NY State Senate Bill 2017-S496

Archive: Last Bill Status - In Senate Committee Elections Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 04, 2017	referred to elections

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2017-S496 (ACTIVE) - Details

See other versions of this Bill:: S7022 ,; A1926 ,
Current Committee:: Senate Elections
Law Section:: Election Law
Laws Affected:: Amd §§14-116 & 14-120, El L
Versions Introduced in Other Legislative Sessions:: 2009-2010: S8395
2011-2012: S30
2013-2014: S166
2015-2016: S5093, S60

2017-S496 (ACTIVE) - Summary

Relates to political contributions by limited liability companies.

2017-S496 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S496

 TITLE OF BILL :

An act to amend the election law, in relation to political
contributions

 SUMMARY OF SPECIFIC PROVISIONS :

Section 1 of the bill adds LLCs to Election Law § 14-116 to provide
that LLCs are subject to the aggregate contribution limit of $5000
that applies to corporations. Section 1 also requires disclosure of
the identity of all direct and indirect owners of the membership
interests in the LLC and the proportion of each direct and indirect
member's ownership interest in the LLC.

Section 2 amends § 14-120 of the Election Law by requiring all
contributions made to a campaign or political committee by a LLC be
attributed to each member of the LLC in proportion to the member's
ownership interest. In addition, the State Board of Elections shall
enact regulations that prevent the avoidance of the established rules.

Section 3 of the bill establishes the effective date.

 JUSTIFICATION :

Current law, as interpreted by the State Board of Elections (SBOE),
allows a single individual to make multiple contributions to the same
candidate or committee through separate LLCs. Often it is difficult to
know who is ultimately directing the contributions.

The election law does not explicitly address contributions by LLCs.
Instead, pursuant to a 1996 SBOE decision, each LLC is treated as a
separate contributor even if many of them are controlled by the same
person. As a result, LLC contributions are governed in a way that is
inconsistent with all other types of campaign contributions. The
contribution limits that apply to corporations do not apply; the
assignment of contributions to members required of partnerships does
not exist; and the transparency and protection against an individual
contributing above the legal limits is absent.

In April, 2015, in the face of public outcry and despite the support
of two of the four SBOE members, the board declined to revisit its
1996 decision, leaving it up to the legislature to act. Thereafter,
the Daily News reported that the LLC loophole was used to contribute
$25 million to state politicians over the past decade and that LLCs
linked to one individual have used it to contribute $13.2 million
since 2000 (Bill Hammond, NY Daily News, April 28, 2015,
www.nydailynews.com/opinion/bill-hammond-bending-cash-article
1.2202628).

Contrary to the current approach, the Federal Election Commission
treats LLCs as corporations or partnerships rather than individuals
for campaign finance purposes. This bill would apply to LLCs the
provisions that already apply to corporations under New York law. It
would also increase transparency by requiring disclosure of the
identity of individuals with membership interests in LLCs. Finally it
would ensure that the loophole is fully closed by attributing LLC
contributions to each LLC member in a manner similar to that provided
for under current law for partnerships.

These changes would clarify the election law with respect to LLCs,
provide uniformity, and close an egregious loophole that has allowed
certain individuals to evade limits that other contributors adhere to.

 PRIOR LEGISLATIVE HISTORY :
2016: S6OB/A6975C - REPORTED FROM ELECTIONS AND COMMITTED TO CODES/
passed assembly
2015: S60/A6975 - REPORTED FROM ELECTIONS AND COMMITTED TO
CORPORATIONS/passed assembly
2013-2014: S166/A5067- REFERRED TO ELECTIONS/Advanced to Third Reading
(Assembly)
2011-2012: S30/A2493- REFERRED TO ELECTIONS
2010: S8395/A11355- REFERRED TO RULES

 EFFECTIVE DATE :
This act shall take effect immediately.

2017-S496 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    496
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 4, 2017
                                ___________
 
 Introduced  by  Sens. SQUADRON, ADDABBO, AVELLA, BRESLIN, COMRIE, DILAN,
   GIANARIS, HAMILTON, HOYLMAN, KAMINSKY, KRUEGER,  LATIMER,  MONTGOMERY,
   PARKER,   PERALTA,   PERKINS,   PERSAUD,  RIVERA,  SERRANO,  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 political contributions
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 14-116 of the election law, subdivision 1 as redes-
 ignated by chapter 9 of the laws of 1978 and subdivision 2 as amended by
 chapter 260 of the laws of 1981, is amended to read as follows:
   §  14-116.  Political  contributions  by certain organizations. 1.  No
 corporation [or], LIMITED LIABILITY COMPANY, joint-stock association  OR
 OTHER  CORPORATE  ENTITY  doing  business in this state, except a corpo-
 ration or association 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 political
 party, committee or organization, or for, or in aid of, any corporation,
 LIMITED LIABILITY COMPANY, joint-stock [or], other association, OR OTHER
 CORPORATE 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  political  purpose  whatever,  or  for  the
 reimbursement or indemnification of any person for moneys or property so
 used. Any officer, director, stock-holder, MEMBER,  OWNER,  attorney  or
 agent  of  any  corporation [or], LIMITED LIABILITY COMPANY, joint-stock
 association  OR  OTHER  CORPORATE  ENTITY  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 know-
 ingly receives any money or property in violation of this section, shall
 be guilty of a misdemeanor.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD00443-01-7

 S. 496                              2
 
   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, ANY LIMITED LIABILITY COMPANY OR OTHER CORPO-
 RATE ENTITY may make expenditures, including contributions,  not  other-
 wise  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 poli-
 tical purposes unless such cost is charged to the shareholders of such a
 public service corporation.
   3. EACH LIMITED LIABILITY COMPANY THAT MAKES AN EXPENDITURE FOR  POLI-
 TICAL PURPOSES SHALL FILE WITH THE STATE BOARD OF ELECTIONS, BY DECEMBER
 THIRTY-FIRST  OF  THE YEAR IN WHICH THE EXPENDITURE IS MADE, ON THE FORM
 PRESCRIBED BY THE STATE BOARD OF ELECTIONS, THE IDENTITY OF  ALL  DIRECT
 AND INDIRECT OWNERS OF THE MEMBERSHIP INTERESTS IN THE LIMITED LIABILITY
 COMPANY AND THE PROPORTION OF EACH DIRECT OR INDIRECT MEMBER'S OWNERSHIP
 INTEREST IN THE LIMITED LIABILITY COMPANY.
   §  2.  Section  14-120  of the election law is amended by adding a new
 subdivision 3 to read as follows:
   3. (A) NOTWITHSTANDING ANY LAW TO THE CONTRARY, ALL CONTRIBUTIONS MADE
 TO A CAMPAIGN OR POLITICAL COMMITTEE  BY  A  LIMITED  LIABILITY  COMPANY
 SHALL  BE  ATTRIBUTED TO EACH MEMBER OF THE LIMITED LIABILITY COMPANY IN
 PROPORTION TO THE MEMBER'S OWNERSHIP INTEREST IN THE  LIMITED  LIABILITY
 COMPANY.
   (B)  IF,  BY  APPLICATION  OF  PARAGRAPH  (A)  OF  THIS SUBDIVISION, A
 CAMPAIGN CONTRIBUTION IS ATTRIBUTED TO A LIMITED LIABILITY COMPANY,  THE
 CONTRIBUTIONS  SHALL BE FURTHER ATTRIBUTED TO EACH MEMBER OF THE LIMITED
 LIABILITY COMPANY IN PROPORTION TO THE MEMBER'S  OWNERSHIP  INTEREST  IN
 THE LIMITED LIABILITY COMPANY.
   (C)  THE STATE BOARD OF ELECTIONS SHALL ENACT REGULATIONS THAT PREVENT
 THE AVOIDANCE OF THE RULES SET FORTH IN PARAGRAPHS (A) AND (B)  OF  THIS
 SUBDIVISION.
   § 3. This act shall take effect immediately.

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Senate Bill S496

Sponsored By

Archive: Last Bill Status - In Senate Committee Elections Committee

co-Sponsors

2017-S496 (ACTIVE) - Details

2017-S496 (ACTIVE) - Summary

2017-S496 (ACTIVE) - Sponsor Memo

2017-S496 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S496

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Sponsored By

Archive: Last Bill Status - In Senate Committee Elections Committee

co-Sponsors

2017-S496 (ACTIVE) - Details

2017-S496 (ACTIVE) - Summary

2017-S496 (ACTIVE) - Sponsor Memo

2017-S496 (ACTIVE) - Bill Text download pdf

Comments