BILL NUMBER: S4039A
SPONSOR: SKOUFIS
 
TITLE OF BILL:
An act to amend the public officers law, the public authorities law and
the general municipal law, in relation to prohibiting certain persons
from receiving compensation for legal fees, consulting, or other work
performed for an industrial development agency, an economic assistance
corporation, or from a state or local authority and relating to consult-
ant disclosure requirements
 
SUMMARY OF PROVISIONS:
Section 1: Amends paragraphs (a) and (b) of subdivision 7 of section 73
of the public officers law to prohibit statewide elected officials,
state officers or employees, members of the legislature, legislative
employees, or political party chairman who owns or controls a certain
percentage of a corporation or limited liability company from receiving
compensation for consulting or legal services from a state or local
authority.
Section 2: Amends subdivision 1-a of section 2825 of the public authori-
ties law to make a conforming amendment to the Public Authorities Law
reflecting the same prohibitions.
Section 3: Amends section 801 of the general municipal law to make a
conforming amendment reflecting the same prohibitions for municipal
officers.
Section 4: Amends section 858-c of the general municipal law to require
individuals and entities providing consulting services, including legal,
lobbying, financial, marketing, and other consulting services, to
disclose details of their engagements with applicants or recipients of
agency financial assistance.
Section 5: Sets Effective Date.
 
JUSTIFICATION:
This legislation arises in response to a case in which a local elected
official received hundreds of thousands of dollars in consulting fees
from local Industrial Development Agencies (IDAs) and Local Development
Corporations (LDCs) through third-party employers and consulting firms.
This conduct led to a Justice Department indictment on eight criminal
counts. Even the State Comptroller has faced significant challenges in
auditing the finances of IDAs and LDCs, highlighting persistent obsta-
cles to transparency. These challenges underscore the significant influ-
ence of these entities and the potential for financial misconduct in
public funds. The current system allows 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 candidates for the job, an injustice occurs that must
be rectified.
To address this issue, this legislation prohibits public officeholders
at local and state levels from collecting consulting fees from state and
local authorities directly or through companies that control 10% or
more.
 
LEGISLATIVE HISTORY:
Senate
2019: N/A
2020: S7555, Advanced to Third Reading
2021: S1543A, Passed Senate
2022: S1543A, Passed Senate
2023: S3310A, Passed Senate
2024: S3310A, Passed Senate
Assembly
2019: N/A
2020: A10104, Referred to Governmental Operations
2021: No Assembly Same-As
2022: No Assembly Same-As
2023: A4670A, Referred to Governmental Operations
2024: A4670A, Amend and Recommit to Governmental Operations
 
FISCAL IMPLICATIONS:
NONE.
 
EFFECTIVE DATE:
This act shall take effect immediately and apply to contracts entered
into on or after such effective date

Statutes affected:
S4039: 2825 public authorities law, 2825(1) public authorities law, 801 general municipal law
S4039A: 2825 public authorities law, 801 general municipal law