STATE OF NEW YORK
STATE ETHICS COMMISSION

Advisory Opinion No.88-2:

Application of §73 of the Public Officers Law, on and after January 1, 1989, to non-paid or per diem members of State boards or councils.

INTRODUCTION

The following advisory opinion is issued in response to several requests from individuals who have raised the same or similar questions as to the application of §73 of the Public Officers Law to them on and after January 1, 1989. The question is whether, for the purposes of §73, a non-paid or per diem member of a State board or council is defined as a State officer or employee under paragraph (i) of §73(1) and is, therefore, subject to the provisions of the section on and after January 1, 1989.1

Pursuant to the authority vested in the New York State Ethics Commission ("Commission") by §94(15) of the Executive Law, the Commission renders its opinion that there is no clear expression of intent as to whether such individuals should be covered with all the restrictions contained in §73 as it is effective on January 1, 1989.

The Commission concludes that:

  1. it will suspend, until March 1, 1989, the enforcement of §73 of the Public Officers Law (except as otherwise indicated below) as to all members of State boards or councils who receive no compensation or are paid on a per diem basis;

  2. such suspension beyond that date through the date of June 30, 1989, or earlier if legislation is enacted affecting these members, will be continued by the Commission only for those members of State boards or councils which properly adopt and file with the Commission, on or before March 1, 1989, a code of conduct setting forth the restrictions covering business or professional activities by such members while serving on such State boards or councils during such suspension;

  3. such code of conduct shall contain, at the minimum, the same restrictions to which such members of such State Boards or councils are now subject under §73 of the Public Officers Law, as it is in effect until December 31, 1988; provisions relating to conflicts of interest of members of such State boards or councils and to appearances, practicing or rendering of services for compensation either before such State boards or councils on which such members serve or the State agencies with which such entities have oversight or a relationship; provisions affecting post-service (or, as commonly known, "revolving door") appearances, practicing or rendering of any services for compensation before such boards or councils or State agencies; and a procedure for enforcement of the provisions of such code; and

  4. it will recommend to the Governor and the Legislature that the coverage of §73, as it is effective on and after January 1, 1989, be clarified as to its application to non-paid or per diem members of State boards or councils.

Because of the general nature of the question of statutory interpretation and application of §73 to non-paid or per diem members of State boards or councils, the Commission states that it will apply this advisory opinion to any similar request and to any complaint alleging a violation of §73 on and after its effective date.

DISCUSSION

A. Statutory Framework
Paragraph (i) of subdivision 1 of §73 of the Public Officers Law, effective January 1, 1989, sets out the definition of the State officers and employees covered by that section. That paragraph states:
. . . the term, "state officer or employee" shall mean:

  1. heads of state departments and their deputies and assistants;

  2. officers and employees of statewide elected officials;

  3. officers and employees of state departments, boards, bureaus, divisions, commissions, councils, or other state agencies;

  4. members or directors of public authorities . . . public benefit corporations and commissions at least one of whom is appointed by the governor, >who receive compensation other than on a per diem basis . . . . (emphasis added)

Subparagraph (iv) provides that those members or directors of public authorities, public benefit corporations and commissions who receive compensation on other than a per diem basis will be defined as State officers or employees for purposes of §73 and subject to its provisions. Those members or directors who receive a per diem payment or receive no per diem payment (or, no compensation) are not so covered by the provisions of that section.2

Members of State boards and councils are not similarly excluded. The definition of State officer or employee contained in §73(1)(i)(iii) includes officers and employees of State boards, commissions and councils without reference to basis of payment.

It is the comparison of subparagraphs (iii) and (iv) of §73(1)(i) of the Public Officers Law which results in the question before the Commission. We note that the term "commission" is included in both subparagraph (iii) and (iv) of §73(1)(i) of the Public Officers Law. Under subparagraph (iii) no limitation as to coverage based on manner of compensation is set out for members of commissions--or for boards or councils. Under subparagraph (iv) the limitation of coverage of §73 based on manner of compensation is set forth for only commissions and does not include boards or councils.

B. Examples of Boards or Councils Affected
In reviewing the request for this advisory opinion, the Commission considered some of the boards or councils which would be affected by a determination that non-paid or per diem members of State boards or councils would be covered by §73.3 These boards or councils include: the Board of Regents of the Education Department, the Boards of Trustees of State University and City University of New York, the Boards of Visitors of the Offices of Mental Health ("OMH") and Mental Retardation and Developmental Disabilities ("OMRDD"), and the State University College Councils. The members of these boards and councils serve without compensation.

The Board of Trustees of State University of New York governs the State University and exercises all its corporate powers.4 The Trustees exercise broad powers and duties relating to the administrative, fiscal and planning functions of the entire State University of New York system.5

The members of a Board of Visitors of a facility of OMH and OMRDD consult, advise and work with the facility director with respect to community relations and conditions at the facility, visit and inspect the facility and have authority to investigate charges of patient abuse or mistreatment.6 State University College Councils exercise general supervision over a college or university campus subject to the oversight of the Board of Trustees.7

The Board of Regents of the University of the State of New York presents a different issue in the consideration of this question. The Board of Regents exercises legislative functions concerning the educational system of the State, determines State educational policy and carries out laws relating to education.

Unlike the other State boards or councils which fall under subparagraph (iii) of §73(1)(i), the Board of Regents is defined by the Education Law as the "head of the department" of Education.8 The Board is, therefore, defined under paragraph (i) of §73(1)(i) of the Public Officers Law and not under either the subparagraph at issue concerning boards and councils or the subparagraph affecting public authorities, public benefit corporations or commissions. The Commission cannot consider the members of the Board of Regents in the same category as other non-paid or per diem members of boards or councils or authorities, public benefit corporations or commissions.9

To compare the responsibilities of those individuals who serve on State boards and councils with those members or directors of public benefit corporations and public authorities who specifically would not be covered by §73, the Commission reviewed some of the powers exercised by the non-paid or per diem members or directors of these entities.

In general terms, public authorities and public benefit corporations have authority to borrow and invest money, enter into and execute contracts, and provide major services to the public. Such entities whose non-paid or per diem members would not be covered by §73 include the Metropolitan Transit Authority, most of whose members receive per diem payments, Dormitory Authority of the State of New York, New York State Energy Research and Development Authority, New York State Environmental Facilities Corporation, Municipal Assistance Corporation for the City of New York and the Urban Development Corporation. Each of these entities has broad public responsibility in the areas of commuter transportation, development and conservation of energy resources, financing and planning solid waste and pollution control facilities, the issuance and sale of bonds to assist municipalities and the provision of capital resources to acquire, construct or improve educational, cultural, public or other facilities.

C. Application of subparagraphs (iii) and (iv) of §73(1)
If the provisions of §73 apply to non-paid or per diem board or council members on and after January 1, 1989, these individuals will be subject to all the restrictions on business and professional activities contained therein.10 We do not believe this is a justifiable result when one considers that similarly situated members of authorities, public benefit corporations and commissions are not so restricted when non-paid or paid on a per diem basis and do not appear to us to have less responsibility or authority to warrant separate treatment. The result is less acceptable when it is not clear that the board or council members were intended to be so affected.

The Commission recognizes the importance of public spirited citizens from the private sector serving the government of New York State. The wealth of experience and varied backgrounds which these citizens bring to government cannot be understated. These individuals serve without compensation or for a per diem, in effect, contributing their knowledge and experience to New York State.

In a letter to the Commission concerning the issue of coverage of non-paid and per diem board and council members, the Counsel to the Governor indicated the lack of clarity in the language of paragraph (i) and stated that there was no desire to place an undue burden on people who were essentially volunteering their services. The Commission agrees that there is ambiguity in the paragraph. The term "commissions" is set forth in both subparagraphs (iii) and (iv). There is no apparent explanation for that. The term "commission" is also referred to twice in the definition of the term State agency in §73(1)(g), once with no limitation and once with the limitation that at least one of its members be appointed by the Governor.11 And, although the word "council" is not referred to in the definition of State agency, subparagraph (iii) refers to officers and employees of councils.12

The Commission could conclude that the subdivision can be strictly construed to require that non-paid or per diem board members are covered by §73. We could determine that §73 covers non-paid members of State boards and councils, while not so covering similarly situated individuals of other entities. The language supports that conclusion and that would be our reading but for the fact that we think that conclusion was probably not intended. The result would not be beneficial to the citizens of this State. The Commission is unwilling to reach that result without providing an opportunity for either a clear statutory provision that §73 covers non-paid or per diem board and council members or a clarification in the law to treat non-paid or per diem members or directors of boards, councils, commissions, authorities or public benefit corporations the same, whether that results in coverage by §73 or not.

The Commission believes that there is little apparent distinction among commissions, public benefit corporations, authorities, and boards and councils to treat them so differently. It is possible that the term "commissions" also was meant to include boards and councils. In any event, it is our judgment that there is a lack of a clear expression of intent to treat such non-paid or per diem board or council members the same as or differently than commission members.

CONCLUSION
It appears to the Commission that no less responsibility or exercise of authority is rendered by the members of those authorities, corporations or commissions not covered by §73 than is engaged in by non-paid or per diem members of State boards or councils. Since the Commission concludes that the law should be clarified as to the coverage of the State board or council members who are paid on a per diem basis or who receive no compensation, the Commission is reluctant, without further legislative guidance, to conclude that such individuals are or are not intended to be covered by §73 of the Public Officers Law.13 Rather, the Commission has determined that it will suspend enforcement of §73 as to these board and council members until March 1, 1989 (except as provided below). It is the judgment of the Commission that this suspension will serve the public interest by permitting these individuals from the private sector to continue to serve in their non-paid or per diem positions until, as the Commission proposes, the law is clarified for them.14

The Commission is concerned that its temporary suspension of the enforcement of §73 not result in the absence of a code of ethical conduct to be applicable to these non-paid or per diem board or council members. The Commission believes that the confidence of the public in the integrity of the operation of these boards and councils demands that they be required to formulate a code of ethics with a mechanism for enforcement if this suspension is to continue pending legislative action. The Commission has concluded that, during the suspension of the application of §73, these boards and councils should be required to adhere to a code of ethical conduct. This same consideration should apply to any statutory exemption which is enacted to cure the ambiguity now present.

Therefore, each affected board or council which desires that the Commission continue this suspension of enforcement of §73 as to it beyond March 1, 1989, or earlier if legislation is enacted affecting these members, until June 30, 1989, shall adopt a code of conduct according to its legal procedure. At a minimum, the code shall contain the same restrictions, if any, to which such State boards and councils are now subject under §73 of the Public Officers Law which expires December 31, 1988.15 The code of conduct should also include provisions relating to conflicts of interest of members of such State boards or councils and to appearances, practicing or rendering of services for compensation before the member's own State board or council or the State agency with which they have a responsibility or relationship; provisions affecting post-service appearances, practicing or rendering of services for compensation before the member's own State board or council or the State agency with which he or she had a responsibility or relationship; and a procedure for the enforcement of the provisions of such code.

The Commission will recommend to the Governor and the Legislature that the coverage of §73, as it is effective on and after January 1, 1989, be clarified as to its application to non-paid or per diem members of State boards or councils. By June 30, 1989, the Commission will review its determination in this advisory opinion should no legislative action have been taken before then.

All members of the State boards and councils affected by this opinion will continue to be subject to the provisions of §74 of the Public Officers Law on and after January 1, 1989. 16 Section 74 establishes a rule with respect to conflicts of interest which provides that:

2. (n)o officer or employee of a state agency . . . should have any interest, financial or otherwise, direct or indirect, or engage in any business or transaction or professional activity or incur any obligation of any nature, which is in substantial conflict with the proper discharge of his duties in the public interest.
Standards for the application of that rule are contained in §74 and will be utilized to determine adherence to that section. Under §94(9)(g) and (11)(c) of the Executive Law, the Commission may receive and investigate complaints which allege a violation of §74.

Additionally, under §73-a of the Public Officers Law, a member of a State board or council affected by this Opinion may be required to file a financial disclosure statement if the position he or she holds is designated policy-making by the appropriate appointing authority. Any such member who is so required to file a financial disclosure statement will continue to be subject to the restriction contained in §73(3) against receipt of compensation for appearances or rendition of services before the Court of Claims.17 The Commission will not suspend enforcement of that provision during the suspension period provided for in this opinion.

All concur:

Elizabeth D. Moore, Chair

Joseph J. Buderwitz, Jr.
Angelo A. Costanza
Norman Lamm
Robert B. McKay, Members

Dated: December 29, 1988


ENDNOTES

  1. Section 73 of the Public Officers Law, as effective on January 1, 1989, contains new restrictions on appearing, practicing and rendering of services before State agencies for compensation, contracting or providing for goods or services and post-service activities by State officers and employees.

  2. The Commission concludes that "compensation on other than a per diem basis" also excludes coverage of those who are not compensated or are paid no per diem. Receipt of a per diem payment, no compensation or compensation on other than a per diem basis is determined by the appropriate provision of law affecting the particular authority, benefit corporation or commission.

  3. The boards and councils which the Commission considered are not inclusive of all those boards and councils which are covered and affected by this advisory opinion. The opinion will apply to all members of such boards and councils regardless of reference to them in this discussion.

  4. Its members are subject to provisions of law setting forth codes of ethics, disclosure requirements and prohibiting business and professional activities. Education Law, §353 and see, generally, the provisions of Article 8 of the Education Law.

  5. The Board of Trustees of the City University of New York exercise similar authority and power over City University of New York (Education Law, §6204).

  6. The members of the Boards of Visitors of OMH and OMRDD are considered State officers for the purposes of §§73 and 74 of the Public Officers Law. See, generally, Mental Hygiene Law, §§7.33 and 13.33, and, specifically, §§7.33(m) and 13.33(m).

  7. State University College Councils, subject to the supervision, management, control and rules of the Board of Trustees, recommend candidates for President of colleges and universities, regulate the care, custody and management of the land, grounds and equipment of the college or university, regulate student conduct, exercise supervision over student housing and review and recommend on all major plans to be submitted to the Board of Trustees. By law, the members of College Councils are subject to the provisions setting out codes of ethics, disclosure requirements and prohibiting business and professional activities. See Education Law, §356.

  8. Education Law, §101. The Regents are appointed by concurrent resolution of the Legislature (Education Law, 202).

  9. One could conclude, therefore, that the members of the Board of Regents should be covered by §73 because of their different status, regardless of the application of §73 to non-paid or per diem board or council members. The opinion addresses this point in the Conclusion.

  10. For example, these individuals could not appear before any State agency while compensated by their employer or client to obtain a license or renewal to continue their business; they could not appear for compensation before any State agency in connection with the adoption or repeal of regulations affecting their private business; nor could they render any services for compensation before any State agency concerning a contract for the purchase or sale of goods or property.

  11. Section 73(1)(g) reads: "The term `state agency' shall mean any state department . . . board, commission . . . public benefit corporation, public authority or commission at least one of whose members is appointed by the governor. . . ."

  12. The word "council" does not appear in the present §73. The Attorney General of the State of New York, in 1955, determined that members of a State University College Council were State officers for the purposes of §73 (1955 Op. Atty. Gen. 286).

  13. 13. The Commission does not believe that the members of the Board of Regents, who are not compensated, should be treated differently than other non-paid or per diem board or council members unless specifically so provided by the Public Officers Law and will cover them with this suspension. The Commission, based on its review of §73, does not find clear statutory expression of legislative intent to support a conclusion that, because of its statutory definition as the head of the Education Department, the Board of Regents should be treated differently than other non-paid or per diem board or council members.

  14. Employees of the boards and councils affected by this opinion are subject to §73 as it is effective on and after January 1, 1989, as are employees of public authorities, public benefit corporations and commissions at least one of whose members is appointed by the Governor.

  15. Since these same boards or councils have been subject to the provisions of the present §73 for a number of years, it will not be a burden for them to continue to be subject, at a minimum, to those provisions.

  16. Section 74 of the Public Officers Law was not amended by the Ethics in Government Act of 1987 and continues in force and effect. Unlike the new §73, "state agency" is defined to mean any state department, division, board, commission or bureau of any state department or any public benefit corporation or public authority at least one of whose members is appointed by the Governor. There is no distinction between those who serve on an other than per diem basis and those who do not.

  17. Section 73(3) of the Public Officers Law states: "No . . . state officer or employee who is subject to the provisions of section seventy-three-a of this chapter [financial disclosure requirements] shall receive, directly or indirectly, or enter into any agreement express or implied for, any compensation, in whatever form, for the appearance or rendition of services by himself or another against the interest of the state in relation to any case, proceeding, application or other matter before, or the transaction of business by himself or another with, the court of claims."