New York State
Ethics Commission


Advisory Opinion No. 96-23: Application of the lifetime bar provision contained in §73(8)(a)(ii) of the Public Officers Law to a former State agency Lands and Claims Adjuster who seeks to assess the same land for his former agency which he had a role in assessing while in State service.

INTRODUCTION

The following advisory opinion is issued in response to an inquiry from [ ], Associate Attorney for [a State agency], who asks whether Public Officers Law §73(8)(a)(ii), the lifetime bar, precludes [ ], a former [State agency] Assistant Lands and Claims Adjuster, from performing an outside appraisal of real property for [the State agency] when, as a State employee, he participated in an appraisal of the same property.

Pursuant to the authority vested in the New York State Ethics Commission ("Commission") by §94(15) of the Executive Law, the Commission hereby renders its opinion that [the former State employee's] involvement in the original appraisal precludes him from now appraising the same property, as the earlier and proposed appraisals constitute the same transaction.

BACKGROUND

[The former State employee] was formerly an Assistant Lands and Claims Adjuster at [the State agency]. He left State service in [ ], 1993, and is currently a professional real estate appraiser in private practice. In early 1989, while serving at [the State agency], he prepared an estimation of value for the State's anticipated purchase of a conservation easement located in [ ], his assigned region. This estimation required that he review appraisals obtained by [the State agency] from outside sources, view the property under consideration and view the properties selected by the outside appraisers as comparable sales. He had to critique each outside appraisal and make an individual recommendation as to value. The outside appraisals and his recommendation were forwarded to [the State agency's] central office for further review and the development of a Real Property Declaration, which sets forth the amount [the State agency] is willing to pay for the property.

[The requesting individual] advised the Commission that lack of funds prevented [the State agency] from purchasing the conservation easement in 1989, and that the estimate of value and the appraisals on which it was based are too old for current consideration. According to [the requesting individual], [the State agency] is now reconsidering purchasing the easement(1) and it must solicit bids from qualified outside appraisers. Both [the State agency] and [the former State employee] have requested the Commission's guidance as to whether [the former State employee] would be permitted to prepare such an appraisal under the lifetime bar provisions of the Public Officers Law.

[The State agency] officials describe real property appraisals as estimates of value at a specific time. [The State agency] audit and control procedures do not permit consideration of comparable property sales more than one year old. In more aggressive markets, sales will only be considered if they occurred within the last six months. Real Property Declarations made by [the State agency] based on comparable sales more than one year old are considered outdated, and the appraisal and valuation process must begin anew.

Because of time constraints, [the former State employee] was advised to submit a bid with language making it clear that his bid request is conditioned on receiving an opinion from the Commission that the lifetime bar does not preclude his performing the proposed services.

APPLICABLE STATUTE

Public Officers Law §73(8)(a)(ii) provides:

No person who has served as a state officer or employee shall after the termination of such service or employment appear, practice, communicate or otherwise render services before any state agency or receive compensation for any such services rendered by such former officer or employee on behalf of any person, firm, corporation or other entity in relation to any case, proceeding, application or transaction with respect to which such person was directly concerned and in which he or she personally participated during the period of his or her service or employment, or which was under his or her active consideration.

DISCUSSION

To respond to [the requesting individual's] request, the Commission must determine whether the proposed appraisal is the same transaction as the prior appraisal, in which [the former State employee] unquestionably personally participated.

In previous opinions, the Commission has held that transactions need not be identical to be considered "the same." For example, in Advisory Opinion No. 91-12, the Commission held that the lifetime bar prohibited a former State employee from bidding on a construction project on which he worked while in State service even though the scope and nature of the project was significantly altered after he left the State. The Commission stated:

The fact that the exact design of that project has changed does not change the essential nature of the transaction. . . . It is like an amendment to an existing contract which does not change the nature of the transaction but merely modifies its terms. . . .

Similarly, in Advisory Opinion No. 95-6, a former DEC [employee] asked the Commission to consider whether the lifetime bar prohibited him from performing engineering services with respect to the clean-up of a landfill, a process that had taken more than eleven years. The engineer had performed investigative services at an early stage while he was in State service. The Commission undertook a detailed examination of the history of the landfill. It held that the former employee could not render engineering services despite many intervening events, the passage of a significant period of time, the progression from investigation to remediation, and the issuance of a new consent order. The Commission found that the essence of the transaction remained the same.

In contrast, the Commission, in Advisory Opinion No. 95-7, held that each successive utility rate case before the PSC involving the same utility should be considered a different proceeding for purposes of the lifetime bar. The Commission noted that the PSC, in considering whether to change rates for a specified period, must re-estimate every component of a utility's revenue requirements for each new period.

Following that opinion, the Commission, in Advisory Opinion No. 95-15, held that the preparation of each new "cost trending index" used by the Office of Real Property Services to trend historical cost information to current assessment year cost levels constitutes a new and separate transaction for purposes of the lifetime bar, as each such index "requires separate index research and preparation on the part of the supplier." The Commission specifically stated that these biannual submissions "do not modify existing indices and are not dependent on any previous index; rather, they are completely recalculated."

Based on these opinions, the question that must be addressed here is whether the appraisal that is about to be undertaken is dependent upon or will modify the previous appraisal. If the two are connected, [the former State employee] would be precluded from working on the new appraisal, as it would be part of the same transaction as the one on which he worked while in State service. However, if the new appraisal is similar to the cost trending indices discussed in Advisory Opinion No. 95-15, which were completely recalculated each time they were prepared, [the State agency] could accept a bid by [the former State employee] to serve as an outside appraiser.

In examining real estate appraisals of the same parcel conducted at different times, the Commission has difficulty in finding that there is not a dependency between the two. It is well established in law that real property is unique; that is, each parcel has features that are not duplicated elsewhere. Every appraisal must begin by considering the nature and features of the property to be appraised. Except in unusual circumstances, where an event or a significant period of time has changed the nature of the property, two appraisals of the same property at different times will, of necessity, be based on the property's unchanged features. While the value will vary in accordance with changes in the real estate market, the appraised property basically remains the same. This gives an unfair advantage to an appraiser who formerly considered the property while in State service. Such an advantage contravenes the central underlying purpose of the lifetime bar restrictions.

In sum, the two appraisals cannot be separated. In most cases, both will constitute part of the same transaction, and an appraiser who worked on an appraisal while in State service cannot appraise the same property after he or she leaves such service.(2)

CONCLUSION

The Commission concludes that the lifetime bar precludes [the State agency] from retaining [the former State employee] to perform outside appraisal services for the same property on which he helped to develop an estimation of value while an agency employee.

This opinion, until and unless amended or revoked, is binding on the Commission in any subsequent proceeding concerning the person who requested it and who acted in good faith, unless material facts were omitted or misstated by the person in the request for opinion or related supporting documentation.

All Concur:

Evans V. Brewster,
Angelo A. Costanza,
Robert E. Eggenschiller, Members

Dated: September 18, 1996


Endnotes

1. The Commission was advised that the original easement purchase included exceptions for development, timber and recreational use. The present proposal will consider an exception only for development rights.

2. As noted, there may be occasions where the property has so changed that the two appraisals would be separate transactions, but these are unusual. For example, if a storm or earthquake so changed the property that its nature was altered, an appraisal before the event might not be the same transaction as an appraisal after the event. The Commission need not given definition to these unusual situations for purposes of this opinion.



URL: http://www.nysl.nysed.gov/edocs/ethics/96-23.htm