2017 -- S 0591

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LC001241

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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A N   A C T

RELATING TO ELECTIONS --REPORTING POLITICAL CONTRIBUTIONS BY STATE

VENDORS

     Introduced By: Senators Lombardi, McCaffrey, Archambault, Jabour, and Conley

     Date Introduced: March 15, 2017

     Referred To: Senate Judiciary

     (Attorney General)

It is enacted by the General Assembly as follows:

     SECTION 1. 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

office officeholder, candidate for general office officeholder, 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

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) "Municipal agency" means a branch, department, division, agency, commission,

board, office, bureau, or authority of the government of a municipality within the state of Rhode

Island;

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

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

     (7)(8) (i) "State or municipal 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 or municipal agency,

or;

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

services to any state or municipal agency,;

     (D) The spouse or minor child of a person qualifying as a state or municipal 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 or

municipal agency.

     (ii) "State or municipal 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 or municipal expense. The

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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, members of the joint committee on legislative services, municipal, school, or

other position that is filled by popular election or a candidate 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 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. For the purposes of a

municipality, the office that is considered to have ultimate responsibility for the award of the

contract shall be:

     (i) The mayor or governing body, if the contract requires approval or appropriation from

the mayor or governing body; or

     (ii) The mayor, if the contract requires approval of the mayor, or if a public officer who is

responsible for the award of a contract is appointed by the mayor.

     (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 (or any successor

provision of federal tax law) established by the bidding or contracting business entity; or

     (iv) Any political committee for which the bidding or contracting business entity.

     SECTION 2. 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 or municipal vendor who contracts with state or municipal agencies, in the

aggregate, annually more than five thousand dollars ($5,000), and any affiliated entities of such

state or municipal vendor, are prohibited from making any contributions to any political

committees established to promote the candidacy of:

     (1) The officeholder responsible for awarding the contracts; or

     (2) 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

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termination of the contracts, whichever is longer.

     (b) Any state or municipal vendor whose aggregate pending bids and proposals for

contract with state or municipal 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 or

municipal vendor's aggregate annual total value of state contracts exceed twenty-five thousand

dollars ($25,000), and any affiliated entities of such state or municipal 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 or municipal agencies and a state or municipal vendor that

violate subsections (a) or (b) of this section shall be voidable. If a state or municipal vendor

violates subsection (a) three (3) of this section or more times within a thirty-six (36) month

period, then all contracts between state or municipal agencies and that state or municipal vendor

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

or request for proposals from any state or municipal agency or otherwise enter into any contract

with any state or municipal 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 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO ELECTIONS --REPORTING POLITICAL CONTRIBUTIONS BY STATE

VENDORS

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     This act would extend the limitation on political contributions for state or municipal

vendors and would establish significant penalties for violations.

     This act would take effect upon passage.

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