HF 2392

1st Engrossment - 93rd Legislature (2023 - 2024) Posted on 03/20/2023 03:53pm

A bill for an act
relating to campaign finance; modifying certain campaign finance provisions;
providing civil penalties; amending Minnesota Statutes 2022, sections 10A.01,
subdivision 26; 10A.022, subdivision 3; 10A.121, subdivision 2; 10A.15,
subdivision 5, by adding a subdivision; 10A.20, subdivision 2a; 10A.271,
subdivision 1; 10A.275, subdivision 1; 10A.38.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2022, section 10A.01, subdivision 26, is amended to read:

Subd. 26.

Noncampaign disbursement.

(a) "Noncampaign disbursement" means a
purchase or payment of money or anything of value made, or an advance of credit incurred,
or a donation in kind received, by a principal campaign committee for any of the following
purposes:

(1) payment for accounting and legal services;

(2) return of a contribution to the source;

(3) repayment of a loan made to the principal campaign committee by that committee;

(4) return of a public subsidy;

(5) payment for food, beverages, and necessary utensils and supplies, entertainment,
and facility rental for a fundraising event;

(6) services for a constituent by a member of the legislature or a constitutional officer
in the executive branch as provided in section 10A.173, subdivision 1;

(7) payment for food and beverages consumed by a candidate or volunteers while they
are engaged in campaign activities;

(8) payment for food or a beverage consumed while attending a reception or meeting
directly related to legislative duties;

(9) payment of expenses incurred by elected or appointed leaders of a legislative caucus
in carrying out their leadership responsibilities;

(10) payment by a principal campaign committee of the candidate's expenses for serving
in public office, other than for personal uses;

(11) costs of child care for the candidate's children when campaigning;

(12) fees paid to attend a campaign school;

(13) costs of a postelection party during the election year when a candidate's name will
no longer appear on a ballot or the general election is concluded, whichever occurs first;

(14) interest on loans paid by a principal campaign committee on outstanding loans;

(15) filing fees;

(16) post-general election holiday or seasonal cards, thank-you notes, or advertisements
in the news media mailed or published prior to the end of the election cycle;

(17) the cost of campaign material purchased to replace defective campaign material, if
the defective material is destroyed without being used;

(18) contributions to a party unit;

(19) payments for funeral gifts or memorials;

(20) the cost of a magnet less than six inches in diameter containing legislator contact
information and distributed to constituents;

(21) costs associated with a candidate attending a political party state or national
convention in this state;

(22) other purchases or payments specified in board rules or advisory opinions as being
for any purpose other than to influence the nomination or election of a candidate or to
promote or defeat a ballot question;

(23) costs paid to a third party for processing contributions made by a credit card, debit
card, or electronic check;

(24) a contribution to a fund established to support a candidate's participation in a recount
of ballots affecting that candidate's election;

(25) costs paid by a candidate's principal campaign committee for a single reception
given in honor of the candidate's retirement from public office after the filing period for
affidavits of candidacy for that office has closed;

(26) a donation from a terminating principal campaign committee to the state general
fund;

(27) a donation from a terminating principal campaign committee to a county obligated
to incur special election expenses due to that candidate's resignation from state office; deleted text begin and
deleted text end

(28) during a period starting January 1 in the year following a general election and ending
on December 31 of the year of general election, total payments of up to $3,000 for security
expenses for a candidate, including home security hardware, maintenance of home security
hardware, identity theft monitoring services, and credit monitoring services deleted text begin . deleted text end new text begin ;
new text end

new text begin (29) costs to support a candidate's principal campaign committee's participation in a
recount of ballots affecting that candidate's election;
new text end

new text begin (30) costs of running a transition office for a winning state constitutional office candidate
during the first three months after election; and
new text end

new text begin (31) costs paid to repair or replace campaign property that is documented to have been
lost, damaged, or stolen, including but not limited to campaign lawn signs.
new text end

(b) The board must determine whether an activity involves a noncampaign disbursement
within the meaning of this subdivision.

(c) A noncampaign disbursement is considered to be made in the year in which the
candidate made the purchase of goods or services or incurred an obligation to pay for goods
or services.

Sec. 2.

Minnesota Statutes 2022, section 10A.022, subdivision 3, is amended to read:

Subd. 3.

Investigation authority; complaint process.

(a) The board may investigate
any alleged or potential violation of this chapter. The board may also investigate an alleged
or potential violation of section 211B.04, 211B.12, or 211B.15 by or related to a candidate,
treasurer, principal campaign committee, political committee, political fund, or party unit,
as those terms are defined in this chapter. The board may only investigate an alleged violation
if the board:

(1) receives a written complaint alleging a violation;

(2) discovers a potential violation as a result of an audit conducted by the board; or

(3) discovers a potential violation as a result of a staff review.

(b) When the board investigates the allegations made in a written complaint and the
investigation reveals other potential violations that were not included in the complaint, the
board may investigate the potential violations not alleged in the complaint only after making
a determination under paragraph (d) that probable cause exists to believe a violation that
warrants a formal investigation has occurred.

(c) Upon receipt of a written complaint filed with the board, the board chair or another
board member designated by the chair shall promptly make a determination as to whether
the complaint alleges a prima facie violation. If a determination is made that the complaint
does not allege a prima facie violation, the complaint shall be dismissed without prejudice
and the complainant and the subject of the complaint must be promptly notified of the
reasons the complaint did not allege a prima facie violation. The notice to the subject of the
complaint must include a copy of the complaint. If the complainant files a revised complaint
regarding the same facts and the same subject, the prima facie determination must be
completed by a board member other than the member who made the initial determination
and who does not support the same political party as the member who made the initial
determination. The chair may order that the prima facie determination for any complaint
be made by the full board and must order that the prima facie determination for a complaint
being submitted for the third time be made by the full board.

(d) If a determination is made that the complaint alleges a prima facie violation, the
board shall, within deleted text begin 45 deleted text end new text begin 60 new text end days of the prima facie determination, make findings and
conclusions as to whether probable cause exists to believe the alleged violation that warrants
a formal investigation has occurred. Any party filing a complaint and any party against
whom a complaint is filed must be given an opportunity to be heard by the board prior to
the board's determination as to whether probable cause exists to believe a violation that
warrants a formal investigation has occurred.

(e) Upon a determination by the board that probable cause exists to believe a violation
that warrants a formal investigation has occurred, the board must undertake an investigation
under subdivision 2 and must issue an order at the conclusion of the investigation, except
that if the complaint alleges a violation of section 10A.25 or 10A.27, the board must either
enter a conciliation agreement or make public findings and conclusions as to whether a
violation has occurred and must issue an order within 60 days after the probable cause
determination has been made. Prior to making findings and conclusions in an investigation,
the board must offer the subject of the complaint an opportunity to answer the allegations
of the complaint in writing and to appear before the board to address the matter. The deadline
for action on a written complaint new text begin , including but not limited to issuance of a probable cause
determination in accordance with paragraph (d), entering into a conciliation agreement, or
issuance of public findings new text end may be extended by majority vote of the board.

Sec. 3.

Minnesota Statutes 2022, section 10A.121, subdivision 2, is amended to read:

Subd. 2.

Penalty.

(a) An independent expenditure political committee deleted text begin or deleted text end new text begin , new text end independent
expenditure political fund new text begin , ballot question political committee, or ballot question political
fund new text end is subject to a civil penalty of up to four times the amount of the contribution or
approved expenditure if it does the following:

(1) makes a contribution to a candidate, local candidate, party unit, political committee,
or political fund other than an independent expenditure political committee deleted text begin or deleted text end new text begin , new text end an independent
expenditure political fund new text begin , ballot question political committee, or ballot question political
fund new text end ; or

(2) makes an approved expenditure.

(b) No other penalty provided in law may be imposed for conduct that is subject to a
civil penalty under this section.

Sec. 4.

Minnesota Statutes 2022, section 10A.15, subdivision 5, is amended to read:

Subd. 5.

Registration number on checks.

A contribution made to a candidate new text begin or local
candidate new text end by a lobbyist, political committee, political fund, or party unit must show the
name of the lobbyist, political committee, political fund, or party unit and the number under
which it is registered with the board.

Sec. 5.

Minnesota Statutes 2022, section 10A.15, is amended by adding a subdivision to
read:

new text begin Subd. 8. new text end

new text begin Virtual currency contributions. new text end

new text begin (a) A principal campaign committee, political
committee, political fund, or party unit may accept a donation in kind in the form of virtual
currency. The value of donated virtual currency is its fair market value at the time it is
donated. The recipient of a virtual currency contribution must sell the virtual currency in
exchange for United States currency within five business days after receipt.
new text end

new text begin (b) Any increase in the value of donated virtual currency after its donation, but before
its conversion to United States currency, must be reported as a receipt that is not a
contribution pursuant to section 10A.20, subdivision 3. Any decrease in the value of donated
virtual currency after its donation, but before its conversion to United States currency, must
be reported as an expenditure pursuant to section 10A.20, subdivision 3.
new text end

new text begin (c) A principal campaign committee, political committee, political fund, or party unit
may not purchase goods or services with virtual currency.
new text end

Sec. 6.

Minnesota Statutes 2022, section 10A.20, subdivision 2a, is amended to read:

Subd. 2a.

Local election reports.

(a) This subdivision applies to a political committee,
political fund, or political party unit that during a non-general election year:

(1) spends in aggregate more than $200 to influence the nomination or election of local
candidates;

(2) spends in aggregate more than $200 to make independent expenditures on behalf of
local candidates; or

(3) spends in aggregate more than $200 to promote or defeat ballot questions defined
in section 10A.01, subdivision 7, clause (2), (3), or (4).

(b) In addition to the reports required by subdivision 2, the entities listed in paragraph
(a) must file the following reports in each non-general election year:

(1) a first-quarter report covering the calendar year through March 31, which is due
April 14;

(2) a report covering the calendar year through May 31, which is due June 14;

(3) a pre-primary-election report due 15 days before the local primary election date
specified in section 205.065;

(4) a pre-general-election report due 42 days before the local general election; and

(5) a pre-general-election report due ten days before a local general election.

The reporting obligations in this paragraph begin with the first report due after the
reporting period in which the entity reaches the spending threshold specified in paragraph
(a). new text begin The pre-primary report required under clause (3) is required for all entities required to
report under paragraph (a), regardless of whether the candidate or issue is on the primary
ballot.
new text end

Sec. 7.

Minnesota Statutes 2022, section 10A.271, subdivision 1, is amended to read:

Subdivision 1.

Notice to contributors.

A political committee, political fund, political
party unit, or principal campaign committee that raises funds through the sale of goods or
services must disclose to potential customers that the proceeds from the purchase are a
political contribution and to whom the contribution is made. new text begin If goods or services are sold
in person, new text end the notice deleted text begin may deleted text end new text begin must new text end be provided verbally at the time of purchase, or through the
prominent display of a sign providing the notice deleted text begin in immediate proximity to deleted text end new text begin within three feet
of, and facing, new text end the point of sale at the location where the goods or services are sold. new text begin If goods
or services are sold using a website or other electronic means, the notice must be prominently
displayed on the page used by potential customers to make a purchase or enter payment
information.
new text end

Sec. 8.

Minnesota Statutes 2022, section 10A.275, subdivision 1, is amended to read:

Subdivision 1.

Exceptions.

Notwithstanding other provisions of this chapter, the
following expenditures by a party unit, or two or more party units acting together, with at
least one party unit being either: the state committee or the party organization within a
congressional district, county, or legislative district, are not considered contributions to or
expenditures on behalf of a candidate for the purposes of section 10A.25 or 10A.27 and
must not be allocated to candidates under section 10A.20, subdivision 3, paragraph (h):

(1) expenditures on behalf of candidates of that party generally without referring to any
of them specifically in a published, posted, or broadcast advertisement;

(2) expenditures for the preparation, display, mailing, or other distribution of an official
party sample ballot listing the names of three or more individuals whose names are to appear
on the ballot;

(3) expenditures for a telephone call, voice mail, text message, multimedia message,
internet chat message, or email when the communication includes the names of three or
more individuals whose names are to appear on the ballot;

new text begin (4) expenditures for a booth at a community event, county fair, or state fair that benefits
three or more individuals whose names are to appear on the ballot;
new text end

deleted text begin (4) deleted text end new text begin (5) new text end expenditures for a political party fundraising effort on behalf of three or more
candidates; or

deleted text begin (5) deleted text end new text begin (6) new text end expenditures for party committee staff services that benefit three or more
candidates.

Sec. 9.

Minnesota Statutes 2022, section 10A.38, is amended to read:

10A.38 CAPTIONING OF CAMPAIGN ADVERTISEMENTS.

(a) This section applies to a campaign advertisement by a candidate who is governed
by an agreement under section 10A.322.

(b) "Campaign advertisement" means a professionally produced visual or audio recording
of two minutes or less produced by the candidate for the purpose of influencing the
nomination or election of a candidate.

(c) A campaign advertisement that is disseminated as an advertisement by broadcast or
cable television must include closed captioning for deaf and hard-of-hearing viewers, unless
the candidate has filed with the board before the advertisement is disseminated a statement
setting forth the reasons for not doing so. A campaign advertisement that is disseminated
as an advertisement to the public on the candidate's website must include closed captioning
for deaf and hard-of-hearing viewers, unless the candidate has posted on the website a
transcript of the spoken content of the advertisement or the candidate has filed with the
board before the advertisement is disseminated a statement setting forth the reasons for not
doing so. A campaign advertisement must not be disseminated as an advertisement by radio
unless the candidate has posted on the candidate's website a transcript of the spoken content
of the advertisement or the candidate has filed with the board before the advertisement is
disseminated a statement setting forth the reasons for not doing so.

new text begin (d) A candidate who fails to comply with the requirements of paragraph (c) is subject
to a civil penalty imposed by the board of up to $1,000.
new text end