STATE OF NEW YORK ________________________________________________________________________ 5657--A 2017-2018 Regular Sessions IN ASSEMBLY February 14, 2017 ___________ Introduced by M. of A. OAKS, KOLB, BARCLAY, BLANKENBUSH, BUTLER, CROUCH, ERRIGO, GARBARINO, GIGLIO, GOODELL, HAWLEY, LAWRENCE, LUPINACCI, McDO- NOUGH, McKEVITT, MONTESANO, MURRAY, RA, RAIA, STEC, WALTER -- Multi- Sponsored by -- M. of A. FITZPATRICK, McLAUGHLIN, B. MILLER -- read once and referred to the Committee on Ways and Means -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the state finance law, in relation to establishing the lump sum allocation advisory committee (Part A); to amend the state finance law, in relation to requiring transparency, identification and disclosure of certain appropriations (Part B); to amend the executive law, in relation to withholding the salaries of the governor, agency commissioners and deputy commissioners for failing to meet certain reporting deadlines (Part C); to amend the tax law, in relation to creating a tax rate reduction board to look at personal income tax and corporate franchise tax rates (Part D); to amend the economic develop- ment law, in relation to conducting an audit of all state economic development programs (Part E); to amend the public officers law and the election law, in relation to prohibiting certain political contributions by individuals appointed to entities that oversee lump sum appropriations (Part F); and to amend the public authorities law, in relation to prohibiting certain third party contracts (Part G) The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Legislative findings and intent. It is the duty of the 2 state government to be responsible, open and transparent about how it 3 spends the taxpayer's hard earned money. With billions of dollars of 4 lump sum appropriations included in the state budget that include no 5 details on who receives the money, or even which elected official has 6 control over the appropriation, and with continued delays in releasing 7 reports by state agencies on the effectiveness of related programs, the EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD08424-02-7A. 5657--A 2 1 government has failed to live up to its responsibility. Often times, 2 this failure goes even deeper, as individuals and entities have 3 personally benefited from the lack of accountability and transparency. 4 Therefore, the legislature finds it necessary to create a lump sum allo- 5 cation advisory committee, require greater transparency related to lump 6 sum appropriations, implement penalties for certain state agencies and 7 entities that fail to release timely reports, prohibit certain political 8 contributions by appointees and conduct studies on how to simplify the 9 current tax system and economic development environment to ensure the 10 current system that creates winners and losers is changed. By implement- 11 ing these policies, the state government can begin to repair the 12 complete breakdown of trust over how it allocates taxpayer money. 13 § 2. This act enacts into law major components of legislation provid- 14 ing for the creation of a lump sum allocation advisory committee, 15 requiring greater transparency related to lump sum appropriations, 16 implementing penalties for certain state agencies and entities that fail 17 to release timely reports, prohibiting certain political contributions 18 by appointees and conducting studies on how to simplify the current tax 19 system and economic development environment to ensure the current system 20 that creates winners and losers is changed. Each component is wholly 21 contained within a Part identified as Parts A through G. The effective 22 date for each particular provision contained within such Part is set 23 forth in the last section of such Part. Any provision in any section 24 contained within a Part, including the effective date of the Part, which 25 makes reference to a section "of this act", when used in connection with 26 that particular component, shall be deemed to mean and refer to the 27 corresponding section of the Part in which it is found. Section four of 28 this act sets forth the general effective date of this act. 29 PART A 30 Section 1. The state finance law is amended by adding a new section 31 49-a to read as follows: 32 § 49-a. Lump sum allocation advisory committee. 1. Definitions. As 33 used in this section, the following terms shall have the following mean- 34 ings: 35 (a) "committee" shall mean the lump sum allocation advisory committee 36 as established by subdivision two of this section; 37 (b) "lump sum appropriation" shall mean an item of appropriation with 38 a single related object or purpose, the purpose of which is to fund one 39 or more grantees by a means other than a statutorily prescribed formula 40 or an allocation pursuant to subdivision five of section twenty-four of 41 this chapter; and 42 (c) "grantee" shall have the same meaning as subdivision twenty-two of 43 section two of this chapter. 44 2. Establishment. There is hereby established the lump sum allocation 45 advisory committee consisting of the director of the division of budget, 46 the comptroller and the attorney general. 47 3. Powers and duties. The committee shall have the power and duty to: 48 (a) review all requests for allocations from a lump sum appropriation 49 where a grantee is not identified; 50 (b) request and receive, and shall utilize and be provided with such 51 facilities, resources and data of any court, department, division, 52 board, bureau, commission, agency subsidiary or subdivision of the state 53 or any political subdivision thereof, or of any public authority orA. 5657--A 3 1 public benefit corporation, as it may reasonably request to carry out 2 its powers and duties pursuant to this subdivision; 3 (c) review and examine financial and personal relationships between 4 any potential grantee and the entity requesting the allocation to deter- 5 mine if a conflict of interest exists; 6 (d) examine the top qualified entities for allocations from a lump sum 7 appropriation that are allocated through a competitive process to deter- 8 mine if a conflict of interest exists; 9 (e) deny any allocation from a lump sum appropriation to a grantee if 10 the committee determines a conflict of interest exists; and 11 (f) approve any allocation from a lump sum appropriation after 12 completing a full and thorough review of such allocation. 13 4. Allocation. No monies from a lump sum appropriation shall be allo- 14 cated unless unanimously approved by the committee. 15 § 2. This act shall take effect immediately. 16 PART B 17 Section 1. Subdivisions 4 and 5 of section 24 of the state finance 18 law, as added by chapter 1 of the laws of 2007, are amended and a new 19 subdivision 5-a is added to read as follows: 20 4. Any appropriation submitted by the governor, when practicable, or 21 added to such budget bills, pursuant to section four of article seven of 22 the constitution, shall only contain itemized appropriations which shall 23 not be in the form of lump sum appropriations, and provided further that 24 for all non-federal state operations appropriations, such bill or bills 25 shall only contain itemized appropriations and shall be made, where 26 practicable, by agency, and within each agency by program and within 27 each program at the following level of detail and in the following 28 order: 29 (a) by fund type, which at a minimum shall include general fund, 30 special revenue-other funds, capital projects funds and debt service 31 funds; 32 (b) for personal service appropriations, separate appropriations shall 33 be made for regular personal service, temporary personal service, and 34 holiday and overtime pay; 35 (c) for nonpersonal service appropriations, separate appropriations 36 shall be made for supplies and materials, travel, contractual services, 37 equipment and fringe benefits, as appropriate; and 38 (d) at the request or discretion of the governor or a member of the 39 legislature, such appropriation shall include the name of the governor 40 or member of the legislature that requested such appropriation. 41 5. Any appropriation submitted by the governor, or added pursuant to 42 section four of article seven of the constitution without designating a 43 grantee shall be allocated only pursuant to a plan setting forth an 44 itemized list of grantees with the amount to be received by each, or the 45 methodology for allocating such appropriation. Such plan shall be 46 subject to the approval of the chair of the senate finance committee, 47 the chair of the assembly ways and means committee, and the director of 48 the budget, and thereafter shall be included in a concurrent resolution 49 calling for the expenditure of such monies, which resolution must be 50 approved by a majority vote of all members elected to each house upon a 51 roll call vote. 52 5-a. Any appropriation submitted by the governor or added to such 53 budget bills, pursuant to section four of article seven of the constitu-A. 5657--A 4 1 tion, or allocation from a lump sum appropriation shall be subject to 2 the following: 3 (a) the governor or member of the legislature requesting such appro- 4 priation or allocation from a lump sum appropriation shall be required 5 to submit a signed conflict of interest form and submit such form to the 6 lump sum allocation advisory committee as established pursuant to 7 section forty-nine-a of this chapter to ensure that no conflict of 8 interest exists; the lump sum allocation advisory committee shall desig- 9 nate the form and content of the conflict of interest form. The governor 10 or member of the legislature shall disclose on the conflict of interest 11 form all political donations he or she is receiving or has received in 12 the past from the intended recipient of the appropriation funding or 13 allocation from a lump sum appropriation. Such a conflict of interest 14 form shall be signed by the governor or member of the legislature under 15 penalty of perjury; 16 (b) an appropriation provided at the discretion of the governor or 17 member of the legislature or an allocation from a lump sum appropriation 18 shall not be provided if the lump sum allocation advisory committee 19 declares a conflict of interest exists between the governor or a member 20 of the legislature designating the appropriation or allocation from a 21 lump sum appropriation and the potential recipient. These appropri- 22 ations and allocations from lump sum appropriations cannot fund an indi- 23 vidual or entity that employs or otherwise compensates the governor or 24 member of the legislature, governor's family or member of the legisla- 25 tor's family, any person sharing the home of the governor or member of 26 the legislature or the governor's or a member of the legislator's staff 27 for services or labor rendered. Furthermore, the governor or members of 28 the legislature shall not designate appropriations or request allo- 29 cations from a lump sum appropriation if the governor or member of the 30 legislature, a member of the governor's or member of the legislator's 31 family, any person sharing the home of the governor or member of the 32 legislature or a member of the governor's or member of the legislator's 33 staff is involved with the operations of the organization in a deci- 34 sion-making capacity including but not limited to working on an unpaid, 35 volunteer basis or as a member of the directing board of an organiza- 36 tion; and 37 (c) an appropriation provided at the discretion of the governor or 38 member of the legislature or an allocation from a lump sum appropriation 39 shall not be provided to any individual or entity who made a political 40 donation within the past year to the governor or member of the legisla- 41 ture requesting the appropriation or allocation from a lump sum appro- 42 priation until the political donation is refunded to the individual or 43 entity. 44 § 2. This act shall take effect immediately. 45 PART C 46 Section 1. The executive law is amended by adding a new section 33 to 47 read as follows: 48 § 33. Lump sum appropriation reporting; enforcement. 1. Notwithstand- 49 ing any law to the contrary, the comptroller is directed to withhold the 50 salaries of the governor, agency commissioners and deputy commissioners 51 when economic development state agencies, subsidiaries and authorities, 52 and/or any state entity required to issue a report related to a lump sum 53 appropriation fails to meet statutorily required reporting deadlines.A. 5657--A 5 1 2. For purposes of this section "economic development state agencies, 2 subsidiaries and authorities" shall include, but are not limited to the 3 department of economic development, empire state development corporation 4 and all of its subsidiaries, the department of taxation and finance, and 5 the dormitory authority of the state of New York and its subsidiaries. 6 3. The comptroller shall withhold the salaries of the governor and 7 offending agency commissioners and deputy commissioners until such 8 required reports, as described in subdivision one of this section, are 9 issued. 10 4. Agencies may receive an extension to submit a required report, as 11 described in subdivision one of this section, if requested and approved 12 by all legislative conference leaders. 13 § 2. This act shall take effect immediately. 14 PART D 15 Section 1. The tax law is amended by adding a new section 171-q to 16 read as follows: 17 § 171-q. Tax rate reduction board; personal and corporate tax study. 18 (1) (a) The commissioner shall contract with a nationally recognized 19 entity to conduct a study to examine the corresponding personal income 20 tax brackets and dollar amounts that could be enacted if a proportionate 21 reduction in the personal income tax bracket and dollar amounts as 22 provided in section six hundred one of this chapter for taxable years 23 beginning after two thousand eleven and before two thousand nineteen and 24 for taxable years beginning after two thousand eighteen, if all of the 25 personal income tax credits provided in section six hundred six of this 26 chapter were eliminated and personal income tax receipts were forecasted 27 to be revenue neutral based on current law. 28 (b) The commissioner shall contract with a nationally recognized enti- 29 ty to conduct a study to examine the corresponding reduction in the 30 imposition of the corporate franchise tax that could be enacted if a 31 proportionate reduction in the imposition of the corporate franchise tax 32 as provided by sections two hundred nine and two hundred ten of this 33 chapter, if all the credits provided in section two hundred ten-B of 34 this chapter were eliminated and the corporate franchise tax receipts 35 were forecasted to be revenue neutral based on current law. 36 (2) There is hereby established a tax rate reduction board consisting 37 of four members. One representative shall be appointed from each of the 38 following: 39 (a) the speaker of the assembly; 40 (b) the minority leader of the assembly; 41 (c) the temporary president of the senate; and 42 (d) the minority leader of the senate. 43 (3) The tax rate reduction board shall: 44 (a) approve the selection of the nationally recognized entity 45 described in subdivision one of this section, priority for such entity 46 shall be given to firms that are not current vendors doing business with 47 the state; 48 (b) oversee the required reports described in paragraphs (a) and (b) 49 of subdivision one of this section; and 50 (c) assist in the determination of areas of inquiry for, review the 51 progress of, and evaluate the results of such required reports. 52 (4) Such board, in consultation with the commissioner shall oversee 53 the analysis of the contracting entity and issue a report to the gover- 54 nor, the speaker of the assembly, the minority leader of the assembly,A. 5657--A 6 1 the temporary president of the senate and the minority leader of the 2 senate detailing the results of such studies described in paragraphs (a) 3 and (b) of subdivision one of this section within one year after the 4 chapter of the laws of two thousand seventeen that added this section 5 takes effect. 6 § 2. This act shall take effect immediately. 7 PART E 8 Section 1. The economic development law is amended by adding a new 9 section 107 to read as follows: 10 § 107. Economic development audit board. 1. The comptroller in coordi- 11 nation with the commissioner and the commissioner of taxation and 12 finance shall contract with a nationally recognized entity to conduct an 13 audit of all state economic development programs. Such audit shall 14 include, but not be limited to: 15 (a) identifying all programs by type and funding source; 16 (b) identifying the types of businesses that have received financial 17 assistance; 18 (c) reviewing information available on job creation or other data on 19 economic expansion; 20 (d) analyzing the geographic distribution of financial assistance 21 throughout the state; 22 (e) reviewing a sample of loans and grants to determine if statutory 23 requirements for the programs were followed; 24 (f) reviewing information available on economic development programs 25 in other states; and 26 (g) any other information deemed necessary by the comptroller in coor- 27 dination with the commissioner and the commissioner of taxation and 28 finance. 29 2. There is hereby established an economic development audit board 30 consisting of four members. One representative shall be appointed from 31 each of the following: 32 (a) the speaker of the assembly; 33 (b) the minority leader of the assembly; 34 (c) the temporary president of the senate; and 35 (d) the minority leader of the senate. 36 3. The economic development board shall: 37 (a) approve the selection of the nationally recognized entity 38 described in subdivision one of this section, priority for such entity 39 shall be given to firms that are not current vendors doing business with 40 the state; 41 (b) oversee the required reports described in subdivision five of this 42 section; and 43 (c) assist in the determination of areas of inquiry for, review the 44 progress of, and evaluate the results of such required reports. 45 4. The economic development audit board in consultation with the comp- 46 troller, the commissioner, and the commissioner of taxation and finance 47 shall develop all necessary rules and regulations to conduct an audit of 48 economic development programs pursuant to this section. Following the 49 review and audit of such economic development programs, the board shall 50 recommend all necessary changes to make such economic development 51 programs more transparent, streamlined, and to ensure that such programs 52 are meeting the goals of the laws that established them and providing 53 for a return on investment to the state. The results of this audit shall 54 be filed with the governor, the temporary president of the senate, theA. 5657--A 7 1 minority leader of the senate, the speaker of the assembly and the 2 minority leader of the assembly and made available for public review 3 online. 4 5. After the conclusion of the audit, the board in consultation with 5 the comptroller, the commissioner and the commissioner of taxation and 6 finance shall study the feasibility of reducing the number of economic 7 development programs currently offered by the state and its subsidiaries 8 and replacing these programs with one centralized competitive program. A 9 report of the study, outlining the impact of such consolidation of 10 programs shall be posted online for public review and filed with the 11 governor, the temporary president of the senate, the minority leader of 12 the senate, the speaker of the assembly and the minority leader of the 13 assembly within one year after the chapter of the laws of two thousand 14 seventeen that added this section takes effect. 15 § 2. This act shall take effect immediately. 16 PART F 17 Section 1. Paragraph (c) of subdivision 17 of section 73 of the public 18 officers law, as added by chapter 14 of the laws of 2007, is amended to 19 read as follows: 20 (c) (i) No state officer or employee shall, directly or indirectly, 21 use his or her official authority to compel or induce any other state 22 officer or employee to make or promise to make any political contrib- 23 ution, whether by gift of money, service or other thing of value. 24 (ii) No officer, appointed by one or more state officers, or by the 25 legislature, including but not limited to appointees to a commission, 26 board, council or panel, charged with the distribution of state lump sum 27 appropriations, as defined by subdivision twenty-one of section two of 28 the state finance law, shall not make any political contributions to 29 such appointing authority. This contribution prohibition shall also 30 apply to anyone residing in the appointee's household including, but not 31 limited to, a spouse, domestic partner and/or child. Such contribution 32 prohibition shall be for the term of one year prior to, one year follow- 33 ing, and during the term of his or her appointment. When an individual 34 is appointed to such a position, the appointee must identify any 35 contributions made to the appointing authority, and the appointing 36 authority must refund the entire contribution made within the previous 37 twelve month period. 38 § 2. The election law is amended by adding a new section 14-133 to 39 read as follows: 40 § 14-133. Contributions by appointed party officers. Any appointed 41 party officer, including but not limited to appointees to a commission, 42 board, council or panel charged with the distribution of state lump sum 43 appropriations, as defined by subdivision twenty-one of section two of 44 the state finance law, shall not make any political contributions to 45 such appointing authority. This contribution prohibition shall also 46 apply to anyone residing in the appointee's household including, but not 47 limited to, a spouse, domestic partner and/or child. Such contribution 48 prohibition shall be for the term of one year prior to, one year follow- 49 ing, and during the term of his or her appointment. When an individual 50 is appointed to such a position, the appointee must identify any 51 contributions made to the appointing authority, and the appointing 52 authority must refund the entire contribution made within the previous 53 twelve month period. 54 § 3. This act shall take effect immediately.A. 5657--A 8 1 PART G 2 Section 1. The public authorities law is amended by adding a new 3 section 2882 to read as follows: 4 § 2882. Third party contracting prohibited. 1. No state authority 5 shall enter into a contract or agreement or extend an existing contract 6 or agreement with another entity, unless authorized by special act of 7 the legislature, (i) where the exclusive or primary role of such entity 8 under the contract or agreement is to procure goods or services of any 9 kind, including, but not limited to, public work, construction, alter- 10 ations, or improvements to public facilities, grant contracts, employ- 11 ment contracts, revenue or concession contracts, the exchange of 12 personal or real property, the exchange of services, or any combination 13 thereof through a contract or agreement with a third party and (ii) 14 where such entity is acting as a procurement conduit, rather than being 15 directly responsible for the goods or services. 16 2. The comptroller may promulgate such rules and regulations as may be 17 necessary to enforce this section, including the standards for determin- 18 ing whether a contract is prohibited by this section. 19 § 2. This act shall take effect immediately and shall apply to 20 contracts entered into on and after such date. 21 § 3. Severability clause. If any clause, sentence, paragraph, subdivi- 22 sion, section or part of this act shall be adjudged by any court of 23 competent jurisdiction to be invalid, such judgment shall not affect, 24 impair, or invalidate the remainder thereof, but shall be confined in 25 its operation to the clause, sentence, paragraph, subdivision, section 26 or part thereof directly involved in the controversy in which such judg- 27 ment shall have been rendered. It is hereby declared to be the intent of 28 the legislature that this act would have been enacted even if such 29 invalid provisions had not been included herein. 30 § 4. This act shall take effect immediately provided, however, that 31 the applicable effective date of Parts A through G of this act shall be 32 as specifically set forth in the last section of such Parts.