges under chapter 17A. If the board determines on the basis of an investigation by staff that there is no probable cause to believe that a violation has occurred, the board shall close the investigation, dismiss any related complaint, and the subject of the complaint shall be notified of the dismissal. If the investigation originated from a complaint filed by a person other than the board, the person making the complaint shall also be notified of the dismissal.
    Sec. 16.  Section 68B.32C, subsections 1 and 3, Code 2011, are amended to read as follows:
   1.  Contested case proceedings initiated as a result of the issuance of a statement of charges pursuant to section 68B.32B, subsection 9, shall be conducted in accordance with the requirements of chapter 17A. Clear and convincing evidence shall be required to support a finding that a person has violated this chapter, section 8.7
 
68B.22A, or any rules adopted by the board pursuant to this chapter. A preponderance of the evidence shall be required to support a finding that a person has violated chapter 68A or any rules adopted by the board pursuant to chapter 68A. The case in support of the statement of charges shall be presented at the hearing by one of the board’s attorneys or staff unless, upon the request of the board, the charges are prosecuted by another legal counsel designated by the attorney general. A person making a complaint under section 68B.32B, subsection 1, is not a party to contested case proceedings conducted relating to allegations contained in the complaint.
   3.  Upon a finding by the board that the party charged has violated this chapter, chapter 68A, section 8.7
 
68B.22A, or rules adopted by the board, the board may impose any penalty provided for by section 68B.32D. Upon a final decision of the board finding that the party charged has not violated this chapter, chapter 68A, section 8.7
 
68B.22A, or the rules of the board, the complaint shall be dismissed and the party charged and the original complainant, if any, shall be notified.
    Sec. 17.  Section 68B.32D, subsection 1, unnumbered paragraph 1, Code 2011, is amended to read as follows:
   The board, after a hearing and upon a finding that a violation of this chapter, chapter 68A, section 8.7
 
68B.22A, or rules adopted by the board has occurred, may do one or more of the following:
    Sec. 18.  Section 68B.32D, subsection 1, paragraphs c, d, and h, Code 2011, are amended to read as follows:
   c.  Issue an order requiring the violator to file any report, statement, or other information as required by this chapter, chapter 68A, section 8.7
 
68B.22A, or rules adopted by the board.
   d.  Publicly reprimand the violator for violations of this chapter, chapter 68A, section 8.7
 
68B.22A, or rules adopted by the board in writing and provide a copy of the reprimand to the violator’s appointing authority.
   h.  Issue an order requiring the violator to pay a civil penalty of not more than two thousand dollars for each violation of this chapter, chapter 68A, section 8.7
 
68B.22A, or rules adopted by the board.
EXPLANATION
   This bill relates to gifts, honoraria, and loans received from restricted donors. The bill is organized by divisions.
   ETHICS LAWS. Currently, the gift law prohibits public officials, public employees, and candidates, and immediate family members of public officials, public employees, and candidates from accepting or receiving gifts from restricted donors. The gift law includes a list of exceptions that makes an otherwise impermissible gift permissible.
   Currently, the term “gift” in Code chapter 68B provides that a gift is the rendering of anything of value in return for which legal consideration of equal or greater value is not given and received. The division adds that a gift can be either tangible or intangible.
   Currently, one of the exceptions to the gift law is a gift from a restricted donor to a public official or public employee for a wedding or twenty-fifth or fiftieth wedding anniversary. The division limits such permissible gifts to a value of $100 or less.
   Currently, one of the exceptions to the gift law is for food, beverage, and entertainment received at a function where every member of the general assembly has been invited to attend during a regular session of the general assembly. The division changes the required time frame from during a regular session of the general assembly to a day when both houses of the general assembly convene during a regular session and members receive a per diem. As a result, functions would only qualify for the exception if they take place during the first 110 days in the first regular session of a general assembly or during the first 100 days in the second regular session of a general assembly. The division also provides that entertainment may include free or reduced-price tickets to a scheduled event open to the general public if the general public may obtain the tickets on the same free or reduced-price basis.
   The division adds a reporting requirement to the gift law. If a gift meets one of the exceptions to the gift law and the value of the gift is more than $100, certain recipients must file a report with the Iowa ethics and campaign disclosure board or with the general assembly, as applicable, disclosing the gift. The reporting requirement does not apply to contributions to a candidate or a candidate’s committee.
   The division requires a public official or public employee receiving permissible honoraria of an amount or with a value of more than $100 to file a report with the Iowa ethics and campaign disclosure board or the general assembly, as applicable, disclosing the honoraria.
   Currently, an official, member of the general assembly, state employee, legislative employee, or candidate for state office is prohibited from seeking or accepting a loan from a lobbyist. The division applies the prohibition to all restricted donors.
   Currently, Code section 8.7 requires all gifts and bequests received by a department or by the governor on behalf of the state to be reported to the ethics and campaign disclosure board and the general assembly’s standing committees on government oversight. The division repeals Code section 8.7 and moves the content of the Code section to new Code section 68B.22A and makes changes. The division provides that all agencies of state government, including the governor, must report the receipt of gifts and bequests. The division limits the reporting to gifts and bequests with a value of more than $100. The division provides that a foundation attached to or associated with an agency of state government must report gifts and bequests with a value of more than $100 when the gift or bequest is intended to provide moneys for the funding of a gift to an official or state employee.
   CONFORMING AMENDMENTS. The division makes conforming amendments related to the moving of the contents of Code section 8.7 to new Code section 68B.22A.