2012 -- H 7859

=======

LC02090

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

____________

A N A C T

RELATING TO ELECTIONS -- DISCLOSURE OF POLITICAL CONTRIBUTIONS AND

EXPENDITURES

     

     

     Introduced By: Representatives Blazejewski, Fox, Ajello, Marcello, and Edwards

     Date Introduced: February 28, 2012

     Referred To: House Judiciary

It is enacted by the General Assembly as follows:

1-1

     SECTION 1. The legislature hereby finds and declares as follows:

1-2

     (1) The amount of money spent in elections by persons, business entities or political

1-3

action committees that are not coordinated with a candidate or political party is playing a greater

1-4

role in elections.

1-5

     (2) The Supreme Court’s decision in Citizens United v. FEC has accelerated these trends

1-6

by allowing unlimited political spending by outside groups via independent expenditures. This

1-7

spending is often extremely difficult or impossible to trace, being funneled through “shadow

1-8

groups” that are able to avoid many current campaign finance disclosure regulations.

1-9

     (3) The legislature finds it to be in the public and governmental interest to revise Rhode

1-10

Island’s campaign finance disclaimer and disclosure laws to keep pace with the aforementioned

1-11

developments and to protect and enhance core democratic values and maintain the integrity of

1-12

elections.

1-13

     (i) The source of political spending is vital information for voters, allowing them to make

1-14

knowledgeable decisions at election time. Disclosure allows voters to properly weigh speakers

1-15

and messages based on their affiliations and other contexts, such as whether the speaker stands to

1-16

personally benefit from their advocated positions.

1-17

     (ii) The United States Supreme Court has repeatedly upheld disclaimer and disclosure

1-18

provisions as constitutionally protected methods of improving the integrity of electoral processes

1-19

without unnecessarily restricting First Amendment free speech rights. The Court has noted that

2-1

these requirements “impose no ceiling on campaign related activities” (Buckley v. Valeo) and “do

2-2

not prevent anyone from speaking” (McConnell v. FEC). Whatever level of burden disclaimer

2-3

and disclosure do place on the ability to speak is justified by a valid government interest in

2-4

providing the electorate with information.

2-5

     (iii) New communications technologies greatly increase the value and potential for

2-6

disclosure by making disclosed information easily available to the average citizen. This potential

2-7

should be embraced by encouraging electronic filing of campaign finance reports as much as is

2-8

practicable and making this information as accessible as possible. New media and technological

2-9

platforms also bring with them a risk of circumvention of existing regulation by funneling money

2-10

through mediums unaddressed by extant law. Extension of disclaimer laws to new media will

2-11

ensure that the interests bolstered by disclosure and disclaimer remain well supported.

2-12

     (iv) By bringing political spending out into the light, stronger, modernized disclaimer and

2-13

disclosure rules can serve as a powerful check on actual government corruption as well as reduce

2-14

the perception of corruption. Armed with information about political spending, citizens can better

2-15

detect improper political favors and then use this knowledge to hold those politicians accountable

2-16

at the ballot box. By preventing the flooding of elections with untraceable money, these rules will

2-17

leave the public with less reason to perceive “bought elections” in which the outcome is

2-18

determined by outside or even out-of-state groups. Thus, improved disclosure and disclaimer laws

2-19

can help restore citizen trust in government.

2-20

     (v) Disclaimer and disclosure can also further the rights and interests of shareholders and

2-21

group members. In both cases, an organization acts in a role representing its constituents’

2-22

interests, including in its political actions. However, if information on a group’s spending is not

2-23

disclosed to members and shareholders, their interests are compromised as they may support or

2-24

oppose certain political spending but not be made aware of the spending being done in their

2-25

names.

2-26

     (vi) At present, spending between the final pre-election filing date and election day is

2-27

hidden from public view until after the election is over. This deprives voters of knowledge when

2-28

it would be most relevant to their decision-making and reduces disclosure’s effectiveness in

2-29

promoting accountability in the political process.

2-30

     (vii) Stronger disclosure rules can also assist in the gathering of information necessary to

2-31

avoid circumvention of other existing rules. Existing law, such as bans on campaign contributions

2-32

by foreign nationals and contribution limits, rely on the type of transparency in political spending

2-33

that these regulations would create.

3-34

     SECTION 2. Section 17-25-3 of the General Laws in Chapter 17-25 entitled "Rhode

3-35

Island Campaign Contributions and Expenditures Reporting" is hereby amended to read as

3-36

follows:

3-37

     17-25-3. Definitions. -- As used in this chapter, unless a different meaning clearly

3-38

appears from the context:

3-39

      (1) "Business entity" means any corporation, whether for profit or not for profit,

3-40

domestic corporation or foreign corporation, as defined in section 7-1.2-106, financial institution,

3-41

cooperative, association, receivership, trust, holding company, firm, joint stock company, public

3-42

utility, sole proprietorship, partnership, limited partnership, or any other entity recognized by the

3-43

laws of the United States and/or the state of Rhode Island for the purpose of doing business. The

3-44

term "business entity" shall not include a political action committee organized pursuant to this

3-45

chapter or a political party committee or an authorized campaign committee of a candidate or

3-46

office holder.

3-47

      (2) "Candidate" means any individual who undertakes any action, whether preliminary or

3-48

final, which is necessary under the law to qualify for nomination for election or election to public

3-49

office, and/or any individual who receives a contribution or makes an expenditure, or gives his or

3-50

her consent for any other person to receive a contribution or make an expenditure, with a view to

3-51

bringing about his or her nomination or election to any public office, whether or not the specific

3-52

public office for which he or she will seek nomination or election is known at the time the

3-53

contribution is received or the expenditure is made and whether or not he or she has announced

3-54

his or her candidacy or filed a declaration of candidacy at that time.

3-55

      (3) "Contributions" and "expenditures" include all transfers of money, credit or debit

3-56

card transactions on-line or electronic payment systems such as "pay pal," paid personal services,

3-57

or other thing of value to or by any candidate, committee of a political party, or political action

3-58

committee or ballot question advocate. A loan shall be considered a contribution of money until it

3-59

is repaid.

3-60

      (4) "Election" means any primary, general, or special election or town meeting for any

3-61

public office of the state, municipality, or district or for the determination of any question

3-62

submitted to the voters of the state, municipality, or district.

3-63

      (5) "Election cycle" means the twenty-four (24) month period commencing on January 1

3-64

of odd number years and ending on December 31 of even number years; provided, with respect to

3-65

the public financing of election campaigns of general officers under sections 17-25-19, 17-25-20,

3-66

and 17-25-25, "election cycle" means the forty-eight (48) month period commencing on January

3-67

1 of odd numbered years and ending December 31 of even numbered years.

4-68

      (6) "In-Kind Contributions" means the monetary value of other things of value or paid

4-69

personal services donated to, or benefiting, any person required to file reports with the board of

4-70

elections.

4-71

      (7) "Other thing of value" means any item of tangible real or personal property of a fair

4-72

market value in excess of one hundred dollars ($100).

4-73

      (8) "Paid personal services" means personal services of every kind and nature, the cost or

4-74

consideration for which is paid or provided by someone other than the committee or candidate for

4-75

whom the services are rendered, but shall not include personal services provided without

4-76

compensation by persons volunteering their time.

4-77

      (9) "Person" means an individual, partnership, committee, association, corporation,

4-78

union, charity and/or any other organization.

4-79

      (10) "Political action committee" means any group of two (2) or more persons that

4-80

accepts any contributions to be used for advocating the election or defeat of any candidate or

4-81

candidates. Only political action committees that have accepted contributions from fifteen (15) or

4-82

more persons in amounts of ten dollars ($10.00) or more within an election cycle shall be

4-83

permitted to make contributions, and those committees must make contributions to at least five

4-84

(5) candidates for state or local office within an election cycle.

4-85

      (11) "Public office" means any state, municipal, school, or district office or other

4-86

position that is filled by popular election, except political party offices. "Political party offices"

4-87

means any state, city, town, ward, or representative or senatorial district committee office of a

4-88

political party or delegate to a political party convention, or any similar office.

4-89

      (12) "State" means state of Rhode Island.

4-90

      (13) "Testimonial affair" means an affair of any kind or nature including, but not limited

4-91

to, cocktail parties, breakfasts, luncheons, dinners, dances, picnics, or similar affairs expressly

4-92

and directly intended to raise campaign funds in behalf of a candidate to be used for nomination

4-93

or election to a public office in this state, or expressly and directly intended to raise funds in

4-94

behalf of any state or municipal committee of a political party, or expressly and directly intended

4-95

to raise funds in behalf of any political action committee.

4-96

     (14) "Electioneering communication" means any print, broadcast, cable, satellite, or

4-97

electronic media communication not coordinated, as set forth in section 17-25-23, with any

4-98

candidate, authorized candidate campaign committee, or political party committee and which

4-99

unambiguously identifies a candidate or referendum and is made either within sixty (60) days

4-100

before a general or special election or town meeting for the office sought by the candidate or

4-101

referendum; or thirty (30) days before a primary election, for the office sought by the candidate;

4-102

and is targeted to the relevant electorate.

5-1

     (i) A communication which refers to a clearly identified candidate or referendum is

5-2

"targeted to the relevant electorate" if the communication can be received by two thousand

5-3

(2,000) or more persons in the constituency the candidate seeks to represent or the constituency

5-4

voting on the referendum.

5-5

     (ii) Exceptions: The term "electioneering communication" does not include:

5-6

     (A) A communication appearing in a news story, commentary, or editorial distributed

5-7

through the facilities of any broadcasting station, unless such facilities are owned or controlled by

5-8

any political party, political committee, or candidate;

5-9

     (B) A communication which constitutes a candidate debate or forum conducted pursuant

5-10

to regulations adopted by the board of elections or which solely promotes such a debate or forum

5-11

and is made by or on behalf of the person sponsoring the debate or forum; or

5-12

     (C) Any other communication exempted under such regulations as the board of elections

5-13

may promulgate (consistent with the requirements of this paragraph) to ensure the appropriate

5-14

implementation of this paragraph.

5-15

     (15) "Independent expenditure" means an expenditure which expressly advocates the

5-16

election or defeat of a clearly identified candidate or referendum and is in no way coordinated, as

5-17

set forth in section 17-25-23,  with any candidate’s campaign, authorized candidate committee, or

5-18

political party committee. An independent expenditure is not a contribution to that candidate or

5-19

committee.

5-20

     SECTION 3. Title 17 of the General Laws entitled "ELECTIONS" is hereby amended by

5-21

adding thereto the following chapter:

5-22

     CHAPTER 25.3

5-23

INDEPENDENT EXPENDITURES AND ELECTIONEERING COMMUNICATIONS

5-24

     17-25.3-1. Independent expenditures and electioneering communications for

5-25

elections. – (a) It shall be lawful for any person, business entity or political action committee, not

5-26

otherwise prohibited by law and not acting in coordination with a candidate, authorized candidate

5-27

campaign committee, political action committee, or political party committee, to expend

5-28

personally from that person's own funds a sum which is not to be repaid to him or her for any

5-29

purpose not prohibited by law to support or defeat a candidate or referendum. Whether a person,

5-30

business entity or political action committee is "acting in coordination with a candidate,

5-31

authorized candidate campaign committee, political action committee or political party

5-32

committee" for the purposes of this subsection shall be determined by application of the standards

5-33

set forth in section 17-25-23. All terms used in this chapter shall have the same meaning as

5-34

defined in section 17-25-3.

6-1

     (b) Any person, business entity or political action committee making independent

6-2

expenditures or electioneering communications shall report all such campaign finance

6-3

expenditures and expenses to the board of elections, provided the total of the money so expended

6-4

exceeds two hundred and fifty dollars ($250) within a calendar year, to the board of elections

6-5

within seven (7) days of making the expenditure.

6-6

     (c) A person, business entity or political action committee who makes or contracts to

6-7

make independent expenditures or electioneering communications with an aggregate value of one

6-8

thousand dollars ($1,000) or more shall electronically file a campaign finance report to the board

6-9

of elections describing the expenditures within twenty-four (24) hours.

6-10

     (d) After a person, business entity or political action committee files a report under

6-11

subsection (b), the person, business entity or political action committee shall file an additional

6-12

report within twenty-four (24) hours after each time the person, business entity or political action

6-13

committee makes or contracts to make independent expenditures or electioneering

6-14

communications aggregating an additional one thousand dollars ($1,000) with respect to the same

6-15

election as that to which the initial report relates.

6-16

     (e) Reports of independent expenditures or electioneering communications by a person

6-17

shall contain the name, street address, city, state, zip code, occupation, employer (if self-

6-18

employed, the name and place of business), of the person responsible for the expenditure, the date

6-19

and amount of each expenditure, and the year to date total.

6-20

     (1) The report shall also include a statement identifying the candidate or referendum that

6-21

the independent expenditure or electioneering communication is intended to promote the success

6-22

or defeat, and affirm under penalty of false statement that the expenditure is not coordinated with

6-23

the campaign in question, and provide any information that the board of elections requires to

6-24

facilitate compliance with the provisions of this chapter.

6-25

     (f) Reports of independent expenditures or electioneering communications by a person,

6-26

business entity or political action committee shall also disclose the identity of all donors of at

6-27

least one thousand dollars ($1000) within the past twelve (12) months, if applicable, unless the

6-28

person, business entity or political action committee has established a separate segregated account

6-29

for independent expenditures and electioneering communications as detailed in section 17-25.3-2

6-30

in which case this paragraph applies only to donors to the person’s, business entity’s or political

6-31

action committee’s segregated campaign account.

6-32

     (g) If a person, business entity or political action committee and a donor mutually agree,

6-33

at the time a donation, payment, or transfer to the person, business entity or political action

6-34

committee which is required to disclose the identification under subsection (f) that the person,

7-1

business entity or political action committee will not use the donation, payment, or transfer for

7-2

campaign-related activity, then not later than thirty (30) days after the person, business entity or

7-3

political action committee receives the donation, payment, or transfer the person, business entity

7-4

or political action committee shall transmit to the donor a written certification by the chief

7-5

financial officer of the person, business entity or political action committee (or, if the

7-6

organization does not have a chief financial officer, the highest ranking financial official of the

7-7

organization) that:

7-8

     (1) The person, business entity or political action committee will not use the donation,

7-9

payment, or transfer for campaign-related activity; and

7-10

     (2) The person, business entity or political action committee will not include any

7-11

information on the donor in any report filed by the person, business entity or political action

7-12

committee under this section with respect to independent expenditures or electioneering

7-13

communications, so that the donor will not be required to appear in the list of donors.

7-14

     (3) Exception for payments made pursuant to commercial activities. Subdivision (e)(1)

7-15

does not apply with respect to any payment or transfer made pursuant to commercial activities in

7-16

the regular course of a person’s, business entity’s or political action committee’s business.

7-17

     (h) For the purposes of this chapter, two (2) or more entities are treated as a single entity

7-18

if the entities:

7-19

     (1) Share the majority of members on their boards of directors;

7-20

     (2) Share two (2) or more officers;

7-21

     (3) A candidate committee and a political committee other than a candidate committee

7-22

are for the purposes of this section treated as a single committee if the committees both have the

7-23

candidate or a member of the candidate’s immediate family as an officer;

7-24

     (4) Are owned or controlled by the same majority shareholder or shareholders or persons;

7-25

     (5) Are in a parent-subsidiary relationship; or

7-26

     (6) Have bylaws so stating.

7-27

     17-25.3-2. Optional use of separate account by person, business entity or political action

7-28

committee for campaign-related activity. – (a) (1) Establishment of account: (i) In general, at

7-29

its option, a person, business entity or political action committee may make disbursements for

7-30

campaign-related activity using amounts from a bank account established and controlled by the

7-31

person, business entity or political action committee to be known as the campaign-related activity

7-32

account (hereafter in this section referred to as the “account”), which shall be maintained

7-33

separately from all other accounts of the person, business entity or political action committee and

7-34

which shall consist exclusively of the deposits described in subdivision (2).

8-1

     (ii) Mandatory use of account after establishment. If a person, business entity or political

8-2

action committee establishes an account under this section, it may not make disbursements for

8-3

campaign-related activity from any source other than amounts from the account, other than

8-4

disbursements for campaign-related activity which, on the basis of a reasonable belief by the

8-5

person, business entity or political action committee, would not be treated as disbursements for an

8-6

exempt function for purposes of section 527(f) of the Internal Revenue Code of 1986.

8-7

     (iii) Exclusive use of account for independent expenditures and electioneering

8-8

communications. Amounts in the account shall be used exclusively for disbursements by the

8-9

person, business entity or political action committee for campaign-related activity. After such

8-10

disbursements are made, information with respect to deposits made to the account shall be

8-11

disclosed in accordance with section 17-25.3-1(f).

8-12

     (2) The deposits described in this paragraph are deposits of the following amounts:

8-13

     (i) Amounts donated or paid to the person, business entity or political action committee

8-14

by a person other than the person, business entity or political action committee for the purpose of

8-15

being used for campaign-related activity as described in section 17-25.3-1(g) and for which the

8-16

person, business entity or political action committee providing the amounts has designated that

8-17

the amounts be used for campaign-related activity with respect to a specific election or specific

8-18

candidate.

8-19

     (ii) Amounts donated or paid to the person, business entity or political action committee

8-20

by a person other than the person, business entity or political action committee for the purpose of

8-21

being used for campaign-related activity as described in section 17-25.3-1(g) and for which the

8-22

person providing the amounts has not designated that the amounts be used for campaign-related

8-23

activity with respect to a specific election or specific candidate.

8-24

     (iii) Amounts donated or paid to the person, business entity or political action committee

8-25

by a person other than the person, business entity or political action committee in response to a

8-26

solicitation for funds to be used for campaign-related activity.

8-27

     (iv) Amounts transferred to the account by the person, business entity or political action

8-28

committee from other accounts of the organization, including from the person’s, business entity’s

8-29

or political action committee’s general treasury funds but excluding any portion of those funds

8-30

whose donors have explicitly refused to have their donations used for campaign purposes as

8-31

described in section 17-25.3-1(g).

8-32

     (3) The establishment and administration of an account in accordance with this

8-33

subsection shall not by itself be treated as the establishment or administration of a political

8-34

committee for any purpose of this chapter.

9-1

     (b) Reduction in amounts otherwise available for account in response to demand of

9-2

general donors.

9-3

     (1) If a person, business entity or political action committee which has established an

9-4

account obtains any revenues during a year which are attributable to a donation or payment from

9-5

a person other than the person, business entity or political action committee, and if the person,

9-6

business entity or political action committee and any such person have mutually agreed as

9-7

provided in section 17-25.3-1(g) that the person, business entity or political action committee will

9-8

not use the person’s donation, payment, or transfer for campaign-related activity, the person,

9-9

business entity or political action committee shall reduce the amount of its revenues available for

9-10

deposit to the account which is described in subparagraph (a)(1)(i) during the year by the amount

9-11

of the donation or payment which is subject to the mutual agreement.

9-12

     (2) Subsection (a) does not apply with respect to any payment made pursuant to

9-13

commercial activities in the regular course of a person’s, business entity’s or political action

9-14

committee’s business.

9-15

     17-25.3-3. Disclaimers. – (a) No person, business entity, political action committee, or

9-16

group of two (2) or more individuals who have joined to promote the success or defeat of a

9-17

referendum question shall make or incur any expenditure for any radio advertising or Internet

9-18

audio advertising which promotes the success or defeat of any referendum question unless the

9-19

advertising ends with an audio message, containing the relevant information specified below, and

9-20

indicating that those identified have approved the advertising. The information to be included is

9-21

determined as follows:

9-22

     (1) In the case of a business entity, organization or association, the name of the business

9-23

entity, organization or association and the name of its chief executive officer or equivalent;

9-24

     (2) In the case of a political committee, the name of the committee and the name of its

9-25

campaign treasurer;

9-26

     (3) In the case of a party committee, the name of the committee; or

9-27

     (4) In the case of a person or such a group of two (2) or more individuals, the name of the

9-28

group and the name and address of its agent.

9-29

     (b) No person, business entity, political action committee or group of two (2) or more

9-30

individuals who have joined to promote the success or defeat of a referendum question shall make

9-31

or incur any expenditure for any written, typed, or other printed communication which promotes

9-32

the success or defeat of any referendum question unless such communication bears clearly upon

9-33

its face the words "paid for by" and the following:

10-34

     (1) In the case of a business entity, organization or association, the name of the business

10-35

entity, organization or association and the name of its chief executive officer or equivalent;

10-36

     (2) In the case of a political committee, the name of the committee and the name of its

10-37

campaign treasurer;

10-38

     (3) In the case of a party committee, the name of the committee; or

10-39

     (4) In the case of a person or such a group of two (2) or more individuals, the name of the

10-40

group and the name and address of its agent.

10-41

     (c) The provisions of subsections (a), (b), (c) and (d) of this section shall not apply to:

10-42

     (1) Any editorial, news story, or commentary published in any newspaper, magazine or

10-43

journal on its own behalf and upon its own responsibility and for which it does not charge or

10-44

receive any compensation whatsoever;

10-45

     (2) Any banner;

10-46

     (3) Political paraphernalia including pins, buttons, badges, emblems, hats, bumper

10-47

stickers or other similar materials; or

10-48

     (4) Signs with a surface area of not more than thirty-two (32) square feet.

10-49

      (d) No person, business entity or political action committee shall make or incur an

10-50

independent expenditure or electioneering communication for any written, typed, or other printed

10-51

communication, or any web-based, written or graphic communication, that promotes the success

10-52

or defeat of any candidate for nomination or election or promotes or opposes any political party

10-53

or solicits funds to benefit any political party or committee or that promotes the success or defeat

10-54

of a referendum, unless such communication bears upon its face the words "Paid for by" and the

10-55

name of the entity, the name of its chief executive officer or equivalent, and its principal business

10-56

address and the words "This message was made independent of any candidate or political party."

10-57

In the case of a person, business entity or political action committee making or incurring such an

10-58

independent expenditure or electioneering communication, which entity is a tax-exempt

10-59

organization under Section 501(c) of the Internal Revenue Code of 1986, or any subsequent

10-60

corresponding internal revenue code of the United States, as amended from time to time, or an

10-61

incorporated tax-exempt political organization organized under Section 527 of said code, such

10-62

communication shall also bear upon its face the words "Top Five Contributors" followed by a list

10-63

of the five (5) persons or entities making the largest contributions to such person, business entity

10-64

or political action committee during the twelve (12) month period before the date of such

10-65

communication.

10-66

     (e) No person, business entity or political action committee shall make or incur an

10-67

independent expenditure or fund an electioneering communication for television advertising or

10-68

Internet video advertising, that promotes the success or defeat of any candidate for nomination or

11-1

election or promotes or opposes any political party or solicits funds to benefit any political party

11-2

or committee or that promotes the success or defeat of a referendum, unless at the end of such

11-3

advertising there appears simultaneously, for a period of not less than four (4) seconds:

11-4

     (1) A clearly identifiable video, photographic or similar image of the entity's chief

11-5

executive officer or equivalent; and

11-6

     (2) A personal audio message, in the following form: "I am …. (name of entity's chief

11-7

executive officer or equivalent), …. (title) of …. (entity). This message was made independent of

11-8

any candidate or political party, and I approved its content."

11-9

     (f) In the case of a person, business entity or political action committee making or

11-10

incurring such an independent expenditure or electioneering communication, which person,

11-11

business entity or political action committee is a tax-exempt organization under Section 501(c) of

11-12

the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the

11-13

United States, as amended from time to time, or an incorporated tax-exempt political organization

11-14

organized under Section 527 of said code, such advertising shall also include a written message in

11-15

the following form: "The top five (5) contributors to the organization responsible for this

11-16

advertisement are" followed by a list of the five (5) persons or entities making the largest

11-17

contributions during the twelve (12) month period before the date of such advertisement.

11-18

     (g) No person, business entity or political action committee shall make or incur an

11-19

independent expenditure or fund an electioneering communication for radio advertising or

11-20

Internet audio advertising, that promotes the election or defeat of any candidate for nomination or

11-21

election or promotes or opposes any political party or solicits funds to benefit any political party

11-22

or committee or that promotes the success or defeat of a referendum, unless the advertising ends

11-23

with a personal audio statement by the entity's chief executive officer or equivalent;

11-24

     (1) Identifying the entity paying for the expenditure; and

11-25

     (2) Indicating that the message was made independent of any candidate or political party,

11-26

using the following form: "I am …. (name of entity's chief executive officer or equivalent), ….

11-27

(title), of …. (entity). This message was made independent of any candidate or political party, and

11-28

I approved its content."

11-29

     (h) In the case of a person, business entity or political action committee making or

11-30

incurring such an independent expenditure or electioneering communication, which entity is a

11-31

tax-exempt organization under Section 501(c) of the Internal Revenue Code of 1986, or any

11-32

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

11-33

time, or an incorporated tax-exempt political organization organized under Section 527 of said

11-34

code, such advertising shall also include:

12-1

     (1) An audio message in the following form: "The top five (5) contributors to the

12-2

organization responsible for this advertisement are" followed by a list of the five (5) persons or

12-3

entities making the largest contributions during the twelve (12) month period before the date of

12-4

such advertisement; or

12-5

     (2) In the case of such an advertisement that is thirty (30) seconds in duration or shorter,

12-6

an audio message providing a website address that lists such five (5) persons or entities. In such

12-7

case, the person, business entity or political action committee shall establish and maintain such a

12-8

website with such listing for the entire period during which such person, business entity or

12-9

political action committee makes such advertisement.

12-10

     (i) No person, business entity or political action committee shall make or incur an

12-11

independent expenditure for automated telephone calls that promote the election or defeat of any

12-12

candidate for nomination or election or promotes or opposes any political party or solicits funds

12-13

to benefit any political party or committee or that promotes the success or defeat of a referendum,

12-14

unless the narrative of the telephone call identifies the person, business entity or political action

12-15

committee making the expenditure and its chief executive officer or equivalent. In the case of a

12-16

person, business entity or political action committee making or incurring such an independent

12-17

expenditure, which entity is a tax-exempt organization under Section 501(c) of the Internal

12-18

Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United

12-19

States, as amended from time to time, or an incorporated tax-exempt political organization

12-20

organized under Section 527 of said code, such narrative shall also include an audio message in

12-21

the following form: "The top five (5) contributors to the organization responsible for this

12-22

telephone call are" followed by a list of the five (5) persons or entities making the largest

12-23

contributions during the twelve (12) month period before the date of such telephone call.

12-24

     17-25.3-4. Penalties. – (a) Any person who willfully and knowingly violates the

12-25

provisions of this chapter shall, upon conviction, be guilty of a felony and shall be fined not more

12-26

than ten thousand dollars ($10,000) per violation or up to 2% of total expenditures.

12-27

     (b) The state board may fine any person or entity who violates the provisions of this

12-28

chapter in an amount not more than one thousand dollars ($1,000) per violation or up to 2% of

12-29

total expenditures.

12-30

     (c) Fines, fees and penalties imposed by the state board for violations of this chapter shall

12-31

be paid for by the person, business entity or political action committee that incurred the obligation

12-32

for the independent expenditure or electioneering communication. Fines, fees and penalties levied

12-33

by the state board pursuant to this chapter shall not be paid for from contributions or funds

12-34

available in a campaign account.

13-1

     SECTION 4. This act shall take effect upon passage.

     

=======

LC02090

=======

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO ELECTIONS -- DISCLOSURE OF POLITICAL CONTRIBUTIONS AND

EXPENDITURES

***

14-1

     This act would impose a regulatory structure relating to the sources of political spending.

14-2

     This act would take effect upon passage.

     

=======

LC02090

=======

H7859