ALBANY - Gov. Eliot Spitzer and legislative leaders on Wednesday agreed to historic ethics reforms to end practices that have painted state government in New York as beholden to special interests and susceptible to corruption.

The agreement calls for a new and far-reaching agency to enforce rules governing lobbyists and employees in the executive branch, bans gifts to lawmakers and quadruples the penalties for violating ethics laws.

The new Commission on Public Integrity will include 13 members, seven of whom will be appointed by the governor. Spitzer said his office will hold the majority on the board because the governor could more easily be held accountable by voters than legislative leaders.

The agreement also calls for replacement of the Legislative Ethics Committee, which has been criticized by good-government groups as ineffective and secretive in handling complaints against lawmakers. The new Legislative Ethics Commission will include five “independent” New Yorkers with no ties to the Legislature or lobbying for at least five years. They and four lawmakers will be appointed by legislative leaders.

The new ethics entities will also have to be more accountable, through public records and annual reports as well as a mandate to refer proven cases to prosecutors.

“These are exactly the kinds of reforms that are needed,” said Barbara Bartoletti of the League of Women Voters.

All the measures will have to be approved by the Legislature and signed by Spitzer. Support from the leaders of the Senate and Assembly virtually guarantee passage.

In the face of several indictments of lawmakers in recent years, existing ethics laws have been criticized as weak and contributing to a capitol culture called unseemly and even corrupt.

“The existing enforcement bodies have operated in the shadows,” said Spitzer, the former two-term attorney general who forced reforms on Wall Street's conflicts of interests. “We will generate transparency.”

“We have heard the demand for government reform,” said Democratic Assembly Speaker Sheldon Silver, “and we have responded to that demand.”

“People in public life today should be role models for everyone,” said Republican Senate Majority Leader Joseph Bruno, who recently announced he is part of an FBI investigation involving his private business dealings.

He has said he's innocent of any wrongdoing.

“This is going to be, really, historic what we are doing today,” Bruno said.

The agreement:

€ Increases the maximum civil penalty for an ethics violation to $40,000, from the current $10,000.

€ Bans gifts from lobbyists and non-lobbyists where the gift could be seen as trying to influence decisions. That would replace the current $75 limit for a gift, which under different interpretations by the lobbying and ethics commissions could allow officials to take in gifts worth much more. “Nominal” gifts, such as T-shirts, are excluded.

€ Bans speeches for pay, unless it has nothing to do with the state job of the agency head, legislator or statewide elected official delivering the speech. Speeches to universities are exempt.

€ Slows Albany's “revolving door” by prohibiting former legislative employees from lobbying the Legislature for two years. That replaces a practice in which a top employee can resign at the end of a two-year legislative session, then take a lucrative lobbying job days later when the next session begins. The measure also restricts for two years executive branch employees who become lobbyists.

€ Prohibits state employees from dealing in state matters with a relative.

€ Bars executive branch employees from asking about political affiliations or activities of job candidates

€ Bans elected officials from taxpayer-paid ads and public service announcements.

“Message delivered. Message received,” said Democratic Senate Minority Leader Malcolm Smith, referring to voter sentiment. “And today we're taking action.”

Blair Horner of the New York Public Interest Research Group and some other government watchdog groups fear the new entity won't include lobbying commission Executive Director David Grandeau, who they consider Albany most effective ethics enforcer.

“Half of it is great, half of it is a great concern,” said Horner. “The ethics side may be the best in 20 years. The enforcement side is a great concern.”

Spitzer said the new commission will decide on staffing.

“They will be individuals of paramount integrity and independence and they will make their judgment,” Spitzer said. He said the new entity isn't a way to get rid of Grandeau, who has rankled Silver and Bruno in his investigations and had disagreements with the attorney general's office under Spitzer.

Grandeau had no comment but said he would seek to implement some of the disclosures announced Wednesday in his upcoming annual report.

“When the merger occurs, the new entity will need to have both the power and resources to carry out its mandate,” said Ethics Commission Executive Director Karl Sleight.