NY State Senate Bill S1126A

Archive: Last Bill Status - Passed Senate

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

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Actions

view actions (18)

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 10, 2022	referred to election law delivered to assembly passed senate ordered to third reading cal.5 reported and committed to rules
Jan 06, 2022	print number 1126b
Jan 06, 2022	amend and recommit to elections
Jan 05, 2022	referred to elections returned to senate died in assembly
Jun 03, 2021	referred to election law delivered to assembly passed senate
May 26, 2021	ordered to third reading cal.1323 committee discharged and committed to rules
Apr 30, 2021	print number 1126a
Apr 30, 2021	amend and recommit to elections
Jan 07, 2021	referred to elections

Votes

view votes

Jan 18, 2022 - Rules committee Vote

S1126B

committee

Aye

Nay

Aye with Reservations

Absent

Excused

Abstained

Jan 10, 2022 - floor Vote

S1126B

floor

Aye

Nay

Absent

Excused

Abstained

Jan 10, 2022 - Elections committee Vote

S1126B

committee

Aye

Nay

Aye with Reservations

Absent

Excused

Abstained

show committee vote details

Committee Vote: Jan 10, 2022

aye (5)

nay (2)

Jan 10, 2022 - Rules committee Vote

S1126B

committee

Aye

Nay

Aye with Reservations

Absent

Excused

Abstained

Jun 3, 2021 - floor Vote

S1126A

floor

Aye

Nay

Absent

Excused

Abstained

May 26, 2021 - Rules committee Vote

S1126A

committee

Aye

Nay

Aye with Reservations

Absent

Excused

Abstained

Bill Amendments

Original

B (Active)

Original

B (Active)

Co-Sponsors

S1126 - Details

See Assembly Version of this Bill:: A7458
Law Section:: Election Law
Laws Affected:: Add §14-116-a, amd §§14-100 & 14-116, El L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S7578
2023-2024: S371, A2633

S1126 - Summary

Enacts the democracy preservation act; prohibits contributions by foreign-influenced business entities; requires certification.

S1126 - Sponsor Memo

 
BILL NUMBER: S1126

SPONSOR: GIANARIS
 
TITLE OF BILL:

An act to amend the election law, in relation to enacting the "democracy
preservation act"; and in relation to prohibiting contributions by
foreign-influenced business entities and requiring certification

 
PURPOSE:

To ban political spending by foreign-influenced business entities in New
York's state and local elections.

 
SUMMARY OF PROVISIONS:

Section one is the title.

Section two of the bill amends the election law by adding section
14-116-a to prohibit contributions by foreign-influenced business enti-
ties.

Section three of the bill amends 14-100 of the election law by adding
subdivisions 18 and 19 to define terms "foreign-influenced," "business
entity," and "foreign owner."

Section four of the bill amends 14-116 of the election law by adding
subdivision 4 to require that business entities that make political
expenditures or contributions file with the state board of elections
certifying that they are not a foreign-influenced business entity as per
the date such expenditure or contribution was made.

 
EXISTING LAW:

 
JUSTIFICATION:

In 2010, the Supreme Court decision in Citizens United v. Federal
Election Commission gave corporations free rein in campaign spending,
which they have taken advantage of in the days since the decision. In
2018, corporations contributed over $70 million to super PACs. Last year
in Seattle, Amazon funded more than $1.5 million in independent expendi-
tures against City Council candidates who opposed the online retailer's
agenda. This lack of restriction on corporations' campaign spending
distorts our elections and interferes with our democracy.  Measures
similar to this bill have been enacted on a municipal level across the
country. Seattle passed an ordinance in January 2020 to ban foreign-in-
fluenced corporations from contributing to their local elections. St.
Petersburg, Florida, has also enacted a similar law.

This bill will effectively prohibit foreign-influenced corporations from
exerting undue influence in elections across New York State.

 
LEGISLATIVE HISTORY:

2020: Died in Elections.

 
FISCAL IMPLICATIONS:

None.
 
LOCAL FISCAL IMPLICATIONS:

 
EFFECTIVE DATE:
180 days after it becomes a law.

S1126 - Bill Text download pdf

 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1126
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                              January 7, 2021
                                ___________
 
 Introduced  by  Sens.  GIANARIS, HARCKHAM, KRUEGER, MAYER, MYRIE, RAMOS,
   SALAZAR -- 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 enacting the "democracy
   preservation  act";  and  in  relation to prohibiting contributions by
   foreign-influenced business entities and requiring certification
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. This act shall be known and may be cited as the "democracy
 preservation act".
   § 2. The election law is amended by adding a new section  14-116-a  to
 read as follows:
   §  14-116-A.  PROHIBITED  CONTRIBUTIONS BY FOREIGN-INFLUENCED BUSINESS
 ENTITIES. 1. NOTWITHSTANDING ANY PROVISION OF LAW TO  THE  CONTRARY,  IT
 SHALL  BE UNLAWFUL FOR A FOREIGN-INFLUENCED BUSINESS ENTITY, DIRECTLY OR
 INDIRECTLY, TO MAKE A CONTRIBUTION OR DONATION OF MONEY OR  OTHER  THING
 OF  VALUE,  OR  TO MAKE AN EXPRESS OR IMPLIED PROMISE TO MAKE A CONTRIB-
 UTION OR DONATION, IN CONNECTION WITH A STATE OR LOCAL ELECTION.
   2. IT SHALL BE UNLAWFUL FOR A BUSINESS ENTITY PROHIBITED UNDER  SUBDI-
 VISION  ONE  OF THIS SECTION, DIRECTLY OR INDIRECTLY, TO MAKE A CONTRIB-
 UTION OR DONATION TO A CONSTITUTED  COMMITTEE,  INDEPENDENT  EXPENDITURE
 COMMITTEE, POLITICAL COMMITTEE, OR PARTY COMMITTEE.
   3.  IT SHALL BE UNLAWFUL FOR A BUSINESS ENTITY PROHIBITED UNDER SUBDI-
 VISION ONE OF THIS SECTION, DIRECTLY OR INDIRECTLY, TO MAKE AN  EXPENDI-
 TURE,  INDEPENDENT EXPENDITURE, OR DISBURSEMENT FOR A POLITICAL COMMUNI-
 CATION.
   4. IT SHALL BE UNLAWFUL FOR A PERSON TO KNOWINGLY SOLICIT, ACCEPT,  OR
 RECEIVE  A CONTRIBUTION OR DONATION DESCRIBED IN SUBDIVISION ONE, TWO OR
 THREE OF THIS SECTION FROM A FOREIGN-INFLUENCED BUSINESS ENTITY.
   5. ANY PERSON FOUND IN VIOLATION OF THIS SECTION SHALL BE GUILTY OF  A
 CLASS  E  FELONY  AND  SHALL  BE SUBJECT TO A CIVIL PENALTY EQUAL TO THE
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD03229-02-1

 S. 1126                             2
 
 CONTRIBUTION OR DONATION AMOUNT PLUS  A  FINE  OF  UP  TO  TEN  THOUSAND
 DOLLARS, TO BE RECOVERABLE IN A SPECIAL PROCEEDING OR CIVIL ACTION TO BE
 BROUGHT BY THE STATE BOARD OF ELECTIONS CHIEF ENFORCEMENT COUNSEL.
   6.  THIS SECTION SHALL NOT APPLY TO AN INDEPENDENT EXPENDITURE MADE BY
 A  FOREIGN-INFLUENCED  BUSINESS  ENTITY  IN  CONNECTION  WITH  A  BALLOT
 PROPOSAL ELECTION.
   § 3. Section 14-100 of the election law is amended by adding three new
 subdivisions 18, 19 and 20 to read as follows:
   18.  "FOREIGN-INFLUENCED"  SHALL  MEAN  A BUSINESS ENTITY FOR WHICH AT
 LEAST ONE OF THE FOLLOWING CONDITIONS IS MET:
   I. A SINGLE FOREIGN OWNER HOLDS,  OWNS,  CONTROLS,  OR  OTHERWISE  HAS
 DIRECT  OR  INDIRECT  BENEFICIAL OWNERSHIP OF ONE PERCENT OR MORE OF THE
 TOTAL EQUITY, OUTSTANDING VOTING  SHARES,  MEMBERSHIP  UNITS,  OR  OTHER
 APPLICABLE OWNERSHIP INTERESTS OF THE BUSINESS ENTITY; OR
   II.  TWO  OR MORE FOREIGN OWNERS, IN AGGREGATE, HOLD, OWN, CONTROL, OR
 OTHERWISE HAVE DIRECT OR INDIRECT BENEFICIAL OWNERSHIP OF  FIVE  PERCENT
 OR  MORE  OF  THE  TOTAL  EQUITY,  OUTSTANDING VOTING SHARES, MEMBERSHIP
 UNITS, OR OTHER APPLICABLE OWNERSHIP INTERESTS OF THE  BUSINESS  ENTITY;
 OR
   III.  A FOREIGN OWNER PARTICIPATES DIRECTLY OR INDIRECTLY IN THE BUSI-
 NESS ENTITY'S DECISION-MAKING PROCESS WITH RESPECT TO THE BUSINESS ENTI-
 TY'S POLITICAL ACTIVITIES IN THE UNITED STATES.
   19. "BUSINESS ENTITY"  SHALL  MEAN  A  CORPORATION,  COMPANY,  LIMITED
 LIABILITY COMPANY, LIMITED PARTNERSHIP, BUSINESS TRUST, BUSINESS ASSOCI-
 ATION,  JOINT-STOCK ASSOCIATION OR OTHER CORPORATE ENTITY DOING BUSINESS
 IN THE STATE.
   20. "FOREIGN OWNER" SHALL MEAN:
   I. A FOREIGN NATIONAL; OR
   II.  A  BUSINESS  ENTITY  WHEREIN  A  FOREIGN  NATIONAL  HOLDS,  OWNS,
 CONTROLS,  OR  OTHERWISE  HAS DIRECTLY OR INDIRECTLY ACQUIRED BENEFICIAL
 OWNERSHIP OF EQUITY OR VOTING SHARES IN AN AMOUNT THAT IS  EQUAL  TO  OR
 GREATER  THAN  FIFTY  PERCENT  OF THE TOTAL EQUITY OR OUTSTANDING VOTING
 SHARES.
   § 4. Section 14-116 of the election law is amended  by  adding  a  new
 subdivision 4 to read as follows:
   4.  EVERY  BUSINESS ENTITY THAT MAKES AN EXPENDITURE, OR CONTRIBUTION,
 FOR POLITICAL PURPOSES FOR A STATE OR LOCAL ELECTION SHALL FILE WITH THE
 STATE BOARD OF ELECTIONS, WITHIN SEVEN BUSINESS DAYS AFTER  MAKING  SUCH
 EXPENDITURE  OR  CONTRIBUTION, ON THE FORM PRESCRIBED BY THE STATE BOARD
 OF ELECTIONS, A STATEMENT OF CERTIFICATION SIGNED BY THE CHIEF EXECUTIVE
 OFFICER, PRESIDENT OR OWNER UNDER PENALTY OF PERJURY, AVOWING THAT AFTER
 DUE INQUIRY, SUCH BUSINESS ENTITY WAS NOT A FOREIGN-INFLUENCED  BUSINESS
 ENTITY  ON  THE DATE SUCH EXPENDITURE OR CONTRIBUTION WAS MADE. BUSINESS
 ENTITIES SHALL PROVIDE A COPY OF THE STATEMENT OF CERTIFICATION REQUIRED
 BY THIS SUBDIVISION TO ANY CAMPAIGN OR COMMITTEE TO WHICH THEY  CONTRIB-
 UTE.
   § 5. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.  Effective immediately, the addition, amend-
 ment and/or repeal of any rule or regulation necessary for the implemen-
 tation of this act on its effective date are authorized to be made on or
 before such effective date.

Co-Sponsors

S1126A - Details

See Assembly Version of this Bill:: A7458
Law Section:: Election Law
Laws Affected:: Add §14-116-a, amd §§14-100 & 14-116, El L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S7578
2023-2024: S371, A2633

S1126A - Summary

Enacts the democracy preservation act; prohibits contributions by foreign-influenced business entities; requires certification.

S1126A - Sponsor Memo

 
BILL NUMBER: S1126A

SPONSOR: GIANARIS
 
TITLE OF BILL:

An act to amend the election law, in relation to enacting the "democracy
preservation act"; and in relation to prohibiting contributions by
foreign-influenced business entities and requiring certification

 
PURPOSE:

To ban political spending by foreign-influenced business entities in New
York's state and local elections.

 
SUMMARY OF PROVISIONS:

Section one is the title.

Section two outlines the legislative findings.

Section three of the bill amends the election law by adding section
14-116-a to prohibit contributions by foreign-influenced business enti-

ties.

Section four of the bill amends 14-100 of the election law by adding
subdivisions 18, 19, and 20 to define terms "foreign-influenced," "busi-
ness entity," and "foreign owner."

Section five of the bill amends 14-116 of the election law by adding
subdivision 4 to require that business entities that make political
expenditures or contributions file with the state board of elections
certifying that they are not a foreign-influenced business entity as per
the date such expenditure or contribution was made, and that copies of
the statement of certification are provided to any campaign or committee
to which they contribute upon request of the recipient to any other
person to whom they contribute.

Section six sets the effective date.

 
EXISTING LAW:

 
JUSTIFICATION:

New York state welcomes immigrants, visitors, and investors from around
the world. However, its elections should be decided by the people of New
York and not by foreign investors or the business entities over which
they exert influence.

Under current federal law, foreign governments, foreign corporations,
foreign political parties, and foreign nationals other than lawful
permanent residents are prohibited from spending money in U.S.
elections. In 2012, the Supreme Court decision in Bluman v. Federal
Election Commission upheld this restriction. New York state law also
prohibits a foreign national, government, instrumentality or agent from
itself registering as an independent expenditure committee for the
purpose of making independent expenditures in any state or local
election.


However, neither federal nor state law adequately protects against the
influence of corporate political spending by U.S.-registered corpo-
rations with significant foreign ownership. In 2010, the Supreme Court
decision in Citizens United v. Federal Election Commission gave corpo-
rations free rein in campaign spending, which they have taken advantage
of in the days since the decision. Today, America's largest corporations
spend hundreds of millions of dollars directly from their corporate
treasuries to influence elections. But the Supreme Court's Citizens
United decision applies to corporations that are "associations of citi-
zens." Multinational corporations increasingly do not meet that defi-
nition. Foreign investors own increasing shares of U.S. corporate stock,
growing from only 5 percent in 1982 to approximately 35 percent in 2017.

Where part of the shareholders' equity is attributable to foreign inves-
tors, spending corporate treasury funds on New York elections means
spending the equity of foreign entities on New York elections.  Further-
more, foreign investors can hold substantial influence even with only a
minority of shares. The U.S. Securities and Exchange Commission, major
capital investors, corporate managers, and corporate governance experts
broadly agree that ownership or control of one percent or more of shares
can confer substantial influence on corporate decision-making.

Political spending by foreign-influenced business entities can weaken,
interfere with, or disrupt New York's democratic self-government and the
faith that the electorate has in its elected officials. To protect the
integrity of New York's democratic self-government, it is necessary to
prevent foreign-influenced business entities from influencing New York
elections through political spending.

Measures similar to this bill have been enacted on a municipal level
across the country. Seattle passed an ordinance in January 2020 to ban
foreign-influenced corporations from spending in their local elections.
St. Petersburg, Florida, has also enacted a similar law.  Similar bills
are pending in at least six other states, and a local law is pending in
New York City.

This bill will protect democratic self-government from the undue influ-
ence of foreign-influenced corporations by effectively prohibiting them
from spending in elections across New York State.

 
LEGISLATIVE HISTORY:

2020: Died in Elections.

 
FISCAL IMPLICATIONS:

None.

 
LOCAL FISCAL IMPLICATIONS:

 
EFFECTIVE DATE:
180 days after it becomes a law. Effective immediately, the addition,
amendment and/or repeal of any rule or regulation necessary for the
implementation of this act on its effective date are authorized to be
made on or before such effective date.

S1126A - Bill Text download pdf

 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  1126--A
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                              January 7, 2021
                                ___________
 
 Introduced  by  Sens.  GIANARIS, HARCKHAM, KRUEGER, MAYER, MYRIE, RAMOS,
   SALAZAR -- read twice and ordered printed,  and  when  printed  to  be
   committed  to the Committee on Elections -- committee discharged, bill
   amended, ordered reprinted as amended and recommitted to said  commit-
   tee

 AN ACT to amend the election law, in relation to enacting the "democracy
   preservation  act";  and  in  relation to prohibiting contributions by
   foreign-influenced business entities and requiring certification
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. This act shall be known and may be cited as the "democracy
 preservation act".
   § 2. Legislative Findings. The legislature hereby finds  and  declares
 that  New  York  state welcomes immigrants, visitors, and investors from
 around the world. However, its elections should be decided by the people
 of New York and not by foreign investors or the business  entities  over
 which  they exert influence. Corporations with partial foreign ownership
 have been spending money to influence state and local elections  in  New
 York  and  around  the  country. The public has a compelling interest in
 limiting the participation of foreign entities in activities of American
 democratic self-government, which include spending  money  to  influence
 voters  and  finance  campaigns,  in  the interest of preventing foreign
 influence over the United States political process.
   Investors are the ultimate beneficiaries of corporate interests. Where
 part of the shareholders' equity is attributable to  foreign  investors,
 spending  corporate  treasury funds on New York elections means spending
 the equity of foreign entities on New York elections.
   Business corporations and similar entities have a  fiduciary  duty  to
 their  shareholders, including investors around the world, and generally
 prioritize  the  interests  of  such  shareholders,  which  may  diverge
 substantially  from the interests of the people of New York and of citi-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD03229-04-1

 S. 1126--A                          2
 
 zens of the United States. In addition, both formal procedures of corpo-
 rate democracy and informal mechanisms of influence can provide  foreign
 investors  with  substantial  influence  even  with  only  a minority of
 shares.  The  United  States  Securities  and Exchange Commission, major
 capital investors, corporate managers, and corporate governance  experts
 broadly agree that ownership or control of one percent or more of shares
 can confer substantial influence on corporate decision-making.
   Political spending by foreign-influenced business entities can weaken,
 interfere with, or disrupt New York's democratic self-government and the
 faith  that  the electorate has in its elected officials. To protect the
 integrity of New York's democratic self-government, it is  necessary  to
 prevent  foreign-influenced  business entities from influencing New York
 elections through political spending.
   § 3. The election law is amended by adding a new section  14-116-a  to
 read as follows:
   §  14-116-A.  PROHIBITED  CONTRIBUTIONS BY FOREIGN-INFLUENCED BUSINESS
 ENTITIES. 1. NOTWITHSTANDING ANY PROVISION OF LAW TO  THE  CONTRARY,  IT
 SHALL  BE UNLAWFUL FOR A FOREIGN-INFLUENCED BUSINESS ENTITY, DIRECTLY OR
 INDIRECTLY, TO MAKE A CONTRIBUTION OR DONATION OF MONEY OR  OTHER  THING
 OF  VALUE,  OR  TO MAKE AN EXPRESS OR IMPLIED PROMISE TO MAKE A CONTRIB-
 UTION OR DONATION, IN CONNECTION WITH A STATE OR LOCAL ELECTION.
   2. IT SHALL BE UNLAWFUL FOR A BUSINESS ENTITY PROHIBITED UNDER  SUBDI-
 VISION  ONE  OF THIS SECTION, DIRECTLY OR INDIRECTLY, TO MAKE A CONTRIB-
 UTION OR DONATION TO A CONSTITUTED  COMMITTEE,  INDEPENDENT  EXPENDITURE
 COMMITTEE, POLITICAL COMMITTEE, OR PARTY COMMITTEE.
   3.  IT SHALL BE UNLAWFUL FOR A BUSINESS ENTITY PROHIBITED UNDER SUBDI-
 VISION ONE OF THIS SECTION, DIRECTLY OR INDIRECTLY, TO MAKE AN  EXPENDI-
 TURE,  INDEPENDENT EXPENDITURE, OR DISBURSEMENT FOR A POLITICAL COMMUNI-
 CATION.
   4. IT SHALL BE UNLAWFUL FOR A PERSON TO KNOWINGLY SOLICIT, ACCEPT,  OR
 RECEIVE  A CONTRIBUTION OR DONATION DESCRIBED IN SUBDIVISION ONE, TWO OR
 THREE OF THIS SECTION FROM A FOREIGN-INFLUENCED BUSINESS ENTITY.
   5. EXCEPT AS PROVIDED IN SUBDIVISION SIX OF THIS SECTION, IT SHALL  BE
 UNLAWFUL  FOR  A  PERSON  WHO RECEIVES A CONTRIBUTION OR DONATION FROM A
 BUSINESS ENTITY TO USE THAT CONTRIBUTION OR DONATION, DIRECTLY OR  INDI-
 RECTLY,  FOR  ANY  OF THE PURPOSES DESCRIBED IN SUBDIVISION ONE, TWO, OR
 THREE OF THIS SECTION, OR TO CONTRIBUTE,  DONATE,  TRANSFER,  OR  CONVEY
 FUNDS FROM SUCH A CONTRIBUTION OR DONATION TO ANOTHER PERSON FOR USE FOR
 ANY  OF THE PURPOSES DESCRIBED IN SUBDIVISION ONE, TWO, OR THREE OF THIS
 SECTION. HOWEVER, A PERSON MAY USE FUNDS THAT DO  NOT  COMPLY  WITH  THE
 REQUIREMENTS OF THIS SECTION FOR OTHER LAWFUL PURPOSES.
   6.  A  PERSON  WHO RECEIVES A CONTRIBUTION OR DONATION FROM A BUSINESS
 ENTITY, AND ALSO RECEIVES FROM THE BUSINESS ENTITY A COPY OF THE  STATE-
 MENT OF CERTIFICATION DESCRIBED IN SUBDIVISION FOUR OF SECTION 14-116 OF
 THIS TITLE, MAY USE SUCH FUNDS FOR THE PURPOSES DESCRIBED IN SUBDIVISION
 ONE,  TWO, OR THREE OF THIS SECTION ONLY IF THE PERSON SEPARATELY DESIG-
 NATES, RECORDS, AND ACCOUNTS FOR SUCH FUNDS, AND ENSURES THAT  DISBURSE-
 MENTS  FOR  THE  PURPOSES DESCRIBED IN SUBDIVISION ONE, TWO, OR THREE OF
 THIS SECTION ARE ONLY MADE FROM FUNDS THAT COMPLY WITH THE  REQUIREMENTS
 OF  THIS  SECTION.  A  PERSON  MAY  RELY IN GOOD FAITH ON A STATEMENT OF
 CERTIFICATION THAT MEETS THE REQUIREMENTS OF SUBDIVISION FOUR OF SECTION
 14-116 OF THIS TITLE.
   7. ANY PERSON FOUND IN VIOLATION OF THIS SECTION SHALL BE GUILTY OF  A
 CLASS  E  FELONY  AND  SHALL  BE SUBJECT TO A CIVIL PENALTY EQUAL TO THE
 CONTRIBUTION OR DONATION AMOUNT PLUS  A  FINE  OF  UP  TO  TEN  THOUSAND

 S. 1126--A                          3
 
 DOLLARS, TO BE RECOVERABLE IN A SPECIAL PROCEEDING OR CIVIL ACTION TO BE
 BROUGHT BY THE STATE BOARD OF ELECTIONS CHIEF ENFORCEMENT COUNSEL.
   § 4. Section 14-100 of the election law is amended by adding three new
 subdivisions 18, 19 and 20 to read as follows:
   18.  "FOREIGN-INFLUENCED"  SHALL  MEAN  A BUSINESS ENTITY FOR WHICH AT
 LEAST ONE OF THE FOLLOWING CONDITIONS IS MET:
   I. A SINGLE FOREIGN OWNER HOLDS,  OWNS,  CONTROLS,  OR  OTHERWISE  HAS
 DIRECT  OR  INDIRECT  BENEFICIAL OWNERSHIP OF ONE PERCENT OR MORE OF THE
 TOTAL EQUITY, OUTSTANDING VOTING  SHARES,  MEMBERSHIP  UNITS,  OR  OTHER
 APPLICABLE OWNERSHIP INTERESTS OF THE BUSINESS ENTITY; OR
   II.  TWO  OR MORE FOREIGN OWNERS, IN AGGREGATE, HOLD, OWN, CONTROL, OR
 OTHERWISE HAVE DIRECT OR INDIRECT BENEFICIAL OWNERSHIP OF  FIVE  PERCENT
 OR  MORE  OF  THE  TOTAL  EQUITY,  OUTSTANDING VOTING SHARES, MEMBERSHIP
 UNITS, OR OTHER APPLICABLE OWNERSHIP INTERESTS OF THE  BUSINESS  ENTITY;
 OR
   III.  A FOREIGN OWNER PARTICIPATES DIRECTLY OR INDIRECTLY IN THE BUSI-
 NESS ENTITY'S DECISION-MAKING PROCESS WITH RESPECT TO THE BUSINESS ENTI-
 TY'S POLITICAL ACTIVITIES IN THE UNITED STATES.
   19. "BUSINESS ENTITY"  SHALL  MEAN  A  CORPORATION,  COMPANY,  LIMITED
 LIABILITY COMPANY, LIMITED PARTNERSHIP, BUSINESS TRUST, BUSINESS ASSOCI-
 ATION,  JOINT-STOCK ASSOCIATION OR OTHER CORPORATE ENTITY DOING BUSINESS
 FOR PROFIT IN THE STATE OR ELSEWHERE.
   20. "FOREIGN OWNER" SHALL MEAN:
   I. A FOREIGN NATIONAL; OR
   II.  A  BUSINESS  ENTITY  WHEREIN  A  FOREIGN  NATIONAL  HOLDS,  OWNS,
 CONTROLS,  OR  OTHERWISE  HAS DIRECTLY OR INDIRECTLY ACQUIRED BENEFICIAL
 OWNERSHIP OF EQUITY OR VOTING SHARES IN AN AMOUNT THAT IS  EQUAL  TO  OR
 GREATER  THAN  FIFTY  PERCENT  OF THE TOTAL EQUITY OR OUTSTANDING VOTING
 SHARES.
   § 5. Section 14-116 of the election law is amended  by  adding  a  new
 subdivision 4 to read as follows:
   4.  EVERY  BUSINESS ENTITY THAT MAKES AN EXPENDITURE, OR CONTRIBUTION,
 FOR POLITICAL PURPOSES FOR A STATE OR LOCAL ELECTION SHALL FILE WITH THE
 STATE BOARD OF ELECTIONS, WITHIN SEVEN BUSINESS DAYS AFTER  MAKING  SUCH
 EXPENDITURE  OR  CONTRIBUTION, ON THE FORM PRESCRIBED BY THE STATE BOARD
 OF ELECTIONS, A STATEMENT OF CERTIFICATION SIGNED BY THE CHIEF EXECUTIVE
 OFFICER, PRESIDENT OR OWNER UNDER PENALTY OF PERJURY, AVOWING THAT AFTER
 DUE INQUIRY, SUCH BUSINESS ENTITY WAS NOT A FOREIGN-INFLUENCED  BUSINESS
 ENTITY  ON  THE DATE SUCH EXPENDITURE OR CONTRIBUTION WAS MADE. BUSINESS
 ENTITIES SHALL PROVIDE A COPY OF THE STATEMENT OF CERTIFICATION REQUIRED
 BY THIS SUBDIVISION TO ANY CAMPAIGN OR COMMITTEE TO WHICH THEY  CONTRIB-
 UTE,  AND,  UPON  REQUEST  OF THE RECIPIENT, TO ANY OTHER PERSON TO WHOM
 THEY CONTRIBUTE.
   § 6. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.  Effective immediately, the addition, amend-
 ment and/or repeal of any rule or regulation necessary for the implemen-
 tation of this act on its effective date are authorized to be made on or
 before such effective date.

Co-Sponsors

view additional co-sponsors

S1126B (ACTIVE) - Details

See Assembly Version of this Bill:: A7458
Law Section:: Election Law
Laws Affected:: Add §14-116-a, amd §§14-100 & 14-116, El L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S7578
2023-2024: S371, A2633

S1126B (ACTIVE) - Summary

Enacts the democracy preservation act; prohibits contributions by foreign-influenced business entities; requires certification.

S1126B (ACTIVE) - Sponsor Memo

 
BILL NUMBER: S1126B

SPONSOR: GIANARIS
 
TITLE OF BILL:

An act to amend the election law, in relation to enacting the "democracy
preservation act"; and in relation to prohibiting contributions by
foreign-influenced business entities and requiring certification

 
PURPOSE:

To ban political spending by foreign-influenced business entities in New
York's state and local elections.

 
SUMMARY OF PROVISIONS:

Section one is the title.

Section two outlines the legislative findings.

Section three of the bill amends the election law by adding section
14-116-a to prohibit contributions by foreign-influenced business enti-

ties.

Section four of the bill amends 14-100 of the election law by adding
subdivisions 18, 19, and 20 to define terms "foreign-influenced," "busi-
ness entity," and "foreign owner."

Section five of the bill amends 14-116 of the election law by adding
subdivision 4 to require that business entities that make political
expenditures or contributions file with the state board of elections
certifying that they are not a foreign-influenced business entity as per
the date such expenditure or contribution was made, and that copies of
the statement of certification are provided to any campaign or committee
to which they contribute upon request of the recipient to any other
person to whom they contribute.

Section six sets the effective date.

 
EXISTING LAW:

 
JUSTIFICATION:

New York state welcomes immigrants, visitors, and investors from around
the world. However, its elections should be decided by the people of New
York and not by foreign investors or the business entities over which
they exert influence.

Under current federal law, foreign governments, foreign corporations,
foreign political parties, and foreign nationals other than lawful
permanent residents are prohibited from spending money in U.S.
elections. In 2012, the Supreme Court decision in Bluman v. Federal
Election Commission upheld this restriction. New York state law also
prohibits a foreign national, government, instrumentality or agent from
itself registering as an independent expenditure committee for the
purpose of making independent expenditures in any state or local
election.


However, neither federal nor state law adequately protects against the
influence of corporate political spending by U.S.-registered corpo-
rations with significant foreign ownership. In 2010, the Supreme Court
decision in Citizens United v. Federal Election Commission gave corpo-
rations free rein in campaign spending, which they have taken advantage
of in the days since the decision. Today, America's largest corporations
spend hundreds of millions of dollars directly from their corporate
treasuries to influence elections. But the Supreme Court's Citizens
United decision applies to corporations that are "associations of citi-
zens." Multinational corporations increasingly do not meet that defi-
nition. Foreign investors own increasing shares of U.S. corporate stock,
growing from only 5 percent in 1982 to approximately 35 percent in 2017.

Where part of the shareholders' equity is attributable to foreign inves-
tors, spending corporate treasury funds on New York elections means
spending the equity of foreign entities on New York elections.  Further-
more, foreign investors can hold substantial influence even with only a
minority of shares. The U.S. Securities and Exchange Commission, major
capital investors, corporate managers, and corporate governance experts
broadly agree that ownership or control of one percent or more of shares
can confer substantial influence on corporate decision-making.

Political spending by foreign-influenced business entities can weaken,
interfere with, or disrupt New York's democratic self-government and the
faith that the electorate has in its elected officials. To protect the
integrity of New York's democratic self-government, it is necessary to
prevent foreign-influenced business entities from influencing New York
elections through political spending.

Measures similar to this bill have been enacted on a municipal level
across the country. Seattle passed an ordinance in January 2020 to ban
foreign-influenced corporations from spending in their local elections.
St. Petersburg, Florida, has also enacted a similar law.  Similar bills
are pending in at least six other states, and a local law is pending in
New York City.

This bill will protect democratic self-government from the undue influ-
ence of foreign-influenced corporations by effectively prohibiting them
from spending in elections across New York State.

 
LEGISLATIVE HISTORY:

2020: Died in Elections.

 
FISCAL IMPLICATIONS:

None.

 
LOCAL FISCAL IMPLICATIONS:

 
EFFECTIVE DATE:
180 days after it becomes a law. Effective immediately, the addition,
amendment and/or repeal of any rule or regulation necessary for the
implementation of this act on its effective date are authorized to be
made on or before such effective date.

S1126B (ACTIVE) - Bill Text download pdf

 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  1126--B
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                              January 7, 2021
                                ___________
 
 Introduced  by  Sens.  GIANARIS,  HARCKHAM,  HOYLMAN,  JACKSON, KRUEGER,
   MAYER, MYRIE, RAMOS, SALAZAR -- read twice and  ordered  printed,  and
   when  printed to be committed to the Committee on Elections -- commit-
   tee discharged, bill amended, ordered reprinted as amended and  recom-
   mitted  to said committee -- recommitted to the Committee on Elections
   in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill
   amended, ordered reprinted as amended and recommitted to said  commit-
   tee
 
 AN ACT to amend the election law, in relation to enacting the "democracy
   preservation  act";  and  in  relation to prohibiting contributions by
   foreign-influenced business entities and requiring certification
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. This act shall be known and may be cited as the "democracy
 preservation act".
   § 2. Legislative Findings. The legislature hereby finds  and  declares
 that  New  York  state welcomes immigrants, visitors, and investors from
 around the world. However, its elections should be decided by the people
 of New York and not by foreign investors or the business  entities  over
 which  they exert influence. Corporations with partial foreign ownership
 have been spending money to influence state and local elections  in  New
 York  and  around  the  country. The public has a compelling interest in
 limiting the participation of foreign entities in activities of American
 democratic self-government, which include spending  money  to  influence
 voters  and  finance  campaigns,  in  the interest of preventing foreign
 influence over the United States political process.
   Investors are the ultimate beneficiaries of corporate interests. Where
 part of the shareholders' equity is attributable to  foreign  investors,
 spending  corporate  treasury funds on New York elections means spending
 the equity of foreign entities on New York elections.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD03229-05-1
 S. 1126--B                          2

 
   Business corporations and similar entities have a  fiduciary  duty  to
 their  shareholders, including investors around the world, and generally
 prioritize  the  interests  of  such  shareholders,  which  may  diverge
 substantially  from the interests of the people of New York and of citi-
 zens of the United States. In addition, both formal procedures of corpo-
 rate  democracy and informal mechanisms of influence can provide foreign
 investors with substantial  influence  even  with  only  a  minority  of
 shares.  The  United  States  Securities  and Exchange Commission, major
 capital investors, corporate managers, and corporate governance  experts
 broadly agree that ownership or control of one percent or more of shares
 can confer substantial influence on corporate decision-making.
   Political spending by foreign-influenced business entities can weaken,
 interfere with, or disrupt New York's democratic self-government and the
 faith  that  the electorate has in its elected officials. To protect the
 integrity of New York's democratic self-government, it is  necessary  to
 prevent  foreign-influenced  business entities from influencing New York
 elections through political spending.
   § 3. The election law is amended by adding a new section  14-116-a  to
 read as follows:
   §  14-116-A.  PROHIBITED  CONTRIBUTIONS BY FOREIGN-INFLUENCED BUSINESS
 ENTITIES. 1. NOTWITHSTANDING ANY PROVISION OF LAW TO  THE  CONTRARY,  IT
 SHALL  BE UNLAWFUL FOR A FOREIGN-INFLUENCED BUSINESS ENTITY, DIRECTLY OR
 INDIRECTLY, TO MAKE A CONTRIBUTION OR DONATION OF MONEY OR  OTHER  THING
 OF  VALUE,  OR  TO MAKE AN EXPRESS OR IMPLIED PROMISE TO MAKE A CONTRIB-
 UTION OR DONATION, IN CONNECTION WITH A STATE OR LOCAL ELECTION.
   2. IT SHALL BE UNLAWFUL FOR A BUSINESS ENTITY PROHIBITED UNDER  SUBDI-
 VISION  ONE  OF THIS SECTION, DIRECTLY OR INDIRECTLY, TO MAKE A CONTRIB-
 UTION OR DONATION TO A CONSTITUTED  COMMITTEE,  INDEPENDENT  EXPENDITURE
 COMMITTEE, POLITICAL COMMITTEE, OR PARTY COMMITTEE.
   3.  IT SHALL BE UNLAWFUL FOR A BUSINESS ENTITY PROHIBITED UNDER SUBDI-
 VISION ONE OF THIS SECTION, DIRECTLY OR INDIRECTLY, TO MAKE AN  EXPENDI-
 TURE,  INDEPENDENT EXPENDITURE, OR DISBURSEMENT FOR A POLITICAL COMMUNI-
 CATION.
   4. IT SHALL BE UNLAWFUL FOR A PERSON TO KNOWINGLY SOLICIT, ACCEPT,  OR
 RECEIVE  A CONTRIBUTION OR DONATION DESCRIBED IN SUBDIVISION ONE, TWO OR
 THREE OF THIS SECTION FROM A FOREIGN-INFLUENCED BUSINESS ENTITY.
   5. EXCEPT AS PROVIDED IN SUBDIVISION SIX OF THIS SECTION, IT SHALL  BE
 UNLAWFUL  FOR  A  PERSON  WHO RECEIVES A CONTRIBUTION OR DONATION FROM A
 BUSINESS ENTITY TO USE THAT CONTRIBUTION OR DONATION, DIRECTLY OR  INDI-
 RECTLY,  FOR  ANY  OF THE PURPOSES DESCRIBED IN SUBDIVISION ONE, TWO, OR
 THREE OF THIS SECTION, OR TO CONTRIBUTE,  DONATE,  TRANSFER,  OR  CONVEY
 FUNDS FROM SUCH A CONTRIBUTION OR DONATION TO ANOTHER PERSON FOR USE FOR
 ANY  OF THE PURPOSES DESCRIBED IN SUBDIVISION ONE, TWO, OR THREE OF THIS
 SECTION. HOWEVER, A PERSON MAY USE FUNDS THAT DO  NOT  COMPLY  WITH  THE
 REQUIREMENTS OF THIS SECTION FOR OTHER LAWFUL PURPOSES.
   6.  A  PERSON  WHO RECEIVES A CONTRIBUTION OR DONATION FROM A BUSINESS
 ENTITY, AND ALSO RECEIVES FROM THE BUSINESS ENTITY A COPY OF THE  STATE-
 MENT OF CERTIFICATION DESCRIBED IN SUBDIVISION FOUR OF SECTION 14-116 OF
 THIS TITLE, MAY USE SUCH FUNDS FOR THE PURPOSES DESCRIBED IN SUBDIVISION
 ONE,  TWO, OR THREE OF THIS SECTION ONLY IF THE PERSON SEPARATELY DESIG-
 NATES, RECORDS, AND ACCOUNTS FOR SUCH FUNDS, AND ENSURES THAT  DISBURSE-
 MENTS  FOR  THE  PURPOSES DESCRIBED IN SUBDIVISION ONE, TWO, OR THREE OF
 THIS SECTION ARE ONLY MADE FROM FUNDS THAT COMPLY WITH THE  REQUIREMENTS
 OF  THIS  SECTION.  A  PERSON  MAY  RELY IN GOOD FAITH ON A STATEMENT OF
 CERTIFICATION THAT MEETS THE REQUIREMENTS OF SUBDIVISION FOUR OF SECTION
 14-116 OF THIS TITLE.
 S. 1126--B                          3
 
   7. ANY PERSON FOUND IN VIOLATION OF THIS SECTION SHALL BE GUILTY OF  A
 CLASS  E  FELONY  AND  SHALL  BE SUBJECT TO A CIVIL PENALTY EQUAL TO THE
 CONTRIBUTION OR DONATION AMOUNT PLUS  A  FINE  OF  UP  TO  TEN  THOUSAND
 DOLLARS, TO BE RECOVERABLE IN A SPECIAL PROCEEDING OR CIVIL ACTION TO BE
 BROUGHT BY THE STATE BOARD OF ELECTIONS CHIEF ENFORCEMENT COUNSEL.
   § 4. Section 14-100 of the election law is amended by adding three new
 subdivisions 18, 19 and 20 to read as follows:
   18.  "FOREIGN-INFLUENCED"  SHALL  MEAN  A BUSINESS ENTITY FOR WHICH AT
 LEAST ONE OF THE FOLLOWING CONDITIONS IS MET:
   I. A SINGLE FOREIGN OWNER HOLDS,  OWNS,  CONTROLS,  OR  OTHERWISE  HAS
 DIRECT  OR  INDIRECT  BENEFICIAL OWNERSHIP OF ONE PERCENT OR MORE OF THE
 TOTAL EQUITY, OUTSTANDING VOTING  SHARES,  MEMBERSHIP  UNITS,  OR  OTHER
 APPLICABLE OWNERSHIP INTERESTS OF THE BUSINESS ENTITY; OR
   II.  TWO  OR MORE FOREIGN OWNERS, IN AGGREGATE, HOLD, OWN, CONTROL, OR
 OTHERWISE HAVE DIRECT OR INDIRECT BENEFICIAL OWNERSHIP OF  FIVE  PERCENT
 OR  MORE  OF  THE  TOTAL  EQUITY,  OUTSTANDING VOTING SHARES, MEMBERSHIP
 UNITS, OR OTHER APPLICABLE OWNERSHIP INTERESTS OF THE  BUSINESS  ENTITY;
 OR
   III.  A FOREIGN OWNER PARTICIPATES DIRECTLY OR INDIRECTLY IN THE BUSI-
 NESS ENTITY'S DECISION-MAKING PROCESS WITH RESPECT TO THE BUSINESS ENTI-
 TY'S POLITICAL ACTIVITIES IN THE UNITED STATES.
   19. "BUSINESS ENTITY" SHALL MEAN A FOR-PROFIT  ENTITY  DOING  BUSINESS
 FOR  PROFIT  IN  THE  STATE  OR ELSEWHERE, INCLUDING A FOR-PROFIT CORPO-
 RATION, COMPANY, LIMITED LIABILITY COMPANY, LIMITED  PARTNERSHIP,  BUSI-
 NESS TRUST, BUSINESS ASSOCIATION, JOINT-STOCK ASSOCIATION OR OTHER SIMI-
 LAR ENTITY.
   20. "FOREIGN OWNER" SHALL MEAN:
   I. A FOREIGN NATIONAL; OR
   II.  A  BUSINESS  ENTITY  WHEREIN  A  FOREIGN  NATIONAL  HOLDS,  OWNS,
 CONTROLS, OR OTHERWISE HAS DIRECTLY OR  INDIRECTLY  ACQUIRED  BENEFICIAL
 OWNERSHIP  OF  EQUITY  OR VOTING SHARES IN AN AMOUNT THAT IS EQUAL TO OR
 GREATER THAN FIFTY PERCENT OF THE TOTAL  EQUITY  OR  OUTSTANDING  VOTING
 SHARES.
   §  5.  Section  14-116  of the election law is amended by adding a new
 subdivision 4 to read as follows:
   4. EVERY BUSINESS ENTITY THAT MAKES AN EXPENDITURE,  OR  CONTRIBUTION,
 FOR POLITICAL PURPOSES FOR A STATE OR LOCAL ELECTION SHALL FILE WITH THE
 STATE  BOARD  OF ELECTIONS, WITHIN SEVEN BUSINESS DAYS AFTER MAKING SUCH
 EXPENDITURE OR CONTRIBUTION, ON THE FORM PRESCRIBED BY THE  STATE  BOARD
 OF ELECTIONS, A STATEMENT OF CERTIFICATION SIGNED BY THE CHIEF EXECUTIVE
 OFFICER, PRESIDENT OR OWNER UNDER PENALTY OF PERJURY, AVOWING THAT AFTER
 DUE  INQUIRY, SUCH BUSINESS ENTITY WAS NOT A FOREIGN-INFLUENCED BUSINESS
 ENTITY ON THE DATE SUCH EXPENDITURE OR CONTRIBUTION WAS  MADE.  BUSINESS
 ENTITIES SHALL PROVIDE A COPY OF THE STATEMENT OF CERTIFICATION REQUIRED
 BY  THIS SUBDIVISION TO ANY CAMPAIGN OR COMMITTEE TO WHICH THEY CONTRIB-
 UTE, AND, UPON REQUEST OF THE RECIPIENT, TO ANY  OTHER  PERSON  TO  WHOM
 THEY CONTRIBUTE.
   § 6. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.  Effective immediately, the addition, amend-
 ment and/or repeal of any rule or regulation necessary for the implemen-
 tation of this act on its effective date are authorized to be made on or
 before such effective date.

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The New York State Senate

senate Bill S1126A

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Jan 18, 2022 - Rules committee Vote

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Jan 10, 2022 - floor Vote

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senate Bill S1126A

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Sponsored By

Archive: Last Bill Status - Passed Senate

Your Voice

Actions

Votes

Jan 18, 2022 - Rules committee Vote

Committee Vote: Jan 18, 2022

Jan 10, 2022 - floor Vote

Floor Vote: Jan 10, 2022

Jan 10, 2022 - Elections committee Vote

Committee Vote: Jan 10, 2022

Jan 10, 2022 - Rules committee Vote

Committee Vote: Jan 10, 2022

Jun 3, 2021 - floor Vote

Floor Vote: Jun 3, 2021

May 26, 2021 - Rules committee Vote

Rules Committee Vote: May 26, 2021

Bill Amendments

Co-Sponsors

S1126 - Details

S1126 - Summary

S1126 - Sponsor Memo

S1126 - Bill Text download pdf

Co-Sponsors

S1126A - Details

S1126A - Summary

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S1126A - Bill Text download pdf

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S1126B (ACTIVE) - Details

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S1126B (ACTIVE) - Sponsor Memo

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