Bill Text: NY S01149 | 2023-2024 | General Assembly | Introduced

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Bill Title: Relates to campaign funds for personal use.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Introduced) 2024-01-03 - REFERRED TO ELECTIONS [S01149 Detail]

Download: New_York-2023-S01149-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          1149

                               2023-2024 Regular Sessions

                    IN SENATE

                                    January 10, 2023
                                       ___________

        Introduced  by Sens. KRUEGER, ADDABBO, GOUNARDES, LIU, MAY -- read twice
          and ordered printed, and when printed to be committed to the Committee
          on Elections

        AN ACT to amend the election law, in  relation  to  campaign  funds  for
          personal use

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Section 14-130 of the election law, as amended by section 9
     2  of part CC of chapter 56 of the laws of 2015, paragraphs (ix) and (x) of
     3  subdivision 3 as amended and paragraph (xi) of subdivision 3 as added by
     4  chapter 136 of the laws of 2019, is amended to read as follows:
     5    § 14-130. Campaign funds for personal use. 1.  Contributions  received
     6  by  a  candidate  or a political committee may only be expended for [any
     7  lawful purpose. Such funds shall not be converted by  any  person  to  a
     8  personal  use  which is unrelated to a political campaign or the holding
     9  of a public office or  party  position.]  bona  fide  purposes  directly
    10  related to either:
    11    [2. No contribution shall be used to pay interest or any other finance
    12  charges  upon  monies  loaned  to  the campaign by such candidate or the
    13  spouse of such candidate.
    14    3. For the purposes of this section, contributions "converted  by  any
    15  person  to a personal use" are expenditures that are exclusively for the
    16  personal benefit of the  candidate  or  any  other  individual,  not  in
    17  connection  with  a political campaign or the holding of a public office
    18  or party position. "Converted by any person to  a  personal  use",  when
    19  meeting  the  definition  in this subdivision, shall include, but not be
    20  limited to, expenses for the following:
    21    (i) any residential or  household  items,  supplies  or  expenditures,
    22  including  mortgage,  rent  or  utility  payments  for  any  part of any
    23  personal residence of a candidate or officeholder or  a  member  of  the
    24  candidate's  or  officeholder's family that are not incurred as a result

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD03670-01-3
        S. 1149                             2

     1  of, or to facilitate, the individual's campaign, or the execution of his
     2  or her duties of public office or party position. In the event that  any
     3  property  or  building  is used for both personal and campaign use or as
     4  part  of  the  execution  of his or her duties of public office or party
     5  position, personal use shall constitute expenses that  exceed  the  pro-
     6  rated amount for such expenses based on fair-market value.
     7    (ii) mortgage, rent, or utility payments to a candidate or officehold-
     8  er  for  any  part  of  any  non-residential property that is owned by a
     9  candidate or officeholder or a member of a candidate's or officeholder's
    10  family and used for campaign purposes, to the extent the payments exceed
    11  the fair market value of the property's usage for campaign activities;
    12    (iii) clothing, other than items that are used in the campaign  or  in
    13  the execution of the duties of public office or party position;
    14    (iv) tuition payments unrelated to a political campaign or the holding
    15  of a public office or party position;
    16    (v)  salary  payments or other compensation provided to any person for
    17  services where such services are not solely  for  campaign  purposes  or
    18  provided in connection with the execution of the duties of public office
    19  or party position;
    20    (vi)  salary  payments or other compensation provided to a member of a
    21  candidate's family, unless the family  member  is  providing  bona  fide
    22  services to the campaign. If a family member provides bona fide services
    23  to  a  campaign,  any salary payments or other compensation in excess of
    24  the fair market value of  the  services  provided  shall  be  considered
    25  payments for personal use;
    26    (vii)  admission  to a sporting event, concert, theater, or other form
    27  of entertainment, unless such event is part of, or in connection with, a
    28  campaign or is related to the holding of public office  or  party  posi-
    29  tion;
    30    (viii)  payment  of any fines or penalties assessed against the candi-
    31  date  pursuant  to  this  chapter  or  in  connection  with  a  criminal
    32  conviction  or  by  the  joint  commission for public ethics pursuant to
    33  section ninety-four of the executive law or  sections  seventy-three  or
    34  seventy-three-a  of  the  public  officers law or the legislative ethics
    35  commission pursuant to section eighty of the legislative law;
    36    (ix) dues, fees, or gratuities at a country club, health club,  recre-
    37  ational  facility  or other entities with a similar purpose, unless they
    38  are expenses connected with a specific  fundraising  event  or  activity
    39  associated  with a political campaign or the holding of public office or
    40  party position that takes place on the organization's premises;
    41    (x) travel expenses including automobile purchases or  leases,  unless
    42  used  for  campaign  purposes or in connection with the execution of the
    43  duties of public office or party position  and  usage  of  such  vehicle
    44  which  is  incidental  to such purposes or the execution of such duties;
    45  and
    46    (xi) childcare expenses, other than expenses incurred in the  campaign
    47  or in the execution of the duties of public office or party position.
    48    4.  Nothing in this section shall prohibit a candidate from purchasing
    49  equipment or property from his or her  personal  funds  and  leasing  or
    50  renting  such  equipment  or property to a committee working directly or
    51  indirectly with him to aid or participate in his or  her  nomination  or
    52  election,  including  an exploratory committee, provided that the candi-
    53  date and his or her campaign treasurer sign a written  lease  or  rental
    54  agreement. Such agreement shall include the lease or rental price, which
    55  shall  not  exceed  the fair lease or rental value of the equipment. The
        S. 1149                             3

     1  candidate shall not receive lease  or  rental  payments  which,  in  the
     2  aggregate, exceed the cost of purchasing the equipment or property.
     3    5.  Nothing  in  this section shall prohibit an elected public office-
     4  holder from using campaign  contributions  to  facilitate,  support,  or
     5  otherwise assist in the execution or performance of the duties of his or
     6  her public office.
     7    6.  The  state  board  of elections shall issue advisory opinions upon
     8  request regarding  expenditures  that  may  or  may  not  be  considered
     9  personal  use of contributions. Any formal or informal advisory opinions
    10  issued by a majority vote of the commissioners of  the  state  board  of
    11  elections  shall  be binding on the board, the chief enforcement counsel
    12  established by subdivision three-a of section 3-100 of this chapter, and
    13  in any subsequent civil or criminal action or proceeding or  administra-
    14  tive proceeding.]
    15    a. promoting the nomination or election of a candidate; or
    16    b.  performing duties of public office or party position which are not
    17  paid for or eligible for reimbursement by the  state  or  any  political
    18  subdivision or private party, and ordinary and necessary expenses relat-
    19  ing to the holding of public office or party position.
    20    2.  Campaign funds shall not be converted to personal use, which shall
    21  be defined as expenditures that:
    22    a. are for the personal benefit of or to defray normal living expenses
    23  of the candidate, officeholder, immediate family or domestic partner  of
    24  either or any other person;
    25    b.  are  used  to  fulfill any commitment, obligation, or expense that
    26  would exist irrespective of the candidate's campaign  or  duties  as  an
    27  officeholder; or
    28    c. are put to any use for which the candidate or officeholder would be
    29  required  to  treat  the amount of the expenditure as gross income under
    30  section 61 of the Internal Revenue Code.
    31    3. Expenditures for personal use  shall  also  include,  but  are  not
    32  limited to, expenditures for:
    33    a.  residential  or  household  items,  supplies, maintenance or other
    34  expenditures, including mortgage, rent, utilities, repairs, or  improve-
    35  ments  for  any part of any personal residence of a candidate or office-
    36  holder, his or her immediate family or domestic partner;
    37    b. rent or utility payments that exceed fair market value for  use  of
    38  any  part  of  any  non-residential  property owned by a candidate, or a
    39  member of a candidate's family or domestic  partner  used  for  campaign
    40  purposes;
    41    c.  salary  and  other  fees  for  bona fide services to a campaign or
    42  legislative office that exceed fair and reasonable market value of  such
    43  services;
    44    d.  interest  or  any  other  finance charges for monies loaned to the
    45  campaign by the candidate or the spouse  or  domestic  partner  of  such
    46  candidate;
    47    e. tuition payments;
    48    f. dues, fees, or gratuities at private clubs, recreational facilities
    49  or  other  nonpolitical  organizations,  unless  connected to a specific
    50  widely attended fundraising event that takes place on the organization's
    51  premises;
    52    g. automobile purchases or long term leases; short  term  car  rentals
    53  and  cellular  equipment  and services not used exclusively for campaign
    54  purposes or duties as an officeholder;
        S. 1149                             4

     1    h. admission to sporting events, concerts, theaters, or other forms of
     2  entertainment, unless  part  of  a  specific  campaign  or  officeholder
     3  related activity; and
     4    i.  payment of any fines, fees, or penalties assessed pursuant to this
     5  chapter.
     6    Nothing in this section shall prohibit  a  candidate  from  purchasing
     7  office  equipment with personal funds and leasing or renting such equip-
     8  ment or property to a committee  working  with  or  for  the  candidate,
     9  provided  the  candidate or the campaign treasurer signs a written lease
    10  or rental agreement and files it with the appropriate required  campaign
    11  financial  filing  which  shall  include the lease or rental price which
    12  shall not exceed the fair lease or rental value of the equipment  or  in
    13  the aggregate exceed the cost of its purchase.
    14    § 2. Section 14-132 of the election law, as added by section 2 of part
    15  C of chapter 286 of the laws of 2016, is amended to read as follows:
    16    §  14-132.  Disposition  of  campaign  funds. [1.] Upon the death of a
    17  candidate, former candidate or holder of elective  office,  [where  such
    18  candidate  or  candidate's  authorized  committee] who received campaign
    19  contributions, all [such funds] contributions shall be disposed  of  [by
    20  any of the following means, or any combination thereof, within two years
    21  of the death of such person:
    22    (a)  returning,  pro rata, to each contributor the funds that have not
    23  been spent or obligated;
    24    (b) donating the funds to a charitable organization  or  organizations
    25  that meet the qualifications of section 501(c)(3) of the Internal Reven-
    26  ue Code;
    27    (c) donating the funds to the state university of New York or the city
    28  university of New York;
    29    (d) donating the funds to the state's general fund; or
    30    (e)  contributing  or  transferring  the  funds to a candidate, party,
    31  constituted or political committee in  accordance  with  the  applicable
    32  limits, if any, set forth in this article.
    33    2. No such candidate's authorized political committee shall dispose of
    34  campaign  funds  by  making  expenditures for personal use as defined in
    35  section 14-130 of this article.
    36    3. If funds are not disposed of  within  the  time  required  by  this
    37  section,  such funds shall be recoverable by the chief enforcement coun-
    38  sel of the state board of elections in a  special  proceeding  in  state
    39  supreme court in the manner prescribed by section 16-116 of this chapter
    40  and deposited into the state's general fund] within twelve months of the
    41  death of the candidate pursuant to subdivision one of this section.
    42    1.  Any  political  committee required to dispose of funds pursuant to
    43  this section shall, at the option of the representative of the estate of
    44  the candidate, or the treasurer of a political committee  formed  solely
    45  to  promote  the passage or defeat of a ballot proposal, dispose of such
    46  funds by any of the following means, or any combination thereof:
    47    a. returning, pro rata, to each contributor the funds  that  have  not
    48  been spent or obligated;
    49    b.  donating  the  funds to a charitable organization or organizations
    50  that meet the qualifications of  section  501(c)  (3)  of  the  Internal
    51  Revenue Code;
    52    c. donating the funds to the state university;
    53    d. donating the funds to the state's general fund;
    54    e.  transferring  the  funds to a political party committee registered
    55  with the state board of elections; or
        S. 1149                             5

     1    f. contributing the funds to a candidate or political  committee  such
     2  that this does not exceed the limits set forth in section 14-114 of this
     3  title.
     4    2. No representative of the estate of a candidate or political commit-
     5  tee  shall dispose of campaign funds by making expenditures for personal
     6  use as defined in section 14-130 of this title.
     7    § 3. This act shall take effect on the sixtieth  day  after  it  shall
     8  have  become  a  law;  provided, that the state board of elections shall
     9  notify all registered campaign committees of the  applicable  provisions
    10  of this act within thirty days after this act shall have become a law.