HF 410

as introduced - 90th Legislature (2017 - 2018) Posted on 05/22/2017 01:31am

A bill for an act
relating to campaign finance; modifying definition of expressly advocating;
providing for disclosure of electioneering communications; amending prorating
method for contributions or use of general treasury money; providing penalties;
amending Minnesota Statutes 2016, sections 10A.01, subdivision 16a; 10A.121,
subdivision 1; 10A.20, subdivision 3; 10A.244; 10A.25, subdivision 3a; 10A.27,
subdivision 15; proposing coding for new law in Minnesota Statutes, chapter 10A.

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

Section 1.

Minnesota Statutes 2016, section 10A.01, subdivision 16a, is amended to read:

Subd. 16a.

Expressly advocating.

"Expressly advocating" means new text begin :
new text end

new text begin (1) new text end that a communication clearly identifies a candidate and uses words or phrases of
express advocacy deleted text begin . deleted text end new text begin ; or
new text end

new text begin (2) that a communication when taken as a whole and with limited reference to external
events, such as the proximity to the election, is susceptible of no reasonable interpretation
other than as an appeal advocating the election or defeat of one or more clearly identified
candidates.
new text end

Sec. 2.

Minnesota Statutes 2016, section 10A.121, subdivision 1, is amended to read:

Subdivision 1.

Permitted disbursements.

An independent expenditure political
committee or fund, or a ballot question political committee or fund, may:

(1) pay costs associated with its fund-raising and general operations;

(2) pay for communications that do not constitute contributions or approved expenditures;

(3) make contributions to independent expenditure or ballot question political committees
or funds;

(4) make independent expenditures;

(5) make expenditures to promote or defeat ballot questions;

(6) return a contribution to its source;

(7) for a political fund, record bookkeeping entries transferring the association's general
treasury money allocated for political purposes back to the general treasury of the association;
deleted text begin and
deleted text end

(8) for a political fund, return general treasury money transferred to a separate depository
to the general depository of the association deleted text begin . deleted text end new text begin ; and
new text end

new text begin (9) make disbursements for electioneering communications.
new text end

Sec. 3.

Minnesota Statutes 2016, section 10A.20, subdivision 3, is amended to read:

Subd. 3.

Contents of report.

(a) The report required by this section must include each
of the items listed in paragraphs (b) to (o) that are applicable to the filer. The board shall
prescribe forms based on filer type indicating which of those items must be included on the
filer's report.

(b) The report must disclose the amount of liquid assets on hand at the beginning of the
reporting period.

(c) The report must disclose the name, address, employer, or occupation if self-employed,
and registration number if registered with the board, of each individual or association that
has made one or more contributions to the reporting entity, including the purchase of tickets
for a fund-raising effort, that in aggregate within the year exceed $200 for legislative or
statewide candidates or more than $500 for ballot questions, together with the amount and
date of each contribution, and the aggregate amount of contributions within the year from
each source so disclosed. A donation in kind must be disclosed at its fair market value. An
approved expenditure must be listed as a donation in kind. A donation in kind is considered
consumed in the reporting period in which it is received. The names of contributors must
be listed in alphabetical order. Contributions from the same contributor must be listed under
the same name. When a contribution received from a contributor in a reporting period is
added to previously reported unitemized contributions from the same contributor and the
aggregate exceeds the disclosure threshold of this paragraph, the name, address, and
employer, or occupation if self-employed, of the contributor must then be listed on the
report.

(d) The report must disclose the sum of contributions to the reporting entity during the
reporting period.

(e) The report must disclose each loan made or received by the reporting entity within
the year in aggregate in excess of $200, continuously reported until repaid or forgiven,
together with the name, address, occupation, principal place of business, if any, and
registration number if registered with the board of the lender and any endorser and the date
and amount of the loan. If a loan made to the principal campaign committee of a candidate
is forgiven or is repaid by an entity other than that principal campaign committee, it must
be reported as a contribution for the year in which the loan was made.

(f) The report must disclose each receipt over $200 during the reporting period not
otherwise listed under paragraphs (c) to (e).

(g) The report must disclose the sum of all receipts of the reporting entity during the
reporting period.

(h) The report must disclose the new text begin following:
new text end

new text begin (1) the new text end name, address, and registration number if registered with the board of each
individual or association to whom aggregate expenditures, approved expenditures,
independent expenditures, deleted text begin and deleted text end ballot question expenditures new text begin , and disbursements for
electioneering communications new text end have been made by or on behalf of the reporting entity
within the year in excess of $200 deleted text begin , together with deleted text end new text begin ;
new text end

new text begin (2) new text end the amount, date, and purpose of each expenditure deleted text begin and deleted text end new text begin ;
new text end

new text begin (3) new text end the name and address of, and office sought by, each candidate on whose behalf the
expenditure was made deleted text begin , deleted text end new text begin or, in the case of electioneering communications, each candidate
identified positively in the communication;
new text end

new text begin (4) new text end identification of the ballot question that the expenditure was intended to promote or
defeat and an indication of whether the expenditure was to promote or to defeat the ballot
question deleted text begin , deleted text end new text begin ; new text end and

new text begin (5) new text end in the case of independent expenditures made in opposition to a candidate new text begin or
electioneering communications in which a candidate is identified negatively new text end , the candidate's
name, address, and office sought. A reporting entity making an expenditure on behalf of
more than one candidate for state or legislative office must allocate the expenditure among
the candidates on a reasonable cost basis and report the allocation for each candidate.

(i) The report must disclose the sum of all expenditures made by or on behalf of the
reporting entity during the reporting period.

(j) The report must disclose the amount and nature of an advance of credit incurred by
the reporting entity, continuously reported until paid or forgiven. If an advance of credit
incurred by the principal campaign committee of a candidate is forgiven by the creditor or
paid by an entity other than that principal campaign committee, it must be reported as a
donation in kind for the year in which the advance of credit was made.

(k) The report must disclose the name, address, and registration number if registered
with the board of each political committee, political fund, principal campaign committee,
or party unit to which contributions have been made that aggregate in excess of $200 within
the year and the amount and date of each contribution.

(l) The report must disclose the sum of all contributions made by the reporting entity
during the reporting period.

(m) The report must disclose the name, address, and registration number if registered
with the board of each individual or association to whom noncampaign disbursements have
been made that aggregate in excess of $200 within the year by or on behalf of the reporting
entity and the amount, date, and purpose of each noncampaign disbursement.

(n) The report must disclose the sum of all noncampaign disbursements made within
the year by or on behalf of the reporting entity.

(o) The report must disclose the name and address of a nonprofit corporation that provides
administrative assistance to a political committee or political fund as authorized by section
211B.15, subdivision 17, the type of administrative assistance provided, and the aggregate
fair market value of each type of assistance provided to the political committee or political
fund during the reporting period.

Sec. 4.

new text begin [10A.201] ELECTIONEERING COMMUNICATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Electioneering communication. new text end

new text begin (a) "Electioneering communication"
means a communication distributed by television, radio, satellite, or cable broadcasting
system; by means of printed material, signs, or billboards; through the use of telephone
communications; or by electronic mail or electronic text messaging that:
new text end

new text begin (1) refers to a clearly identified candidate;
new text end

new text begin (2) is made within:
new text end

new text begin (i) 30 days before a primary election or special primary election for the office sought
by the candidate; or
new text end

new text begin (ii) 60 days before a general election or special election for the office sought by the
candidate;
new text end

new text begin (3) is targeted to the relevant electorate; and
new text end

new text begin (4) is made without the express or implied consent, authorization, or cooperation of, and
not in concert with or at the request or suggestion of, a candidate or a candidate's principal
campaign committee or agent.
new text end

new text begin (b) Electioneering communication does not include:
new text end

new text begin (1) the publishing or broadcasting of news items or editorial comments by the news
media;
new text end

new text begin (2) a communication that constitutes an approved expenditure or an independent
expenditure;
new text end

new text begin (3) a voter guide, which is a pamphlet or similar printed material, intended to help voters
compare candidates' positions on a set of issues, as long as each of the following is true:
new text end

new text begin (i) the guide does not focus on a single issue or a narrow range of issues, but includes
questions and subjects sufficient to encompass major issues of interest to the entire electorate;
new text end

new text begin (ii) the questions and any other description of the issues are clear and unbiased in both
their structure and content;
new text end

new text begin (iii) the questions posed and provided to the candidates are identical to those included
in the guide;
new text end

new text begin (iv) each candidate included in the guide is given a reasonable amount of time and the
same opportunity as other candidates to respond to the questions;
new text end

new text begin (v) if the candidate is given limited choices for an answer to a question, for example:
"support," "oppose," "yes," or "no," the candidate is also given an opportunity, subject to
reasonable limits, to explain the candidate's position in the candidate's own words; the fact
that a candidate provided an explanation is clearly indicated in the guide; and the guide
clearly indicates that the explanations will be made available for public inspection, subject
to reasonable conditions;
new text end

new text begin (vi) answers included in the guide are those provided by the candidates in response to
questions, the candidates' answers are unedited, and the answers appear in close proximity
to the question to which they respond;
new text end

new text begin (vii) if the guide includes candidates' positions based on information other than responses
provided directly by the candidate, the positions are based on recorded votes or public
statements of the candidates and are presented in an unedited and unbiased manner; and
new text end

new text begin (viii) the guide includes all major party candidates for each office listed in the guide;
new text end

new text begin (4) any other communication specified in board rules or advisory opinions as being
excluded from the definition of electioneering communication; or
new text end

new text begin (5) a communication that:
new text end

new text begin (i) refers to a clearly identified candidate who is an incumbent member of the legislature
or a constitutional officer;
new text end

new text begin (ii) refers to a clearly identified issue that is or was before the legislature in the form of
an introduced bill; and
new text end

new text begin (iii) is made when the legislature is in session or within ten days after the last day of a
regular session of the legislature.
new text end

new text begin (c) A communication that meets the requirements of paragraph (a) but is made with the
authorization or express or implied consent of, or in cooperation or in concert with, or at
the request or suggestion of a candidate, a candidate's principal campaign committee, or a
candidate's agent is an approved expenditure.
new text end

new text begin (d) Distributing a voter guide questionnaire, survey, or similar document to candidates
and communications with candidates limited to obtaining their responses, without more, do
not constitute communications that would result in the voter guide being an approved
expenditure on behalf of the candidate.
new text end

new text begin Subd. 2. new text end

new text begin Targeted to relevant electorate. new text end

new text begin (a) For purposes of this section, a
communication that refers to a clearly identified candidate is targeted to the relevant electorate
if the communication is distributed to or can be received by more than 1,500 persons in the
district the candidate seeks to represent, in the case of a candidate for the house of
representatives, senate, or a district court judicial office or by more than 6,000 persons in
the state, in the case of a candidate for constitutional office or appellate court judicial office.
When determining the number of persons to whom a communication in the form of printed
material, telephone communication, electronic mail, or electronic text messaging is
distributed, an association may exclude communications distributed to its own members.
new text end

new text begin (b) A communication consisting of printed materials, other than signs, billboards, or
advertisements published in the print media, is targeted to the relevant electorate if it meets
the requirements of paragraph (a) and is distributed to voters by means of United States
mail or through direct delivery to a resident's home or business.
new text end

new text begin Subd. 3. new text end

new text begin Disclosure of electioneering communications. new text end

new text begin (a) Electioneering
communications made by a political committee, a party unit, or a principal campaign
committee must be disclosed on the periodic reports of receipts and expenditures filed by
the association on the schedule and in accordance with the terms of section 10A.20.
new text end

new text begin (b) An association other than a political committee, party unit, or principal campaign
committee may register a political fund with the board and disclose its electioneering
communications on the reports of receipts and expenditures filed by the political fund. If it
does so, it must disclose its disbursements for electioneering communications on the schedule
and in accordance with the terms of section 10A.20.
new text end

new text begin (c) An association that does not disclose its disbursements for electioneering
communications under paragraph (a) or (b) must disclose its electioneering communications
according to the requirements of subdivision 4.
new text end

new text begin Subd. 4. new text end

new text begin Statement required for electioneering communications. new text end

new text begin (a) Except for
associations providing disclosure as specified in subdivision 3, paragraph (a) or (b), every
person who makes a disbursement for the costs of producing or distributing electioneering
communications that aggregate more than $1,500 in a calendar year must, within 24 hours
of each disclosure date, file with the board a disclosure statement containing the information
described in this subdivision.
new text end

new text begin (b) Each statement required to be filed under this section must contain the following
information:
new text end

new text begin (1) the names of: (i) the association making the disbursement; (ii) any person exercising
direction or control over the activities of the association with respect to the disbursement;
and (iii) the custodian of the financial records of the association making the disbursement;
new text end

new text begin (2) the address of the association making the disbursement;
new text end

new text begin (3) the amount of each disbursement of more than $200 during the period covered by
the statement, a description of the purpose of the disbursement, and the identification of the
person to whom the disbursement was made;
new text end

new text begin (4) the names of the candidates identified or to be identified in the communication;
new text end

new text begin (5) if the disbursements were paid out of a segregated bank account that consists of funds
donated specifically for electioneering communications, the name and address of each
person who gave the association more than $200 in aggregate to that account during the
period beginning on the first day of the preceding calendar year and ending on the disclosure
date; and
new text end

new text begin (6) if the disbursements for electioneering communications were made using general
treasury money of the association, an association that has paid more than $5,000 in aggregate
for electioneering communications during the calendar year must file with its disclosure
statement a written statement that includes the name, address, and amount attributable to
each person that paid the association membership dues or fees, or made donations to the
association that, in total, aggregate more than $5,000 of the money used by the association
for electioneering communications. The statement must also include the total amount of the
disbursements for electioneering communications attributable to persons not subject to
itemization under this clause. The statement must be certified as true by an officer of the
association that made the disbursements for the electioneering communications.
new text end

new text begin (c) To determine the amount of the membership dues or fees, or donations made by a
person to an association and attributable to the association's disbursements for electioneering
communications, the association must separately prorate the total disbursements made for
electioneering communications during the calendar year over all general treasury money
received during the calendar year.
new text end

new text begin (d) If the amount spent for electioneering communications exceeds the amount of general
treasury money received by the association during that year:
new text end

new text begin (1) the electioneering communications must be attributed first to all receipts of general
treasury money received during the calendar year in which the electioneering communications
were made;
new text end

new text begin (2) any amount of current year electioneering communications that exceeds the total of
all receipts of general treasury money during the current calendar year must be prorated
over all general treasury money received in the preceding calendar year; and
new text end

new text begin (3) if the allocation made in clauses (1) and (2) is insufficient to cover the subject
electioneering communications, no further allocation is required.
new text end

new text begin (e) After a portion of the general treasury money received by an association from a
person has been designated as the source of a disbursement for electioneering
communications, that portion of the association's general treasury money received from that
person may not be designated as the source of any other disbursement for electioneering
communications or as the source for any contribution to an independent expenditure political
committee or fund.
new text end

new text begin Subd. 5. new text end

new text begin Disclosure date. new text end

new text begin For purposes of this section, the term "disclosure date" means
the earlier of:
new text end

new text begin (1) the first date on which an electioneering communication is publicly distributed,
provided that the person making the electioneering communication has made disbursements
for the direct costs of producing or distributing one or more electioneering communication
aggregating in excess of $1,500; or
new text end

new text begin (2) any other date during the same calendar year on which an electioneering
communication is publicly distributed, provided that the person making the electioneering
communication has made disbursements for the direct costs of distributing one or more
electioneering communication aggregating in excess of $1,500 since the most recent
disclosure date.
new text end

new text begin Subd. 6. new text end

new text begin Contracts to disburse. new text end

new text begin For purposes of this section, a person shall be treated
as having made a disbursement if the person has entered into an obligation to make the
disbursement.
new text end

new text begin Subd. 7. new text end

new text begin Statement of attribution. new text end

new text begin (a) An electioneering communication must include
a statement of attribution.
new text end

new text begin (1) For communications distributed by printed material, signs, and billboards, the
statement must say, in conspicuous letters: "Paid for by [association name] [address]."
new text end

new text begin (2) For communications distributed by television, radio, satellite, or cable broadcasting
system, the statement must be included at the end of the communication and must orally
state at a volume and speed that a person of ordinary hearing can comprehend: "The preceding
communication was paid for by the [association name]."
new text end

new text begin (3) For communications distributed by telephone, the statement must precede the
communication and must orally state at a volume and speed that a person of ordinary hearing
can comprehend: "The following communication is paid for by the [association name]."
new text end

new text begin (b) If the communication is paid for by an association registered with the board, the
statement of attribution must use the association's name as it is registered with the board.
If the communication is paid for by an association not registered with the board, the statement
of attribution must use the association's name as it is disclosed to the board on the
association's disclosure statement associated with the communication.
new text end

new text begin Subd. 8. new text end

new text begin Failure to file; penalty. new text end

new text begin (a) If a person fails to file a statement required by this
section by the date the statement is due, the board may impose a late filing fee of $50 per
day, not to exceed $1,000, commencing the day after the statement was due.
new text end

new text begin (b) The board must send notice by certified mail to a person who fails to file a statement
within ten business days after the statement was due that the person may be subject to a
civil penalty for failure to file the statement. A person who fails to file the statement within
seven days after the certified mail notice was sent by the board is subject to a civil penalty
imposed by the board of up to $1,000.
new text end

new text begin (c) An association that provides disclosure under section 10A.20 rather than under this
section is subject to the late filing fee and civil penalty provisions of section 10A.20 and is
not subject to the penalties provided in this subdivision.
new text end

new text begin (d) An association that makes electioneering communications under this section and
willfully fails to provide the statement required by subdivision 4, paragraph (b), clause (6),
within the time specified is subject to an additional civil penalty of up to four times the
amount of the electioneering communications disbursements that should have been included
on the statement.
new text end

Sec. 5.

Minnesota Statutes 2016, section 10A.244, is amended to read:

10A.244 VOLUNTARY INACTIVE STATUS; POLITICAL FUNDS.

Subdivision 1.

Election of voluntary inactive status.

An association that has a political
fund registered under this chapter may elect to have the fund placed on voluntary inactive
status if the following conditions are met:

(1) the association makes a written request for inactive status;

(2) the association has filed all periodic reports required by this chapter and has received
no contributions into its political fund and made no expenditures or disbursements new text begin , including
disbursements for electioneering communications, new text end through its political fund since the last
date included on the association's most recent report; and

(3) the association has satisfied all obligations to the state for late filing fees and civil
penalties imposed by the board or the board has waived this requirement.

Subd. 2.

Effect of voluntary inactive status.

After an association has complied with
the requirements of subdivision 1:

(1) the board must notify the association that its political fund has been placed in
voluntary inactive status and of the terms of this section;

(2) the board must stop sending the association reports, forms, and notices of report due
dates that are periodically sent to entities registered with the board;

(3) the association is not required to file periodic disclosure reports for its political fund
as otherwise required under this chapter;

(4) the association may not accept contributions into its political fund and may not make
expenditures, contributions, or disbursements new text begin , including disbursements for electioneering
communications, new text end through its political fund; and

(5) if the association maintains a separate depository account for its political fund, it
may continue to pay bank service charges and receive interest paid on that account while
its political fund is in inactive status.

Subd. 3.

Resumption of active status or termination.

(a) An association that has placed
its political fund in voluntary inactive status may resume active status upon written notice
to the board.

(b) A political fund placed in voluntary inactive status must resume active status within
14 days of the date that it has accepted contributions or made expenditures, contributions,
or disbursements new text begin , including disbursements for electioneering communications, new text end that aggregate
more than $750 since the political fund was placed on inactive status. If, after meeting this
threshold, the association does not notify the board that its fund has resumed active status,
the board may place the association's political fund in active status and notify the association
of the change in status.

(c) An association that has placed its political fund in voluntary inactive status may
terminate the registration of the fund without returning it to active status.

Subd. 4.

Penalty for financial activity while in voluntary inactive status.

If an
association fails to notify the board of its political fund's resumption of active status under
subdivision 3, the board may impose a civil penalty of $50 per day, not to exceed $1,000
commencing on the 15th calendar day after the fund resumed active status.

Sec. 6.

Minnesota Statutes 2016, section 10A.25, subdivision 3a, is amended to read:

Subd. 3a.

Independent expenditures new text begin and electioneering communications new text end .

The principal
campaign committee of a candidate must not make independent expenditures new text begin or
disbursements for electioneering communications new text end .

Sec. 7.

Minnesota Statutes 2016, section 10A.27, subdivision 15, is amended to read:

Subd. 15.

Contributions or use of general treasury money.

(a) An association may,
if not prohibited by other law, contribute its general treasury money to an independent
expenditure or ballot question political committee or fund, including its own independent
expenditure or ballot question political committee or fund, without complying with
subdivision 13.

(b) Before the day when the recipient committee or fund's next report must be filed with
the board under section 10A.20, subdivision 2 or 5, an association that has contributed more
than $5,000 in aggregate to independent expenditure political committees or funds during
the calendar year or has contributed more than $5,000 in aggregate to ballot question political
committees or funds during the calendar year must provide in writing to the recipient's
treasurer a statement that includes the name, address, and amount attributable to each person
that paid the association dues or fees, or made donations to the association that, in total,
aggregate more than $5,000 of the contribution from the association to the independent
expenditure or ballot question political committee or fund. The statement must also include
the total amount of the contribution attributable to persons not subject to itemization under
this section. The statement must be certified as true by an officer of the donor association.

(c) To determine the amount of membership dues or fees, or donations made by a person
to an association and attributable to the association's contribution to the independent
expenditure or ballot question political committee or fund, the donor association must deleted text begin :
deleted text end new text begin separately prorate the total independent expenditures and ballot question expenditures made
during the calendar year over all general treasury money received during the calendar year.
new text end

deleted text begin (1) apply a pro rata calculation to all unrestricted dues, fees, and contributions received
by the donor association in the calendar year; or
deleted text end

deleted text begin (2) as provided in paragraph (d), identify the specific individuals or associations whose
dues, fees, or contributions are included in the contribution to the independent expenditure
political committee or fund.
deleted text end

deleted text begin (d) Dues, fees, or contributions from an individual or association must be identified in
a contribution to an independent expenditure political committee or fund under paragraph
(c), clause (2), if:
deleted text end

deleted text begin (1) the individual or association has specifically authorized the donor association to use
the individual's or association's dues, fees, or contributions for this purpose; or
deleted text end

deleted text begin (2) the individual's or association's dues, fees, or contributions to the donor association
are unrestricted and the donor association designates them as the source of the subject
contribution to the independent expenditure political committee or fund.
deleted text end

new text begin (d) If the amount contributed to independent expenditure and ballot question political
committees or funds in a calendar year exceeds the amount of general treasury money
received by the association during that year:
new text end

new text begin (1) the contributions must be attributed first to all receipts of general treasury money
received during the calendar year in which the contributions were made;
new text end

new text begin (2) any amount of current-year contributions that exceeds the total of all receipts of
general treasury money during the current calendar year must be prorated over all general
treasury money received in the preceding calendar year; and
new text end

new text begin (3) if the allocation made in clauses (1) and (2) is insufficient to cover the subject
independent expenditures and ballot question expenditures, no further allocation is required.
new text end

(e) After a portion of the general treasury money received by an association from a
person has been designated as the source of a contribution to an independent expenditure
or ballot question political committee or fund, that portion of the association's general
treasury money received from that person may not be designated as the source of any other
contribution to an independent expenditure or ballot question political committee or fund new text begin ,
or as the source of funds for a disbursement for electioneering communications made by
that association new text end .

Sec. 8. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 7 are effective the day following final enactment.
new text end