Make State Funds Transparent

Section 1. The legislative law is amended by adding a new section 54-b to read as follows:

§ 54-b. Member items, discretionary funds and unitemized lump sum appropriations. 1. As used in this section, the term "member item, discretionary fund or unitemized lump sum appropriation" shall mean a budgetary allocation as funded by the legislative community projects fund as defined in section ninety-nine-m of the state finance law, and the executive community projects fund as defined in section ninety-nine-g of the state finance law at the discretion and request of the governor or a member of the legislature for a certified tax-exempt non-profit organization under section 501(c)(3) of the Internal Revenue Code in New York state, a state agency, a municipality or their affiliated department, university, college, or school district.

2. Member items, discretionary funds or unitemized lump sum appropriations shall not be appropriated when a conflict of interest exists between the legislator or governor designating the member item, discretionary fund and unitemized lump sum appropriation and the potential

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD08513-01-7

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recipient. A member item, discretionary fund or unitemized lump sum appropriation cannot fund organizations that employ or otherwise compensate the legislator or governor, a member of the legislator's or governor's family, any person sharing the home of the legislator or governor or a member of the legislator's or governor's staff for services or labor rendered. Furthermore, legislators and the governor shall not designate member items, discretionary funds and unitemized lump sum appropriations if the legislator or governor, a member of the legislator's or governor's family, any person sharing the home of the legislator or governor or a member of the legislator's or governor's staff is involved with the operations of the organization in a decision-making capacity including but not limited to working on an unpaid, volunteer basis or a member of the directing board of an organization.

3. Prior to the appropriation of member items discretionary funds and unitemized lump sum appropriations, the legislature shall:

(a) provide that each member of the senate and each member of the assembly receive an equal share of the dollar amount of member items discretionary funds or unitemized lump sum appropriation allocated to the respective legislative body;

(b) require the legislator or governor requesting such member item, discretionary fund or unitemized lump sum appropriation to submit a signed conflict of interest form along with the member item discretionary fund or unitemized lump sum appropriation request form to ensure that no conflict of interest exists. The legislator or governor shall disclose on the conflict of interest form all political donations he or she is receiving or has received in the past from the intended recipient of the member item, discretionary fund or unitemized lump sum appropriation funding. Such a conflict of interest form shall be signed by the legislator or governor under penalty of perjury, stating that the member item, discretionary fund or unitemized lump sum appropriation is not being directed in a manner described in subdivision two of this section;

(c) provide that any state agency that provides funding for member items, discretionary funds and unitemized lump sum appropriations evaluate the spending of such member item funds, discretionary funds and unitemized lump sum appropriations by the local project, organization or other entity receiving such funds. The state agency shall track the funds to ensure that they are being spent in a manner consistent with the member item application;

(d) ensure that the following criteria are satisfied:

(1) grants are to be designated for public purposes. The program funded must be open and available to all individuals on a nonsectarian basis;

(2) grants are provided in support of services and activities that have statewide benefit or benefit local communities;

(3) grants are only designated for not-for-profit organizations, municipalities or their affiliated departments/agencies, universities, colleges, or school districts;

(4) grants are available solely for activities and programs conducted within the state of New York;

(5) grants are not to be redistributed unless the grant recipient is identified and the grant to the end recipient complies with the criteria;

(6) grants are to be used only for the purpose stated in the funding request;

(7) grants are not to be used to fund loan programs;

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(8) grants are not to be used for the following purposes: (A) to fund an entity in bankruptcy, receivership, or foreclosure or to fund legal or administrative expenses related to bankruptcy, receivership or foreclosure proceedings; (B) to pay for any arrears in workers' compensation, unemployment insurance or other employee benefits; or (C) to pay for any arrears or current obligations for federal, state, or municipal taxes; for lobbying activities as defined under section one-c of this chapter and comparable sections of federal or municipal law;

(9) grants are not to be the only significant source of funding for the organization;

(10) grant applications shall include a brief description of the project to be funded; and

(11) grants shall not be used by recipients to pay wages or other employee benefits.

(e) The legislature shall produce and make public a compiled quarterly report with respect to each member item, discretionary fund or unitemized lump sum appropriation, the name of the member of the senate, the member of the assembly, the governor, or any state elected official that is sponsoring the member item discretionary fund or unitemized lump sum appropriation, the dollar amount of the member item discretionary fund or unitemized lump sum appropriation to be appropriated, the name of the local project, organization, or other entity receiving such member item discretionary fund or unitemized lump sum appropriation. Such compiled quarterly reports detailing and disclosing the use of such funds shall start with the date of the enacting state budget with updated reports being delivered on each first day of every fourth month thereafter. Such publication shall, at a minimum, be published on the website of each house of the legislature in a manner that is easily accessible.

4. All member item, discretionary fund and unitemized lump sum appropriation allocation recipients shall provide certification of proper use of funds received. For allocations totaling less than fifty thousand dollars, a duly authorized representative of the member item, discretionary fund or unitemized lump sum appropriation recipient organization shall attest under penalty of perjury that the recipient organization actually spent the member item grant money, discretionary fund or unitemized lump sum appropriation in the manner and for the purposes designated in its application for a member item, discretionary fund and itemized lump sum appropriation allocation. For allocations totaling more than fifty thousand dollars, a duly authorized representative of the member item, discretionary fund or unitemized lump sum appropriation recipient organization shall attest under penalty of perjury that the recipient organization actually spent the member item grant money, discretionary fund or unitemized lump sum appropriation in the manner and for the purposes designated in its application for a member item, discretionary fund and itemized lump sum appropriation allocation and shall file a final report, under penalty of perjury, detailing the expenditures. Such report shall be submitted by May thirty-first of the calendar year following the calendar year in which the member item, discretionary fund or unitemized lump sum appropriation was allocated and shall follow the requirements established by the attorney general. No future member item grants, discretionary funds or unitemized lump sum appropriations shall be approved for an organization which has previously received a member item, discretionary fund and itemized lump sum appropriation allocation until such documents have been signed and received by the office of the New York state attorney general.

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5. Prior to submitting an application for a member item, discretionary fund and itemized lump sum appropriation allocation, each organization seeking a member item, discretionary fund and itemized lump sum appropriation allocation must meet pre-certification standards as established by the office of the New York state attorney general. At a minimum, those standards shall require that the organization seeking pre-certification is a certified tax-exempt non-profit organization under section 501(c)(3) of the Internal Revenue Code in New York state, a state agency, a municipality or their affiliated department, university, college, or school district capable of accepting potential funding and that such entity is not in bankruptcy or arrears on any obligations. If an organization has received member item funding, discretionary funds or unitemized lump sum appropriations in the past, the organization shall also comply with the requirements of subdivision four of this section. No application from any organization shall be considered by a legislator until the office of the New York state attorney general has certified such organization based upon the criteria set forth in this subdivision and upon any additional regulatory standards established by the attorney general.

6. Any state agency that provides funding for member items, discretionary funds or unitemized lump sum appropriations shall review member item spending, discretionary funds and unitemized lump sum appropriations on an annual basis and periodically review grant recipients' use of grant money.

7. Any member item, discretionary fund or unitemized lump sum appropriation appropriated by the legislature shall be set forth separately and apart from every other member item, discretionary fund or unitemized lump sum appropriation in the state budget in order to clearly identify each legislator's or governor's request.

8. Any violation of the provisions of this section shall be referred to the legislative ethics commission or its successor entity. Complaints regarding the failure of an allocation or use of a member item, discretionary fund or unitemized lump sum appropriation to comply with the provisions of this chapter shall be submitted to (a) the legislative ethics commission with regard to a member item, discretionary fund or unitemized lump sum appropriation allocation made at the discretion of a legislator, or (b) the commission on public integrity with regard to a member item, discretionary fund or unitemized lump sum appropriation allocation made at the discretion of the governor. Each complaint shall be investigated in accordance with the rules and procedures of the commission receiving the complaint.

§ 2. Subdivisions 4 and 5 of section 24 of the state finance law, as added by chapter 1 of the laws of 2007, are amended to read as follows:

4. Any appropriation added to such budget bills, pursuant to section four of article seven of the constitution, shall only contain itemized appropriations which shall not be in the form of lump sum appropriations[,] and shall designate for each appropriation a grantee of such appropriation, and [provided further that] for all non-federal state operations appropriations, such bill or bills shall only contain itemized appropriations and shall be made, where practicable, by agency, and within each agency by program and within each program at the following level of detail and in the following order:

(a) by fund type, which at a minimum shall include general fund, special revenue-other funds, capital projects funds and debt service funds;

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(b) for personal service appropriations, separate appropriations shall be made for regular personal service, temporary personal service, and holiday and overtime pay;

(c) for nonpersonal service appropriations, separate appropriations shall be made for supplies and materials, travel, contractual services, equipment and fringe benefits, as appropriate.

5. [Any appropriation added pursuant to section four of article seven of the constitution without designating a grantee shall be allocated only pursuant to a plan setting forth an itemized list of grantees with the amount to be received by each, or the methodology for allocating such appropriation. Such plan shall be subject to the approval of the chair of the senate finance committee, the chair of the assembly ways and means committee, and the director of the budget, and thereafter shall be included in a concurrent resolution calling for the expenditure of such monies, which resolution must be approved by a majority vote of all members elected to each house upon a roll call vote.] The provisions of this section shall not preclude members of the legislature from collaborating with each other in the selection of member items and packaging their individual member item, discretionary fund or unitemized lump sum appropriation allocations together with other member's allocations for specified regional or joint projects.