SPONSORS MEMO: NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(e)

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1 Page 1 of 44 STATUS: A3736-A Silver (MS) Executive Law TITLE...Public employee ethics reform; repealer 01/26/07 referred to governmental operations 02/02/07 amend and recommit to governmental operations 02/02/07 print number 3736a 02/06/07 reported referred to codes 02/13/07 reported referred to ways and means 02/13/07 reported referred to rules 02/14/07 reported 02/14/07 rules report cal.3 02/14/07 ordered to third reading rules cal.3 02/14/07 motion to amend lost 02/14/07 ruling of chair on point of order 02/14/07 passed assembly 02/14/07 delivered to senate 02/14/07 REFERRED TO FINANCE 03/06/07 SUBSTITUTED FOR S /06/07 3RD READING CAL /07/07 PASSED SENATE 03/07/07 RETURNED TO ASSEMBLY 03/15/07 delivered to governor 03/26/07 signed chap.14 SUMMARY: SILVER, MCENENY, DESTITO, CAHILL, WRIGHT, FARRELL, CANESTRARI, N. RIVERA, ORTIZ, T. GORDON, REILLY, STIRPE; M-S: Alessi, Arroyo, Aubertine, Benedetto, Benjamin, Bing, Boyland, Bradley, Brennan, Brodsk Amd S94, Exec L; amd S107, Civ Serv L; rpld S1-c sub (j), rpld & add SS 1-l, 1-m & 1-o, amd SS1-c, 1-d, 1-e, 1-h, 1-i, 1-j, 1-k & 80, Leg L; add SS73-b & 3-c, amd SS73 & 74, rpld S74 sub 3 Pj, Pub Off L; amd S8, Chap 2 of 1999 Relates to ethics provisions for all public employees. EFF. DATE 04/25/2007 (SEE TABLE) Governor's Program SPONSORS MEMO: NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(e) BILL NUMBER: A3736A REVISED 2/5/07 SPONSOR: Silver (MS) TITLE OF BILL: An act to amend the executive law, in relation to establishing the commission on public integrity; to amend the public officers law, in relation to prohibiting advertisements by elected government officials and candidates with funds of the state, and places restrictions on the receipt of gifts and hiring by public officials,

2 Page 2 of 44 imposes violations; to amend the civil service law, in relation to prohibitions against certain political activities; to amend the legislative law, in relation to the creation of a legislative ethics commission, and in relation to making amendments to the lobbying act; and to amend chapter 2 of the laws of 1999, amending the legislative law relating to enacting the lobbying act, in relation to making certain provisions permanent; and to repeal certain provisions of the legislative law and paragraph j of subdivision 3 of section 74 of the public officers law relating thereto PURPOSE: This bill enacts the Public Employee Ethics Reform Act of 2007, which establishes comprehensive reforms to strengthen New York's ethics and lobbying laws. SUMMARY OF PROVISIONS: Section 1 of the bill provides that the short title of this law shall be the Public Employee Ethics Reform Act of Section 2 of the bill amends Executive Law 94, effective 180 days after enactment, to create a 13-member State Commission on Public Integrity having jurisdiction over the individuals presently subject to the jurisdiction of the State Ethics Commission and the Temporary State Commission on Lobbying. Section 2-a of the bill amends Executive Law 94, effective 30 days after enactment, to strengthen the State Ethics Commission (the responsibilities of which will be assumed by the Commission on Public Integrity 150 days thereafter) by: (a) increasing the penalties for violating enumerated subdivisions of Public Officers Law 73 from a maximum of $10,000 to a maximum of $40,000 plus the value of any gain resulting from the violation; (b) permitting penalties for violations of certain paragraphs of Public Officers Law 74(3), including a maximum penalty of $10,000 plus the value of any associated gain; and (c) requiring the Commission to refer to the Legislative Ethics Commission any potential ethics violations by members and employees of the Legislature. Sections 3 through 7 of the bill amend Executive Law 94(9)(1), 94(12), 94(15), 94(17) and Civil Service Law 107 to add cross-references relating to the Commission on Public Integrity's jurisdiction over lobbying activities and its new name. Section 8 of the bill amends Legislative Law 1-c(f) to amend the definition of the term "commission" to refer to the new Commission on Public Integrity. Section 9 of the bill repeals the definition of "gift" contained in Legislative Law 1-c(j), and replaces it with a new definition prohibiting gifts in excess of a nominal value. Section 10 of the bill amends Legislative Law 1-c(l) to require lobbyists and their clients to report lobbying of unpaid or per diem members of state boards, commissions and councils. Section 11 of the bill amends Legislative Law 1-d to remove references to the Temporary State Commission on Lobbying and to remove duplicative provisions relating to the powers of the Commission on Public Integrity.

3 Page 3 of 44 Section 12 of the bill amends Legislative Law 1-e to require organizations that are lobbyists to report the information about the organization's officers and employees. Sections 13 through 16 of the bill amend Legislative Law 1-h(a), 1-h(b)(3), 1-i(a) and 1-j(a) to require that lobbyists file registration statements if they "reasonably anticipate" spending the threshold amount required for registration, and to make certain other changes relating to lobbyist reporting. Sections 17 and 18 of the bill amend Legislative Law 1-k(a)(3) and 1-1 to prohibit lobbyists from entering into retainer agreements contingent on the outcome of government grantmaking and other public funding decisions and require registered lobbyists to also report their lobbying for grants, loans and other disbursements of public funds over $15,000. Section 19 of the bill repeals the current gift prohibition contained in Legislative Law 1-m and replaces it with a new provision prohibiting lobbyists and their families from offering or giving gifts of more than nominal value to a public official unless under circumstances where it is not reasonable to infer an intent to influence a public official. Section 20 of the bill repeals the current penalty provisions contained in Legislative Law 1-o and replaces them with new provisions that increase those penalties, including permitting the suspension of lobbyists who engage in repeated violations. Section 21 of the bill adds a new Section 73-b to the Public Officers Law to prohibit elected government officials and candidates for elected local, state or federal office from appearing in taxpayer-funded advertisements or promotions (including public or community service announcements) in any print or electronic media, and prohibits the use of taxpayer money to pay for such appearances. Section 22 of the bill adds two new paragraphs to Public Officers Law 73(1) to provide definitions of "financial interest" and "relative." Section 23 of the bill amends Public Officers Law 73(5) to eliminate the provision allowing gifts to public officials valued at up to $75 under circumstances in which it could reasonably be inferred that the gift was made to influence the official. The amendment bans such gifts having more than a nominal value. This section also prohibits public officials from accepting any gift from a lobbyist or client of a lobbyist that may not be made pursuant to the Lobbying Law. Section 24 of the bill adds a new subdivision 5-a to Public Officers Law 73 to ban honoraria for speeches paid to statewide elected officials, agency heads and legislators, except that legislators may accept honoraria for speeches unrelated to their public office. Section 25 of the bill amends Public Officers Law 73(8)(a)(iii) to prohibit former legislative employees from directly lobbying the Legislature for a period of two years after their departure, effective December 31, Section 26 of the bill amends Public Officers Law 73(8)(a) to prohibit former employees of the Executive Chamber from appearing or practicing before any state agency for a period of two years after their departure.

4 Page 4 of 44 Section 27 of the bill adds new subdivisions 14 through 17 to Public Officers Law 73 to prohibit nepotism and improper political considerations in government hiring and contracting. Section 28 of the bill amends Public Officers Law 74(1) to include within the definition of "state agency" not-for-profit corporations closely affiliated with specific State agencies, as defined in section 53-a(5)(d) of the State Finance Law. Section 29 of the bill amends Public Officers Law 74(4) to permit the Commission on Public Integrity to impose penalties for knowing and intentional violations of certain paragraphs of Public Officers Law 74(3), including a maximum penalty of $10,000 plus the value of any associated gain. Section 30 of the bill repeals Public Officers Law 74(3)(j) of the Public Officers Law, which contains an obsolete disclosure requirement. Section 31 of the bill adds a new Section 3-c to the Public Officers Law to prohibit agency heads from seeking the nomination for, election to, or campaigning regarding any compensated federal, state or local public office, unless such person first resigns from public employment or is granted a leave of absence without pay. Section 32 of the bill amends Civil Service Law 107 to provide the Commission on Public Integrity with jurisdiction over violations of that section, which prohibits the consideration of politics in civil service hiring. Section 33 of the bill amends Legislative Law 80 to replace the Legislative Ethics Committee (comprised of eight members of the Legislature) with a new Legislative Ethics Commission of nine members, including four legislators and five individuals who may not be current or former members of the legislature, legislative employees, candidates for the legislature, political party chairpersons, lobbyists (or persons who have been employees of the legislature, political party chairpersons, or lobbyists within the five years preceding their appointment). This section also requires the Legislative Ethics Commission to: (1) accept referrals from the Commission on Public Integrity regarding potential violations by public officials subject to its jurisdiction; (2) establish a website disclosing public information; (3) make an annual report of the number and treatment of complaints; and (4) make public the terms of any settlement of an ethics violation. Finally, this section makes certain other conforming changes relating to the jurisdiction and powers of the commission. Section 34 of the bill amends Public Officers Law 73(6)(b) to provide that financial disclosure forms filed with the State Ethics Commission that are presently subject to public inspection can also be photocopied. Sections 35 through 44 provide for the continuous and efficient oversight of public officials while the State Ethics Commission and the Temporary State Commission on Lobbying are combined into the State Commission on Public Integrity. Section 45 of the bill contains a separability clause. Section 46 of the bill contains the effective date. EXISTING LAW: The current ethics laws are contained in Public Officers Law 73, 74,

5 Page 5 of 44 the State Ethics Commission is established by Executive Law 94, the Temporary State Commission on Lobbying is established by Article 1-A of the Legislative law, and the Legislative Ethics Committee is established by Article 5 of the Legislative Law. Those laws do not contain numerous provisions added by this bill, as further described below. STATEMENT IN SUPPORT: This groundbreaking legislation - the "Public Employee Ethics Reform Act of 2007" - reforms both the ethical standards that public officials must observe as well as the oversight bodies charged with enforcing those standards. These sweeping reforms are intended to ensure that New York State officials adhere to the highest possible ethical standards, in an effort to restore public trust and confidence in government. Those laws do not contain numerous provisions added by this bill, as further described below. Most notably, this bill would amend the State's ethics laws in the following areas: * GIFTS - eliminates a provision that allows gifts up to $75 under circumstances that could imply an intent to influence official conduct, and instead prohibits all such gifts having more than a nominal value; * HONORARIA - bans honoraria paid to statewide elected officials, agency heads and legislators, except that legislators may accept honoraria for speeches on topics unrelated to their public office; * NEPOTISM - prohibits any state officer or employee from participating in: (1) any hiring, termination, disciplinary or promotional decision concerning a relative; or (2) any contracting decisions involving relatives and entities in which their relatives have a significant financial interest; * POLITICAL HIRING - bars non-legislative employees from asking about the political affiliation, contributions or voting records of any prospective employees or contractors, except as necessary to comply with existing laws or policies the purpose of which are to insure diverse political representation on multi-member bodies; * SOLICITING POLITICAL CONTRIBUTIONS - prohibits non-legislative state employees from using their authority or influence to "compel or induce" another employee to make political donations; * RUNNING FOR ELECTIVE OFFICE - precludes agency heads from becoming candidates for any compensated elective office unless they resign or take an unpaid leave of absence; * REVOLVING DOOR ABUSES - prohibits former legislative employees from directly lobbying the legislature for two years, effective December 31, 2008, and precludes Executive Chamber appointees from appearing before any state agency for two years; * TAXPAYER-FINANCED ADVERTISEMENTS - prohibits elected officials and candidates for elected office from appearing in taxpayer-funded advertisements or promotions, including public or community service announcements, in any print or electronic media, and prohibits the use of taxpayer money to pay for such appearances (this prohibition only applies to media advertisements, and therefore does not prohibit agency reports or brochures, government websites, etc., nor does it prohibit the lawful expenditure of publicly funded campaign money); *

6 Page 6 of 44 PENALTIES - increases the current $10,000 maximum civil penalty for violations of Public Officers Law 73 to $40,000 PLUS the restitution of any associated gain, and for the first time authorizes the imposition of civil penalties (up to $10,000 plus such restitution) for violations of certain provisions of Public Officers Law 74; This bill also strengthens the standards and penalties applied to lobbyists and their clients, in the following areas: * GIFTS - prohibits lobbyists and their clients from giving gifts of more than nominal value to public officials and their immediate families, including most travel, lodging and other expenses; prohibits public officials from accepting such gifts; and prohibits a public official from permitting a third party to receive, accept or solicit a gift from a lobbyist under circumstances where it is reasonable to infer the gift was intended to influence the official (as where an official agrees with a lobbyist's request to make a gift to charity in the official's name or where a lobbyist gifts a car to an official's spouse and the official agrees with or allows the gift); * DISCLOSURE - requires lobbyists and their clients to report lobbying of unpaid or per diem members of state boards, commissions and councils, and requires lobbyists who are otherwise required to register and report lobbying activities to disclose their lobbying for grants, loans or other disbursements of public funds over $15,000; * PENALTIES - increases the penalties for violating the Lobbying Law, and authorizes the suspension of lobbyists who repeatedly flout the law. Finally, this bill restructures the State's ethics oversight bodies. Specifically, the Act creates: * THE STATE COMMISSION ON PUBLIC INTEGRITY, which combines the jurisdiction and powers, as amplified by this bill, of the current State Ethics Commission and Temporary State Commission on Lobbying. The new State Commission on Public Integrity will have 13 members appointed by the Governor, 7 on his own nomination, and 6 on the nomination of others _ one each by the Attorney General, the Comptroller, and the four legislative leaders. * THE LEGISLATIVE ETHICS COMMISSION, which replaces the current Legislative Ethics Committee (composed of 8 members of the Legislature). * The new Legislative Ethics Commission will have 9 members, a majority of whom must be members "independent" from the legislature - i.e., they cannot be present or former legislators, legislative employees, candidates for the legislature, political party chairs or lobbyists (or anyone who was a legislative employee, political party chair or lobbyist within the five years preceding their appointment). * Each of the four legislative leaders will select two members, one legislator and one independent member, and the fifth independent member will be selected jointly by the Assembly Speaker and the Senate Majority Leader. * MANDATORY REFERRAL OBLIGATIONS, where each Commission shall issue and accept referrals to the other where the referral suggests an ethics violation by an office holder not subject to the jurisdiction of the referring Commission. * ADDITIONAL PUBLIC DISCLOSURES, requiring each Commission to make public all settlements of ethical violations, issue annual reports describing all complaints received, the status of open complaints, and

7 Page 7 of 44 the date and nature of any dispositions, and create a website to publicize each Commission's mission, rules, jurisdiction, instructions on filing a complaint, opinions and results of contested matters. BUDGET IMPLICATIONS: This legislation will not have any significant impact on the budget, although there may be a small increase in revenues due to increased fine levels. EFFECTIVE DATE: This bill becomes effective 30 days after enactment, except that: (a) the provisions replacing the State Ethics Commission and the Temporary State Commission on Lobbying with the new Commission on Public Integrity take effect 180 days after enactment; (b) the requirement that organizations that are lobbyists report information about their officers and employees takes effect April 1, 2007; (c) the requirement that lobbyists and their clients report lobbying of unpaid or per diem members of state boards, commissions and councils takes effect December 31, 2007; (d) the lobbyist reporting requirements regarding grants, loans and other disbursements of funds over $15,000 take effect January 1, 2008; and (e) the "revolving door" provisions relating to legislative employees take effect on December 31, 2008 and those relating to the Governor's chamber employees take effect immediately. CHAPTER TEXT: LAWS OF NEW YORK, 2007 CHAPTER 14 AN ACT to amend the executive law, in relation to establishing the commission on public integrity; to amend the public officers law, in relation to prohibiting advertisements by elected government officials and candidates with funds of the state, and places restrictions on the receipt of gifts and hiring by public officials, imposes violations; to amend the civil service law, in relation to prohibitions against certain political activities; to amend the legislative law, in relation to the creation of a legislative ethics commission, and in relation to making amendments to the lobbying act; and to amend chapter 2 of the laws of 1999, amending the legislative law relating to enacting the lobbying act, in relation to making certain provisions permanent; and to repeal certain provisions of the legislative law and paragraph j of subdivision 3 of section 74 of the public officers law relating thereto Became a law March 26, 2007, with the approval of the Governor. Passed by a majority vote, three-fifths being present. The People of the State of New York, represented in Senate and Assembly, do enact as follows: Section 1. This act shall be known as the public employee ethics reform act of The section heading and subdivisions 1, 2, 3, 4, 5, 6, 7 and 8 of section 94 of the executive law, as added by chapter 813 of the laws of 1987, subdivision 1 as amended by chapter 165 of the laws of 2005, are amended to read as follows:

8 Page 8 of 44 [State ethics commission] Commission on public integrity; functions, powers and duties; review of financial disclosure statements; advisory opinions; investigation and enforcement. 1. There is established within the department of state a [state ethics] commission on public integrity which shall consist of [five] thirteen members and shall have and exercise the powers and duties set forth in this section only with respect to statewide elected officials and state officers and employees, as defined in sections seventy-three and seventy-three-a of the public officers law, candidates for statewide elected office, and the political party chairman as that term is defined in section seventy-three-a of the public officers law, lobbyists and the clients of lobbyists as such terms are defined in article one-a of the legislative law, and individuals who have formerly held such positions, were lobbyists or clients of lobbyists, as such terms are defined in article one-a of the legislative law, or who have formerly been such candidates. This section shall not revoke or rescind any regulations or advisory opinions issued by the state ethics commission and the temporary lobbying commission in effect upon the effective date of a chapter of the laws of two thousand seven which amended this section to the extent that such regulations or opinions are not inconsistent with any law of the state of New York, but such regulations and opinions shall apply only to matters over which such commissions had jurisdiction at the time such regulations and opin- EXPLANATION--Matter in italics is new; matter in brackets [ ] is old law to be omitted.

9 Page 9 of 44 CHAP ions were promulgated or issued. The commission shall undertake a comprehensive review of all such regulations and opinions, which will address the consistency of such regulations and opinions among each other and with the new statutory language. The commission shall, before April first, two thousand eight, report to the governor and legislature regarding such review and shall propose any regulatory changes and issue any advisory opinions necessitated by such review. 2. The members of the commission shall be appointed by the governor provided, however, that one member shall be appointed on the nomination of the comptroller [and], one member shall be appointed on the nomination of the attorney general, one member shall be appointed on the nomination of the temporary president of the senate, one member shall be appointed on the nomination of the speaker of the assembly, one member shall be appointed on the nomination of the minority leader of the senate, and one member shall be appointed on the nomination of the minority leader of the assembly. Of the [three] seven members appointed by the governor without prior nomination, no more than [two] four members shall belong to the same political party and [at least two] no members shall [not] be public officers or employees or hold any public office, elected or appointed. No member shall [hold office in any political party or be employed as a lobbyist] be a member of the legislature, a candidate for member of the legislature, an employee of the legislature, a political party chairman as defined in paragraph (k) of subdivision one of section seventy-three of the public officers law, or a lobbyist as defined in subdivision (a) of section one-c of the legislative law. 3. Members of the commission shall serve for terms of five years; provided, however, that of the members first appointed without prior nomination, one shall serve for one year, one shall serve for two years, one shall serve for three years, and one shall serve for [five] four years, as designated by the governor; the [member] members first appointed on the [nomination] nominations of the comptroller and the temporary president of the senate shall serve for four years and the [member] members first appointed on the [nomination] nominations of the attorney general and the speaker of the assembly shall serve for two years. 4. The governor shall designate the chairman of the commission from among the members thereof, who shall serve as chairman at the pleasure of the governor. The chairman or any [three] seven members of the commission may call a meeting. 5. Any vacancy occurring on the commission shall be filled within sixty days of its occurrence, by the governor, in the same manner as the member whose vacancy is being filled was appointed. A person appointed to fill a vacancy occurring other than by expiration of a term of office shall be appointed for the unexpired term of the member he succeeds. 6. [Three] Seven members of the commission shall constitute a quorum, and the commission shall have power to act by majority vote of the total number of members of the commission without vacancy. 7. Members of the commission may be removed by the governor for substantial neglect of duty, gross misconduct in office, inability to discharge the powers or duties of office or violation of this section, after written notice and opportunity for a reply. 8. The members of the commission shall not receive compensation but shall be reimbursed for reasonable expenses incurred in the performance of their official duties.

10 Page 10 of 44 3 CHAP a. Subdivisions 9, 10, 11, 12, 13, 14, 15, 16, 17 and 18 of section 94 of the executive law, as added by chapter 813 of the laws of 1987, subdivision 11 as amended and paragraph (c) of subdivision 12 as added by chapter 165 of the laws of 2005, paragraph (a) of subdivision 12 and subdivisions 13 and 16 as amended by chapter 242 of the laws of 1989, are amended and three new subdivisions 13-a, 16-a and 18 are added to read as follows: 9. The commission shall: (a) Appoint an executive director who shall act in accordance with the policies of the commission. The commission may delegate authority to the executive director to act in the name of the commission between meetings of the commission provided such delegation is in writing and the specific powers to be delegated are enumerated; (b) Appoint such other staff as are necessary to carry out its duties under this section; (c) Adopt, amend, and rescind rules and regulations to govern procedures of the commission, which shall include, but not be limited to, the procedure whereby a person who is required to file an annual financial disclosure statement with the commission may request an additional period of time within which to file such statement, due to justifiable cause or undue hardship; such rules or regulations shall provide for a date beyond which in all cases of justifiable cause or undue hardship no further extension of time will be granted; (d) [Promulgate guidelines] Adopt, amend, and rescind rules and regulations to assist appointing authorities in determining which persons hold policy-making positions for purposes of section seventy-three-a of the public officers law; (e) Make available forms for annual statements of financial disclosure required to be filed pursuant to section seventy-three-a of the public officers law; (f) Review financial disclosure statements in accordance with the provisions of this section, provided however, that the commission may delegate all or part of this review function to the executive director who shall be responsible for completing staff review of such statements in a manner consistent with the terms of the commission's delegation; (g) Receive complaints and referrals alleging [a violation] violations of section seventy-three, seventy-three-a or seventy-four of the public officers law, article one-a of the legislative law or section one hundred seven of the civil service law; (h) Permit any person subject to the jurisdiction of the commission who is required to file a financial disclosure statement to request the commission to delete from the copy thereof made available for public inspection and copying one or more items of information which may be deleted by the commission[, after denial of a request for deletion by the public advisory council as provided in subdivision eighteen of this section,] upon a finding by [a majority of the total number of members of] the commission [without vacancy] that the information which would otherwise be required to be made available for public inspection and copying will have no material bearing on the discharge of the reporting person's official duties. If such request for deletion is denied, the commission, in its notification of denial, shall inform the person of his or her right to appeal the commission's determination pursuant to its rules governing adjudicatory proceedings and appeals adopted pursuant to subdivision thirteen of this section[. The commission shall promulgate rules and regulations governing the issuance of written decisions in connection with appeals from the advisory council];

11 Page 11 of 44 CHAP (i) Permit any person subject to the jurisdiction of the commission who is required to file a financial disclosure statement to request an exemption from any requirement to report one or more items of information which pertain to such person's spouse or unemancipated children which item or items may be exempted by the commission[, after denial of a request for exemption by the public advisory council as provided in subdivision eighteen of this section,] upon a finding by [a majority of the total number of members of] the commission [without vacancy] that the reporting individual's spouse, on his or her own behalf or on behalf of an unemancipated child, objects to providing the information necessary to make such disclosure and that the information which would otherwise be required to be reported will have no material bearing on the discharge of the reporting person's official duties. If such request for exemption is denied, the commission, in its notification of denial, shall inform the person of his or her right to appeal the commission's determination pursuant to its rules governing adjudicatory proceedings and appeals adopted pursuant to subdivision thirteen of this section[. The commission shall promulgate rules and regulations governing the issuance of written decisions in connection with appeals from the advisory council]; (j) Advise and assist any state agency in establishing rules and regulations relating to possible conflicts between private interests and official duties of present or former statewide elected officials and state officers and employees; (k) Permit any person who has not been determined by his or her appointing authority to hold a policy-making position but who is otherwise required to file a financial disclosure statement to request an exemption from such requirement in accordance with rules and regulations governing such exemptions. Such rules and regulations shall provide for exemptions to be granted either on the application of an individual or on behalf of persons who share the same job title or employment classification which the commission deems to be comparable for purposes of this section. Such rules and regulations may permit the granting of an exemption where, in the discretion of the commission, the public interest does not require disclosure and the applicant's duties do not involve the negotiation, authorization or approval of: (i) contracts, leases, franchises, revocable consents, concessions, variances, special permits, or licenses as defined in section seventythree of the public officers law; (ii) the purchase, sale, rental or lease of real property, goods or services, or a contract therefor; (iii) the obtaining of grants of money or loans; or (iv) the adoption or repeal of any rule or regulation having the force and effect of law; [and] (l) Prepare an annual report to the governor and the legislature summarizing the activities of the commission and recommending changes in the laws governing the conduct of statewide elected officials, state officers and employees and political party [chairmen.] chairs; and (m) [Upon certification of a question by the public advisory council to the commission, as provided in paragraph (k) of subdivision eighteen of this section, the commission may determine] Determine a question common to a class or defined category of persons or items of information required to be disclosed, where determination of the question will prevent undue repetition of requests for exemption or deletion or prevent undue complication in complying with the requirements of such section.

12 Page 12 of 44 5 CHAP The commission, or the executive director and staff of the commission if responsibility therefor has been delegated, shall inspect all financial disclosure statements filed with the commission to ascertain whether any person subject to the reporting requirements of section seventy-three-a of the public officers law has failed to file such a statement, has filed a deficient statement or has filed a statement which reveals a possible violation of section seventy-three, seventythree-a or seventy-four of the public officers law. 11. If a person required to file a financial disclosure statement with the commission has failed to file a disclosure statement or has filed a deficient statement, the commission shall notify the reporting person in writing, state the failure to file or detail the deficiency, provide the person with a fifteen day period to cure the deficiency, and advise the person of the penalties for failure to comply with the reporting requirements. Such notice shall be confidential. If the person fails to make such filing or fails to cure the deficiency within the specified time period, the commission shall send a notice of delinquency: (a) to the reporting person; [and] (b) in the case of a statewide elected official, to the temporary president of the senate and the speaker of the assembly; and (c) in the case of a state officer or employee, to the appointing authority for such person. Such notice of delinquency may be sent at any time during the reporting person's service as a statewide elected official, state officer or employee, political party chair or while a candidate for statewide office, or within one year after termination of such service or candidacy. The jurisdiction of the commission, when acting pursuant to subdivision thirteen of this section with respect to financial disclosure, shall continue notwithstanding that the reporting person separates from state service, or ceases to hold office as a statewide elected official or political party chair, or ceases to be a candidate, provided the commission notifies such person of the alleged failure to file or deficient filing pursuant to this subdivision. 12. (a) If the commission receives a sworn complaint alleging a violation of section seventy-three, seventy-three-a or seventy-four of the public officers law, section one hundred seven of the civil service law or article one-a of the legislative law by a [state officer or employee] person or entity subject to [the provisions of section seventy-three or seventy-three-a of the public officers law] the jurisdiction of the commission, or if a reporting individual has filed a statement which reveals a possible violation [of section seventy-three, seventythree-a or seventy-four of the public officers law] of these provisions, or if the commission determines on its own initiative to investigate a possible violation, the commission shall notify the individual in writing, describe the possible or alleged violation of such [section seventy-three, seventy-three-a or seventy-four] laws and provide the person with a fifteen day period in which to submit a written response setting forth information relating to the activities cited as a possible or alleged violation of law. If the commission thereafter makes a determination that further inquiry is justified, it shall give the individual an opportunity to be heard. The commission shall also inform the individual of its rules regarding the conduct of adjudicatory proceedings and appeals and the due process procedural mechanisms available to such individual. If the commission determines at any stage of the proceeding, that there is no violation or that any potential conflict of interest violation has been rectified, it shall so advise the individual and the

13 Page 13 of 44 CHAP complainant, if any. All of the foregoing proceedings shall be confidential. (b) If the commission determines that there is reasonable cause to believe that a violation has occurred, it shall send a notice of reasonable cause: (i) to the reporting person; (ii) to the complainant if any; (iii) in the case of a statewide elected official, to the temporary president of the senate and the speaker of the assembly; and (iv) in the case of a state officer or employee, to the appointing authority for such person. (c) The jurisdiction of the commission when acting pursuant to this section shall continue notwithstanding that a statewide elected official or a state officer or employee separates from state service, or a political party chair ceases to hold such office, or a candidate ceases to be a candidate, provided that the commission notifies such individual of the alleged violation of law pursuant to paragraph (a) of this subdivision within one year from his or her separation from state service or his or her termination of party service or candidacy. Nothing in this section shall serve to limit the jurisdiction of the commission in enforcement of subdivision eight of section seventy-three of the public officers law. 13. An individual subject to the jurisdiction of the commission who knowingly and intentionally violates the provisions of subdivisions two through five [or subdivision], seven, eight [or], 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 individual 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 [ten] forty 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 b, c, d 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 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 a, e or g 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 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. 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 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 subdivision, other than for conduct which constitutes a violation of [subdivision] 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

14 Page 14 of 44 7 CHAP. 14 law, the commission may, in lieu of 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. 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 criminal may be imposed for a failure to file, or for a false filing, of such statement, or a violation 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 [state 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 and commission denials of requests for certain deletions or exemptions to be made from a financial disclosure statement as authorized in paragraph (h) or paragraph (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 substantially similar to those set forth in [such] 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 [state ethics] commission, pursuant to article seventy-eight of the civil practice law and rules. 13-a. If the commission has a reasonable basis to believe that any person subject to the jurisdiction of the legislative ethics commission may have violated any provisions of section seventy-three or seventyfour of the public officers law, it shall refer such violation to the legislative ethics commission unless the commission determines that such a referral would compromise the prosecution or confidentiality of its investigations and, if so, shall make such a referral as soon as practicable. The referral by the commission to the legislative ethics commission shall include any information relating thereto coming into the custody or under the control of the commission at any time prior or subsequent to the time of the referral. 14. A copy of any notice of delinquency or notice of reasonable cause sent pursuant to subdivisions eleven and twelve of this section shall be included in the reporting person's file and be available for public inspection and copying. 15. Upon written request from any person who is subject to the requirements of sections seventy-three, seventy-three-a [and] or seventy-four of the public officers law, the commission shall render advisory opinions on the requirements of said provisions. An opinion rendered by the commission, until and unless amended or revoked, shall be binding on the commission in any subsequent proceeding concerning the person who requested the opinion and who acted in good faith, unless material facts

15 Page 15 of 44 CHAP were omitted or misstated by the person in the request for an opinion. Such opinion may also be relied upon by such person, and may be introduced and shall be a defense, in any criminal or civil action. Such requests shall be confidential but the commission may publish such opinions provided that the name of the requesting person and other identifying details shall not be included in the publication. 16. In addition to any other powers and duties specified by law, the commission shall have the power and duty to: (a) Promulgate rules concerning restrictions on outside activities and limitations on the receipt of gifts and honoraria by persons subject to its jurisdiction, provided, however, a violation of such rules in and of itself shall not be punishable pursuant to subdivision thirteen of this section unless the conduct constituting the violation would otherwise constitute a violation of this section; and (b) Conduct training programs in cooperation with the governor's office of employee relations to provide education to individuals subject to its jurisdiction; and (c) Administer and enforce all the provisions of this section; and (d) Conduct any investigation necessary to carry out the provisions of this section. Pursuant to this power and duty, the commission may administer oaths or affirmations, subpoena witnesses, compel their attendance and require the production of any books or records which it may deem relevant or material[.]; 16-a. Within one hundred twenty days of the effective date of this subdivision, the commission shall create and thereafter maintain a publicly accessible website which shall set forth the procedure for filing a complaint with the commission, and which shall contain the documents identified in subdivision seventeen of this section, other than financial disclosure statements, and any other records or information which the commission determines to be appropriate. 17. (a) Notwithstanding the provisions of article six of the public officers law, the only records of the commission which shall be available for public inspection and copying are: (1) the information set forth in an annual statement of financial disclosure filed pursuant to section seventy-three-a of the public officers law except the categories of value or amount, which shall remain confidential, and any other item of information deleted pursuant to paragraph (h) of subdivision nine of this section; (2) notices of delinquency sent under subdivision eleven of this section; (3) notices of reasonable cause sent under paragraph (b) of subdivision twelve of this section; [and] (4) notices of civil assessments imposed under this section which shall include a description of the nature of the alleged wrongdoing, the procedural history of the complaint, the findings and determinations made by the commission, and any sanction imposed; and (5) the terms of any settlement or compromise of a complaint or referral which includes a fine, penalty or other remedy. (b) Notwithstanding the provisions of article seven of the public officers law, no meeting or proceeding, including any such proceeding contemplated under paragraph (h) or (i) of subdivision nine of this section, of the commission shall be open to the public, except if expressly provided otherwise by the commission. [18. (a) There is established within the state ethics commission a public advisory council which shall consist of five members and shall have and exercise the powers and duties set forth in this subdivision.

16 Page 16 of 44 9 CHAP. 14 (b) The members of the public advisory council shall be appointed by the governor provided, however, that one member shall be appointed on the nomination of the comptroller and one member shall be appointed on the nomination of the attorney general. Of the three members appointed by the governor without prior nomination, no more than two members shall belong to the same political party and at least two members shall not be public officers or employees or hold any public office, elected or appointed. No member shall hold office in any political party or be employed as a lobbyist. (c) Members of the public advisory council shall serve for terms of four years concurrent with the terms of office of the governor with respect to members appointed without prior nomination or concurrent with the term of office of the comptroller or attorney general, as the case may be, who nominated their appointment by the governor. The initial members appointed by the governor shall serve until December thirtyfirst, nineteen hundred ninety or until his successor is qualified if later than such date. (d) The governor shall designate the chairman of the public advisory council from among the members thereof, who shall serve as chairman at the pleasure of the governor. The chairman or any three members of the public advisory council may call a meeting. (e) Any vacancy occurring on the public advisory council shall be filled within sixty days of its occurrence, by the governor, in the same manner as the member whose vacancy is being filled was appointed. A person appointed to fill a vacancy occurring other than by expiration of a term of office shall be appointed for the unexpired term of the member he succeeds. (f) Three members of the public advisory council shall constitute a quorum, and the public advisory council shall have power to act by majority vote of the total number of members of the public advisory council without vacancy. Members of the council may be removed by the governor for substantial neglect of duty, gross misconduct in office, inability to discharge the powers or duties of office or violation of this section after written notice and opportunity for reply. (g) The members of the public advisory council shall not receive compensation but shall be reimbursed for reasonable expenses incurred in the performance of their official duties. (h) The public advisory council shall: (1) Permit any person required to file a financial disclosure statement to request the public advisory council to delete from the copy thereof made available for public inspection one or more items of information which may be deleted upon a finding by a majority of the total number of members of the public advisory council without vacancy that the information which would otherwise be available for public inspection will have no material bearing on the discharge of the reporting person's official duties. If such request for deletion is denied, the public advisory council, in its notification of denial, shall inform the person of his or her right to appeal the public advisory council's determination to the commission pursuant to the commission's rules governing adjudicatory proceedings and appeals adopted pursuant to subdivision thirteen of this section; and (2) Permit any person required to file a financial disclosure statement to request an exemption from any requirement to report one or more items of information which pertain to such person's spouse or unemancipated children which item or items may be exempted upon a finding by a majority of the total number of members of the public advisory council without vacancy that the reporting individual's spouse, on his or her