A07056 Summary:
BILL NO | A07056A |
  | |
SAME AS | SAME AS S05690-A |
  | |
SPONSOR | Magnarelli |
  | |
COSPNSR | Bronson, Skoufis, Woerner, Zebrowski |
  | |
MLTSPNSR | |
  | |
Amd §34, Gen Muni L | |
  | |
Relates to audits by the state comptroller of certain organizations directly or indirectly controlled by municipal corporations and certain other government entities. |
A07056 Actions:
BILL NO | A07056A | |||||||||||||||||||||||||||||||||||||||||||||||||
  | ||||||||||||||||||||||||||||||||||||||||||||||||||
04/22/2015 | referred to local governments | |||||||||||||||||||||||||||||||||||||||||||||||||
06/02/2015 | reported referred to codes | |||||||||||||||||||||||||||||||||||||||||||||||||
06/08/2015 | reported referred to ways and means | |||||||||||||||||||||||||||||||||||||||||||||||||
06/10/2015 | reported referred to rules | |||||||||||||||||||||||||||||||||||||||||||||||||
06/15/2015 | reported | |||||||||||||||||||||||||||||||||||||||||||||||||
06/15/2015 | rules report cal.373 | |||||||||||||||||||||||||||||||||||||||||||||||||
06/15/2015 | ordered to third reading rules cal.373 | |||||||||||||||||||||||||||||||||||||||||||||||||
06/16/2015 | passed assembly | |||||||||||||||||||||||||||||||||||||||||||||||||
06/16/2015 | delivered to senate | |||||||||||||||||||||||||||||||||||||||||||||||||
06/16/2015 | REFERRED TO RULES | |||||||||||||||||||||||||||||||||||||||||||||||||
01/06/2016 | DIED IN SENATE | |||||||||||||||||||||||||||||||||||||||||||||||||
01/06/2016 | RETURNED TO ASSEMBLY | |||||||||||||||||||||||||||||||||||||||||||||||||
01/06/2016 | ordered to third reading cal.268 | |||||||||||||||||||||||||||||||||||||||||||||||||
02/01/2016 | amended on third reading 7056a | |||||||||||||||||||||||||||||||||||||||||||||||||
03/22/2016 | passed assembly | |||||||||||||||||||||||||||||||||||||||||||||||||
03/22/2016 | delivered to senate | |||||||||||||||||||||||||||||||||||||||||||||||||
03/22/2016 | REFERRED TO LOCAL GOVERNMENT |
A07056 Committee Votes:
Go to topA07056 Floor Votes:
Yes
Abbate
Yes
Corwin
Yes
Goodell
Yes
Lupardo
Yes
Paulin
Yes
Silver
Yes
Abinanti
Yes
Crespo
Yes
Gottfried
Yes
Lupinacci
Yes
Peoples-Stokes
Yes
Simanowitz
Yes
Arroyo
Yes
Crouch
Yes
Graf
Yes
Magee
Yes
Perry
Yes
Simon
Yes
Aubry
Yes
Curran
Yes
Gunther
Yes
Magnarelli
Yes
Persaud
Yes
Simotas
Yes
Barclay
Yes
Cusick
Yes
Hawley
Yes
Malliotakis
Yes
Pichardo
Yes
Skartados
Yes
Barrett
Yes
Cymbrowitz
Yes
Hevesi
Yes
Markey
Yes
Pretlow
Yes
Skoufis
Yes
Barron
Yes
Davila
Yes
Hikind
Yes
Mayer
Yes
Quart
Yes
Solages
Yes
Benedetto
Yes
DenDekker
Yes
Hooper
Yes
McDonald
Yes
Ra
Yes
Stec
Yes
Bichotte
Yes
Dilan
Yes
Jaffee
Yes
McDonough
Yes
Raia
Yes
Steck
Yes
Blake
Yes
Dinowitz
Yes
Jean-Pierre
Yes
McKevitt
Yes
Ramos
Yes
Stirpe
Yes
Blankenbush
No
DiPietro
Yes
Johns
Yes
McLaughlin
Yes
Richardson
Yes
Tedisco
Yes
Borelli
Yes
Duprey
Yes
Joyner
Yes
Miller
Yes
Rivera
Yes
Tenney
Yes
Brabenec
Yes
Englebright
Yes
Kaminsky
Yes
Montesano
Yes
Roberts
Yes
Thiele
Yes
Braunstein
Yes
Fahy
No
Katz
Yes
Morelle
Yes
Robinson
Yes
Titone
Yes
Brennan
Yes
Farrell
Yes
Kavanagh
Yes
Mosley
Yes
Rodriguez
Yes
Titus
Yes
Brindisi
Yes
Finch
Yes
Kearns
Yes
Moya
Yes
Rosenthal
Yes
Walker
Yes
Bronson
Yes
Fitzpatrick
Yes
Kim
Yes
Murray
Yes
Rozic
Yes
Walter
Yes
Brook-Krasny
No
Friend
Yes
Kolb
Yes
Nojay
Yes
Russell
Yes
Weinstein
Yes
Buchwald
Yes
Galef
Yes
Lalor
Yes
Nolan
Yes
Ryan
Yes
Weprin
Yes
Butler
Yes
Gantt
Yes
Lavine
Yes
Oaks
Yes
Saladino
Yes
Woerner
Yes
Cahill
Yes
Garbarino
Yes
Lawrence
Yes
O'Donnell
Yes
Santabarbara
Yes
Wozniak
Yes
Ceretto
Yes
Giglio
Yes
Lentol
Yes
Ortiz
Yes
Schimel
Yes
Wright
ER
Clark
Yes
Gjonaj
Yes
Lifton
Yes
Otis
Yes
Schimminger
Yes
Zebrowski
Yes
Colton
Yes
Glick
Yes
Linares
Yes
Palmesano
Yes
Seawright
Yes
Mr. Speaker
Yes
Cook
Yes
Goldfeder
Yes
Lopez
Yes
Palumbo
Yes
Sepulveda
‡ Indicates voting via videoconference
Yes
Abbate
Yes
Curran
Yes
Gunther
Yes
Lupardo
Yes
Paulin
Yes
Simotas
Yes
Abinanti
Yes
Cusick
Yes
Harris
Yes
Lupinacci
Yes
Peoples-Stokes
Yes
Skartados
Yes
Arroyo
Yes
Cymbrowitz
Yes
Hawley
Yes
Magee
Yes
Perry
Yes
Skoufis
Yes
Aubry
Yes
Davila
Yes
Hevesi
Yes
Magnarelli
Yes
Pichardo
Yes
Solages
Yes
Barclay
Yes
DenDekker
Yes
Hikind
No
Malliotakis
Yes
Pretlow
Yes
Stec
Yes
Barrett
Yes
Dilan
Yes
Hooper
Yes
Markey
Yes
Quart
Yes
Steck
Yes
Barron
Yes
Dinowitz
Yes
Hunter
Yes
Mayer
Yes
Ra
Yes
Stirpe
Yes
Benedetto
No
DiPietro
Yes
Hyndman
Yes
McDonald
Yes
Raia
Yes
Tedisco
Yes
Bichotte
Yes
Duprey
Yes
Jaffee
Yes
McDonough
Yes
Ramos
Yes
Tenney
Yes
Blake
Yes
Englebright
Yes
Jean-Pierre
Yes
McKevitt
Yes
Richardson
Yes
Thiele
Yes
Blankenbush
Yes
Fahy
Yes
Johns
Yes
McLaughlin
Yes
Rivera
Yes
Titone
Yes
Brabenec
Yes
Farrell
Yes
Joyner
Yes
Miller
Yes
Robinson
Yes
Titus
Yes
Braunstein
Yes
Finch
Yes
Kaminsky
Yes
Montesano
ER
Rodriguez
Yes
Walker
Yes
Brennan
Yes
Fitzpatrick
ER
Katz
Yes
Morelle
Yes
Rosenthal
Yes
Walter
Yes
Brindisi
No
Friend
Yes
Kavanagh
Yes
Mosley
Yes
Rozic
Yes
Weinstein
Yes
Bronson
Yes
Galef
Yes
Kearns
Yes
Moya
Yes
Russell
Yes
Weprin
Yes
Buchwald
ER
Gantt
Yes
Kim
Yes
Murray
Yes
Ryan
Yes
Woerner
Yes
Butler
Yes
Garbarino
Yes
Kolb
No
Nojay
Yes
Saladino
Yes
Wozniak
Yes
Cahill
Yes
Giglio
ER
Lalor
Yes
Nolan
Yes
Santabarbara
Yes
Wright
Yes
Ceretto
Yes
Gjonaj
Yes
Lavine
Yes
Oaks
Yes
Schimel
Yes
Zebrowski
Yes
Colton
Yes
Glick
Yes
Lawrence
Yes
O'Donnell
Yes
Schimminger
Yes
Mr. Speaker
Yes
Cook
Yes
Goldfeder
Yes
Lentol
Yes
Ortiz
Yes
Seawright
Yes
Corwin
Yes
Goodell
ER
Lifton
Yes
Otis
Yes
Sepulveda
Yes
Crespo
Yes
Gottfried
ER
Linares
Yes
Palmesano
Yes
Simanowitz
Yes
Crouch
Yes
Graf
Yes
Lopez
Yes
Palumbo
Yes
Simon
‡ Indicates voting via videoconference
A07056 Memo:
Go to topNEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)   BILL NUMBER: A7056A SPONSOR: Magnarelli
  TITLE OF BILL: An act to amend the general municipal law, in relation to audits by the state comptroller of certain organizations controlled by municipal corporations and certain other government entities   PURPOSE: To authorize the State Comptroller to audit private organizations controlled by local government entities.   SUMMARY OF PROVISIONS: Section 1 of this bill amends section 34 of the General Municipal Law to authorize the State Comptroller to examine the financial affairs of any organization (other than a statewide association of local governments or local government officials) that is under the control of one or more local government entities, including municipal corporations, school districts, fire districts and industrial development agencies. An organ- ization would be deemed "under the control" of a local government entity when one or more individuals who serve as officers or employees of the local government entity (a) select either a majority of the organiza- tion's highest policy-making body or the organization's chief executive officer; (b) constitute a majority of the voting strength that selects either a majority of the organization's highest policy-making body or the organization's chief executive officer; or (c) serve as (i) a major- ity of the organization's highest policy-making body; (ii) the organiza- tion's chief executive officer in his or her official capacity; or (iii) a partner in the organization in his or her official capacity. The phrase "a majority of the organization's highest policy-making body" would mean a majority of the whole number of positions comprising such body, unless such body is allowed to act by a majority of a quorum, in which case the term would mean a majority of the quorum. Subsidiaries and other entities controlled by the organization would also be covered. Section 2 of this bill provides that this act would take effect imme- diately.   PRIOR LEGISLATIVE HISTORY: S. 7907 (Passed Senate) and A. 11088 of 2009-2010 S. 7540 and A. 9689 (Passed Assembly) of 2011-2012 S.4497 and A.3633 (Passed Assembly) of 2013-2014   JUSTIFICATION: Local development corporations, as well as certain other types of private organizations (e g , limited liability companies), have been utilized by counties, cities, towns, villages, and other local govern- ments, such as fire districts, as a means to indirectly finance local government operations and projects. Audits performed by the State Comp- troller's Office have found these private entities have been used to avoid constitutional or statutory provisions that apply to projects undertaken directly by a local government entity (e.g. the prohibition on gifts and loans to or in aid of private entities in Article VIII, § 1 of the State Constitution; referendum requirements such as those in the Local Finance Law applicable to certain municipal bond resolutions; the competitive bidding requirements of Article 5-A of the General Municipal Law; and limitations on the issuance of debt such as those contained in Article VIII, § 4 of the State Constitution). Currently, the State Comptroller does not have the authority to audit directly local development corporations and other similar types of private organizations, even when they are controlled by a local govern- ment entity. Instead, the Comptroller may only examine the relationship between the local government entity and the private organization as part of an audit of the local government entity. And even in the context of such an audit, the Comptroller generally may not look beyond the finan- cial or business relationship to examine the overall finances and oper- ations of the private organization itself. Thus, for example, the Comp- troller may be unable to examine a private organization's internal controls to assess whether moneys provided to the organization by a local government entity are properly safeguarded. While local development corporations and other similar types of private organizations are established to be legally separate from the local government entity, as a practical matter, they often function as if they are instrumentalities of local government entities. The bill would recognize this reality and expand the Comptroller's audit authority commensurately to include direct audits of private organizations which are under the . control of one or more local government entities. Such audits would provide greater assurance that these organizations are operating in the public interest. The bill's definition of "under the control" is necessary to ensure that the Comptroller's audit authority is based on the substance, rather than the form, of the relationship between the local government entity and the private organization. To avoid creating incentives or disincentives to the use of any particular type of private organization, this bill would apply to every type of organization under the control of a munici- pal corporation or other local government entity that is not already subject to audit by the Comptroller, except a statewide association of local governments or local government officials.   BUDGET IMPLICATIONS: This bill has no significant fiscal impact. The fiscal impact of the bill is limited to organizations actually audited by the Comptroller and confined to the staff time and other resources required to cooperate with the auditors. Any such impact would be offset by potential savings based upon the audit findings.   EFFECTIVE DATE: This bill would take effect immediately.
A07056 Text:
Go to top STATE OF NEW YORK ________________________________________________________________________ 7056--A Cal. No. 268 2015-2016 Regular Sessions IN ASSEMBLY April 22, 2015 ___________ Introduced by M. of A. MAGNARELLI, BRONSON, SKOUFIS, WOERNER -- (at request of the State Comptroller) -- read once and referred to the Committee on Local Governments -- advanced to a third reading, amended and ordered reprinted, retaining its place on the order of third read- ing AN ACT to amend the general municipal law, in relation to audits by the state comptroller of certain organizations controlled by municipal corporations and certain other government entities The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 34 of the general municipal law, as amended by 2 chapter 233 of the laws of 2006, is amended to read as follows: 3 § 34. Powers and duties of examiners. 1. The comptroller and each 4 examiner of municipal affairs shall have power to examine into the 5 financial affairs of every such municipal corporation, industrial devel- 6 opment agency, district, [fire company as defined in section two hundred7four-a of this chapter,] agency [and], activity [and], any fire company 8 as defined in section two hundred four-a of this chapter, and any other 9 organization, except a statewide association of local governments or 10 local government officials, that is controlled by one or more of any 11 such municipal corporations, industrial development agencies, districts 12 or agencies. An organization shall be deemed under the control of one 13 or more municipal corporations, industrial development agencies, 14 districts or agencies when one or more individuals who serve as officers 15 or employees of any such municipal corporation, industrial development 16 agency, district or agency: (a) select either a majority of the organ- 17 ization's highest policy-making body or the organization's chief execu- 18 tive officer; (b) constitute a majority of the voting strength that 19 selects either a majority of the organization's highest policy-making 20 body or the organization's chief executive officer; or (c) serve as: 21 (i) a majority of the organization's highest policy-making body; (ii) in EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD02340-04-5A. 7056--A 2 1 his or her official capacity, the organization's chief executive offi- 2 cer; or (iii) in his or her official capacity, a partner in the organ- 3 ization. An organization under the control of one or more municipal 4 corporations, industrial development agencies, districts or agencies 5 shall also include any other organization that is controlled by such 6 organization. 7 2. In connection with any examination authorized by subdivision one of 8 this section, the comptroller and each examiner of municipal affairs 9 shall have power to administer an oath to any person whose testimony may 10 be required, and to compel the appearance and attendance of such person 11 for the purpose of any such examination and investigation, and the 12 production of books and papers. In the case of a municipal corporation, 13 industrial development agency, or school district, no such person shall 14 be compelled to appear or be examined elsewhere than within such munici- 15 pal corporation, industrial development agency, or school district. In 16 the case of any district other than a school district, no such person 17 may be compelled to appear or be examined elsewhere than within the town 18 or one of the towns in which such district or portion thereof is 19 located. In the case of an urban renewal agency, no such person shall be 20 compelled to appear or be examined outside the municipal corporation 21 wherein such agency is established. In the case of a fire company, no 22 such person shall be compelled to appear or be examined outside the area 23 served by the company. In the case of an activity, no such person shall 24 be compelled to appear outside the area served by the activity. In the 25 case of an organization under the control of one or more municipal 26 corporations, industrial development agencies, districts or agencies, no 27 such person shall be compelled to appear or to be examined outside the 28 county in which the organization has its principal headquarters. Willful 29 false swearing in such examination shall be perjury and shall be punish- 30 able as such. 31 3. For purposes of this section, the term "a majority of the organiza- 32 tion's highest policy-making body" shall mean a majority of the whole 33 number of positions comprising such body, provided, however, that if the 34 documents establishing the organization's internal governance allow such 35 body to act by a majority of a quorum, then such term shall mean a 36 majority of the quorum. 37 § 2. This act shall take effect immediately.