NY State Senate Bill 2017-S7022

Archive: Last Bill Status - Stricken

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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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2018	recommit, enacting clause stricken
Jan 03, 2018	referred to elections

co-Sponsors

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2017-S7022 (ACTIVE) - Details

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-S7022 (ACTIVE) - Summary

Relates to political contributions by limited liability companies.

2017-S7022 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S7022

SPONSOR: RIVERA
 
TITLE OF BILL:  An act to amend the election law, in relation to poli-
tical 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 iden-
tity of all direct and indirect owners of the membership interests in
the LLC and the proportion of each direct and indirect member's owner-
ship interest in the LLC.

Section 2 amends § 14-120 of the Election Law by requiring all contrib-
utions 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 inter-
est. 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 assign-
ment 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 indi-
viduals 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: S6013/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-S7022 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7022
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 3, 2018
                                ___________
 
 Introduced  by  Sens.  RIVERA, ADDABBO, AVELLA, BRESLIN, BROOKS, COMRIE,
   DILAN, GIANARIS, HAMILTON, HOYLMAN, KAMINSKY, KAVANAGH, KRUEGER, MONT-
   GOMERY, PARKER, PERALTA, PERSAUD, 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.
   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-

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD00443-01-7

 S. 7022                             2
 
 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 S7022

Sponsored By

Archive: Last Bill Status - Stricken

co-Sponsors

2017-S7022 (ACTIVE) - Details

2017-S7022 (ACTIVE) - Summary

2017-S7022 (ACTIVE) - Sponsor Memo

2017-S7022 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S7022

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Sponsored By

Archive: Last Bill Status - Stricken

co-Sponsors

2017-S7022 (ACTIVE) - Details

2017-S7022 (ACTIVE) - Summary

2017-S7022 (ACTIVE) - Sponsor Memo

2017-S7022 (ACTIVE) - Bill Text download pdf

Comments