A09670 Summary:

BILL NOA09670A
 
SAME ASNo Same As
 
SPONSORLifton
 
COSPNSRGottfried, Simon
 
MLTSPNSRTitone
 
Amd 203, Lim Lil L; add 139-l, St Fin L
 
Requires that the identity of all direct and indirect owners of the membership interests in a limited liability company be included in the articles of organization and in state contracts.
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A09670 Actions:

BILL NOA09670A
 
03/28/2016referred to corporations, authorities and commissions
05/31/2016amend and recommit to corporations, authorities and commissions
05/31/2016print number 9670a
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A09670 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A9670A
 
SPONSOR: Lifton
  TITLE OF BILL: An act to amend the limited liability company law and the state finance law, in relation to requiring the inclusion of the identity of all direct and indirect owners of the membership interests in a limited liability company in the articles of organization and in state contracts   PURPOSE: To increase transparency with respect to limited liability companies and contracts they enter into with the state.   SUMMARY OF PROVISIONS: The bill amends limited liability company law to require the inclusion of the identity of all direct and indirect owners of the membership interests in a limited liability company and the proportion of each direct or indirect member's ownership interest in the limited liability company be filed at time of organization, and further amends state finance law to require the inclusion of the identity of all direct and indirect owners of the membership interests in a limited liability company and the proportion of each direct or indirect members ownership interest in the limited liability company be included when entering into contracts between a limited liability company and the state.   EXISTING LAW: Section 203-cc of the limited liability company law; section 139-1 of the executive law.   JUSTIFICATION: Currently, the individual(s) behind the formation of a limited liability company are not required to be disclosed on the articles of organiza- tion. As LLCs can be campaign contributors, it is impossible to know who is behind the contributions, which can result in a conflict of interest, or the appearance of a conflict of interest. The conflict is heightened if the state itself is entering into a business contract with an LLC, which then makes direct campaign contributions. By requiring the inclu- sion of the identity of all direct and indirect owners of the membership interests in a limited liability company to be filed with the articles of organization and any state contracts, we would allow any New Yorker the access to important information that could, potentially, reveal a conflict of interest.   LEGISLATIVE HISTORY: New bill.   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: The thirtieth day after it shall have become law.
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A09670 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         9670--A
 
                   IN ASSEMBLY
 
                                     March 28, 2016
                                       ___________
 
        Introduced by M. of A. LIFTON, GOTTFRIED, SIMON -- Multi-Sponsored by --
          M.  of A.  TITONE -- read once and referred to the Committee on Corpo-
          rations, Authorities and Commissions  --  committee  discharged,  bill
          amended,  ordered reprinted as amended and recommitted to said commit-
          tee
 
        AN ACT to amend the limited liability company law and the state  finance
          law,  in  relation  to  requiring the inclusion of the identity of all
          direct and indirect owners of the membership interests  in  a  limited
          liability  company  in  the  articles  of  organization  and  in state
          contracts
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section 1. Paragraphs 6 and 7 of subdivision (e) of section 203 of the
     2  limited  liability  company  law, as added by chapter 470 of the laws of
     3  1997, are amended to read as follows:
     4    (6) if all or specified members are to be liable in their capacity  as
     5  members  for  all  or specified debts, obligations or liabilities of the
     6  limited liability company as authorized pursuant to section six  hundred
     7  nine  of  this chapter, a statement that all or specified members are so
     8  liable for such debts, obligations or liabilities in their  capacity  as
     9  members  of  the  limited  liability  company  as authorized pursuant to
    10  section six hundred nine of this chapter; [and]
    11    (7) the identity of all direct and indirect owners of  the  membership
    12  interests  in  the  limited liability company and the proportion of each
    13  direct or indirect member's ownership interest in the limited  liability
    14  company; and
    15    (8)  any other provisions, not inconsistent with law, that the members
    16  elect to include in the articles or organization for the  regulation  of
    17  the  internal  affairs  of the limited liability company, including, but
    18  not limited to, (A) the business purpose for which the limited liability
    19  company is formed, (B) a statement of whether there are  limitations  on
    20  the  authority  of  members or managers or a class or classes thereof to
    21  bind the limited liability company  and  (C)  any  provisions  that  are
    22  required  or  permitted to be included in the operating agreement of the
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14532-03-6

        A. 9670--A                          2
 
     1  limited liability company pursuant to section four hundred seventeen  of
     2  this chapter.
     3    § 2. The state finance law is amended by adding a new section 139-l to
     4  read as follows:
     5    §  139-l. Contracts with limited liability companies.  Notwithstanding
     6  any other provision of law, any contract entered into by the state  with
     7  a  limited  liability  company, shall, in addition to any other require-
     8  ments for such contract, include the identity of all direct and indirect
     9  owners of the membership interests in the limited liability company  and
    10  the proportion of each direct or indirect member's ownership interest in
    11  the limited liability company.
    12    §  3.  This  act shall take effect on the thirtieth day after it shall
    13  have become a law and shall apply to all contracts entered into  by  the
    14  state on or after such effective date.
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