2012 -- H 7460

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LC01329

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

____________

A N A C T

RELATING TO ELECTIONS - RHODE ISLAND CAMPAIGN CONTRIBUTIONS AND

EXPENDITURES REPORTING

     Introduced By: Representative Donald J. Lally

     Date Introduced: February 09, 2012

     Referred To: House Judiciary

It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 17-25-7.2, 17-25-10, 17-25-10.1 and 17-25-11 of the General

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Laws in Chapter 17-25 entitled "Rhode Island Campaign Contributions and Expenditures

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Reporting" are hereby amended to read as follows:

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     17-25-7.2. Personal use of campaign funds prohibited. -- (a) The personal use by any

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elected public office holder or by any candidate for public office, as defined in section 17-25-3, of

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campaign funds contributed after April 29, 1992, is prohibited. For the purposes of this section,

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"personal use" is defined as any use other than expenditures related to gaining or holding public

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office and for which the candidate for public office or elected public official would be required to

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treat the amount of the expenditure as gross income under section 61 of the Internal Revenue

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Code of 1986, 26 U.S.C. section 61, or any subsequent corresponding Internal Revenue Code of

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the United States, as from time to time amended.

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      (b) Expenditures that are specifically prohibited under this chapter include:

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      (1) Any residential or household items, supplies or expenditures, including mortgage,

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rent or utility payments for any part of any personal residence of a candidate or officeholder or a

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member of the candidate's or officeholder's family;

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      (2) Mortgage, rent, or utility payments for any part of any non-residential property that is

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owned by a candidate or officeholder or a member of a candidate's or officeholder's family and

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used for campaign purposes, to the extent the payments exceed the fair market value of the

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property usage;

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      (3) Funeral, cremation, or burial expenses, including any expenses related to deaths

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within a candidate's or officeholder's family;

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      (4) Clothing, other than items of de minimis value that are used in the campaign;

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      (5) Tuition payments;

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      (6) Dues, fees, or gratuities at a country club, health club, recreational facility or other

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nonpolitical organization, unless they are part of a specific fundraising event that takes place on

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the organization's premises;

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      (7) Salary payments to a member of a candidate's family, unless the family member is

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providing bona fide services to the campaign. If a family member provides bona fide services to a

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campaign, any salary payments in excess of the fair market value of the services provided is

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personal use;

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      (8) Admission to a sporting event, concert, theater, or other form of entertainment, unless

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part of a specific campaign or officeholder activity;

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      (9) Payment of any fines, fees, or penalties assessed pursuant to this chapter.

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      (c) Any expense that results from campaign or officeholder activity is permitted use of

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campaign funds. Such expenditures may include:

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      (1) The defrayal of ordinary and necessary expenses of a candidate or officeholder;

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      (2) Office expenses and equipment, provided the expenditures and the use of the

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equipment can be directly attributable to the campaign or the officeholder's duties and

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responsibilities;

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      (3) Donations to charitable organizations, provided the candidate or officeholder does

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not personally benefit from the donation or receive compensation from the recipient organization;

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      (4) Travel expenses for an officeholder, provided that the travel is undertaken as an

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ordinary and necessary expense of seeking, holding, or maintaining public office, or seeking,

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holding, or maintaining a position within the legislature or other publicly elected body. If a

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candidate or officeholder uses campaign funds to pay expenses associated with travel that

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involves both personal activities and campaign or officeholder activities, the incremental

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expenses that result from the personal activities are personal use, unless the person(s) benefiting

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from this use reimburse(s) the campaign account within thirty (30) days for the amount of the

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incremental expenses;

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      (5) Gifts of nominal value and donations of a nominal amount made on a special

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occasion such as a holiday, graduation, marriage, retirement or death, unless made to a member

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of the candidate's or officeholder's family;

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      (6) Meal expenses which are incurred as part of a campaign activity or as a part of a

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function that is related to the candidate's or officeholder's responsibilities, including meals

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between and among candidates and/or officeholders that are incurred as an ordinary and

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necessary expense of seeking, holding, or maintaining public office, or seeking holding, or

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maintaining a position within the legislature or other publicly elected body;

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      (7) Food and beverages which are purchased as part of a campaign or officeholder

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activity;

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      (8) Communication access expenses which are incurred as part of a campaign activity

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and operation to ensure that deaf and hard of hearing citizens are fully participating, are

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volunteers, and/or are otherwise maintaining a position with the campaign committee. Examples

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of communication access expenses include, but are not limited to, the following: captioning on

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television advertisements; video clips; sign language interpreters; computer aided real time

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(CART) services; and assistive listening devices.

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      (d) Any campaign funds not used to pay for the expenses of gaining or holding public

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office may:

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      (1) Be maintained in a campaign account(s);

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      (2) Be donated to a candidate for public office, to a political organization, or to a

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political action committee, subject to the limitation on contributions in section 17-25-10.1;

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      (3) Be transferred in whole or in part into a newly established political action committee

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or ballot question advocate;

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      (4) Be donated to a tax exempt charitable organization as that term is used in section

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501(c)(3) of the Internal Revenue Code of 1986, 26 U.S.C. section 501, or any subsequent

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corresponding internal revenue code of the United States as from time to time amended;

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      (5) Be donated to the state of Rhode Island; or

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      (6) Be returned to the donor; provided however, that any remaining campaign funds of a

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candidate or officeholder who dies or becomes permanently incapacitated shall convert to the

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candidate’s or officeholder’s estate. Concurrently, the candidate’s or officeholder’s campaign

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account with the board of elections (“Board”) shall be dissolved.

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     17-25-10. Lawful methods of contributing to support of candidates -- Reporting --

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Disposition of anonymous contributions. -- (a) No contribution shall be made or received, and

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no expenditures shall be directly made or incurred, to support or defeat a candidate except

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through:

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      (1) The duly appointed campaign treasurer, or deputy campaign treasurers, of the

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candidates;

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      (2) The duly appointed campaign treasurer or deputy campaign treasurers of a political

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party committee;

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      (3) The duly appointed campaign treasurer or deputy campaign treasurer of a political

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action committee.

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      (b) It shall be lawful for any person, not otherwise prohibited by law and not acting in

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concert with any other person or group, to expend personally from that person's own funds a sum

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which is not to be repaid to him or her for any purpose not prohibited by law to support or defeat

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a candidate; provided, that any person making the expenditure shall be required to report all of his

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or her expenditures and expenses, if the total of the money so expended exceeds one hundred

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dollars ($100) within a calendar year, to the board of elections within seven (7) days of making

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the expenditure and to the campaign treasurer of the candidate or political party committee on

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whose behalf the expenditure or contribution was made, or to his or her deputy, within seven (7)

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days of making the expenditure, who shall cause the expenditures and expenses to be included in

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his or her reports to the board of elections. Whether a person is "acting in concert with any other

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person or group" for the purposes of this subsection shall be determined by application of the

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standards set forth in section 17-25-23.

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      (c) Any anonymous contribution received by a campaign treasurer or deputy campaign

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treasurer shall not be used or expended, but shall be returned to the donor, if the donor's identity

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can be ascertained; if not, the contribution shall escheat to the state.

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     17-25-10.1. Political contributions -- Limitations. -- (a) (1) No person, other than the

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candidate to his or her own campaign, nor any political action committee shall make a

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contribution or contributions to any candidate, as defined by section 17-25-3, or political action

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committee or political party committee which in the aggregate exceed one thousand dollars

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($1,000) one thousand five hundred dollars ($1,500) within a calendar year, nor shall any person

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make contributions to more than one state or local candidate, to more than one political action

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committee, or to more than one political party committee, or to a combination of state and local

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candidates and political action committees and political party committees which in the aggregate

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exceed ten thousand dollars ($10,000) fifteen thousand dollars ($15,000) within a calendar year,

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nor shall any political action committee make such contributions which in the aggregate exceed

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twenty-five thousand dollars ($25,000) forty thousand dollars ($40,000) within a calendar year,

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nor shall any candidate or any political action committee or any political party committee accept

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a contribution or contributions which in the aggregate exceed one thousand dollars ($1,000) one

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thousand five hundred dollars ($1,500) within a calendar year from any one person or political

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action committee.

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      (2) Notwithstanding the provisions of subdivision (1) of this subsection, a person or

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political action committee or political party committee may contribute an amount which in the

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aggregate does not exceed ten thousand dollars ($10,000) fifteen thousand dollars ($15,000)

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within a calendar year to a political party committee, which funds can be utilized for

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organizational and party building activities, but shall not be used for contributions to candidates

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state and local for public office.

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      (b) Contributions to a named candidate made to any political committee authorized by

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that candidate to accept contributions on the candidate's behalf shall be considered to be

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contributions made to the candidate. Contributions to a candidate by a political committee for

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another person shall be considered to be contributions by that person.

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      (c) Expenditures made by any person in cooperation, consultation or concert with, or at

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the request or suggestion of, a candidate, the candidate's authorized political committees, or their

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agents shall be considered to be a contribution to the candidate.

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      (d) The financing by any person of the dissemination, distribution, or republication, in

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whole or in part, of any broadcast or any written, graphic, or other form of campaign materials

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prepared by the candidate, the candidate's campaign committees, or their authorized agents shall

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be considered to be a contribution to a candidate.

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      (e) Nothing in this section shall be construed to restrict political party committees

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organized pursuant to this title from making contributions to the candidates of that political party;

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provided, that these contributions, other than allowable "in-kind" contributions, shall not exceed,

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in the aggregate, twenty-five thousand dollars ($25,000) forty thousand dollars ($40,000) to any

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one candidate within a calendar year, nor shall any candidate accept a contribution or

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contributions, other than allowable "in-kind" contributions, which in the aggregate exceed

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twenty-five thousand dollars ($25,000) forty thousand dollars ($40,000) within a calendar year

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from all committees of his or her political party. There shall be no restriction on the amount of

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"in-kind" contributions that a political party committee may make to a candidate of its political

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party; provided, that for the purposes of this subsection only, the cost of any preparation and

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airing of television and/or radio advertisements and the cost of any print advertisements shall not

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be considered an allowable "in-kind" contribution and shall be subject to the aggregate limitation

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of twenty-five thousand dollars ($25,000) forty thousand dollars ($40,000).

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      (f) (1) A contribution from an individual's dependent children, as defined in section 36-

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14-2, shall be deemed a contribution from the individual for the purpose of determining whether

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aggregate contributions exceed either the one hundred dollar ($100) two hundred dollars ($200)

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threshold for reporting purposes or the one thousand dollar ($1,000) one thousand five hundred

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dollars ($1,500) maximum for contributions to a single candidate or political action committee or

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the ten thousand dollar ($10,000) fifteen thousand dollars ($15,000) maximum for contributing to

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all candidates and political action committees within a calendar year.

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      (2) No dependent child shall contribute an amount which, when added to contributions

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already made by that child's parent or legal guardian and by other dependent children of that

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parent or legal guardian, exceed the one thousand dollar ($1,000) one thousand five hundred

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dollars ($1,500) maximum for contributions to a single candidate or political action committee or

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exceed the ten thousand dollar ($10,000) fifteen thousand dollars ($15,000) maximum for

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contributions to all state or local candidates and political action committees within a calendar

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year.

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      (g) Nothing in this section shall be construed to restrict the amount of money that a

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candidate can borrow in his or her own name, and subsequently contribute or loan to his or her

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own campaign.

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      (h) (1) It shall be unlawful for any corporation, whether profit or non-profit, domestic

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corporation or foreign corporation, as defined in section 7-1.2-106, or other business entity to

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make any campaign contribution or expenditure, as defined in section 17-25-3, to or for any

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candidate, political action committee, or political party committee, or for any candidate, political

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action committee, or political party committee to accept any campaign contribution or

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expenditure from a corporation or other business entity. Any contribution made in the personal

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name of any employee of a corporation or other business entity, for which the employee received

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or will receive reimbursement from the corporation or other business entity, shall be considered

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as a contribution by the corporation or other business entity, in violation of this section.

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      (2) Any voluntary payroll deduction and/or contribution made by employees of a

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corporation or other business entity shall not be deemed a contribution of a corporation or other

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business entity, notwithstanding that the contributions were sent to the recipient by the

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corporation or other business entity.

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      (i) All contributions of funds shall be by check, money order, or credit card and may be

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made over the Internet, but in each case the source of the funds must be identified; provided, that

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candidates may accept contributions in cash which do not exceed twenty-five dollars ($25.00)

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fifty dollars ($50.00) in the aggregate from an individual within a calendar year. The cash

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contribution must be delivered directly by the donor to the candidate, his or her campaign

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treasurer, or deputy treasurer. The treasurer or deputy treasurer shall maintain a record of the

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name and address of all persons making these cash contributions.

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      (j) Except as provided in subsection (h) of this section, no entity other than an individual,

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a political action committee which is duly registered and qualified pursuant to the terms of this

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chapter, political party committee authorized by this title, or an authorized committee of an

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elected official or candidate established pursuant to this chapter shall make any contribution to or

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any expenditure on behalf of or in opposition to any candidate, political action committee, or

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political party.

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     17-25-11. Dates for filing of reports by treasurers of candidates or of committees. --

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(a) During the period between the appointment of the campaign treasurer for state and municipal

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committees and political action committees, or in the case of an individual, the date on which the

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individual becomes a "declared or undeclared candidate", as defined in section 17-25-3(2), except

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when the ninety (90) day reporting period ends less than forty (40) days prior to an election, in

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which case the ninety (90) day report shall be included as part of the report required to be filed on

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the twenty-eighth (28th) day next preceding the day of the primary, general, or special election

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pursuant to subdivision (2) of this subsection, and the election, with respect to which

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contributions are received or expenditures made by him or her in behalf of or in opposition to a

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candidate, the campaign treasurer of a candidate, a political party committee, or a political action

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committee shall file a report containing an account of contributions received and expenditures

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made on behalf of or in opposition to a candidate:

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      (1) At ninety (90) day intervals commencing on the date on which the individual first

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becomes a candidate, as defined in section 17-25-3(2);

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      (2) In a contested election, on the twenty-eighth (28th) and seventh (7th) days next

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preceding the day of the primary, general, or special election; provided, that in the case of a

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primary election for a special election, where the twenty-eighth (28th) day next preceding the day

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of the primary election occurs prior to the first day for filing declarations of candidacy pursuant to

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section 17-14-1, the reports shall be due on the fourteenth (14th) and seventh (7th) days next

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preceding the day of the primary election for the special election; and

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      (3) A final report on the twenty-eighth (28th) day following the election. The report shall

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contain:

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      (i) The name and address and place of employment of each person from whom

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contributions in excess of a total of one hundred dollars ($100) two hundred dollars ($200) within

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a calendar year were received;

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      (ii) The amount contributed by each person;

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      (iii) The name and address of each person to whom expenditures in excess of one

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hundred dollars ($100) were made; and

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      (iv) The amount and purpose of each expenditure.

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      (b) Concurrent with the report filed on the twenty-eighth (28th) day following an

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election, or at any time thereafter, the campaign treasurer of a candidate, or political party

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committee or political action committee, may certify to the board of elections that the campaign

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fund of the candidate, political party committee, or political action committee having been

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instituted for the purposes of the past election, has completed its business and been dissolved or,

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in the event that the committee will continue its activities beyond the election, that its business

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regarding the past election has been completed; and the certification shall be accompanied by a

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final accounting of the campaign fund, or of the transactions relating to the election, including the

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final disposition of any balance remaining in the fund at the time of dissolution or the

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arrangements which have been made for the discharge of any obligations remaining unpaid at the

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time of dissolution.

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      (c) Once the campaign treasurer certifies that the campaign fund has completed its

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business and been dissolved, no contribution which is intended to defray expenditures incurred on

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behalf of or in opposition to a candidate during the campaign can be accepted. Until the time that

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the campaign treasurer certifies that the campaign fund has completed its business and been

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dissolved, the treasurer shall file reports containing an account of contributions received and

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expenditures made at ninety (90) day intervals commencing with the next quarterly report

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following the election; however, the time to file under this subsection shall be no later than the

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last day of the month following the ninety (90) day period, except when the last day of the month

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filing deadline following the ninety (90) day reporting period occurs less than twenty-eight (28)

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days before an election, in which case the report shall be filed pursuant to the provisions of

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subdivisions (a)(1) and (2) of this section. Provided, however, if the last day of the month falls on

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a weekend or a holiday, the report shall be due on the following business day.

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      (d) (1) There shall be no obligation to file the reports of expenditures required by this

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section on behalf of or in opposition to a candidate if the total amount to be expended in behalf of

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the candidacy by the candidate, by any political party committee, by any political action

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committee, or by any person shall not in the aggregate exceed one thousand dollars ($1,000) one

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thousand five hundred dollars ($1,500).

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      (2) However, even though the aggregate amount expended on behalf of the candidacy

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does not exceed one thousand dollars ($1,000) one thousand five hundred dollars ($1,500),

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reports must be made listing the source and amounts of all contributions in excess of a total of

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one hundred dollars ($100) two hundred dollars ($200) from any one source within a calendar

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year. Even though the aggregate amount expended on behalf of the candidacy does not exceed

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one thousand dollars ($1,000) one thousand five hundred dollars ($1,500) and no contribution

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from any one source within a calendar year exceeds one hundred dollars ($100) two hundred

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dollars ($200), the report shall state the aggregate amount of all contributions received. In

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addition, the report shall state the amount of aggregate contributions that were from individuals,

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the amount from political action committees, and the amount from political party committees.

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      (e) On or before the first date for filing contribution and expenditure reports, the

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campaign treasurer may file a sworn statement that the treasurer will accept no contributions nor

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make aggregate expenditures in excess of the minimum amounts for which a report is required by

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this chapter. Provided however, that for the purpose of this section only, loans or contributions by

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a candidate to his or her own campaign or contributions received in-kind from the political party

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committee of the candidate may exceed the minimum amounts for which a report is required by

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this chapter. Thereafter, the campaign treasurer shall be excused from filing all the reports for that

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campaign, other than the final report due on the twenty-eighth (28th) day following the election.

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      (f) A campaign treasurer must file a report containing an account of contributions

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received and expenditures made at the ninety (90) day intervals provided for in subsection (c) of

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this section for any ninety (90) day period in which the campaign received contributions in excess

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of a total of one hundred dollars ($100) two hundred dollars ($200) within a calendar year from

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any one source and/or made expenditures in excess of one thousand dollars ($1,000) one

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thousand five hundred dollars ($1,500) within a calendar year; however, the time to file under this

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subsection shall be no later than the last day of the month following the ninety (90) day period,

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except when the last day of the month filing deadline following the ninety (90) day reporting

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period occurs less than twenty-eight (28) days before an election, in which case the report shall be

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filed pursuant to the provisions of subdivisions (a)(1) and (2) of this section. Provided, however,

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if the last day of the month falls on a weekend or a holiday, the report shall be due on the

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following business day.

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      (g) (1) The board of elections may, for good cause shown and upon the receipt of a

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written or electronic request, grant a seven (7) day extension for filing a report; provided, that the

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request must be received no later than the date upon which the report is due to be filed grant up to

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seven (7) days extension for filing a report; provided that no extension shall be granted for filing

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a report due seven (7) days before an election.

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      (2) Any person or entity required to file reports with the board of elections pursuant to

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this section and who has not filed the report by the required date, unless granted an extension

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pursuant to subdivision (1) of this subsection, shall be fined twenty-five dollars ($25.00).

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Notwithstanding any of the provisions of this section, the board of elections shall have the

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authority to waive late filing fees for good cause shown.

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      (3) The board of elections shall send a notice of non-compliance, by certified mail, to

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any person or entity who fails to file the reports required by this section. A person or entity who is

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sent a notice of non-compliance and fails to file the required report within seven (7) days fourteen

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(14) days of the receipt mailing of the notice shall be fined two dollars ($2.00) per day from the

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day of receipt of mailing the notice of non-compliance until the day the report has been received

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by the state board. Notwithstanding any of the provisions of this section, the board of elections

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shall have the authority to waive late filing fees for good cause shown.

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     (4) Total fines and fees assessed by the board pursuant to this section shall not exceed

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two thousand dollars ($2,000).

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     (5) Any candidate or officeholder required to file reports pursuant to this chapter and

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having failed to file four (4) or more reports, or who has outstanding fines and fees totaling two

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thousand dollars ($2,000) or more, shall be prohibited from receiving any contributions or

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making any expenditures and may not declare as a candidate for state or local public office until

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all delinquent reports are filed and all fines and fees are paid in full.

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     (6) Any political action committee or political part committee required to file reports

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pursuant to this chapter and having failed to file four (4) or more reports, or who has outstanding

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fines and fees of two thousand dollars ($2,000) or more, shall be prohibited from making any

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expenditures until all delinquent reports are filed and fines and fees are paid in full.

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     (7) Any candidate, officeholder, committee member or other person found in violation of

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subdivisions (5) and (6) shall be subject to the penalty provisions of this chapter.

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     SECTION 2. This act shall take effect upon passage.

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LC01329

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO ELECTIONS - RHODE ISLAND CAMPAIGN CONTRIBUTIONS AND

EXPENDITURES REPORTING

***

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     This act would amend the campaign finance statutes to update the equivalent contribution

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limits, address handling campaign funds upon the death or incapacity of a candidate eliminate the

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requirement that an independent advocate notify the candidate or political party that a

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contribution was made, exempt a candidate who funds his own campaign from filing, clarify time

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period for filing extensions, eliminate the need for certified mail, and prohibit those who fail to

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file, for a long time, from accepting contributions or declaring a run for office until they comply.

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     This act would take effect upon passage.

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LC01329

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