S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    25
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 4, 2017
                                ___________
 
 Introduced  by  Sens.  HOYLMAN,  GIANARIS,  KENNEDY,  KRUEGER,  PERKINS,
   RIVERA, SERRANO, STAVISKY -- read twice and ordered printed, and  when
   printed to be committed to the Committee on Investigations and Govern-
   ment Operations

 AN  ACT to amend the legislative law, in relation to prohibiting members
   of the legislature from receiving certain income and establishing  the
   commission on legislative compensation
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The legislative law is amended by adding two  new  sections
 5-b and 5-c to read as follows:
   §  5-B. PROHIBITION ON OUTSIDE EARNED INCOME FOR MEMBERS. 1.  STARTING
 IN CALENDAR YEAR TWO THOUSAND EIGHTEEN, A MEMBER OF THE LEGISLATURE  MAY
 NOT  HAVE  OUTSIDE EARNED INCOME ATTRIBUTABLE TO SUCH YEAR WHICH EXCEEDS
 FIFTEEN PERCENT OF THE GROSS ANNUAL SALARY OF MEMBERS  OF  THE  LEGISLA-
 TURE, PURSUANT TO SECTION FIVE OF THIS ARTICLE.
   2.  A.  FOR  THE  PURPOSES  OF  THIS SECTION, THE TERM "OUTSIDE EARNED
 INCOME" INCLUDES, BUT IS NOT LIMITED  TO,  WAGES,  SALARIES,  FEES,  AND
 OTHER FORMS OF COMPENSATION FOR SERVICES ACTUALLY RENDERED.
   B.  FOR THE PURPOSES OF THIS SECTION, THE TERM "OUTSIDE EARNED INCOME"
 DOES NOT INCLUDE:
   (1) SALARY, BENEFITS, AND ALLOWANCES PAID BY NEW YORK STATE;
   (2) INCOME ATTRIBUTABLE TO  SERVICE  WITH  THE  MILITARY  RESERVES  OR
 NATIONAL GUARD;
   (3) INCOME FROM PENSIONS AND OTHER CONTINUING BENEFITS ATTRIBUTABLE TO
 PREVIOUS EMPLOYMENT OR SERVICES;
   (4) INCOME FROM INVESTMENT ACTIVITIES, WHERE THE MEMBER'S SERVICES ARE
 NOT A MATERIAL FACTOR IN THE PRODUCTION OF INCOME;

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05112-01-7
              

 S. 25                               2
 
   (5) INCOME FROM A TRADE OR BUSINESS IN WHICH THE MEMBER OR THEIR FAMI-
 LY  HOLDS  A CONTROLLING INTEREST, WHERE THE MEMBER'S SERVICES ARE NOT A
 MATERIAL FACTOR IN THE PRODUCTION OF INCOME;
   (6)  COPYRIGHT  ROYALTIES, FEES, AND THEIR FUNCTIONAL EQUIVALENT, FROM
 THE USE OR SALE OF COPYRIGHT, PATENT AND SIMILAR FORMS  OF  INTELLECTUAL
 PROPERTY  RIGHTS,  WHEN RECEIVED FROM ESTABLISHED USERS OR PURCHASERS OF
 THOSE RIGHTS; AND
   (7) COMPENSATION FOR  SERVICES  ACTUALLY  RENDERED  PRIOR  TO  JANUARY
 FIRST,  TWO THOUSAND EIGHTEEN, OR PRIOR TO BEING SWORN IN AS A MEMBER OF
 THE LEGISLATURE.
   3.   NOTWITHSTANDING ANY OTHER PROVISIONS  OF  LAW  TO  THE  CONTRARY,
 MEMBERS OF THE LEGISLATURE ARE PROHIBITED FROM:
   A.  RECEIVING COMPENSATION FOR AFFILIATING WITH OR BEING EMPLOYED BY A
 FIRM,  PARTNERSHIP,  ASSOCIATION,  CORPORATION,  OR  OTHER  ENTITY  THAT
 PROVIDES  PROFESSIONAL  SERVICES  INVOLVING  A  FIDUCIARY  RELATIONSHIP,
 EXCEPT FOR THE PRACTICE OF MEDICINE;
   B. PERMITTING THEIR NAME TO BE USED BY SUCH A FIRM, PARTNERSHIP, ASSO-
 CIATION, CORPORATION, OR OTHER ENTITY;
   C. RECEIVING COMPENSATION FOR PRACTICING A PROFESSION THAT INVOLVES  A
 FIDUCIARY RELATIONSHIP EXCEPT FOR THE PRACTICE OF MEDICINE;
   D.  RECEIVING  COMPENSATION AS AN OFFICER OR MEMBER OF THE BOARD OF AN
 ASSOCIATION, CORPORATION, OR OTHER ENTITY;
   E. RECEIVING COMPENSATION FOR TEACHING, WITHOUT PRIOR NOTIFICATION  TO
 AND APPROVAL FROM THE LEGISLATIVE ETHICS COMMISSION;
   F.  RECEIVING ADVANCE PAYMENTS ON COPYRIGHT ROYALTIES, FEES, AND THEIR
 FUNCTIONAL EQUIVALENTS.
   4. A MEMBER OF THE LEGISLATURE WHO KNOWINGLY  AND  WILLFULLY  VIOLATES
 THE PROVISIONS OF THIS SECTION SHALL BE SUBJECT TO A CIVIL PENALTY IN AN
 AMOUNT  NOT  TO  EXCEED  FORTY  THOUSAND  DOLLARS. ASSESSMENT OF A CIVIL
 PENALTY SHALL BE MADE BY THE LEGISLATIVE ETHICS COMMISSION. THE LEGISLA-
 TIVE ETHICS COMMISSION, ACTING PURSUANT TO SUBDIVISION ELEVEN OF SECTION
 EIGHTY OF THE LEGISLATIVE LAW, MAY, IN LIEU OF OR IN ADDITION TO A CIVIL
 PENALTY, REFER A VIOLATION TO THE APPROPRIATE PROSECUTOR AND  UPON  SUCH
 CONVICTION,  BUT  ONLY  AFTER  SUCH  REFERRAL,  SUCH  VIOLATION SHALL BE
 PUNISHABLE AS A CLASS A MISDEMEANOR.
   § 5-C. COMMISSION ON LEGISLATIVE COMPENSATION.   1. ON  THE  FIRST  OF
 APRIL  OF  EVERY FOURTH YEAR, COMMENCING APRIL FIRST, TWO THOUSAND EIGH-
 TEEN, THERE SHALL BE ESTABLISHED FOR SUCH YEAR A COMMISSION ON  LEGISLA-
 TIVE  COMPENSATION  TO  EXAMINE,  EVALUATE AND MAKE RECOMMENDATIONS WITH
 RESPECT TO ADEQUATE LEVELS OF COMPENSATION AND NON-SALARY  BENEFITS  FOR
 MEMBERS  OF  THE STATE LEGISLATURE. IN ACCORDANCE WITH THE PROVISIONS OF
 THIS SECTION, THE COMMISSION SHALL:
   A. EXAMINE THE PREVAILING ADEQUACY OF PAY LEVELS AND NON-SALARY  BENE-
 FITS  RECEIVED BY MEMBERS OF THE STATE LEGISLATURE AND DETERMINE WHETHER
 ANY OF SUCH PAY LEVELS WARRANT ADJUSTMENT; AND
   B. DETERMINE WHETHER, FOR ANY OF THE  FOUR  YEARS  COMMENCING  ON  THE
 FIRST OF APRIL OF SUCH YEARS, FOLLOWING THE YEAR IN WHICH THE COMMISSION
 IS  ESTABLISHED, THE ANNUAL SALARIES FOR THE MEMBERS OF THE STATE LEGIS-
 LATURE WARRANT ADJUSTMENT.
   IN DISCHARGING ITS RESPONSIBILITIES UNDER PARAGRAPHS A AND B  OF  THIS
 SUBDIVISION,  THE  COMMISSION  SHALL  TAKE  INTO ACCOUNT ALL APPROPRIATE
 FACTORS INCLUDING, BUT NOT LIMITED TO:  THE  OVERALL  ECONOMIC  CLIMATE;
 RATES  OF  INFLATION;  CHANGES  IN PUBLIC-SECTOR SPENDING; THE LEVELS OF
 COMPENSATION AND  NON-SALARY  BENEFITS  RECEIVED  BY  JUDGES,  EXECUTIVE
 BRANCH  OFFICIALS  AND  LEGISLATORS  OF  OTHER STATES AND OF THE FEDERAL
 GOVERNMENT; THE LEVELS OF COMPENSATION AND NON-SALARY BENEFITS  RECEIVED

 S. 25                               3
 
 BY  PROFESSIONALS  IN  GOVERNMENT,  ACADEMIA  AND  PRIVATE AND NONPROFIT
 ENTERPRISE; AND THE STATE'S ABILITY TO FUND  INCREASES  IN  COMPENSATION
 AND NON-SALARY BENEFITS.
   2.  THE  COMMISSION  SHALL  CONSIST OF NINE MEMBERS TO BE APPOINTED AS
 FOLLOWS: THREE  SHALL  BE  APPOINTED  BY  THE  GOVERNOR;  ONE  SHALL  BE
 APPOINTED  BY  THE  TEMPORARY  PRESIDENT  OF  THE  SENATE;  ONE SHALL BE
 APPOINTED BY THE SPEAKER OF THE ASSEMBLY; ONE SHALL BE APPOINTED BY  THE
 SENATE  MINORITY LEADER; ONE SHALL BE APPOINTED BY THE ASSEMBLY MINORITY
 LEADER; AND TWO SHALL BE APPOINTED BY THE STATE COMPTROLLER. THE MEMBERS
 APPOINTED SHALL NOT BE EMPLOYEES OF THE STATE OR ANY POLITICAL  SUBDIVI-
 SION  THEREOF.  THE GOVERNOR SHALL DESIGNATE THE CHAIR OF THE COMMISSION
 FROM AMONG THE MEMBERS SO APPOINTED.  VACANCIES IN THE COMMISSION  SHALL
 BE  FILLED  IN  THE  SAME MANNER AS ORIGINAL APPOINTMENTS. TO THE EXTENT
 PRACTICABLE, MEMBERS OF THE COMMISSION SHALL HAVE EXPERIENCE IN  ONE  OR
 MORE  OF  THE  FOLLOWING: DETERMINATION OF EXECUTIVE COMPENSATION, HUMAN
 RESOURCE ADMINISTRATION AND FINANCIAL MANAGEMENT.
   3. THE COMMISSION MAY MEET WITHIN AND  WITHOUT  THE  STATE,  MAY  HOLD
 PUBLIC HEARINGS AND SHALL HAVE ALL THE POWERS OF A LEGISLATIVE COMMITTEE
 PURSUANT TO THIS CHAPTER.
   4.  THE  MEMBERS  OF  THE COMMISSION SHALL RECEIVE NO COMPENSATION FOR
 THEIR SERVICES BUT SHALL BE ALLOWED THEIR ACTUAL AND NECESSARY  EXPENSES
 INCURRED IN THE PERFORMANCE OF THEIR DUTIES HEREUNDER.
   5. TO THE MAXIMUM EXTENT FEASIBLE, THE COMMISSION SHALL BE ENTITLED TO
 REQUEST  AND RECEIVE AND SHALL UTILIZE AND BE PROVIDED WITH SUCH FACILI-
 TIES, RESOURCES AND DATA OF  ANY  COURT,  DEPARTMENT,  DIVISION,  BOARD,
 BUREAU, COMMISSION, AGENCY OR PUBLIC AUTHORITY OF THE STATE OR ANY POLI-
 TICAL SUBDIVISION THEREOF AS IT MAY REASONABLY REQUEST TO PROPERLY CARRY
 OUT ITS POWERS AND DUTIES PURSUANT TO THIS SECTION.
   6.  THE  COMMISSION MAY REQUEST, AND SHALL RECEIVE, REASONABLE ASSIST-
 ANCE FROM STATE AGENCY PERSONNEL AS NECESSARY FOR THE PERFORMANCE OF ITS
 FUNCTIONS.
   7. THE COMMISSION SHALL MAKE A REPORT TO THE GOVERNOR, THE STATE COMP-
 TROLLER AND THE LEGISLATURE OF ITS FINDINGS, CONCLUSIONS, DETERMINATIONS
 AND RECOMMENDATIONS, IF ANY, NOT LATER THAN ONE HUNDRED FIFTY DAYS AFTER
 ITS ESTABLISHMENT. EACH RECOMMENDATION MADE TO IMPLEMENT A DETERMINATION
 PURSUANT TO PARAGRAPH B OF SUBDIVISION ONE OF THIS  SECTION  SHALL  HAVE
 THE FORCE OF LAW, AND SHALL SUPERSEDE INCONSISTENT PROVISIONS OF SECTION
 FIVE  OF  THIS ARTICLE, UNLESS MODIFIED OR ABROGATED BY STATUTE PRIOR TO
 APRIL FIRST OF THE YEAR AS TO WHICH SUCH DETERMINATION APPLIES.
   8. UPON THE MAKING OF ITS REPORT AS PROVIDED IN SUBDIVISION  SEVEN  OF
 THIS SECTION, EACH COMMISSION ESTABLISHED PURSUANT TO THIS SECTION SHALL
 BE DEEMED DISSOLVED.
   9. NOTWITHSTANDING THE PROVISIONS OF THIS SECTION OR OF ANY OTHER LAW,
 EACH INCREASE IN SALARY OR COMPENSATION OF ANY MEMBER OF THE LEGISLATURE
 PROVIDED BY THIS SECTION SHALL BE ADDED TO THE SALARY OR COMPENSATION OF
 SUCH  MEMBER  AT  THE  BEGINNING OF THAT PAYROLL PERIOD THE FIRST DAY OF
 WHICH IS NEAREST TO THE EFFECTIVE DATE OF SUCH INCREASE AS  PROVIDED  IN
 THIS  SECTION, OR AT THE BEGINNING OF THE EARLIER OF TWO PAYROLL PERIODS
 THE FIRST DAYS OF WHICH ARE NEAREST BUT EQUALLY NEAR  TO  THE  EFFECTIVE
 DATE  OF  SUCH  INCREASE AS PROVIDED IN THIS SECTION; PROVIDED, HOWEVER,
 THE PAYMENT OF SUCH SALARY INCREASE PURSUANT TO THIS SECTION ON  A  DATE
 PRIOR  THERETO  INSTEAD  OF ON SUCH EFFECTIVE DATE, SHALL NOT OPERATE TO
 CONFER ANY ADDITIONAL SALARY RIGHTS OR BENEFITS ON SUCH MEMBER.
   10. THE ANNUAL SALARIES AS PRESCRIBED PURSUANT TO THIS SECTION FOR THE
 MEMBERS OF THE STATE  LEGISLATURE  WHENEVER  ADJUSTED  PURSUANT  TO  THE

 S. 25                               4
 
 PROVISIONS  OF THIS SECTION, SHALL BE ROUNDED UP TO THE NEAREST MULTIPLE
 OF ONE HUNDRED DOLLARS.
   §  2. Subdivision 7 of section 80 of the legislative law is amended by
 adding a new paragraph f-1 to read as follows:
   F-1. PROMULGATE GUIDELINES FOR MEMBERS OF THE LEGISLATURE  TO  REQUEST
 PERMISSION  FROM THE COMMISSION TO ACCEPT COMPENSATION FOR TEACHING, AND
 PROMULGATE GUIDELINES FOR THE COMMISSION TO EVALUATE AND ISSUE A  DETER-
 MINATION FOR SUCH REQUESTS.
   §  3.  Paragraph (a) of subdivision 9 of section 80 of the legislative
 law, as amended by section 9 of part A of chapter 399  of  the  laws  of
 2011, is amended to read as follows:
   (a)  An  individual subject to the jurisdiction of the commission with
 respect to the imposition of penalties who knowingly  and  intentionally
 violates  the  provisions  of  subdivisions  two  through five-a, seven,
 eight, twelve, fourteen or  fifteen  of  section  seventy-three  of  the
 public  officers  law  OR  SECTION  FIVE-B  OF  THE LEGISLATIVE LAW or a
 reporting individual who knowingly and wilfully fails to file an  annual
 statement  of  financial  disclosure  or who knowingly and wilfully with
 intent to deceive makes a false statement  or  gives  information  which
 such individual knows to be false on such statement of financial disclo-
 sure  filed  pursuant  to section seventy-three-a of the public officers
 law 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 as a result of such violation. Any such individual who knowing-
 ly and intentionally violates the provisions of paragraph a, b, c, d, e,
 g, or i of subdivision three of section seventy-four of the public offi-
 cers  law shall be subject to a civil penalty in an amount not to exceed
 ten thousand dollars and the value of any gift, compensation or  benefit
 received  as  a  result of such violation. Assessment of a civil penalty
 hereunder shall be made  by  the  commission  with  respect  to  persons
 subject to its jurisdiction. In assessing the amount of the civil penal-
 ties to be imposed, the commission shall consider the seriousness of the
 violation, the amount of gain to the individual and whether the individ-
 ual  previously  had any civil or criminal penalties imposed pursuant to
 this section, and any other factors the  commission  deems  appropriate.
 For  a  violation  of this section, other than for conduct which consti-
 tutes a violation of subdivision twelve, fourteen or fifteen of  section
 seventy-three  or  section  seventy-four of the public officers law, the
 legislative ethics commission may, in lieu of or in addition to a  civil
 penalty,  refer  a violation to the appropriate prosecutor and upon such
 conviction, but only  after  such  referral,  such  violation  shall  be
 punishable  as  a class A misdemeanor. Where the commission finds suffi-
 cient cause, it shall refer such matter to the appropriate prosecutor. A
 civil penalty for false filing may not be imposed hereunder in the event
 a category of "value" or "amount" reported hereunder is incorrect unless
 such reported information is falsely  understated.  Notwithstanding  any
 other provision of law to the contrary, no other penalty, civil or crim-
 inal  may  be  imposed  for a failure to file, or for a false filing, of
 such statement, or a violation of subdivision six  of  section  seventy-
 three  of  the public officers law, except that the appointing authority
 may impose disciplinary action as otherwise provided by law. The  legis-
 lative  ethics  commission  shall  be  deemed to be an agency within the
 meaning of article three of the state administrative procedure  act  and
 shall  adopt rules governing the conduct of adjudicatory proceedings and
 appeals taken pursuant to a proceeding commenced under article  seventy-
 eight  of the civil practice law and rules relating to the assessment of

 S. 25                               5
 
 the civil penalties herein authorized. Such rules, which  shall  not  be
 subject to the promulgation and hearing requirements of the state admin-
 istrative  procedure act, shall provide for due process procedural mech-
 anisms  substantially  similar  to those set forth in such article three
 but such mechanisms need not be identical in terms or scope.  Assessment
 of  a civil penalty shall be final unless modified, suspended or vacated
 within thirty days of imposition, with respect to the assessment of such
 penalty, or unless such denial of request is reversed within  such  time
 period,  and  upon  becoming  final  shall  be  subject to review at the
 instance of the affected reporting individuals in a proceeding commenced
 against the legislative ethics commission, pursuant to article  seventy-
 eight of the civil practice law and rules.
   § 4. This act shall take effect January 1, 2018.