Location:
CAMPAIGNS - FINANCE; CAMPAIGNS - PUBLIC FINANCING; ELECTIONS;
Scope:
Connecticut laws/regulations; Background;

OLR Research Report


September 6, 2011

 

2011-R-0246

2011 CAMPAIGN FINANCE LEGISLATION AFFECTING CANDIDATES

 

By: Kristin Sullivan, Principal Analyst

You asked (1) for a summary of campaign finance legislation passed during the 2011 regular session affecting candidates; (2) whether the changes apply to candidates who participate in the Citizens' Election Program (CEP), candidates who do not participate, or both; and (3) when the changes take effect.

SUMMARY

PA 11-48 ( 286-301), which the General Assembly passed during the 2011 regular session, makes several changes to state campaign finance laws, including those concerning the CEP and the State Elections Enforcement Commission (SEEC). For example, the act authorizes (1) testimonial affairs in honor of a candidate, statewide officer, or General Assembly member to raise funds for a party committee, not just the candidate or public official ( 296) and (2) campaign treasurers to use a bank or cashier's check to pay a television company for advertising costs, provided the treasurer maintains documentation showing the payment came from the candidate committee's funds ( 297).

The act specifies that for purposes of Chapter 155 of the General Statutes (i.e., campaign finance provisions, other than the CEP), “candidate committee” means one for a candidate who participates or does not participate in the CEP, unless a provision clearly indicates otherwise ( 298). With some exceptions, the act's changes Chapter 157 of the General Statutes (i.e., the CEP) generally apply to participating candidates. Provisions on excess spending and reporting under the CEP apply to both participating and nonparticipating candidates.

The act takes effect January 1, 2012 and applies to primaries and elections held on or after that date, except its provisions on (1) the State SEEC, lobbyist forms, and eliminating duplicate campaign finance statements for town committees took effect upon passage and (2) payments to television companies took effect July 1, 2011.

Any candidate who has questions about complying with PA 11-48 should contact the SEEC—the state agency responsible for enforcing campaign finance laws.

CAMPAIGN FINANCE

Campaign Contributions (PA 11-48 286 & 288)

Existing law places limits on contributions made to benefit candidates committees, party committees, and political committees (known as PACs) and subjects the contributions to campaign finance reporting requirements. However, the law creates exemptions for certain items and services under the definition of contribution. Thus, these items and services need not be reported as contributions. The act expands the list of items and services that are not considered contributions. In certain instances, it applies the exemptions for party committees to slate committees and PACs.

De Minimis Activities. Existing law exempts from the definition of contribution certain de minimis campaign activities that benefit PACs and party, slate, and candidate committees, including those for participating and nonparticipating candidates. The act expands the list of de minimis activities to include:

1. receiving, not just sending, without compensation, e-mail or messages;

2. an individual using up to $100 per election or calendar year, as applicable, in (a) personal items or services that are customarily associated with occupying a residence or (b) donated personal property customarily used for campaign purposes, to benefit a candidate committee by an individual;

3. posting or displaying the name or names of one or more candidates at a town fair, county fair, local festival, or similar gathering by a party committee; and

4. voluntarily creating electronic or written communications, including ongoing content development and social media on the Internet or a phone.

Under the act, “social media” means an electronic medium where users may create and view user-generated content, such as uploaded or downloaded videos or still photographs, blogs, video blogs, podcasts, or instant messages.

Volunteer Services and Travel Costs. By law, volunteer services provided by individuals are not considered campaign contributions. The act specifies that the exemption applies when individuals provide volunteer services to party committees, PACs, slate committees, and candidate committees, including those for participating and nonparticipating candidates.

The act exempts as a contribution all travel expenses incurred by a volunteer. Under prior law, travel expenses over $200 per election for volunteers to a single candidate and over $400 per calendar year for volunteers to a state central or town committee were considered contributions.

The act specifies that people are considered volunteers when they do not receive compensation for the services they provide, regardless of whether they did in the past or may in the future.

Business Donations. The act raises, from $100 to $200, the contribution exemption for donated goods and services by a business entity for a fundraiser. By law, the exemption applies to any committee.

Ad Books and Advertising Space on Signs. The act extends to advertising space on a sign at a fundraising affair existing law's ad book limits: $250 for purchases by a business entity and $50 for purchases by an individual.

Discounted Food. The act (1) raises the exemptions for discounted food and drinks sold to a candidate or party committee and (2) extends them to slate committees and PACs. Specifically, it raises the exemption from $200 to $400 for candidate committees and applies it separately to a single primary or general election. Prior law applied the exemption to a single election. The act also raises the exemption from $400 to $600 in a calendar year for party committees and applies it to slate committees and PACs.

Donated Food. Existing law exempts the cost of food and drink donated by an individual, up to a total of $50, to be consumed at a single slate, candidate, legislative caucus, legislative leadership, or party committee meeting or event, other than a fundraiser. The act extends the exemption to PAC meetings and events.

Food Sold by a Town Committee. Existing law exempts the sale of food or beverages, up to $50, sold by a town committee to an individual at a town fair, county fair, or similar mass gathering. The act extends this exemption to local festivals.

Personal Property. The act raises, from $50 to $100, the maximum allowable exemption for an item of personal property donated to or purchased at a committee's fundraising affair.

Slate Cards. The act changes the exemption for costs associated with preparing, displaying, or distributing slate cards, sample ballots, or other printed materials that list the names of three or more candidates. Specifically, it eliminates the exemption for PACs and individuals, but extends it to slate committees. It retains the exemption for party committees.

Security Deposits. Existing law establishes a contribution exemption for security deposits made by an individual for a committee's phone service, provided he or she receives a refund. The act extends this exemption to cover security deposits to any utility company, such as an electric company.

“House Parties.” The act:

1. raises the exemption for costs associated with hosting a house party (i.e., cost of invitations, food, drinks, and using real and personal property);

2. creates exemptions for two or more people hosting a house party, provided at least one resides at the residence where the party is held;

3. extends the house party exemption to a community room in a person's residential facility; and

4. extends the exemption to house parties given on behalf of a slate committee or PAC.

The act's exemption for an individual hosting a candidate party applies to a single event for one candidate during a primary or general election. Under prior law, the exemption applied to one candidate during an election cycle.

The act's exemption for an individual hosting an event for a party committee, slate committee, or PAC applies to a single event for one committee during a calendar year or a single election, whichever applies. Under prior law, the threshold applied to all party committees during a calendar year.

The act's exemption for two or more individuals hosting an event sets a threshold for each event and also a threshold for each of the two individuals (e.g., one person may host multiple events per year or election with different people.) Table 1 shows the exemptions.

Table 1: Maximum Exemptions for House Parties

Recipient

Individual Candidate

Party Committee

Slate Committees and PACs

“Donor”

Prior Law

Act

Prior Law

Act

Prior Law

Act

Individual Acting Alone

$200 per candidate per single election

$400 per event, per candidate, per election or primary

$400 for all party committees per calendar year

$400 per event, per committee, per calendar year

N/A

$400 per event, per committee, per single election or calendar year, whichever applies

Individual Acting as Part of Two or More

(see below)

N/A

$800 per candidate per single election

N/A

$800 per committee per calendar year

N/A

$800 per committee per single election or calendar year, whichever applies

Event hosted by Two or More People

(at least one lives on the premises)

N/A

$800 per event

N/A

$800 per event

N/A

$800 per event

N/A means not applicable.

Joint Checking Accounts. By law, campaign treasurers must equally divide campaign contributions from joint checking account holders who co-sign the check. The act creates an exception to the law by allowing the account holders to submit a written statement indicating how they want the contribution attributed.

Anonymous Contributions. The act changes the procedure for handling anonymous contributions by requiring campaign treasurers to remit those of any amount to the SEEC for deposit in the General Fund. Under prior law, treasurers had to remit anonymous contributions of more than $15 to the state treasurer, who then deposited them in the General Fund.

Reporting Organization Expenditures ( 290)

By law, organization expenditures are made by legislative caucus, legislative leadership, or party committees for the benefit of candidates or their committees. They are not considered campaign contributions.

Existing law requires each campaign finance statement that a legislative caucus, legislative leadership, or party committee treasurer files to include an itemized accounting of organization expenditures made to benefit participating legislative candidates. The act expands this requirement to also include organization expenditures made to benefit (1) nonparticipating legislative candidates and (2) all statewide office candidates.

Existing law, unchanged by the act, requires a committee that makes an organization expenditure to notify the benefited candidate committee. The act eliminates the requirement that these notifications include the expenditure's amount and purpose. It also eliminates the requirement that the treasurer of the benefited candidate committee file a statement with the SEEC listing the (1) committee that made the expenditure and (2) amount and purpose, if known.

Instead, the act requires the SEEC to post a link on its website's homepage listing all organization expenditures reported by any legislative leadership, legislative caucus, or party committee. The list must include information on the committee making the expenditure, the committee receiving the expenditure, and the expenditure's date and purpose.

Campaign Finance Statements ( 287 & 289 – 290)

Existing law requires the following committees and individuals to file periodic campaign finance statements with the SEEC: (1) candidate committees for statewide, legislative, and probate judge offices; (2) party committees; (3) individual lobbyists; and (4) PACs, other than those formed to aid or promote the success or defeat of a municipal referendum or municipal office candidates.

Required Information. The act eliminates a requirement for candidate committees, PACs, and party committees to include in their periodic campaign finance statements:

1. the total amount and denomination of money received from anonymous contributors;

2. the names of people who purchase items totaling $100 or less at a fundraiser or food at a town fair, county fair, or similar gathering;

3. the names of people who donate food or beverages for a meeting; or

4. costs associated with permissible de minimis activities.

It requires these committees to include in their statements:

1. whether a person contributing over $400 in the aggregate to a slate committee financing a candidate for chief executive officer of a town, city, or borough has, or is associated with, a business that has a contract valued at over $5,000 with the town, city, or borough and

2. the name and address of any person or business that purchased ad space on a sign at a fundraiser and the aggregate amount.

The act specifies that treasurers need not retain receipts related to de minimis activities.

Duplicate Reporting. The act eliminates duplicate filing requirements for campaign finance statements. Specifically, it eliminates the requirement that (1) town committees file copies of reports with the applicable town clerks since they also file with the SEEC and (2) slate committees for the office of justice of the peace file a duplicate report with the SEEC since they also file with the applicable town clerk. It eliminates a requirement that individual lobbyists file with the SEEC since the law requires them to file periodic financial reports with the Office of State Ethics.

Filing Exemption. Under prior law, candidates in a primary or general election had to file periodic campaign finance reports, unless they were exempt. Certain candidates had to also file supplemental campaign finance statements.

The act eliminates this dual filing requirement by allowing a supplemental statement to satisfy the requirement for the periodic campaign finance statement due to the SEEC on the seventh day before a regular election (see Excess Spending and Reporting below).

Covered Period. The act slightly expands the period that periodic campaign finance statements must cover but maintains existing deadlines for submitting them. Under the act, monthly statements must include information through 11:59 p.m. on the last day, rather than simply on the last day, of the month before the filing deadline. Statements required to be filed seven days before an election, primary, or referendum must include information through 11:59 p.m. on the second, rather than the seventh, day preceding the filing deadline.

Timely Submission. Under the act, to be considered timely, periodic campaign finance statements must not just be postmarked by the filing deadline, but the SEEC must receive them by a specified time on the filing deadline. To be deemed timely, the SEEC must receive hard copies by 5 p.m. and electronic submissions by 11:59 p.m. on the filing deadline. “Authorized electronic” methods include e-mail, fax, and SEEC-created web-based programs.

The act specifies that grant applications, supplemental campaign finance statements, and independent expenditure reports are considered timely when they are filed according to the procedures under existing law.

Certifying Contributions Over $50 ( 290)

The law prohibits principals of state and prospective state contractors and their immediate family members from making contributions to (1) candidate and exploratory committees for statewide and legislative candidates, (2) PACs authorized to contribute to these candidates, and (3) party committees. It places a $100 limit on contributions to these committees from communicator lobbyists and their family members.

Under prior law, individuals who made such contributions that separately or in the aggregate exceeded $50 had to certify that they were not a principal of a state or prospective state contractor. But they also had to certify that they were neither a communicator lobbyist nor an immediate family member of one, even though the law permits these individuals to make contributions of up to $100.

The act changes this procedure by requiring individuals who make contributions exceeding $50 to instead (1) provide their status as a communicator lobbyist, immediate family member of a communicator lobbyist, state or prospective state contractor, or such a contractor's principal and (2) certify that they are not prohibited from making a contribution to any of these candidates or committees. The law, unchanged by the act, requires them to also provide the name of their employer.

The act requires the SEEC to amend the sample form upon which certifications are made to include an explanation of the terms “immediate family,” “state contractor,” and “prospective state contractor.” The form already explains “communicator lobbyist” and “principal of a state contractor or principal of a prospective state contractor.”

The act requires treasurers to keep only one certification per contributor, unless non-financial information changes. Treasurers who deposit a contribution based on a certification have a complete defense in any action taken against them concerning the contribution, including any investigation that the SEEC initiates or conducts based on a complaint.

Surplus Distributions and Post-Election Payments ( 290)

By law, candidate committees and political committees, other than ongoing PACs or exploratory committees, must spend or distribute surplus funds after (1) a primary if the candidate loses, (2) an election, or (3) a referendum.

The act extends the distribution deadline from January 31st to March 31st following an election or referendum held in November, unless a candidate uses the surplus to comply with a post-election audit by the SEEC. For these candidates, the act extends the distribution deadline from (1) within 90, to within 120, days after (a) an election or referendum not held in November or (b) a primary resulting in a defeat or (2) January 31st to June 30th following an election or referendum held in November.

“Thank You” Parties. The act authorizes participating candidates to host a meal after an unsuccessful primary or an election to acknowledge committee workers' efforts. The meal must be provided no later than 14 days after the primary or election, whichever is applicable. The cost for meals cannot exceed $30 per worker.

Treasurer Payment. The act authorizes participating candidates to use any remaining funds after an election or unsuccessful primary to make a payment of up to $1,000 to their campaign treasurer for services rendered. By law, candidates may compensate without limitation (1) campaign and committee staff and (2) attorneys, accountants, consultants, or other professionals for services during a campaign.

Exemption from Affidavit of Intent to Participate in the CEP ( 291)

By law, candidates who finance their campaigns entirely from personal funds or do not receive or spend over $1,000 from other sources are not required to form a candidate committee and must attest to their eligibility for this exemption in a sworn statement.

If these candidates do not intend to participate in the CEP, the act exempts them from the requirement to file an affidavit certifying their intent to abide or not abide by the program's spending limits. Like other candidates who do not intend to participate, they are called “nonparticipating candidates.”

CEP

Qualifying Contributions (QCs) ( 292)

To participate in the CEP, candidates must qualify by raising a specified amount in small donations, knows as QCs. The act specifies that “individuals” include sole proprietorships, thus allowing them to make QCs. In addition, it prohibits contributions by minors under age 12 from counting as QCs. By law, minors under age 18 can contribute a maximum of $30 to (1) exploratory and candidate committees and (2) PACs and party committees in a calendar year.

Grant Applications ( 293 – 294)

By law, each participating candidate and campaign treasurer must sign the CEP grant application. The application must include certain written certifications and a cumulative itemized accounting of all funds received, expenditures made, and expenses incurred but not yet paid. The act requires the itemized accounting to cover campaign finances as of three days preceding the date the application is actually filed, rather than three days before its filing deadline.

The act also (1) establishes (a) the first Wednesday, rather than Thursday, in May as the earliest date when participating candidates may apply for a grant and (b) subsequent Wednesdays, rather than Thursdays, for later application submissions; (2) extends, from four to five business days and from four to 10 business days, the time that the SEEC has to review most applications from legislative candidates and statewide office candidates, respectively; and (3) specifies that the SEEC will not review general election grant applications it receives during the seven business days before the final primary application deadline, until five or 10 business days, as applicable, after the next application deadline.

Excess Spending and Reporting ( 295)

The act (1) revises the procedure for submitting supplemental campaign finance statements and for reporting excess expenditures, (2) deems candidates who submit supplemental campaign finance statements to have satisfied the campaign finance report filing requirement for seven days preceding a primary or election, and (3) requires supplemental statements to include the same information as periodic campaign finance statements (see Required Information, above).

Supplemental Campaign Finance Statements. Under prior law, if a candidate in a primary or general election campaign with at least one participating candidate received contributions, loans, or other funds, or made or became obligated to make an expenditure that in the aggregate exceeded 90% of the applicable spending limit for the primary or general election period, his or her campaign treasurer had to file a supplemental campaign finance statement with the SEEC. Thereafter, the campaign treasurer for every candidate in the race had to file periodic supplemental campaign finance statements according to a specified schedule.

The act eliminates the 90% threshold. Instead, it requires the campaign treasurer of each candidate in a primary or general election campaign with at least one participating candidate to file weekly supplemental campaign finance statements:

1. for a primary campaign, on the Thursday following the July filing date set by law, and every subsequent Thursday, including the one before the primary and

2. for a general election campaign, on the Thursday following the October filing date, and every subsequent Thursday, including the one before the election.

The act eliminates the supplemental reporting requirement for candidates who spend under $1,000. Those who spend $1,000 or more are subject to the requirement. The act similarly eliminates the requirement for unopposed participating candidates, provided they file a supplemental statement on the last Thursday before a primary or general election, whichever applies.

Supplemental statements must cover the first day not included in the last statement through 11:59 p.m. on the second day preceding the filing deadline.

Excess Expenditures. Under prior law, each campaign treasurer of a candidate in a primary or general election campaign with at least one participating candidate had to file a declaration of excess receipts or expenditures when the candidate committee received contributions, loans, or other funds, or made or became obligated to make an expenditure that in the aggregate exceeded 100% of the applicable spending limit. The treasurer had to do the same if the candidate had receipts or expenditures that in the aggregate exceeded 125%, 150%, or 175% of the applicable spending limit for the primary or general election.

The act eliminates the excess expenditure reporting requirement for nonparticipating candidates. For participating candidates, the act (1) bases reporting on their expenditures only and (2) eliminates filings at the 125%, 150%, and 175% thresholds.

The reporting schedule remains the same. A candidate who exceeds the applicable threshold must file the declaration of excess expenditures with the commission within 48 hours; one who exceeds the applicable threshold 20 or fewer days before the primary or election, must file the declaration within 24 hours.

The act specifies that declarations of excess expenditures must cover the first day not included in the last statement through 11:59 p.m. on the first day preceding the filing deadline.

SEEC ( 299 – 301)

Commission Members

The act reduces the terms of SEEC members appointed on or after July 1, 2011, from five to three years. As of the same date, it prohibits members from serving consecutive terms, except sitting members may serve until their successor is appointed and qualifies.

Complaints and Preliminary Investigations

Unless the campaign treasurer, deputy treasurer, chairperson, or candidate affiliated with a committee that is the subject of a complaint or preliminary investigation by the SEEC requests otherwise, the act requires the commission to keep information concerning the complaint or investigation confidential until it determines that a full investigation is necessary.

Audits

The act prohibits the SEEC from auditing more than 50% of legislative candidate committees after an election or primary. It requires the SEEC to (1) randomly select by lottery the legislative candidate committees that it will audit, (2) audit all statewide office candidate committees, and (3) notify those committees of the audit no later than May 31 following the election for the office sought.

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