Public Dollars, Reasonable Salaries Act
The Public Dollars, Reasonable Salaries Act establishes limits on executive compensation for entities receiving taxpayer-funded contracts. It ensures responsible use of public funds by capping excessive pay, mandating transparency in reporting, and implementing penalties for violations.
Key Provisions
Executive Compensation Cap: Limits total annual compensation for executives at taxpayer-funded entities to a percentage of the U.S. President’s salary or another federally recognized benchmark.
Scope of Application: Applies to entities receiving state or federally funded contracts exceeding $1 million annually, with limited exceptions for specialized fields.
Compensation Definition: Covers all forms of financial benefits, including salary, bonuses, stock options, and deferred compensation, in the total compensation calculation.
Mandatory Reporting: Requires annual disclosure of executive compensation details to state agencies to verify compliance with the Act.
Penalties for Noncompliance: Establishes financial penalties and disqualification from future taxpayer-funded contracts for entities violating the Act.
Transparency Provisions: Mandates the publication of executive compensation data for taxpayer-funded contractors on a public website to ensure accountability.
Model Language
Section 1. Title: This Act shall be known as the “Public Dollars, Reasonable Salaries Act.”
Section 2. Definitions
(a) “Executive compensation” means the total value of salary, bonuses, stock options, deferred compensation, and other financial benefits provided to any executive, officer, or key personnel of an entity.
(b) “Taxpayer-funded contract” means any agreement, grant, or funding arrangement funded primarily by state or federal taxpayer dollars.
(c) “Entity” refers to any corporation, nonprofit organization, or other body that enters into a taxpayer-funded contract.
Section 3. Executive Compensation Cap
(a) Entities receiving taxpayer-funded contracts shall limit executive compensation to no more than 150% of the U.S. President’s annual salary.
(b) The compensation cap shall apply to all executives whose compensation is paid, in whole or in part, using taxpayer funds.
Section 4. Scope of Application
(a) This Act shall apply to entities receiving taxpayer-funded contracts valued at $1,000,000 or more annually.
(b) Exemptions may be granted for entities operating in specialized fields where higher compensation is necessary to retain qualified personnel, subject to approval by the relevant state agency.
Section 5. Reporting Requirements
(a) Entities shall submit annual reports to the [State Department of Revenue or equivalent] detailing executive compensation, including a breakdown of salary, bonuses, and other financial benefits.
(b) Reports shall certify compliance with the provisions of this Act.
Section 6. Enforcement and Penalties
(a) Noncompliance with this Act shall result in the following penalties:
(i) A fine not exceeding 5% of the total value of the taxpayer-funded contract;
(ii) Disqualification from entering into taxpayer-funded contracts for a period of up to five years.
(b) The [State Department of Revenue or equivalent] shall conduct periodic audits to ensure compliance.
Section 7. Transparency and Public Access
(a) The [State Department of Revenue or equivalent] shall maintain a publicly accessible online database of executive compensation for all entities receiving taxpayer-funded contracts.
(b) The database shall be updated annually to reflect the most recent reporting.
Section 8. Severability: If any provision of this Act or its application is found to be invalid, the remainder of the Act shall not be affected.
Section 9. Effective Date: This Act shall take effect on [specific date], and shall apply to all taxpayer-funded contracts executed or renewed after this date.