By: Avi D. Kelin
On March 5, 2019, the New York State Senate approved a bill that would impose contribution restrictions on government contractors. This type of restriction on government-contractor political contributions is commonly known as a “pay-to-play” law. After passage by the Senate, for New York’s new pay-to-play bill (S3167) to become law, it would need to be passed by the Assembly and then signed by the governor.
Pay-to-play laws often impose reduced contribution limits on government contractors or prospective government contractors, while in some cases heightened disclosure obligations are also required.
New York’s S3167 would focus on reducing contributions from government contractors by instituting a ban on political contributions from a person, group, or business entity that submits a bid or otherwise responds to a state procurement opportunity.
The time frame of this prohibition, if passed, would be focused on the period surrounding procurement decisions, extending from the time of the response to a government-procurement opportunity through the date that is six months following the final contract award. (For vendors who do not succeed in winning the contract, the prohibition concludes once the final contract award is made to a different vendor.)
It is important to note that contributions to only enumerated covered New York recipients would be prohibited during the relevant time period. Under the bill, covered recipients would be limited to officeholders or candidates for offices with authority over the specific procurement opportunity. It is anticipated that this prohibition would be most relevant to gubernatorial candidates, as the Governor of New York has ultimate authority over the State Executive Branch.
While there is still a long legislative road to come before New York’s pay-to-play bill becomes law and while there are at this point a good number of open questions (for example, will the shareholders, officers, and directors of a government contractor be subject to the prohibition in addition to the contracting business entity itself?), New York government contractors should take S3167’s passage in the New York Senate as an opportunity to familiarize themselves with this potential pay-to-play prohibition and to assess their political activity more generally.