Relates to pay-to-play disclosure reform

Summary of specific provisions

The state finance law is amended by adding new section 139-1 to establish 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 partnership, 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 organization 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 contribution 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.

Justification

In our representative form of government, it is essential that individuals 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

New Bill.

Fiscal implications

To be determined.

Effective date

This act shall take effect on the ninetieth day after it shall have become a law.