PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Action taken:
Repeal of Part 932; and addition of new Part 932 to 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 final rule:
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.
932.2 Definitions.
(a) Approving Authority, for a Policy Maker, shall mean (i) the head of a State Agency employing such Policy Maker; (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) 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) 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.
(g) Policy Maker shall mean an officer, employee, director, commissioner, or member of a State Agency (other than a multi-state authority) who has been determined to hold a policy-making position pursuant to Public Officers Law § 73-a(1)(c).
(h) Political Organization shall mean any organization that is affiliated with, or subsidiary to, a Party. The term does not include campaign or fundraising committees.
(i) 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. State Agency shall also include the State University of New York 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.
(j) Statewide Elected Official shall mean the Governor, Lieutenant Governor, Attorney General, or Comptroller 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 substantially conflicts with the proper and effective discharge of such individual’s official State duties or responsibilities.
932.4 Restrictions on Certain Political Activities.
(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) shall serve as an officer, director, or board member of any Party or Political 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) shall serve as a member, officer, director, board member, or district leader of any Party Committee.
(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.
932.5 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 unpaid 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 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.
(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 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 the time and manner in which 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.
932.9 Codes of Ethics for Uncompensated and Per Diem Directors, Members and 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 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.
Final rule as compared with last published rule:
Nonsubstantive changes were made in sections 932.3, 932.6 and 932.7(b).
Text of rule and any required statements and analyses may be obtained from:
Carol Quinn, Associate Counsel, Joint Commission on Public Ethics, 540 Broadway, Albany, NY 12207, (518) 408-3976, email: carol.quinn@jcope.ny.gov
Revised Regulatory Impact Statement, Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement
A Revised Regulatory Impact Statement, Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement are not submitted with this Notice of Adoption because the revisions made to the proposed rule were not substantive and do not necessitate revision of the previously published Regulatory Impact Statement, Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement.
Initial Review of Rule
As a rule that does not require a RFA, RAFA or JIS, this rule will be initially reviewed in the calendar year 2020, which is no later than the 5th year after the year in which this rule is being adopted.
Assessment of Public Comment
The Commission received public comments from six entities. One entity provided comments that were premised on a misinterpretation and misunderstanding of both the current regulations and the proposed amended regulations. Accordingly, the Commission declined to make any changes based on these comments.
Another entity provided four comments. The first comment suggested that the proposed Regulations specify whether the approval requirement for elected or appointed public office as an outside activity applies to non-partisan positions. The Commission believes the proposed amended regulations are clear that the requirements apply to all elected or appointed public offices. The second comment suggested requiring the approval of the Approving Authority with respect to service as a Director or Officer of a not-for-profit entity as opposed to requiring that the individual only provide notice of such service to the Approving Authority. The Commission considers the requirement of notice to the Approving Authority of such service to be sufficient to implement the purposes of the Public Officers Law, but also notes that individual agencies have the authority to impose requirements stricter than those in the proposed Regulations. The third comment suggested that proposed Part 932.6(a)(2) could be misinterpreted as creating a right to appeal to JCOPE from Approving Authority decisions with respect to outside activities that are subject to Approving Authority approval only. The Commission agrees that the proposed language may create some ambiguity. Consequently, this subsection has been removed in the final version of the rule. The fourth comment suggested clarification of which entities are subject to the requirement of Part 932.9. The Commission considers the proposed Regulations clear on this point.
Another entity provided two comments. The first comment recommended a requirement of notification to the Commission when an Approving Authority approves an outside activity with compensation between $1,000 and $5,000. The Commission believes that such notification would not, on balance, provide a sufficient benefit in light of the administrative burden. The current requirement that Commission approval is only needed when annual compensation exceeds $4,000 (changed to $5,000 in the proposed amended regulations) has been in place for over two decades and has proven its effectiveness. The Commission has determined that these Regulations should maintain the existing regulatory structure. The second comment recommended retaining the previous Part 932.6, which stated that any person may report a possible violation of the Part, and the Commission has authority to investigate such a report. The Commission omitted this language because there is no question or ambiguity that the Commission retains the authority to receive complaints and investigate alleged violations of the Public Officers Law and its attendant regulations.
The fourth entity provided two comments. The first comment objected to the requirement of proposed Part 932.5 that policy makers provide written notice to the Approving Authority of income between $0 and $999 for service as a Director or Officer of a not-for-profit entity, on the grounds that this may “chill” persons’ participation in certain groups. The Commission is sensitive to this concern, but does not believe that the proposed amended regulations will, in fact, have any such impact. The second comment argued that the outside activity reporting requirements are overly burdensome. The Commission rejects this point, and notes that the proposed Regulations maintain, to a large degree, the existing regulatory regime which has been in place for more than two decades and which has not been the subject of any widespread complaints with respect to the burden it places on individuals or agencies.
The fifth entity provided three comments. The first comment argued that the proposed Regulations should allow an Approving Authority to disapprove an outside activity generating income between $0 and $999 for service as a Director or Officer of a not-for-profit entity. The Commission notes that individual agencies have the authority to impose requirements stricter than those in the proposed Regulations. The second comment approved the proposed Regulations’ establishment of the requirement of annual reporting of previously reported and approved outside activities. The third comment suggested a modification to the proposed Part 932.3 “General Standard for all Persons Subject to Public Officers Law § 74”. The Commission considers the proposed Part 932.3 to be sufficiently clear.
The sixth entity provided five comments. The first comment suggested that the term “outside activity” be more clearly defined in the proposed Regulations and it noted that some of the entity’s employees engage in activity through private entities as part of their State service, suggesting that such activity should not be regarded as an “outside activity.” The Commission does not believe that the term “outside activity” is in need of any additional clarification. The term has been used for more than two decades in the existing regulations and there has not been any widespread call for its further refinement. The Commission also notes that all personal and professional activities, which are distinct from their official positions, may have the possibility of presenting conflicts of interest. Thus, the Commission considers the reporting and approval requirements for all outside activities to be necessary to effect the purposes of Public Officers Law § 74. The second comment suggested that the requirement of Commission approval of outside activities be eliminated entirely or that the threshold for Commission approval is increased to outside activities expected to generate “at least $30,000” in compensation. The Commission rejected this comment as it would, in essence, eliminate one of the fundamental roles the Commission plays in ensuring compliance with Public Officers Law § 74 by policy makers with respect to their outside employment. The third comment objected to the proposed Regulations’ requirement of notice to the Approving Authority of income between $0 and $999 for service as a Director or Officer of a not-for-profit entity. Again, the Commission is sensitive to this concern, but does not believe that the proposed amended regulations will, in fact, have any discernable negative impact. The fourth comment expressed concern that the requirement of Commission approval of outside activities could cause undue delay and that the regulations contain a specified time period in which the Commission must make a determination on granting approval. The Commission notes that the average time to respond to a request for an approval of an outside activity is less than 5 business days. Again, there has been no widespread concern expressed concerning the timeliness of the Commission’s response to such requests. The fifth comment requested an improved definition of “honoraria.” Honoraria are not a subject of the proposed Regulations, and the Commission rejected this comment.
