NY State Senate Bill 2025-S4039

Senate Bill S4039

2025-2026 Legislative Session

Prohibits certain persons from receiving compensation for legal fees, consulting, or other work performed for an industrial development agency or an economic assistance corporation

download bill text pdf

Current Bill Status - In Senate Committee Ethics And Internal Governance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 31, 2025	referred to ethics and internal governance

2025-S4039 (ACTIVE) - Details

Current Committee:: Senate Ethics And Internal Governance
Law Section:: Public Officers Law
Laws Affected:: Amd §73, Pub Off L; amd §2825, Pub Auth L; amd §801, Gen Muni L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S7555
2021-2022: S1543
2023-2024: S3310

2025-S4039 (ACTIVE) - Summary

Prohibits certain persons from receiving compensation for legal fees, consulting, or other work performed for an industrial development agency, an economic assistance corporation or state or local authority.

2025-S4039 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S4039

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

 
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 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: 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: 57555, 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

2025-S4039 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4039
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             January 31, 2025
                                ___________
 
 Introduced  by  Sen. SKOUFIS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Ethics and Internal Gover-
   nance
 
 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
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraphs (a) and (b) of subdivision 7 of  section  73  of
 the  public officers   law, as amended by section 3 of part K of chapter
 286 of the laws of 2016, are amended to read as follows:
   (a) No statewide elected official, or state officer or employee, other
 than in the proper discharge of official  state  or  local  governmental
 duties,  or  member of the legislature or legislative employee, or poli-
 tical party [chairman] CHAIR shall receive, directly or  indirectly,  or
 enter  into  any  agreement express or implied for, any compensation, in
 whatever form, for the appearance or rendition of services by  [himself,
 herself] THEMSELF or another in relation to any case, proceeding, appli-
 cation  or  other  matter before a state agency where such appearance or
 rendition of services is in connection with:
   (i) the purchase, sale, rental or lease of  real  property,  goods  or
 services, or a contract therefor, from, to or with any such agency;
   (ii) any proceeding relating to rate making;
   (iii)  the  adoption  or  repeal  of any rule or regulation having the
 force and effect of law;
   (iv) the obtaining of grants of money or loans;
   (v) licensing; [or]
   (vi) any proceeding relating to a franchise provided for in the public
 service law[.]; OR

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07904-01-5

 S. 4039                             2
 
   (VII) LEGAL SERVICES, CONSULTING, OR ANY OTHER CONTRACTUAL EXPENDITURE
 FOR SERVICES, WHETHER ACTUALLY PERFORMED OR NOT FROM  A  STATE  OR LOCAL
 AUTHORITY IF SUCH STATEWIDE ELECTED OFFICIAL, STATE OFFICER  OR  EMPLOY-
 EE,   MEMBER   OF   THE  LEGISLATURE, LEGISLATIVE EMPLOYEE  OR POLITICAL
 PARTY  CHAIR:  (A)  IS DIRECTLY CONTRACTED BY A STATE OR LOCAL AUTHORITY
 FOR THE RELATED SERVICES; (B) OWNS OR CONTROLS  DIRECTLY  OR  INDIRECTLY
 TEN  PER  CENTUM  OR MORE OF STOCK IN A  CORPORATION THAT  IS CONTRACTED
 BY  A  STATE  OR  LOCAL  AUTHORITY FOR THE RELATED SERVICES; OR (C) OWNS
 OR CONTROLS TEN PER CENTUM OR MORE OF THE  CAPITAL,  PROFITS, OR   BENE-
 FICIAL  INTEREST  IN A FIRM OR ASSOCIATION THAT IS CONTRACTED BY A STATE
 OR LOCAL AUTHORITY FOR THE RELATED SERVICES.
   (b) No political party [chairman] CHAIR in a county wholly included in
 a city having a population of one million or more shall receive, direct-
 ly or indirectly, or enter into any agreement express  or  implied  for,
 any  compensation,  in whatever form, for the appearance or rendition of
 services by [himself, herself] THEMSELF or another in  relation  to  any
 case,  proceeding,  application  or  other matter before any city agency
 where such appearance or rendition of services is in connection with:
   (i) the purchase, sale, rental or lease of  real  property,  goods  or
 services, or a contract therefor, from, to or with any such agency;
   (ii) any proceeding relating to ratemaking;
   (iii)  the  adoption  or  repeal  of any rule or regulation having the
 force and effect of law;
   (iv) the obtaining of grants of money or loans;
   (v) licensing. For purposes of this paragraph,  the  term  "licensing"
 shall  mean  any  city  agency  activity  respecting  the grant, denial,
 renewal, revocation,  enforcement,  suspension,  annulment,  withdrawal,
 recall,  cancellation or amendment of a license, permit or other form of
 permission conferring the right or privilege to engage in (i) a  profes-
 sion, trade, or occupation or (ii) any business or activity regulated by
 a  regulatory  agency  of  a  city  agency  which in the absence of such
 license, permit or other form of permission would be prohibited; [and]
   (vi) any proceeding relating to a franchise[.]; AND
   (VII) LEGAL SERVICES, CONSULTING, OR ANY OTHER CONTRACTUAL EXPENDITURE
 FOR SERVICES, WHETHER ACTUALLY PERFORMED OR NOT FROM A  STATE  OR  LOCAL
 AUTHORITY  IF SUCH POLITICAL  PARTY CHAIR: (A) IS DIRECTLY CONTRACTED BY
 A STATE OR LOCAL  AUTHORITY  FOR  THE  RELATED  SERVICES;  (B)  OWNS  OR
 CONTROLS  DIRECTLY  OR  INDIRECTLY  TEN PER CENTUM OR MORE OF STOCK IN A
 CORPORATION THAT IS  CONTRACTED BY A STATE  OR LOCAL AUTHORITY  FOR  THE
 RELATED  SERVICES; OR (C) OWNS OR CONTROLS TEN PER CENTUM OR MORE OF THE
 CAPITAL, PROFITS, OR BENEFICIAL INTEREST IN A FIRM OR  ASSOCIATION  THAT
 IS CONTRACTED BY A STATE OR LOCAL AUTHORITY FOR THE RELATED SERVICES.
   §  2.  Subdivision 1 of section 2825 of the public authorities law, as
 amended by chapter 766 of the laws  of  2005,  is  amended  to  read  as
 follows:
   1.  No  public officer or employee shall be ineligible for appointment
 as a trustee or member of the governing body of a state or local author-
 ity, as defined in section two of this chapter, and any  public  officer
 or  employee  may  accept  such appointment and serve as such trustee or
 member without forfeiture of any other  public  office  or  position  of
 public  employment  by  reason  thereof.  PROVIDED, NO STATEWIDE ELECTED
 OFFICIAL, STATE OFFICER OR EMPLOYEE, MEMBER OF THE LEGISLATURE, LEGISLA-
 TIVE EMPLOYEE OR POLITICAL PARTY CHAIR AS DEFINED IN  SECTIONS  SEVENTY-
 THREE  AND  SEVENTY-THREE-A  OF  THE  PUBLIC  OFFICERS LAW SHALL RECEIVE
 COMPENSATION FOR  LEGAL  FEES,  CONSULTING,  OR  ANY  OTHER  CONTRACTUAL
 EXPENDITURE  FOR  SERVICES,  WHETHER  ACTUALLY  PERFORMED OR NOT, FROM A
 S. 4039                             3
 
 STATE OR LOCAL AUTHORITY IF   SUCH  STATEWIDE  ELECTED  OFFICIAL,  STATE
 OFFICER  OR EMPLOYEE, MEMBER OF THE LEGISLATURE, LEGISLATIVE EMPLOYEE OR
 POLITICAL PARTY CHAIR: (I) IS DIRECTLY CONTRACTED BY A  STATE  OR  LOCAL
 AUTHORITY  FOR  THE  RELATED SERVICES; (II) OWNS OR CONTROLS DIRECTLY OR
 INDIRECTLY TEN PER CENTUM OR MORE OF STOCK IN A CORPORATION OR  THAT  IS
 CONTRACTED  BY  A  STATE OR LOCAL AUTHORITY FOR THE RELATED SERVICES; OR
 (III) OWNS OR CONTROLS TEN PER CENTUM OR MORE OF THE  CAPITAL,  PROFITS,
 OR  BENEFICIAL INTEREST IN A FIRM OR ASSOCIATION THAT IS CONTRACTED BY A
 STATE OR LOCAL AUTHORITY FOR THE RELATED SERVICES.
   § 3. Section 801 of the general municipal law, as amended  by  chapter
 1043 of the laws of 1965, is amended to read as follows:
   § 801. Conflicts of interest prohibited. Except as provided in section
 eight  hundred two of this chapter, (1) no municipal officer or employee
 shall have an interest in any contract with the  municipality  of  which
 [he  is] THEY ARE an officer or employee, when such officer or employee,
 individually or as a member of a board, has the power  or  duty  to  (a)
 negotiate,  prepare,  authorize  or approve the contract or authorize or
 approve payment thereunder (b) audit bills or claims under the contract,
 or (c) appoint an officer or employee who  has  any  of  the  powers  or
 duties set forth above [and], (2) no chief fiscal officer, treasurer, or
 [his]  THEIR  deputy  or  employee,  shall have an interest in a bank or
 trust company designated as a  depository,  paying  agent,  registration
 agent  or  for  investment of funds of the municipality of which [he is]
 THEY ARE an officer or employee, AND  (3)  NO  MUNICIPAL  OFFICER  SHALL
 RECEIVE COMPENSATION FOR LEGAL FEES, CONSULTING, OR ANY OTHER CONTRACTU-
 AL  EXPENDITURE  FOR SERVICES, WHETHER ACTUALLY PERFORMED OR NOT, FROM A
 STATE OR LOCAL AUTHORITY IF   SUCH MUNICIPAL OFFICER:  (A)  IS  DIRECTLY
 CONTRACTED  BY  A STATE OR LOCAL AUTHORITY FOR THE RELATED SERVICES, (B)
 OWNS OR CONTROLS DIRECTLY OR INDIRECTLY TEN PERCENT OR MORE OF STOCK  IN
 A  CORPORATION  THAT IS CONTRACTED BY A STATE OR LOCAL AUTHORITY FOR THE
 RELATED SERVICES, OR (C) OWNS OR CONTROLS TEN PERCENT  OR  MORE  OF  THE
 CAPITAL,  PROFITS,  OR BENEFICIAL INTEREST IN A FIRM OR ASSOCIATION THAT
 IS CONTRACTED BY A STATE OR LOCAL AUTHORITY FOR  THE  RELATED  SERVICES.
 The  provisions  of  this  section  shall  in  no  event be construed to
 preclude the payment of lawful compensation and  necessary  expenses  of
 any  municipal  officer  or  employee in one or more positions of public
 employment, the holding of which is not prohibited by law.
   § 4. This act shall take effect immediately, and  apply  to  contracts
 entered into on or after such effective date.

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