§ 5-b. Limit on outside earned income by members. 1. Effective January first, two thousand twenty-five a member of the legislature receiving a salary for legislative work from the state of New York shall be permitted to earn outside income each year for performing fee for service activities and compensated outside activities approved under the permanent joint rules of the Senate and Assembly in an amount totaling no greater than the earning limitations for retired persons in positions of public service allowed for the same year under subdivision two of section two hundred twelve of the retirement and social security law. Effective January first, two thousand twenty-seven, compliance with the limit on outside earned income described in this section shall be a condition precedent to receiving a salary for legislative activities from the state of New York, and voting as a member of the legislature of the state of New York.
2. a. For purposes of this section, the term "outside earned income" shall mean wages, salaries, fees and other forms of compensation for services actually rendered.
b. For the purposes of this section, the term "outside earned income" shall not include:
(1) salary, benefits and allowances paid by the state;
(2) income and allowances attributable to service in the reserves of the armed forces of the United States, national guard or other active military service;
(3) copyright royalties, fees, and their functional equivalent, from the use of copyrights, patents and similar forms of intellectual property rights, when received from established users or purchasers of such rights;
(4) income from retirement plans of the state of New York or the city of New York, private pension plans or deferred compensation plans (e.g., 401, 403(b), 457, etc.) established in accordance with the internal revenue code;
(5) income from investments and capital gains, where the member's services are not a material factor in the production of income;
(6) income from a trade or business in which a member of their family holds a controlling interest, where the member's services are not a material factor in the production of income; and
(7) compensation from services actually rendered prior to January first, two thousand twenty-five, or prior to being sworn in as a member of the legislature.
3. Effective January first, two thousand twenty-seven, a member of the legislature who knowingly and intentionally violates the provisions of this section shall be subject to a civil penalty in an amount not to exceed forty thousand dollars and the value of any gift, compensation or benefit received in connection with such violation. Assessment of a civil penalty shall be made by the legislative ethics commission, provided however, that no civil penalty shall be assessed pursuant to paragraph (a) of subdivision nine of section eighty of this chapter for violations of this section occurring prior to January first, two thousand twenty-seven.