[Federal Register Volume 65, Number 58 (Friday, March 24, 2000)]
[Rules and Regulations]
[Pages 15825-15830]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-7275]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
week.

========================================================================


Federal Register / Vol. 65, No. 58 / Friday, March 24, 2000 / Rules 
and Regulations

[[Page 15825]]



DEPARTMENT OF AGRICULTURE

5 CFR Chapter LXXIII

RIN 3209-AA15


Supplemental Standards of Ethical Conduct for Employees of the 
Department of Agriculture

AGENCY: Department of Agriculture (Department or USDA).

ACTION: Interim rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Agriculture (Department or USDA), with the 
concurrence of the Office of Government Ethics (OGE), is issuing 
regulations for Department employees that supplement the Standards of 
Ethical Conduct for Employees of the Executive Branch (Standards), as 
issued by OGE. The regulations set forth both a general requirement for 
certain Department employees to obtain prior approval before engaging 
in outside employment and separate, more-extensive prior approval 
requirements for employees of the USDA Farm Service Agency (FSA), Food 
Safety and Inspection Service (FSIS), Office of the General Counsel 
(OGC), and Office of Inspector General (OIG). They also contain certain 
restrictions on financial interests applicable to FSA employees.

DATES: These regulations are effective March 24, 2000. Comments must be 
received or postmarked on or before April 24, 2000.

ADDRESSES: Comments should be submitted to the Office of Ethics, U.S. 
Department of Agriculture, Room 348--W--Stop 0122, 1400 Independence 
Avenue, SW., Washington, DC 20250-0122, telephone (202) 720-2251, 
Attention: John C. Surina, Director, Office of Ethics, or by e-mail at 
the following address: [email protected].

FOR FURTHER INFORMATION CONTACT: John C. Surina, Director, Office of 
Ethics, U.S. Department of Agriculture, Room 348-W--Stop 0122, 1400 
Independence Avenue, SW., Washington, DC 20250-0122, telephone (202) 
720-2251.

SUPPLEMENTARY INFORMATION:

I. Background

    On August 7, 1992, OGE published the new Standards, which became 
effective on February 3, 1993. The standards, as corrected and amended, 
are codified at 5 CFR part 2635. On October 3, 1997, the Department's 
Employee Conduct and Responsibilities regulations were removed. See 62 
FR 51759-51760.
    5 CFR 2635.105 authorizes agencies, with the concurrence of OGE, to 
publish agency-specific supplemental regulations that are necessary to 
implement their respective ethics programs. The Department, with OGE 
concurrence, has determined that the following interim supplemental 
rules being codified in a new chapter LXXIII of 5 CFR, consisting of 
part 8301, are necessary to the success of its ethics program.

II. Analysis of the Regulations

Section 8301.101  General

    Section 8301.101 explains that the regulations apply to all 
Department employees and supplement the executive branchwide Standards. 
In addition, this section notes that employees of the Department are 
also subject to the Standards at 5 CFR part 2635, the executive branch 
financial disclosure regulations at 5 CFR part 2634, and additional 
regulations on employee responsibilities and conduct at 5 CFR part 735. 
This section also notes that agencies and components of the Department, 
with concurrence of the Designated Agency Ethics Official (DAEO), may 
issue explanatory guidance, internal procedures, and delegations of 
authority consistent with 5 CFR 2635.105. Finally, to facilitate agency 
employees, across the Department, in accessing and utilizing applicable 
agency-specific guidance and procedures, the section provides that the 
Deputy Ethics Official for each USDA agency or component shall retain 
copies of all such guidance issued by that agency or component.

Section 8301.102  General Prior Approval Requirement for Outside 
Employment

    The Standards, at 5 CFR 2635.803, specifically recognize that an 
agency may find it necessary or desirable to issue a supplemental 
regulation requiring its employees, or any category of employees, to 
obtain approval before engaging in outside employment. Department 
employees, pursuant to the Department's Employee Conduct and 
Responsibilities regulations at 7 CFR part 0, long had been required to 
seek prior approval before engaging in outside employment. This 
regulatory requirement lapsed after November 1, 1996, upon the 
expiration of the last grace period extension granted by OGE for agency 
prior approval requirements and agency prohibitions on holding or 
acquiring financial interests in effect prior to the effective date of 
the Standards.
    The Department found its prior approval requirement particularly 
useful in ensuring that the outside employment of USDA employees 
conformed with all applicable laws and regulations. At the same time, 
the former requirement for universal prior approval had been viewed as 
unnecessarily burdensome and intrusive, particularly in those instances 
in which the employee's outside employment posed little danger to the 
interests of USDA and its agencies, or where there was little or no 
nexus between the employee's official duties and his or her outside 
employment.
    In accordance with 5 CFR 2635.803, USDA has determined that it is 
necessary to the administration of its departmentwide ethics program to 
again require certain of its employees to seek approval before engaging 
in any outside employment. The Department has determined that all USDA 
employees who file either a public or confidential financial disclosure 
report (SF 278 or OGE Form 450), or an alternative form of reporting 
approved by OGE, must seek approval before engaging in any outside 
employment. Financial disclosure report filers occupy high level 
positions or otherwise hold positions that have a direct and 
substantial effect on the interests of non-Federal entities. 
Accordingly, prior approval of these employees' outside employment is 
warranted. Approval, however, merely constitutes an

[[Page 15826]]

assessment that the employment, as described on the submission, 
generally does not appear likely to violate any criminal statutes or 
other ethics rules. It is not a determination that a criminal or 
ethical conflict could not arise. Thus, Department employees should 
remain sensitive to ethics issues and seek further ethics guidance 
should their outside work circumstances or official duties 
significantly change.
    Included within the definition of employment, for purposes of this 
regulation, is participation in teaching, speaking, writing or editing 
that, irrespective of compensation, either relates to the employee's 
official duties or is undertaken pursuant to an invitation extended by 
any person who is a prohibited source to any employee of USDA. The 
Department is obligated, under numerous statutes, to protect from 
release to the public various types of information regarding its 
programs. For example, numerous statutes restrict the premature release 
of various types of information concerning the many different 
commodities regulated by USDA. Premature release of such information, 
or of other information from which such information could reasonably be 
derived, could result in misuse of position through unfair speculation 
in those commodity markets. The Department believes that its statutory 
interests in avoiding this result may be protected, with a minimum of 
interference to its employees, through the imposition of a prior 
approval requirement limited solely to those situations where there is 
a heightened potential for risk to USDA--where an employee engages in 
outside speaking, teaching, writing, or editing that may result in the 
release of protected information or where the invitation to engage in 
the outside employment comes from one who has an interest in obtaining 
such protected information.
    In addition to the foregoing, departmentwide requirement for prior 
approval of outside employment, other USDA component offices and 
agencies have determined that prior approval is required for their 
employees not covered under the departmentwide requirement. The 
Department has determined that it is necessary to the administration of 
its ethics program to implement the additional component-specific 
requirements for obtaining prior approval for outside employment 
specified in paragraph (f) of Sec. 8301.103, and in Secs. 8301.104 
through 8301.106.

Section 8301.103  Additional Rules for Employees of the Farm Service 
Agency

    The Farm Service Agency has determined that certain additional 
rules are necessary in order to protect the integrity of its programs. 
Many FSA programs, particularly farm loan programs, are administered in 
a highly decentralized manner. Many FSA employees reside in the same 
small communities as the FSA loan applicants, borrowers, and program 
participants they serve. At the same time, many FSA employees and/or 
their family members are themselves farmers. Farm Service Agency 
employees often are part of the very farm community being serviced by 
the local FSA office. Given the opportunity and, in many cases, the 
need for regular, non-official interaction between FSA employees and 
those persons in their communities serviced by FSA, there is a need to 
establish for FSA employees certain limitations upon outside employment 
and to prohibit FSA employees from obtaining certain financial 
holdings.
    Paragraph (a) of Sec. 8301.103 specifies that the additional rules 
in the section apply solely to FSA personnel who are Federal employees 
within the meaning of 5 U.S.C. 2105. This specification is necessary to 
distinguish that FSA community committee members, county committee 
members, and county office personnel, who serve either by election, or 
by being employed by a committee or county office, under 16 U.S.C. 
590h, are not covered by the additional rules in this section. Such 
personnel consistently have been deemed by Federal courts not to be 
Federal employees under 5 U.S.C. 2105. See Hedman v. Department of 
Agriculture, 915 F. 2d 1552 (Fed. Cir. 1990); Hamlet v. United States, 
14 Cl. Ct. 62 (1988), vacated and remanded, 873 F.2d 1414 (Fed. Cir. 
1989); Hargens v. U.S. Department of Agriculture, 865 F. Supp. 1314, 
1320 (N.D. Iowa 1994). Also contained in this paragraph is a cross-
reference to rules that do apply to FSA community committee members, 
county committee members, and county office personnel, at 7 CFR part 7.
    Paragraph (b) defines the phrase ``FSA program participant'' to 
include any person who is, or is an applicant to become, an FSA 
borrower, FSA grantee, or recipient of any other form of FSA financial 
assistance available under any farm credit, payment or other program 
administered by FSA.
    Section 8103.103 contains two prohibitions on FSA employees 
acquiring certain financial interests. Paragraph (c) generally 
prohibits an employee, or a spouse or minor child of an FSA employee, 
from directly or indirectly obtaining FSA direct loans. Paragraph (d) 
generally prohibits an employee, or a spouse or minor child of an FSA 
employee, from directly or indirectly purchasing certain FSA-related 
real properties. These prophylactic prohibitions reinstate similar 
provisions that existed before the executive branchwide Standards 
regulation superseded agency-specific rules.
    Under 5 CFR 2635.403(a), an agency may, by supplemental regulation 
prohibit or restrict the acquisition or holding by its employees of 
financial interests that the agency determines would cause a reasonable 
person to question the impartiality or objectivity with which agency 
programs are administered. Many FSA farm loan borrowers are recipients 
of FSA direct loans which involve FSA as a ``lender-of-last-resort.'' 
Similarly, many FSA employees are themselves farmers. The Farm Service 
Agency has found that permitting its employees to obtain FSA direct 
loans creates a high-risk ethics environment for FSA employees. The 
Department must shield the administration of the loan program against 
self-dealing and a lack of impartiality. Moreover, the close proximity 
of FSA employees to FSA program participants, generally, and the 
dependence of FSA program participants on FSA, especially FSA loan 
applicants, also warrant supplemental safeguards against any FSA 
employee in a position to secure private gain for himself or herself, 
or for any other person, by virtue of the public position he or she 
holds. Further, the restrictions will avoid the potential for 
disqualification of critical employees from official duties which might 
result in FSA being unable to fulfill its mission.
    The prohibitions under paragraphs (c) and (d) apply whether the 
prohibited financial interest involved is obtained directly or 
indirectly. Thus, for example, an FSA employee would violate paragraph 
(c) should he or she obtain FSA direct loan funds through an agreement 
with another person under which the other party poses as a ``front'' 
for the FSA employee (e.g., by applying for an FSA loan knowing that a 
portion of the loan funds will be provided by him or her to the FSA 
employee for the employee's personal use). The same would be true for 
utilizing a ``front'' for the purchase of otherwise prohibited 
property.
    Because application of the prohibitions in paragraphs (c) and (d) 
may result in undue financial hardship to various FSA employees in 
certain

[[Page 15827]]

instances, the prohibitions are tempered in application by the 
inclusion of various exceptions and waiver provisions. Paragraph (c) is 
subject to an exception permitting retention of direct loans secured by 
FSA employees either prior to the effective date of this regulation, 
March 24, 2000, or secured after such date, but prior to the FSA 
employee being appointed to, or nominated for appointment to an FSA 
position. Also, this prohibition may be waived for FSA State Committee 
members where the conditions stated in paragraph (c)(3) have been met. 
As State Committee members are special Government employees, 
application of the prohibition under paragraph (c) would result in an 
undue financial hardship to those State Committee members who are 
farmers by occupation. The exception for pre-existing loans and the 
waiver for State Committee members are available for use by a 
relatively small number of employees, to whom application of the 
prohibition would pose an inordinate financial hardship when compared 
to any perceived ethical dangers that they are likely to encounter 
through having an FSA direct loan.
    The prohibition under paragraph (d) is subject to waiver based on a 
determination made by the FSA State Executive Director, in response to 
a written waiver request submitted jointly to the FSA State Executive 
Director by both the FSA employee and FSA program participant, that the 
purchase is not inconsistent with part 2635 of this title; that it is 
not otherwise prohibited by law, including, 7 U.S.C. 1986; and that, 
under the circumstances, application of the prohibition is not 
necessary to avoid the appearance of misuse of position or loss of 
impartiality, nor otherwise needed to ensure confidence in the 
impartiality and objectivity with which agency programs are 
administered. FSA has chosen to employ a broad standard for exemption 
to this prohibition because there exist numerous situations in which 
the primary benefit from the exemption accrues not to the FSA employee 
but rather to the FSA program participant. For example, in many small 
farming communities, an FSA borrower may have difficulty in finding a 
buyer for his or her property. Since flat application of this 
prohibition could result in significant financial harm to the very 
persons whom FSA programs are intended to serve, FSA believes that an 
effective and fair solution involves a waiver procedure under which the 
FSA State Executive Director would make a determination balancing 
ethical considerations against the potential financial hardship to the 
FSA program participant. This process provides flexibility and fairness 
while raising the level of decision making visibility and 
accountability.
    Paragraph (e) of this section sets forth a general prohibition 
against an FSA employee and a spouse or minor child of an FSA employee 
engaging in certain transactions with persons whom the FSA employee 
knows or reasonably should know to be a FSA program participant 
directly affected by decisions made by the employee's FSA office, 
unless certain exceptions apply. The transactions covered by this 
general prohibition include sales of real property, leases of real or 
personal property, the sale or purchase of personal property, and 
engaging for personal services. The prohibition does not apply to 
transactions involving goods available to the general public at posted 
prices that are customary and usual within the community (e.g., sale of 
a tractor through placing an advertisement in the local newspaper) or 
to transactions involving the purchase or sale of property pursuant to 
a public auction. The prohibition also does not apply where a 
transaction is determined in advance by the appropriate FSA State 
Executive Director, after consulting with the FSA Headquarters ethics 
advisor, to be consistent with the Standards and otherwise not 
prohibited by law. This general prohibition reflects, in large part, a 
similar requirement that existed within those current segments of FSA 
that formerly were part of Farmers Home Administration and which lapsed 
upon publication of the Standards as a final rule.
    Since farm leases and other transactions between FSA employees and 
FSA program participants are so prevalent within the farming community, 
FSA has determined that a prohibition without providing FSA employees 
the opportunity to obtain an advance determination that the transaction 
would be consistent with ethics requirements would work an undue 
financial hardship upon both the FSA employees, their spouses and minor 
children, and the FSA program participants. Requiring requests for 
advance determinations to be submitted to the FSA State Executive 
Director pursuant to the exception provides for the agency's need to 
have control over these interactions without imposing undue financial 
hardship. As a result, approved transactions will have the visibility 
and accountability addressed previously with regard to the prohibition 
in paragraph (d). Further, the determination of the FSA State Executive 
Director is to be based upon the same standard employed in paragraph 
(d).
    Paragraph (f) of Sec. 8301.103 requires an FSA employee, not 
otherwise required to do so under Sec. 8301.102, to obtain prior 
approval from the agency before engaging in outside employment with a 
person whom the FSA employee knows, or reasonably should know, to be an 
FSA program participant directly affected by decisions made by the 
particular FSA office in which the FSA employee serves. This 
requirement reflects, in large part, a similar requirement that existed 
within those segments of FSA that formerly were part of Farmers Home 
Administration and which lapsed on November 1, 1996. While outside 
interaction is vital to the FSA employees and to the community in which 
they live, the potential for outside employment opportunities to lead 
to favoritism and a loss of impartiality is significant enough to 
justify agency concerns. Thus, FSA has determined that it is necessary 
to require approval before any of its employees may engage in any 
outside employment involving an FSA program participant directly 
affected by decisions made by the office in which the FSA employees 
serves.

Section 8301.104  Additional Rules for Employees of the Food Safety and 
Inspection Service

    The Food Safety and Inspection Service has determined that it is 
necessary to require prior approval before any of its employees, not 
otherwise required to do so under section 8301.102, may engage in any 
outside employment. The implementation of Hazard Analysis and Critical 
Control Points (HACCP) systems within the regulated industry, as well 
as the anticipated creation of Consumer Safety Officer positions, means 
that FSIS employees of all pay levels will be involved in ensuring food 
safety and, therefore, will be facing increased exposure to the food 
industry. Given the vital importance to public health of maintaining 
high standards of food safety in light of the changing nature of FSIS 
responsibilities through HACCP, FSIS believes that its long-standing 
requirement of universal prior approval for outside employment is even 
more necessary.

Section 8301.105  Additional Rules for Employees of the Office of the 
General Counsel

    The USDA Office of the General Counsel previously has required 
lawyers serving within that office to

[[Page 15828]]

obtain prior approval before engaging in the outside practice of law. 
Given the fiduciary duties performed for the Department by OGC, such a 
requirement has been particularly useful in ensuring that the outside 
practice of law does not interfere or conflict with the official duties 
of attorneys within that Office. Accordingly, the Department has 
determined that it is necessary to require that all attorneys serving 
in OGC seek prior approval before engaging in outside employment 
involving the practice of law.

Section 8301.106  Additional Rules for Employees of the Office of 
Inspector General

    The Office of Inspector General has determined that it is necessary 
to require prior approval before any of its employees may engage in 
outside employment involving law enforcement, investigation, security, 
firearms training, defensive tactics training, protective services, 
auditing, accounting, tax preparation, practice of law, and employment 
involving personnel, procurement, budget, computer, or equal employment 
opportunity services. The OIG had long relied upon the departmental 
prior approval requirement. The OIG has a wide range of 
responsibilities for investigation and auditing of departmental 
operations. These mission activities are of a highly sensitive nature. 
The aforementioned types of outside employment involve duties that, 
under certain circumstances, are similar to the mission activities of 
OIG, and therefore are more likely to create an actual or apparent 
conflict of interest. The Department has determined that it is 
necessary to the administration of its ethics program to require prior 
approval for the identified types of outside employment that pose a 
potential for OIG employees to engage in conduct that might violate 
applicable laws and regulations.

III. Matters of Regulatory Procedure

Administrative Procedure Act

    The Department has found that good cause exists under 5 U.S.C. 
553(b) and (d) for waiving, as unnecessary and contrary to public 
interest, the general notice of proposed rulemaking, opportunity for 
comment and the 30-day delay in effectiveness as to this interim rule. 
This rulemaking contains statements of policy, interpretive rules, and 
conduct regulations related solely to Department personnel and, in 
significant part, reissues in revised form the outside employment rules 
previously published in 7 CFR part 0. Delaying the effectiveness of 
this rule could also result in an effort by some employees likely to be 
affected by the rules on outside employment and prohibited financial 
interests to engage in covered outside employment or to obtain covered 
financial interests prior to the effective date of this rule.
    However, because this rule may be improved, comments may be 
submitted on or before April 24, 2000. All comments will be analyzed 
and any appropriate changes to the rule will be incorporated in the 
subsequent publication of the final rule.

Congressional Review

    The Department has found that this rulemaking is not a rule as 
defined in 5 U.S.C. 804, and, thus, does not require review by 
Congress. This rulemaking is related to Department personnel.

Executive Orders Nos. 12866 and 12988

    Since this rule relates to Department personnel, it is exempt from 
the provisions of Executive Orders Nos. 12866 and 12988.

Regulatory Flexibility Act

    The Department has determined under the Regulatory Flexibility Act 
(5 U.S.C. chapter 6) that this regulation will not have a significant 
economic impact on a substantial number of small entities because it 
affects only Department employees.

Paperwork Reduction Act

    The Department has determined that the Paperwork Reduction Act (44 
U.S.C. chapter 35) does not apply because this regulation does not 
contain any information collection requirements that require the 
approval of the Office of Management and Budget.

Environmental Impact

    This decision will not have a significant impact upon the quality 
of the human environment or the conservation of energy resources.

List of Subjects in 5 CFR Part 8301

    Conflict of interests, Executive branch standards of conduct, 
Government employees.

    Dated: March 16, 2000.
Dan Glickman,
Secretary of Agriculture.
    Approved: March 17, 2000.
Stephen D. Potts,
Director, Office of Government Ethics.

    For the reasons set forth in the preamble, the Department of 
Agriculture, with the concurrence of the Office of Government Ethics, 
is amending Title 5 of the Code of Federal Regulations by adding a new 
chapter LXXIII, consisting of Part 8301, to read as follows:

CHAPTER LXXIII--DEPARTMENT OF AGRICULTURE

PART 8301--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES 
OF THE DEPARTMENT OF AGRICULTURE

Sec.
8301.101   General.
8301.102   Prior approval for outside employment.
8301.103   Additional rules for employees of the Farm Service 
Agency.
8301.104   Additional rules for employees of the Food Safety and 
Inspection Service.
8301.105   Additional rules for employees of the Office of the 
General Counsel.
8301.106   Additional rules for employees of the Office of Inspector 
General.

    Authority: 5 U.S.C. 301, 7301; 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 CFR 2635.105, 2635.403(a), 2635.803, 2635.807(a)(2)(ii).


Sec. 8301.101  General.

    (a) In accordance with 5 CFR 2635.105, the regulations in this part 
apply to employees of the Department of Agriculture (Department or 
USDA) and supplement the Standards of Ethical Conduct for Employees of 
the Executive Branch contained in 5 CFR part 2635.
    (b) In addition to 5 CFR part 2635 and this part, employees also 
are required to comply with the executive branch financial disclosure 
regulations at 5 CFR part 2634, the regulations on responsibilities and 
conduct contained in 5 CFR part 735, and Department guidance and 
procedures established pursuant to paragraph (c) of this section.
    (c) With the concurrence of the Designated Agency Ethics Official 
(DAEO), agencies and components of the Department may, in accordance 
with 5 CFR 2635.105(c), issue explanatory guidance for their employees 
and establish procedures necessary to implement this part and part 2635 
of this title. The Deputy Ethics Official for each agency or component 
shall retain copies of all such guidance issued by that agency or 
component.


Sec. 8301.102  Prior approval for outside employment.

    (a) Prior approval requirement. An employee, other than a special 
Government employee, who is required to file either a public or 
confidential financial disclosure report (SF 278 or OGE Form 450), or 
an alternative form of reporting approved by the Office of Government 
Ethics, shall, before

[[Page 15829]]

engaging in outside employment, obtain written approval in accordance 
with the procedures set forth in paragraph (c) of this section.
    (b) Definition of employment. For purposes of this section, 
``employment'' means any form of non-Federal employment or business 
relationship or activity involving the provision of personal services 
by the employee for direct, indirect, or deferred compensation other 
than reimbursement of actual and necessary expenses. It also includes, 
irrespective of compensation, the following outside activities:
    (1) Providing personal services as a consultant or professional, 
including service as an expert witness or as an attorney;
    (2) Engaging in teaching, speaking, writing, or editing that:
    (i) Relates to the employee's official duties within the meaning of 
5 CFR 2635.807(a)(2)(i)(B) through (E); or
    (ii) Would be undertaken as a result of an invitation to engage in 
the activity that was extended by a person who is a prohibited source 
within the meaning of 5 CFR 2635.203(d); and
    (3) Providing personal services to a non-Federal entity as an 
officer, director, employee, agent, attorney, consultant, contractor, 
general partner, or trustee, which involves decision making or 
policymaking for the non-Federal entity, or the provision of advice, 
counsel, consultation, unless such personal services are provided:
    (i) To a political, religious, employee, social, fraternal, or 
recreational organization; and (ii) Without compensation other than 
reimbursement of expenses.
    (c) Submission of requests for approval. An employee seeking to 
engage in employment for which advance approval is required shall 
submit a written request for approval to the employee's supervisor a 
reasonable time before the employee proposes to begin the employment. 
Upon a significant change in the nature of the outside employment or in 
the employee's official position, the employee shall submit a revised 
request for approval. The supervisor will forward written requests for 
approval to the agency designee, or to the DAEO where no agency 
designee exists, through normal supervisory channels. All requests for 
prior approval shall include the following information:
    (1) The employee's name, organizational location, occupational 
title, grade, and salary;
    (2) The nature of the proposed outside employment, including a full 
description of the specific duties or services to be performed;
    (3) A description of the employee's official duties that relate in 
any way to the proposed employment;
    (4) The name and address of the person or organization for whom or 
with which the employee is to be employed, including the location where 
the services will be performed;
    (5) The estimated total time that will be devoted to the outside 
employment. If the proposed outside employment is to be performed on a 
continuing basis, a statement of the estimated number of hours per 
year; for other employment, a statement of the anticipated beginning 
and ending dates;
    (6) A statement as to whether the work can be performed entirely 
outside of the employee's regular duty hours and, if not, the estimated 
number of hours of absence from work that will be required;
    (7) The method or basis of any compensation (e.g., fee, per diem, 
honorarium, royalties, stock options, travel and expenses, or other);
    (8) A statement as to whether the compensation is derived from a 
USDA grant, contract, cooperative agreement, or other source of USDA 
funding;
    (9) For employment involving the provision of consultative or 
professional services, a statement indicating whether the client, 
employer, or other person on whose behalf the services are performed is 
receiving, or intends to seek, a USDA grant, contract, cooperative 
agreement, or other funding relationship; and
    (10) For employment involving teaching, speaking, writing or 
editing, the proposed text of any disclaimer required by 5 CFR 
2635.807(b).
    (d) Standard for approval. Approval shall be granted by the agency 
designee (or the DAEO, when there is not an agency designee) unless it 
is determined that the outside employment is expected to involve 
conduct prohibited by statute or Federal regulation, including 5 CFR 
part 2635 or this part.
    (e) Responsibilities of the Designated Agency Ethics Official and 
component agencies. (1) The DAEO or, with the concurrence of the DAEO, 
each separate agency or component of USDA may issue an instruction or 
manual issuance exempting categories of employment from a requirement 
of prior written approval based on a determination that employment 
within those categories would generally be approved and is not likely 
to involve conduct prohibited by Federal statutes or regulations, 
including 5 CFR part 2635 and this part.
    (2) Department components may specify internal procedures governing 
the submission of prior approval requests and designate appropriate 
officials to act on such requests. The instructions or manual issuances 
may include examples of outside employment that are permissible or 
impermissible consistent with 5 CFR part 2635 and this part. With 
respect to employment involving teaching, speaking, writing, or 
editing, the instructions or manual issuances may specify pre-clearance 
procedures and/or require disclaimers indicating that the views 
expressed do not necessarily represent the views of the agency, USDA or 
the United States.
    (3) The officials within the respective USDA agencies or components 
responsible for the administrative aspects of these regulations and the 
maintenance of records shall make provisions for the filing and 
retention of requests for approval of outside employment and copies of 
the notification of approval or disapproval.


Sec. 8301.103  Additional rules for employees of the Farm Service 
Agency.

    (a) Application. This section applies only to Farm Service Agency 
(FSA) personnel who are Federal employees within the meaning of 5 
U.S.C. 2105. This section does not apply to FSA community committee 
members, county committee members, and county office personnel, who are 
either elected to their positions or are employees of community or 
county committees established under 16 U.S.C. 590h. For rules 
applicable to FSA community committee members, county committee 
members, and county office personnel, see 7 CFR part 7.
    (b) Definition of FSA program participant. For purposes of this 
section, the phrase ``FSA program participant,'' includes any person 
who is, or is an applicant to become, an FSA borrower, FSA grantee, or 
recipient of any other form of FSA financial assistance available under 
any farm credit, payment or other program administered by FSA.
    (c) Prohibited borrowing. (1) No FSA employee, or spouse or minor 
child of an FSA employee, may directly or indirectly seek or obtain a 
``direct loan'' under paragraph (a)(9) of section 343 of the 
Consolidated Farm and Rural Development Act, 7 U.S.C. 1991(a)(9).
    (2) Nothing in this section bars an FSA employee, or spouse or 
minor child of an FSA employee, from retaining a direct loan secured 
prior to March 24, 2000 or, if subsequent to March 24, 2000, such 
direct loan is secured prior to the FSA employee being appointed to, or 
nominated for appointment to an FSA position. Any FSA employee who 
either personally has such a pre-existing loan, or whose spouse or 
minor child has such a pre-existing loan, must

[[Page 15830]]

submit a written disqualification from taking any official action on 
any such loan. Other than through the application of normal FSA loan 
servicing options set forth under FSA regulations, the terms of any 
such pre-existing loans shall remain fixed and shall not be subject to 
renegotiation or renewal unless pursuant to policy decision(s) made by 
the USDA Secretary or the FSA Administrator.
    (3) Waiver for FSA State Committee members. A request for an 
exception to the general prohibition of paragraph (c)(1) of this 
section may be submitted by an FSA State Committee member (whether on 
his or her own behalf, or on behalf the FSA State Committee member's 
spouse or minor child), to the FSA Deputy Administrator for Farm Loans. 
The Deputy Administrator for Farm Loans may grant a written waiver from 
this prohibition based on a determination made with the concurrence of 
the DAEO and the FSA headquarters ethics advisor that:
    (i) The applicant is a current FSA State Committee member or the 
spouse or minor child of a current FSA State Committee member;
    (ii) The applicant meets the statutory qualification requirements 
for obtaining a direct loan; and
    (iii) A waiver is not inconsistent with part 2635 of this title nor 
7 U.S.C. 1986 nor otherwise prohibited by law, and that, under the 
particular circumstances, application of the prohibition is not 
necessary to avoid the appearance of misuse of position, including the 
appearance of misuse of non-public information, or loss of 
impartiality, or otherwise to ensure confidence in the impartiality and 
objectivity with which agency programs are administered.
    (d) Prohibited real estate purchases. (1) No FSA employee, or 
spouse or minor child of an FSA employee, may directly or indirectly 
purchase real estate held in the FSA inventory, for sale under 
forfeiture to FSA, or from an FSA program participant.
    (2) Waiver. A request for an exception to the prohibition found in 
paragraph (l)(1) of this section may be submitted jointly by the FSA 
program participant and FSA employee (whether on his or her own behalf, 
or on behalf of the employee's own spouse or minor child), to the FSA 
State Executive Director. The FSA State Executive Director may grant a 
written waiver from this prohibition based on a determination made with 
the advice and clearance of the DAEO and the FSA headquarters ethics 
advisor that the waiver is not inconsistent with part 2635 of this 
title nor 7 U.S.C. 1986 nor otherwise prohibited by law and that, under 
the particular circumstances, application of the prohibition is not 
necessary to avoid the appearance of misuse of position or loss of 
impartiality or otherwise to ensure confidence in the impartiality and 
objectivity with which agency programs are administered. A waiver under 
this paragraph may impose appropriate conditions, such as requiring 
execution of a written disqualification.
    (e) Prohibited transactions with FSA program participants. (1) 
Except as provided in paragraph (e)(2) of this section, no FSA employee 
or spouse or minor child of an FSA employee may directly or indirectly: 
Sell real property to; lease real property to or from; sell to, lease 
to or from, or purchase personal property from; or employ for 
compensation a person whom the FSA employee knows or reasonably should 
know is an FSA program participant directly affected by decisions of 
the particular FSA office in which the FSA employee serves.
    (2) Exceptions. Paragraph (e)(1) of this section does not apply to:
    (i) A sale, lease, or purchase of personal property, if it 
involves:
    (A) Goods available to the general public at posted prices that are 
customary and usual within the community; or
    (B) Property obtained pursuant to public auction; or
    (ii) Transactions listed in paragraph (e)(1) of this section 
determined in advance by the appropriate FSA State Executive Director, 
after consulting with the FSA Headquarters ethics advisor, to be 
consistent with part 2635 of this title and otherwise not prohibited by 
law.
    (f) Additional prior approval requirement for outside employment. 
Any FSA employee not otherwise required to obtain approval for outside 
employment under Sec. 8301.102 shall obtain written approval in 
accordance with the procedures set forth in paragraph (c) of 
Sec. 8301.102 before engaging in outside employment, as that term is 
defined by paragraph (b) of Sec. 8301.102, with or for a person:
    (1) Whom the FSA employee knows, or reasonably should know, is an 
FSA program participant; and
    (2) Who is directly affected by decisions made by the particular 
FSA office in which the FSA employee serves.


Sec. 8301.104  Additional rules for employees of the Food Safety and 
Inspection Service.

    Any employee of the Food Safety and Inspection Service not 
otherwise required to obtain approval for outside employment under 
Sec. 8301.102, shall, before engaging in any form of outside 
employment, obtain written approval in accordance with the procedures 
set forth in paragraph (c) of Sec. 8301.102.


Sec. 8301.105  Additional rules for employees of the Office of the 
General Counsel.

    Any attorney serving within the Office of the General Counsel, not 
otherwise required to obtain approval for outside employment under 
Sec. 8301.102, shall obtain written approval, in accordance with the 
procedures set forth in paragraph (c) of Sec. 8301.102, before engaging 
in the outside practice of law, whether compensated or not.


Sec. 8301.106  Additional rules for employees of the Office of 
Inspector General.

    Any employee of the Office of Inspector General, not otherwise 
required to obtain approval for outside employment under Sec. 8301.102, 
shall obtain written approval, in accordance with the procedures set 
forth in paragraph (c) of Sec. 8301.102, before engaging in any form of 
outside employment that involves the following:
    (a) Law enforcement, investigation, security, firearms training, 
defensive tactics training, and protective services;
    (b) Auditing, accounting, bookkeeping, tax preparation, and other 
services involving the analysis, use, or interpretation of financial 
records;
    (c) The practice of law, whether compensated or not; or
    (d) Employment involving personnel, procurement, budget, computer, 
or equal employment opportunity services.

[FR Doc. 00-7275 Filed 3-23-00; 8:45 am]
BILLING CODE 3410-01-U