2017 -- H 5947

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LC001846

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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A N   A C T

RELATING TO ELECTIONS - CAMPAIGN CONTRIBUTIONS

     

     Introduced By: Representatives Donovan, Ajello, Carson, Casimiro, and Marszalkowski

     Date Introduced: March 17, 2017

     Referred To: House Judiciary

     (Board of Elections)

It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 17-25-3 and 17-25-10.1 of the General Laws in Chapter 17-25

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entitled "Rhode Island Campaign Contributions and Expenditures Reporting" are hereby amended

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to read as follows:

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     17-25-3. Definitions.

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     As used in this chapter, unless a different meaning clearly appears from the context:

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

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corporation or foreign corporation, as defined in § 7-1.2-106, financial institution, cooperative,

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association, receivership, trust, holding company, firm, joint stock company, public utility, sole

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proprietorship, partnership, limited partnership, or any other entity recognized by the laws of the

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

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

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

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holder. The term "business entity" shall not include any exempt nonprofit as defined herein or any

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organization described in § 501(c)(3) of the Internal Revenue Code of 1986, or any subsequent

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

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purposes of chapter 17-25.3 of the general laws only.

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

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

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

 

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

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

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

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

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

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     (3) "Conduit" or "intermediary" means any person who receives and forwards an

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earmarked contribution to a candidate or a candidate's authorized committee, except as otherwise

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limited in this chapter.

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

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

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

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

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is repaid.

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     (5) "Earmarked" means a designation, instruction, or encumbrance, whether direct or

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indirect, express or implied, oral or written, which results in all or any part of a contribution or

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expenditure being made to, or expended on behalf of, a clearly identified candidate or a

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candidate's authorized committee.

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

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

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

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

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

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

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

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

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

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

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elections.

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

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

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

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

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candidate for whom the services are rendered, but shall not include personal services provided

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without compensation by persons volunteering their time.

 

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

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union, charity and/or any other organization. The term "person" shall not include any exempt

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nonprofit as defined herein or any organization described in § 501(c)(3) of the Internal Revenue

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

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amended from time to time, for the purposes of chapter 17-25.3 of the general laws only.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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intended to raise funds in behalf of any political action committee.

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

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

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authorized candidate campaign committee, or political party committee and which

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

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

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

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and is targeted to the relevant electorate.

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

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

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

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on the referendum.

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

 

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

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

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any political party, political committee, or candidate;

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

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

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

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     (C) A communication made by any business entity to its members, owners, stockholders,

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or employees;

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     (D) A communication over the Internet, except for (I) Communications placed for a fee

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on the website of another person, business entity, or political action committee; and (II) Websites

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formed primarily for the purpose, or whose primary purpose is, to expressly advocate the election

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or defeat of a clearly identified candidate or the passage or defeat of a referendum; or

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

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

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implementation of this paragraph.

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     (15)(17) "Independent expenditure" means an expenditure which, when taken as a whole,

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expressly advocates the election or defeat of a clearly identified candidate, or the passage or

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defeat of a referendum, or amounts to the functional equivalent of such express advocacy, and is

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in no way coordinated, as set forth in § 17-25-23, with any candidate's campaign, authorized

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candidate committee, or political party committee. An expenditure amounts to the functional

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equivalent of express advocacy if it can only be interpreted by a reasonable person as advocating

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the election, passage, or defeat of a candidate or referendum, taking into account whether the

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communication mentions a candidate or referendum and takes a position on a candidate's

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character, qualifications, or fitness for office. An independent expenditure is not a contribution to

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that candidate or committee.

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     (i) Exceptions: The term "independent expenditure" does not include:

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

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

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any political party, political committee, or candidate;

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

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

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

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     (C) A communication made by any business entity to its members, owners, stockholders,

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or employees;

 

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     (D) A communication over the Internet, except for (I) Communications placed for a fee

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on the website of another person, business entity, or political action committee; and (II) Websites

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formed primarily for the purpose, or whose primary purpose is, to expressly advocate the election

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or defeat of a clearly identified candidate or the passage or defeat of a referendum; or

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

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

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implementation of this paragraph.

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     (16)(18) "Covered transfer" means any transfer or payment of funds by any person,

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business entity or political action committee to another person, business entity, or political action

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committee if the person, business entity, or political action committee making the transfer: (i)

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Designates, requests, or suggests that the amounts be used for independent expenditures or

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electioneering communications or making a transfer to another person for the purpose of making

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or paying for such independent expenditures or electioneering communications; (ii) Made such

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transfer or payment in response to a solicitation or other request for a transfer or payment for the

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making of or paying for independent expenditures or electioneering communications or making a

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transfer to another person for the purpose of marking or paying for such independent expenditures

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or electioneering communications; (iii) Engaged in discussions with the recipient of the transfer

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or payment regarding independent expenditures or electioneering communications or making a

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transfer to another person for the purpose of marking or paying for such independent expenditures

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or electioneering communications; or (iv) Made independent expenditures or electioneering

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communications in an aggregate amount of five thousand dollars ($5,000) or more during the two

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(2) year period ending on the date of the transfer or payment, or knew or had reason to know that

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the person receiving the transfer or payment made such independent expenditures or

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electioneering communications in such an aggregate amount during that two (2) year period.

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     (A) Exceptions: The term "covered transfer" does not include:

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     (I) A transfer or payment made by a person, business entity or political action committee

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in the ordinary course of any trade or business conducted by the person, business entity or

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political action committee or in the form of investments made by the person, business entity or

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political action committee; or

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     (II) A transfer or payment made by a person, business entity or political action committee

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if the person, business entity or political action committee making the transfer prohibited, in

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writing, the use of such transfer or payment for independent expenditures, electioneering

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communications, or covered transfers and the recipient of the transfer or payment agreed to

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follow the prohibition and deposited the transfer or payment in an account which is segregated

 

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from any account used to make independent expenditures, electioneering communications, or

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covered transfers.

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     (17)(19) For the purposes of chapter 17-25.3 of the general laws, "donation" means all

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transfers of money, credit or debit card transactions on-line or electronic payment systems such as

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"pay pal," paid personal services, or other thing of value to or by any person, business entity, or

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political action committee. A loan shall be considered a donation of money until it is repaid.

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     (18)(20) For the purposes of chapter 17-25.3 of the general laws, "donor" means a

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person, business entity, or political action committee that makes a donation.

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     (19)(21) "Exempt nonprofit" means any organization described in § 501(c)(4) of the

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Internal Revenue Code that spends an aggregate annual amount of no more than ten percent

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(10%) of its annual expenses or no more than fifteen thousand dollars ($15,000), whichever is

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less, on independent expenditures, electioneering communications, and covered transfers as

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defined herein and certifies the same to the board of elections seven (7) days before and after a

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primary election and seven (7) days before and after a general or special election.

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     (20)(22) For purposes of chapter 17-25.3 of the general laws, "referendum" means the

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same as the definition set forth in § 17-5-1 of the general laws.

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     17-25-10.1. Political contributions -- Limitations.

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     (a) (1) No person, other than the candidate to his or her own campaign, nor any political

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action committee shall make a contribution or contributions to any candidate, as defined by § 17-

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25-3, or political action committee or political party committee which in the aggregate exceed

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one thousand dollars ($1,000) within a calendar year, nor shall any person make contributions to

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more than one state or local candidate, to more than one political action committee, or to more

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

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action committees and political party committees which in the aggregate exceed ten thousand

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dollars ($10,000) within a calendar year, nor shall any political action committee make such

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contributions which in the aggregate exceed twenty-five thousand dollars ($25,000) within a

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calendar year, nor shall any candidate or any political action committee or any political party

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committee accept a contribution or contributions which in the aggregate exceed one thousand

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dollars ($1,000) within a calendar year from any one person or political 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) within a calendar year to a political

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party committee, which funds can be utilized for organizational and party building activities, but

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shall not be used for contributions to candidates 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) to any one candidate within a calendar

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year, nor shall any candidate accept a contribution or contributions, other than allowable "in-

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kind" contributions, which in the aggregate exceed twenty-five thousand dollars ($25,000) within

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a calendar year from all committees of his or her political party. There shall be no restriction on

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

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its political party; provided, that for the purposes of this subsection only, the cost of any

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preparation and airing of television and/or radio advertisements and the cost of any print

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advertisements shall not be considered an allowable "in-kind" contribution and shall be subject to

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the aggregate limitation of twenty-five thousand dollars ($25,000).

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     (f) (1) A contribution from an individual's dependent children, as defined in § 36-14-2,

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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) threshold for reporting

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purposes or the one thousand dollar ($1,000) maximum for contributions to a single candidate or

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political action committee or the ten thousand dollar ($10,000) maximum for contributing to all

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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) maximum for contributions to a

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single candidate or political action committee or exceed the ten thousand dollar ($10,000)

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maximum for contributions to all state or local candidates and political action committees within

 

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a calendar 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 § 7-1.2-106, or other business entity to make any

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campaign contribution or expenditure, as defined in § 17-25-3, to or for any candidate, political

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

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or political party committee to accept any campaign contribution or expenditure from a

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corporation or other business entity. Any contribution made in the personal name of any

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

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

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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, political action committees and political party committees may accept contributions in

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cash which do not exceed twenty-five dollars ($25.00) in the aggregate from an individual within

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a calendar year. The cash contribution must be delivered directly by the donor to the candidate,

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his or her the campaign treasurer, or deputy treasurer. The treasurer or deputy treasurer shall

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maintain a record of the 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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     (k) For purposes of the limitations imposed by this section, all contributions made by a

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person, either directly or indirectly, on behalf of a particular candidate, including contributions

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which are in any way earmarked or otherwise directed through an intermediary or conduit to such

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candidate, shall be treated as contributions from such person to such candidate. The intermediary

 

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or conduit shall report the original source and the intended recipient of such contribution to the

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board of elections and to the intended recipient, in accordance with regulations and reporting

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requirements promulgated by the board of elections.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO ELECTIONS - CAMPAIGN CONTRIBUTIONS

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     This act would define the terms "conduit" and "earmarked" for purposes of reporting

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campaign contributions. In addition, it would eliminate aggregate contributions limits and add a

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prohibition on earmarked contributions. It also recognizes political action committees and

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political party committees as lawful recipients of minimal cash contributions.

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     This act would take effect upon passage.

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