[Federal Register Volume 63, Number 155 (Wednesday, August 12, 1998)]
[Rules and Regulations]
[Pages 43067-43069]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20829]



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Rules and Regulations
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Federal Register / Vol. 63, No. 155 / Wednesday, August 12, 1998 / 
Rules and Regulations

[[Page 43067]]


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OFFICE OF GOVERNMENT ETHICS

5 CFR Parts 2634 and 2636

RINs 3209-AA00 and 3209-AA13


Removal of Obsolete Regulations Concerning the Inoperative 
Statutory Honorarium Bar, Revisions to Related Supplemental Reporting 
Requirements, and Conforming Technical Amendments

AGENCY: Office of Government Ethics (OGE).

ACTION: Final rule; technical amendments and removals.

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SUMMARY: The Office of Government Ethics is removing obsolete executive 
branch regulatory provisions implementing the statutory honorarium bar, 
which is no longer legally operative. In addition, OGE is removing 
related executive branch regulatory provisions concerning a dormant 
special reporting requirement for payments to charitable organizations 
in lieu of honoraria. That reporting requirement is being subsumed (for 
those few to whom it may apply) as part of the overall executive branch 
financial disclosure regulation, but will remain inactive for now, 
pending further examination. For conformity with these changes, OGE is 
also making minor technical amendments to regulatory provisions 
covering the overall executive branch financial disclosure system and 
the statutory restrictions for certain employees on outside earned 
income, employment and affiliations.

DATES: These technical amendments and removals are effective August 12, 
1998, except that Sec. 2634.302(a)(2) is stayed indefinitely until OGE 
makes a final determination about its status. Once that determination 
is made, OGE will publish an appropriate document in the Federal 
Register, and will also notify executive branch departments and 
agencies by memorandum.

ADDRESSES: Office of Government Ethics, Suite 500, 1201 New York 
Avenue, NW., Washington, DC 20005-3917, Attn.: Mr. G. Sid Smith. A copy 
of the OGE Memorandum noted in the ``Supplementary Information'' 
section below may be obtained from OGE's Web site on the Internet at 
http://www.usoge.gov, or by contacting Mr. Smith.

FOR FURTHER INFORMATION CONTACT: G. Sid Smith, Senior Associate General 
Counsel, Office of Government Ethics, telephone: 202-208-8000; TDD: 
202-208-8025; FAX: 202-208-8037.

SUPPLEMENTARY INFORMATION: In National Treasury Employees Union v. 
United States, 513 U.S. 454 (1995), the U.S. Supreme Court overturned, 
as to most executive branch employees, the honorarium bar at 5 U.S.C. 
app., section 501(b) which had been enacted as part of the Ethics 
Reform Act of 1989. Subsequently, the Department of Justice determined 
that because of the scope of the Supreme Court decision, the statutory 
ban on receipt of honoraria was inoperative as to all Government 
employees. See OGE Memorandum to Designated Agency Ethics Officials, 
General Counsels and Inspectors General of February 28, 1996 (# DO-96-
012). On that basis, this rulemaking removes the provisions in OGE's 
executive branchwide regulations at subpart B of 5 CFR part 2636 that 
previously implemented the honorarium bar, which is now legally 
inoperative. By final rule at 62 FR 48746-48748 (September 17, 1997), 
OGE has already removed cross-references to the honorarium bar that 
were contained in the executive branch regulations on financial 
disclosure and standards of ethical conduct at 5 CFR parts 2634 and 
2635.
    By this current rulemaking, OGE is also removing from 5 CFR part 
2636 the provisions in Sec. 2636.205 on special confidential reporting 
of information about payments to charitable organizations in lieu of 
honoraria, as a supplement to employee financial disclosure reports. 
That requirement was specified in the financial disclosure portion of 
the Ethics Reform Act of 1989 (5 U.S.C. app., section 102(a)(1)(A)), 
but has never been activated for the executive branch. The effective 
date of the provisions in 5 CFR part 2636 to implement this special 
reporting requirement was deferred several times by OGE, most recently 
indefinitely at 57 FR 5369 (February 14, 1992), pending development of 
a reporting form. Subsequently, because of legal uncertainties about 
the related portion of the Ethics Reform Act of 1989 which had banned 
receipt of honoraria, as well as overall policy issues about how to 
implement the reporting requirement itself, this special reporting 
requirement remained inactive. With the determination by the Department 
of Justice that the statutory bar on receipt of honoraria is legally 
inoperative, as discussed above, the implementing provisions of 5 CFR 
part 2636 on supplemental disclosure are no longer necessary. That 
results because, by removing a major incentive for payments to 
charitable organizations in lieu of honoraria (which had been 
permissible notwithstanding the honorarium bar), the determination that 
the honorarium bar is no longer operative will virtually eliminate the 
need for employees to make these supplemental reports, in OGE's 
opinion. While the statutory requirement for supplemental reporting of 
information about charitable payments in lieu of honoraria remains, it 
no longer justifies a separate regulatory structure and form, and the 
attendant continuing need for distinct Paperwork Reduction Act 
clearance.
    In place thereof, this special supplemental reporting requirement 
will be preserved in a dormant status, by subsuming its basic outline 
into the overall executive branch financial disclosure system at 5 CFR 
part 2634. Minor changes to that part are being made by this current 
rulemaking to conform with the law by limiting the potential scope of 
this special reporting requirement to public financial disclosure 
filers, to eliminate reference to a supplemental report form, and to 
preserve the supplemental reporting requirement as dormant (not 
currently effective) for the executive branch, pending further 
determination of its viability. Its viability remains somewhat of an 
open question, in light of the inoperability of the related honorarium 
bar, since these provisions were enacted together as part of the Ethics 
Reform Act of 1989. If this supplemental reporting requirement is 
subsequently activated, OGE will notify affected executive branch 
departments and agencies, and

[[Page 43068]]

provide them with appropriate guidance.
    Finally, in order to conform with the removals and changes 
discussed above, OGE is making minor technical amendments to the 
regulatory provisions in 5 CFR part 2636 concerning restrictions under 
5 U.S.C. app., section 501(a) and section 502 on outside earned income, 
employment and affiliations which apply to certain noncareer employees. 
Those technical amendments remove references that become obsolete, in 
light of the changes discussed above.

Administrative Procedure Act

    Pursuant to 5 U.S.C. 553(b) and (d), as Director of the Office of 
Government Ethics, I find good cause exists for waiving the general 
notice of proposed rulemaking and 30-day delay in effectiveness as to 
these revisions. The notice and delayed effective date are being waived 
because these technical amendments to certain OGE regulations concern 
matters of agency organization, practice and procedure. Furthermore, it 
is in the public interest that the obsolete provisions be removed as 
soon as possible.

Executive Order 12866

    In promulgating these technical amendments to its regulations, OGE 
has adhered to the regulatory philosophy and the applicable principles 
of regulation set forth in section 1 of Executive Order 12866, 
Regulatory Planning and Review. These amendments have also been 
reviewed by the Office of Management and Budget under that Executive 
order.

Regulatory Flexibility Act

    As Director of the Office of Government Ethics, I certify under the 
Regulatory Flexibility Act (5 U.S.C. chapter 6) that this rulemaking 
will not have a significant economic impact on a substantial number of 
small entities because it primarily affects Federal executive branch 
agencies and their employees.

Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply 
because this rulemaking, involving technical amendments and removals, 
eliminates the detailed separate regulatory structure (old OMB 
paperwork control #3209-0004, now expired), which had been developed 
but never made effective in the executive branch, for supplemental 
reporting of payments in lieu of honoraria to charitable organizations. 
Executive branch employees filing public financial disclosure reports 
(SF 278s, OMB control #3209-0001) will be advised of this supplemental 
confidential reporting requirement by separate OGE guidance and by 
their agencies, if it is subsequently activated. For now, it will be 
subsumed by the financial disclosure regulation at 5 CFR part 2634, 
which will preserve the basic outline of this supplemental requirement. 
Further, if it is activated, OGE expects a very low volume of these 
supplemental reports, amounting to less than 50 per year for the entire 
executive branch, with fewer than 10 private citizen filers per year. 
These paperwork determinations have been approved by the Office of 
Management and Budget.

List of Subjects

5 CFR Part 2634

    Administrative practice and procedure, Certificates of divestiture, 
Conflict of interests, Financial disclosure, Government employees, 
Penalties, Privacy, Reporting and recordkeeping requirements, Trusts 
and trustees.

5 CFR Part 2636

    Administrative practice and procedure, Conflict of interests, 
Government employees, Penalties.

    Approved: December 12, 1997.
Stephen D. Potts,
Director, Office of Government Ethics.

    For the reasons set forth in the preamble, the Office of Government 
Ethics is amending parts 2634 and 2636 of chapter XVI of 5 CFR as 
follows:

PART 2634--[AMENDED]

    1. The authority citation for part 2634 continues to read as 
follows:

    Authority: 5 U.S.C. App. (Ethics in Government Act of 1978); 26 
U.S.C. 1043; E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as 
modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306.

    2. In Sec. 2634.302, paragraph (a)(2) is revised to read as follows 
and is immediately stayed indefinitely:


Sec. 2634.302  Income.

    (a) * * *
    (2) In the case of payments to charitable organizations in lieu of 
honoraria, public filers shall also file a separate confidential 
listing of recipients, along with dates and amounts of payments, to the 
extent known. (See 5 U.S.C. app. 102(a)(1)(A) and app. 501(c).)
* * * * *


Sec. 2634.601  [Amended]

    3. Section 2634.601 is amended by removing paragraph (c) and 
redesignating paragraph (d) as new paragraph (c).

PART 2636--[AMENDED]

    4. The authority citation for part 2636 continues to read as 
follows:

    Authority: 5 U.S.C. App. (Ethics in Government Act of 1978); 
E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by 
E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306.

    5. The heading of part 2636 is revised to read as follows:

PART 2636--LIMITATIONS ON OUTSIDE EARNED INCOME, EMPLOYMENT AND 
AFFILIATIONS FOR CERTAIN NONCAREER EMPLOYEES

    6. Section 2636.101 is revised to read as follows:


Sec. 2636.101  Purpose.

    This part is issued under authority of title VI of the Ethics 
Reform Act of 1989 (Pub. L. 101-194, as amended), to implement the 15 
percent outside earned income limitation at 5 U.S.C. app. 501(a) and 
the limitations at 5 U.S.C. app. 502 on outside employment and 
affiliations, which are applicable to certain noncareer employees.


Sec. 2636.102  [Amended]

    7. Section 2636.102 is amended by removing from paragraph (a) the 
words and terms ``or to receive and review reports of honoraria 
recipients under Sec. 2636.204 of this part''.
    8. Section 2636.103 is amended by revising paragraph (a)(2)(i) to 
read as follows:


Sec. 2636.103  Advisory opinions.

    (a) * * *
    (2) * * *
    (i) Whether a particular entity qualifies as a charitable 
organization to which a payment in lieu of honoraria may be excluded 
from the definition of outside earned income and compensation under 
Sec. 2636.303(b)(7) of this part; or
* * * * *


Sec. 2636.104  [Amended]

    9. Section 2636.104 is amended by removing from the first sentence 
of paragraph (a) the words ``who accepts an honorarium or engages in 
any other conduct'' and adding in their place the words ``who engages 
in any conduct'', by removing the last sentence of paragraph (a), and 
by removing paragraphs (c) and (d).

[[Page 43069]]

Subpart B--[Removed and Reserved]

    10. Subpart B of part 2636 is removed and reserved.
    11. Section 2636.302 is amended by removing the sentence fragment 
at the end of the undesignated introductory text, by removing 
paragraphs (a) and (b), and by adding a new sentence at the end of that 
section to read as follows:


Sec. 2636.302  Relationship to other laws and regulations.

    * * * In particular, a covered noncareer employee should accept 
compensation only after determining that its receipt does not violate 
section 102 of Executive Order 12674, as amended, which prohibits a 
covered noncareer employee who is also a Presidential appointee to a 
full-time noncareer position from receiving any outside earned income 
for outside employment or for any other activity performed during that 
Presidential appointment.
    12. Section 2636.303 is amended by removing from the penultimate 
sentence in the undesignated text at the end of paragraph (c) the words 
and terms ``under Sec. 2636.204 of this part'' and adding in their 
place the words and terms ``under 5 U.S.C. app. 501(c)'', and by 
revising paragraph (b)(7) to read as follows:


Sec. 2636.303  Definitions.

* * * * *
    (b) * * *
    (7) Payments to charitable organizations in lieu of honoraria, as 
described in 5 U.S.C. app. 501(c) and app. 505; or
* * * * *
[FR Doc. 98-20829 Filed 8-11-98; 8:45 am]
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