What's happening
This bill prohibits state officials and certain others from receiving compensation for services provided to state or local authorities if they hold significant ownership in related entities.
Why it matters
Targets Potential Conflicts of Interest. By prohibiting key state officials and party leaders who have significant financial interests in companies or partnerships from receiving compensation for services to state or local authorities, the bill aims to close loopholes that previously allowed such officials to indirectly profit from government contracts.
Covers a Broad Range of Services. The restriction is not limited to legal or consulting fees but extends to any contractual expenditure for services, whether the work was actually performed or not. This comprehensive scope is designed to prevent creative workarounds that might otherwise evade ethical scrutiny.
Expands and Clarifies Enforcement. The bill specifies that violations can result in significant civil penalties—up to $40,000 plus the value of the benefit received—strengthening the deterrent against unethical or self-dealing behavior among public officials and party leaders.
Aims to Increase Public Trust. By addressing both real and perceived self-dealing, the bill seeks to enhance public confidence in the impartiality and integrity of state and local government decision-making, especially in areas involving economic development incentives and public contracts.
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Headline styles
Ban Officials' Agency Payments
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to ethics and internal governance
- Returned to senate
- Died in assembly
- Referred to governmental operations
- Delivered to assembly
- Passed senateVote 53–9
- Amended on third reading 97b
- Advanced to third reading
- 2nd report cal.
- 1st report cal.634
- Print number 97a
- Amend and recommit to ethics and internal governance
Show 2 earlier actions
- Committee discharged and committed to ethics and internal governance
- Referred to finance
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Ban Officials' Agency Payments
In Assembly Committee · Governmental Operations · Sponsor Michaelle C. Solages
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
97--B Cal. No. 634
2019-2020 Regular Sessions
IN SENATE (Prefiled)
January 9, 2019
Introduced by Sens. KAMINSKY, BROOKS, HOYLMAN, KRUEGER -- read twice and ordered printed, and when printed to be committed to the Committee on Finance -- committee discharged and said bill committed to the Committee on Ethics and Internal Governance -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- reported favorably from said committee, ordered to first and second report, ordered to a third reading, amended and ordered reprinted, retaining its place in the order of third reading
AN ACT to amend the public officers law and the public authorities law, in relation to prohibiting certain persons from receiving compensation for legal fees, consulting, or other work performed for an industrial development agency or an economic assistance corporation
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 18 of section 73 of the public officers law, as amended by section 5 of part CC of chapter 56 of the laws of 2015, is amended to read as follows:
18. No statewide elected official, state officer or employee, member of the legislature, legislative employee or political party chairman as defined in this section and section seventy-three-a of this article who: (i) owns or controls directly or indirectly ten per centum or more of stock in a corporation or limited liability company; or (ii) owns or controls ten per centum or more of the capital, profits, or beneficial interest in a partnership or firm, shall receive compensation for legal fees, consulting, or any other contractual expenditure for services, whether actually performed or not, from a state or local authority as defined section two of the public authorities law.
19. In addition to any penalty contained in any other provision of law, any person who knowingly and intentionally violates the provisions of subdivisions two through five, seven, seven-a, eight, twelve or four-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03420-04-9
S. 97--B 2
teen through [seventeen] eighteen of this section shall be subject to a civil penalty in an amount not to exceed forty thousand dollars and the value of any gift, compensation or benefit received in connection with such violation. Assessment of a civil penalty hereunder shall be made by the state oversight body with jurisdiction over such person. A state oversight body acting pursuant to its jurisdiction, may, in lieu of a civil penalty, with respect to a violation of subdivisions two through five, seven or eight of this section, refer a violation of any such subdivision to the appropriate prosecutor and upon such conviction such violation shall be punishable as a class A misdemeanor.
§ 2. Subdivision 1 of section 2825 of the public authorities law, as amended by chapter 766 of the laws of 2005, is amended to read as follows:
1. No public officer or employee shall be ineligible for appointment as a trustee or member of the governing body of a state or local authority, as defined in section two of this chapter, and any public officer or employee may accept such appointment and serve as such trustee or member without forfeiture of any other public office or position of public employment by reason thereof. Provided, additionally no statewide elected official, state officer or employee, member of the legislature, legislative employee or political party chairman as defined in sections seventy-three and seventy-three-a of the public officers law who: (i) owns or controls directly or indirectly ten per centum or more of stock in a corporation or limited liability company; or (ii) owns or controls ten per centum or more of the capital, profits, or beneficial interest in a partnership or firm, shall receive compensation for legal fees, consulting, or any other contractual expenditure for services, whether actually performed or not, from a state or local authority.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the public officers law and the public authorities law, in relation to prohibiting certain persons from receiv- ing compensation for legal fees, consulting, or other work performed for an industrial development agency or an economic assistance corporation
Summary of provisions
Section 1 of the bill amends the Public Officers Law to prohibit elected officials, state officer or employee, member of the legislature, legis- lative employee or political party chairman from receiving compensation for consulting or legal services from any state or local authority. Such a violation is punishable by forfeiture of any gains related to the prohibited action, as well as a civil penalty of up to 40,000.
Section 2 of the bill makes a conforming amendment to the Public Author- ities Law reflecting the same prohibitions.
Section 3 of the bill is the effective date, which is immediate upon enactment.
Justification
This legislation arises in response to an instance wherein a local elected official collected hundreds of thousands of dollars in consult- ing fees from local industrial development agencies (IDAs) and local economic assistance corporations (LDCs) via outside employers and consulting companies, which resulted in a Justice Department indictment on eight criminal counts.
Even the State's auditor, the Comptroller, has encountered difficulty and even litigation - in auditing IDAs' and LDCs' finances. These obsta- cles to basic transparency demonstrate these entities' power and the potential for misconduct with respect to expenditure of public dollars.
The current system seems to allow for a preference in appointments of those consultants or attorneys who are politically connected, as opposed to suitably qualified to advise the IDAs on issues that impact taxpayers in the jurisdiction. The members of the IDA are authorized to hire consultants to advise them in their decision-making capacity. When those consultants or attorneys have conflicts of interest and/or are not the best qualified candidate for the job, an injustice occurs that must be rectified.
To address this issue, this legislation prohibits public officeholders and party committee leaders from collecting consulting fees from state and local authorities either directly or through companies in which they have at least 100 ownership.
Elected officials can have significant influence over state and local revenues and spending plans, and can have access to agencies that private companies may not. It is time for them to choose whether they want to serve the public or private clients.
Legislative history
S.5695 - 2017/2018
Fiscal implications
No negative impact anticipated. To the extent that public actions are less affected by officials' private interests, it may reduce state and local expenditures.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.