SB 221

Existing law does not provide a process for the evaluation of business arrangements entered into by members of the Alabama Legislature

This bill would require a member of the Legislature who enters into certain business arrangements with a client for which the member is compensated to seek preapproval from the Ethics Commission prior to receiving compensation under the arrangement

This bill would provide a presumption that certain business arrangements are appropriate under this act

This bill would provide guidance to the Ethics Commission in determining whether to preapprove a business arrangement

This bill would provide limited protection to a member of the Legislature for certain business arrangements entered into by a member

This bill would require members to submit to the Ethics Commission certain detailed information

This bill would authorize the Ethics Commission to adopt rules

Relating to the Code of Ethics; to add Section 36-25-7.1 to the Code of Alabama 1975; to require a member of the Legislature who enters into certain business arrangements with a client for which the member is compensated to seek preapproval from the Ethics Commission prior to receiving compensation under the arrangement; to provide a presumption that certain business arrangements are appropriate under this act; to provide guidance to the Ethics Commission in determining whether to preapprove a business arrangement; to provide limited protection to a member of the Legislature who is compensated for providing professional services in certain circumstances; to require members to submit to the Ethics Commission certain detailed information; and to authorize the Ethics Commission to adopt rules.

Section 1

Section 36-25-7.1 is added to the Code of Alabama 1975, to read as follows: (a) For the purposes of this section, the following words have the following meanings: (1) BUSINESS ARRANGEMENT. A contract or agreement entered into between a member and a client whereby the client promises to provide compensation to the member, whether directly or through another entity, in exchange for goods or services provided by the member. The term does not include arrangements that are personal in nature or where the compensation to the member is routine or de minimis and in a trade in which the member actively engaged before the member qualified to run for legislative office. (2) CLIENT. An individual, business or other entity, board, commission, or political subdivision of the state. (3) COMPENSATION. The payment of money. The term includes commissions. (4) MEMBER. A member of the state Legislature. (b) A member may not accept compensation pursuant to any business arrangement until the member has submitted a detailed written request seeking preapproval from the commission regarding the business arrangement in accordance with this section. (c) After receiving a request, the commission has 60 days to determine whether to preapprove the business arrangement; provided, however, the commission shall have up to 30 additional days to make its determination if the commission finds it needs additional information to make a determination. The member shall cooperate with any request from the commission for additional information, documentation, or other evidence the commission deems appropriate. (d) The commission shall consider all of the following factors, taken together with the totality of the circumstances, when determining whether to preapprove a business arrangement: (1) The level of expertise or knowledge the member possesses with regard to any specific service the member would provide under the business arrangement. (2) The extent to which the performance to be provided by the member under the business arrangement is of the like and kind the client would customarily or routinely seek. (3) The rate of compensation to the member for services compared to the usual and customary rate for the services provided in that field. (4) The rate of compensation to the member for goods provided compared to the fair market value or the usual and customary cost charged for those goods. (e) There shall be a presumption that the following types of business arrangements under this section are appropriate: (1) The continuation of services or goods provided where the business relationship between the member and the client existed before the member qualified to run for legislative office and the performance by the member would be substantially similar to the performance provided by the member to that particular client in the past. (2) Professional services provided in a field of work in which the member regularly engages at a compensation rate that is usual and customary for that field. (3) Goods provided by a member in a business in which the member regularly engages, purchased at their fair market value and are of the like, kind, and quantity that is usual and customary for the member's business. (f) Preapproval under this section requires a majority vote of the members of the commission present. If a regularly scheduled meeting of the commission does not occur in a time frame that allows the commission to make a determination under this section, the director shall call a special meeting for consideration of the business arrangement. A preappoval by the commission shall be effective and deemed valid only to the extent that the facts presented, assertions alleged, and information provided by the member to the commission are complete and accurate. (g) The member shall notify the commission of any material change in a business arrangement or if the member becomes aware of additional information that may potentially affect the commission's determination under this section. (h) The provisions of this section may not require the disclosure of any lawyer-client privilege or doctor-patient privilege otherwise protected by law, provided the compensation rate for the services rendered or goods provided by the member are at usual and customary rates. (i) Preapproval by the commission of a business arrangement pursuant to this section shall protect the member from civil and criminal liability to the state or any political subdivision of the state for services rendered or goods provided in reliance on the commission's approval of the business arrangement; provided, however, the protection granted under this subsection only applies to the extent that the facts presented, assertions alleged, and information provided by the member to the commission are complete and accurate. Failure by the commission to preapprove a business arrangement pursuant to this section does not by itself constitute evidence of any wrongdoing on the part of the member. (j)(1) Except as provided in subdivision (2), records generated to comply with the provisions of this section are public records for purposes of Section 36-12-40. (2) Upon request by the member and a showing of good cause by the member that public disclosure of information relating to the business arrangement may cause harm to the member or the other parties to the business arrangement, the commission may withhold such information from public disclosure, provided; however, the fact that a request for preapproval by the member was made shall remain a public record. (k) In addition to the statement of economic interest filed pursuant to this chapter, no later than the date a member is sworn into office, each member shall file with the commission a detailed list of all clients with which the member was engaged in a business arrangement at the time the member qualified to run for office. (l) The commission may adopt rules to carry out this section.

Section 2

This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law and shall apply to members of the Legislature on and after November 7, 2018.