BILL NUMBER: S324
SPONSOR: GIANARIS
 
TITLE OF BILL:
An act to amend the election law, in relation to enacting the "democracy
preservation act"; and in relation to prohibiting contributions by
foreign-influenced business entities and requiring certification
 
PURPOSE:
To ban political spending by foreign-influenced business entities in New
York's state and local elections.
 
SUMMARY OF PROVISIONS:
Section one of the bill sets the title as the "democracy preservation
act." Section two of the bill outlines the legislative findings.
Section three of the bill amends the election law by adding § 14-116-a
to prohibit contributions by foreign-influenced business entities.
Section four of the bill amends § 14-100 of the election law by adding
subdivisions 18, 19, and 20 to define terms "foreign-influenced," "busi-
ness entity," and "foreign owner."
Section five of the bill amends § 14-116 of the election law by adding
subdivision 4 to require that business entities that make political
expenditures or contributions file with the state board of elections
certifying that they are not a foreign-influenced business entity as per
the date such expenditure or contribution was made, and that copies of
the statement of certification are provided to any campaign or committee
to which they contribute upon request of the recipient to any other
person to whom they contribute.
Section six of the bill sets the effective date.
 
JUSTIFICATION:
New York state welcomes immigrants, visitors, and investors from around
the world. However, its elections should be decided by the people of New
York and not by foreign investors or the business entities over which
they exert influence.
Under current federal law, foreign governments, foreign corporations,
foreign political parties, and foreign nationals other than lawful
permanent residents are prohibited from spending money in U.S.
elections. In 2012, the Supreme Court decision in Bluman v. Federal
Election Commission upheld this restriction. New York state law also
prohibits a foreign national, government, instrumentality or agent from
itself registering as an independent expenditure committee for the
purpose of making independent expenditures in any state or local
Election. However, neither federal nor state law adequately protects
against the influence of corporate political spending by U.S-registered
corporations with significant foreign ownership. In 2010, the Supreme
Court decision in Citizens United v. Federal Election Commission gave
corporations free rein in campaign spending, which they have taken
advantage of in the days since the decision. Today, America's largest
corporations spend hundreds of millions of dollars directly from their
corporate treasuries to influence elections. But the Supreme Court's
Citizens United decision applies to corporations that are "associations
of citizens." Multinational corporations increasingly do not meet that
definition. Foreign investors own increasing shares of U.S. corporate
stock, growing from only 4 percent in 1986 to approximately 40 percent
in 2020.
Where part of the shareholders' equity is attributable to foreign inves-
tors, spending corporate treasury funds on New York elections means
spending the equity of foreign entities on New York elections. Further-
more, foreign investors can hold substantial influence even with only a
minority of shares. The U.S. Securities and Exchange Commission, major
capital investors, corporate managers, and corporate governance experts
broadly agree that ownership or control of one percent or more of shares
can confer substantial influence on corporate decision-making.
Political spending by foreign-influenced business entities can weaken,
interfere with, or disrupt New York's democratic self-government and the
faith that the electorate has in its elected officials. To protect the
integrity of New York's democratic self-government, it is necessary to
prevent foreign-influenced business entities from influencing New York
elections through political spending.
Measures similar to this bill have been enacted on a municipal level
across the country. Seattle, Washington, passed an ordinance in January
2020 to ban foreign-influenced corporations from spending in their local
elections. In January of 2024, San Jose, California, approved a ban on
foreign corporate spending in city elections. At least twelve other
states and Congress have introduced or passed similar legislation on
foreign-influenced corporations.
This bill will protect democratic self-government from the undue influ-
ence of foreign-influenced corporations by effectively prohibiting them
from spending in elections across New York State.
 
LEGISLATIVE HISTORY:
2024: S371 (Gianaris) PASSED SENATE / A2633 (Walker) died in elections
2023: S371 (Gianaris) PASSED SENATE / A2633 (Walker) died in elections
2022: S1126-B (Gianaris) PASSED SENATE / A7458-A (Walker) died in
elections
2021: S1126-A (Gianaris) PASSED SENATE / A7458 (Walker) died in
elections
2020: S7578 (Gianaris) died in Elections
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
shall have become a law. Effective immediately, the addition, amendment
and/or repeal of any rule or regulation necessary for the implementation
of this act on its effective date are authorized to be made on or before
such effective date.

Statutes affected:
S324: 14-100 election law, 14-116 election law