Connecticut Seal

General Assembly

File No. 568

    February Session, 2016

Substitute House Bill No. 5511

House of Representatives, April 11, 2016

The Committee on Government Administration and Elections reported through REP. JUTILA of the 37th Dist., Chairperson of the Committee on the part of the House, that the substitute bill ought to pass.

AN ACT CONCERNING DISCLOSURE OF COORDINATED AND INDEPENDENT SPENDING IN CAMPAIGN FINANCE.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Subdivision (3) of section 9-601 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(3) "Political committee" means (A) a committee organized by a business entity or organization, (B) persons other than individuals, or two or more individuals organized or acting jointly conducting their activities in or outside the state, (C) an exploratory committee, (D) a committee established by or on behalf of a slate of candidates in a primary for the office of justice of the peace, but does not mean a candidate committee or a party committee, (E) a legislative caucus committee, [or] (F) a legislative leadership committee, or (G) an independent expenditure political committee, as defined in section 2 of this act.

Sec. 2. (NEW) (Effective from passage) As used in chapters 155 and 157 of the general statutes, "independent expenditure political committee" means a political committee that may only make independent expenditures, as defined in section 9-601c of the general statutes, as amended by this act, and is prohibited from making any contribution, as defined in section 9-601a of the general statutes, as amended by this act, to, or for the benefit of, any candidate or committee unless such contribution is made to any other independent expenditure political committee.

Sec. 3. Subsection (a) of section 9-601a of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) As used in this chapter and chapter 157, "contribution" means:

(1) Any gift, subscription, loan, advance, payment or deposit of money or anything of value, made (A) to promote the success or defeat of any [candidate] person seeking (i) the nomination for election, or (ii) election, or (B) for the purpose of aiding or promoting (i) the success or defeat of any referendum question, or (ii) the success or defeat of any political party;

(2) A written contract, promise or agreement to make a contribution for any such purpose;

(3) The payment by any person, other than a candidate or treasurer, of compensation for the personal services of any other person which are rendered without charge to a committee or candidate for any such purpose;

(4) An expenditure that is not an independent expenditure; or

(5) Funds received by a committee which are transferred from another committee or other source for any such purpose.

Sec. 4. Subsections (a) and (b) of section 9-601b of the general statutes are repealed and the following is substituted in lieu thereof (Effective from passage):

(a) As used in this chapter and chapter 157, [the term] "expenditure" means:

(1) Any purchase, payment, distribution, loan, advance, deposit or gift of money or anything of value, when made (A) to promote the success or defeat of any [candidate] person seeking (i) the nomination for election, or (ii) election, [of any person] or (B) for the purpose of aiding or promoting (i) the success or defeat of any referendum question, or (ii) the success or defeat of any political party;

(2) Any communication that (A) refers to one or more clearly identified candidates, and (B) (i) is broadcast (I) by radio, by television, other than on a public access channel, [or] by satellite communication or via the Internet, or (II) as a paid-for telephone communication, [or] (ii) appears in a newspaper [,] or magazine or on a billboard, or (iii) is sent by mail; or

(3) The transfer of funds by a committee to another committee.

(b) [The term "expenditure"] "Expenditure" does not mean:

(1) A loan of money, made in the ordinary course of business, by a state or national bank;

(2) A communication made by any corporation, organization or association solely to its members, owners, stockholders, executive or administrative personnel, or their families;

(3) Nonpartisan voter registration and get-out-the-vote campaigns by any corporation, organization or association aimed at its members, owners, stockholders, executive or administrative personnel, or their families;

(4) Uncompensated services provided by individuals volunteering their time on behalf of a party committee, political committee, slate committee or candidate committee, including any services provided for the benefit of nonparticipating and participating candidates under the Citizens' Election Program and any unreimbursed travel expenses made by an individual who volunteers the individual's personal services to any such committee. For purposes of this subdivision, an individual is a volunteer if such individual is not receiving compensation for such services regardless of whether such individual received compensation in the past or may receive compensation for similar services that may be performed in the future;

(5) Any news story, commentary or editorial distributed through the facilities of any broadcasting station, newspaper, magazine or other periodical, unless such facilities are owned or controlled by any political party, committee or candidate;

(6) The use of real or personal property, a portion or all of the cost of invitations and the cost of food or beverages, voluntarily provided by an individual to a candidate, including a nonparticipating or participating candidate under the Citizens' Election Program, or to a party, political or slate committee, in rendering voluntary personal services at the individual's residential premises or a community room in the individual's residence facility, to the extent that the cumulative value of the invitations, food or beverages provided by an individual on behalf of any candidate or committee does not exceed four hundred dollars with respect to any single event or does not exceed eight hundred dollars for any such event hosted by two or more individuals, provided at least one such individual owns or resides at the residential premises, and further provided the cumulative value of the invitations, food or beverages provided by an individual on behalf of any such candidate or committee does not exceed eight hundred dollars with respect to a calendar year or single election, as the case may be;

(7) A communication described in subdivision (2) of subsection (a) of this section that includes speech or expression [made] (A) made prior to the ninety-day period preceding the date of a primary or an election at which the clearly identified candidate or candidates are seeking nomination to public office or position, [that is] including a communication made for the purpose of influencing any legislative or administrative action, as defined in section 1-91, or executive action, [or] (B) made during a legislative session for the purpose of influencing legislative action, or (C) that constitutes a candidate debate or that solely promotes any such debate and is made by or on behalf of the person sponsoring the debate;

(8) An organization expenditure by a party committee, legislative caucus committee or legislative leadership committee;

(9) A commercial advertisement that refers to an owner, director or officer of a business entity who is also a candidate, [and that] which commercial advertisement had previously been broadcast or appeared when the owner, director or officer was not a candidate;

(10) A communication containing an endorsement on behalf of a candidate for nomination or election to the office of Governor, Lieutenant Governor, Secretary of the State, State Treasurer, State Comptroller, Attorney General, state senator or state representative, from a candidate for the office of Governor, Lieutenant Governor, Secretary of the State, State Treasurer, State Comptroller, Attorney General, state senator or state representative, shall not be an expenditure attributable to the endorsing candidate, if the candidate making the endorsement is unopposed at the time of the communication;

(11) A communication that is sent by mail to addresses in the district for which a candidate being endorsed by another candidate pursuant to the provisions of this subdivision is seeking nomination or election to the office of state senator or state representative, containing an endorsement on behalf of such candidate for such nomination or election, from a candidate for the office of state senator or state representative, shall not be an expenditure attributable to the endorsing candidate, if the candidate making the endorsement is not seeking election to the office of state senator or state representative for a district that contains any geographical area shared by the district for the office to which the endorsed candidate is seeking nomination or election;

(12) Campaign training events provided to multiple individuals by a legislative caucus committee and any associated materials, provided the cumulative value of such events and materials does not exceed six thousand dollars, in the aggregate, for a calendar year;

(13) A lawful communication by any charitable organization which is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended;

(14) The use of offices, telephones, computers and similar equipment provided by a party committee, legislative caucus committee or legislative leadership committee that serve as headquarters for or are used by such party committee, legislative caucus committee or legislative leadership committee; or

(15) An expense or expenses incurred by a human being acting alone in an amount that is two hundred dollars or less, in the aggregate, that benefits a candidate for a single election.

Sec. 5. Section 9-601c of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) As used in this chapter and chapter 157, [the term] "independent expenditure" means an expenditure, as defined in section 9-601b, as amended by this act, that is made entirely without the consent, coordination [, or consultation of,] or consultation of a candidate, [or] agent of [the] a candidate, candidate committee, political committee or party committee.

(b) As used in this section, (1) "candidate" includes any person who, during an election cycle, becomes a candidate later in the election cycle and benefits from any expenditure made by a coordinated spender or any other expenditure that is not an independent expenditure, and (2) "election cycle" means, with respect to an office to which a person seeks nomination or election, the period beginning the day after the previous regular election for such office and ending the day of the regular election for the same office that next follows such previous regular election.

(c) As used in this section, "coordinated spender" means, with respect to a candidate or committee:

(1) Any person directly or indirectly formed, controlled or established in the current or immediately preceding election cycle by, at the request or suggestion of or with the encouragement of the candidate or committee, any agent of the candidate or committee, any other person deemed to be a coordinated spender with respect to such candidate or committee or any agent of such coordinated spender, including with the express or tacit approval of the candidate or committee or any agent of the candidate or committee;

(2) Except as otherwise provided in this subdivision, any person on whose behalf during an election cycle the candidate, committee or any agent of the candidate or committee solicits funds or engages in fund-raising activity, including by providing to such person the name of any potential donor or other list to be used by such person in engaging in fund-raising activity, regardless of whether such person pays fair market value for any such name or list so provided. Such person shall not be considered a coordinator spender under this subdivision if any funds raised by the candidate, committee or any agent of the candidate or committee are (A) segregated from all other accounts controlled by such person, and (B) not used to make (i) independent expenditures that benefit the candidate or committee, or (ii) contributions or covered transfers to any other person who later in the current election cycle makes independent expenditures, contributions or covered transfers that benefit the candidate or committee;

(3) Any person established, directed or managed by any other person who, during the current or immediately preceding election cycle (A) was employed or retained as a political, media or fund-raising advisor or consultant for the candidate, committee or any entity directly or indirectly controlled by the candidate or committee, or (B) held a formal position with a title for the candidate or committee;

(4) Any person established, directed or managed by any member of the family of the candidate. As used in this subdivision, "member of the family" means (A) the spouse or civil union partner of the candidate, (B) any sibling, parent, child, grandparent, grandchild, aunt or uncle of the candidate, (C) any sibling, parent, child, grandparent, grandchild, aunt or uncle of the spouse or civil union partner of the candidate, or (D) the spouse or civil union partner or any child of any such individual described in subparagraph (B) or (C) of this subdivision; or

(5) Any person or any officer or agent of such person who has had more than incidental discussion regarding campaign advertising, message, strategy, policy, polling, fund-raising or allocation of resources of the candidate, committee or any other person deemed to be a coordinated spender with respect to such candidate or committee.

(d) (1) If any person who makes an expenditure is a coordinated spender with respect to a candidate or committee, as described in subsection (c) of this section, such person shall be deemed to have made such expenditure with the consent, coordination or consultation of, or at the request or suggestion of, the candidate or committee.

(2) If any person or any agent of such person merely engages a candidate, committee or any agent of a candidate or committee in discussion regarding such person's position on a legislative or policy matter, including a discussion in which the person or agent urges the candidate or committee to adopt such person's position, any expenditure of such person shall not be considered to be made with the consent, coordination or consultation of, or at the request or suggestion of, the candidate or committee, provided such person does not engage the candidate, committee or agent of the candidate or committee in any discussion regarding any campaign advertising, message, strategy, policy, polling, fund-raising, allocation of resources or campaign operations of the candidate or committee.

[(b)] (e) When the State Elections Enforcement Commission evaluates an expenditure, other than an expenditure described in subdivision (1) of subsection (d) of this section, to determine whether such expenditure is an independent expenditure, there shall be a rebuttable presumption that the following expenditures are not independent expenditures:

(1) An expenditure made by a person in cooperation, consultation or in concert with, at the request, suggestion or direction of, or pursuant to a general or particular understanding with (A) a candidate, candidate committee, political committee or party committee, or (B) a consultant or other agent acting on behalf of a candidate, candidate committee, political committee or party committee;

(2) An expenditure made by a person for the production, dissemination, distribution or publication, in whole or in substantial part, of any broadcast or any written, graphic or other form of political advertising or campaign communication prepared by (A) a candidate, candidate committee, political committee or party committee, or (B) a consultant or other agent acting on behalf of a candidate, candidate committee, political committee or party committee;

(3) An expenditure made by a person based on information about a candidate's, political committee's, or party committee's plans, projects or needs, provided by (A) a candidate, candidate committee, political committee or party committee, or (B) a consultant or other agent acting on behalf of a candidate, candidate committee, political committee or party committee, with the intent that such expenditure be made;

(4) An expenditure made by an individual who, in the same election cycle, is serving or has served as the campaign chairperson, treasurer or deputy treasurer of a candidate committee, political committee or party committee benefiting from such expenditure, or in any other executive or policymaking position, including as a member, employee, [fundraiser] fund-raiser, consultant or other agent, of a candidate, candidate committee, political committee or party committee;

(5) An expenditure made by a person or an entity on or after January first in the year of an election in which a candidate is seeking public office that benefits such candidate when such person or entity has hired an individual as an employee or consultant and such individual was an employee of or consultant to such candidate, candidate's candidate committee or such candidate's opponent's candidate committee during [any part of the eighteen-month period preceding such expenditure] the current or immediately preceding election cycle;

(6) An expenditure made by a person for [fundraising] fund-raising activities (A) with or for a candidate, candidate committee, political committee or party committee, or a consultant or other agent acting on behalf of a candidate, candidate committee, political committee or party committee, or (B) for the solicitation or receipt of contributions on behalf of a candidate, candidate committee, political committee or party committee, or a consultant or other agent acting on behalf of a candidate, candidate committee, political committee or party committee;

(7) An expenditure made by a person based on information about a candidate's campaign plans, projects or needs [,] that is directly or indirectly provided by a candidate, the candidate's candidate committee, a political committee or a party committee, or a consultant or other agent acting on behalf of such candidate, candidate committee, political committee or party committee, to the person making the expenditure or such person's agent, with an express or tacit understanding that such person is considering making the expenditure;

(8) An expenditure made by a person for a communication that clearly identifies a candidate during an election campaign [,] if the person making the expenditure, or such person's agent, has informed the candidate who benefits from the expenditure, that candidate's candidate committee, a political committee or a party committee, or a consultant or other agent acting on behalf of the benefiting candidate or candidate committee, political committee [,] or party committee, concerning the communication's contents [,] or of the intended audience, timing, location or mode or frequency of dissemination. As used in this subdivision, a communication clearly identifies a candidate when that communication contains the name, nickname, initials, photograph or drawing of the candidate or an unambiguous reference to that candidate, [which includes, but is] including, but not limited to, a reference that can only mean that candidate; [and]

(9) An expenditure made by a person or an entity for consultant or creative services, including, but not limited to, services related to communications strategy or design or campaign strategy or to engage a campaign-related vendor, to be used to promote or oppose a candidate's election to office if the provider of such services is providing or has provided consultant or creative services to such candidate, such candidate's candidate committee or an agent of such candidate committee, or to any opposing candidate's candidate committee or an agent of such opposing candidate's candidate committee after January first of the year in which the expenditure occurs. For purposes of this subdivision, communications strategy or design does not include the costs of printing or costs for the use of a medium for the purpose of communications. For purposes of this subdivision, campaign-related vendor includes, but is not limited to, a vendor that provides any of the following services: Polling, mail design, mail strategy, political strategy, general campaign advice or telephone banking; and

(10) An expenditure made by any person directly or indirectly formed, controlled or established in the current or immediately preceding election cycle by, at the request or suggestion of or with the encouragement of any other person deemed to be a coordinated spender or any agent of such coordinated spender, including with the express or tacit approval of any such coordinated spender or agent.

[(c) When the State Elections Enforcement Commission evaluates an expenditure to determine whether an expenditure by entity is an independent expenditure, the following shall not be presumed to constitute evidence of consent, coordination or consultation within the meaning of subsection (a) of this section: (1) Participation by a candidate or an agent of the candidate in an event sponsored by the entity, unless such event promotes the success of the candidate's candidacy or the defeat of the candidate's opponent, or unless the event is during the period that is forty-five days prior to the primary for which the candidate is seeking nomination for election or election to office; (2) membership of the candidate or agent of the candidate in the entity, unless the candidate or agent of the candidate holds an executive or policymaking position within the entity after the candidate becomes a candidate; or (3) financial support for, or solicitation or fundraising on behalf of the entity by a candidate or an agent of the candidate, unless the entity has made or obligated to make independent expenditures in support of such candidate in the election or primary for which the candidate is a candidate.]

[(d)] (f) When the State Elections Enforcement Commission evaluates an expenditure to determine whether such expenditure is an independent expenditure, the commission shall consider, as an effective rebuttal to the presumptions provided in subsection [(b)] (e) of this section, the establishment by the person making the expenditure of a firewall policy designed and implemented to prohibit the flow of information between (1) employees, consultants or other individuals providing services to the person paying for the expenditure, and (2) the candidate or agents of the candidate.

Sec. 6. Section 9-601d of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) Any person, as defined in section 9-601, as amended by this act, may, unless otherwise restricted or prohibited by law, including, but not limited to, any provision of this chapter or chapter 157, make unlimited independent expenditures, as defined in section 9-601c, as amended by this act, and accept unlimited covered transfers, as defined in [said] section 9-601, as amended by this act. Except as provided [pursuant to] in this section, any such person who makes or obligates to make an independent expenditure or expenditures in excess of one thousand dollars, in the aggregate, shall file statements according to the same schedule and in the same manner as is required of a treasurer of a [candidate] political committee pursuant to section 9-608, as amended by this act. Such person shall file such statements on forms described in subsections (c) and (d) of this section.

(b) Any person who makes or obligates to make an independent expenditure or expenditures in an election or primary for the office of Governor, Lieutenant Governor, Secretary of the State, State Treasurer, State Comptroller, Attorney General, state senator or state representative [,] which exceed one thousand dollars, in the aggregate, during [a primary campaign or a general election campaign, as defined in section 9-700,] the period beginning July first in the year of a regular election and ending the day following the primary or election for which such independent expenditure or expenditures is made or incurred shall file, electronically, a long-form and a short-form report of such independent expenditure or expenditures with the State Elections Enforcement Commission pursuant to subsections (c) and (d) of this section. The person [that] who makes or obligates to make such independent expenditure or expenditures shall file such reports not later than twenty-four hours after (1) making any such payment, or (2) obligating to make any such payment, with respect to the primary or election. If any such person makes or incurs a subsequent independent expenditure, such person shall report such expenditure pursuant to subsection (d) of this section. Such reports shall be filed under penalty of false statement.

(c) The independent expenditure long-form report shall identify: (1) The name of the person making or obligating to make such expenditure or expenditures; (2) if applicable, the tax exempt status of such person, [if applicable] except that if such person files a report with the Federal Election Commission, the Internal Revenue Service or any similar out-of-state agency, such person shall include a statement to that effect and the identification number or other identifying information under which any such filings are made; (3) the street address and mailing address, if different, of such person; (4) the principal business address of the person, if different from either the mailing address or street address; (5) the mailing address, or street address if different, telephone number and electronic mail address of the agent for service of process in this state of such person; (6) the date of the primary, [or] election or referendum for which [the] such independent expenditure or expenditures were made or obligated to be made; (7) (A) the name of any candidate who, or the text of any referendum question that, was the subject of [any] such independent expenditure or expenditures, [and whether the] (B) whether such independent expenditure or expenditures were in support of or in opposition to such candidate or referendum question, and (C) any other information required under subsection (d) of this section for such independent expenditure or expenditures; and (8) the name, telephone number and electronic mail address for the individual filing such report. [Such] Each individual filing such report shall affirm [that the expenditure reported is an independent expenditure under penalty of false statement] under penalty of false statement that any expenditure so reported is an independent expenditure.

(d) As part of any filing made pursuant to subsection (c) of this section and for each subsequent independent expenditure made or obligated to be made by a person with respect to the primary, [or] election or referendum for which a long-form report pursuant to subsection (c) of this section has been filed on behalf of such person, an individual shall file [, electronically, a short-form report for each such independent expenditure, not later than twenty-four hours after such person makes a payment for an independent expenditure or obligates to make such an independent expenditure] a short-form report for each such independent expenditure. Such short-form report shall identify: (1) The name of the person making or obligating to make such independent expenditure; (2) the amount of the independent expenditure; (3) whether the independent expenditure was in support of or in opposition to a candidate or referendum question and the name of such candidate or text of such referendum question; (4) a brief description of the expenditure made, including the type of communication, based on categories determined by the State Elections Enforcement Commission, and the allocation of such expenditure in support of or in opposition to each such candidate or referendum question, if such expenditure was made in support of or in opposition to more than one candidate [; and] or question; (5) the name, telephone number and electronic mail address for the individual filing such report; [. Such] and (6) any other information that the State Elections Enforcement Commission may require to facilitate compliance with the provisions of chapters 155 to 157, inclusive. Each individual filing such report shall affirm [that the expenditure reported is an independent expenditure] under penalty of false statement that any expenditure so reported is an independent expenditure.

(e) No person reporting an independent expenditure pursuant to the provisions of subsection (c) or (d) of this section shall be required to file a statement pursuant to section 9-608, as amended by this act, for such independent expenditure.

(f) (1) Except as provided in subdivision (2) of this subsection, as part of any statement filed pursuant to this section, if a person who makes or obligates to make an independent expenditure (A) has received a covered transfer during the twelve-month period prior to a primary, [or] election or referendum, as applicable to the reported expenditure, [for an office that a candidate described in subdivision (7) of subsection (c) of this section is seeking,] and (B) such independent expenditure is made or obligated to be made on or after the date that is one hundred eighty days prior to such primary, [or] election or referendum, such person shall disclose the source and the amount of any such covered transfer such person received that is in an amount that is five thousand dollars or more, in the aggregate, during the twelve-month period prior to such primary or election, as applicable to the reported expenditure.

(2) The provisions of subdivision (1) of this subsection shall not apply to any person who discloses the source and amount of a covered transfer described in subdivision (1) of this subsection as part of any report to the Federal Election Commission, [or] the Internal Revenue Service or any similar out-of-state agency, provided such person includes a copy of, or information sufficient to find, any such report as part of the [report] statement of each applicable independent expenditure filed pursuant to this section. If a source and amount of a covered transfer is not included as part of any such [report] statement, the maker of the expenditure shall disclose the source and amount of such covered transfer pursuant to subdivision (1) of this subsection, if applicable.

(g) (1) A person may, unless otherwise restricted or prohibited by law, including, but not limited to, any provision of this chapter or chapter 157, establish a dedicated independent expenditure account [, for the purpose of engaging in] that may be used to make independent expenditures, [that] provided such account is segregated from all other accounts controlled by such person. Such dedicated independent expenditure account may receive covered transfers directly from persons other than the person establishing the dedicated account and may not receive transfers from another account controlled by the person establishing the dedicated account, except as provided in subdivision (2) of this subsection. If an independent expenditure is made from such segregated account, any report required pursuant to this section or disclaimer required pursuant to section 9-621, as amended by this act, [may include only] shall include at least those persons who made covered transfers directly to the dedicated independent expenditure account.

(2) If a person who has made a covered transfer to another account controlled by the person establishing a dedicated independent expenditure account requests that such covered transfer be used for the purposes of making an independent expenditure from the dedicated independent expenditure account, the amount of such covered transfer may be transferred to the dedicated independent expenditure account and shall be treated as a covered transfer directly to the dedicated independent expenditure account.

(h) Any person may file a complaint with the commission upon the belief that (1) any such independent expenditure report or statement is false, or (2) any person who is required to file an independent expenditure report under this subsection has failed to do so. The commission shall make a prompt determination on such a complaint.

(i) (1) If a person fails to file a report in accordance with the provisions of this section for an independent expenditure or expenditures made or obligated to be made more than ninety days before the day of a primary, [or] election or referendum, the person shall be subject to a civil penalty, imposed by the State Elections Enforcement Commission, of not more than ten thousand dollars. If a person fails to file a report required in accordance with the provisions of this section for an independent expenditure or expenditures made or obligated to be made ninety days or less before the day of a primary, [or] election or referendum, such person shall be subject to a civil penalty, imposed by the State Elections Enforcement Commission, of not more than twenty thousand dollars or twice the amount of any such independent expenditure not so reported, whichever is greater.

(2) [If] Notwithstanding subsection (a) of section 9-623, if the State Elections Enforcement Commission finds that any such failure is knowing and wilful, the person responsible for the failure shall [also be fined] be subject to an additional civil penalty, imposed by the State Elections Enforcement Commission, of not more than fifty thousand dollars or ten times the amount of any such independent expenditure not so reported, whichever is greater, and the commission may refer the matter to the office of the Chief State's Attorney.

Sec. 7. Subsections (a) and (b) of section 9-603 of the general statutes are repealed and the following is substituted in lieu thereof (Effective from passage):

(a) Statements filed by (1) party committees, (2) political committees formed to aid or promote the success or defeat of a referendum question proposing a (A) constitutional convention, (B) constitutional amendment, or (C) revision of the Constitution, (3) individual lobbyists, [and] (4) those political committees and candidate committees formed to aid or promote the success or defeat of any candidate for the office of Governor, Lieutenant Governor, Secretary of the State, State Treasurer, State Comptroller, Attorney General, judge of probate, [and members of the General Assembly,] state senator or state representative, and (5) those persons making an independent expenditure or expenditures in excess of one thousand dollars, in the aggregate, for any such referendum question or candidate pursuant to section 9-601d, as amended by this act, shall be filed with the State Elections Enforcement Commission. A political committee formed for a slate of candidates in a primary for the office of justice of the peace shall file statements with the town clerk of the municipality in which the primary is to be held.

(b) Statements filed by (1) political committees formed solely to aid or promote the success or defeat of a referendum question to be voted upon by the electors of a single municipality, [and] (2) those political committees or candidate committees formed to aid or promote the success or defeat of any candidate for (A) public office, other than those enumerated in subsection (a) of this section, or (B) the position of town committee member, and (3) those persons making an independent expenditure or expenditures in excess of one thousand dollars, in the aggregate, for any such question or candidate pursuant to section 9-601d, as amended by this act, shall be filed only with the town clerk of the municipality in which the election or referendum is to be held. Each unsalaried town clerk shall be entitled to receive ten cents from the town for the filing of each such statement.

Sec. 8. Subsections (a) to (d), inclusive, of section 9-605 of the general statutes are repealed and the following is substituted in lieu thereof (Effective from passage):

(a) [The] Except as provided in subsection (d) of this section for an independent expenditure political committee, the chairperson of each political committee shall designate a treasurer and may designate a deputy treasurer. The treasurer and any deputy treasurer so designated shall sign a statement accepting the designation. The chairperson of each political committee shall file a registration statement described in subsection (b) of this section along with the statement signed by the designated treasurer and deputy treasurer with the proper authority, within ten days after its organization, provided that the chairperson of any political committee organized within ten days prior to any primary, election or referendum in connection with which it intends to make any contributions or expenditures, shall immediately file a registration statement.

(b) The registration statement shall include: (1) The name and address of the committee; (2) a statement of the purpose of the committee; (3) the name and address of its treasurer, and deputy treasurer if applicable; (4) the name, address and position of its chairman, and other principal officers if applicable; (5) the name and address of the depository institution for its funds; (6) the name of each person, other than an individual, that is a member of the committee; (7) the name and party affiliation of each candidate whom the committee is supporting and the office or position sought by each candidate; (8) if the committee is supporting the entire ticket of any party, a statement to that effect and the name of the party; (9) if the committee is supporting or opposing any referendum question, a brief statement identifying the substance of the question; (10) if the committee is established by a business entity, [or] an organization or an individual acting as the agent of another person, the name of the business entity, [or] organization or other person; (11) if the committee is established by an organization, a statement of whether it will receive its funds from the organization's treasury or from voluntary contributions; (12) if the committee, or a person establishing the committee through an individual acting as such person's agent, files reports with the Federal Elections Commission or any similar out-of-state agency, a statement to that effect including the name of the commission or such agency; (13) a statement indicating whether the committee is established for a single primary, election or referendum or for ongoing political activities; (14) if the committee is established or controlled by a lobbyist, a statement to that effect and the name of the lobbyist; (15) the name and address of the person making the initial contribution or disbursement, if any, to the committee; and (16) any information that the State Elections Enforcement Commission [requires] may require to facilitate compliance with the provisions of this chapter or chapter 157. If no such initial contribution or disbursement, as described in subdivision (15) of this subsection, has been made at the time of the filing of such statement, the treasurer of the committee shall, not later than forty-eight hours after receipt of such contribution or disbursement, file a report with the State Elections Enforcement Commission. The report shall be in the same form as statements filed under section 9-608, as amended by this act.

(c) The treasurer of each political committee shall report any addition to or change in information previously submitted in a statement of organization to the proper authority not later than ten days after the addition or change, [provided] except that if an officer of the committee has changed, such amended statement shall be filed by the chairperson of the committee.

(d) A group of two or more individuals who have joined solely to promote the success or defeat of a referendum question or form an independent expenditure political committee shall not be required to file as a political committee, make such designations in accordance with subsections (a) and (b) of this section or file statements pursuant to section 9-608, as amended by this act, if the group does not receive [or expend] contributions, or make or incur expenditures, in excess of one thousand dollars, in the aggregate, for the entire campaign. If the group receives [funds] contributions, or makes or incurs expenditures, exceeding one thousand dollars, in the aggregate, the group shall complete the statement of organization and file as a political committee not later than (1) three business days [thereafter] after receiving such contributions, or making or incurring such expenditures, for a group joined solely to promote the success or defeat of a referendum question, and (2) ten business days after receiving such contributions, or making or incurring such expenditures, for a group joined solely to form an independent expenditure political committee. The group shall provide the designated treasurer with all information required for completion of the statements for filing as required by section 9-608, as amended by this act.

Sec. 9. Subdivisions (1) and (2) of subsection (g) of section 9-607 of the general statutes are repealed and the following is substituted in lieu thereof (Effective from passage):

(g) (1) As used in this subsection, (A) "the lawful purposes of the committee" means: (i) For a candidate committee or exploratory committee, the promoting of the nomination or election of the candidate who established the committee, except that after a political party nominates candidates for election to the offices of Governor and Lieutenant Governor, whose names shall be so placed on the ballot in the election that an elector will cast a single vote for both candidates, as prescribed in section 9-181, a candidate committee established by either such candidate may also promote the election of the other such candidate; (ii) for a political committee, other than an independent expenditure political committee described in subparagraph (A)(iv) of this subdivision, the promoting of (I) a political party, including party building activities, (II) the success or defeat of candidates for nomination [and] or election to public office or position subject to the requirements of this chapter, or (III) the success or defeat of referendum questions, provided a political committee formed for a single referendum question shall not promote the success or defeat of any candidate, and provided further a legislative leadership committee or a legislative caucus committee may expend funds to defray costs for conducting legislative or constituency-related business which are not reimbursed or paid by the state; [and] (iii) for a party committee, the promoting of the party, party building activities, the candidates of the party and continuing operating costs of the party; and (iv) for an independent expenditure political committee, the promoting of (I) a political party, (II) the success or defeat of candidates for nomination or election to public office or position subject to the requirements of this chapter, or (III) the success or defeat of referendum questions, provided an independent expenditure political committee shall act entirely independently of a candidate or any agent of the candidate, the candidate's candidate committee and any political committee or party committee, and (B) "immediate family" means a spouse or dependent child of a candidate who resides in the candidate's household.

(2) Unless otherwise provided by this chapter, any treasurer, in accomplishing the lawful purposes of the committee, may pay the expenses of: (A) Advertising in electronic and print media; (B) any other form of printed advertising or communications including "thank you" advertising after the election; (C) campaign items, including, but not limited to, brochures, leaflets, flyers, invitations, stationery, envelopes, reply cards, return envelopes, campaign business cards, direct mailings, postcards, palm cards, "thank you" notes, sample ballots and other similar items; (D) political banners and billboards; (E) political paraphernalia, which is customarily given or sold to supporters including, but not limited to, campaign buttons, stickers, pins, pencils, pens, matchbooks, balloons, pads, calendars, magnets, key chains, hats, tee shirts, sweatshirts, frisbees, pot holders, jar openers and other similar items; (F) purchasing office supplies for campaign or political purposes, campaign photographs, raffle or other fund-raising permits required by law, fund-raiser prizes, postage, express mail delivery services, bulk mail permits, and computer supplies and services; (G) banking service charges to maintain campaign and political accounts; (H) subscriptions to newspapers and periodicals which enhance the candidacy of the candidate or party; (I) lease or rental of office space for campaign or political purposes and expenses in connection therewith including, but not limited to, furniture, parking, storage space, utilities and maintenance, provided a party committee or political committee organized for ongoing political activities may purchase such office space; (J) lease or rental of vehicles for campaign use only; (K) lease, rental or use charges of any ordinary and necessary campaign office equipment including, but not limited to, copy machines, telephones, postage meters, facsimile machines, computer hardware, software and printers, provided a party committee or political committee organized for ongoing political activities may purchase office equipment, and provided further that a candidate committee or a political committee, other than a political committee formed for ongoing political activities or an exploratory committee, may purchase computer equipment; (L) compensation for campaign or committee staff, fringe benefits and payroll taxes, provided the candidate and any member of his immediate family shall not receive compensation; (M) travel, meals and lodging expenses of speakers, campaign or committee workers, the candidate and the candidate's spouse for political and campaign purposes; (N) fund raising; (O) reimbursements to candidates and campaign or committee workers made in accordance with the provisions of this section for campaign-related expenses for which a receipt is received by the treasurer; (P) campaign or committee services of attorneys, accountants, consultants or other professional persons for campaign activities, obtaining or contesting ballot status, nomination, or election, and compliance with this chapter; (Q) purchasing campaign finance reports; (R) repaying permissible campaign loans made to the committee that are properly reported and refunding contributions (i) received from an impermissible source or in excess of the limitations set forth in this chapter, and (ii) to any source in the case of an independent expenditure political committee organized for ongoing political activities; (S) conducting polls concerning any political party, issue, candidate or individual; (T) gifts to campaign or committee workers or purchasing flowers or other commemorative items for political purposes not to exceed one hundred dollars to any one recipient in a calendar year or for the campaign, as the case may be; (U) purchasing tickets or advertising from charities, inaugural committees, or other civic organizations if for a political purpose, for any candidate, a candidate's spouse, a member of a candidate's campaign staff, or members of committees; (V) the inauguration of an elected candidate by that candidate's candidate committee; (W) hiring of halls, rooms, music and other entertainment for political meetings and events; (X) reasonable compensation for public speakers hired by the committee; (Y) transporting electors to the polls and other get-out-the-vote activities on election day; and (Z) any other necessary campaign or political expense.

Sec. 10. Subdivision (1) of subsection (c) of section 9-608 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(c) (1) Each statement filed under subsection (a), (e) or (f) of this section shall include, but not be limited to: (A) An itemized accounting of each contribution, if any, including the full name and complete address of each contributor and the amount of the contribution. For an independent expenditure political committee, if any contributor to such independent expenditure political committee is a recipient of a covered transfer or transfers amounting to twenty-five thousand dollars or more, in the aggregate, such statement so filed shall include, but not be limited to, the name of any person or persons who made the covered transfer or transfer to such recipient during the twelve-month period immediately preceding the primary, election or referendum, as applicable; (B) an itemized accounting of each expenditure, if any, including the full name and complete address of each payee, including secondary payees whenever the primary or principal payee is known to include charges which the primary payee has already paid or will pay directly to another person, vendor or entity, the amount and the purpose of the expenditure, the candidate supported or opposed by the expenditure, whether the expenditure is made independently of the candidate supported or is an in-kind contribution to the candidate, and a statement of the balance on hand or deficit, as the case may be; (C) an itemized accounting of each expense incurred but not paid, provided if the expense is incurred by use of a credit card, the accounting shall include secondary payees, and the amount owed to each such payee; (D) the name and address of any person who is the guarantor of a loan to, or the cosigner of a note with, the candidate on whose behalf the committee was formed, or the treasurer in the case of a party committee or a political committee or who has advanced a security deposit to a telephone company, as defined in section 16-1, for telecommunications service for a committee; (E) for each business entity or person purchasing advertising space in a program for a fund-raising affair or on signs at a fund-raising affair, the name and address of the business entity or the name and address of the person, and the amount and aggregate amounts of such purchases; (F) for each individual who contributes in excess of one hundred dollars but not more than one thousand dollars, in the aggregate, to the extent known, the principal occupation of such individual and the name of the individual's employer, if any; (G) for each individual who contributes in excess of one thousand dollars, in the aggregate, the principal occupation of such individual and the name of the individual's employer, if any; (H) for each itemized contribution made by a lobbyist, the spouse of a lobbyist or any dependent child of a lobbyist who resides in the lobbyist's household, a statement to that effect; and (I) for each individual who contributes in excess of four hundred dollars, in the aggregate, to or for the benefit of any candidate's campaign for nomination at a primary or election to the office of chief executive officer or a slate or town committee financing the nomination or election or a candidate for chief executive officer of a town, city or borough, a statement indicating whether the individual or a business with which he is associated has a contract with said municipality that is valued at more than five thousand dollars. Each treasurer shall include in such statement (i) an itemized accounting of the receipts and expenditures relative to any testimonial affair held under the provisions of section 9-609 or any other fund-raising affair, which is referred to in subsection (b) of section 9-601a, and (ii) the date, location and a description of the affair, except that a treasurer shall not be required to include the name of any individual who has purchased items at a fund-raising affair or food at a town fair, county fair or similar mass gathering, if the cumulative value of items purchased by such individual does not exceed one hundred dollars, or the name of any individual who has donated food or beverages for a meeting. A treasurer shall not be required to report or retain any receipts or expenditures related to any de minimis donations described in subdivision (17) of subsection (b) of section 9-601a.

Sec. 11. Subparagraph (C) of subdivision (1) of subsection (e) of section 9-608 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(C) (i) Each political committee formed solely to aid or promote the success or defeat of any referendum question, which does not receive contributions from a business entity or an organization, shall distribute its surplus to a party committee, to a political committee organized for ongoing political activities, to a national committee of a political party, to all contributors to the committee on a prorated basis of contribution, to state or municipal governments or agencies or to any organization which is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended. (ii) Each political committee formed solely to aid or promote the success or defeat of any referendum question, which receives contributions from a business entity or an organization, and each independent expenditure political committee that is established for a single primary or election, shall distribute its surplus to all contributors to the committee on a prorated basis of contribution, to state or municipal governments or agencies, or to any organization which is tax-exempt under said provisions of the Internal Revenue Code. Notwithstanding the provisions of this subsection, a committee formed for a single referendum shall not be required to expend its surplus not later than ninety days after the referendum and may continue in existence if a substantially similar referendum question on the same issue will be submitted to the electorate within six months after the first referendum. If two or more substantially similar referenda on the same issue are submitted to the electorate, each no more than six months apart, the committee shall expend such surplus within ninety days following the date of the last such referendum;

Sec. 12. Subsection (b) of section 9-610 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(b) A candidate committee, including the candidate committee of a participating or nonparticipating candidate under the Citizens' Election Program, may pay or reimburse another candidate committee, a party committee, a legislative leadership committee or a legislative caucus committee for its pro rata share of the expenses of operating a campaign headquarters and of preparing, printing and disseminating any political communication on behalf of that candidate and any other candidate or candidates, including any shared expenses for which only the committee being paid or reimbursed was under a contractual obligation to pay. Notwithstanding the provisions of subdivision (1) of subsection (a) of section 9-616, a candidate committee, including the candidate committee of a participating or nonparticipating candidate under the Citizens' Election Program, may reimburse a party committee for any expenditure such party committee has incurred for the benefit of such candidate committee.

Sec. 13. Section 9-611 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) No individual shall make a contribution or contributions to, for the benefit of, or pursuant to the authorization or request of, a candidate or a committee supporting or opposing any candidate's campaign for nomination at a primary, or any candidate's campaign for election, to the office of (1) Governor, in excess of three thousand five hundred dollars; (2) Lieutenant Governor, Secretary of the State, Treasurer, Comptroller or Attorney General, in excess of two thousand dollars; (3) chief executive officer of a town, city or borough, in excess of one thousand dollars; (4) state senator or probate judge, in excess of one thousand dollars; or (5) state representative or any other office of a municipality not previously included in this subsection, in excess of two hundred fifty dollars. The limits imposed by this subsection shall be applied separately to primaries and elections.

(b) (1) No individual shall make a contribution or contributions to, or for the benefit of, an exploratory committee, in excess of three hundred seventy-five dollars, if the candidate establishing the exploratory committee certifies on the statement of organization for the exploratory committee pursuant to subsection (c) of section 9-604 that the candidate will not be a candidate for the office of state representative. No individual shall make a contribution or contributions to, or for the benefit of, any exploratory committee, in excess of two hundred fifty dollars, if the candidate establishing the exploratory committee does not so certify.

(2) No individual shall make a contribution or contributions to, or for the benefit of, a political committee formed by a slate of candidates in a primary for the office of justice of the peace, in excess of two hundred fifty dollars.

[(c) No individual shall make contributions to such candidates or committees which in the aggregate exceed thirty thousand dollars for any single election and primary preliminary to such election.]

[(d)] (c) No individual shall make a contribution to any candidate or committee, other than a contribution in kind, in excess of one hundred dollars except by personal check or credit card of that individual.

[(e)] (d) No individual who is less than eighteen years of age shall make a contribution or contributions, in excess of thirty dollars to, for the benefit of, or pursuant to the authorization or request of: (1) A candidate or a committee supporting or opposing any candidate's campaign for nomination at a primary to any office; (2) a candidate or a committee supporting or opposing any candidate's campaign for election to any office; (3) an exploratory committee; (4) any other political committee in any calendar year; or (5) a party committee in any calendar year. Notwithstanding any provision of subdivision (2) of section 9-7b, any individual who is less than eighteen years of age who violates any provision of this subsection shall not be subject to the provisions of subdivision (2) of section 9-7b.

Sec. 14. Subsection (a) of section 9-612 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) No individual shall make a contribution or contributions in any one calendar year in excess of ten thousand dollars to the state central committee of any party, or for the benefit of such committee pursuant to its authorization or request; or two thousand dollars to a town committee of any political party, or for the benefit of such committee pursuant to its authorization or request; or two thousand dollars to a legislative caucus committee or legislative leadership committee; [,] or one thousand dollars to any other political committee other than (1) a political committee formed solely to aid or promote the success or defeat of a referendum question, (2) an exploratory committee, (3) a political committee established by an organization, or for the benefit of such committee pursuant to its authorization or request, [or] (4) a political committee formed by a slate of candidates in a primary for the office of justice of the peace of the same town, or (5) an independent expenditure political committee.

Sec. 15. Subsection (d) of section 9-612 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(d) Any individual may make unlimited contributions or expenditures to aid or promote the success or defeat of any referendum question, provided any individual who makes an expenditure or expenditures in excess of one thousand dollars to promote the success or defeat of any referendum question shall file statements according to the same schedule and in the same manner as is required of a treasurer of a political committee under section [9-608] 9-601d, as amended by this act.

Sec. 16. Section 9-613 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) No business entity shall make any contributions or expenditures (1) to, or for the benefit of, any candidate's campaign (A) for election to any public office or position subject to this chapter, or (B) for nomination at a primary for any such office or position, or (2) to promote the defeat of any candidate for any such office or position. No business entity shall make any other contributions or [expenditures] engage in coordinated spending, as described in section 9-601c, as amended by this act, to promote the success or defeat of any political party, except as provided in subsection (b) of this section. No business entity shall establish or control more than one political committee. A political committee shall be deemed to have been established by a business entity if the initial disbursement or contribution to the committee is made under subsection (b) of this section or by an officer, director, owner, limited or general partner or holder of stock constituting five per cent or more of the total outstanding stock of any class of the business entity.

(b) A business entity may make reasonable and necessary transfers or disbursements to or for the benefit of a political committee established by such business entity, for the administration of, or solicitation of contributions to, such political committee. Nonmonetary contributions by a business entity which are incidental in nature and are directly attributable to the administration of such political committee shall be exempt from the reporting requirements of this chapter.

(c) The provisions of this section shall not preclude a business entity from making contributions or expenditures to promote the success or defeat of a referendum question.

(d) [A] Except as provided in subdivision (2) of subsection (g) of this section, a political committee organized by a business entity shall not make a contribution or contributions to or for the benefit of any candidate's campaign for nomination at a primary or any candidate's campaign for election to the office of: (1) Governor, in excess of five thousand dollars; (2) Lieutenant Governor, Secretary of the State, Treasurer, Comptroller or Attorney General, in excess of three thousand dollars; (3) state senator, probate judge or chief executive officer of a town, city or borough, in excess of one thousand five hundred dollars; (4) state representative, in excess of seven hundred fifty dollars; or (5) any other office of a municipality not included in subdivision (3) of this subsection, in excess of three hundred seventy-five dollars. The limits imposed by this subsection shall apply separately to primaries and elections and contributions by any such committee to candidates designated in this subsection shall not exceed one hundred thousand dollars, in the aggregate, for any single election and primary preliminary thereto. Contributions to such committees shall also be subject to the provisions of section 9-618, as amended by this act, in the case of committees formed for ongoing political activity or section 9-619, as amended by this act, in the case of committees formed for a single election or primary.

(e) [No] Except as provided in subdivision (2) of subsection (g) of this section, no political committee organized by a business entity shall make a contribution or contributions to (1) a state central committee of a political party, in excess of seven thousand five hundred dollars in any calendar year, (2) a town committee of any political party, in excess of one thousand five hundred dollars in any calendar year, (3) an exploratory committee in excess of three hundred seventy-five dollars, or (4) any other kind of political committee, in excess of two thousand dollars in any calendar year.

(f) As used in this subsection, "investment services" means investment legal services, investment banking services, investment advisory services, underwriting services, financial advisory services or brokerage firm services. No political committee established by a firm which provides investment services and to which the State Treasurer pays compensation, expenses or fees or issues a contract shall make a contribution to, or solicit contributions on behalf of, an exploratory committee or candidate committee established by a candidate for nomination or election to the office of State Treasurer during the term of office of the State Treasurer who does business with such firm.

(g) (1) Notwithstanding the provisions of this section, a corporation, cooperative association, limited partnership, professional association, limited liability company or limited liability partnership, whether formed in this state or any other, [acting alone,] may make independent expenditures.

(2) No independent expenditure political committee, as defined in section 2 of this act, that is organized by a business entity shall make any contribution to, or for the benefit of, any candidate or committee unless such contribution is to any other independent expenditure political committee.

Sec. 17. Section 9-614 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) An organization may make contributions, [or] engage in coordinated spending, as described in section 9-601c, as amended by this act, or make expenditures, other than those made to promote the success or defeat of a referendum question, only by first forming its own political committee. The political committee shall then be authorized to (1) receive funds (A) exclusively from the organization's treasury or exclusively from voluntary contributions made by its members, but not both, (B) from another political committee, or [,] (C) from a candidate committee distributing a surplus, and [(1) to] (2) make (A) contributions or expenditures to, or for the benefit of, a candidate's campaign or a political party, or [(2) to make] (B) contributions to another political committee. No organization shall form more than one political committee. A political committee shall be deemed to have been established by an organization if the initial contribution to the committee is made by the organization's treasury or an officer or director of the organization.

(b) A political committee established by an organization may elect to alter the manner in which it is funded if it complies with the requirements of this subsection. The committee chairperson shall notify the repository with which the committee's most recent statement of organization is filed, in writing, of the committee's intent to alter its manner of funding. Within fifteen days after the date of receipt of such notification, the treasurer of such political committee shall return any funds remaining in the account of the committee to the organization's treasury after payment of each outstanding liability. Within seven days after the distribution and payments have been made, the treasurer shall file a statement with the same repository itemizing each such distribution and payment. Upon such filing, the treasurer may receive voluntary contributions from any member of the organization which established such committee subject to the limitations imposed in subsection (b) of section 9-612.

(c) The chairperson of each political committee established by an organization on or after July 1, 1985, shall designate the manner in which the committee shall be funded in the committee's statement of organization.

(d) Notwithstanding the provisions of this section, an organization [, acting alone,] may make independent expenditures and contributions to any other independent expenditure political committee.

Sec. 18. Section 9-615 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) No political committee established by an organization shall make a contribution or contributions to, or for the benefit of, any candidate's campaign for nomination at a primary or for election to the office of: (1) Governor, in excess of five thousand dollars; (2) Lieutenant Governor, Secretary of the State, Treasurer, Comptroller or Attorney General, in excess of three thousand dollars; (3) chief executive officer of a town, city or borough, in excess of one thousand five hundred dollars; (4) state senator or probate judge, in excess of one thousand five hundred dollars; (5) state representative, in excess of seven hundred fifty dollars; or (6) any other office of a municipality not previously included in this subsection, in excess of three hundred seventy-five dollars.

(b) No such committee shall make a contribution or contributions to, or for the benefit of, an exploratory committee, in excess of three hundred seventy-five dollars. Any such committee may make unlimited contributions to a political committee formed solely to aid or promote the success or defeat of a referendum question.

(c) The limits imposed by subsection (a) of this section shall apply separately to primaries and elections and no such committee shall make contributions to the candidates designated in this section which, in the aggregate, exceed fifty thousand dollars for any single election and primary preliminary thereto.

(d) [No] Except as provided in subsection (f) of this section, no political committee established by an organization shall make contributions in any one calendar year to, or for the benefit of, (1) the state central committee of a political party, in excess of seven thousand five hundred dollars; (2) a town committee, in excess of one thousand five hundred dollars; or (3) any political committee, other than an exploratory committee or a committee formed solely to aid or promote the success or defeat of a referendum question, in excess of two thousand dollars.

(e) Contributions to a political committee established by an organization for the purpose of making contributions and engaging in coordinated spending shall be subject to the provisions of section 9-618, as amended by this act, in the case of a committee formed for ongoing political activity or section 9-619, as amended by this act, in the case of a committee formed for a single election or primary.

(f) No independent expenditure political committee, as defined in section 2 of this act, that is established by an organization shall make any contribution to, or for the benefit of, any candidate or committee unless such contribution is made to any other independent expenditure political committee.

Sec. 19. Subsection (a) of section 9-618 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) A political committee organized for ongoing political activities may make unlimited contributions to, or for the benefit of, any national committee of a political party; or a committee of a candidate for federal or out-of-state office. Except as provided in subdivision (3) of subsection (d) of this section, no such political committee shall make a contribution or contributions in excess of two thousand dollars to another political committee in any calendar year. No political committee organized for ongoing political activities shall make a contribution in excess of three hundred seventy-five dollars to an exploratory committee. If such an ongoing committee is established by an organization or a business entity, its contributions shall be subject to the limits imposed by sections 9-613 to 9-615, inclusive, as amended by this act. A political committee organized for ongoing political activities may make [contributions] donations to a charitable organization which is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code, as from time to time amended, or make memorial [contributions] donations. No independent expenditure political committee, as defined in section 2 of this act, that is organized for ongoing political activities shall make any contribution to, or for the benefit of, any candidate or committee unless such contribution is made to any other independent expenditure political committee.

Sec. 20. Subsection (a) of section 9-619 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) No political committee established for a single primary or election shall make contributions to a national committee, or a committee of a candidate for federal or out-of-state office. If such a political committee is established by an organization or a business entity, its contributions shall also be subject to the limitations imposed by sections 9-613 to 9-615, inclusive, as amended by this act. Except as provided in subdivision (2) of subsection (d) of this section, no political committee formed for a single election or primary shall, with respect to such election or primary make a contribution or contributions in excess of two thousand dollars to another political committee, provided no such political committee shall make a contribution in excess of three hundred seventy-five dollars to an exploratory committee. No independent expenditure political committee, as defined in section 2 of this act, that is established for a single primary or election shall make any contribution to, or for the benefit of, any committee unless such contribution is made to any other independent expenditure political committee.

Sec. 21. Subsection (d) of section 9-621 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(d) The provisions of [subsections (a), (b) and (c) of] this section do not apply to (1) any editorial, news story, or commentary published in any newspaper, magazine or journal on its own behalf and upon its own responsibility and for which it does not charge or receive any compensation whatsoever, (2) any banner, (3) political paraphernalia including pins, buttons, badges, emblems, hats, bumper stickers or other similar materials, or (4) signs with a surface area of not more than thirty-two square feet.

Sec. 22. Subsection (j) of section 9-621 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(j) [(1) Except as provided in subdivisions (2) and (3) of this subsection, if] If any person whose name is included on a disclaimer of a communication pursuant to the provisions of this section, as a person who made a covered transfer to the maker of the communication, is also a recipient of a covered transfer, the maker of the communication, as part of any report filed pursuant to section 9-601d, as amended by this act, or section 9-608, as amended by this act, associated with the making of such communication, shall include the names of the five persons who made the top five largest aggregate covered transfers to such recipient during the twelve-month period [immediately prior to the primary or election, as applicable] prior to the covered transfer from the recipient to the maker of the communication and the amount of such covered transfer.

[(2) The name of any person who made a covered transfer to a tax-exempt organization recognized under Section 501(c)(4) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, that has not had its tax exempt status revoked, shall not be disclosed pursuant to the provisions of subdivision (1) of this subsection.

(3) The name of any person who made a covered transfer to a person whose name is included on a disclaimer pursuant to the provisions of this section shall not be disclosed pursuant to the provisions of subdivision (1) of this subsection if the recipient of such covered transfer accepts covered transfers from at least one hundred different sources, provided no such source accounts for ten per cent or more of the total amount of covered transfers accepted by the recipient during the twelve-month period immediately prior to the primary or election, as applicable.]

This act shall take effect as follows and shall amend the following sections:

Section 1

from passage

9-601(3)

Sec. 2

from passage

New section

Sec. 3

from passage

9-601a(a)

Sec. 4

from passage

9-601b(a) and (b)

Sec. 5

from passage

9-601c

Sec. 6

from passage

9-601d

Sec. 7

from passage

9-603(a) and (b)

Sec. 8

from passage

9-605(a) to (d)

Sec. 9

from passage

9-607(g)(1) and (2)

Sec. 10

from passage

9-608(c)(1)

Sec. 11

from passage

9-608(e)(1)(C)

Sec. 12

from passage

9-610(b)

Sec. 13

from passage

9-611

Sec. 14

from passage

9-612(a)

Sec. 15

from passage

9-612(d)

Sec. 16

from passage

9-613

Sec. 17

from passage

9-614

Sec. 18

from passage

9-615

Sec. 19

from passage

9-618(a)

Sec. 20

from passage

9-619(a)

Sec. 21

from passage

9-621(d)

Sec. 22

from passage

9-621(j)

GAE

Joint Favorable Subst.

 

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note

State Impact: None

Municipal Impact: None

Explanation

The bill, which makes technical changes to election and campaign finance statutes, has no fiscal impact.

The Out Years

State Impact: None

Municipal Impact: None

OLR Bill Analysis

sHB 5511

AN ACT CONCERNING DISCLOSURE OF COORDINATED AND INDEPENDENT SPENDING IN CAMPAIGN FINANCE.

SUMMARY:

This bill modifies laws affecting elections, campaign finance, and the State Elections Enforcement Commission (SEEC). Among other things, the bill:

The bill also makes several minor, conforming, and technical changes.

EFFECTIVE DATE: Upon passage

3, 4 & 13 — CONTRIBUTIONS AND EXPENDITURES

Definitions ( 3 & 4)

Current law defines “contribution,” in part, as anything of value made to promote the success or defeat of any candidate seeking nomination or election. The bill expands the definition to cover persons, not only candidates, seeking nomination or election and makes the same change to the parallel definition of expenditure. It thus covers contributions and expenditures made to benefit or oppose individuals who have not officially declared their candidacy.

The law further defines contribution and expenditure, in part, as any communication that refers to one or more clearly identified candidates and (1) is broadcast by radio, television (other than a public access channel), satellite communication, via the Internet, or as a paid-for telephone communication; (2) appears in a newspaper, magazine, or on a billboard; or (3) is sent by mail.

Under current law, such a communication is not considered a contribution or expenditure if it is made more than 90 days before the primary or election and its purpose is to influence legislative or administrative action, as defined by the State Ethics Code, or executive action. The bill (1) extends the exemption to include all communications made more than 90 days before the primary or election and (2) exempts communications that constitute candidate debates, or that solely promote such debates, and that are made by or on behalf of the debate sponsor.

Aggregate Limit for Individuals ( 13)

Current law prohibits an individual from contributing more than $30,000 in the aggregate during a single primary and election to (1) candidate committees; (2) exploratory committees; and (3) slate PACs for justice of the peace (in a primary). The bill removes this limit, thus allowing individuals to make unlimited aggregate contributions to these committees (see BACKGROUND).

5 — INDEPENDENT AND COORDINATED EXPENDITURES

The law authorizes persons (including individuals, entities, and committees) to make unlimited IEs and defines “independent expenditure” as an expenditure made without the consent, coordination, or consultation of a (1) candidate or candidate's agent, (2) candidate committee, (3) PAC, or (4) party committee. It creates a rebuttable presumption that certain expenditures are not IEs, and thus are coordinated and considered contributions for campaign finance purposes.

The bill:

The bill defines “candidate,” with respect to IEs and coordinated spenders, as any person who, during an election cycle, later becomes a candidate and who benefits from (1) an expenditure made by a coordinated spender or (2) any other spending that is not an independent expenditure. It defines “election cycle,” with respect to an office to which a person seeks nomination or election, as the period beginning the day after the previous regular election for that office and ending on the day of the upcoming regular election for the office.

Coordinated Spenders

Under the bill, expenditures by coordinated spenders are deemed to be made with a candidate's or committee's consent, coordination, or consultation, or at its request or suggestion. By law, “committee” means candidate and party committees and PACs.

Unlike existing law, which creates a rebuttable presumption that certain expenditures are not IEs, coordinated spenders' expenditures are by definition not IEs. Since, by law, expenditures that are not IEs are contributions, coordinated spenders' expenditures are considered contributions. However, for the first type of coordinated spending listed below, the bill also creates a rebuttable presumption that it is not an IE (see Rebuttable Presumptions below).

Under the bill, a “coordinated spender,” with respect to a candidate or committee, is:

The bill creates an exception under the last type of coordinated spender. Under the exception, a person is not considered a coordinated spender if funds that the candidate, committee, or agent raises for the person are segregated from other accounts the person controls and not used to make (1) IEs benefitting the candidate or committee or (2) contributions or covered transfers to any other person that, later in the current election cycle, makes IEs, contributions, or covered transfers benefitting the candidate or committee.

The bill also specifies that a person, or person's agent, that merely engages a candidate, committee, or candidate's or committee's agent in discussion about the person's position on a legislative or policy matter is generally not considered a coordinated spender. This (1) includes discussions in which the person or agent urges the candidate or committee to adopt a position but (2) excludes discussions on campaign advertising, message, strategy, policy, polling, fundraising, resource allocation, or operations.

The bill defines “member of the family” as the (1) candidate's spouse or civil union partner; (2) sibling, parent, child, grandparent, grandchild, aunt, or uncle of the candidate or the candidate's spouse or civil union partner; or (3) spouse, civil union partner, or child of anyone described above.

Rebuttable Presumptions

The law creates a rebuttable presumption that certain expenditures are not IEs and thus are coordinated and considered contributions for campaign finance purposes. The bill modifies two types of expenditures under the rebuttable presumption and adds another, as shown in Table 1.

Table 1: Expenditures Not Considered IEs Under The Rebuttable Presumption

Current Law

Bill

Expenditures made by an individual who, in the same election cycle, is serving or has served (1) as the campaign chairperson, treasurer, or deputy treasurer of a candidate committee, PAC, or party committee benefiting from the expenditure or (2) in any other executive or policymaking position, including as a member, employee, fundraiser, consultant, or other agent, of a candidate committee, PAC, or party committee

Adds expenditures by an individual who served as an employee, fundraiser, consultant, or other agent of a candidate

Expenditures made by a person or an entity, on or after January 1st in an election year, that benefit a candidate when (1) the person or entity has hired an individual as an employee or consultant and (2) such individual was an employee of, or consultant to, the candidate's committee or that of his or her opponent during any part of the 18-month period preceding the expenditure

Specifies that the (1) provision also applies to individuals who were employees of, or consultants to, the candidate and (2) applicable time period covers the current or preceding election cycle, rather than the 18-month period preceding the expenditure

N/A

Expenditures made by any person directly or indirectly formed, controlled, or established in the current or preceding election cycle by, at the request or suggestion of, or with the encouragement of any other person deemed to be a coordinated spender or coordinated spender's agent, including with the spender's or agent's express or tacit approval

With respect to the last type of expenditure listed in Table 1, the bill also makes it a contribution by definition. It is thus unclear which provision applies.

Additionally, the bill eliminates a prohibition on SEEC presuming that certain activities constitute evidence of consent, coordination, or consultation. Generally, they are:

1, 2, 8-10 & 14-20 — IE-ONLY PACS

The bill codifies “independent expenditure political committees” (known as IE-Only PACs) as a type of PAC under Connecticut's campaign finance laws and, like other committees that make IEs, requires their registration with SEEC. It defines them as PACs that (1) make only IEs and (2) are prohibited from making contributions to or for the benefit of any candidate or committee, other than to other IE-Only PACs.

The bill authorizes individuals, labor unions, and party committees to make unlimited contributions to IE-Only PACs. By law, these persons may also make IEs (see BACKGROUND).

Lawful Purposes ( 9)

The bill defines “lawful purposes of the committee” for IE-Only PACs as promoting (1) a political party, (2) the success or defeat of candidates for nomination or election, or (3) the success or defeat of referendum questions. It requires these committees to act entirely independently of any candidate or candidate's agent, candidate committee, PAC, or party committee. It also authorizes treasurers of IE-only PACs organized for ongoing political purposes to refund contributions to any source since, by law, they may not accept contributions unless they are from other IE-only PACs.

Registration ( 8)

The bill requires a group of two or more individuals who join to form an IE-Only PAC to register with SEEC if the group makes or incurs expenditures exceeding $1,000 in the aggregate. Under the bill, IE-Only PACs must register within 10 business days after reaching the $1,000 expenditure threshold.

Periodic Campaign Finance Statements ( 10)

By law, candidate committees, PACs, and party committees must file periodic campaign finance statements with SEEC according to specified schedules. The statements must include, among other things, an itemized accounting of each contribution the committees and PACs receive.

The bill requires IE-Only PACs to include the name of any person that makes a covered transfer to one of its contributors if the covered transfer (1) equals $25,000 or more in the aggregate and (2) occurs during the 12-month period before the primary, general election, or referendum whichever applies.

By law, a “covered transfer” is, with certain exceptions, any donation, transfer, or payment of funds by a person to a recipient that (1) makes IEs or (2) transfers funds to another person who makes IEs.

11 — Surplus Distributions

By law, candidate committees and PACs, other than exploratory committees or PACs organized for ongoing purposes, must generally spend or distribute surplus funds within 90 days after (1) a primary when a candidate loses or (2) March 31 following an election or a referendum held in November.

The bill establishes a surplus distribution procedure for IE-only PACs created for a single primary or election. Specifically, it requires them to distribute surplus funds, according to the schedule outlined above, to (1) their contributors, on a prorated basis; (2) state or municipal governments or agencies; or (3) tax-exempt organizations.

6-8, 15 & 22 — IE REPORTING REQUIREMENTS

The law requires persons to disclose information about IEs they make that exceed $1,000 in the aggregate. Under current law, a person must file a long-form report, as well as a short-form report, after first making or obligating to make an IE during a primary or general election campaign that promotes the success or defeat of a statewide office or legislative candidate. For any subsequent IE, a person must file only the short-form report. Both reports must be filed with SEEC electronically within 24 hours after making or obligating to make an IE.

The bill instead applies the 24-hour electronic filing requirements to such IEs made on or after July 1 in a regular election year through the day following the primary or general election for which the IE is made or incurred. For any other IEs, it requires that IE reports be filed according to the same schedule as the periodic statements filed by PACs. As under existing law, IEs made for or against (1) statewide office or legislative candidates, or statewide referenda, must be filed with SEEC and (2) municipal office candidates or municipal referenda must be filed with town clerks.

The bill also (1) conforms law to practice by requiring all persons that make IEs, including IEs supporting or opposing municipal candidates or referenda, to use the long- and short-form reports and (2) adds to the reports' required contents.

For the person making or obligating to make the IE, the bill requires the long-form report to also include (1) a statement indicating the person files a report with the Federal Election Commission (FEC), the Internal Revenue Service (IRS), or any similar out-of-state agency, if applicable, and the identification number or other identifying information under which any such filings are made; (2) the person's street address, if different from the mailing address; and (3) the street address, if different than the mailing address, of the agent for service of process.

With respect to referenda, the bill requires that the (1) long-form report include the date, the question's text, and whether the IE supported or opposed it and (2) short-form report identify the question's text and whether the IE supported or opposed it.

The bill requires both reports to also include any other information SEEC requires to facilitate compliance with state campaign finance laws.

Disclosing Covered Transfers ( 6 & 22)

As part of both the long- and short-form reports, the law requires a person to disclose the source and amount of any covered transfer of $5,000 or more, in the aggregate, it received during the 12 months before the applicable primary or election if the IE (for which the report is being filed) is made or obligated to be made 180 or less days before the primary or election. The bill extends the requirement to covered transfers made to promote or oppose referenda.

The law exempts from this disclosure requirement a person that discloses the source and amount of a covered transfer in a report it files with the FEC, IRS, or similar out-of-state agency, provided the person includes a copy of such report in the statement it files with SEEC. The bill extends the exemption to persons that include in their IE reports information sufficient for SEEC to find their FEC, IRS, or similar out-of-state agency report.

Top Five Transferors. By law, printed, video, and audio political advertisements must include certain attributions, known as “disclaimers.” A person that makes an IE (“IE maker”) during the 90 days before a primary or general election must, among other things, list the names of the five persons that made covered transfers, in the five largest aggregate amounts, during the 12 months immediately preceding the applicable primary or election. If a person listed as a “top five transferor” is also a recipient of a covered transfer (“recipient transferor”), the IE maker must disclose in its reports to SEEC the names of the top five transferors to that recipient transferor.

The bill redefines “top five transferors” with respect to these recipient transferors as the five persons that made the five largest aggregate covered transfers to the recipient transferor during the 12 months before “the covered transfer” to the recipient transferor. Under current law, the period covers the 12 months immediately preceding the applicable primary or election.

The bill eliminates provisions in current law prohibiting disclaimers from listing certain persons that make covered transfers. Specifically, current law prohibits disclosing the name of any person that made a covered transfer to a 501(c)(4) organization if the organization is a top five transferor. Under federal law, these organizations are not required to publicly disclose their donors.

Current law also prohibits disclosing the name of any person that made a covered transfer to a top five transferor listed on a disclaimer if the recipient accepts covered transfers from at least 100 different sources. The prohibition applies if no such source accounts for 10% or more of the covered transfers accepted by the recipient during the 12 months immediately preceding the applicable primary or election.

Penalties for Failure to File an IE Report ( 6)

By law, persons that make or obligate to make IEs exceeding $1,000 in the aggregate during a primary or general election campaign must file IE reports with SEEC. The bill potentially increases the maximum (1) civil penalties SEEC may impose for failure to file certain required IE reports and (2) fine SEEC or a court may impose for a knowing and willful failure to file. It also subjects IEs that support or oppose referendum questions to these penalties.

Specifically, the law allows SEEC to impose a maximum penalty of $10,000 for failure to file more than 90 days before a primary or general election. The bill extends this penalty to IEs that support or oppose a referendum.

For failure to file 90 days or less before a primary or general election, SEEC may currently impose a maximum penalty of $20,000. The bill instead allows SEEC to impose a penalty of up to $20,000 or twice the amount of any unreported IE, including for a referendum, whichever is greater.

Currently, a knowing and willful failure to file an IE report is punishable by a fine of up to $50,000. The bill instead allows SEEC to impose a penalty of up to $50,000 or 10 times the amount of any unreported expenditure, whichever is greater.

By law, in addition to the penalties described above, (1) SEEC may refer the matter to the chief state's attorney and (2) any knowing and willful violation of Chapter 155 of the General Statutes (i.e., campaign finance, other than the CEP) is a class D felony punishable by up to five years in prison, a fine of up to $5,000, or both.

8 — AFFILIATED PACS

By law, most PACs must register with SEEC, and the registration statement must include, among other things, the name of the committee and its purpose. The bill requires a PAC established by an individual acting as an agent for another person (known as Affiliated PACs) to additionally (1) include the name of the person for whom the agent is acting and (2) indicate whether the PAC filed a report with the FEC or other out-of-state agency and if so, include the agency name.

12 — CANDIDATE COMMITTEE EXPENSE REIMBURSEMENTS

Existing law allows a candidate committee to reimburse another candidate committee to pay its pro rata share of expenses for operating a campaign headquarters or preparing, printing, or disseminating political communications on behalf of any candidates. This includes instances when the committee receiving the reimbursement is under a contract with the vendor; the committee that pays or reimburses need not be under contract.

The bill authorizes candidate committees to additionally reimburse party committees, legislative leadership committees, and legislative caucus committees for these expenses. It also clarifies that this authorization, as well as the authorization to reimburse party committees for expenditures that benefit a candidate committee, apply to candidates participating or not participating in the Citizens' Election Program, among others.

21 — POLITICAL ADVERTISING

By law, printed, video, and audio political advertisements must include certain disclaimers. The bill exempts from the law's IE disclaimer requirements (1) editorials, news stories, or commentaries published independently and without compensation in any newspaper, magazine, or journal; (2) banners; (3) political paraphernalia, including pins, buttons, badges, emblems, hats, or bumper stickers; or (4) signs with a surface area of not more than 32 square feet. These communications are already exempt from the disclaimer requirements that the law establishes for non-IE spending.

BACKGROUND

Aggregate Contribution Limits

In McCutcheon et al. v. Federal Election Commission, 134 S.Ct. 1434 (2014), the U.S. Supreme Court held that aggregate limits on contributions by individuals to federal candidates, political parties, and PACs were unconstitutional under the First Amendment.

In Advisory Opinion 2014-03, SEEC announced that, unless it received further guidance from the legislature or a court, it would no longer enforce current law's $30,000 aggregate limit on contributions by individuals during a single primary and election to (1) candidate committees, (2) exploratory committees, and (3) slate PACs for justice of the peace (in a primary).

IE-Only PACs

In Declaratory Ruling 2013-02, SEEC ruled that, in light of a line of cases ruling that contribution limits to IE-Only PACS are unconstitutional, it would no longer enforce contribution limits to PACs that receive and spend funds only for IEs, unless it received further guidance from the legislature or a court.

COMMITTEE ACTION

Government Administration and Elections Committee

Joint Favorable Substitute

Yea

8

Nay

6

(03/21/2016)

TOP