Prohibits individuals in certain positions from taking any position with a business or entity doing business with an agency or industrial development authority.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4847A
SPONSOR: Jacobson TITLE OF BILL:
An act to amend the general municipal law, in relation to prohibiting
individuals in certain positions from taking any position with a busi-
ness or entity doing business with an industrial development authority
PURPOSE OR GENERAL IDEA OF BILL:
To prohibit individuals in certain positions from taking any position
with a business or entity doing business with an industrial development
agency and to provide penalties for violations.
SUMMARY OF PROVISIONS:
Section 1 amends Section 883 of the General Municipal Law with the
following provisions:
New subdivision 2 of Section 883 prohibits any Industrial Development
Agency or Authority (IDA) Board member, officer, employee, or independ-
ent contractor to take a position, paid or unpaid, with any business or
entity which is applying for or receiving financial assistance or any
other benefit determined or granted by the IDA for the duration of their
tenure and within two years after the termination of such employment or
rendering of services.
These restrictions shall not apply to workers, contractors, companies,
and corporations performing maintenance, repairs or improvements to the
premises owned or leased by the IDA including, but not limited to:
*maintenance workers
*landscapers
*snowplowers
*plumbers
*electricians
*painters
*A member of a union who is a member of the IDA board and whose union
has members who work for an entity which receives or is applying for
financial assistance from the IDA.
New subdivision 3 states that when any person knowingly and willfully
violates subdivision 2 and is compensated or receives a benefit as a
result of their prohibited actions, that person shall pay a civil penal-
ty to the IDA equal to five times the amount of compensation or benefit
received. These penalties shall be in addition to any criminal liabil-
ity.
Section 2 sets forth the effective date which is immediately.
JUSTIFICATION:
As New York State Comptroller Thomas DiNapoli has said, "An Industrial
Development Agency's (IDA) core mission is to economically benefit their
communities, not the officials running them."
Unfortunately, too many IDA officials have abused their positions by
enriching themselves through secret financial dealings with the very
businesses that they either sign contracts with or grant tax exemptions
to in the course of their official IDA duties. As a result, these IDA
officials compromise the interests of the communities and taxpayers they
are meant to serve. Instead, these communities and taxpayers are
defrauded of significant tax monies, sometimes totaling in the millions
and even billions of dollars. These hidden conflicts and self-dealings
call into question the integrity of the IDA system.
Recently, the former managing director, the former CEO, and a former
county executive who sat on the Orange County IDA board pleaded guilty
to felonies of committing a prohibited conflict of interest. It was
shown that the managing director had set up a consulting firm which
contracted to do business with the IDA, and that the former CEO and
former county executive were on the firm's payroll even as they respec-
tively signed and voted upon contracts their employer had presented to
the IDA.
After the trio were indicted, the District Attorney required them to
return the more than $1.2 million dollars they had obtained through
their self-dealing scheme. However, no jail time was received-only
probation. Upon restitution and future cooperation, the felony plea of
the former county executive will be reduced to just a misdemeanor.
This bill eliminates opportunities for IDA fraud by prohibiting IDA
officials, employees and independent contractors of the IDA from being
employed or taking any position, paid or unpaid, with any entity doing
business with the IDA-either applying for or receiving IDA benefits-whi-
le employed or rendering services to the IDA and for two years after the
conclusion of an individual's IDA employment or rendering of services to
the IDA.
A prohibition without a penalty does not adequately deter similar
crimes. That is why this bill mandates a strict penalty. Any person
violating these restrictions will be subject to a civil penalty of five
times the compensation or benefit received by the person.
PRIOR LEGISLATIVE HISTORY:
2021-2022: A8200B/S7445B - Vetoed Memo.183
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
4847--A
2023-2024 Regular Sessions
IN ASSEMBLY
February 23, 2023
___________
Introduced by M. of A. JACOBSON, SANTABARBARA, EACHUS, COLTON -- read
once and referred to the Committee on Local Governments -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
AN ACT to amend the general municipal law, in relation to prohibiting
individuals in certain positions from taking any position with a busi-
ness or entity doing business with an industrial development authority
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 883 of the general municipal law, as amended by
2 section 7 of part J of chapter 59 of the laws of 2013, is amended to
3 read as follows:
4 § 883. Conflicts of interest. 1. All members, officers, and employees
5 of an agency or industrial development authority established by this
6 chapter or created by the public authorities law shall be subject to the
7 provisions of article eighteen of this chapter.
8 2. (a) No member, officer, employee or independent contractor of any
9 agency or industrial development authority established by this chapter
10 or the public authorities law shall take any position, whether paid or
11 unpaid, including but not limited to an independent contractor, with any
12 business or entity applying for or receiving financial assistance from
13 such agency or industrial development authority while employed by or
14 rendering services to such agency or industrial development authority or
15 within two years after termination of such employment or rendering of
16 services.
17 (b) These restrictions shall not apply to workers, contractors, compa-
18 nies, and corporations performing maintenance, repairs or improvements
19 to the premises owned or leased by the industrial development authority
20 including, but not limited to, maintenance workers, landscapers, snow-
21 plowers, plumbers, electricians, painters and other trades workers.
22 These restrictions shall not apply to a member of a union who is a
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02770-03-3
A. 4847--A 2
1 member of the industrial development authority board and whose union has
2 members who work for an entity which receives or is applying for finan-
3 cial assistance from the industrial development authority.
4 3. Any person who knowingly and willfully violates the provisions of
5 subdivision two of this section and is compensated or receives any bene-
6 fit due to such violation shall pay a civil penalty to the agency or
7 industrial development authority in an amount equal to five times the
8 compensation or benefit received by such person.
9 § 2. This act shall take effect immediately.
