Government Affairs Council
Update
April 28, 2006
Lobby
Commission Guidelines
Staff
Contact: Ken
Pokalsky
This week, the State Lobby Commission issued additional draft amendments to its Lobby Act compliance guidelines that specifically address procurement lobbying issues.
In doing so, the Commission has begun addressing a number of concerns raised by The Business Council and member companies with regard to the regulation of procurement lobbying.
The Commission said that their intent is to allow for public review and comment on these proposed changes prior to any final decisions by the Commission. However, the Commission has not yet given a specific timetable for public input at today's meeting. Their next meeting will be in June, but no meeting date has been set. These proposals may also be discussed at the May 4th meeting of the state Advisory Council on Procurement Lobbying.
These largely positive changes include the following:
(new language in italics)
- Lobbying v. Business Development Contacts -- In an attempt to more specifically define the type of procurement-related contacts that constitute "lobbying", The Commission proposed that:
- "A contact that is intended to generate interest in a vendor’s product or service is not lobbying activity if it occurs prior to the governmental entity’s having determined that a need exists for the [particular] product or service. A limited inquiry as to whether a governmental entity has made such a determination is not lobbying activity."
The Commission based this proposal on a provision in the State Procurement Council's operating guidelines stating that agency needs determinations "form the first steps of the procurement process and the first entries in the procurement record."
However, the Commission said it did not know the extent to which state agencies documented "determinations of need," and was seeking input on this proposal both from the agency and vendor community.
- Commission Salesperson - The Commission did not accept a staff proposal to require that 50% of a person’s salary come from commission in order to qualify for the commission salesperson exemption. Instead, the Commission proposes two new criteria that would be applied in addition to statutory criteria:
- "i. The person earns his living primarily by promoting the sale of the products of a single vendor through direct contacts with potential purchasers.
- ii. The person receives a significant portion of his or her compensation from the vendor in the form of commission income-i.e. by payment of a percentage of the sales which such person has caused, promoted, influenced or induced. "
In addition, with regard to the criteria that a commission salesperson cannot receive a commission for sale to government that is " substantially in excess" of commissions payable for comparable non-government sale, the Commission suggested that "substantially in excess" be defined as a 5% difference between government and non-government commissions.
Finally, the Commission proposed language that:
- "A person who does not meet the criteria set forth above, but believes that he/she should be considered a commission sales person, may apply to the Lobbying Commission for such designation."
- Discretionary Bonus - The Commission raised the concern that persons engaged in procurement lobbying that also received discretionary bonuses based in part on government sales activities could be construed as receiving an illegal "contingent" payment. They agreed that such discretionary bonuses were not intended to be covered by the contingent retainer ban. To address this issue, the Commission proposes the following:
- "A discretionary bonus which is based on factors that include success in meeting sales targets, but which is not calculated as a percentage of sales, does not constitute commission income. Such a bonus is not a contingent retainer."
- Restricted Period - With regard to the commencement of a restricted period, the Commission noted that the statute was unclear whether all "triggering" events listed in statute had to be written communications. Rather than make that interpretation, the Commission proposed to say that all such communications had to represent a "formal", but not necessarily "written", notice.
- "The Restricted Period begins with the earliest written notice, advertisement or solicitation of a request for proposal, invitation for bids, or solicitation of proposals, or any other method for formally soliciting a response from Offerers with regards to a procurement contract."
- Procurement Conference - The Commission deleted language in the initial draft guidelines that required a person to be an "active" participant in a pre-bid conference in order to qualify for the exemption for such contacts.
- "Procurement Conference Participation: Exempts participants, including those appearing on behalf of a client, in a conference provided for in an RFP, IFB, or any other method for soliciting a response from offerers intending to result in a procurement contract. Note: This exemption applies to those having an active role in the conference."
- Technical Contacts - Under the lobbying exemption for "technical contacts" between those providing technical services and designated government contact person, the Commission proposed the additional criteria:
- "A contact is not informational if the person gives anything of value other than informational material to the public official."
TBC will be developing comments in response to these proposals, and look forward to receiving your input. Also please feel free to contact us for more information on this latest proposal, or if you would like to be added to our Contract Procurement Council contact list.
Legislature Overrides Veto #208 (S.6460C - Budget Revenue Bill)
The Senate - followed by the Assembly - on Wednesday carried out an override vote of veto message #208. The underlying legislation, S.6460C, was the Legislature's amended version of the Governor's Executive Budget Revenue Bill - which contained 27 separate parts (A through AA). Veto #208 was a (non-line item) veto of the entire bill; however, within the veto message, the Governor specifically stated that "the Legislature's rewriting of the Governor's proposed real property tax rebate program [Part A] represented 'an unconstitutional alteration of an appropriation proposed in my Executive Budget'." The Governor's position on a Legislative override of a Budget Bill veto that had been based on unconstitutional grounds can be found in Veto Message #74 of 2006: "The Governor's disapproval of an item on the basis of its unconstitutionality is not subject to override by the Legislature. See Silver v. Pataki, 4 N.Y.3d 75 (2004) (dismissing challenge by Speaker of the State Assembly to the Governor's disapproval of 55 unconstitutional items added by the Legislature to the 1998-99 budget); 1982 N.Y. Op. Att'y General 21 (recognizing that the Governor's disapproval of unconstitutional budget items 'is not subject to override by the Legislature'). Even a vote by two-thirds of the members of both Houses of the State Legislature cannot transform an unconstitutional budgetary item into a law that may be validly executed by responsible state officials."
With specific respect to S.6460C, the Governor maintains that the override vote is ineffective in enacting Part A, but, that parts B through AA are enacted into Law. There are no broad-based business tax reductions within parts B through AA.
The Senate, or another interested party, might seek further judicial review in an attempt to enact Part A's real property tax rebate program, and, if so, on an expedited purpose as rebate checks were intended by the Legislature to arrive within the month before the 2006 General Election.
Senator
Padavan Introduces "Massachusetts" Health
Bill
Staff Contact: Mark
Amodeo
Senator Frank Padavan (R) Queens has introduced the new "Massachusetts" health law in the state Senate. The bill - S.7676 - has obviously been re-cast to be New York specific and has been committed to the Committee on Health. Among the highlights of the Padavan bill:
- Creates a New York Health Insurance Connector to connect individuals and small businesses with health insurance products;
- As of 7/1/07 requires certain individuals over the age of eighteen to buy a health insurance policy "if it is deemed affordable";
- Includes penalties if an individual does not buy coverage for themself;
- Creates a Health Care Quality and Cost Council;
- Creates a study on uncompensated care; a health disparities council; payment policy advisory board; New York cares Public Health Council;
- Employers of eleven or more workers, who do not offer health insurance, will pay a fee to the state of $295 per worker annually. (Governor Romney vetoed this provision, but the Massachusett's legislature overrode him)
S.7676 bill text
President of Massachusetts Taxpayers Foundation to Speak at May 10th Health Committee Meeting
Michael Widmer, President of the Massachusetts Taxpayers Foundation, will be the luncheon speaker at the May 10th meeting of The Business Council's Health Committee. Mr. Widmer will discuss the policy and politics of the new Massachusetts Health law that requires individuals to buy a health insurance policy, imposes an assessment on some businesses that do not offer health insurance and creates a Health Insurance Connector to link individuals and businesses with health insurance products.
Mr. Widmer will be joined by Victoria Burgess of the Foundation. She is responsible for research and analysis of local health policy. The Massachusetts law has gained national attention. Mr. Widmer will provide details on the myriad of issues raised by the new law.
The Health Committee meeting will run from 10:30 a.m. - 2:30 p.m. at The Business Council headquarters in Albany. Lunch will be included, and a $20 meeting fee is due upon registration.
