An Act concerning school ethics and amending P.L.1991, c.393.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 3 of P.L.1991, c.393 (C.18A:12-23) is amended to read as follows:

3. For the purposes of this act, unless the context clearly requires a different meaning:

"Administrator" means any officer, other than a board member, or employee of a local school district who (i) holds a position which requires a certificate that authorizes the holder to serve as school administrator, principal, or school business administrator; or (ii) holds a position which does not require that the person hold any type of certificate but is responsible for making recommendations regarding hiring or the purchase or acquisition of any property or services by the local school district; or (iii) holds a position which requires a certificate that authorizes the holder to serve as supervisor and who is responsible for making recommendations regarding hiring or the purchase or acquisition of any property or services by the local school district;

"Board member" means any person holding membership, whether by election or appointment, on any board of education other than the State Board of Education;

"Business" means any corporation, partnership, firm, enterprise, franchise, association, trust, sole proprietorship, union, political organization, or other legal entity but shall not include a local school district or any other public entity;

"Commission" means the School Ethics Commission established pursuant to section 7 of this act;

"Commissioner" means the Commissioner of Education;

"Interest" means the ownership or control of more than 10% of the profits, assets, or stock of a business but shall not include the control of assets in a labor union;

"Local school district" means any local or regional school district established pursuant to chapter 8 or chapter 13 of Title 18A of the New Jersey Statutes and any jointure commission, county vocational school, county special services district, educational services commission, educational research and demonstration center, environmental education center, and educational information and resource center;

"Member of immediate family" means the spouse, partner in a civil union as defined pursuant to section 92 of P.L.2006, c.103 (C.37:1-33), domestic partner as defined in section 3 of P.L.2003, 246 (C.26:8A-3), or dependent child of a school official residing in
the same household;

"Political organization" means a "political committee" or a "continuing political committee" as those terms are defined in "The New Jersey Campaign Contributions and Expenditures Reporting Act," P.L.1973, c.83 (C.19:44A-1 et seq.);

"Relative" means the school official's spouse, [natural or adopted] partner in a civil union as defined pursuant to section 92 of P.L.2006, c.103 (C.37:1-33), or domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), or the child, parent, [or] sibling [of a school official] , aunt, uncle, niece, nephew, grandparent, grandchild, son-in-law, daughter-in-law, stepparent, stepchild, stepbrother, stepsister, half-brother or half-sister of the school official or of the school official's spouse, civil union partner, or domestic partner, whether the relative is related to the school official or the school official's spouse, civil union partner, or domestic partner by blood, marriage, or adoption;

"School official" means a board member, an employee or officer of the New Jersey School Boards Association, but not including any member of the secretarial, clerical or maintenance staff of the association, or an administrator; and

"Spouse" means the person to whom a school official is legally married under New Jersey law.

(cf: P.L.1995, c.14, s.1)

2. Section 5 of P.L.1991, c.393 (C.18A:12-25) is amended to read as follows:

5. a. On a form to be prescribed by the commission and to be filed annually with the commission, each school official shall state:

(1) whether any relative of the school official [or any other person related to the school official by marriage] is employed by the school district with which the school official holds office or employment or, for officers or employees of the New Jersey School Boards Association, any school district, and, if so, the name and position of each such relative;

(2) whether the school official or a relative is a party to a contract with the school district with which the school official holds office or employment or, for officers or employees of the New Jersey School Boards Association, any school district, and, if so, the nature of the contract; and

(3) whether the school official or a relative is employed by, receives compensation from, or has an interest in any business which is a party to a contract with the school district with which the school official holds office or employment or, for officers or employees of the New Jersey School Boards Association, any school district, and, if so, the name of each such business.

b. Each statement shall be signed by the school official filing it, and the school official's signature shall constitute a representation of the accuracy of the contents of the statement.

c. A school official who fails to file a statement or who files a statement containing information which the school official knows to be false shall be subject to reprimand, censure, suspension, or removal pursuant to the procedures established in section 9 of P.L.1991, c.393 (C.18A:12-29). Nothing in this subsection shall be construed to prevent or limit criminal prosecution.

d. All statements filed pursuant to this section shall be retained by the commission as public records.

(cf: P.L.1995, c.14, s.3)

3. Section 6 of P.L.1991, c.393 (C.18A:12-26) is amended to read as follows:

6. a. Each school official shall annually file a financial disclosure statement with the School Ethics Commission. All financial disclosure statements filed pursuant to this act shall include the following information which shall specify, where applicable, the name and address of each source and the school official's position:

(1) Each source of income, earned or unearned, exceeding $2,000 received by the school official or a member of his immediate family during the preceding calendar year. Individual client fees, customer receipts or commissions on transactions received through a business organization need not be separately reported as sources of income. If a publicly traded security or interest derived from a financial institution is the source of income, the security or interest derived from a financial institution need not be reported unless the school official or member of his immediate family has an interest in the business organization or financial institution;

(2) Each source of fees and honorariums having an aggregate amount exceeding $250 from any single source for personal appearances, speeches or writings received by the school official or a member of his immediate family during the preceding calendar year;

(3) Each source of gifts, reimbursements or prepaid expenses having an aggregate value exceeding $250 from any single source, excluding relatives, received by the school official or a member of his immediate family during the preceding calendar year; and

(4) The name and address of all business organizations in which the school official or a member of his immediate family had an interest during the preceding calendar year.

b. The commission shall prescribe a financial disclosure statement form for filing purposes. Initial financial disclosure statements shall be filed within 90 days following the effective date of this act. Thereafter, statements shall be filed on or before April 30th each year.

c. All financial disclosure statements filed shall be public records.

d. A school official who fails to file a statement or who files a statement containing information which the school official knows to be false shall be subject to reprimand, censure, suspension, or removal pursuant to the procedures established in section 9 of P.L.1991, c.393 (C.18A:12-29). Nothing in this subsection shall be construed to prevent or limit criminal prosecution.

(cf: P.L.1991, c.393, s.6)

4. Section 8 of P.L.1991, c.393 (C.18A:12-28) is amended to read as follows:

8. a. The commission may appoint professional employees and clerical staff and may incur expenses which are necessary to carry out the provisions of this act within the limits of funds appropriated or otherwise made available to it for that purpose. All appointments shall be made in accordance with the provisions of Title 11A of the New Jersey Statutes.

b. In order to carry out the provisions of this act, the commission shall have the power to issue advisory opinions, receive complaints filed pursuant to section 9 of this act, receive and retain disclosure statements filed pursuant to sections 5 and 6 of this act, issue orders to show cause, conduct investigations, hold hearings, and compel the attendance of witnesses and the production of documents as it may deem necessary and relevant to such matter under investigation. The members of the commission and persons appointed by it for this purpose are empowered to administer oaths and examine witnesses under oath.

c. A person shall not be excused from testifying or producing evidence on the ground that the testimony or evidence might tend to incriminate the person, but an answer shall not be used or admitted in any proceeding against the person, except in a prosecution for perjury. The foregoing use immunity shall not be granted without prior written approval of the Attorney General. If use immunity is not granted, the person may be excused from testifying or producing evidence on the ground that the testimony or evidence might tend to incriminate the person.

d. The commission shall promptly report to the Attorney General any information which indicates the possible violation of any criminal law.

(cf: P.L.1991, c.393, s.8)

5. Section 9 of P.L.1991, c.393 (C.18A:12-29) is amended to read as follows:

9. a. Any person, including a member of the commission, may file a complaint alleging a violation of the provisions of this act or the Code of Ethics for School Board Members as set forth in section 5 of P.L.2001, c.178 (C.18A:12-24.1), by submitting it, on a form prescribed by the commission, to the commission. No complaint shall be accepted by the commission unless it has been signed under oath by the complainant. If a member of the commission submits the complaint, the member shall not participate in any subsequent proceedings on that complaint in the capacity of a commission member. If a commission member serves on the school board of, or is employed by, the school district which employs or on whose board the school official named in the complaint serves, the commission member shall not participate in any subsequent proceedings on that complaint.

b. Upon receipt of a complaint, the commission shall serve a copy of the complaint on each school official named therein and shall provide each named school official with the opportunity to submit a written statement under oath.

[The] In the case of a complaint alleging a violation of section 4 of P.L.1991, c.393 (C.18A:12-24), section 5 of P.L.1991, c.393 (C.18A:12-25), or section 6 of P.L.1991, c.393 (C.18A:12-26), the commission shall [thereafter] , upon receipt of an answer to the complaint or the expiration of the time for filing the answer, decide by majority vote whether probable cause exists to credit the allegations in the complaint. If the commission decides that probable cause does not exist, it shall dismiss the complaint and shall so notify the complainant and any school official named in the complaint. The dismissal shall constitute final agency action. If the commission determines that probable cause exists, it shall refer the matter to the Office of Administrative Law for a hearing to be conducted in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), and shall so notify the complainant and each school official named in the complaint.

[In making a determination regarding an alleged violation of the Code of Ethics for School Board Members, the burden of proof shall be on the accusing party to establish factually a violation of the code. A decision regarding a complaint alleging violations of the code shall be rendered by the commission within 90 days of the receipt of the complaint by the commission] If the complaint solely alleges a violation of the Code of Ethics for School Board Members, the commission shall, upon receipt of an answer to the complaint or the expiration of the time for filing the answer, decide by majority vote to either retain the complaint for a hearing by the commission or refer the matter to the Office of Administrative Law for a hearing to be conducted in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), and shall so notify the complainant and each school official named in the complaint. In making a determination regarding an alleged violation of the Code of Ethics for School Board Members, the burden of proof shall be on the accusing party to establish factually a violation of the code. In the case of a complaint solely alleging a violation of the Code of Ethics for School Board Members, a decision by the commission on whether or not a school official has violated the Code of Ethics for School Board Members shall be made within 120 days of the receipt of the complaint by the commission.

c. Upon completion of the hearing, the commission, by majority vote, shall determine whether the conduct complained of constitutes a violation of this act, or in the case of a board member, this act or the code of ethics, or whether the complaint should be dismissed. If the complaint is dismissed, the dismissal shall constitute final agency action and an appeal of that action shall be directly to the Appellate Division of the Superior Court. If a violation is found, the commission shall, by majority vote, recommend to the commissioner the reprimand, censure, suspension, or removal of the school official found to have violated this act, or in the case of a board member, this act or the code of ethics. The commission shall state in writing its findings of fact and conclusions of law. The commissioner shall then act on the commission's recommendation regarding the sanction.

d. Any appeal of the commission's determination [regarding a violation of] that a school official has violated this act, or in the case of a board member, this act or the code of ethics, [and of the commissioner's decision regarding the sanction] shall be in accordance with the provisions of P.L.2008, c.36 (C.18A:6-9.1 et al.).

e. If prior to the hearing the commission determines, by majority vote, that the complaint is frivolous, the commission may impose on the complainant a fine not to exceed $500. The standard for determining whether a complaint is frivolous shall be the same as that provided in subsection b. of section 1 of P.L.1988, c.46 (C.2A:15-59.1).

f. Notwithstanding the provisions of subsections c. and d. of this section, the commission shall be authorized to determine and impose the appropriate sanction including reprimand, censure, suspension or removal of any school official found to have violated this act who is an officer or employee of the New Jersey School Boards Association. Any action of the commission regarding a violation of P.L.1991, c.393 (C.18A:12-21 et seq.) or the sanction to be imposed in the event that the school official involved is an officer or employee of the New Jersey School Boards Association shall be considered final agency action and an appeal of that action shall be directly to the Appellate Division of the Superior Court.

(cf: P.L.2008, c.36, s.5)

6. This act shall take effect immediately.

STATEMENT

This bill makes a number changes to the "School Ethics Act," P.L.1991, c.393 (C.18A:12-21 et seq.). The bill provides the following:

� expands the definitions of "relative" and "member of immediate family." This change will increase the number of individuals that will be effected by the provisions of the "School Ethics Act";

� permits the School Ethics Commission to take certain actions against a school official who fails to file the required financial disclosure statement or who files a statement containing information the person knows to be false. The commission currently has the authority to take these actions against school officials in regard to another type of statement which is required to be filed annually with the commission;

� specifically provides the commission the power to issue orders to show cause. Under current regulations the commission issues orders to show cause in the case of school officials who fail to file (N.J.A.C.6A:28-3.3) or who file incomplete disclosure statements (N.J.A.C.6A:28-3.4) or board members or charter school trustees who fail to comply with mandated training requirements (N.J.A.C.6A:28-4.2); and

� alters the procedures for processing complaints filed with the commission. The bill will permit the commission in the case of complaints related solely to violations of the Code of Ethics for School Board Members to determine whether the matter should be referred to the Office of Administrative Law for a hearing or retained by the commission for a hearing. In these cases the commission will have 120 days to make its decision on whether or not a violation of the Code of Ethics for School Board Members has occurred. The bill also clarifies that if a complaint is dismissed at any stage of the proceedings, the dismissal will constitute final agency action and appeal of that action will be directly to the Appellate Division of the Superior Court.

The bill requires the commission to make its decisions in regard to complaints alleging violations of the Code of Ethics for School Board Members within 120 days.