S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    324
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 8, 2025
                                ___________
 
 Introduced  by  Sens. GIANARIS, GONZALEZ, HARCKHAM, HOYLMAN-SIGAL, JACK-
   SON, KRUEGER, LIU, MAY, 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. 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.
              

                                                            LBD00069-01-5
 S. 324                              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. 324                              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 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.