2398 Federal Register / Vol. 61, No. 18 / Friday, January 26, 1996 / Rules and Regulations

Dated: January 19, 1996.

Philip Lader,

Administrator.

[FR Doc. 96–1163 Filed 1–25–96; 8:45 am]

BILLING CODE 8025–01–P

13 CFR Part 105

Standards of Conduct and Other

Employee Responsibilities

AGENCY: Small Business Administration.

ACTION: Final rule.

SUMMARY: The Small Business

Administration (SBA) amends its

regulations governing employee

standards of conduct. This amendment

repeals provisions that are superseded

by the Office of Government Ethics

(OGE) Uniform Standards of Conduct

for Employees of the Executive Branch

(5 CFR Part 2635); amends one

provision by adding the Associate

General Counsel for General Law as an

Assistant Standards of Conduct

Counselor; and renumbers the

remaining provisions with several

minor technical amendments.

EFFECTIVE DATE: This rule is effective

February 26, 1996.

FOR FURTHER INFORMATION CONTACT:

Robinson S. Nunn, Chief Counsel for

Ethics, Office of the General Counsel,

U.S. Small Business Administration,

409 Third Street SW., Washington, D.C.

20416, (202) 205–6867, or Martin D.

Teckler, Deputy General Counsel (202)

205–6642.

SUPPLEMENTARY INFORMATION: The Small

Business Administration repeals

numerous provisions of its existing

standards of conduct regulations at 13

CFR Part 105 as either superseded by

the Office of Government Ethics’ (OGE)

Uniform Standards of Ethical Conduct

for Employees of the Executive Branch

(5 CFR Part 2635), eliminated by other

regulatory authority, or determined to

be inappropriate for continued

inclusion in this part. SBA repeals the

following sections of 13 CFR Part 105:

105.101 through 105.301; 105.401;

105.402; 105.405; 105.406 through

105.408; 105.501 through 105.505;

105.506 except paragraph (g)(1); 105.507

through 105.515; 105.518 through

105.521 and 105.901. The remaining

provisions of 13 CFR Part 105 are

renumbered and renamed ‘‘Standards of

Conduct and Employee Restrictions and

Responsibilities.’’

In place of SBA’s former standards at

13 CFR Part 105, SBA issues a residual

cross reference provision at new 13 CFR

section 105.101 to refer to the uniform

Standards of Conduct and financial

disclosure regulations for Executive

Branch employees and SBA’s

Supplemental Standards of Conduct

regulation. Additionally, SBA reissues,

in the new 13 CFR Part 105, several

provisions regarding other employee

responsibilities.

Proposed changes to Part 105 were

published in the Federal Register on

November 27, 1995 (60 FR 58260). The

public was invited to comment during

a thirty day comment period. SBA

received seven comments (all of which

concerned post-employment

restrictions) during that time period.

SBA discusses the comments and SBA’s

response here.

Section 105.201, ‘‘Definitions’’: This

section provides definitions unique to

SBA which are applicable throughout

Part 105. The definition of ‘‘SBA

Assistance’’ (§ 105.201(e)) was proposed

to be amended to include all

participating lenders, including banks,

as recipients of SBA Assistance. This

proposal generated several comments,

which noted that SBA employees with

specialized knowledge losing jobs due

to downsizing would now be precluded

from employment with participating

lenders, and that such employment is

often the only means available to such

employees to maintain a customary

standard of living and make use of

education and skills. SBA employees

commented that the SBA would be

unable to attract private sector

employees to the SBA if they believe

that they will be unmarketable when

they leave the government. In addition,

participants in SBA’s financial programs

commented that the interpretation

would deny them a qualified universe of

potential employees to the detriment of

the delivery of SBA’s programs.

As a result of these comments, and

those relative to the other sections

contained in the proposal (discussed

below), SBA has determined that

revision of the definition will be

deferred. This final rule therefore

merely restates the existing definition of

SBA Assistance, and does not adopt the

proposed change, pending further

review.

SBA also received three comments

concerning Section 105.202,

‘‘Employment of Former Employee by

Person Previously the Recipient of SBA

Assistance’’. This section, the first of

two sections providing restrictions

relating to former SBA employees, was

not changed by the proposed rule,

although the preamble to this section

did not make that fact completely clear.

All of the comments were directed at

the effect on § 105.202 of the addition of

participating lenders as recipients of

SBA Assistance to the definition section

of section 105.201(e).

All three commenters were concerned

that agency employees losing their

employment as a result of an

involuntary separation or those

otherwise seeking post-SBA

employment would be unfairly denied

employment best suited for their

specialized knowledge and education

and would be unable the maintain their

lifestyles and support their families by

virtue of section 105.202. One of the

commenters also argued that 105.202

should not apply to Certified

Development Companies (CDC’s),

because they are not business

enterprises receiving loans from the

agency and should therefore be exempt

from this rule.

As set forth above, the proposed rule

made no change to section 105.202

which is based upon section 13 of the

Small Business Act. To the extent all of

these comments were directed at the

addition of participating lenders to the

§ 105.201 definition of SBA Assistance,

that issue is addressed by the

withdrawal of the proposal.

The same issue arises in connection

with section 105.203 ‘‘SBA Assistance

to Person Employing Former SBA

Employee.’’ This section is based on the

same provision of the Small Business

Act as section 105.202. It prohibits SBA

from providing assistance to any Person

who has as an employee, owner,

partner, attorney, agent, owner of stock,

officer, director, creditor, or debtor, any

individual who, within one year prior to

the request for such assistance, was an

SBA employee, without the prior

approval of the SBA Standards of

Conduct Counselor.

Additionally, this section sets forth

the criteria to be used in reviewing such

applications for SBA Assistance.

SBA received one comment on this

section to the effect that this provision

unfairly penalizes a business which

hires a qualified former SBA employee.

As discussed above, to the extent that

the impact of this section was proposed

to be altered by adding Participating

lenders as recipients of Assistance, the

provision is unaffected by this rule.

However, it is SBA’s intent to revisit

both sections 105.202 and 105.203 at a

later point keeping in mind the

comments received in this rulemaking.

SBA received no other comments on

this rule. For a detailed description of

the other changes made to this rule,

please refer to SBA’s proposed rules,

published at 60 FR 58260 (November

27, 1995).
Federal Register / Vol. 61, No. 18 / Friday, January 26, 1996 / Rules and Regulations 2399

Compliance With Executive Orders

12612, 12778 and 12866; the Regulatory

Flexibility Act, 5 U.S.C. 601 et seq.; and

the Paperwork Reduction Act, 44 U.S.C.

ch. 35

SBA certifies that this rule will not be

considered a significant rule within the

meaning of Executive Order 12866 and

does not have a significant economic

impact on a substantial number of small

entities within the meaning of the

Regulatory Flexibility Act, 5 U.S.C. 601,

et seq.

For purposes of Executive Order

12612, SBA certifies that this rule does

not have federalism implications. For

purposes of Executive Order 12778,

SBA certifies that this rule is drafted, to

the extent practicable, in accordance

with the standards set forth in section

2 of that Order.

For purposes of the Paperwork

Reduction Act, SBA certifies that this

rule, if promulgated in final, will

impose no new reporting or

recordkeeping requirements.

List of Subjects in 13 CFR Part 105

Conflict of interests.

For the reasons set forth above, part

105 of title 13, Code of Federal

Regulations, is revised to read as

follows:

PART 105—STANDARDS OF

CONDUCT AND EMPLOYEE

RESTRICTIONS AND

RESPONSIBILITIES

Standards of Conduct

Sec.

105.101 Cross reference to employee ethical

conduct standards and financial

disclosure regulations.

Restrictions and Responsibilities Related to

SBA Employees and Former Employees

105.201 Definitions.

105.202 Employment of former employee

by person previously the recipient of

SBA Assistance.

105.203 SBA Assistance to person

employing former SBA employee.

105.204 Assistance to SBA employees or

members of their household.

105.205 Duty to report irregularities.

105.206 Applicable rules and directions.

105.207 Politically motivated activities

with respect to the Minority Small

Business Program.

105.208 Penalties.

Restrictions on SBA Assistance to Other

Individuals

105.301 Assistance to officers or employees

of other Government organizations.

105.302 Assistance to employees or

members of quasi-Government

organizations.

Administrative Provisions

105.401 Standards of Conduct Committee.

105.402 Standards of Conduct Counselors.

105.403 Designated Agency Ethics Officials.

Authority: 5 U.S.C. 7301; 15 U.S.C. 634,

637(a)(18) and (a)(19), 642, and 645(a).

Standards of Conduct

§ 105.101 Cross-reference to employee

ethical conduct standards and financial

disclosure regulations.

In addition to this Part, Small

Business Administration (SBA)

employees should refer to the Uniform

Standards of Ethical Conduct for

Executive Branch employees at 5 CFR

Part 2635, the SBA Supplemental

Standards of Ethical Conduct at 5 CFR

Chapter XLIV, and the Uniform

Financial Disclosure regulation for

Executive Branch employees at 5 CFR

Part 2634.

Restrictions and Responsibilities

Related to SBA Employees and Former

Employees

§ 105.201 Definitions.

(a) Employee means an officer or

employee of the SBA regardless of

grade, status or place of employment,

including employees on leave with pay

or on leave without pay other than those

on extended military leave. Unless

stated otherwise. Employee shall

include those within the category of

Special Government Employee.

(b) Special Government Employee

means an officer or employee of SBA,

who is retained, appointed or employed

to perform temporary duties on a fulltime or intermittent basis, with or

without compensation, for not to exceed

130 days during any period of 365

consecutive days.

(c) Person means an individual, a

corporation, a company, an association,

a firm, a partnership, a society, a joint

stock company, or any other

organization or institution.

(d) Household member means spouse

and minor children of an employee, all

blood relations of the employee and any

spouse who resides in the same place of

abode with the employee.

(e) SBA Assistance means financial,

contractual, grant, managerial or other

aid, including size determinations,

section 8(a) participation, licensing,

certification, and other eligibility

determinations made by SBA. The term

also includes an express decision to

compromise or defer possible litigation

or other adverse action.

§ 105.202 Employment of former employee

by person previously the recipient of SBA

Assistance.

(a) No former employee, who

occupied a position involving discretion

over, or who exercised discretion with

respect to, the granting or

administration of SBA Assistance may

occupy a position as employee, partner,

agent, attorney or other representative of

a concern which has received this SBA

Assistance for a period of two years

following the date of granting or

administering such SBA Assistance if—

(1) The date of granting or

administering such SBA Assistance was

within the period of the employee’s

term of employment; or

(2) The date of granting or

administering such SBA Assistance was

within one year following the

termination of such employment.

(b) Failure of a recipient of SBA

Assistance to comply with these

provisions may result, in the discretion

of SBA, in the requirement for

immediate repayment of SBA financial

Assistance, the immediate termination

of other SBA Assistance involved or

other appropriate action.

§ 105.203 SBA Assistance to person

employing former SBA employee.

(a) SBA will not provide SBA

Assistance to any person who has, as an

employee, owner, partner, attorney,

agent, owner of stock, officer, director,

creditor or debtor, any individual who,

within one year prior to the request for

such SBA Assistance was an SBA

employee, without the prior approval of

the SBA Standards of Conduct

Counselor. The Standards of Conduct

Counselor will refer matters of a

controversial nature to the Standards of

Conduct Committee for final decision;

otherwise, his or her decision is final.

(b) In reviewing requests for approval,

the Standards of Conduct Counselor

will consider:

(1) The relationship of the former

employee with the applicant concern;

(2) The nature of the SBA Assistance

requested;

(3) The position held by the former

employee with SBA and its relationship

to the SBA Assistance requested; and

(4) Whether an apparent conflict of

interest might exist if the SBA

Assistance were granted.

§ 105.204 Assistance to SBA employees or

members of their household.

Without the prior written approval of

the Standards of Conduct Committee, no

SBA Assistance, other than Disaster

loans under subparagraphs (1) and (2) of

section 7(b) of the Small Business Act,

shall be furnished to a person when the

sole proprietor, partner, officer, director

or significant stockholder of the person

is an SBA employee or a household

member.

§ 105.205 Duty to report irregularities.

Every employee shall immediately

report to the SBA Inspector General any
2400 Federal Register / Vol. 61, No. 18 / Friday, January 26, 1996 / Rules and Regulations

acts of malfeasance or misfeasance or

other irregularities, either actual or

suspected, arising in connection with

the performance by SBA of any of its

official functions.

§ 105.206 Applicable rules and directions.

Every employee shall follow all

agency rules, regulations, operating

procedures, instructions and other

proper directions in the performance of

his official functions.

§ 105.207 Politically motivated activities

with respect to the Minority Small Business

Program.

(a) Any employee who has authority

to take, direct others to take,

recommend, or approve any action with

respect to any program or activity

conducted pursuant to section 8(a) or

section 7(j) of the Small Business Act,

shall not, with respect to any such

action, exercise or threaten to exercise

such authority on the basis of the

political activity or affiliation of any

party. Employees shall expeditiously

report to the SBA Inspector General any

such action for which such employee’s

participation has been solicited or

directed.

(b) Any employee who willfully and

knowingly violates this section shall be

subject to disciplinary action, which

may consist of separation from service,

reduction in grade, suspension, or

reprimand.

(c) This section shall not apply to any

action taken as a penalty or other

enforcement of a violation of any law,

rule, or regulation prohibiting or

restricting political activity.

(d) The prohibitions in and remedial

measures provided for under this

section with regard to such prohibitions,

shall be in addition to, and not in lieu

of, any other prohibitions, measures or

liabilities that may arise under any other

provision of law.

§ 105.208 Penalties.

Any employee guilty of violating any

of the provisions in this Part may be

disciplined, including removal or

suspension from SBA employment.

Restrictions on SBA Assistance to Other

Individuals

§ 105.301 Assistance to officers or

employees of other Government

organizations.

(a) SBA must receive a written

statement of no objection by the

pertinent Department or military service

before it gives any SBA Assistance,

other than Disaster loans under

subparagraphs (1) and (2) of section 7(b)

of the Small Business Act, to a person

when its sole proprietor, partner, officer,

director or stockholder with a 10

percent or more interest, or a household

member, is an employee of another

Government Department or Agency

having a grade of at least GS–13 or its

equivalent.

(b) The Standards of Conduct

Committee must approve an SBA

contract with an entity if a sole

proprietor, general partner, officer,

director, or stockholder with a 10 or

more percent interest (or a household

member of such individuals) is an

employee of a Government Department

or Agency. See also 48 CFR part 35,

subpart 3.6.

(c) The Standards of Conduct

Committee must approve SBA

Assistance, other than disaster loans

under subparagraphs (1) and (2) of

section 7(b) of the Small Business Act,

to a person if its sole proprietor, general

partner, officer, director or stockholder

with a 10 percent or more interest (or a

household member of such individual)

is a member of Congress or an appointed

official or employee of the legislative or

judicial branch of the Government.

§ 105.302 Assistance to employees or

members of quasi-Government

organizations.

(a) The Standards of Conduct

Committee must approve SBA

Assistance, other than Disaster loans

under subparagraphs (1) and (2) of

section 7(b) of the Small Business Act,

to a person if its sole proprietor, general

partner, officer, director or stockholder

with a 10 percent or more interest (or a

household member) is a member or

employee of a Small Business Advisory

Council or is a SCORE volunteer.

(b) In reviewing requests for approval,

factors the Standards of Conduct

Committee may consider include

whether the granting of the SBA

Assistance might result in or create the

appearance of giving preferential

treatment, the loss of complete

independence or impartiality, or

adversely affect the confidence of the

public in the integrity of the

Government.

Administrative Provisions

§ 105.401 Standards of Conduct

Committee.

(a) The Standards of Conduct

Committee will:

(1) Advise and give direction to SBA

management officials concerning the

administration of this Part and any other

rules, regulations or directives dealing

with conflicts of interest and ethical

standards of SBA employees; and

(2) Make decisions on specific

requests when its approval is required.

(b) The Standards of Conduct

Committee will consist of:

(1) The General Counsel or, in his or

her absence, the Deputy General

Counsel or, in his or her absence, the

Acting General Counsel who shall act as

Chairman of the Committee;

(2) The Associate Deputy

Administrator for Management and

Administration, or in his or her absence,

the Assistant Administrator for

Administration; and

(3) The Director of Human Resources,

or in his or her absence, the Deputy

Director of Human Resources.

§ 105.402 Standards of Conduct

Counselors.

(a) The SBA Standards of Conduct

Counselor is the Deputy General

Counsel. The Associate General Counsel

for General Law (AGC) is an Assistant

Standards of Conduct Counselor, and

other Assistants may be designated by

the Standards of Conduct Counselor.

(b) The Standards of Conduct

Counselors and Assistants:

(1) Provide general advice, assistance

and guidance to employees concerning

this Part and the regulations referred to

in § 105.101;

(2) Monitor the Standards of Conduct

Program within their assigned areas and

provide required reports thereon;

(3) Review Confidential Financial

Disclosure Reports as required under 5

CFR part 2634, subpart I, and provide an

annual report on compliance with filing

requirements to the SBA Standards of

Conduct Counselor as of February 1 of

each year; and

(4) Provide Outside Employment

decisions pursuant to 5 CFR 5401.104.

(c) Each employee will be periodically

informed of the name, address and

telephone number of the Assistant

Standards of Conduct Counselor to

contact for advice and assistance.

(d) Employee requests for advice or

rulings should be directed to the

appropriate Standards of Conduct

Counselor for appropriate action.

§ 105.403 Designated Agency Ethics

Officials.

(a) The Designated Agency Ethics

Official, pursuant to the Ethics in

Government Act of 1978 (5 U.S.C.

App.), is the Deputy General Counsel.

He or she may, in turn, appoint one or

more Alternate Designated Agency

Ethics Officials. The Alternates will

assist the Designated Agency Ethics

Official and act for him or her whenever

absent.

(b) The Designated Agency Ethics

Official and Alternates administer the

program for Financial Disclosure

Statements under 5 CFR 2634.201,
Federal Register / Vol. 61, No. 18 / Friday, January 26, 1996 / Rules and Regulations 2401

receive and evaluate these statements,

and provide advice and counsel

regarding matters relating to the Ethics

in Government Act of 1978 and its

implementing regulations. The duties

and responsibilities of the Designated

Agency Ethics Official and Alternates

are set forth in more detail in 5 CFR

2638.203, which is promulgated and

amended by the Office of Government

Ethics.

Dated: January 19, 1996.

Philip Lader,

Administrator.

[FR Doc. 96–1161 Filed 1–25–96; 8:45 am]

BILLING CODE 8025–01–P

13 CFR Part 114

Policies of General Application

AGENCY: Small Business Administration.

ACTION: Final rule.

SUMMARY: In response to President

Clinton’s regulatory review directive,

the Small Business Administration has

completed a page-by-page and line-byline review of its regulations. As a

result, SBA is clarifying and

streamlining its regulations, revising or

eliminating any duplicative, outdated,

inconsistent or confusing provisions.

This final rule reorganizes the entire

Part 114 covering administrative claims

under the Federal Tort Claims Act to

make it clearer and easier to use. It also

amends the Part to streamline the

review and adjustment of claims and

provide for the use of nonbinding

alternative dispute resolution in

appropriate cases.

EFFECTIVE DATE: This rule is effective

February 26, 1996.

FOR FURTHER INFORMATION CONTACT: Jeff

Lane, Office of General Counsel, at (202)

205–6879.

SUPPLEMENTARY INFORMATION: Part 114 of

chapter I, 13 CFR contains policies

governing the presentment, review and

handling of administrative claims

brought against the Federal Government

for money damages for injuries or death

arising from the negligent or wrongful

act or omission of any employee of the

Small Business Administration. The

rule reorganizes the entire Part 114 to

make it clearer and easier to use and

amends it to create a more efficient

administrative process. It eliminates

from the process the various boards of

survey that now investigate and review

claims, and gives District Counsel

authority to review and deny claims of

$5,000 or less and use nonbinding

alternative dispute resolution in

appropriate cases. (Boards of Survey

would retain all other existing

responsibilities.)

The proposed rule was published on

November 3, 1995, at 60 FR 55808. The

SBA received four comments on the

proposed rule during the thirty-day

comment period. Two comments

questioned generally the need for

revisions in the existing rule. As

indicated, SBA has revised and

reorganized the rule to streamline its

operation and make it more

understandable to employees and others

who may be affected by it. One of those

two comments supported the proposal

to eliminate the boards of survey from

the review process, but stated that

employees should not enjoy the benefits

of the attorney-client privilege. With

regard to this latter point, this final rule

makes no substantive change in the

longstanding SBA policy applying the

attorney-client privilege in cases where

Government legal representation is

authorized for employees. Finally, two

commenters suggested changes in

section 114.105 that are adopted in the

final rule. Section 114.105(b) now

makes clear that any alternative dispute

resolution mechanisms must be

nonbinding, and § 114.105(c) is clarified

to state that District Counsel have

authority to deny claims under $5,000,

but may only recommend their

approval. In addition to this

clarification in proposed section

114.105(c) in response to comments,

SBA includes in the final rule an

administrative change: the

recommendation for approval will be

made by District Counsel to the General

Counsel or designee, not to the Senior

Area Counsel.

Compliance With Executive Orders

12612, 12778, and 12866, the

Regulatory Flexibility Act (5 U.S.C. 601,

et seq.), and the Paperwork Reduction

Act (44 U.S.C. Ch. 35)

SBA certifies that this rule involves

internal administrative procedures and

is not a significant rule within the

meaning of Executive Order 12866 and

will not have a significant economic

impact on a substantial number of small

entities within the meaning of the

Regulatory Flexibility Act, 5 U.S.C. 601,

et seq. It is not likely to have an annual

economic effect of $100 million or more,

result in a major increase in costs or

prices, or have a significant adverse

effect on competition or the United

States economy.

For purposes of the Paperwork

Reduction Act, 44 U.S.C. Ch. 35, SBA

certifies that this rule contains no new

reporting or recordkeeping

requirements.

For purposes of Executive Order

12612, SBA certifies that this rule does

not have any federalism implications

warranting the preparation of a

Federalism Assessment.

For purposes of Executive Order

12778, SBA certifies that this rule is

drafted, to the extent practicable, in

accordance with the standards set forth

in Section 2 of that Order.

List of Subjects in 13 CFR Part 114

Claims.

Accordingly, pursuant to the

authority set forth in sections 5(b)(1)

and (b)(6) of the Small Business Act, 15

U.S.C. 634(b)(1) and (b)(6), 28 U.S.C.

2672, and 28 CFR 14.11 (31 FR 16616),

SBA revises part 114 of Title 13, Code

of Federal Regulations (CFR), to read as

follows:

PART 114—ADMINISTRATIVE CLAIMS

UNDER THE FEDERAL TORT CLAIMS

ACT AND REPRESENTATION AND

INDEMNIFICATION OF SBA

EMPLOYEES

Subpart A—Administrative Tort Claims

Sec.

114.100 Definitions.

114.101 What do these regulations cover?

114.102 When and where do I present a

claim?

114.103 Who may file a claim?

114.104 What evidence and information

may SBA require relating to my claim?

114.105 Who investigates and considers my

claim?

114.106 What if my claim exceeds $5,000?

114.107 What if my claim exceeds $25,000

or has other special features?

114.108 What if my claim is approved?

114.109 What if my claim is denied?

Subpart B—Representation and

Indemnification of SBA Employees

114.110 What is SBA’s policy with respect

to indemnifying and providing legal

representation to SBA employees?

114.111 Does the attorney-client privilege

apply when SBA employees are

represented by the Government?

Authority: 15 U.S.C. 634 (b)(1), (b)(6); 28

U.S.C. 2672; 28 CFR 14.11.

Subpart A—Administrative Tort Claims

§ 114.100 Definitions.

As used throughout this Part 114, date

of accrual means the date you know or

reasonably should have known of your

injury. The date of accrual will depend

on the facts of each case. Site means the

geographic location where the incident

giving rise to your claim occurred.

§ 114.101 What do these regulations

cover?

This part applies only to monetary

claims you assert under the Federal Tort

Claims Act, 28 U.S.C. 2671 et seq., for