2016 -- H 7543

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LC004012

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO ELECTIONS - REPORTING OF POLITICAL CONTRIBUTIONS BY STATE

VENDORS

     Introduced By: Representatives Marcello, Nunes, McKiernan, Ajello, and O`Grady

     Date Introduced: February 10, 2016

     Referred To: House Judiciary

     (Attorney General)

It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 17-27 of the General Laws entitled "Reporting of Political

Contributions by State Vendors" is hereby amended by adding thereto the following sections:

     17-27-6. Prohibition of political contributions. -- (a) Any state vendor who contracts

with state agencies, in the aggregate, annually more than five thousand dollars ($5,000), and any

affiliated entities of such state vendor, are prohibited from making any contributions to any

political committees established to promote the candidacy of: the officeholder responsible for

awarding the contracts; or any other declared candidate for that office. This prohibition shall be

effective for the duration of the term of office of the incumbent officeholder awarding the

contracts or for a period of two (2) years following the expiration or termination of the contracts,

whichever is longer.

     (b) Any state vendor whose aggregate pending bids and proposals for contract with state

agencies total more than five thousand dollars ($5,000), or whose aggregate pending bids and

proposals for contract with state agencies combined with the state vendor's aggregate annual total

value of state contracts exceed twenty five thousand dollars ($25,000), and any affiliated entities

of such state vendor, are prohibited from making any contributions to any political committee

established to promote the candidacy of the officeholder responsible for awarding the contract on

which the business entity has submitted a bid or proposal during the period beginning on the date

the invitation for bids or request for proposals is issued and ending on the day after the date the

contract is awarded.

     (c) All contracts between state agencies and a state vendor that violate subsections (a) or

(b) of this section shall be voidable. If a state vendor violates subsection (a) of this section three

(3) or more times within a thirty six (36) month period, then all contracts between state agencies

and that state vendor shall be void, and that state vendor shall not bid or respond to any invitation

to bid or request for proposals from any state agency or otherwise enter into any contract with any

state agency for three (3) years from the date of the last violation. A notice of each violation and

the penalty imposed shall be published on the website of the board of elections.

     (d) Any political committee that has received a contribution in violation of subsections

(a) or (b) of this section shall pay an amount equal to the value of the contribution to the state no

more than thirty (30) days after notice of the violation from the board of elections. Payments

received by the state pursuant to this subsection shall be deposited into the general revenue fund.

     17-27-7. Severability. -- If the provisions of this act or its application to any person or

circumstance are held invalid, the invalidity of that provision or application does not affect the

other provisions or applications of this act that can be given effect without the invalid provision

or application.

     SECTION 2. Section 17-27-1 of the General Laws in Chapter 17-27 entitled "Reporting

of Political Contributions by State Vendors" is hereby amended to read as follows:

     17-27-1. Definitions. -- As used in this chapter:

      (1) "Aggregate amount" means the total of all contributions made to a particular general

officer, candidate for general office, or political party within the time period set forth;

      (2) "Business entity" means a sole proprietorship, partnership, firm, corporation, holding

company, joint stock company, receivership, trust, or any other entity recognized in law through

which business for profit is conducted;

      (3) "Contribution" means a transfer of money, paid personal services, or other thing of

value reportable under the terms of chapter 25 of this title;

      (4) "Executive officer" means any person who is appointed or elected as an officer of a

business entity by either the incorporators, stockholders, or directors of the business entity who is

in charge of a principal business unit, division, or function of the business entity, or participates

or has authority to participate other than in the capacity of a director in major policymaking

functions of the business entity or who is actively engaged in soliciting business from the state or

conducting, other than in a ministerial capacity, business with the state; provided, that officers of

the business entity who are located outside the state, are not residents of the state, and do not

participate in the business of the business entity within this state shall be exempted from the

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requirements of this chapter;

      (5) "Goods or services" shall include, but not be limited to, cost reimbursement

contracts or contingency fee contracts; not include services provided to a state agency by:

      (i) Any public utility company; or

     (ii) A federal or state banking institution or other depository institution solely in

connection with depository accounts held by the institution on behalf of a state agency;

      (6) "State agency" means a branch, department, division, agency, commission, board,

office, bureau, or authority of the government of the state of Rhode Island;

      (7) (i) "State vendor" means:

      (A) A person or business entity that sells goods or provides services to any state agency,

      (B) A person or business entity which has an ownership interest of ten (10%) percent or

more in a business entity that sells goods or provides services to any state agency, or

      (C) A person who is an executive officer of a business entity that sells goods or provides

services to any state agency,

      (D) The spouse or minor child of a person qualifying as a state vendor under the terms of

subparagraphs (A), (B) or (C) of this paragraph, unless the spouse works for a vendor in

competition for state business with the reporting business entity, or

      (E) A business of the business entity that is a parent or subsidiary of a business entity

that sells goods or provides services to any state agency., or

     (F) A person or business entity that bids to sell goods or provide services to any state

agency.

      (ii) "State vendor" does not mean:

      (A) A municipality,

      (B) A corporation established pursuant to Section 501(c)(3) of the Internal Revenue

Code, 26 U.S.C. § 501(c)(3),

      (C) A hospital,

      (D) A state or federal agency, or

      (E) A person receiving reimbursement for an approved state expense. The director of

administration is authorized to provide as a public record a list of further exemptions consistent

with the purposes of this chapter.

     (8) "Officeholder" means the governor, lieutenant governor, attorney general, secretary of

state, treasurer, and members of the joint committee on legislative services or candidates for the

aforementioned offices. The governor shall be considered the officeholder responsible for

awarding all contracts by all officers and employees of, and vendors and others doing business

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with, executive branch state agencies not within the jurisdiction of lieutenant governor, the

attorney general, the secretary of state, the treasurer or members of the joint committee on

legislative services.

     (9) "Affiliated entity" means:

     (i) Any subsidiary of the bidding or contracting business entity;

     (ii) Any member of the same unitary business group as the bidding or contracting

business entity;

     (iii) Any organization recognized by the United States Internal Revenue Service as a tax-

exempt organization described in §501(c) of the Internal Revenue Code of 1986, 26 U.S.C.

§501(c), (or any successor provision of federal tax law) established by the bidding or contracting

business entity; or

     (iv) Any political committee of or formed by the bidding or contracting business entity.

     SECTION 3. This act shall take effect upon passage.

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LC004012

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO ELECTIONS - REPORTING OF POLITICAL CONTRIBUTIONS BY STATE

VENDORS

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     This act would disqualify certain state vendors from making political contributions, based

on their business with the state.

     This act would take effect upon passage.

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