Clarifies the application of the accountability standards, open meetings law and freedom of information requirements to local development corporations

BILL NUMBER:S5399

Title of bill

An act to amend the public authorities law, the executive law and the public officers law, in relation to clarifying the application of the accountability standards, open meetings law and freedom of information requirements to local development corporations

Purpose

To extend the application of the accountability standards, open meetings law and freedom of information requirements to local development corporations (LDCs) so that there is full and public disclosure of LDC activities.

Summary of provisions

Amends various sections of the public authorities law to include local development corporations in the provisions of the law governing accountability and transparency of public authorities.

Existing law

Under the current public authorities law, it is not clear from the wording of the statute that LDCs are required to comply with the open meetings law and freedom of information requirements. Due to this ambiguity in drafting the law, the wording has been interpreted to mean that LDC's do not have to comply with the open meetings law and freedom of information requests.

Justification

Local Development Corporations (LDCs) enable counties, cities, towns and villages to play a role in economic development. LDCs allow local governments to assist businesses with specific types of loans and grants, play a more flexible role in public-private partnerships, and even structure arrangements to purchase and develop real estate. LDCs have unique powers in statute that allow them to receive public property from local governments while avoiding any competitive process for awarding contracts, as LDCs do not have to comply with public procurement laws. LDCs are free to award contracts at will, which potentially allows local government officials (who often appoint LDC board members) to reward friends and political allies with these lucrative contracts. These powers leave open the potential for abuse.

Full and public disclosure of LDC activities would prohibit government officials from abusing powers associated with Local Development Corporations. Because LDCs are directly involved in the acquisition of public property, a greater level of transparency must exist in order to keep the public informed on the actions of their local government and government created LDCs. The sunshine requirements pertaining to LDCs are currently inadequate. The incomplete language of the public authorities law as it relates to the account.ability standards for local authorities, warrants action. This legislation clarifies the law and prevents LDCs from operating under a veil of unaccountability. It must be enacted so that both LDCs and local

governments are held responsible for their decisions and actions surrounding local development projects.

Legislative history

2008 - Corporations. 2009 - Passed Senate. 2010 - Corporations.

Fiscal implications

Not yet determined.

Effective date

This act shall take effect on the one hundred twentieth day after it shall have become a law; provided, however, that effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized and directed to be made completed on or before such effective date.