Bill Text: AZ SB1338 | 2018 | Fifty-third Legislature 2nd Regular | Introduced
Bill Title: Campaign finance; covered transfers; disclosure.
Spectrum: Partisan Bill (Democrat 8-0)
Status: (Introduced - Dead) 2018-01-25 - Senate read second time [SB1338 Detail]
Download: Arizona-2018-SB1338-Introduced.html
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REFERENCE TITLE: campaign finance; covered transfers; disclosure. |
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State of Arizona Senate Fifty-third Legislature Second Regular Session 2018
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SB 1338 |
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Introduced by Senators Hobbs: Cajero Bedford, Contreras, Dalessandro, Mendez, Miranda, Peshlakai, Quezada
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AN ACT
amending sections 16-901, 16-905, 16-906, 16-922 and 16-926, Arizona Revised Statutes; relating to campaign contributions and expenses.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 16-901, Arizona Revised Statutes, is amended to read:
16-901. Definitions
In this chapter, unless the context otherwise requires:
1. "Advertisement" means information or materials, other than nonpaid social media messages, that are mailed, e‑mailed, posted, distributed, published, displayed, delivered, broadcasted or placed in a communication medium and that are for the purpose of influencing an election.
2. "Affiliate" means any organization that controls, is controlled by or is under common control with a corporation, limited liability company or labor organization.
3. "Affiliated entity":
(a) Means an entity to which any one or more of the following apply:
(i) the governing INSTRUMENT of the entity requires it to be bound by the decisions of the other entity.
(ii) The governing board of the entity includes persons who are specifically designated REPRESENTATIVES of the other entity or who are members of the GOVERNING board of or officers or paid executive staff members of the other entity or whose service on the governing board is contingent on the approval of the other entity.
(iii) The ENTITY is chartered by the other entity.
(b) Includes entities that are an affiliate of the other entity or in which both of the ENTITIES are an affiliate of the same entity.
3. 4. "Agent" means any person who has actual authority, either express or implied, to represent or make decisions on behalf of another person.
4. 5. "Ballot measure expenditure" means an expenditure made by a person that expressly advocates the support or opposition of a clearly identified ballot measure.
5. 6. "Best effort" means that a committee treasurer or treasurer's agent makes at least one written effort, including an attempt by e-mail, text message, private message through social media or other similar communication, or at least one oral effort that is documented in writing to identify the contributor of an incomplete contribution.
6. 7. "Calendar quarter" means a period of three consecutive calendar months ending on March 31, June 30, September 30 or December 31.
7. 8. "Candidate" means an individual who receives contributions or makes expenditures or who gives consent to another person to receive contributions or make expenditures on behalf of that individual in connection with the candidate's nomination, election or retention for any public office.
8. 9. "Candidate committee" includes the candidate.
9. 10. "Clearly identified candidate" means that the name or a description, image, photograph or drawing of the candidate appears or the identity of the candidate is otherwise apparent by unambiguous reference.
10. 11. "Committee" means a candidate committee, a political action committee or a political party.
11. 12. "Contribution" means any money, advance, deposit or other thing of value that is made to a person for the purpose of influencing an election. Contribution includes:
(a) A contribution that is made to retire campaign debt from a previous election cycle.
(b) Money or the fair market value of anything that is directly or indirectly provided to an elected official for the specific purpose of defraying the expense of communications with constituents.
(c) The full purchase price of any item from a committee.
(d) A loan that is made to a committee for the purpose of influencing an election, to the extent the loan remains outstanding.
12. 13. "Control" means to possess, directly or indirectly, the power to direct or to cause the direction of the management or policies of another organization, whether through voting power, ownership, contract or otherwise.
13. 14. "Coordinate", "coordinated" or "coordination" means the coordination of an expenditure as prescribed by section 16‑922.
14. 15. "Coordinated party expenditures" means expenditures that are made by a political party to directly pay for goods or services on behalf of its nominee.
16. "Covered transfer" means a donation, transfer or payment of monies by a person to another person if the person receiving the monies makes an independent expenditure or transfers monies to another person who makes an independent expenditure. Covered Transfer does not include any of the following:
(a) A donation, transfer or payment made by a person in the ordinary course of a trade or business.
(b) A donation, transfer or payment of monies made by a person if the person making the donation, transfer or payment prohibited the use of those monies for an independent expenditure or a covered transfer and the recipient of the monies agreed with the terms of the prohibition and DEPOSITED the monies in an account that is segregated from any account used to make independent expenditures or covered transfers.
(c) Dues, fees or assessments that are transferred between affiliated entities and that are paid by individuals on a regular periodic basis in accordance with a per individual calculation that is made on a regular basis.
15. 17. "District office" means an elected office established or organized pursuant to title 15 or 48.
16. 18. "Earmarked" means a designation, instruction or encumbrance between the transferor of a contribution and a transferee that requires the transferee to make a contribution to a clearly identified candidate.
17. 19. "Election" means any election for any ballot measure in this state or any candidate election during a primary, general, recall, special or runoff election for any office in this state other than a federal office and a political party office prescribed by chapter 5, article 2 of this title.
18. 20. "Election cycle" means the two‑year period beginning on January 1 in the year after a statewide general election and ending on December 31 in the year of a statewide general election or, for cities and towns, the two‑year period beginning on the first day of the calendar quarter after the calendar quarter in which the city's or town's second, runoff or general election is scheduled and ending on the last day of the calendar quarter in which the city's or town's immediately following second, runoff or general election is scheduled, however that election is designated by the city or town. For the purposes of a:
(a) Recall election, "election cycle" means the period between issuance of a recall petition serial number and the latest of the following:
(i) The date of the recall election that is called pursuant to section 19‑209.
(ii) The date that a resignation is accepted pursuant to section 19‑208.
(iii) The date that the receiving officer provides notice pursuant to section 19‑208.01 that the number of signatures is insufficient.
(b) Special election, "election cycle" means the period between the date of issuance of a proclamation or order calling the special election and the last day of the calendar quarter in which the special election is held.
19. 21. "Employee" means an individual who is entitled to compensation for labor or services performed for the individual's employer.
20. 22. "Employer" means any person that pays compensation to and directs the labor or services of any individual in the course of employment.
21. 23. "Enforcement officer" means the attorney general or the county, city or town attorney with authority to collect fines or issue penalties with respect to a given election pursuant to section 16‑938.
22. 24. "Entity" means a corporation, limited liability company, labor organization, partnership, trust, association, organization, joint venture, cooperative, unincorporated organization or association or other organized group that consists of more than one individual.
23. 25. "Excess contribution" means a contribution that exceeds the applicable contribution limits for a particular election.
24. 26. "Exclusive insurance contract" means an insurance producer's contract with an insurer that does either of the following:
(a) Prohibits the producer from soliciting insurance business for any other insurer.
(b) Requires a right of first refusal on all lines of insurance business written by the insurer and solicited by the producer.
25. 27. "Expenditure" means any purchase, payment or other thing of value that is made by a person for the purpose of influencing an election.
26. 28. "Family contribution" means any contribution that is provided to a candidate's committee by the parent, grandparent, aunt, uncle, child or sibling of the candidate or the candidate's spouse, including the spouse of any of the listed family members, regardless of whether the relation is established by marriage or adoption.
27. 29. "Filing officer" means the secretary of state or the county, city or town officer in charge of elections for that jurisdiction who accepts statements and reports for those elections pursuant to section 16‑928.
28. 30. "Firewall" means a written policy that precludes one person from sharing information with another person.
29. 31. "Identification" or "identify" means:
(a) For an individual, the individual's first and last name, residence location or street address and occupation and the name of the individual's primary employer.
(b) For any other person, the person's full name and physical location or street address.
30. 32. "Incomplete contribution" means any contribution that is received by a committee for which the contributor's complete identification has not been obtained.
31. 33. "Independent expenditure" means an expenditure by a person, other than a candidate committee, that complies with both of the following:
(a) Expressly advocates the election or defeat of a clearly identified candidate.
(b) Is not made in cooperation or consultation with or at the request or suggestion of the candidate or the candidate's agent.
32. 34. "In‑kind contribution" means a contribution of goods, services or anything of value that is provided without charge or at less than the usual and normal charge.
33. 35. "Insurance producer" means a person that:
(a) Is required to be licensed to sell, solicit or negotiate insurance.
(b) Has an exclusive insurance contract with an insurer.
34. 36. "Itemized" means that each contribution received or expenditure made is set forth separately.
35. 37. "Labor organization" means any employee representation organization that exists for the purpose of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment or other conditions of employment.
36. 38. "Legislative office" means the office of representative in the state house of representatives or senator in the state senate.
37. 39. "Mega PAC status" means official recognition that a political action committee has received contributions from five hundred or more individuals in amounts of ten dollars or more in the four-year period immediately before application to the secretary of state.
38. 40. "Nominee" means a candidate who prevails in a primary election for partisan office and includes the nominee's candidate committee.
39. 41. "Person" means an individual or a candidate, nominee, committee, corporation, limited liability company, labor organization, partnership, trust, association, organization, joint venture, cooperative or unincorporated organization or association.
40. 42. "Personal monies" means any of the following:
(a) Assets to which the individual or individual's spouse has either legal title or an equitable interest.
(b) Salary and other earned income from bona fide employment of the individual or individual's spouse.
(c) Dividends and proceeds from the sale of investments of the individual or individual's spouse.
(d) Bequests to the individual or individual's spouse.
(e) Income to the individual or individual's spouse from revocable trusts for which the individual or individual's spouse is a beneficiary.
(f) Gifts of a personal nature to the individual or individual's spouse that would have been given regardless of whether the individual became a candidate or accepted a contribution.
(g) The proceeds of loans obtained by the individual or individual's spouse that are secured by collateral or security provided by the individual or individual's spouse.
(h) Family contributions.
41. 43. "Political action committee" means an entity that is required to register as a political action committee pursuant to section 16-905.
42. 44. "Political party" means a committee that meets the requirements for recognition as a political party pursuant to chapter 5 of this title.
43. "Primary purpose" means an entity's predominant purpose. Notwithstanding any other law or rule, an entity is not organized for the primary purpose of influencing an election if all of the following apply at the time the contribution or expenditure is made:
(a) The entity has tax exempt status under section 501(a) of the internal revenue code.
(b) Except for a religious organization, assembly or institution, the entity has properly filed a form 1023 or form 1024 with the internal revenue service or the equivalent successor form designated by the internal revenue service.
(c) The entity's tax exempt status has not been denied or revoked by the internal revenue service.
(d) The entity remains in good standing with the corporation commission.
(e) The entity has properly filed a form 990 with the internal revenue service or the equivalent successor form designated by the internal revenue service in compliance with the most recent filing deadline established by internal revenue service regulations or policies.
44. 45. "Retention" means the election process by which a superior court judge, appellate court judge or supreme court justice is retained in office as prescribed by article VI, section 38 or 40, Constitution of Arizona.
45. 46."Separate segregated fund" means a fund established by a corporation, limited liability company, labor organization or partnership that is required to register as a political action committee.
46. 47. "Social media messages" means forms of communication, including internet sites for social networking or blogging, through which users create a personal profile and participate in online communities to share information, ideas and personal messages.
47. 48. "Sponsor" means any person that establishes, administers or contributes financial support to the administration of a political action committee or that has common or overlapping membership or officers with that political action committee.
48. 49. "Standing committee" means a political action committee or political party that is active in more than one reporting jurisdiction in this state and that files a statement of organization in a format prescribed by the secretary of state.
49. 50. "Statewide office" means the office of governor, secretary of state, state treasurer, attorney general, superintendent of public instruction, corporation commissioner or mine inspector.
50. 51. "Surplus monies" means those monies of a terminating committee that remain after all of the committee's expenditures have been made, all debts have been extinguished and the committee ceases accepting contributions.
Sec. 2. Section 16-905, Arizona Revised Statutes, is amended to read:
16-905. Committee qualification; requirements; exemption; adjustments
A. A candidate for election or retention shall register as a candidate committee if the candidate receives contributions or makes expenditures, in any combination, of at least one thousand dollars in connection with that candidacy.
B. An entity shall register as a political action committee if both of the following apply:
1. The entity is organized for the primary purpose of influencing the result of an election.
2. The entity knowingly receives contributions or makes expenditures, in any combination, of at least one thousand dollars in connection with any election during a calendar year Before making a contribution or expenditure. The political action committee may only receive monies from either the entity's treasury or voluntary contributions made by its members, but not both, or may receive monies from another political action committee. The political action committee is deemed to have been established by an entity if the initial contribution to the political action committee is made by the entity's treasury or an officer or director of the entity. An entity may not form more than one political action committee.
C. A filing officer or enforcement officer shall make a rebuttable presumption that an entity is organized for the primary purpose of influencing the result of an election if the entity meets any of the following:
1. Except for a religious organization, assembly or institution, claims tax exempt status but had not filed form 1023 or form 1024 with the internal revenue service, or the equivalent successor form designated by the internal revenue service, before making a contribution or expenditure.
2. Made a contribution or expenditure and at that time had its tax exempt status revoked by the internal revenue service.
3. Made a contribution or expenditure and at that time failed to file form 990 with the internal revenue service, or the equivalent successor form designated by the internal revenue service, if required by law.
4. At the time of making a contribution or expenditure was not registered with the corporation commission if required by law.
5. At the time of making a contribution or expenditure was registered with the corporation commission but was not in good standing.
D. A fund that is established by a corporation, limited liability company, labor organization or partnership for the purpose of influencing the result of an election shall register as a political action committee.
E. An entity may register as a political party committee only as prescribed in chapter 5 of this title.
F. A committee is not subject to state income tax and is not required to file a state income tax return.
G. The dollar amounts amount prescribed by this section shall be increased every two years pursuant to section 16‑931.
Sec. 3. Section 16-906, Arizona Revised Statutes, is amended to read:
16-906. Committee statement of organization; amendment; committee limitation
A. A committee shall file a statement of organization with the filing officer within ten days after qualifying as a committee except that if the committee is formed within ten days before the start of early voting, that committee shall file its statement of organization within twenty-four hours after qualifying as a committee.
B. A statement of organization shall include the following committee information:
1. The committee name, mailing address, e‑mail address, website, if any, and telephone number, if any, and the type of committee. The committee name shall include:
(a) For a candidate committee, the candidate's first or last name and, if the candidate has a candidate committee open for more than one office, the office sought.
(b) For a political action committee that is sponsored, the sponsor's name or commonly known nickname.
2. The name, mailing address, e‑mail address, website, if any, and telephone number of any sponsor.
3. The name, physical location or street address, e‑mail address, telephone number, occupation and employer of the committee's chairperson and treasurer. For a candidate committee, the candidate may serve as both chairperson and treasurer.
4. For a candidate committee for a partisan office, the candidate's party affiliation.
5. A listing of all banks or other financial institutions used by the committee.
6. A statement that the committee chairperson and committee treasurer have read the filing officer's campaign finance and reporting guide, agree to comply with this article and articles 1, 1.2, 1.3, 1.4, 1.5, 1.6 and 1.7 of this chapter, and agree to accept all notifications and service of process via the e-mail address provided by the committee.
C. A committee shall file an amended statement of organization within ten days after any change in committee information.
D. On filing a statement of organization, the filing officer shall issue an identification number to the committee.
E. A standing committee shall file a statement of organization with the secretary of state and a copy of the statement in each jurisdiction in which the committee is active. Only the secretary of state shall issue an identification number.
F. A candidate may have only one committee in existence for the same office during the same election cycle.
G. On filing a statement of organization, a political action committee or political party may perform any lawful activity, including making contributions, making expenditures or conducting issue advocacy, without establishing a separate committee for each activity or specifying each activity in its statement of organization.
Sec. 4. Section 16-922, Arizona Revised Statutes, is amended to read:
16-922. Independent and coordinated expenditures
A. Any person may make independent expenditures.
B. An expenditure is not an independent expenditure if either of the following applies:
1. There is actual coordination with respect to an expenditure between a candidate or candidate's agent and the person making the expenditure or that person's agent.
2. Both of the following apply:
(a) The expenditure is based on nonpublic information about a candidate's or candidate committee's plans or needs that the candidate or candidate's agent provides to the person making the expenditure or that person's agent.
(b) The candidate or candidate's agent provides the nonpublic information with an intent toward having the expenditure made.
C. In evaluating whether an expenditure is an independent expenditure, a filing officer or enforcement officer may consider the following to be rebuttable evidence of coordination:
1. Any agent of the person making the expenditure is also an agent of the candidate whose election or whose opponent's defeat is being advocated by the expenditure.
2. In the same election cycle, the person making the expenditure or that person's agent is or has been authorized to raise or spend monies on the candidate's behalf.
3. In the same election cycle, the candidate is or has been authorized to raise money or solicit contributions on behalf of the person making the expenditure.
D. Notwithstanding subsection C of this section, coordination does not exist under either of the following:
1. If the person making the expenditure maintains a firewall between the person and that person's agent in compliance with all of the following:
(a) The person's agent did not participate in deciding to make the expenditure or in deciding the content, timing or targeting of the expenditure.
(b) The person making the expenditure has a written policy establishing the firewall and its requirements.
(c) The person making the expenditure and the person's agent followed the written policy regarding the firewall.
2. Solely because an agent of a person making the expenditure serves or has served on a candidate's host committee for a fund‑raising event.
E. An expenditure that is coordinated with a candidate, other than a coordinated party expenditure, is deemed an in-kind contribution to the candidate.
F. An entity that makes an independent expenditure, other than an individual or a committee, shall file independent expenditure reports pursuant to section 16-926, subsection G H.
Sec. 5. Section 16-926, Arizona Revised Statutes, is amended to read:
16-926. Campaign finance reports; contents
A. A committee shall file campaign finance reports with the filing officer. The secretary of state's instructions and procedures manual adopted pursuant to section 16‑452 shall prescribe the format for all reports and statements.
B. A campaign finance report shall set forth:
1. The amount of cash on hand at the beginning of the reporting period.
2. Total receipts during the reporting period, including:
(a) An itemized list of receipts in the following categories, including the source, amount and date of receipt, together with the total of all receipts in each category:
(i) Contributions from individuals whose contributions exceed fifty dollars for that election cycle, including identification of the contributor's occupation and employer.
(ii) Contributions from candidate committees.
(iii) Contributions from political action committees.
(iv) Contributions from political parties.
(v) Contributions from partnerships.
(vi) Covered transfers.
(vi) (vii) For a political action committee or political party, contributions from corporations and limited liability companies, including identification of the corporation's or limited liability company's file number issued by the corporation commission.
(vii) (viii) For a political action committee or political party, contributions from labor organizations, including identification of the labor organization's file number issued by the corporation commission.
(viii) (ix) For a candidate committee, a candidate's contribution of personal monies.
(ix) (x) All loans, including identification of any endorser or guarantor other than a candidate's spouse, and the contribution amount endorsed or guaranteed by each.
(x) (xi) Rebates and refunds.
(xi) (xii) Interest on committee monies.
(xii) (xiii) The fair market value of in-kind contributions received.
(xiii) (xiv) Extensions of credit that remain outstanding, including identification of the creditor and the purpose of the extension.
(b) The aggregate amount of contributions from all individuals whose contributions do not exceed fifty dollars for the election cycle.
3. An itemized list of all disbursements in excess of two hundred fifty dollars during the reporting period in the following categories, including the recipient, the recipient's address, a description of the disbursement and the amount and date of the disbursement, together with the total of all disbursements in each category:
(a) Disbursements for operating expenses.
(b) Contributions to candidate committees.
(c) Contributions to political action committees.
(d) Contributions to political parties.
(e) Contributions to partnerships.
(f) Covered transfers.
(f) (g) For a political action committee or political party, contributions to corporations and limited liability companies, including identification of the corporation's or limited liability company's file number issued by the corporation commission.
(g) (h) For a political action committee or political party, contributions to labor organizations, including identification of the labor organization's file number issued by the corporation commission.
(h) (i) Repayment of loans.
(i) (j) Refunds of contributions.
(j) (k) Loans made.
(k) (l) The value of in-kind contributions provided.
(l) (m) Independent expenditures that are made to advocate the election or defeat of a candidate, including identification of the candidate, office sought by the candidate, election date, mode of advertising and distribution or publication date.
(m) (n) Expenditures to advocate the passage or defeat of a ballot measure, including identification of the ballot measure, ballot measure serial number, election date, mode of advertising and distribution or publication date.
(n) (o) Expenditures to advocate for or against the issuance of a recall election order or for the election or defeat of a candidate in a recall election, including identification of the officer to be recalled or candidate supported or opposed, mode of advertising and distribution or publication date.
(o) (p) Any other disbursements or expenditures.
4. The total sum of all receipts and disbursements for the reporting period.
5. A certification by the committee treasurer, issued under penalty of perjury, that the contents of the report are true and correct.
C. For the purposes of reporting under subsection B of this section:
1. A contribution is deemed to be received either on the date the committee knowingly takes possession of the contribution or the date of the check or credit card payment. For an in-kind contribution of services, the contribution is deemed made either on the date the services are performed or the date the committee receives the services.
2. An expenditure or disbursement is deemed made either on the date the committee authorizes the monies to be spent or the date the monies are withdrawn from the committee's account. For a transaction by check, the expenditure or disbursement is deemed made on the date the committee signs the check. For a credit card transaction on paper, the expenditure or disbursement is deemed made on the date the committee signs the authorization to charge the credit card. For an electronic transaction, an expenditure or disbursement is deemed made on the date the committee electronically authorizes the charge. For an agreement to purchase goods or services, the expenditure or disbursement is deemed made either on the date the parties enter into the agreement or the date the purchase order is issued.
3. A committee may record its transactions using any of the methods authorized by this subsection but for each type of contribution, expenditure or disbursement made or received, the committee shall use a consistent method of recording transactions throughout the election cycle.
D. The amount of an in-kind contribution of services shall be equal to the usual and normal charges for the services on the date performed.
E. If any receipt or disbursement is earmarked, the committee shall report the identity of the person to whom the receipt or disbursement is earmarked.
F. Candidate committee reports shall be cumulative for the election cycle to which they relate. Political action committee and political party reports shall be cumulative for a two-year election cycle ending in the year of a statewide general election. If there has been no change during the reporting period in an item listed in the immediately preceding report, only the amount need be carried forward.
G. For a political action committee that receives individual contributions through a payroll deduction plan, that committee is not required to separately itemize each contribution received from the contributor during the reporting period. In lieu of itemization, the committee may report all of the following:
1. The aggregate amount of contributions received from the contributor through the payroll deduction plan during the reporting period.
2. The individual's identity.
3. The amount deducted per pay period.
H. An entity that makes or obligates itself to make independent expenditures or ballot measure expenditures in excess of one thousand dollars in any combination during a reporting period shall file an expenditure report with the filing officer for the applicable reporting period. Expenditure reports shall identify all of the following:
1. The name of the person making or obligating the entity to make the expenditure.
2. The tax exempt status of that person or entity, if applicable.
3. The mailing address of the person or entity.
4. The principal business address of the person or entity, if different from the mailing address.
5. The address, telephone number and email address of the person's or entity's agent for service of process in this state.
6. The candidate or ballot measure supported or opposed. ,
7. The office sought by the candidate, if any. ,
8. The election date. ,
9. The mode of advertising and first date of publication, display, delivery or broadcast of the advertisement.
10. The name, telephone number and e-mail address of the individual filing the report.
I. an entity that makes or obligates ITSELF to make independent expenditures or ballot measure expenditures in excess of five thousand dollars in any combination during the thirty days before the start of early voting shall file its expenditure report within twenty‑four hours after making or obligating itself to make the expenditure.
