Bill S192A-2013

Establishes new contribution limits, expands the types of organizations prohibited from making contributions and aggregates certain contributions

Establishes new contribution limits, expands the types of organizations prohibited from making contributions and aggregates certain contributions.

Details

Actions

  • Mar 28, 2014: PRINT NUMBER 192A
  • Mar 28, 2014: AMEND AND RECOMMIT TO ELECTIONS
  • Jan 8, 2014: REFERRED TO ELECTIONS
  • Jan 9, 2013: REFERRED TO ELECTIONS

Memo

BILL NUMBER:S192A

TITLE OF BILL: An act to amend the election law, in relation to establishing new contribution limits, expanding the types of organizations prohibited from making contributions and aggregating certain contributions

PURPOSE:

To establish new limits on political contributions and expand upon the types of organizations prohibited from making political contributions under current laws as well as to aggregate certain other types of contributions.

SUMMARY OF PROVISIONS:

Section 1 of the bill amends section 14-100 of the election law by adding three new subdivisions (12-14) to ensure that various corporate forms-related limited liability companies and related limited liability partnerships, as well as partnerships and limited liability companies (LLCs)-are covered by contribution limits, and defines "single source" to clarify that individuals and the corporate entities they control are considered to be a single entity for the purpose of contributions.

Section 2 of the bill amends 14-116 of the election law to apply the $5,000 contribution limit to all additional business entities, including limited liability companies (LLCs), and bans all contributions from corporate summaries.

Section 3 of the bill amends subdivision 2 of section 14-120 of the election law, as added by chapter 79 of the laws of 1992, to apply the $5,000 contribution limit to partnership, related corporations, and LLCs.

Section 4 of the bill adds a severability clause. Section 5 of the bill establishes the effective date.

JUSTIFICATION:

It is widely believed that our campaign finance laws need substantial changes to ensure the integrity of elections in our state. This bill does not address the broad range of issues that might be addressed in a comprehensive reform package. However, this bill would close an enormous loophole in the current system by clarifying that separate LLCs and partnerships and the individuals that control these corporate entities, are considered a single source for the purposes of the maximum allowable contribution to a political campaign. Since a single individual or a small group of individuals often control multiple corporate entities, in some cases a very large number of such entities-the treatment of these entities as separate contributors effectively allows one or more individuals to make a virtually unlimited amount of campaign contributions. This bill would correct this by attributing contributions from these entities to the members of the LLC, in the same way the law currently attributes contributions from partnerships to the individual partners. The bill also makes limited liability companies and related limited liability partnerships

subject to the same restrictions to ensure that the contribution limitations cannot be easily circumvented.

LEGISLATIVE HISTORY:

2010: S.5282C/A.8752A 2012: Referred to Elections

FISCAL IMPACT ON THE STATE:

None.

EFFECTIVE DATE:

This act shall take effect January 1, 2015; provided, further, that contributions legally received prior to the effective date of this act may be retained and expended for lawful purposes and shall not provide the basis for a violation of article 14 of the election law as amended by this act; and provided, further, that the state board of elections shall notify all candidates and political committees of the applicable provisions of this act within thirty days after this act shall have become a law.


Text

STATE OF NEW YORK ________________________________________________________________________ 192--A 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________
Introduced by Sens. SQUADRON, KRUEGER, SERRANO, STAVISKY -- read twice and ordered printed, and when printed to be committed to the Committee on Elections -- recommitted to the Committee on Elections in accord- ance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the election law, in relation to establishing new contribution limits, expanding the types of organizations prohibited from making contributions and aggregating certain contributions THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 14-100 of the election law is amended by adding three new subdivisions 12, 13 and 14 to read as follows: 12. "RELATED LIMITED LIABILITY COMPANY" MEANS A LIMITED LIABILITY COMPANY THAT IS AN AFFILIATE OF A CORPORATION WITHIN THE MEANING OF PARAGRAPH (A) OF SECTION NINE HUNDRED TWELVE OF THE BUSINESS CORPORATION LAW. AS USED IN THIS ARTICLE, CORPORATION MEANS BOTH A FOR-PROFIT CORPO- RATION WITHIN THE MEANING OF SUBPARAGRAPH FOUR OF PARAGRAPH (A) OF SECTION ONE HUNDRED TWO OF THE BUSINESS CORPORATION LAW AS WELL AS A NONPROFIT CORPORATION WITHIN THE MEANING OF SUBPARAGRAPH FIVE OF PARA- GRAPH (A) OF SECTION ONE HUNDRED TWO OF THE NOT-FOR-PROFIT CORPORATION LAW. 13. (1) "RELATED LIMITED LIABILITY PARTNERSHIP," CONSISTENT WITH SECTION TEN OF THE PARTNERSHIP LAW, MEANS, UNLESS THE CONTEXT OTHERWISE REQUIRES, A PARTNERSHIP (I) FORMED BY TWO OR MORE PERSONS PURSUANT TO THE PARTNERSHIP LAW OR WHICH COMPLIES WITH SUBDIVISION (A) OF SECTION 121-1202 OF THE PARTNERSHIP LAW AND (II) HAVING ONE OR MORE GENERAL PARTNERS AND ONE OR MORE LIMITED PARTNERS, WHICH (A) IS NOT A PROFES- SIONAL PARTNERSHIP UNDER THIS SECTION, (B) IS AFFILIATED WITH A PROFES- SIONAL SERVICE LIMITED LIABILITY COMPANY, FOREIGN PROFESSIONAL SERVICE LIMITED LIABILITY COMPANY, PROFESSIONAL SERVICE CORPORATION, FOREIGN
PROFESSIONAL SERVICE CORPORATION, REGISTERED LIMITED LIABILITY PARTNER- SHIP THAT IS A PROFESSIONAL PARTNERSHIP UNDER THIS SECTION OR A FOREIGN LIMITED LIABILITY PARTNERSHIP UNDER CLAUSE (I) OR (II) OF THE EIGHTH UNDESIGNATED PARAGRAPH OF SECTION TWO OF THE PARTNERSHIP LAW, AND (C) RENDERS SERVICES RELATED OR COMPLEMENTARY TO THE PROFESSIONAL SERVICES RENDERED BY, OR PROVIDES SERVICES OR FACILITIES TO, SUCH PROFESSIONAL SERVICE LIMITED LIABILITY COMPANY, FOREIGN PROFESSIONAL SERVICE LIMITED LIABILITY COMPANY, PROFESSIONAL SERVICE CORPORATION, FOREIGN PROFES- SIONAL SERVICE CORPORATION, REGISTERED LIMITED LIABILITY PARTNERSHIP OR FOREIGN LIMITED LIABILITY PARTNERSHIP. (2) FOR PURPOSES OF THIS SUBDIVISION, SUCH A PARTNERSHIP IS AFFILIATED WITH A PROFESSIONAL SERVICE LIMITED LIABILITY COMPANY, FOREIGN PROFES- SIONAL SERVICE LIMITED LIABILITY COMPANY, PROFESSIONAL SERVICE CORPO- RATION, FOREIGN PROFESSIONAL SERVICE CORPORATION, REGISTERED LIMITED LIABILITY PARTNERSHIP OR FOREIGN LIMITED LIABILITY PARTNERSHIP IF (A) AT LEAST A MAJORITY OF PARTNERS IN ONE PARTNERSHIP ARE PARTNERS IN THE OTHER PARTNERSHIP, (B) AT LEAST A MAJORITY OF THE PARTNERS IN EACH PART- NERSHIP ALSO ARE PARTNERS, HOLD INTERESTS OR ARE MEMBERS IN A LIMITED LIABILITY COMPANY OR OTHER BUSINESS ENTITY, AND EACH PARTNERSHIP RENDERS SERVICES PURSUANT TO AN AGREEMENT WITH SUCH LIMITED LIABILITY COMPANY OR OTHER BUSINESS ENTITY, OR (C) THE PARTNERSHIPS OR THE PARTNERSHIP AND SUCH PROFESSIONAL SERVICE LIMITED LIABILITY COMPANY, SUCH FOREIGN PROFESSIONAL SERVICE LIMITED LIABILITY COMPANY, SUCH PROFESSIONAL SERVICE CORPORATION, OR SUCH FOREIGN PROFESSIONAL SERVICE CORPORATION ARE AFFILIATES WITHIN THE MEANING OF PARAGRAPH (A) OF SECTION NINE HUNDRED TWELVE OF THE BUSINESS CORPORATION LAW. 14. "SINGLE SOURCE" MEANS ANY PERSON, PERSONS IN COMBINATION, OR ENTI- TY WHO OR WHICH ESTABLISHES, MAINTAINS, OR CONTROLS ANOTHER ENTITY AND EVERY ENTITY SO ESTABLISHED, MAINTAINED, OR CONTROLLED, INCLUDING EVERY POLITICAL COMMITTEE ESTABLISHED, MAINTAINED, OR CONTROLLED BY THE SAME PERSON, PERSONS IN COMBINATION, OR ENTITY. IF A CANDIDATE ACCEPTS MORE THAN ONE CONTRIBUTION FROM A SINGLE SOURCE, THE CONTRIBUTIONS SHALL BE TOTALED TO DETERMINE THE CANDIDATE'S COMPLIANCE WITH THE APPLICABLE CONTRIBUTION LIMIT. A GENERAL PARTNER OR GENERAL MANAGER AND EACH PART- NERSHIP AND LIMITED LIABILITY COMPANY IT CONTROLS SHALL BE PRESUMED, IN THE ABSENCE OF EVIDENCE DEMONSTRATING THE CONTRARY, TO BE A SINGLE SOURCE FOR THE PURPOSE OF COMPLIANCE WITH THE APPLICABLE CONTRIBUTION LIMIT. S 2. Subdivisions 1 and 2 of section 14-116 of the election law, subdivision 1 as redesignated by chapter 9 of the laws of 1978 and subdivision 2 as amended by chapter 260 of the laws of 1981, are amended and a new subdivision 3 is added to read as follows: 1. No corporation [or], joint-stock association, LIMITED LIABILITY COMPANY, PROFESSIONAL LIMITED LIABILITY COMPANY, PARTNERSHIP OR LIMITED LIABILITY PARTNERSHIP doing business in this state, except [a corpo- ration or association] AN ENTITY organized or maintained for political purposes only, shall directly or indirectly pay or use or offer, consent or agree to pay or use any money or property for or in aid of any poli- tical party, committee or organization, or for, or in aid of, any [corporation, joint-stock or other association] ENTITY organized or maintained for political purposes, or for, or in aid of, any candidate for political office or for nomination for such office, or for any poli- tical purpose whatever, or for the reimbursement or indemnification of any person for moneys or property so used. Any officer, director, stock- holder, MEMBER, PARTNER, attorney or agent of any corporation [or], joint-stock association, LIMITED LIABILITY COMPANY, PROFESSIONAL LIMITED
LIABILITY COMPANY, PARTNERSHIP OR LIMITED LIABILITY PARTNERSHIP which violates any of the provisions of this section, who participates in, aids, abets or advises or consents to any such violations, and any person who solicits or knowingly receives any money or property in violation of this section, shall be guilty of a misdemeanor. 2. Notwithstanding the provisions of subdivision one of this section, any corporation or an organization financially supported in whole or in part, by such corporation, OR ANY LIMITED LIABILITY COMPANY, PROFES- SIONAL LIMITED LIABILITY COMPANY, PARTNERSHIP OR LIMITED LIABILITY PART- NERSHIP may make expenditures, including contributions, not otherwise prohibited by law, for political purposes, in an amount not to exceed five thousand dollars in the aggregate in any calendar year; provided that no public utility shall use revenues received from the rendition of public service within the state for contributions for political purposes unless such cost is charged to the shareholders of such a public service corporation. 3. FOR THE PURPOSES OF SUBDIVISION TWO OF THIS SECTION, ALL OF THE COMPONENT MEMBERS OF A CONTROLLED GROUP OF CORPORATIONS WITHIN THE MEAN- ING OF SECTION ONE THOUSAND FIVE HUNDRED SIXTY-THREE OF THE INTERNAL REVENUE CODE OF THE UNITED STATES SHALL BE DEEMED TO BE ONE CORPORATION, AND PROVIDED FURTHER, CONTRIBUTIONS GIVEN BY A SUBSIDIARY OF A CORPO- RATION THAT IS WHOLLY OR IN PART CONTROLLED BY THE CORPORATION, A RELATED LIMITED LIABILITY PARTNERSHIP THAT IS WHOLLY OR IN PART CONTROLLED BY THE CORPORATION, OR A RELATED LIMITED LIABILITY COMPANY THAT IS WHOLLY OR IN PART CONTROLLED BY THE CORPORATION, ARE DEEMED TO BE A CONTRIBUTION BY THE CORPORATION. ALL SINGLE SOURCES OF CONTRIB- UTIONS, INCLUDING FROM AFFILIATED CORPORATE ENTITIES, WITHIN THE MEANING OF PARAGRAPH (A) OF SECTION NINE HUNDRED TWELVE OF THE BUSINESS CORPO- RATION LAW, TOGETHER MAY MAKE CONTRIBUTIONS, NOT OTHERWISE PROHIBITED BY LAW, FOR POLITICAL PURPOSES, IN AN AMOUNT NOT TO EXCEED FIVE THOUSAND DOLLARS IN THE AGGREGATE IN ANY CALENDAR YEAR. S 3. Subdivision 2 of section 14-120 of the election law, as added by chapter 79 of the laws of 1992, is amended and a new subdivision 3 is added to read as follows: 2. Notwithstanding subdivision one of this section, a partnership, as defined in section ten of the partnership law, [may be considered a separate entity for the purposes of this section, and as such] may make contributions in the name of said partnership without attributing such contributions to the individual members of the partnership provided that any such contribution made by a partnership to a candidate or to a poli- tical committee, shall not exceed[, twenty-five hundred dollars. In the event that such partnership contribution to any such candidate or poli- tical committee exceeds twenty-five hundred dollars, the aggregate amount of such contribution shall be attributed to each partner whose share of the contribution exceeds ninety-nine dollars] FIVE THOUSAND DOLLARS. ANY PARTNERSHIP THAT IS RELATED TO A CORPORATION WILL HAVE ITS CONTRIBUTIONS AGGREGATED WITH THAT RELATED CORPORATION FOR THE PURPOSES OF CALCULATING THE CONTRIBUTIONS GIVEN. INDIVIDUALS MAY NOT ESTABLISH A PARTNERSHIP, AS DEFINED IN SECTION TEN OF THE PARTNERSHIP LAW, FOR THE PURPOSE OF EVADING THE CONTRIBUTION LIMITS THAT WOULD OTHERWISE APPLY TO SUCH INDIVIDUAL. 3. NOTWITHSTANDING SUBDIVISION ONE OF THIS SECTION, EVERY CONTRIBUTION MADE BY A LIMITED LIABILITY COMPANY IS CONSIDERED TO BE A CONTRIBUTION BY THE LIMITED LIABILITY COMPANY AS A WHOLE. INDIVIDUALS MAY NOT ESTAB- LISH A LIMITED LIABILITY COMPANY FOR THE PURPOSE OF EVADING THE CONTRIB- UTION LIMITS THAT WOULD OTHERWISE APPLY TO SUCH INDIVIDUAL.
S 4. Severability. If any clause, sentence, paragraph, section or part of this act shall be adjudged by any court of competent jurisdiction to be invalid and after exhaustion of all further judicial review, the judgment shall not affect, impair or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, para- graph, section or part of this act directly involved in the controversy in which the judgment shall have been rendered. S 5. This act shall take effect January 1, 2015; provided that contributions legally received prior to the effective date of this act may be retained and expended for lawful purposes and shall not provide the basis for a violation of article 14 of the election law, as amended by this act; and provided, further, that the state board of elections shall notify all candidates and political committees of the applicable provisions of this act within thirty days after this act shall have become a law.

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