2012 -- S 2978

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LC02424

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO ELECTIONS - STATE VENDOR'S POLITICAL CONTRIBUTIONS

     Introduced By: Senator Michael J. McCaffrey

     Date Introduced: May 17, 2012

     Referred To: Senate Judiciary

It is enacted by the General Assembly as follows:

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

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

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

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

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

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

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

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which business for profit is conducted;

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

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

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

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

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

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

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

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

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

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

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requirements of this chapter;

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

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contracts or contingency fee contracts services provided to a state agency by:;

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      (i) Any public utility company; or

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

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

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

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

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      (7) (i) "State vendor" means:

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

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

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

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

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services to any state agency,

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

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

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competition for state business with the reporting business entity, or

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

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

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

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agency.

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      (ii) "State vendor" does not mean:

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      (A) A municipality,

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

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Code, 26 U.S.C. section 501(c)(3),

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      (C) A hospital,

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      (B)(D) A state or federal agency, or

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

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

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with the purposes of this chapter.

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     (8) “Officeholder” means the governor, lieutenant governor, attorney general, secretary

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

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

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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 the lieutenant governor, the

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

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legislative services.

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     (9) “Affiliated entity” means:

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

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

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business entity;

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

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exempt organization described in section 501(c) of the Internal Revenue Code of 1986 (or any

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

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or

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

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     SECTION 2. Chapter 17-27 of the General Laws entitled "Reporting of Political

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

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

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

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

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political committees established to promote the candidacy of: (1) The officeholder responsible for

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awarding the contracts; or (2) Any other declared candidate for that office. This prohibition shall

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

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

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whichever is longer.

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

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

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

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

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

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

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

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

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contract is awarded.

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     (c) All contracts between state agencies and a state vendor that violates subsection (a) or

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(b) shall be voidable. If a state vendor violates subsection (a) three (3) or more times within a

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thirty-six (36) month period, then all contracts between state agencies and that state vendor shall

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

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

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

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

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

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or (b) shall pay to the state an amount equal to the value of the contribution no more than thirty

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(30) days after notice of the violation from the board of elections. Payments received by the state

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

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

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

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

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or application.

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     SECTION 3. This act shall take effect upon passage.

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LC02424

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO ELECTIONS - STATE VENDOR'S POLITICAL CONTRIBUTIONS

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     This act would expand and clarify those state vendors and their related businesses which

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are disqualified from making certain political contributions.

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     This act would take effect upon passage.

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LC02424

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