The Legislature adjourned sine die late Wednesday, May 4, 2016.

Lawmakers started the impeachment process of Gov. Robert Bentley and passed an education budget. The general fund added $15 million to Medicaid, but left an $85 million deficit. Bentley is expected to call for a special session to address the deficit.

Q. My employer is a wholly owned subsidiary of a parent corporation.  Does a parent corporation, a subsidiary, or other affiliated entity have its own contribution limit or must the contributions be aggregated and have a shared limit?

A. This is a very important question that must be addressed when making a contribution, particularly when there is a hierarchy to the corporate structure.  If a limit is shared, the parent, subsidiary, or other affiliated entity must have an open line of communication when it comes to making political contributions.

In New York, each affiliated or subsidiary corporation, if a separate legal entity, has its own limit.

In California, contributions made by certain combinations of affiliated individuals, entities, and committees must be aggregated.  It all comes down to a matter of control:

• The contributions of an entity whose contributions are directed and controlled by any individual must be aggregated with contributions made by that individual and any other entity whose contributions are directed and controlled by the same individual.
• If two or more entities make contributions directed and controlled by a majority of the same persons, the contributions of those entities must be aggregated.
• Contributions made by entities majority-owned by any person must be aggregated with the contributions of the majority owner and all other entities majority-owned by that person, unless those entities act independently in their decision to make contributions.

So in California, a parent and subsidiary share a contribution limit if the decision to make a contribution is directed and controlled by a majority of the same persons.  If the parent and subsidiary act wholly independently of each other in deciding to make a contribution, the parent and subsidiary each have their own limit.

In New Jersey, if a corporation has subsidiaries, affiliates, branches, or locals, then the contributions of these organizations cannot exceed the applicable contribution limit in the aggregate.  Two or more corporations will be conclusively deemed to be affiliated if:

• Any individual, corporation, partnership, company, association, or other entity owns, directly or indirectly, more than a 30 percent interest in each of such corporations; or
• One such corporation owns, directly or indirectly, more than a 30 percent interest in the other such corporation.

These are just a few examples of aggregation of limits.  As we always advise, verify the rules in your state before making political contributions.

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: experts@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

The Connecticut General Assembly adjourned its regular session yesterday, May 4, 2016, without reaching a deal on the state budget.

As time ran out on the session, constitutionally mandated to end at midnight, Democratic leaders postponed a vote on the budget and will return next week for a special session. The Senate announced the special session will begin on May 12.

Lobbying

California: “State Senator Calls for a Ban on Private Meetings with Coastal Commissioners to ‘Level the Playing Field’” by Dan Weikel and Kim Christensen for Los Angeles Times

Campaign Finance

Kentucky: “FBI Agent: Illegal donations went to campaigns of Andy Beshear, Jack Conway” by John Cheves for Lexington Herald-Leader

Montana: “Montana Defends Campaign Finance Law Ahead of Elections” by The Associated Press for Billings Gazette

Ethics

“When It Comes to Politics, Corruption Is Subtler Than You Think” by Trevor Burrus for Washington Post

Louisiana: “Walter Reed Guilty on 18 of 19 Counts in Federal Corruption Trial” by Robert Rhoden for New Orleans Times-Picayune

New York: “From Albany to Prison: Ex-lawmakers on life behind bars” by Vivian Yee for New York Times

Rhode Island: “R.I. House Finance Chairman Resigns; Investigation Involves Prostitution” by Katherine Gregg for Providence Journal

Elections

“John Kasich Exits the Presidential Race, Leaving Trump as Presumptive Nominee” by David Fahrenthold, David Weigel and Philip Rucker for Washington Post

“Big Business Fears Campaign-Trail Criticisms Putting Policy Priorities at Risk” by Jim Tankersley for Washington Post

The Hawaii State Ethics Commission is currently accepting applications for Executive Director to replace former executive director and chief legal counsel, Leslie Kondo. The Legislature appointed Kondo as the new state auditor in April; his eight-year term began May 1.

Kondo spent the last five years cracking down on certain activities by lawmakers and issuing strict interpretations of the state ethics code. While no longer monitoring legislative ethics, Kondo believes his new position will allow him to continue to promote public confidence in state government.

Lobbying

California: “Legislature Passes Bill to Disclose Lobbying on State Contracts” by Guy Marzorati for KQED

Campaign Finance

New Jersey: “Ex-Birdsall Exec Admits Role in $1M Pay-to-Play Scheme” by S.P. Sullivan (NJ Advance Media) for Newark Star-Ledger

New York: “Hearing Advances Reforms to City Campaign Finance System” by Samar Khurshid for Gotham Gazette

Ethics

“What is Corruption?” by Robert Gebelhoff for Washington Post

Alabama: “Zeigler Says He’ll File Court Motion Seeking Bentley Testimony” by Mike Cason for AL.com

New York: “Sheldon Silver, Ex-New York Assembly Speaker, Gets 12-Year Prison Sentence” by Benjamin Weiser and Vivian Yee for New York Times

Virginia: “Fla. Businessman Paid $10K for Va. Senator’s Trip to Meet Syrian President Assad” by Laura Vozzella for Washington Post

Elections

“Ted Cruz Drops Out of the Republican Presidential Race” by Sean Sullivan and Katie Zezima for Washington Post

“Sanders Wins Indiana, but Clinton Looks to November” by Heidi Przybyla for USA Today

Legislative Issues

“Now, Dennis Hastert Seems an Architect of Dysfunction as Speaker” by Carl Hulse for New York Times

Gov. Larry Hogan signed a pay-to-play bill, amending campaign finance reporting requirements for filers doing public business. House Bill 112 requires filers disclosing contributions to also include contributions of any subsidiary entity the filer owns or controls by 30 percent or more, regardless of whether the subsidiary is doing public business in Maryland.

A limited exception exists for publically-traded banking institutions not owned or controlled by anyone in excess of 10 percent if they are not contracted with Maryland in connection with public business.

The law takes effect October 1, 2016.

You know I hate cancer.  No one wants to be in the club, yet every day someone else is initiated without a request.

It has been three years since we had our first Race for the Cure team for the Susan G. Komen event in Akron. Well, I have re-signed up our ST8PACS team on the site and registered to participate in the 5K walk. This year’s event will be Saturday, July 23 at Canal Park.

Why are we involved?

One in eight women in the US will be diagnosed with breast cancer.

Because every minute someone dies of breast cancer.

Breast cancer knows no boundaries—be it age, gender, socio-economic, or geographic location.

Consider going to http://neohio.info-komen.org to register and join the ST8PACS team by contributing.

Until next month remember, in 1980, the five-year survival rate for women diagnosed with early stage breast cancer was 74%. Today it is 99% because so many people have helped to raise money for awareness, having mammograms, and the research to help end breast cancer.

Thank you.

Elizabeth Z. Bartz

President and CEO
@elizabethbartz

The San Francisco Ethics Commission has announced two interested persons meetings on May 11 and May 16 to discuss a proposed November 2016 ballot measure that would ask San Francisco voters to place new restrictions on lobbyist contributions, bundling of contributions by lobbyists, and gifts from lobbyists.

The feedback from these meetings will be used in the analysis and recommendations on the proposed ballot measure presented at the May 23, 2016 commission meeting.

Written comments and RSVPs can be sent via email to ethics.commission@sfgov.org.

Assembly Bill 1200 has been sent to California Gov. Jerry Brown. The bill revises the definition of lobbyist to include individuals attempting to influence state governmental procurement of $250,000 or more.

Legislators passed the bill despite criticism of the measure from the California Fair Political Practices Commission.

If Brown signs the bill, the new rules will go into effect January 1, 2017.

Campaign Finance

“Clinton Fundraising Leaves Little for State Parties” by Kenneth Vogel and Isaac Arnsdorf for Politico

“Cruz’s Faltering Campaign Shows the Risks of Depending on a Few Wealthy Donors” by Joseph Tanfani and Noah Bierman for Los Angeles Times

Massachusetts: “Top Donors Could Gain More Access to Baker, Officials” by Jim O’Sullivan for Boston Globe

Washington: “Sen. Roach Wants AG to Decide If Campaign Donors Should Be Named on Petitions” by Joseph O’Sullivan for Seattle Times

Ethics

Florida: “Nonprofit Contributions from Developers Get Scrutiny in Miami Beach” by James Teeple for The Real Deal

New York: “Executive Chamber Receives Subpoena; Percoco Said to Be Under Federal Gaze” by Casey Seiler for Albany Times Union

Pennsylvania: “Guilty: Aide to former PA Gov. Rendell pleas to wire fraud” by Marc Levy (Associated Press) for Binghamton Press & Bulletin

South Carolina: “Watchdogs Say Ethics Bills Could Instill Confidence” by Tim Smith for Greenville News

Elections

“Stricter Rules for Voter IDs Reshape Races” by Michael Wines and Manuel Fernandez for New York Times

Virginia: “Va. Republicans Hire Lawyer in Bid to Stop Restoration of Felons’ Voting Rights” by Laura Vozzella for Washington Post

Vendors and lobbyists are now required to disclose campaign contributions and affirm the disclosed contributions were made without the expectation of a governmental benefit in return. The late-2015 amendment requires disclosure of contributions to county officials and county-level candidates if made on or after April 1, 2016.

While the amendment aims at promoting greater transparency of the procurement process, some have argued contributions to political parties and noncandidate committees allow contributors to remain out of public view.

The Kansas Legislature adjourned after passing a budget in the early hours of May 2, 2016. Lawmakers have been in session only 73 of the scheduled 90 days and will return to the state capitol on June 1 for a brief adjournment ceremony.

Leadership is hopeful business has been completed for the year; however, more work may be ahead as the state’s supreme court reviews changes to how more than $4 billion is distributed to school districts. Justices will hear arguments on May 10.

Photo of the Kansas State Capital dome by Aviper2k7 on Wikimedia Commons.

Last week, Gov. Matt Bevin signed a revenue bill including changes for executive agency lobbyists. House Bill 80 contains a provision increasing the registration fee for lobbying executive agencies from $125 to $500 beginning July 1, 2016 through June 30, 2018.

The change was included in a last-minute amendment by the Senate on the final day of the legislative session. The Executive Branch Ethics Commission had been pushing hard during the closing days of the session to increase the fee, fearing a budget short-fall would result in cuts to the Commission’s staff.