S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8232
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              August 25, 2021
                                ___________
 
 Introduced  by M. of A. WALLACE -- read once and referred to the Commit-
   tee on Governmental Operations
 
 AN ACT to amend the legislative law, the public  officers  law  and  the
   executive  law,  in relation to prohibiting members of the legislature
   and statewide elected officials from receiving certain income

   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 a new section 5-b
 to read as follows:
   § 5-B. PROHIBITION ON OUTSIDE EARNED INCOME FOR MEMBERS. 1.   STARTING
 IN  CALENDAR YEAR TWO THOUSAND TWENTY-THREE, 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
 LEGISLATURE, 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;
   (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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD11672-02-1

 A. 8232                             2
 
 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 TWENTY-THREE, 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 THIS CHAPTER, MAY, IN LIEU OF OR IN ADDITION TO A CIVIL PENAL-
 TY, 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.
   § 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 THIS  CHAPTER  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 individ-
 ual  knows  to  be false on such statement of financial disclosure 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 knowingly  and  inten-
 tionally  violates the provisions of paragraph a, b, c, d, e, g, or i of
 subdivision three of section seventy-four of  the  public  officers  law
 shall be subject to a civil penalty in an amount not to exceed ten thou-
 sand dollars and the value of any gift, compensation or benefit received

 A. 8232                             3
 
 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 penalties to be
 imposed, the commission shall consider the seriousness of the violation,
 the  amount  of gain to the individual and whether the individual previ-
 ously 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  constitutes  a
 violation  of  subdivision twelve, fourteen or fifteen of section seven-
 ty-three or section seventy-four of the public officers law, the  legis-
 lative  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
 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. Subdivision 3 of section 74 of the public officers law is amended
 by adding a new paragraph j to read as follows:
   J. (I) STARTING IN CALENDAR YEAR TWO THOUSAND TWENTY-THREE, NO OFFICER
 ELECTED  TO  A STATEWIDE OFFICE WITHIN THE STATE MAY HAVE OUTSIDE EARNED
 INCOME ATTRIBUTABLE TO SUCH YEAR WHICH EXCEEDS FIFTEEN PERCENT OF  THEIR
 GROSS ANNUAL SALARY.
   (II)  (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;

 A. 8232                             4
 
   (4) INCOME FROM INVESTMENT ACTIVITIES, WHERE THE MEMBER'S SERVICES ARE
 NOT A MATERIAL FACTOR IN THE PRODUCTION OF INCOME;
   (5)  INCOME  FROM  A  TRADE  OR BUSINESS IN WHICH THE OFFICER OR THEIR
 FAMILY HOLDS A CONTROLLING INTEREST, WHERE THE  OFFICER'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 TWENTY-THREE, OR PRIOR TO BEING SWORN IN AS A STATE-
 WIDE ELECTED OFFICER.
   (C) NOTWITHSTANDING ANY OTHER PROVISIONS OF LAW TO THE CONTRARY, OFFI-
 CERS ELECTED TO A STATEWIDE OFFICE WITHIN THE STATE ARE PROHIBITED FROM:
   (1) 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;
   (2)  PERMITTING  THEIR  NAME  TO  BE USED BY SUCH A FIRM, PARTNERSHIP,
 ASSOCIATION, CORPORATION, OR OTHER ENTITY;
   (3) RECEIVING COMPENSATION FOR PRACTICING A PROFESSION THAT INVOLVES A
 FIDUCIARY RELATIONSHIP EXCEPT FOR THE PRACTICE OF MEDICINE;
   (4) RECEIVING COMPENSATION AS AN OFFICER OR MEMBER OF THE BOARD OF  AN
 ASSOCIATION, CORPORATION, OR OTHER ENTITY;
   (5) RECEIVING COMPENSATION FOR TEACHING, WITHOUT PRIOR NOTIFICATION TO
 AND APPROVAL FROM THE JOINT COMMISSION ON PUBLIC ETHICS; AND
   (6) RECEIVING ADVANCE PAYMENTS ON COPYRIGHT ROYALTIES, FEES, AND THEIR
 FUNCTIONAL EQUIVALENTS.
   (D)  AN  OFFICER  ELECTED  TO  A STATEWIDE OFFICE WITHIN THE STATE 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 JOINT
 COMMISSION ON PUBLIC ETHICS. THE JOINT COMMISSION ON PUBLIC ETHICS, 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. Subdivision 9 of section 94  of the executive law is  amended  by
 adding a new paragraph (o) to read as follows:
   (O)  PROMULGATE  GUIDELINES FOR STATEWIDE ELECTED OFFICIALS 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.
   § 6. Subdivision 14 of section 94 of the executive law, as amended  by
 section  6  of  part A of chapter 399 of the laws of 2011, is amended to
 read as follows:
   14. An individual subject to the jurisdiction of  the  commission  who
 knowingly  and intentionally violates the provisions of subdivisions two
 through five-a, seven, eight, twelve or fourteen  through  seventeen  of
 section  seventy-three  of  the public officers law, section one hundred
 seven of the civil service 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  fraudulent omission or gives information which such indi-
 vidual knows to be false on such statement of financial disclosure 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

 A. 8232                             5
 
 dollars and the value of any gift, compensation or benefit received as a
 result of such violation. An individual who knowingly and  intentionally
 violates  the provisions of paragraph a, b, c, d, e, g, or i of subdivi-
 sion  three  of section seventy-four of the public officers 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.  AN INDIVIDUAL WHO KNOWINGLY AND INTENTIONALLY
 VIOLATES  THE  PROVISIONS OF PARAGRAPH J OF SUBDIVISION THREE OF SECTION
 SEVENTY-FOUR 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.  An  individual subject to the jurisdiction of the commission
 who knowingly and willfully violates article one-A  of  the  legislative
 law  shall  be subject to civil penalty as provided for in that article.
 Except with respect  to  members  of  the  legislature  and  legislative
 employees,  assessment of a civil penalty hereunder shall be made by the
 commission with respect to persons subject  to  its  jurisdiction.  With
 respect  to  a  violation  of any law other than sections seventy-three,
 seventy-three-a, and seventy-four of the public officers law, where  the
 commission  finds  sufficient cause by a vote held in the same manner as
 set forth in paragraph (b) of subdivision thirteen of this  section,  it
 shall refer such matter to the appropriate prosecutor for further inves-
 tigation.  In assessing the amount of the civil penalties to be imposed,
 the commission shall consider the  seriousness  of  the  violation,  the
 amount  of  gain to the individual and whether the individual previously
 had any civil or criminal penalties imposed pursuant  to  this  section,
 and  any  other  factors  the  commission deems appropriate. Except with
 respect to members of the legislature and legislative employees,  for  a
 violation  of this subdivision, other than for conduct which constitutes
 a violation of section one hundred  seven  of  the  civil  service  law,
 subdivisions  twelve  or  fourteen through seventeen of section seventy-
 three or section seventy-four of the  public  officers  law  or  article
 one-A of the legislative law, the commission may, in lieu of or in addi-
 tion to a civil penalty, refer a violation to the appropriate prosecutor
 and  upon such conviction, such violation shall be punishable as a class
 A misdemeanor. A civil penalty for false filing may not be imposed here-
 under 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 criminal 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 commission may refer violations of this subdivision
 to  the  appointing  authority  for  disciplinary  action  as  otherwise
 provided by law. The 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  the  civil  penalties  herein  authorized and commission
 denials of requests for certain deletions or exemptions to be made  from
 a financial disclosure statement as authorized in paragraph (h) or para-
 graph  (i)  of subdivision nine of this section. Such rules, which shall
 not be subject to the approval requirements of the state  administrative
 procedure  act,  shall  provide  for  due  process procedural mechanisms

 A. 8232                             6
 
 substantially similar to those set forth in article three of  the  state
 administrative  procedure  act but such mechanisms need not be identical
 in terms or scope. Assessment of a civil penalty or commission denial of
 such  a  request  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 commission, pursuant to article seventy-eight of  the  civil
 practice law and rules.
   § 7. This act shall take effect January 1, 2023.