New York State's new lobbying law, Procurement Lobbying Act

New Lobbying Laws Take Effect in New York State

November 16 , 2006
From www.bcnys.org with material added by RBA

Ken Pokalsky of the New York Business Council has undertaken the difficult task of breaking down the State's new "Procurement Lobbying Act."

The Act provides new guidelines for businesses and individuals engaged in government procurement, meaning lobbying for contracts for services with the government. The Business Council and the Rockland Business Association is urging its members to understand and address their compliance obligations under the new state lobbying law that may affect businesses and employees that are involved in selling goods and services to state and local governments.

"There is no doubt that the new 'procurement lobbying law' will affect many employers in New York State that sell goods and services to government in New York, even for activities by the employer that don't constitute conventional lobbying," said Ken Pokalsky, the Council's specialist in state laws related to lobbying.

"We are urging our members to read the law and consult with counsel about what they must do to comply with the law and how this should affect the way they conduct business," Pokalsky added. "Violations of this law, even inadvertent ones, may subject employers to stiff penalties, including a ban on doing business with the state."

"Given the law's complexity and ambiguity, and the consequence of noncompliance, we urge you review the legislation in detail and consult with legal counsel," he said.

Regulation of Procurement Lobbying

Amendments to the Lobby Act are applicable to businesses and individuals that spend or earn more than $5,000 in a year for all lobbying activities (an increase from $2,000, effective 1/1/06), including but not limited to procurement lobbying.

Specifically, the Lobbying Act now applies to "any attempt to influence ...any determination by a public official...related to a government procurement," where the contract's annualized value is greater than $15,000. This applies to contracts let by state agencies, the state legislature, its unified court system and public authorities; to all municipalities with populations over 50,000 (school districts are specifically exempt), and to IDA's in these larger municipalities.

Lobbyists exceeding the $5,000 limit are required to register with the state and submit bimonthly reports on their lobbying activities, income and expenses. Importantly, registered lobbyists are also prohibited from giving gifts valued at $75 or more to public officials and from entering into "contingency contracts." Lobbyist's clients are also required to file semi-annual reports.

Importantly, "commissioned salespersons," as defined in law, are exempted from the Lobbying Act.

"Restricted Periods"

The new law also imposes "restricted periods," related to government contracts. During the time from the first written notice of a procurement solicitation to its final approval, vendors and their representatives are only allowed to contact an agency's designated contact person(s) with regard to that procurement effort.

Further, during the restricted period, contacts regarding that specific procurement effort with employees of other governmental entities – other than the state legislature – are similarly restricted. Exemptions are made for responses to certain agency requests, certain legal challenges relating to the procurement act, and efforts to negotiate contract terms after a tentative award is made.

These contact restrictions apply to contracts:

valued more than $15,000;
involving contracts for goods, services, technology, construction, and real estate, and to revenue contracts;
let by state agencies, legislature, public authorities, and unified court system; IDAs in jurisdictions greater than 50,000 population; and local public benefit corporations. (Municipalities and school districts are exempt from the restricted contact provisions.)

Note that restricted contact provisions are found in both the State Finance Law and the Lobbying Act. Their provisions are similar although not identical with regard to exempted.

Effective Date

The restricted contact provisions apply to procurements that commenced on or after 1/1/06. However, the Lobbying Commission is interpreting its law as applying to ongoing procurements that were initiated prior to that date.

Enforcement

Under the Lobbying Act, registered lobbyists who violate restricted contact provisions are subject to civil penalties of up to $10,000; a second violation within four years is subject to civil penalty up to $25,000 and a four-year debarment from lobbying. The State Finance Law imposes a four-year debarment from government contracts for repeat violations within a four-year period.

Compliance Help

Both the State Lobbying Commission and the Advisory Council on Procurement Lobbying have issued compliance guidance. These documents, the text of the new law, and information on state compliance training, are available on our web site. Please feel free to contact Ken Pokalsky at The Business Council with any questions or comments. Phone (518) 465-7511, ext. 205
Email: ken.pokalsky@bcnys.org

The State has created an online FAQ about the law at
https://www3.ogs.state.ny.us/legal/lobbyinglawfaq/default.asp