senate Bill S192A

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

  • 09 / Jan / 2013
    • REFERRED TO ELECTIONS
  • 08 / Jan / 2014
    • REFERRED TO ELECTIONS
  • 28 / Mar / 2014
    • AMEND AND RECOMMIT TO ELECTIONS
  • 28 / Mar / 2014
    • PRINT NUMBER 192A

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:
A86A
Versions:
S192
S192A
Legislative Cycle:
2013-2014
Current Committee:
Senate Elections
Law Section:
Election Law
Laws Affected:
Amd §§14-100, 14-116 & 14-120, El L
Versions Introduced in Previous Legislative Cycles:
2011-2012: S89, A5877
2009-2010: S5282C, A8752A, S5282A

Sponsor 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.

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

                                 192--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00300-02-4

S. 192--A                           2

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

S. 192--A                           3

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. 192--A                           4

  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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