NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A113
SPONSOR: Buchwald (MS) TITLE OF BILL: An act to amend the election law, in relation to
government vendor contributions
PURPOSE OF THE BILL:
This bill would reduce the appearance of or actual improper influence of
the state contracting process and increase its fairness by banning camp-
ing contributions from a company seeking state contracts to officehold-
ers with authority over procuring entities during a "restricted vendor
contribution period." Prospective vendors would be barred from making
contributions when responding to a request for proposals (RFPs) for six
months after winning a contract, or when lobbying to create a procure-
ment opportunity.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 of the bill creates a new section 131 of Article 14 of the
Election Law.
Subsection 1 (a) prohibits vendor contributions, indirectly or directly,
to political committees operationally controlled by officeholders with
authority over state governmental entities responsible for issuing a
procurement solicitation, evaluating responses, or determining or award-
ing a final contract.
Subsection 1 (b) distinguishes between the senate and assembly when a
solicitation for procurement is issued by the legislature.
Subsection 1 (c) requires the state government entity issuing a procure-
ment solicitation to include a notice of the prohibition on campaign
contributions by vendors submitting a proposal in response to the solic-
itation.
Subsection 2 defines the term "business entity" broadly including affil-
iated subsidiaries and political organizations directly or indirectly
controlled by the business entity.
Subsection 3 defines the "restricted vendor contribution period" during
which a business entity may not make contributions to the committees
operationally controlled by officeholders with authority over state
governmental entities issuing a procurement solicitation.
Subsection 4 indicates when the restricted vendor contribution period
begins and ends. The restricted vendor contribution period covers the
period from the issuance of a bid until 6 months after a contract has
been awarded (except the post award 6-month restricted period does not
apply to losing bidders) and, for vendors registering as lobbyists to
create a procurement opportunity, additionally includes the period
before a bid is issued during which the vendor is registered to lobby to
create a procurement opportunity or pilot program.
Section 2 of the bill amends sections 14-126 of Election Law by adding a
new subdivision 7.
Subdivision 7 (a) provides that any business entity intentionally
violating the law is subject to a penalt4 of up to $10,000 or 200
percent of the amount of the contribution, to be recoverable in a
special proceeding brought by the board of elections chief enforcement
counsel.
Subdivision 7 (b) provides that any person acting on behalf of an
officeholder, candidate or political committee who receives a contrib-
ution in contravention with the restricted vendor contribution prohibi-
tion will be required to refund the contribution.
Section 3 establishes the effective date of the legislation which is 180
days after passage into law.
JUSTIFICATION:
New York State government has over 50,000 contracts worth billions of
dollars with companies that provide products and services across numer-
ous industries. The United Nations, Transparency International and
Global Witness recognize the contracting process as vulnerable to
improper influence and "bid rigging." Allegations of bid rigging of
contacts in New York have led to indictments and trials of company exec-
utives and state officials in 2018. Nineteen states and New York City
have laws that restrict campaign contributions from entities seeking
government contracts.
Many state contracts are bid out through Requests for Proposals (RFPs).
Other contracts are the result of lobbying and engagement of government
by vendors to make their products and services known to state officials,
which may result in a competitive bid by the procuring entity or a
contract reached with a specific vendor without a competitive bidding
process. Currently, when a vendor presents its products and services to
a government entity, it may also make campaign contributions to office-
holders overseeing that entity. This may unfairly influence the procure-
ment process or create a perception of improper influence. This legis-
lation prohibits vendors from making contributions to the officeholder
with authority over the bidding entity during a "restricted vendor
contribution period." The "restricted vendor contribution period" varies
depending on vendor's activities, but at minimum covers from when an RFP
is issued to when a contract is awarded when a vendor makes a bid. The
restricted period lasts six months beyond the award of the contract for
the winning vendor. A vendor lobbying to create a procurement opportu-
nity or on an awarded contract is also prohibited from making contrib-
utions during that time The prohibition will larg ely impact contrib-
utions to the Governor, as most bidding entities are state agencies.
Contributions to legislators will only be banned if the legislature is
bidding for a product or service, and are limited to vendors lobbying or
bidding for a specific contract for that particular product or service.
PRIOR LEGISLATIVE HISTORY:
2018: A.9924 (Buchwald) - Referred to Election Law / S.8039 (Croci)
Referred to Elections
(Similar to Governor's proposal, part ;L of A.3010 (Budget) /S.2010
(Budget) of 2017 and Part ;L of A.9510 (Budget) /S.7510 (Budget) of
2018)
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None
EFFECTS ON FINES. TERMS OF IMPRISONMENT AND OTHER PENAL SANCTIONS:
None
EFFECTIVE DATE:
This act shall take effect on the 180th day after it shall have become a
law.
STATE OF NEW YORK
________________________________________________________________________
113
2019-2020 Regular Sessions
IN ASSEMBLY(Prefiled)
January 9, 2019
___________
Introduced by M. of A. BUCHWALD, ABINANTI, RIVERA, ENGLEBRIGHT, D'URSO,
ASHBY, MOSLEY, PAULIN, GALEF, COLTON, PALUMBO, BLAKE, LAVINE, CAHILL,
MORINELLO, GOODELL, SANTABARBARA -- Multi-Sponsored by -- M. of A.
CROUCH, DAVILA, SIMON -- read once and referred to the Committee on
Election Law
AN ACT to amend the election law, in relation to government vendor
contributions
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The election law is amended by adding a new section 14-131
2 to read as follows:
3 § 14-131. Government vendor contributions. 1. (a) It shall be unlawful
4 during the restricted vendor contribution period for any person, organ-
5 ization, group of persons, or business entity that submits a bid, quota-
6 tion, offer or response to a state governmental entity posting or solic-
7 itation for procurement to make a contribution to any officeholder of or
8 with authority over the state governmental entity or entities responsi-
9 ble for issuing such procurement posting or solicitation, evaluating
10 responses to the procurement posting or solicitation for purposes of
11 determining an award, or approving the selection of an awardee, or
12 awarding the final contract, or to any candidate for an office of such
13 governmental entity, including to such officeholder's or candidate's
14 authorized political committees or political committees the officeholder
15 or candidate exerts operational control over. It shall further be unlaw-
16 ful, pursuant to section 14-120 of this article, to make contributions
17 to political committees not authorized or operationally controlled by
18 the officeholder or candidate for the purpose of transferring a contrib-
19 ution to the officeholder's or candidate's authorized political commit-
20 tees or political committees they exert operational control over.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00939-01-9
A. 113 2
1 (b) For purposes of this section the assembly and senate shall be
2 separate and distinct governmental entities when a particular posting or
3 solicitation for procurement is issued by only one respective house.
4 (c) The state governmental entity directly responsible for issuing
5 such posting or solicitation for procurement shall include a notice of
6 the prohibition established by this section and the state governmental
7 entity responsible for evaluating responses to such posting or solicita-
8 tion shall provide to any person, organization, group of persons, or
9 business entity that submits a proposal in response to such posting or
10 solicitation a notice of the prohibition established by this section and
11 the restricted vendor contribution period commencement date.
12 2. As used in this section "business entity" means a business corpo-
13 ration, professional services corporation, limited liability company,
14 partnership, limited partnership, business trust, association or any
15 other legal commercial entity organized under the laws of this state or
16 any other state or foreign jurisdiction, including any subsidiary
17 directly or indirectly controlled by the business entity, and any poli-
18 tical organization, including but not limited to any political organiza-
19 tion organized under section 527 of the Internal Revenue Code, that is
20 directly or indirectly controlled by the business entity.
21 3. The restricted vendor contribution period described in this section
22 shall commence, with respect to a specific person, organization, group
23 of persons, or business entity when it files a statement of registration
24 pursuant to section one-e of the legislative law, or engages lobbying,
25 as defined by subdivision (c) of section one-c of the legislative law,
26 to generate a procurement opportunity or pilot program or submits a bid,
27 quotation, offer or response to the state governmental entity posting or
28 solicitation, at the earliest posting, on a state governmental entity's
29 website, in a newspaper of general circulation or in the procurement
30 opportunities newsletter in accordance with article four-C of the
31 economic development law of written notice, advertisement or solicita-
32 tion of a request for proposal, invitation for bids, or solicitations of
33 proposals, or any other method provided for by law or regulation for
34 soliciting a response from offerers intending to result in a procurement
35 contract with a state governmental entity. The restricted vendor
36 contribution period does not apply to a person, organization, group of
37 persons or business entity that is responding to a state governmental
38 entity's request for information or other informational exchanges occur-
39 ring prior to such governmental entity's posting or solicitation for
40 procurement provided it has not filed a statement of registration pursu-
41 ant to section one-e of the legislative law or engaged in lobbying, as
42 defined by subdivision (c) of section one-c of the legislative law, to
43 generate a procurement opportunity or pilot program.
44 4. The restricted vendor contribution period described in this section
45 shall end with respect to a specific person, organization, group of
46 persons, or business entity if:
47 (a) the person, organization, group of persons, or business entity is
48 the recipient of the final contract award, the restricted vendor
49 contribution period shall end six months after the final contract award
50 and approval by the state governmental entity and, where applicable, the
51 state comptroller and if the person, organization, group of persons or
52 business entity does not lobby on the execution of the contract after
53 its award; or
54 (b) the person, organization, group of persons, or business entity is
55 not the recipient of the final contract award, the restricted vendor
56 contribution period shall end with the final contract award and approval
A. 113 3
1 by the state governmental entity and, where applicable, the state comp-
2 troller.
3 5. The restricted vendor contribution period shall recommence if a
4 person, organization, group of persons or business entity engages in
5 activity pursuant to subdivision three of this section.
6 § 2. Section 14-126 of the election law is amended by adding a new
7 subdivision 8 to read as follows:
8 8. (a) Any person, organization, group of persons, or business entity
9 as that term is used in section 14-131 of this article, who, under
10 circumstances evincing an intent to violate such law, makes a contrib-
11 ution in contravention of section 14-131 of this article shall be
12 subject to a civil penalty not to exceed the greater of ten thousand
13 dollars or an amount equal to two hundred percent of the contribution,
14 to be recoverable in a special proceeding or civil action to be brought
15 by the state board of elections chief enforcement counsel.
16 (b) Any person who, acting as or on behalf of an officeholder, candi-
17 date, or political committee, accepts a contribution or receives a
18 transfer in contravention of section 14-131 of this article shall be
19 required to refund such contribution.
20 § 3. This act shall take effect on the one hundred eightieth day after
21 it shall have become a law.
