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(9)(c) and (17)(a)
Subject:
Outside activities regulations.
Purpose:
To provide guidance and approval procedures for outside activities by State government employees and officials.
Text of proposed rule:
Title 19 NYCRR Part 932 is amended to read as follows:
Part 932 Outside Activity Restrictions And Approval Procedures
932.1 Purpose of Regulations.
The purpose of these regulations is to effectuate the conflicts of interests provisions of the Public Officers Law and to provide an approval procedure for outside activities by Policy Makers, heads of State Agencies, and Statewide Elected Officials.
932.[1]2 Definitions.
(a) Approving Authority, for a Policy Maker, shall mean (i) the head of a State [a]Agency employing such Policy Maker; [or appointing authority, or his or her designee, as appropriate for the individual involved and, for the four statewide elected officials and the heads of State agencies, shall mean the State Ethics Commission which may delegate its approval authority to its executive director] (ii) the appropriate designee of the head of such State Agency; (iii) the individual or body that has the authority to appoint such Policy Maker to a position; or (iv) the appropriate designee of such individual or body.
(b) [Covered individual shall mean the four statewide elected officials and State officers or employees] Commission shall mean the New York State Joint Commission on Public Ethics and, where applicable, its predecessor agencies.
(c) Compensation shall mean the financial consideration received in exchange for services rendered, e.g., wages, salaries, benefits, professional fees, royalties, bonuses, or commissions on sales. Compensation shall also include income received from any business venture, whether or not incorporated, that is owned or controlled by an individual who is subject to this Part. Notwithstanding the foregoing, income received from transactions involving such individual’s own securities, personal property, or real estate is not included in the term Compensation.
[(d) Nominal compensation 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 in annual compensation for personal services actually rendered, e.g. wages, salaries, professional fees, royalties, bonuses, or commissions on sales, and that portion of income received from a corporation or unincorporated trade or business which represents a reasonable allowance for salaries and compensation for personal services actually rendered
Income received by the individual from transactions involving the individual’s own securities, person property or real estate is not included in determining annual compensation for personal services actually rendered, provided the transactions are not with any State agency.]
(d) Outside Activity Approval Form shall mean a form designated by the Commission as the Outside Activity Approval Form and available on the Commission’s website.
(e) Party shall mean (i) any organization which at the last preceding election for governor of the State of New York polled at least fifty thousand votes for its candidate for governor; or (ii) the national political entity affiliated with such organization.
(f) Party Committee shall mean any State committee, county committee, and such other committee (including national committee) as the rules of the Party may allow.
[(e)] (g) Policy[-making position] Maker shall mean an officer, employee, director, commissioner, or member of a State Agency (other than a multi-state authority) who has been [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] to hold a policy-making position pursuant to Public Officers Law[, section] § 73-a(1)(c)[(ii) and (iii)].
[(h) State officer or employee shall be defined as the term State officer or employee is defined in § 73 and § 73-a of the Public Officers Law.]
[(f)] (h) Political [o]Organization shall mean any organization that is affiliated with, or subsidiary to, a [political] [p]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 fundraising committees]. The term does not include campaign or fundraising committees.
[(g)] (i) State [a]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] State Agency shall also include the State University of New York [and] or the City University of New York, including all their constituent units except (1) community colleges of the State University of New York and (2) the independent institutions operating statutory or contract colleges on behalf of the State.
[c] (j) [Four] [s]Statewide [e]Elected [o]Official[s] shall mean the Governor, [the] Lieutenant Governor, Attorney General, or [the] Comptroller [and the Attorney General] of the State of New York.
932.3 General Standard for All Persons Subject to Public Officers Law § 74.
No individual who is subject to Public Officers Law § 74, shall engage in any outside activity which interferes or conflicts with the proper and effective discharge of such individual’s official State duties or responsibilities.
932.[2]4 Restrictions on [policymakers and] [c]Certain [others holding positions of officer or member of] [p]Political Activities [party organizations].
(a) No head of a State Agency, Statewide Elected Official, or Policy Maker (regardless of whether the person serves on an unpaid or per diem basis) [department, individual who serves as one of the four statewide elected officials, individual who serves in a policymaking position or member or director of a public authority (other than a multistate 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] [p]Party or [p]Political [o]Organization.
(b) No head of a State Agency, Statewide Elected Official, or Policy Maker (regardless of whether the person serves on an unpaid or per diem basis) [department, individual who serves as one of the four statewide elected officials, 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, officer, director, board member, or district leader of any [political] [p]Party [c]Committee [including political party district leader (however designated) or member of the national committee of a political party].
(c) Nothing in this section shall prohibit a head of a State Agency, Statewide Elected Official, or Policy Maker from serving 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 activities.
(a) No covered individual shall engage in any outside activity which interferes or is conflict with the proper and effective discharge of such individual's official duties or responsibilities.
(b) No individual who serves in a policymaking position on other than a nonpaid or per diem basis, or who serves as one of the four Statewide elected officials, shall hold any other public office or public employment for which more than nominal compensation, in whatever form, is received without, in each case, obtaining prior approval from the State Ethics Commission.
(c) No individual who serves in a policymaking position on other than a nonpaid or per diem basis, or who serves as one of the four Statewide elected officials, shall expend time or otherwise engage in any private employment, profession or business, or other outside activity from which more than nominal compensation, 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 who serves in a policymaking position on other than a nonpaid or per diem basis, or who serves as one of the four Statewide elected officials 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 compensation, 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 who serves in a policymaking position on other than a nonpaid or per diem basis, or who serves as one of the four Statewide elected officials 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 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 compensation, in whatever form, is to be received, must file a written request to approve outside activities with the State Ethics Commission which must contain the consent of the individual'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 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 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 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) 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 are more restrictive than the requirements of this Part.]
932.5 Required Prior Approval for Salaried Policy Makers, Heads of State Agencies, and Statewide Elected Officials
(a) A Policy Maker who serves the State on other than a nonpaid or per diem basis, shall obtain the following approvals prior to engaging in the activities listed below:
Outside Activity
Required Approvals/Actions
A job, employment (including public employment), or business venture that generates, or is expected to generate, between $1,000 and $5,000 in Compensation annually
Approving Authority must approve
A job, employment (including public employment), or business venture that generates, or is expected to generate, more than $5,000 in Compensation annually
Approving Authority and the Commission must approve
Holding elected or appointed public office (regardless of Compensation) as an outside activity
Approving Authority and the Commission must approve
Serving as a director or officer of a for-profit entity (regardless of Compensation)
Approving Authority and the Commission must approve
Serving as a director or officer of a not-for-profit entity
Compensation is $0 - $999 annually
Approval not required, but must notify Approving Authority in writing prior to commencing service
Compensation is between $1,000 and $5,000 annually
Approving Authority must approve
Compensation is more than $5,000 annually
Approving Authority and the Commission must approve
(b) A head of a State Agency or a Statewide Elected Official shall obtain approval from the Commission prior to engaging in the outside activities listed in Section 932.5(a).
[932.6 Complaints
Any person may file a complaint with the State Ethics Commission which 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.]
932.6 Approval Procedures.
(a) A Policy Maker who requires approval pursuant to Part 932.5(a) from his Approving Authority only, shall submit to the Approving Authority a written approval request prior to commencing the outside activity.
(1) The Approving Authority shall make its determination based on its interpretation of whether the proposed outside activity is in accordance with the applicable provisions of the Public Officers Law, Commission Advisory Opinions, pertinent State Agency policies, procedures, or regulations governing employee conduct, and such other factors as the Approving Authority may deem appropriate.
(2) The interpretations of the Approving Authority of the Public Officers Law shall not be binding on the Commission.
(b) A Policy Maker who also requires Commission approval pursuant to Part 932.5(a) shall submit to the Commission a request on the Outside Activity Approval Form. The form must be completed in full, including signatures from the individual and the Approving Authority. The Commission will not consider requests without a completed Outside Activity Approval Form.
(c) A head of a State Agency or Statewide Elected Official who requires Commission approval pursuant to Part 932.5(b) shall submit to the Commission a request on the Outside Activity Approval Form. The Commission will not consider requests without a completed Outside Activity Approval Form.
(d) With respect to outside activity requests that require Commission approval, the Commission shall make its determination based on its interpretation of whether the proposed outside activity is in accordance with the applicable provisions of the Public Officers Law, Commission Advisory Opinions, regulations, and policies. The Commission may require additional information as it deems appropriate.
[932.7 Violations
In addition to any penalty contained in any provision of law, a knowing and intentional violation of this Part by an individual subject to it may result in appropriate action taken by the State Ethics Commission or referral by it to the individual's appointing authority. The appointing authority, after such a referral, may take disciplinary action which may include a fine, suspension without pay or removal from office or employment in the manner provided by law.]
932.7 Previously Approved Outside Activity: Annual Disclosure and Material Changes
(a) Once an outside activity has been approved pursuant to Part 932.6 it shall remain effective unless and until there is a material change in the individual’s State responsibilities or in the outside activity, at which point the individual must submit a new request for approval in accordance with Parts 932.5 and 932.6.
(b) On an annual basis, an individual who has received approval for an outside activity pursuant to Part 932.6, or has otherwise disclosed the not-for-profit board service pursuant to Part 932.5, must inform, in writing, his Approving Authority (or, in the case of a head of a State Agency or a Statewide Elected Official, that State Agency’s ethics officer or other designated individual) if the individual is still engaged in the outside activity for which approval was granted. The Approving Authority (or, in the case of a head of a State Agency or a Statewide Elected Official, that State Agency’s ethics officer or other designated individual) shall determine when such annual disclosure is to be made.
932.8 Enforcement.
In addition to any penalty contained in any other provision of law, an individual’s performance of an outside activity that is in violation of Public Officers Law § 73 or § 74 may subject him to a civil penalty or other Commission action. Nothing herein shall limit or prohibit the State Agency, Approving Authority, or other appropriate entity from taking disciplinary action with respect to violations of this Part or the Public Officers Law, including a fine, suspension without pay, or removal from office or employment in the manner provided by law, regulation, or collective bargaining agreement.
932.[5]9 Codes of Ethics for [u]Uncompensated and [p]Per [d]Diem [d]Directors, [m]Members and [o]Officers.
The boards or councils whose officers or members are subject to § 73-a of the Public Officers Law and are not subject to § 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 § 73-a of the Public Officers Law and are not subject to § 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.
932.10 Agencies Permitted More Restrictive Rules.
Nothing contained in this Part shall prohibit any State Agency from adopting or implementing its own rules, regulations, or procedures with regard to outside activities that are more restrictive than the requirements of this Part.
Text of proposed rule and any required statements and analyses may be obtained from:
Michael E. Sande, Associate Counsel, Joint Commission on Public Ethics, 540 Broadway, Albany, New York 12207, (518) 408-3976, email: regs@jcope.ny.gov
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(9)(c) generally directs the Joint Commission on Public Ethics (“JCOPE”) to adopt, amend, and rescind rules and regulations to govern JCOPE’s various procedures. Executive Law section 94(17)(a) directs JCOPE to promulgate rules concerning limitations on outside activities by persons subject to its jurisdiction. Public Officers Law section 74 establishes general standards concerning the prevention of actual and apparent conflicts of interest between a State employee’s official responsibilities and her private interests.
2. Legislative objectives: To provide guidance and procedures regarding the outside activities of certain State officers and employees.
3. Needs and benefits: JCOPE’s predecessor agencies created regulations regarding outside activities in Part 932. The proposed rulemaking will refine these regulations in order to make them easier to understand and to clarify certain provisions by defining key terms. The proposed rulemaking also will effect substantive changes to the existing regulations as follows:
A. Not-for-Profit Board Service
The current regulations require approval from an individual’s agency and JCOPE for service on the Board of a for-profit entity, regardless of the compensation received. The regulations have no such requirement for Board service on a not-for-profit company or corporation.
The proposed amendment would now require a Policy Maker to disclose to his agency service as a board member of a not-for profit entity, regardless of compensation received. If the individual receives compensation for such service, the approval requirements and thresholds remain the same as for any other outside activity.
B. Annual Disclosure of Previously-Approved Outside Activity
The proposed amended regulations would impose a new requirement on persons who have a previously-approved outside activity. Namely, these individuals would be required to disclose to their agencies, on an annual basis, if they are still engaged in the approved outside activity. The amended regulations codify the long-standing practice that an outside activity approval, duly approved by the agency and/or JCOPE, remains effective unless and until there is a material change in the individual’s State responsibilities or in the previously-approved outside activity, at which point the individual must submit a new request for approval in accordance with Parts 932.5 and 932.6.
In many cases, current ethics officers may be unaware of approvals that were granted before they came to their jobs. This proposed change thus provides agencies with the opportunity to systematically review, if need be, all outside activities.
C. Monetary Threshold for Commission Approval
Currently, the regulations require an individual who has an outside activity that generates more than $4,000 a year to seek approval from her agency and the Commission.
The proposed amended regulations increase this threshold to $5,000. This figure corresponds with the upper range of Category C in the current Financial Disclosure Statement.
D. Summary of Amended Sections
Part 932.1 provides the purpose of the regulations.
Part 932.2 defines key terms in the regulations. The definitions are not meant to alter the scope of the existing regulations, but are instead designed to clarify those regulations.
Part 932.3 states the general ethical standards, with respect to outside activities, for all persons subject to Public Officers Law § 74.
Part 932.4 sets forth restrictions on certain political activities by Policy Makers, heads of State Agencies, and Statewide Elected Officials. The definitions of certain terms have been clarified, but the proposed amended regulations do not change the prohibitions on political activities in the current regulations.
Part 932.5 sets forth the required approvals and actions for various categories of covered outside activities. Policy Makers must obtain approval from their Approving Authority for an outside job, employment (including public employment), or business venture that generates, or is expected to generate, between $1,000 and $5,000 in Compensation annually. Policy Makers must obtain approval from their Approving Authority and JCOPE with respect to: (i) a job, employment (including public employment), or business venture that generates, or is expected to generate, more than $5,000 in Compensation annually; (ii) holding elected or appointed public office (regardless of Compensation) as an outside activity; and (iii) serving as a director or officer of a for-profit entity (regardless of Compensation). A head of a State Agency or a Statewide Elected Official must obtain approval from JCOPE prior to engaging in any of the outside activities listed in this Part. As discussed above, a Policy Maker who holds a position as an officer or director of a not-for-profit entity and receives less than $1,000 in annual compensation for such service must disclose this position to the agency’s ethics officer.
Part 932.6 outlines the procedures for seeking approval of outside activities.
Part 932.7 states that an approval of an outside activity remains in effect unless and until there is a material change in the individual’s State responsibilities or in the outside activity. This Part also establishes a new requirement that an individual who has received approval of an outside activity to provide annual notification of whether the individual is still engaged in the outside activity.
Part 932.8 identifies the statutory provision, Executive Law section 94, that authorizes JCOPE to investigate possible violations of Public Officers Law sections 73 and 74 and their corresponding regulations and to take appropriate action as authorized in these statutes.
Part 932.9 directs boards, councils, commissions, and other entities whose officers or members are subject to Public Officers Law § 73-a, but are not subject to § 73 of such law by virtue of their uncompensated or per diem compensation status, to adopt a code of ethical conduct.
Part 932.10 reserves the authority of any State Agency to adopt or implement its own rules, regulations, or procedures with regard to outside activities that are more restrictive than the requirements of this Part.
4. Costs:
a. costs to regulated parties for implementation and compliance: Minimal.
b. costs to the agency, state and local government: Minimal costs to state and local governments.
c. cost information is based on the fact that there will be minimal costs to regulated parties and state and local government for training staff on changes to the requirements. The cost to the agency is based on the estimated slight increase in staff resources to implement the regulations.
5. Local government mandate: The proposed regulation imposes no new programs, services, duties or responsibilities upon any county, city, town, village, school district, fire district, or other special district.
6. Paperwork: This regulation may require the preparation of additional forms or paperwork. Such additional paperwork is expected to be minimal.
7. Duplication: This regulation does not duplicate any existing federal, state, or local regulations.
8. Alternatives: JCOPE could promulgate a formal advisory opinion or other guidance. However, amending the existing outside activity regulations through the formal rulemaking process provides more clarity to affected parties.
9. Federal standards: These regulations do not exceed any federal minimum standard with regard to a similar subject area.
10. Compliance schedule: Compliance will take effect upon adoption.
Regulatory Flexibility Analysis
A Regulatory Flexibility Analysis for Small Businesses and Local Governments is not submitted with this Notice of Proposed Rule Making because the proposed rulemaking will not impose any adverse economic impact on small businesses or local governments, nor will it require or impose any reporting, record-keeping, or other affirmative acts on the part of these entities for compliance purposes. The New York State Joint Commission on Public Ethics notes that while the outside activity regulations may affect what activities a Policy Maker, head of a State Agency, or Statewide Elected Official (as defined in the regulations) may perform outside the individual’s State responsibilities, this does not impose record-keeping requirements or other adverse economic impacts on small businesses and local governments.
Rural Area Flexibility Analysis
A Rural Area Flexibility Analysis is not submitted with this Notice of Proposed Rule Making because the proposed rulemaking will not impose any adverse economic impact on rural areas, nor will compliance require or impose any reporting, record-keeping, or other affirmative acts on the part of rural areas. The Joint Commission on Public Ethics makes these findings based on the fact that the outside activity regulations govern activities a Policy Maker, head of a State Agency, or Statewide Elected Official (as defined in the regulations) may perform outside the individual’s State responsibilities. Rural areas are not affected in any way.
Job Impact Statement
A Job Impact Statement is not submitted with this Notice of Proposed Rule Making because the proposed rulemaking will have a limited impact on jobs or employment opportunities. The Joint Commission on Public Ethics makes these findings based on the fact that the regulations apply only to Policy Makers, heads of a State Agency, and Statewide Elected Officials, during the period of their State service.
