STATE OF NEW YORK ________________________________________________________________________ 1350 2019-2020 Regular Sessions IN ASSEMBLY January 15, 2019 ___________ Introduced by M. of A. SANTABARBARA, WOERNER, RAIA, GUNTHER -- Multi- Sponsored by -- M. of A. GLICK -- read once and referred to the Committee on Governmental Operations AN ACT to amend the legislative law, in relation to prohibiting members of the legislature from receiving certain income The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The legislative law is amended by adding a new section 5-b 2 to read as follows: 3 § 5-b. Prohibition on outside earned income for members. 1. Starting 4 in calendar year two thousand twenty-one, a member of the legislature 5 may not have outside earned income attributable to such year which 6 exceeds fifteen percent of the gross annual salary of members of the 7 legislature, pursuant to section five of this article. 8 2. a. For the purposes of this section, the term "outside earned 9 income" includes, but is not limited to, wages, salaries, fees, and 10 other forms of compensation for services actually rendered. 11 b. For the purposes of this section, the term "outside earned income" 12 does not include: 13 (1) salary, benefits, and allowances paid by New York state; 14 (2) income attributable to service with the military reserves or 15 national guard; 16 (3) income from pensions and other continuing benefits attributable to 17 previous employment or services; 18 (4) income from investment activities, where the member's services are 19 not a material factor in the production of income; 20 (5) income from a trade or business in which the member or their fami- 21 ly holds a controlling interest, where the member's services are not a 22 material factor in the production of income; 23 (6) copyright royalties, fees, and their functional equivalent, from 24 the use or sale of copyright, patent and similar forms of intellectual EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD06442-01-9A. 1350 2 1 property rights, when received from established users or purchasers of 2 those rights; and 3 (7) compensation for services actually rendered prior to January 4 first, two thousand twenty-one, or prior to being sworn in as a member 5 of the legislature. 6 3. Notwithstanding any other provisions of law to the contrary, 7 members of the legislature are prohibited from: 8 a. receiving compensation for affiliating with or being employed by a 9 firm, partnership, association, corporation, or other entity that 10 provides professional services involving a fiduciary relationship, 11 except for the practice of medicine; 12 b. permitting their name to be used by such a firm, partnership, asso- 13 ciation, corporation, or other entity; 14 c. receiving compensation for practicing a profession that involves a 15 fiduciary relationship except for the practice of medicine; 16 d. receiving compensation as an officer or member of the board of an 17 association, corporation, or other entity; 18 e. receiving compensation for teaching, without prior notification to 19 and approval from the legislative ethics commission; 20 f. receiving advance payments on copyright royalties, fees, and their 21 functional equivalents. 22 4. A member of the legislature who knowingly and willfully violates 23 the provisions of this section shall be subject to a civil penalty in an 24 amount not to exceed forty thousand dollars. Assessment of a civil 25 penalty shall be made by the legislative ethics commission. The legisla- 26 tive ethics commission, acting pursuant to subdivision eleven of section 27 eighty of this chapter, may, in lieu of or in addition to a civil penal- 28 ty, refer a violation to the appropriate prosecutor and upon such 29 conviction, but only after such referral, such violation shall be 30 punishable as a class A misdemeanor. 31 § 2. Paragraph (a) of subdivision 9 of section 80 of the legislative 32 law, as amended by section 9 of part A of chapter 399 of the laws of 33 2011, is amended to read as follows: 34 (a) An individual subject to the jurisdiction of the commission with 35 respect to the imposition of penalties who knowingly and intentionally 36 violates the provisions of subdivisions two through five-a, seven, 37 eight, twelve, fourteen or fifteen of section seventy-three of the 38 public officers law or section five-b of this chapter or a reporting 39 individual who knowingly and wilfully fails to file an annual statement 40 of financial disclosure or who knowingly and wilfully with intent to 41 deceive makes a false statement or gives information which such individ- 42 ual knows to be false on such statement of financial disclosure filed 43 pursuant to section seventy-three-a of the public officers law shall be 44 subject to a civil penalty in an amount not to exceed forty thousand 45 dollars and the value of any gift, compensation or benefit received as a 46 result of such violation. Any such individual who knowingly and inten- 47 tionally violates the provisions of paragraph a, b, c, d, e, g, or i of 48 subdivision three of section seventy-four of the public officers law 49 shall be subject to a civil penalty in an amount not to exceed ten thou- 50 sand dollars and the value of any gift, compensation or benefit received 51 as a result of such violation. Assessment of a civil penalty hereunder 52 shall be made by the commission with respect to persons subject to its 53 jurisdiction. In assessing the amount of the civil penalties to be 54 imposed, the commission shall consider the seriousness of the violation, 55 the amount of gain to the individual and whether the individual previ- 56 ously had any civil or criminal penalties imposed pursuant to thisA. 1350 3 1 section, and any other factors the commission deems appropriate. For a 2 violation of this section, other than for conduct which constitutes a 3 violation of subdivision twelve, fourteen or fifteen of section seven- 4 ty-three or section seventy-four of the public officers law, the legis- 5 lative ethics commission may, in lieu of or in addition to a civil 6 penalty, refer a violation to the appropriate prosecutor and upon such 7 conviction, but only after such referral, such violation shall be 8 punishable as a class A misdemeanor. Where the commission finds suffi- 9 cient cause, it shall refer such matter to the appropriate prosecutor. A 10 civil penalty for false filing may not be imposed hereunder in the event 11 a category of "value" or "amount" reported hereunder is incorrect unless 12 such reported information is falsely understated. Notwithstanding any 13 other provision of law to the contrary, no other penalty, civil or crim- 14 inal may be imposed for a failure to file, or for a false filing, of 15 such statement, or a violation of subdivision six of section seventy- 16 three of the public officers law, except that the appointing authority 17 may impose disciplinary action as otherwise provided by law. The legis- 18 lative ethics commission shall be deemed to be an agency within the 19 meaning of article three of the state administrative procedure act and 20 shall adopt rules governing the conduct of adjudicatory proceedings and 21 appeals taken pursuant to a proceeding commenced under article seventy- 22 eight of the civil practice law and rules relating to the assessment of 23 the civil penalties herein authorized. Such rules, which shall not be 24 subject to the promulgation and hearing requirements of the state admin- 25 istrative procedure act, shall provide for due process procedural mech- 26 anisms substantially similar to those set forth in such article three 27 but such mechanisms need not be identical in terms or scope. Assessment 28 of a civil penalty shall be final unless modified, suspended or vacated 29 within thirty days of imposition, with respect to the assessment of such 30 penalty, or unless such denial of request is reversed within such time 31 period, and upon becoming final shall be subject to review at the 32 instance of the affected reporting individuals in a proceeding commenced 33 against the legislative ethics commission, pursuant to article seventy- 34 eight of the civil practice law and rules. 35 § 3. This act shall take effect January 1, 2021.