seec: FAQs State Contractor Provisions

 
{SEEC}  General
 
What is a "state contract"? (rev. 6/6/2012)
A “state contract” is defined broadly to include contracts or agreements for (i) the rendition of services, (ii) the furnishing of any goods, material, supplies, equipment or any items of any kind, (iii) the construction, alteration or repair of any public building or public work, (iv) the acquisition, sale or lease of any land or building, (v) a licensing arrangement, or (vi) a grant, loan or loan guarantee.  To trigger the state contractor provisions, the state contract in question must be valued at or above $50,000 in a calendar year, for a single contract, or $100,000 or more in a calendar year, for a series of contracts.
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Are there any exceptions to the definition of state contract?  (rev. 6/6/2012)
Yes.  The term “state contract” does not include any agreement or contract with the state, any state agency, or any quasi-public agency that is exclusively federally funded, an education loan, a loan to an individual for other than commercial purposes or any agreement or contract between the state or any state agency and the United States Department of the Navy or the United States Department of Defense.  
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What is the "rendition of services"?  (rev. 6/6/2012)
“Rendition of services” is defined as the provision of any service to a state agency or quasi-public agency in exchange for a fee, remuneration or compensation of any kind from the state or through an arrangement with the state.
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Is a contract with a state agency that produces revenue to the state included in the definition of a state contract and therefore subject to the contribution and solicitation ban?  (rev. 6/6/2012)
Yes.  Contracts that result in revenue to the state of Connecticut, such as payments paid by airlines to Bradley International Airport for use of communication towers, are considered state contracts for purposes of the ban. 
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How is the value of the contract calculated for purposes of determining the applicability of the state contractor contribution ban?  (rev. 6/6/2012)
The value of a state contract is determined on a calendar year basis.  The value of the contract or series of contracts is the total amount of the contract award, fees, remuneration or compensation of any kind or through an arrangement with the state, any state agency or quasi-public agency in a calendar year.  If the contract extends over several years, once the value drops below $50,000, for a single contract, for example, the entity ceases to be a state contractor for purposes of the ban on December 31 of that calendar year.  If the value of the contract again exceeds $50,000 in a subsequent calendar year, the entity would again be a state contractor. 
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My union has a collective bargaining agreement with the state.  Is that a state contract for purposes of this law?  (rev. 6/6/2012)
No. Collective bargaining agreements or contracts are not considered state contracts for purposes of this law.  However, if the union has any agreement to provide any other service to a state agency or quasi-public agency, such as personnel training and human services consulting, and such agreement or contract for those services is valued at or above $50,000 in a calendar year, for a single contract, or $100,000 or more in a calendar year for a series of contracts with one or several agencies, then the union would be considered a state contractor, and be subject to the contribution and solicitation provisions.
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Are bond purchase agreements considered state contracts?  (rev. 6/6/2012)
Yes. Bond purchase agreements are considered “the rendition of services” within the meaning of the statute.  In addition, consultants to the state regarding bond issues are considered state contractors, assuming they meet the monetary threshold, even if they are paid from the bond proceeds and not from state funds.
 
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Are fees paid to the state or a state agency by an individual for a professional or trade or business license, such as a hairdresser or home improvement contractor, considered a licensing arrangement and thus a state contract?  (rev. 6/6/2012)
No.  Fees paid by individuals for licenses to practice a profession or trade are not considered a licensing arrangement and thus are not considered a state contract for purposes of this law. 
 
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Are the services that a company or organization provides to the public or a particular segment of the public, such as special needs children, under an agreement with a state agency considered “services to the state?”  (rev. 6/6/2012)
Yes.  Services to the public or a specific population under agreement with a state agency are services to the state.
 
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{SEEC}  Starting and Termination Dates of Contracts
 
 When does the contract begin for purposes of the state contractor provisions: when it is signed or when the first payment is made under the contract?  (rev. 6/6/2012)
The contract begins when it is officially awarded/approved by the state agency or quasi-public agency. Where a company or organization does not have a time-limited agreement or contract, but bills the state for rendition of services, the date of the state’s first payment in a calendar year under the contract is the “start date.”
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When does a state contract terminate, and when do the state contractor provisions cease to apply to a state contractor whose contract has terminated?  (rev. 6/6/2012)
Termination of the contract means that all conditions, services and payments under the contract have been performed, completed or made.  If the contract is terminated at some point during the calendar year, the contractor will remain subject to the state contractor provisions until December 31 of the year in which the contract terminates. 
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What about a grant or loan that a state contractor has received from a state or       quasi-public agency?  (rev. 6/6/2012)
For a single loan contract with a state agency or quasi-public agency, the ban would remain in effect until January 1 of the next calendar year after the balance (amount owed) falls below $50,000.  For more than one loan agreement (or any combination of loans, grants, and state payments) the ban would remain in effect until January 1 of the next calendar year after the balance of the loans or the value of the grants falls below $100,000.
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Are there some loans received from a state or quasi-public agency that are exempt?  (rev. 6/6/2012)
Education loans or loans made to an individual for other than commercial purposes (e.g. a residential mortgage loan) are not considered state contracts for purposes of the state contractor provisions.
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If I am a prospective state contractor, how will I know when the ban ends?             (rev. 6/6/2012)
The ban is no longer applicable when the state announces or posts the name of the winning bidder or proposer, or otherwise officially notifies the entity that it has not been awarded the contract (including a grant or loan) in question.  If you are the winning bidder or proposer, then you become a state contractor.
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{SEEC}  Principal Definitions 
 
Who are the principals of the state contractor or prospective state contractor that is a business entity?  (rev. 6/6/2012)
The principals of a business entity are:

i) members of the board of directors;
ii) individuals with ownership interest of 5% or more in the business;
iii) a president, treasurer, or executive vice president of the business;
iv) employees with managerial or discretionary responsibilities with respect to the state contract;
v) the spouse or dependent children of individuals described above; and
vi) a political committee established by the business entity that is the state contractor or established or controlled by an individual described above.
 
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Who are the principals of the state contractor or prospective state contractor that is a non-business entity?  (rev. 6/6/2012)
The principals of a non-business entity (e.g. a non-profit) are:

i) the chief executive officer, or if there is no CEO then the officer who possesses comparable powers and duties;
ii) employees who have managerial or discretionary responsibilities with respect to the state contract;
iii) the spouse or dependent children of individuals described above; and
iv) a political committee established by the non-business entity that is the state contractor or established or controlled by an individual described above.
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Who is an employee with “managerial or discretionary responsibilities with respect to the state contract”?  (rev. 6/6/2012)
For the purposes of this law, employees with managerial or discretionary responsibilities with respect to the state contract are those individuals having direct, extensive and substantive responsibilities with respect to the negotiation of the state contract and not peripheral, clerical or ministerial responsibilities.
 
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When is a “dependent child” considered a principal of a state contractor or prospective state contractor?  (rev. 6/6/2012)
A dependent child is considered a “principal” when that child is 18 years of age or older, resides in the household and can legally be claimed as a dependent on the federal income tax return of the individual.
 
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{SEEC}  Ownership
 
I am an individual holding less than a 5% ownership interest in a non-publicly traded company (for example, a large law firm partnership) that is a state contractor or prospective state contractor.  Am I considered a principal because of my ownership interest?  (rev. 6/6/2012)
No.  Individuals holding 5% or more ownership interest in any business entity, whether publicly or non-publicly traded, are principals for the purposes of this law.  Since you own less than 5% ownership interest, you are not considered a principal because of your ownership interest in the business entity.  
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{SEEC}  Principals of Business Entities
 
How do you define president, treasurer, or executive vice president for a business entity?  (rev. 6/6/2012)
Any individual who holds any of those actual titles is a principal.
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 A large international or national firm doing business with the State of Connecticut but located out of state or out of the United States may have dozens of Presidents, Treasurers, or Executive Vice Presidents.  Who is a principal? (rev. 7/18/2012)
Any officer who holds one of these titles, including one that resides outside of the state of Connecticut, would be considered a principal for purposes of the state contractor provisions.  Note that the agency has reconsidered its previous position as to out of state officers.
 
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My non-profit organization does not have a paid chief executive officer.  Instead, a member of our volunteer board of directors acts as a CEO.  Is that person considered a principal?  (rev. 6/6/2012)
Yes.  If a non-profit does not have a CEO then the individual who possesses comparable powers and duties to a CEO is considered a principal and would be subject to the contribution and solicitation prohibitions.
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My company holds a valid prequalification certificate issued by the Department of Administrative Services.  How does the contribution and solicitation ban apply to my company’s principals?  (rev. 6/6/2012)
Because it holds a DAS issued prequalification certificate, your company is considered a prospective state contractor and thus your principals are prohibited from contributing to candidates for executive branch offices AND to candidates for the General Assembly, and all the other covered committees (see below).  In addition, your principals may not solicit employees of your company, a subcontractor of your company or a subcontractor’s principals on behalf of a covered committee.   
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Only those prospective state contractors issued a prequalification certificate by the Commissioner of the Department of Administrative Services are subject to the state contractor provisions because of the certificate.

Your company may still be a prospective state contractor.  For example, if your company is pre-qualified by the Department of Transportation as a prerequisite for submitting an invitation to bid, a request for proposal or any other form of state contract solicitation AND your company makes an actual submission, your company is considered a prospective state contractor and the provisions will apply for the period of time from your submission to the point at which the contract is awarded.  If your company is not awarded the contract, your company’s principals are no longer subject to the ban.
 
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{SEEC}  State Contractor Lists
 
No.  The law no longer required state contractors to submit the names of their principals to the SEEC. 
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If the SEEC is no longer publishing the names of principals, what information will be disclosed?  (rev. 6/6/2012)
The SEEC is required to maintain master lists of prohibited state contractors and prospective state contractors on its website and to update these lists monthly.  To review these lists, go to www.ct.gov/seec and click on link “Lobbyist/Contractor Limitations”.  Note that these lists are not exhaustive.  Accordingly, the fact that an entity is not listed on the master lists does not foreclose the possibility that it is a state contractor or prospective state contractor. 
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{SEEC}  State Grants and Loans 
 
Are there any exceptions to the definition of a “state contract” as it applies to state grants and state loans?  (rev. 6/6/2012)
The law excludes grants or loans from the state, any state agency or any quasi-public agency that are exclusively federally funded, education loans and  loans to an individual for other than commercial purposes. 
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My non-profit entity received a grant of state funds valued over $50,000 from a library consortium.  Is my entity a state contractor?  (rev. 6/6/2012)
No.  The library consortium is the state contractor.  Only an entity with direct relationship with the state is a state contractor. 
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Is a municipal library that receives a one-time grant of $60,000 directly from the state considered a state contractor?  (rev. 6/6/2012)
No, provided the library is an agency or department of the municipal government.  The law specifically excludes municipalities from the definition of state contractor.  An independent non-profit library that is governed by a Board of Directors or Trustees and not by the municipality would, however, be a state contractor if it receives a grant in excess of $50,000.
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My non-profit entity works in the community to facilitate home ownership in low-income neighborhoods in Connecticut.  We receive loan funds directly from a Connecticut state agency or quasi-public agency and lend that money to others.  Is my entity a state contractor?  (rev. 6/6/2012)
Yes, provided the funds are state funds and the loan meets the statutory financial threshold of $50,000 for a single contract or $100,000 for a series of contracts.  Your entity would not be a state contractor if the loans are exclusively federal funded and the state agency or quasi-public agency merely administers the federal funds.
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My non-profit entity receives over $100,000 in state funds in a calendar year as a combination of loans and grants from a municipal housing authority to rehabilitate housing.  Is my group a state contractor?  (rev. 6/6/2012)
No, because the non-profit did not receive funds directly from the state.  The answer would be yes if the funds were from a state or quasi-public agency, unless exclusively federally funded. 
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Is a municipal housing authority, which receives over $100,000 in loans and grants from state and quasi-public agencies in a calendar year, considered a state contractor?      (rev. 6/6/2012)
No.  The law specifically excludes municipalities from the definition of state contractor.  However, if the entity is not an agency or department of municipal government, then it would be a state contractor under these circumstances and its principals would be covered by the contribution and solicitation prohibitions.
 
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My family will receive grants valued over $50,000 from Connecticut social service agencies this year.  Are we state contractors?  (rev. 6/6/2012)
No, individual or family recipients of state social services aid such as SAGA, TANF, Section 8 vouchers, Title 19 assistance, grants via the Connecticut Department of Veterans Affairs, and similar programs, are not considered state contractors. 
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Are fees paid to the state or a state agency by an individual for a professional or trade or business license, such as a hairdresser or home improvement contractor, considered a licensing arrangement and thus a state contract? (rev. 6/6/2012)
No. Fees paid by individuals for licenses to practice a profession or trade are not considered a licensing arrangement and thus are not considered a state contract for purposes of this law.
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Is a student receiving education loans valued at over $50,000 from a Connecticut state college or a quasi-public agency a state contractor? (rev. 6/6/2012)
No.  Individual recipients of student loans and other loans, as a service to individuals in Connecticut, such as certain home mortgage loans and guarantees to homeowners or families, are not state contractors.
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Is a mortgage loan from a state or quasi-public agency to an individual to purchase a house a state contract? (rev. 6/6/2012)
No.  Individual or family recipients of loans to purchase a residence are not state contractors.
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If my company or non-profit has a contract, loan or grant from a pending bid, proposal or quotation with any judicial branch agency, are my principals covered by the ban?  (rev. 6/6/2012)
No, contracts with judicial branch agencies are generally not covered by these provisions.  The only exception to this general rule is where an executive branch agency is also a party to the contract (e.g. a lease for the judicial branch where the Department of Administrative Services is a party to the contract).
 
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If my company or non-profit entity has small contracts with both executive and legislative branch agencies, is my company a state contractor?  (rev. 6/6/2012)
If your company has small contracts with both the executive and legislative branches of government, but the contracts with neither branch exceed the $50,000 or $100,000 thresholds then your company is not a state contractor with either branch.  In other words, contracts are not aggregated between the separate branches for purposes of determining the liabilities of the ban.
 
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{SEEC}  Application of Provisions 
 
What are the offices and committees covered by the state contractor contribution and solicitation prohibitions?  (rev. 6/6/2012)

For contractors meeting the statutory financial threshold based on contracts held with executive branch agencies:
i) an exploratory or candidate committee established by a candidate for the office of Governor, Lieutenant Governor, Attorney General, Comptroller, State Treasurer, or Secretary of the State; 
ii) a political committee authorized to make contributions or expenditures to benefit such candidates; or 
iii) a party committee.

For contractors meeting the statutory financial threshold based on contracts held with legislative branch agencies:
i) an exploratory or candidate committees established by candidate for the office of state senator or state representative;
ii) a political committee authorized to make contributions or expenditures to or for the  benefit of such candidates; or
iii) a party committee.

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My company has several contracts with state agencies within the executive branch that exceed $100,000 in the aggregate but does not have a contract or pending bid or proposal with any legislative branch agency.  May the company’s principals contribute to or solicit for candidates for state representative or state senator or their political committees?  (rev. 6/6/2012)
Yes, as long as the company is not on the DAS prequalification list.  Note that candidates participating in the Citizens’ Election Program may NOT accept contributions from principals of state contractors regardless of branch.   
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My company has several contracts with the legislative branch that exceed $100,000 in the aggregate but does not have a contract, or pending bid or proposal with any executive branch agency.  May the company’s principals donate to or solicit for candidates for statewide office, such as Governor or Attorney General?  (rev. 6/6/2012)
Yes, as long as the company is not on the DAS prequalification list.  Note that candidates participating in the Citizens’ Election Program may NOT accept contributions from principals of state contractors regardless of branch. 
 
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As a principal of a state contractor, may I volunteer my time to assist a candidate, candidate committee, or other political committee? (rev. 6/6/2012)
Generally speaking, you may volunteer your time to a committee even if it is covered by the state contractor provisions.  Note that the law prohibits principals of state contractors from soliciting certain individuals on behalf of a covered committee (employees of your state contractor, the state contractor’s subcontractors or a subcontractor’s principals).   
 
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Could a principal accept a free ticket to a fundraising event for a covered candidate? (rev. 6/6/2012)
Yes. There used to be a broad solicitation prohibition which prohibited mere attendance at a fundraiser for a covered committee. This solicitation prohibition was narrowed substantially with Public Act 10-01 (Special Session).
 
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As a principal of a state contractor or prospective state contractor, may I contribute to and solicit for candidates for federal or municipal office?  (rev. 6/6/2012)
Yes. Candidates for federal and municipal office are not subject to the state contractor provisions. You may also contribute to or solicit for committees formed to support the success or defeat of a referendum. Note that you may not contribute to a party committee even if that committee is the funding vehicle for a municipal candidate or candidates.
 
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Does the contribution ban for principals apply to the elective office sought or to the individual seeking office? For example, if a friend is a sitting State Representative but also has a candidate committee for mayor, may I contribute to her?  (rev. 6/6/2012)
The ban applies to the office sought, not the individual. As a principal of a state contractor or prospective state contractor, you may donate to municipal candidate committees, such as a mayoral candidate committee because such candidate committees are not covered by the state contractor provisions.
 
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{SEEC}  Party Committees
 
Is a town committee included in the principals’ contribution ban?  (rev. 6/6/2012)
Yes.  A town committee is considered a party committee.
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May a principal who is a member of a party committee pay dues?  (rev. 6/6/2012)
No, paying dues to a party committee is considered a contribution to the committee.
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If I am a principal of a state contractor, may I continue to be a member of a town committee?  (rev. 6/6/2012)
Yes, but in your role with the town committee you may not solicit (employees of your state contractor, the state contractor’s subcontractors or a subcontractor’s principals).
 
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 If I am a principal of a state contractor, may I run for elective office and solicit contributions on behalf of my candidate committee?   (rev. 6/6/2012)
Yes.  You may run for elective office, establish a candidate committee, and solicit from persons not otherwise prohibited from contributing to your campaign.
 
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If I am a principal or a state contractor, and running for municipal office, can I run with the rest of a slate being financed by the town committee?   (rev. 6/6/2012)
Yes.  A principal or state contractor running for municipal office may designate the town committee as his or her funding vehicle by completing and filing with the town clerk of the municipality the SEEC Form 1, Registration by Candidate, accompanied by SEEC Form 1B, Certification of Exemption from Forming a Candidate Committee designating the town committee as your sole funding vehicle.  You may run with the rest of the slate, contribute to, and solicit for the town committee from the time the form is filed until the date of the municipal election.   
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{SEEC}  Political Committees
 
Are political committees (PACs) covered by the ban?  (rev. 6/6/2012)
For purposes of the solicitation and contribution provisions both political committees established by a state contractor and political committees established or controlled by a principal of a state contractor, are treated as covered principals.  This means that such political committees are prohibited from contributing to covered candidates (within the branch they contract with), political committees authorized to contribute to them, and party committees.

In addition, principals of state contractors may not contribute to political committees authorized to give to candidates within the branch they contract with.  This means that a principal of an executive branch state contractor may not contribute to any political committee that is authorized to give to candidates for statewide office.   Likewise a principal of a legislative branch state contractor may not contribute to any political committee that is authorized to give to candidates for General Assembly.

Political committees formed to support only municipal candidates or referendum question are not covered by the state contractor provisions.
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Content Last Modified on 9/19/2017 10:56:28 AM