CPI-47-09-00004-P Outside Activities for Executive Branch State Officers and Employees

11/25/09 N.Y. St. Reg. CPI-47-09-00004-P

NEW YORK STATE REGISTER

VOLUME XXXI, ISSUE 47

November 25, 2009

RULE MAKING ACTIVITIES

PUBLIC INTEGRITY, COMMISSION ON

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. CPI-47-09-00004-P

Outside Activities for Executive Branch State Officers and Employees

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

Amendment of Part 932 of Title 19 NYCRR.

Statutory authority:

Executive Law, section 94(16)(a)

Subject:

Outside Activities for executive branch State officers and employees.

Purpose:

Rules concerning restrictions on outside activities.

Text of proposed rule:

Title 19 NYCRR Part 932 is amended to read as follows:

OFFICIAL COMPILATION OF CODES, RULES AND REGULATIONS OF THE STATE OF NEW YORK

TITLE 19. DEPARTMENT OF STATE

CHAPTER XX. [STATE ETHICS COMMISSION] COMMISSION ON PUBLIC INTEGRITY

PART 932 OUTSIDE ACTIVITIES

932.1 Definitions.

(a) Approving authority shall mean the head of a State agency or appointing authority, or his or her designee, as appropriate, for the [individual] person involved and, for the [four] statewide elected officials defined in this Subpart and the heads of State agencies, shall mean the [State Ethics] Commission as defined in this Subpart [which may delegate its approval authority to its executive director].

(b) Commission shall mean the New York State Commission on Public Integrity.

[(b) Covered individual shall mean the four statewide elected officials and State officers or employees.]

[(c) Four statewide elected officials shall mean the Governor, the Lieutenant Governor, the Comptroller and the Attorney General.]

([d] c) [Nominal][ c]Compensation threshold shall mean [no more than either:

(1) the per diem amount provided to such position, where no other compensation for such appointment is received; or

(2) $4,000] $5,000 in annual compensation for personal services actually rendered, e.g., wages, salaries, health insurance benefits, professional fees, royalties, bonuses, or commissions on sales, and [that] the portion of income received from a corporation or unincorporated trade or business [which] that represents a reasonable allowance for salaries and compensation for personal services actually rendered.

(1) Income received by the [individual] person from transactions involving the [individual's] person's own investments, securities, personal property , partnership interest or real estate is not included in determining annual compensation for personal services actually rendered, provided the transactions are not with any State agency as the term is defined in this Subpart.

([e] d) Policy-making position shall mean that position annually determined by the appointing authority as set forth in a written instrument filed with the [State Ethics] Commission or as amended as required by Public Officers Law, section 73-a(1)(c)(ii) and (iii).

([f] e) Political organization shall mean any organization that is affiliated with or a subsidiary to a political party [, and shall include, for example, partisan political clubs. Political organization shall not include an organization supporting a particular cause with no partisan inclination, for example, the League of Women Voters, and shall not include campaign or fund-raising committees] including, without limitation, a partisan political club or committee, or a campaign or fundraising committee for a political party or political candidate.

([g] f) State agency shall mean any State department, or division, board, commission or bureau of any State department, any public benefit corporation, public authority or commission at least one of whose members is appointed by the Governor, [and] or the State University of New York [and] or the City University of New York, including all their constituent units except community colleges of the State University of New York and the independent institutions operating statutory or contract colleges on behalf of the State.

([h] g) State officer or employee shall [be defined as the term State officer or employee is defined in section 73 and section 73-a of the Public Officers Law.] mean:

(1) Heads of State departments and their deputies and assistants other than members of the Board of Regents of the University of the State of New York who receive no compensation or are compensated on a per diem basis;

(2) Officers and employees of statewide elected officials;

(3) Officers and employees of State departments, boards, bureaus, divisions, commissions, councils or other State agencies other than officers of such boards, commissions or councils who receive no compensation or are compensated on a per diem basis; and

(4) Members or directors of public authorities, other than multi-state authorities, public benefit corporations and commissions at least one of whose members is appointed by the Governor, who receive compensation other than on a per diem basis, and employees of such authorities, corporations and commissions.

(h) Statewide elected official shall mean the Governor, Lieutenant Governor, Comptroller or Attorney General.

932.2 Restriction on policymakers and certain others holding positions [of officer or member of] in political [party] parties and other political organizations.

(a) No [head of a State department,] [individual] State officer or employee who serves in a policy-making position, [who serves as one of the four] statewide elected official[s], [individual who serves in a policy-making position] or member or director of a public authority (other than a multi-state authority), public benefit corporation or commission at least one of whose members is appointed by the Governor shall serve as an officer, director or board member of any political party or other political organization.

(b) No [head of a State department, individual] State officer or employee who serves in a policy-making position, [who serves as one of the four] statewide elected official[s], [individual who serves in a policymaking position] or member or director of a public authority (other than a multi-state authority), public benefit corporation or commission at least one of whose members is appointed by the Governor shall serve as a member of any political party committee including political party district leader (however designated) or member of the national committee of a political party.

(c) Notwithstanding subdivisions (a) and (b) of this Subpart, any State officer or employee or statewide elected official may serve as a delegate to a State or national party convention.

932.3 Restriction on holding other public office or private employment or engaging in other outside activities.

(a) No [covered individual] State officer or employee or statewide elected official shall engage in any outside activity [which] that interferes or is in substantial conflict with the proper and effective discharge of such [individual's] person's official duties or responsibilities.

(b) No [individual] State officer or employee who serves in a policy-making position on other than a nonpaid or per diem basis, or [who serves as one of the four S]statewide elected official[s], shall hold any other public office regardless of compensation, or public employment for which more than [nominal] the compensation threshold, in whatever form, is received or anticipated to be received without, in each case, obtaining prior approval from the [State Ethics] Commission.

(c) No [individual] State officer or employee who serves in a policy-making position on other than a nonpaid or per diem basis, or [who serves as one of the four S]statewide elected official[s] shall expend time or otherwise engage in any private employment, profession or business, or other outside activity from which more than [nominal] the compensation threshold, in whatever form, is received or anticipated to be received without, in each case, obtaining prior approval from the [State Ethics] Commission.

(d) No [individual] State officer or employee who serves in a policy-making position on other than a nonpaid or per diem basis, or [who serves as one of the four] S]statewide elected official[s] shall expend time or otherwise engage in any private employment, profession or business, or other outside activity from which more than $1,000 but less than [nominal] the compensation threshold, in whatever form, is received or anticipated to be received without, in each case, obtaining prior approval from his or her approving authority.

(e) No [individual] State officer or employee who serves in a policy-making position on other than a nonpaid or per diem basis, or [who serves as one of the four] S]statewide elected official[s] shall serve as a director or officer of a for-profit corporation or institution without, in each case, obtaining prior approval from the [State Ethics] Commission.

932.4 Procedure to approve certain outside activities.

(a) Any [individual] person who requests approval to engage in any of the outside activities set forth in section 932.3 of this Part from which more than [nominal] the compensation threshold, in whatever form, is to be received, [must file] shall submit to the Commission a written [Request to Approve Outside Activities with the State Ethics Commission] request on forms approved by the Commission [which] that [must] shall contain the consent of the [individual's] person's approving authority [and any other information the Commission deems necessary to make a determination]. The Commission will not consider requests without such consent. The [State Ethics] Commission may require such [individual] person to submit additional information as it deems appropriate.

(b) The approving authority shall make its determination based on the provisions of sections 73 and 74 of the Public Officers Law, as well as pertinent State agency policies, procedures or rules and regulations governing employee conduct, and such other factors as the approving authority may deem appropriate. The interpretations of the approving authority of sections 73 or 74 of the Public Officers Law shall not be binding on the [State Ethics] Commission in any later investigation or proceeding.

(c) The [State Ethics] Commission shall make its determination based on whether the proposed outside activity interferes with or is in conflict with the proper and effective discharge of such [individual's] person's duties. In making its determination, the Commission shall consider the provisions of sections 73 and 74 of the Public Officers Law.

[(d) Those individuals who, prior to the effective date of this Part (April 11, 1990), are engaged in activities prohibited by section 932.3 of this Part shall have forty-five (45) days from such effective date to submit a request to approve outside activities to the State Ethics Commission to continue to engage in such activity. Upon a determination by State Ethics Commission that such outside activity is not appropriate, the individual must immediately cease and desist from engaging in such activity.]

([e]d) Nothing contained in this Part shall prohibit any State agency from adopting or implementing its own rules, regulations or procedures with regard to outside employment [which] that are more restrictive than the requirements of this Part.

932.5 Codes of Ethics for uncompensated and per diem directors, members and officers.

The boards or councils whose officers or members are subject to section 73-a of the Public Officers Law and are not subject to section 73 of such law by virtue of their uncompensated or per diem compensation status and the commissions, public authorities and public benefit corporations whose member or directors are subject to section 73-a of the Public Officers Law and are not subject to section 73 by virtue of their uncompensated or per diem compensation status shall adopt a code of ethical conduct covering conflicts of interest and business and professional activities, including outside activities, of such directors, members or officers both during and after service with such boards, councils, commissions, public authorities and public benefit corporations. Such codes of ethical conduct shall be filed with the [State Ethics] Commission.

932.6 Complaints.

Any person may file a complaint with the [State Ethics] Commission [which] that alleges [that] a violation of the provisions of this Part has occurred. The Commission, pursuant to its authority under section 94 of the Executive Law, may conduct an investigation and take such other action as it deems proper.

932.7 Violations.

In addition to any penalty contained in any provision of law, a [knowing and intentional] violation of this Part by a[n individual] person subject to it may result in appropriate action taken by the [State Ethics] Commission or referral by it to the [individual's] person's appointing authority. The appointing authority, after such a referral, may take disciplinary action [which] that may include a fine, suspension without pay or removal from office or employment in the manner provided by law.

Text of proposed rule and any required statements and analyses may be obtained from:

Shari Calnero, Associate Counsel, NYS Commission on Public Integrity, 540 Broadway, Albany, New York 12207, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

45 days after publication of this notice.

Regulatory Impact Statement

1. Statutory authority: Executive Law section 94(16)(a) directs the Commission on Public Integrity ("Commission") to promulgate rules concerning restrictions on outside activities.

2. Legislative objectives: The Public Employee Ethics Reform Act of 2007 ("PEERA") established the Commission. PEERA intended that the Commission would strengthen integrity, public trust and confidence in New York State government. As part of the Act, the Commission is charged with the authority to promulgate rules including those concerning restrictions on outside activities by persons subject to its jurisdiction. By setting forth conditions under which public employees may engage in outside activities, these rules provide comprehensive parameters of acceptable conduct for covered individuals.

3. Needs and benefits: The proposed rulemaking is necessary to amend the rules governing outside activities to comport with PEERA. These amendments include technical changes as well as the deletion of obsolete terms. These amendments also increase the minimum annual earning threshold from $4,000 to $5,000, which will simplify the Commission's internal auditing procedures. The financial disclosure statement form defines Category B income as $5,000 to $20,000. Thus, by matching the compensation threshold with the beginning range of Category B, the Commission's audit staff can easily select for audit those marked as Category B and higher incomes. This amendment will allow the Commission's audit staff to review more thoroughly a fewer number of financial disclosure statements. In addition, these amendments revise the definition of "political organization" to include campaign or fundraising committees for a political party or political candidate. This amended definition is now consistent with the definition contained in the Commission's proposed gift regulations.

4. Costs:

a. Costs to regulated parties for implementation and compliance: None.

b. Costs to the agency, State and local government: None.

c. Cost information is based on the fact that the proposed rulemaking involves primarily the elimination of confusing and outdated references currently contained in the regulation. There are no costs associated with these changes.

5. Local government mandate: None.

6. Paperwork: It will not require the preparation of any additional forms or paperwork.

7. Duplication: None.

8. Alternatives: Due to inflation, the Commission concluded that the compensation threshold should be increased. In considering alternatives to the existing $4,000 threshold, the Commission concluded that increasing the amount to $5,000 would simplify the Commission's internal auditing procedures. The financial disclosure statement form defines Category B income as $5,000 to $20,000. Thus, by matching the compensation threshold with the beginning range of Category B, the Commission's audit staff can easily select for audit those financial disclosure statements with reported Category B and higher incomes. This amendment will allow the Commission's audit staff to review more thoroughly a fewer number of financial disclosure statements. Also, the Commission considered not amending the rules to reflect the revised definition of "political organization." The Commission, however, deemed that the definition should match the proposed gift regulations and that a formal rulemaking expressly amending the definition of "political organization" was the optimal manner in which to give the public notice and an opportunity to comment on the Commission's interpretation of this term.

9. Federal standards: The proposed rulemaking pertains to the restrictions on outside activities of State officers and employees pursuant to PEERA and does not exceed any federal minimum standard with regard to a similar subject area.

10. Compliance schedule: This rule shall become effective upon adoption.

Regulatory Flexibility Analysis

A Regulatory Flexibility Analysis for Small Businesses and Local Governments is not submitted with this Notice since the proposed rule-making will not impose any adverse economic impact on small businesses or local governments, nor will it require or impose any reporting, recordkeeping or other affirmative acts on the part of these entities for compliance purposes. Commission makes these findings based on the fact that restrictions on outside activities affect only certain State officers and employees.

Rural Area Flexibility Analysis

A Rural Area Flexibility Analysis is not submitted with this Notice since the proposed rule-making will not impose any adverse economic impact on rural areas, nor will compliance require or impose any reporting, recordkeeping or other affirmative acts on the part of rural areas. The Commission on Public Integrity makes these findings based on the fact that the restrictions on outside activities affect only certain State officers and employees. Rural areas are not affected in any way.

Job Impact Statement

Job Impact Statement is not submitted with this Notice since the proposed rule-making will have no impact on jobs or employment opportunities. The Commission on Public Integrity makes this finding based on the fact that the proposed rule-making applies narrowly to restrictions on outside activity. In addition, the regulation only affects certain State officers and employees and does not apply, nor relate to small businesses, economic development or employment opportunities.