Bill S5127-2013

Relates to campaign funds for personal use

Relates to campaign funds for personal use.

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  • Jan 8, 2014: REFERRED TO ELECTIONS
  • May 10, 2013: REFERRED TO ELECTIONS

Memo

BILL NUMBER:S5127

TITLE OF BILL: An act to amend the election law, in relation to campaign funds for personal use

PURPOSE:

This legislation will more clearly delineate how candidates for elected office can and cannot use their campaign funds, and establish rules for the disposal of excess campaign funds upon the death of a candidate.

SUMMARY OF PROVISIONS:

Section 1 amends section 14-130 of the election law, defining the proper uses of campaign funds and delineating the improper use of campaign funds;

Section 2 adds a new section 14-132 to the election law, delineating when and how political committees must dispose of unused campaign funds upon the death of a candidate or elected official.

Section 3 sets forth the effective date.

JUSTIFICATION:

This bill addresses a number of concerns with how campaign funds are expended. Currently, New York's election law, allowing candidates to spend campaign funds for "any lawful purpose," is among the most lax in the nation. While spending campaign funds for personal use is technically prohibited, the lack of any definition for what constitutes a personal use renders the provision meaningless, This shortcoming in the law is striking when compared to the detailed restrictions issued by the Federal Election Commission. And when it is combined with the provision that allows elected officials to retain campaign funds for any use related to the holding of public office, it gives legislators virtual carte blanche for expenditures that are, at best, tangentially related to their campaigns and official duties.

Examples of successful, unsuccessful or former candidates using excess campaign funds fox luxury vehicles, sky boxes, extravagant meals, inter-national travel and home improvements have regularly appeared in newspapers across the state. There is a growing and justifiable public perception that campaign funds are being used to enhance the post election lifestyles of candidates for public office. Such largesse turns the ideal of representatives serving the public on its head.

Campaign donors have a reasonable expectation that their contributions will be used for the candidate's election efforts and the execution of his or her duties. They do not expect their contributions to subsidize personal spending. This legislation addresses these abuses while preserving elected officials' ability to fund the legitimate work of their offices.

By adding a detailed list, both in generalities and specific examples, to the current language, the line as to what can and cannot be done is brightly drawn. In addition to the obvious need to spend campaign

funds on campaigns, the expanded definition makes it clear that expenditures related to holding public office are restricted to those costs that would not otherwise be incurred if an individual was a private citizen.

In addition, the bill sets limits on how long campaign committees can be maintained after the death of a candidate_ Reports of committees continuing years after campaigns were ended are all too common. By setting time limits and also specifying how excess funds can be disbursed, this abuse will be eliminated.

LOCAL FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

This act shall take effect on the 60th day after becoming law.


Text

STATE OF NEW YORK ________________________________________________________________________ 5127 2013-2014 Regular Sessions IN SENATE May 10, 2013 ___________
Introduced by Sens. GIPSON, ADDABBO, AVELLA, BRESLIN, GIANARIS, HOYLMAN, KRUEGER, O'BRIEN, SERRANO, SQUADRON, STAVISKY, STEWART-COUSINS -- read twice and ordered printed, and when printed to be committed to the Committee on Elections AN ACT to amend the election law, in relation to campaign funds for personal use THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 14-130 of the election law, as added by chapter 152 of the laws of 1985, is amended to read as follows: S 14-130. Campaign funds for personal use. 1. Contributions received by a candidate or a political committee may ONLY be expended for [any lawful purpose. Such funds shall not be converted by any person to a personal use which is unrelated to a political campaign or the holding of a public office or party position] BONA FIDE PURPOSES DIRECTLY RELATED TO EITHER: A. PROMOTING THE NOMINATION OR ELECTION OF A CANDIDATE; OR B. PERFORMING DUTIES OF PUBLIC OFFICE OR PARTY POSITION WHICH ARE NOT PAID FOR OR ELIGIBLE FOR REIMBURSEMENT BY THE STATE OR ANY POLITICAL SUBDIVISION OR PRIVATE PARTY, AND ORDINARY AND NECESSARY EXPENSES RELAT- ING TO THE HOLDING OF PUBLIC OFFICE OR PARTY POSITION. 2. CAMPAIGN FUNDS SHALL NOT BE CONVERTED TO PERSONAL USE, WHICH SHALL BE DEFINED AS EXPENDITURES THAT: A. ARE FOR THE PERSONAL BENEFIT OF OR TO DEFRAY NORMAL LIVING EXPENSES OF THE CANDIDATE, OFFICEHOLDER, IMMEDIATE FAMILY OR DOMESTIC PARTNER OF EITHER OR ANY OTHER PERSON; B. ARE USED TO FULFILL ANY COMMITMENT, OBLIGATION, OR EXPENSE THAT WOULD EXIST IRRESPECTIVE OF THE CANDIDATE'S CAMPAIGN OR DUTIES AS AN OFFICEHOLDER; OR
C. ARE PUT TO ANY USE FOR WHICH THE CANDIDATE OR OFFICEHOLDER WOULD BE REQUIRED TO TREAT THE AMOUNT OF THE EXPENDITURE AS GROSS INCOME UNDER SECTION 61 OF THE INTERNAL REVENUE CODE. 3. EXPENDITURES FOR PERSONAL USE SHALL ALSO INCLUDE, BUT ARE NOT LIMITED TO, EXPENDITURES FOR: A. RESIDENTIAL OR HOUSEHOLD ITEMS, SUPPLIES, MAINTENANCE OR OTHER EXPENDITURES, INCLUDING MORTGAGE, RENT, UTILITIES, REPAIRS, OR IMPROVE- MENTS FOR ANY PART OF ANY PERSONAL RESIDENCE OF A CANDIDATE OR OFFICE- HOLDER, HIS OR HER IMMEDIATE FAMILY OR DOMESTIC PARTNER; B. RENT OR UTILITY PAYMENTS THAT EXCEED FAIR MARKET VALUE FOR USE OF ANY PART OF ANY NON-RESIDENTIAL PROPERTY OWNED BY A CANDIDATE, OR A MEMBER OF A CANDIDATE'S FAMILY OR DOMESTIC PARTNER USED FOR CAMPAIGN PURPOSES; C. SALARY AND OTHER FEES FOR BONA FIDE SERVICES TO A CAMPAIGN OR LEGISLATIVE OFFICE THAT EXCEED FAIR AND REASONABLE MARKET VALUE OF SUCH SERVICES; D. INTEREST OR ANY OTHER FINANCE CHARGES FOR MONIES LOANED TO THE CAMPAIGN BY THE CANDIDATE OR THE SPOUSE OR DOMESTIC PARTNER OF SUCH CANDIDATE; E. TUITION PAYMENTS; F. DUES, FEES, OR GRATUITIES AT PRIVATE CLUBS, RECREATIONAL FACILITIES OR OTHER NONPOLITICAL ORGANIZATIONS, UNLESS CONNECTED TO A SPECIFIC WIDELY ATTENDED FUNDRAISING EVENT THAT TAKES PLACE ON THE ORGANIZATION'S PREMISES; G. AUTOMOBILE PURCHASES OR LONG TERM LEASES; SHORT TERM CAR RENTALS AND CELLULAR EQUIPMENT AND SERVICES NOT USED EXCLUSIVELY FOR CAMPAIGN PURPOSES OR DUTIES AS AN OFFICEHOLDER; H. ADMISSION TO SPORTING EVENTS, CONCERTS, THEATERS, OR OTHER FORMS OF ENTERTAINMENT, UNLESS PART OF A SPECIFIC CAMPAIGN OR OFFICEHOLDER RELATED ACTIVITY; AND I. PAYMENT OF ANY FINES, FEES, OR PENALTIES ASSESSED PURSUANT TO THIS CHAPTER. NOTHING IN THIS SECTION SHALL PROHIBIT A CANDIDATE FROM PURCHASING OFFICE EQUIPMENT WITH PERSONAL FUNDS AND LEASING OR RENTING SUCH EQUIP- MENT OR PROPERTY TO A COMMITTEE WORKING WITH OR FOR THE CANDIDATE, PROVIDED THE CANDIDATE OR THE CAMPAIGN TREASURER SIGNS A WRITTEN LEASE OR RENTAL AGREEMENT AND FILES IT WITH THE APPROPRIATE REQUIRED CAMPAIGN FINANCIAL FILING WHICH SHALL INCLUDE THE LEASE OR RENTAL PRICE WHICH SHALL NOT EXCEED THE FAIR LEASE OR RENTAL VALUE OF THE EQUIPMENT OR IN THE AGGREGATE EXCEED THE COST OF ITS PURCHASE. S 2. The election law is amended by adding a new section 14-132 to read as follows: S 14-132. DISPOSITION OF CAMPAIGN FUNDS. UPON THE DEATH OF A CANDI- DATE, FORMER CANDIDATE OR HOLDER OF ELECTIVE OFFICE, WHO RECEIVED CAMPAIGN CONTRIBUTIONS, ALL CONTRIBUTIONS SHALL BE DISPOSED OF WITHIN TWELVE MONTHS OF THE DEATH OF THE CANDIDATE PURSUANT TO SUBDIVISION ONE OF THIS SECTION. 1. ANY POLITICAL COMMITTEE REQUIRED TO DISPOSE OF FUNDS PURSUANT TO THIS SECTION SHALL, AT THE OPTION OF THE REPRESENTATIVE OF THE ESTATE OF THE CANDIDATE, OR THE TREASURER OF A POLITICAL COMMITTEE FORMED SOLELY TO PROMOTE THE PASSAGE OR DEFEAT OF A BALLOT PROPOSAL, DISPOSE OF SUCH FUNDS BY ANY OF THE FOLLOWING MEANS, OR ANY COMBINATION THEREOF: A. RETURNING, PRO RATA, TO EACH CONTRIBUTOR THE FUNDS THAT HAVE NOT BEEN SPENT OR OBLIGATED;
B. DONATING THE FUNDS TO A CHARITABLE ORGANIZATION OR ORGANIZATIONS THAT MEET THE QUALIFICATIONS OF SECTION 501(C) (3) OF THE INTERNAL REVENUE CODE; C. DONATING THE FUNDS TO THE STATE UNIVERSITY; D. DONATING THE FUNDS TO THE STATE'S GENERAL FUND; E. TRANSFERRING THE FUNDS TO A POLITICAL PARTY COMMITTEE REGISTERED WITH THE STATE BOARD OF ELECTIONS; OR F. CONTRIBUTING THE FUNDS TO A CANDIDATE OR POLITICAL COMMITTEE SUCH THAT THIS DOES NOT EXCEED THE LIMITS SET FORTH IN SECTION 14-114 OF THIS ARTICLE. 2. NO REPRESENTATIVE OF THE ESTATE OF A CANDIDATE OR POLITICAL COMMIT- TEE SHALL DISPOSE OF CAMPAIGN FUNDS BY MAKING EXPENDITURES FOR PERSONAL USE AS DEFINED IN SECTION 14-130 OF THIS ARTICLE. S 3. This act shall take effect on the sixtieth day after it shall have become a law; provided, however, that the state board of elections shall notify all registered campaign committees of the applicable provisions of this act within thirty days after this act shall have become a law.

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