senate Bill S89

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

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 05 / Jan / 2011
    • REFERRED TO ELECTIONS
  • 05 / Apr / 2011
    • NOTICE OF COMMITTEE CONSIDERATION - REQUESTED
  • 04 / Jan / 2012
    • REFERRED TO ELECTIONS

Summary

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

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Bill Details

See Assembly Version of this Bill:
A5877
Versions:
S89
Legislative Cycle:
2011-2012
Current Committee:
Senate Elections
Law Section:
Election Law
Laws Affected:
Amd §§14-100, 14-116 & 14-120, El L
Versions Introduced in 2009-2010 Legislative Cycle:
S5282C, A8752A, S5282A

Sponsor Memo

BILL NUMBER:S89

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

FISCAL IMPACT ON THE STATE:
None.

EFFECTIVE DATE:
This act shall take effect January 1, 2012;
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.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   89

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 5, 2011
                               ___________

Introduced  by  Sens. SQUADRON, KRUEGER, SERRANO, STAVISKY -- 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  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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00061-01-1

S. 89                               2

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,

S. 89                               3

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

S. 89                               4

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,  2012;  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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