Relates to pay-to-play disclosure reform; requires reporting of contributions business entities have made to a candidate committee or election fund of certain public officers prior to contracts for procurement.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A3525
SPONSOR: Englebright TITLE OF BILL:
An act to amend the state finance law, in relation to pay-to-play
disclosure reform
PURPOSE OR GENERAL IDEA OF BILL:
This bill requires the reporting of contributions that business entities
have made to a candidate, committees, or election funds of certain
public officers prior to contracts for procurement.
SUMMARY OF PROVISIONS:
The state finance law is amended by adding new section 139-1 to estab-
lish the reporting conditions for contributions by business entities
prior to the execution of the procurement contract.
The new section provides the definition of "business entity" which means
any natural or legal person, business corporation, professional services
corporation, limited liability company, partnership, limited partner-
ship, business trust, association labor organization, or any other legal
commercial -entity organized under the laws of this State or any other
state or foreign jurisdiction, including (i) all individuals who own or
control more than 10 percent of the profits or assets of a business
entity or 10 percent of the stock in the case of a business entity that
is a corporation for profit, as appropriate; (ii) key employees of the
business entity and their spouses; (iii) any subsidiaries directly or
indirectly controlled by the business entity; (iv) any political organ-
ization organized under section 527 of the Internal Revenue Code that is
directly or indirectly controlled by the business entity, other than a
candidate committee, election fund, or political party committee; and
(v) if a business entity is a natural person, that person's spouse or
child, who resides with that natural person submitting a procurement
contract to the Department of Audit and Control and the Department of
Law for approval or executing such contract if no approval is required.
It requires business entities to report on all contributions made during
the preceding eighteen months to a candidate committee or election fund
of any candidate or holder of the public office of Governor, Lieutenant
Governor, State Comptroller, Attorney General, or to a member of either
house of the state legislature. The report is made prior to awarding the
contract on a form to be created by the Office of Audit and Control. The
business entity also has the duty to report on any contributions it
makes during the term of the contract or for a period of eighteen months
after the award, whichever is greater.
New section 139-L also provides that it is a breach of the terms of a
government contract to conceal, or misrepresent the source of a contrib-
ution or make or solicit contributions through intermediaries in order
to conceal the source of the contribution. It also describes the process
by which business entities shall be notified and investigated for a
possible violation of this section and provides an accused entity an
opportunity to be heard.
As a result of a determination of non-responsibility pursuant to new
section 139-L, a business entity shall not be awarded the contract
unless it is necessary to protect public property or public health or
safety. Any subsequent determination of non-responsibility due to
violation of this section shall render the entity ineligible to submit a
proposal or be awarded a contract for a period of four years from the
date of the second final determination. Additionally, the Office of
General Services shall publish a list on its website of all business
entities that have been determined to be non-responsible bidders under
this section.
New section 139-1 requires every contract and bid application to contain
a provision that describes the requirements of this section. It also
requires the Office of the State Comptroller to maintain a detailed
listing on its website of all contributions made by business entities in
the procurement records of contracts involving such business entities.
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):JUSTIFICATION:
In our representative form of government, it is essential that individ-
uals have the trust, respect and confidence of the citizenry. While
individuals, businesses, association and other persons have a right to
participate in the political process of New York, it should be clear to
the public what entities the state is doing business with and what
contributions have been received by the public officials with control
over a given procurement. Every State department, board, bureau or
commission is obligated to administer State contracts, grants, programs
and funding streams in the best interest of the People of the State of
New York. It has long been the public policy of this State to secure for
the taxpayers the benefits of competition, to promote the public good by
promoting the honesty and integrity of bidders for public contracts and
the system in order to benefit the taxpayers. The State's procurement
process grants the State discretion to award a contract to a bidder
whose proposal will be most advantageous to the State. Therefore, the
Legislature must safeguard the integrity of State government procurement
by requiring adequate disclosure of such contributions and interactions
between State Officials and entities that benefit from doing business
with the State.
PRIOR LEGISLATIVE HISTORY:
2013-14 A8199 referred to governmental operations
2015-16 A6692 referred to governmental operations
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
Undetermined.
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law.
STATE OF NEW YORK
________________________________________________________________________
3525
2017-2018 Regular Sessions
IN ASSEMBLY
January 27, 2017
___________
Introduced by M. of A. ENGLEBRIGHT, MONTESANO -- read once and referred
to the Committee on Governmental Operations
AN ACT to amend the state finance law, in relation to pay-to-play
disclosure reform
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The state finance law is amended by adding a new section
2 139-l to read as follows:
3 § 139-l. Reporting of contributions by business entities. 1. For the
4 purposes of this section, a "business entity" shall mean any natural or
5 legal person, business corporation, professional services corporation,
6 limited liability company, partnership, limited partnership, business
7 trust, association, labor organization, religious corporation, education
8 corporation, or not-for-profit corporation organized under the laws of
9 this state or any other state or foreign jurisdiction, including:
10 a. all individuals who own or control more than ten percent of the
11 profits or assets of a business entity or ten percent of the stock in
12 the case of a business entity that is a corporation for profit, as
13 appropriate;
14 b. key employees of the business entity, which shall mean officers,
15 members of the board of directors and trustees, and their spouses;
16 c. any subsidiaries directly or indirectly controlled by the business
17 entity;
18 d. any political organization organized under section 527 of the
19 Internal Revenue Code that is directly or indirectly controlled by the
20 business entity, other than a candidate committee, election fund, or
21 political party committee; and
22 e. if a business entity is a natural person, that person's spouse
23 and/or child, residing with the business entity.
24 2. Prior to the submission to the department of law and the department
25 of audit and control for approval of a procurement contract for the sale
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03880-01-7
A. 3525 2
1 of goods, services, or construction to a state agency, as defined in
2 section one hundred sixty of this chapter, or any public authority when
3 its procurement contracts are submitted to the department of audit and
4 control for approval, or to either house of the state legislature or,
5 for procurements that do not require the approval of the department of
6 law or the department of audit and control, prior to the execution of
7 the procurement contract, including but not limited to contracts for the
8 acquisition, sale, or lease of any real property from or to any business
9 entity or prior to the award of a grant to any business entity, the
10 business entity shall report on a form to be created by the office of
11 audit and control all contributions the business entity made during the
12 preceding eighteen months to a candidate committee or election fund of
13 any candidate or holder of the office of governor, lieutenant governor,
14 state comptroller or attorney general if the procurement is to be made
15 by a state agency or contributions to candidates for election to the
16 house of the state legislature seeking the procurement if the procure-
17 ment is to be made by a house of the legislature. The business entity
18 shall have a continuing duty to report any contribution it makes during
19 the term of the contract until its completion or for a period of eigh-
20 teen months after the award, whichever is greater.
21 3. It shall be a breach of the terms of the government contract for a
22 business entity to knowingly conceal or misrepresent a contribution
23 given or received or to make or solicit contributions through interme-
24 diaries for the purpose of concealing or misrepresenting the source of
25 the contribution.
26 4. If a business entity is found, after notification of an allegation
27 of a violation of the provisions of this section, an opportunity to be
28 heard, and review and investigation by the ethics officer of the govern-
29 mental entity conducting the procurement or other designated official of
30 the procuring governmental entity responsible for reviewing and investi-
31 gating such matters, to have knowingly and willfully violated the
32 requirements of this section, it shall result in a determination of
33 non-responsibility for such business entity, and such business entity
34 and its subsidiaries, and any related or successor entity with substan-
35 tially similar function, management, board of directors, officers and
36 shareholders shall not be awarded the procurement contract, unless the
37 governmental entity finds that the award of the procurement contract to
38 the business entity is necessary to protect public property or public
39 health or safety, and that the business entity is the only source capa-
40 ble of supplying the required article of procurement within the neces-
41 sary timeframe, provided that the governmental entity shall include in
42 the procurement record a statement describing the basis for such find-
43 ing. Any subsequent determination of non-responsibility due to violation
44 of this section within four years of a determination of non-responsibil-
45 ity due to a violation of this section shall result in the business
46 entity being rendered ineligible to submit a proposal on or be awarded
47 any procurement contract for a period of four years from the date of the
48 second final determination. Every governmental entity shall ensure that
49 its solicitations of proposals for procurement contracts require poten-
50 tial vendors to disclose findings of non-responsibility due to
51 violations of the provisions of this section within the previous four
52 years made by any governmental entity. The failure of business entities
53 to timely disclose accurate and complete information or otherwise coop-
54 erate with the governmental entity in administering this provision shall
55 be considered by the governmental entity in its determination of respon-
56 sibility. Upon a determination of non-responsibility or debarment due to
A. 3525 3
1 a violation of this section, the governmental entity shall notify the
2 office of general services, which shall keep a list of all business
3 entities that have been determined to be nonresponsible bidders or
4 debarred due to violation of this section, and the office of audit and
5 control. The office of general services shall make such list publicly
6 available and shall publish such list on its website.
7 5. Every contract and bid application and specifications promulgated
8 in connection therewith covered by this article shall contain a
9 provision describing the requirements of this section and a statement
10 that compliance with this section shall be a material term and condition
11 of said contract or bid application and binding upon the parties thereto
12 upon the entry of all applicable contracts.
13 6. The department of audit and control shall maintain a detailed list-
14 ing of all contributions, on its website, made by interested business
15 entities in the procurement records of contracts involving such business
16 entities.
17 § 2. This act shall take effect on the ninetieth day after it shall
18 have become a law.
