ADJUSTMENT OF DOLLAR AMOUNT IN DEFINITION OF “OWNERSHIP INTEREST”

Adopted Rules: Closed to Comments

Agency:
Effective Date: 
Wednesday, January 1, 2014
Download Copy of Adopted Rule (.pdf): 

CITY OF NEW YORK CONFLICTS OF INTEREST BOARD
Notice of Adoption of Amendment to Rule on the Dollar Amount With Respect to “Ownership Interest”

NOTICE IS HEREBY GIVEN PURSUANT TO THE AUTHORITY VESTED IN THE Conflicts of Interest Board by Section 2603(a) of the New York City Charter that the Conflicts of Interest Board has adopted an amendment to its rule on Adjustment of Dollar Amount in Definition of Ownership Interest, Section 1-11 of Title 53 of the Rules of the City of New York, to adjust the dollar amount in the definition of “Ownership Interest” (Charter Section 2601(16)) to reflect changes in the Consumer Price Index for the metropolitan New York-New Jersey region published by the United States Department of Commerce, Bureau of Labor Statistics.  Pursuant to a notice published on December 16, 2013, in the City Record, on the Board’s website, and on NYCRules, a public hearing was held on January 16, 2014, at 2 Lafayette Street, Suite 1010, New York, New York.  The Board received no comments on the proposed amendment and adopted the proposed amendment as final.  The text of the amendment is set forth below.

Section 1-11.  ADJUSTMENT OF DOLLAR AMOUNT IN DEFINITION OF “OWNERSHIP INTEREST”
Effective as of January 1, [2010] 2014, the dollar amount in the definition of “Ownership Interest” in subdivision (16) of § 2601 of the New York City Charter shall be adjusted from [$40,000] $44,000 to [$44,000] $48,000.

STATUTORY AUTHORITY: Sections 2601(16) and 2603(a) of the New York City Charter.

STATEMENT OF BASIS AND PURPOSE OF AMENDMENT:
Subject to certain exceptions, the conflicts of interest provisions of Chapter 68 of the New York City Charter prohibit New York City public servants from having “interests” in firms engaged in business dealings with the City or from taking actions as a public servant particularly affecting the public servant’s interest in a firm.  See Charter Sections 2604(a) and 2604(b)(1).  Interest is defined in Charter Section 2601(12) as either an ownership interest in a firm or a position with a firm.  “Ownership interest” is, in turn, defined in Charter Section 2601(16) as

an interest in a firm held by a public servant, or the public servant’s spouse, domestic partner, or unemancipated child, which exceeds five percent of the firm or an investment of twenty-five thousand dollars in cash or other form of commitment, whichever is less, or five percent or twenty-five thousand dollars of the firm’s indebtedness, whichever is less, and any lesser interest in a firm when the public servant, or the public servant’s spouse, domestic partner, or unemancipated child exercises managerial control or responsibility regarding any such firm, but shall not include interests held in any pension plan, deferred compensation plan or mutual fund, the investments of which are not controlled by the public servant, the public servant’s spouse, domestic partner, or unemancipated child, or in any blind trust which holds or acquires an ownership interest.  The amount of twenty-five thousand dollars specified herein shall be modified by the board pursuant to subdivision a of section twenty-six hundred three.  (Emphasis added.)

Charter Section 2603(a) requires the Conflicts of Interest Board, by rule amendment, once every four years to adjust the $25,000 amount established in Section 2601(16) to reflect changes in the Consumer Price Index for the metropolitan New York-New Jersey region as published by the United States Bureau of Labor Statistics.  The foregoing provision became effective on January 1, 1990.

Effective Year

Consumer Price Index (CPI)

Ownership Interest Amount (rounded to the nearest $1,000)

Percent change from 1990 CPI

1990

135.1

$25,000

-

1994

156.0

$29,000

15.5%

1998

172.1

$32,000

27.4%

2002

188.5

$35,000

39.5%

2006

216.6

$40,000

60.3%

2010

238.8

$44,000

76.8%

2014

258.5

$48,000

91.3%

According to the United States Department of Labor, Bureau of Labor Statistics, for the twenty-three year period from January 1990, to September 2013, the Consumer Price Index for the metropolitan area increased from 135.1 to 258.5, reflecting a total increase of 91.3%.  Thus, the $25,000 Charter amount should be adjusted to $48,000, rounded to the nearest $1,000, reflecting the requisite increase from the $25,000 Charter amount.

Pursuant to Charter Section 1042, this proposed amendment to Board Rule Section 1-11 was published in the Board’s Fiscal Year 2014 regulatory agenda.