Senate Bill S4678A

                                
 
BILL NUMBER: S4678A

SPONSOR: SKOUFIS
 
TITLE OF BILL:

An act to amend the general municipal law, in relation to preventing
certain elected officials from being a member of an agency; and to
repeal subdivision 4 of section 856 of such law relating thereto

 
PURPOSE OR GENERAL IDEA OF BILL:

The bill would prohibit any elected official serving at the county,
town, city, or village level, from serving as member of the board of any
industrial development agency (IDA) located within the county.  This
reform would eliminate major potential conflicts of interest in the
current law.

 
SUMMARY OF PROVISIONS:

Section 1: Repeals the existing subdivision 4 of section 856 of the
general municipal law which deals with elected officials serving as
              

members of IDA boards and replaces it with a new subdivision 4 that
prohibits any elected official serving at the county, town, city, or
village level from serving as member of the board of any industrial
development agency (IDA) located within the county. Any IDA board member
who would now be ineligible to serve may serve until the expiration of
his or her term as a member of the IDA, at which time new board members
must be selected using the existing process established by each IDA. The
enabling legislation for certain county and municipal IDAs specifically
requires certain elected positions to be represented on the IDA's board.
This bill would not apply to any elected officials required by the terms
of the enabling legislation for a particular IDA to serve on the board
of that IDA.

Section 2: Effective Date.

 
JUSTIFICATION:

Each year, local industrial development agencies grant millions of
dollars of financial assistance in the form of tax incentives, payment
in lieu of taxes (PILOT) agreements, and others, to projects seeking
assistance. The members of IDA boards make decisions on which projects
will receive assistance and how much assistance to offer. Allowing
elected officials to serve as IDA board members opens obvious opportu-
nities for corruption and conflicts of interest. For instance, a company
(or its officers) seeking financial assistance from a county or munici-
pal IDA could contribute to the campaign of an elected official who
serves on the IDA board and that elected official could then vote to
confer millions of dollars in taxpayer incentives on the company.
Despite this clear potential for corruption, elected officials currently
serve on IDA boards all around the state, making this bill a vitally
needed anti-corruption measure.

 
PRIOR LEGISLATIVE HISTORY:

None.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.