A06975 Summary:

COSPNSRSimon, Zebrowski, Cahill, Miller, Gottfried, Lavine, Jaffee, Galef, Abinanti, Woerner, Buchwald, Colton, Magnarelli, Mayer, Mosley, Santabarbara, Skoufis, Cook, Bronson, Rosenthal, Ryan, Barrett, Fahy, Russell, Steck, Rozic, Simotas, Ortiz, Blake, Quart, Dinowitz, Peoples-Stokes, Lifton, Schimel, Cusick, Titone, Hunter, Stirpe, Ceretto, Jean-Pierre, Nolan, O'Donnell, Paulin, Solages
MLTSPNSRBrennan, Englebright, Farrell, Glick, Lupardo, Lupinacci, Magee, Markey, McDonald, Robinson, Schimminger, Seawright, Thiele
Amd §§14-116 & 14-120, El L
Relates to political contributions by limited liability companies.
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A06975 Actions:

04/15/2015referred to election law
04/23/2015amend and recommit to election law
04/23/2015print number 6975a
04/29/2015reported referred to codes
04/29/2015amend and recommit to codes
04/29/2015print number 6975b
05/04/2015reported referred to rules
05/04/2015rules report cal.37
05/04/2015ordered to third reading rules cal.37
05/12/2015passed assembly
05/12/2015delivered to senate
01/06/2016DIED IN SENATE
01/06/2016ordered to third reading cal.261
04/05/2016amended on third reading 6975c
06/16/2016passed assembly
06/16/2016delivered to senate
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A06975 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6975C         REVISED MEMO 06/17/2016
SPONSOR: Kavanagh (MS)
  TITLE OF BILL: An act to amend the election law, in relation to poli- tical contributions   PURPOSE: This bill would add Limited Liability Companies (LLCs) to section 14-116 of the election law, so that LLCs are made subject to the existing contribution limits for corporations. This bill would also increase transparency by requiring disclosure of the identity of individuals with membership interests in LLCs and attribute contributions to members of LLCs.   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, wvvw.nydailynews.com/opinion/bill-hammond-bending-cash-article-1.2202 628). 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: A6975C - Passed Assembly 2015: A6975B - Passed Assembly 2014: A5067 - On the floor 2013: A5067 - On the floor 2012: A2493 - Codes 2011: A2493 - Rules 2010: A11355A - Rules Similar legislation: 2016: A2614 - Election Law 2015: A2614 - Election Law 2014: A112 - Election Law 2013: A112 - Election Law 2012: A5912 - Election Law 2011: A5912 - Election Law 2010: A7069 - Election Law 2009: A7069 - Election Law   EFFECTIVE DATE: This act shall take effect immediately.
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