JPE-33-13-00010-A Gift Regulations for Lobbyists and Their Clients

6/18/14 N.Y. St. Reg. JPE-33-13-00010-A

NEW YORK STATE REGISTER

VOLUME XXXVI, ISSUE 24

June 18, 2014

RULE MAKING ACTIVITIES

NEW YORK STATE JOINT COMMISSION ON PUBLIC ETHICS

NOTICE OF ADOPTION

 

I.D No. JPE-33-13-00010-A

Filing No. 454

Filing Date. Jun. 03, 2014

Effective Date. Jun. 18, 2014

Gift Regulations for Lobbyists and Their Clients

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

Action taken:

Addition of Part 934 to Title 19 NYCRR.

Statutory authority:

Legislative Law, art. 1-A, sections 1-c(j) and 1-m; Executive Law, section 94(9)(c) and (17)(a)

Subject:

Gift regulations for lobbyists and their clients.

Purpose:

To implement the restrictions on the offering of gifts contained in Legislative Law article 1-A (the "Lobbying Act").

Text of final rule:

Title 19 NYCRR Part 934 is added to read as follows:

CHAPTER XX. JOINT COMMISSION ON PUBLIC ETHICS

TITLE 19 NYCRR PART 934: GIFTS (Pursuant to Legislative Law Article 1-A)

934.1 Purpose and Effect of Regulation.

(a) The purpose of these regulations is to effectuate the statutory provisions of § 1-c(j) and § 1-m of article 1-A of the Legislative Law.

(b) The effect of these regulations is to supersede prior Advisory Opinions issued by predecessor agencies to the Joint Commission on Public Ethics to the extent they are inconsistent with this Part.

934.2 Definitions.

(a) Bona Fide Charitable Event shall mean a function the primary purpose of which is to provide financial support to a Charitable Organization.

(b) Bona Fide Political Event shall mean a function the primary purpose of which is to provide financial support to Political Organization(s) or Political Candidate(s).

(c) Charitable Organization shall mean:

(1) an entity as defined in Executive Law § 171-a(1) that is registered with the Office of the Attorney General, as required by Executive Law § 172, unless otherwise exempted from filing pursuant to Executive Law § 172-a; or

(2) an entity organized and operated exclusively for charitable purposes and qualified as an exempt organization by the United States Department of Treasury under section 501(c)(3) of the Internal Revenue Code; or

(3) a person who requests contributions for the relief of any individual, specified by name at the time of the solicitation, if all of the contributions collected, without any deductions whatsoever, are paid to or for the benefit of the named beneficiary, provided the individual has submitted a form entitled “Charitable Solicitation for the Relief of an Individual” with the Charities Bureau of the Office of Attorney General prior to the event.

(d) Client shall mean every person or organization as defined in § 1-c(b) of article 1-A of the Legislative Law.

(e) Commission shall mean the New York State Joint Commission on Public Ethics.

(f) Complimentary Attendance shall mean the waiver of all or part of a registration or admission fee, or waiver of all or part of a fee or charge for the provision of food, beverages, entertainment, instruction, or materials. “Complimentary Attendance” shall include the awarding of continuing education credits or certification for attendance at a program provided such credits or certification are offered to all attendees. “Complimentary Attendance” shall not include travel, lodging, or items of more than Nominal Value.

(g) Educational Program shall mean formal instruction provided to attendees. Factors to be considered in assessing whether a program is educational include, but are not limited to: the curriculum; whether the entity providing the program, or the instructors, are accredited, certified, or otherwise qualified to provide the program; who the program is presented to; and where and how the program is presented.

(h) Family Member of any Public Official shall have the same meaning as the term Relative set forth in Public Officers Law § 73(1)(m).

(i) Gift shall mean anything of more than Nominal Value in any form including, but not limited to: money; service; loan; travel; lodging; meals; refreshments; entertainment; discount; or a forbearance of an obligation or a promise that has a monetary value. Notwithstanding the preceding sentence, the exclusions contained in section 934.4 are not Gifts and do not need to be analyzed under section 934.3.

(j) Informational Event shall mean an event or meeting the primary purpose of which is to provide information about a subject or subjects related to a Public Official’s official responsibilities.

(k) Lobbyist shall mean every person or organization as defined in § 1-c(a) of article 1-A of the Legislative Law.

(l) Ministerial Matter shall mean an administrative act carried out in a prescribed manner not allowing for substantial personal discretion.

(m) Nominal Value is not defined in the Public Officers Law or Legislative Law Article One-A. The Commission, however, generally deems an item or service with a fair market value of fifteen dollars or less as having a Nominal Value.

(n) Political Candidate shall mean any individual meeting any of the requirements in Public Officers Law § § 73-a(2)(a)(iii)-(viii), including the current office holder.

(o) Political Organization shall mean any entity that is affiliated with or a subsidiary of a political party including, without limitation, a partisan political club or committee, or a campaign or fund-raising committee for a political party or Political Candidate.

(p) Professional Program shall mean a program that provides information, such as trends in an industry or discipline, which would benefit the administration or operation of the State or the Public Official’s applicable governmental entity, and would enable a Public Official to perform his or her duties more effectively. It shall not include a program, the primary purpose of which is the promotion or marketing of products or services for purchase or lease by the State or the Public Official’s applicable governmental entity.

(q) Public Official(s) shall mean:

(1) Statewide elected officials (the Governor, Lieutenant Governor, Comptroller, or Attorney General of the State of New York) and their officers and employees;

(2) Members, officers, and employees of the New York State Legislature;

(3) 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;

(4) Officers and employees of state departments, boards, bureaus, divisions, commissions, councils, or other state agencies;

(5) Members, directors, and employees of public authorities (other than multi-state authorities), public benefit corporations, and commissions at least one of whose members is appointed by the Governor; and

(6) Municipal officers and employees (including officers or employees of a municipality as defined § 1-c(k) of article 1-A of the Legislative Law), whether paid or unpaid. Municipal officers and employees also includes members of any administrative board, commission, or other agency thereof, and in the case of a county, shall include any officer or employee paid from county funds. No person shall be deemed to be a municipal officer or employee solely by reason of being a volunteer fireman or civil defense volunteer, except a fire chief or assistant fire chief.

(r) Widely Attended Event shall mean an event as defined in Section 934.4(a)(4)(i).

934.3 Gifts.

(a) It is presumptively impermissible for a Lobbyist or Client to offer or give a Gift to any Public Official. Such a Gift is only permissible if, under the circumstances, all of the following criteria are met:

(1) it is not reasonable to infer that the Gift was intended to influence the Public Official; and

(2) the Gift could not reasonably be expected to influence the Public Official, in the performance of his or her official duties; and

(3) it is not reasonable to infer that the Gift was intended as a reward for any official action on the Public Official’s part.

(b) The offering or giving of a Gift from a Lobbyist or a Client to the spouse or unemancipated child of a Public Official is permissible unless, under the circumstances, any one of the following criteria is met:

(1) it could reasonably be inferred that the Gift was offered or given with the intent to influence the Public Official; or

(2) the Gift could reasonably be expected to influence the Public Official in the performance of his or her official duties; or

(3) it could reasonably be inferred that the Gift was offered or given with the intent to reward the Public Official for any official action on his or her part.

(c) The offering or giving of a Gift from a spouse or unemancipated child of a Lobbyist or a Client to a Public Official is permissible unless, under the circumstances, any one of the following criteria is met:

(1) it could reasonably be inferred that the Gift was offered or given with the intent to influence the Public Official; or

(2) the Gift could reasonably be expected to influence the Public Official in the performance of his or her official duties; or

(3) it could reasonably be inferred that the Gift was offered or given with the intent to reward the Public Official for any official action on his or her part.

(d) Notwithstanding sections 934.3(a), (b), and (c), nothing in this Part shall apply to Gifts to officers, members, or directors of boards, commissions, councils, public authorities, or public benefit corporations who receive no compensation or are compensated on a per diem basis if the Lobbyist or Client giving or offering such Gift does not appear, and does not have any matters pending before, the entity on which the recipient sits.

(e) No Lobbyist or Client shall offer or give a Gift to a third party, including a Charitable Organization:

(1) on behalf of a Public Official (or a Public Official’s spouse or unemancipated child), when such Gift cannot be offered or given to such Public Official (or the spouse or unemancipated child of such Public Official) under section 934.3(a); or

(2) at the designation or recommendation of a Public Official (or a Public Official’s spouse or unemancipated child), when such Gift cannot be offered or given to such Public Official (or the spouse or unemancipated child of such Public Official) under section 934.3(a).

(f) Multiple Gifts. A Gift that is otherwise permissible under sections 934.3(a), (b), or (c) may be prohibited if it is one of multiple Gifts from the same person, entity, or organization if, under the circumstances, it could be reasonable to infer that the multiple Gifts, collectively, (i) were given with the intent to influence the Public Official; or (ii) could reasonably be expected to influence the Public Official in the performance of his or her official duties; or (iii) were offered or given with the intent to reward the Public Official for any official action on his or her part.

934.4 Exclusions.

(a) The following are not Gifts:

(1) Contributions reportable under article fourteen of the Election Law, including contributions made in violation of that article of the Election Law.

(2) Food or beverage valued at fifteen dollars or less per occasion.

(3) Complimentary Attendance (including food and beverage) at a Bona Fide Charitable Event or a Bona Fide Political Event.

(4) Complimentary Attendance (including food and beverage) offered by a Lobbyist or Client who is the sponsor of a Widely Attended Event.

(i) Widely Attended Event shall mean an event:

(A) which at least twenty-five individuals other than members, officers, or employees from the governmental entity in which the Public Official serves attend or were, in good faith, invited to attend in person; and

(B) which is related to the attendee’s duties or responsibilities or allows the Public Official to perform a ceremonial function appropriate to his or her position. For the purposes of this exclusion, a Public Official’s duties or responsibilities shall include but not be limited to:

(1) For an elected Public Official (or his or her staff attending with or on behalf of such elected official) only, attending an event or a meeting at which more than one-half of the attendees, or persons invited in good faith to attend in person, are residents of the county, district, or jurisdiction from which the elected Public Official was elected; or

(2) For all Covered Persons, attending an event or a meeting at which a speaker or attendee addresses an issue of public interest or concern as a significant activity at such event or meeting.

(I) For the purposes of Section 934.4(a)(4)(i)(B), Complimentary Attendance does not include registration or admission without charge to any entertainment, recreational, or sporting activity unless the presentation addressing the issue of public interest or concern that is made by the speaker or attendee is delivered at such entertainment, recreational, or sporting activity.

(II) For the purposes of Section 934.4(a)(4)(i)(B), Complimentary Attendance does not include food and beverage unless such food or beverage are available to all participants as part of the Widely Attended Event.

(5) Awards, Plaques, and Other Ceremonial Items.

Awards, plaques, and other ceremonial items must be publicly presented, or intended to be publicly presented, and in recognition of service related to a Public Official’s official duties and responsibilities. Additionally, such awards, plaques, and other ceremonial items must be of the type customarily bestowed at similar ceremonies and be otherwise reasonable under the circumstances.

(6) Honorary degrees bestowed upon a Public Official by a public or private college or university.

(7) Promotional Items.

Items having no substantial resale value such as pens, mugs, calendars, hats, and t-shirts which bear an entity’s name, logo, or message in a manner which promotes the entity’s cause.

(8) Goods and Services and Discounts for Goods and Services.

(i) Goods and services, or discounts for goods and services, must be offered to the general public or a segment of the general public defined on a basis other than status as a Public Official and offered on the same terms and conditions as the goods and services are offered to the general public or segment thereof.

(ii) Notwithstanding section 934.4(a)(8)(i), discounts made available to all Public Officials fall within this exclusion.

(iii) Notwithstanding section 934.4(a)(8)(i), discounts made to a select group of Public Officials may fall within this exclusion. The following non-exhaustive list of factors shall be considered when any discount is made available to a select group of Public Officials to determine whether the discount would fall within this exclusion:

(A) the scope of the class of Public Officials who are offered the discount;

(B) the amount and duration of the discount; and

(C) whether the criterion for the offer is based on factors other than the Public Official’s official duties and responsibilities.

(9) Gifts from Friends or Family Members.

(i) Gifts, including an invitation to attend a personal or family social event, from a Client or Lobbyist (or the Client’s or Lobbyist’s spouse or unemancipated child) when all of the following criteria are met:

(A) the Client or Lobbyist (or the Client’s or Lobbyist’s spouse or unemancipated child) is a Family Member or a person with a personal relationship with a Public Official; and

(B) it is reasonable to infer that the Gift was primarily motivated by the family or personal relationship.

(ii) In determining whether the Gift was primarily motivated by a family or personal relationship, the factors to be considered include but are not limited to:

(A) the history and nature of the relationship between the individual offering the Gift and the recipient, including whether items have previously been exchanged;

(B) whether the item was purchased by the individual offering the Gift; and

(C) whether the individual offering the Gift at the same time gave similar items to other Public Officials.

(iii) The Gift shall not be considered to be motivated by a family or personal relationship if the individual or entity seeks to charge or deduct the value of such item as a business expense or seeks reimbursement from a client.

(10) Reimbursement of Expenses for Speakers at Informational Events.

Travel reimbursement or payment for transportation, meals, and accommodations for an attendee, panelist, or speaker at an Informational Event when such reimbursement or payment is made by a governmental entity or by an in-state accredited public or private institution of higher education that hosts the event on its campus, provided, however, that the Public Official may only accept lodging from an institution of higher education: (a) at a location on or within close proximity to the host campus; and (b) for the night preceding and the nights of the days on which the attendee, panelist, or speaker actually attends the Informational Event.

(11) Provision of Local Transportation to Inspect Facilities.

(i) Provision of local transportation to inspect or tour facilities, operations, or property located in New York State, when such inspection or tour is related to the Public Official’s official duties or responsibilities.

(ii) The payment or reimbursement for expenses for lodging or travel expenses to and from the locality where such facilities, operations, or property are located is not covered by this exclusion.

(12) Meals for Participants at a Professional or Educational Program.

Receipt of food and beverages when participating in a Professional Program or Educational Program as a part of a Public Official’s official duties, provided the food or beverages are available to all participants.

934.5 Enforcement.

The Commission is authorized pursuant to Executive Law § 94 to investigate possible violations of § 1-m of article 1-A of the Legislative Law and its corresponding regulations and take appropriate action as authorized in these statutes.

Final rule as compared with last published rule:

Nonsubstantive changes were made in section 934.3(f).

Revised rule making(s) were previously published in the State Register on

April 9, 2014 and March 19, 2014.

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

Louis Manuta, Associate Counsel, Joint Commission on Public Ethics, 540 Broadway, Albany, NY 12207, [phone], email: [e-mail]

Revised Regulatory Impact Statement

1. Statutory authority: Executive Law § 94(17)(a) directs the Joint Commission on Public Ethics (“JCOPE”) to promulgate rules concerning limitations on the receipt of Gifts, and § 94(9)(c) authorizes JCOPE to adopt, amend, and rescind rules and regulations to govern JCOPE procedures. Legislative Law Article 1-A, § 1-c(j) defines a “Gift” and sets forth exclusions from the definition of Gift. Legislative Law Article 1-A, § 1-m prohibits, except in certain limited circumstances, individuals or entities who are required to be listed on a statement of registration – referred to as “Lobbyists” and/or “Clients” – or certain of their family members from offering or giving Gifts to “Public Officials” (i.e., generally, persons defined in Legislative Law Article 1-A) or certain of their family members.

2. Legislative objectives: To regulate and clarify the restrictions on the offering and giving of Gifts to public officials by lobbyists and their clients.

3. Needs and benefits: The final rulemaking is necessary to regulate and clarify the restrictions on the offering and giving of Gifts to Public Officials by Lobbyists and their Clients. The regulations provide clear guidance concerning who is a Public Official, who is restricted from offering and giving a Gift to a Public Official, and what qualifies as a Gift.

Part 934.1 provides the purpose and effect of the regulations. The Part clarifies that the regulations supersede prior Advisory Opinions issued by predecessor agencies to the extent such Advisory Opinions are inconsistent with the regulations.

Part 934.2 defines key terms in the regulations. In particular, the final regulations amend the definition of Nominal Value. The initial proposed regulations defined the term as an item or service (or anything else of value) with a fair market value of ten dollars or less. The final regulations note that the term is not defined in the Public Officers Law or Legislative Law Article 1-A, but that the Commission “generally deems an item or service with a fair market value of fifteen dollars or less as having a Nominal Value.”

Part 934.3 incorporates various statutory provisions concerning the offering or giving of a Gift to a Public Official. These rules are designed to provide Lobbyists and Clients with an established structure within which to determine whether the giving or offering of a Gift to public officials is permissible. Part 934.3(a) specifies that a Gift offered or given by a Lobbyist or Client to a Public Official is presumptively impermissible unless certain criteria are met. The presumption is overcome (making the Gift permissible) only when: (1) it would not be reasonable to infer that the Gift was intended to influence the Public Official; and (2) the Gift could not reasonably be expected to influence the Public Official in the performance of his official duties; and (3) it would not be reasonable to infer that the Gift was intended as a reward for any official action on the Public Official’s part.

Pursuant to Part 934.3(b), the offering or giving of a Gift from a Lobbyist or a Client to the spouse or unemancipated child of a Public Official is permissible unless, under the circumstances, any one of the following criteria is met: (1) it could reasonably be inferred that the Gift was offered or given with the intent to influence the Public Official; or (2) the Gift could reasonably be expected to influence the Public Official in the performance of his or her official duties; or (3) it could reasonably be inferred that the Gift was offered or given with the intent to reward the Public Official for any official action on his or her part.

Finally, the final regulations include new language – found in Part 934.3(c) – that incorporates the statutory provision regarding the offering or giving of a Gift from a spouse or unemancipated child of a Lobbyist or a Client to a Public Official. Such a Gift is permissible unless, under the circumstances, any one of the following criteria is met: (1) it could reasonably be inferred that the Gift was offered or given with the intent to influence the Public Official; or (2) the Gift could reasonably be expected to influence the Public Official in the performance of his or her official duties; or (3) it could reasonably be inferred that the Gift was offered or given with the intent to reward the Public Official for any official action on his or her part.

Part 934.3(d) sets forth the statutory exception that a Lobbyist or Client is permitted to give a Gift to officers, members, or directors of boards, commissions, councils, public authorities, or public benefit corporations who receive no compensation or are compensated on a per diem basis as long as the Lobbyist or Client does not appear, and does not have any matters pending before, the entity on which the recipient sits.

Part 934.3(e) articulates the rule that a Lobbyist or Client may not offer or give an impermissible Gift to a third party, including a charitable organization, on behalf of or at the direction of, a Public Official.

Finally, Part 934.3(f) addresses a Lobbyist or Client giving or offering multiple Gifts to the same person. The final Part 934.3(f) states that a Gift that is otherwise permissible may be prohibited if it is one of multiple Gifts from the same person, entity, or organization if, under the circumstances, it could be reasonable to infer that the multiple Gifts, collectively, (i) were given with the intent to influence the Public Official; or (ii) could reasonably be expected to influence the Public Official in the performance of his or her official duties; or (iii) were offered or given with the intent to reward the Public Official for any official action on his or her part.

Part 934.4 sets forth and clarifies the statutory exclusions from the definition of Gifts, which are contained in Legislative Law Article 1-A, § 1-c(j). In particular, the final regulations amend aspects of the Widely Attended Event exclusion where the sponsor of the Widely Attended Event is a Lobbyist or the Client of a Lobbyist. The amendments clarify the conditions under which entertainment, recreational, and sporting activities, as well as food and beverage, are considered to be part of the Widely Attended Event and therefore covered by the exclusion.

Part 934.5 identifies the statutory provision, Executive Law § 94, that authorized JCOPE to investigate possible violations of § 1-m of article 1-A of the Legislative Law and its corresponding regulations and to take appropriate action as authorized in these statutes.

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. Minimal administrative costs to the agency during the implementation phase.

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 final regulation imposes, at most, minimal new programs, services, duties or responsibilities upon any county, city, town, village, school district, fire district or other special district, as they must make themselves aware of any requirements from the regulation that would apply to Gifts they would give to public officials.

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, but 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.

Revised Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement

Changes made to the last published rule do not necessitate revision to the previously published Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement.

Initial Review of Rule

As a rule that requires a RFA, RAFA or JIS, this rule will be initially reviewed in the calendar year 2017, which is no later than the 3rd year after the year in which this rule is being adopted.

Assessment of Public Comment

The Commission received public comments from one entity. This commenter offered a number of technical amendments. The commenter also suggested including examples in the regulations to help clarify certain provisions. Additionally, the commenter suggested that the provision relating to multiple Gifts should be amended to include either a specific time frame or dollar amount. Finally, the commenter stated that the regulations would benefit from a clear statement regarding the consequences, for both donors and recipients, of a violation.

The Commission considered these comments and adopted nearly all the technical amendments. With respect to the inclusion of examples, the Commission expects to issue guidance documents when the regulations become effective. As for the comments concerning the inclusion of a time period or dollar amount for the receipt of multiple Gifts, the Commission chose not to include either in order to permit an analysis under the totality of the circumstances. Finally, the consequences for impermissible Gift-giving are plainly articulated in the Public Officers Law.