Connecticut Seal

nsSmallSeal

House of Representatives

File No. 806

General Assembly

 

January Session, 2017

(Reprint of File No. 577)

Substitute House Bill No. 5589

 

As Amended by House Amendment

Schedule "B"

Approved by the Legislative Commissioner

May 30, 2017

AN ACT CONCERNING CAMPAIGN FINANCE REFORM.

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 Subdivision (3) of section 9-601 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):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 makes only (1) independent expenditures, as defined in section 9-601c of the general statutes, and (2) contributions to other independent expenditure political committees.

Sec. 3. Subdivision (1) of subsection (g) of section 9-607 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):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, candidate committee, party committee or political committee that is not an independent expenditure political committee, or any agent of such candidate or committee, and (B) "immediate family" means a spouse or dependent child of a candidate who resides in the candidate's household.

Sec. 4. 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; (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.

(2) Each contributor described in subparagraph (F), (G), (H) or (I) of subdivision (1) of this subsection shall, at the time the contributor makes such a contribution, provide the information that the treasurer is required to include under said subparagraph in the statement filed under subsection (a), (e) or (f) of this section. Notwithstanding any provision of subdivision (2) of section 9-7b, any contributor described in subparagraph (F) of subdivision (1) of this subsection who does not provide such information at the time the contributor makes such a contribution and any treasurer shall not be subject to the provisions of subdivision (2) of section 9-7b. If a treasurer receives a contribution from an individual which separately, or in the aggregate, is in excess of one thousand dollars and the contributor has not provided the information required by said subparagraph (G) or if a treasurer receives a contribution from an individual to or for the benefit of any candidate's campaign for nomination at a primary or election to the office of chief executive officer of a town, city or borough, which separately, or in the aggregate, is in excess of four hundred dollars and the contributor has not provided the information required by said subparagraph (I), the treasurer: (i) Not later than three business days after receiving the contribution, shall send a request for such information to the contributor by certified mail, return receipt requested; (ii) shall not deposit the contribution until the treasurer obtains such information from the contributor, notwithstanding the provisions of section 9-606; and (iii) shall return the contribution to the contributor if the contributor does not provide the required information not later than fourteen days after the treasurer's written request or the end of the reporting period in which the contribution was received, whichever is later. Any failure of a contributor to provide the information which the treasurer is required to include under said subparagraph (F) or (H), which results in noncompliance by the treasurer with the provisions of said subparagraph (F) or (H), shall be a complete defense to any action against the treasurer for failure to disclose such information.

(3) In addition to the requirements of subdivision (2) of this subsection, each contributor who makes a contribution to a candidate or exploratory committee for Governor, Lieutenant Governor, Attorney General, State Comptroller, Secretary of the State, State Treasurer, state senator or state representative, any political committee authorized to make contributions to such candidates or committees, and any party committee that separately, or in the aggregate, exceeds fifty dollars shall provide with the contribution: (A) The name of the contributor's employer, if any; (B) the contributor's status as a communicator lobbyist, as defined in section 1-91, a member of the immediate family of a communicator lobbyist, a state contractor, a prospective state contractor or a principal of a state contractor or prospective state contractor, as defined in section 9-612, as amended by this act; and (C) a certification that the contributor is not prohibited from making a contribution to such candidate or committee. The State Elections Enforcement Commission shall prepare a sample form for such certification by the contributor and shall make it available to treasurers and contributors. Such sample form shall include an explanation of the terms "communicator lobbyist", "principal of a state contractor or prospective state contractor", "immediate family", "state contractor" and "prospective state contractor". The information on such sample form shall be included in any written solicitation conducted by any such committee. If a treasurer receives such a contribution and the contributor has not provided such certification, the treasurer shall: (i) Not later than three business days after receiving the contribution, send a request for the certification to the contributor by certified mail, return receipt requested; (ii) not deposit the contribution until the treasurer obtains the certification from the contributor, notwithstanding the provisions of section 9-606; and (iii) return the contribution to the contributor if the contributor does not provide the certification not later than fourteen days after the treasurer's written request or at the end of the reporting period in which the contribution was received, whichever is later. No treasurer shall be required to obtain and keep more than one certification from each contributor, unless information certified to by the contributor, other than the amount contributed, changes. If a treasurer deposits a contribution based on a certification that is later determined to be false, the treasurer shall have a complete defense to any action, including, but not limited to, any complaint investigated by the State Elections Enforcement Commission or any other investigation initiated by [said] the commission, against such treasurer for the receipt of such contribution.

(4) When an independent expenditure political committee discloses a contribution or contributions pursuant to subparagraph (A) of subdivision (1) of this subsection in excess of one thousand dollars, in the aggregate, and the contributor is also a recipient of a covered transfer, the independent expenditure political committee shall include for any covered transfer or transfers in excess of five thousand dollars, in the aggregate, the source and the amount of such covered transfer or transfers to such contributor during the twelve-month period immediately prior to the primary or election, as applicable.

(5) (A) If a person makes a contribution or contributions in excess of one thousand dollars, in the aggregate, to an independent expenditure political committee and such person derives all funds of such contribution or contributions from a dedicated independent expenditure account established by such person that is segregated from all other accounts controlled by such person, such person shall provide to the treasurer of such committee the source and the amount of each donation, transfer or payment that is in excess of five thousand dollars, in the aggregate, to such dedicated account. Such dedicated independent expenditure account may receive covered transfers directly from persons other than the person who established such dedicated account and shall not receive covered transfers from any other account controlled by the person who established such dedicated account, except as provided in subparagraph (B) of this subdivision. The treasurer of such independent expenditure political committee shall include the information so provided under this subdivision with the disclosure of such contribution or contributions.

(B) If a person who made a covered transfer to any other account controlled by the person who established a dedicated independent expenditure account requests that such covered transfer be used for the purpose of making an independent expenditure or expenditures from such dedicated account, the amount of such covered transfer may be transferred to such dedicated account and shall be treated as a covered transfer directly to such dedicated account.

(6) If a person makes a contribution or contributions in excess of one thousand dollars, in the aggregate, to an independent expenditure political committee and such person derives any funds of such contribution or contributions from any source other than a dedicated independent expenditure account established by such person that is segregated from all other accounts controlled by such person, such person shall provide to the treasurer of such committee the source and the amount of each donation, transfer or payment to such person that is in excess of five thousand dollars, in the aggregate, during the twelve-month period prior to the primary or election, as applicable, for which an independent expenditure is made. The treasurer of such independent expenditure political committee shall include the information so provided under this subdivision with the disclosure of such contribution or contributions.

(7) (A) The treasurer of an independent expenditure political committee shall not accept a contribution or contributions in excess of one thousand dollars, in the aggregate, unless the information required to be provided under subdivision (8) of this subsection is so provided.

(B) The recipient of a covered transfer or transfers in excess of five thousand dollars, in the aggregate, shall not knowingly make any contribution to an independent expenditure political committee unless the information required to be disclosed or provided, as applicable, under subdivision (4), (5) or (6) of this subsection is so disclosed or provided.

(8) In addition to the requirements of subdivision (2) of this subsection, each contributor who is the recipient of any covered transfer or transfers that, in the aggregate, exceed five thousand dollars and who makes a contribution to an independent expenditure political committee that separately, or in the aggregate, exceeds one thousand dollars per calendar year shall provide with the contribution a statement signed under penalty of false statement, which statement shall include: (A) If the contributor is a human being, the name of the contributor's employer or employers, if any; (B) the contributor's status as a client lobbyist or communicator lobbyist, as defined in section 1-91, or a member of the immediate family of a communicator lobbyist; (C) a certification that the contributor is not a state contractor, a principal of a state contractor, a foreign-influenced entity or otherwise prohibited from making such contribution; and (D) the name of any person required to be disclosed or provided, as applicable, under subdivision (4), (5) or (6) of this subsection and the amounts of the covered transfers of any such person. The State Elections Enforcement Commission shall prepare a form for such certification by the contributor and shall make it available to treasurers and contributors. Such form shall include an explanation of the terms "covered transfer" and "campaign-related disbursement", as they are defined in section 9-601, as amended by this act, as well as notice of the prior authorization requirements set forth in section 13 of this act. The information on such sample form shall be included in any written solicitation conducted by such independent expenditure political committee. If a treasurer receives a contribution and the contributor has not provided such certification, the treasurer shall: (i) Not later than three business days after receiving the contribution, send a request for the certification to the contributor by certified mail, return receipt requested; (ii) not deposit the contribution until the treasurer obtains the certification from the contributor, notwithstanding the provisions of section 9-606; and (iii) return the contribution to the contributor if the contributor does not provide the certification not later than fourteen days after the treasurer's written request or at the end of the reporting period in which the contribution was received, whichever is later. If a treasurer deposits a contribution based on a certification signed under penalty of false statement that is later determined to be false, the treasurer shall have a complete defense to any action, including, but not limited to, any complaint investigated by the State Elections Enforcement Commission or any other investigation initiated by the commission, against such treasurer for the receipt of such contribution.

[(4)] (9) Contributions from a single individual to a treasurer in the aggregate totaling fifty dollars or less need not be individually identified in the statement, but a sum representing the total amount of all such contributions made by all such individuals during the period to be covered by such statement shall be a separate entry, identified only by the words "total contributions from small contributors".

[(5)] (10) Each statement filed by the treasurer of a party committee, a legislative caucus committee or a legislative leadership committee shall include an itemized accounting of each organization expenditure made by the committee. Concomitant with the filing of any such statement containing an accounting of an organization expenditure made by the committee for the benefit of any candidate for the office of state senator, state representative, Governor, Lieutenant Governor, Attorney General, Secretary of the State, State Comptroller or State Treasurer such treasurer shall provide notice of the organization expenditure to the candidate committee of such candidate.

[(6)] (11) The commission shall post a link on the home page of the commission's Internet web site to a listing of all organizational expenditures reported by a party, legislative leadership or caucus committee under subdivision [(5)] (10) of this subsection. Such information shall include reported information on the committee making the expenditure, the committee receiving the expenditure and the date and purpose for the expenditure.

[(7)] (12) Statements filed in accordance with this section shall remain public records of the state for five years from the date such statements are filed.

Sec. 5. 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 other than an independent expenditure political committee formed for ongoing political activities, 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. 6. 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. 7. Section 9-613 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) [No] Except as provided in subsection (g) of this section, a business entity shall not 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] A business entity shall not make any other contributions or expenditures to promote the success or defeat of any political party. [, except as provided in subsection (b) of this section. No] A business entity shall not establish 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 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 subsection (g) of this section, a political committee organized by a business entity shall not 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] A 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 not 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,] subsections (a) to (f), inclusive, of this section, a business entity may make independent expenditures and contributions to an independent expenditure political committee.

(2) An independent expenditure political committee, as defined in section 2 of this act, organized by a business entity shall not make any contribution unless such contribution is to another independent expenditure political committee.

Sec. 8. 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 expenditures, other than [those made to promote] for the purpose of promoting the success or defeat of a referendum question, only by first forming its own political committee. [The] Unless such political committee is an independent expenditure political committee, the political committee shall then be authorized to (1) receive funds (A) exclusively from the organization's treasury or 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] An organization shall not 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] Not later than 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] Not later than 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 an independent expenditure political committee.

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

(a) [No] A political committee established by an organization shall not 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] Any such committee shall not 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, a political committee established by an organization shall not 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 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) An independent expenditure political committee, as defined in section 2 of this act, established by an organization shall not make any contribution unless such contribution is to another independent expenditure political committee.

Sec. 10. Subsection (a) of section 9-618 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) (1) 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.

(2) An independent expenditure political committee organized for ongoing political activities shall not make any contribution unless such contribution is to another independent expenditure political committee.

Sec. 11. Subsection (a) of section 9-619 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) (1) 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.

(2) An independent expenditure political committee shall not make any contribution unless such contribution is to another independent expenditure political committee.

Sec. 12. Section 9-620 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) A political committee formed solely to aid or promote the success or defeat of a referendum question shall not make contributions to, or for the benefit of, a party committee, a political committee, a national committee, a committee of a candidate for federal or out-of-state office or a candidate committee, except in the distribution of a surplus, as provided in subsection (e) of section 9-608, as amended by this act.

(b) A political committee formed solely to aid or promote the success or defeat of a referendum question shall not receive contributions from a national committee or from a committee of a candidate for federal or out-of-state office.

(c) [No] A person, other than an individual or a committee, shall not make a contribution to a political committee formed solely to aid or promote the success or defeat of a referendum question, or to any other person [,] to aid or promote the success or defeat of a referendum question, in excess of ten cents for each individual residing in the state or political subdivision thereof in which such referendum question is to be voted upon, in accordance with the last federal decennial census.

(d) Notwithstanding the provisions of subsections (a) to (c), inclusive, of this section, an independent expenditure political committee, as defined in section 2 of this act, formed solely to aid or promote the success or defeat of a referendum question shall not make any contribution unless such contribution is made to another independent expenditure political committee.

Sec. 13. (NEW) (Effective from passage) Notwithstanding any provision of the general statutes, the board of governance, if any, for any entity incorporated, organized or operating in this state, shall vote for prior authorization for each payment or distribution of money in an amount in excess of ten thousand dollars, in the aggregate for a calendar year, to be used as a campaign-related disbursement, as defined in section 9-601 of the general statutes, as amended by this act. The board shall be informed of the specific use of the money, including any candidate that might be the target or beneficiary of an independent expenditure, as defined in section 9-601c of the general statutes, from such campaign-related disbursement prior to any such vote. Individual board member votes and the details of such expenditures shall be disclosed (1) to the public on the entity's Internet web site not later than forty-eight hours after the vote, and (2) to the State Elections Enforcement Commission electronically and in a manner prescribed by the commission.

Sec. 14. Subsection (a) of section 9-605 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) [The] Except as provided in subsection (d) of this section, the chairperson of each political committee shall be an individual who has direct, extensive and substantive decision-making authority over such committee's activities with respect to raising and spending funds, 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.

Sec. 15. Section 9-601 of the general statutes is amended by adding subdivisions (32) to (34), inclusive, as follows (Effective from passage):

(NEW) (32) "Foreign owner" means (A) a foreign national, as defined in 52 USC 30121(b), as amended from time to time, or (B) an entity of which a foreign national holds, owns, controls or otherwise has directly or indirectly acquired beneficial ownership of equity or voting shares in an amount equal to or greater than fifty per cent of total equity or outstanding voting shares.

(NEW) (33) "Foreign-influenced entity" means any entity of which (A) one foreign owner holds, owns, controls or otherwise has directly or indirectly acquired beneficial ownership of equity or voting shares in an amount equal to or greater than five per cent of total equity or outstanding voting shares, (B) two or more foreign owners hold, own, control or otherwise have directly or indirectly acquired beneficial ownership of equity or voting shares in an amount equal to or greater than twenty per cent of total equity or outstanding voting shares, or (C) any foreign owner participates in any way, directly or indirectly, in the process of making decisions with regard to the political activities of such entity in the United States, including, but not limited to, the political activities of such entity during an election in the state or any town, city, municipality, borough or other unit of local government within the state.

(NEW) (34) "Campaign-related disbursement" means an independent expenditure, as defined in section 9-601c, or a covered transfer to an independent expenditure political committee, as defined in section 2 of this act.

Sec. 16. (NEW) (Effective from passage) (a) A foreign-influenced entity, as defined in section 9-601 of the general statutes, as amended by this act, shall not make any independent expenditure or any contribution to an independent expenditure political committee.

(b) Any person who violates any provision of subsection (a) of this section shall be subject to a civil penalty, imposed by the State Elections Enforcement Commission, of not more than five thousand dollars or three times the amount of any independent expenditure or contribution to an independent expenditure political committee made, whichever is greater.

(c) No violation of the prohibitions contained in subsection (a) of this section shall be deemed to have occurred if, and only if, the chief executive or chief financial officer, or an equivalent officer, of the entity made due inquiry to determine that such entity was not a foreign-influenced entity, as defined in section 9-601 of the general statutes, as amended by this act, prior to making the independent expenditure or contribution to an independent expenditure political committee in question.

Sec. 17. Subsection (c) of section 9-601d of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(c) The independent expenditure long-form report shall identify: (1) The name of the person making or obligating to make such independent expenditure or expenditures and, in the case of a person other than a human being, the name of an individual who had direct, extensive and substantive decision-making authority over the independent expenditure or expenditures made or obligated to be made; (2) the tax exempt status of such person, if applicable; (3) the mailing address of such person; (4) the principal business address of the person, if different from the mailing address; (5) the address, 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 for which the independent expenditure or expenditures were made or obligated to be made; (7) the name of any candidate who was the subject of any independent expenditure or expenditures and whether the independent expenditure or expenditures were in support of or in opposition to such candidate; and (8) the name, telephone number and electronic mail address for the individual filing such report. Such individual filing such report shall, under penalty of false statement, (A) affirm that the expenditure reported is an independent expenditure, [under penalty of false statement] and (B) certify that due inquiry has been made by the chief executive or chief financial officer, or an equivalent officer, of such person to determine that such person is not a foreign-influenced entity on the date such independent expenditure was made or obligated to be made.

Sec. 18. Subsection (a) of 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, (1) make unlimited independent expenditures, as defined in section 9-601c, and (2) accept [unlimited] covered transfers, as defined in said section 9-601, provided the amount of any such covered transfer or transfers accepted by an independent expenditure political committee, as defined in section 2 of this act, from any one person in any calendar year shall not exceed seventy thousand dollars in the aggregate. Except as provided pursuant to 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 committee pursuant to section 9-608, as amended by this act.

Sec. 19. Subsections (h) to (m), inclusive, of section 9-621 of the general statutes are repealed and the following is substituted in lieu thereof (Effective from passage):

(h) (1) No person shall make or incur an independent expenditure for any written, typed or other printed communication, including on a billboard, or any web-based, written communication, unless such communication bears upon its face, as a disclaimer, (A) the words "Paid for by", [and] (B) the name of such person and, if such person is an entity, the name of such entity's chief executive officer or equivalent and such entity's principal business address, and (C) the following statement: "This message was made independent of any candidate or political party.". In the case of a person making or incurring such an independent expenditure during the ninety-day period immediately prior to the primary or election for which the independent expenditure is made, such communication shall also bear upon its face the names of the five persons who made the five largest aggregate covered transfers to the person making such communication during the twelve-month period immediately prior to such primary or election, as applicable. The communication shall also state that additional information about the person making such communication may be found on the State Elections Enforcement Commission's Internet web site.

(2) In addition to the requirements of subdivision (1) of this subsection, and except as provided in this subdivision for an entity, no person shall make or incur an independent expenditure for a video broadcast by television, satellite or Internet, unless at the end of such advertising there appears for a period of not less than four seconds as a disclaimer, the following as an audio message and a written statement: "This message was paid for by (person making the communication) and made independent of any candidate or political party.". If such person is an entity, there shall simultaneously appear at the end of such advertising, for a period of not less than four seconds, (A) a clearly identifiable video, photographic or similar image of such entity's chief executive officer or equivalent, and (B) a personal audio message, in the following form: "I am …. (name of entity's chief executive officer or equivalent), …. (title) of …. (entity). This message was made independent of any candidate or political party, and I approved its content.". In the case of a person making or incurring such an independent expenditure during the ninety-day period immediately prior to the primary or election for which the independent expenditure is made, such communication shall also list the names of the five persons who made the five largest aggregate covered transfers to the person making such communication during the twelve-month period immediately prior to such primary or election, as applicable. The communication shall also state that additional information about the person making such communication may be found on the State Elections Enforcement Commission's Internet web site.

(3) In addition to the requirements of subdivision (1) of this subsection, and except as provided in this subdivision for an entity, no person shall make or incur an independent expenditure for an audio communication broadcast by radio, satellite or Internet, unless the advertising ends with a disclaimer that is a personal audio statement by such person's agent or, if such person is an entity, such entity's chief executive officer or equivalent (A) identifying the person paying for the expenditure, and (B) indicating that the message was made independent of any candidate or political party, using the following form: "I am .... (name of the person's agent), .... (title), of .... (the person). This message was made independent of any candidate or political party.". If such person is an entity, the personal audio statement by such entity's chief executive officer or equivalent shall use the following form: "I am …. (name of entity's chief executive officer or equivalent), …. (title) of …. (entity). This message was made independent of any candidate or political party, and I approved its content.". In the case of a person making or incurring such an independent expenditure during the ninety-day period immediately prior to the primary or election for which the independent expenditure is made, such communication shall state the names of the five persons who made the five largest aggregate covered transfers to the person making such communication during the twelve-month period immediately prior to such primary or election, as applicable. The communication shall also state that additional information about the person making such communication may be found on the State Elections Enforcement Commission's Internet web site.

(4) In addition to the requirements of subdivision (1) of this subsection, no person shall make or incur an independent expenditure for telephone calls, unless the narrative of the telephone call identifies the person making the expenditure and, if such person is an entity, such entity's chief executive officer or equivalent. In the case of a person making or incurring such an independent expenditure during the ninety-day period immediately prior to the primary or election for which the independent expenditure is made, such communication shall state the names of the five persons who made the five largest aggregate covered transfers to the person making such communication during the twelve-month period immediately prior to such primary or election, as applicable. The communication shall also state that additional information about the person making such communication may be found on the State Elections Enforcement Commission's Internet web site.

(i) In any print, television or social media promotion of a slate of candidates by a party committee, the party committee shall use applicable disclaimers pursuant to the provisions of this section for such promotion, and no individual candidate disclaimers shall be required.

(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, 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.

[(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.]

(k) Any disclaimer required to be on the face of a written, typed or other printed communication pursuant to the provisions of this section shall be printed in no smaller than eight-point type of uniform font when such disclaimer is on a communication contained in a flyer or leaflet, newspaper, magazine or similar literature, or that is delivered by mail.

(l) Notwithstanding the provisions of this section, no person making an independent expenditure for a communication shall be required to list as part of any disclaimer pursuant to this section any person whose covered transfers to the maker of the communication are not in an aggregate amount of five thousand dollars or more during the twelve-month period immediately prior to the primary, [or] election or referendum, as applicable, for which such independent expenditure is made.

(m) (1) Notwithstanding the provisions of this section, any disclaimer required to be on the face of any Internet text advertisement communication [(1)] (A) that appears based on the result of a search conducted by a user of an Internet search engine, and [(2)] (B) the text of which contains two hundred or fewer characters, shall not be required, (i) in the case of any such communication, which communication is an independent expenditure, as defined in section 9-601c, to list the names of the five persons who made the top five largest aggregate covered transfers to the maker of such communication, as otherwise required by this section, if such disclaimer [(A)] (I) includes a link to an Internet web site that discloses the names of such five persons, and [(B)] (II) otherwise contains any statement required pursuant to the provisions of this section, and (ii) in the case of any such communication made by a participating candidate, as described in section 9-703, as amended by this act.

(2) Notwithstanding the provisions of this section, any disclaimer required to be on the face of an Internet text communication, which communication (A) is transmitted from, appears on or is otherwise generated by any social media account or Internet web site of a candidate or agent of such candidate, and (B) contains a link to any other communication described in this section, shall not be required if such other communication complies with the requirements of this section.

Sec. 20. Subsection (a) of section 9-703 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2017):

(a) Each candidate for nomination or election to the office of state senator or state representative in 2008, or thereafter, or the office of Governor, Lieutenant Governor, Attorney General, State Comptroller, Secretary of the State or State Treasurer in 2010, or thereafter, shall file an affidavit with the State Elections Enforcement Commission. The affidavit shall include a written certification that the candidate either intends to abide by the expenditure limits under the Citizens' Election Program set forth in subsection (c) of section 9-702, or does not intend to abide by said limits. If the candidate intends to abide by said limits, the affidavit shall also include written certifications (1) that the treasurer of the candidate committee for said candidate shall expend any moneys received from the Citizens' Election Fund in accordance with the provisions of subsection (g) of section 9-607, as amended by this act, and regulations adopted by the State Elections Enforcement Commission under subsection (e) of section 9-706, (2) that the candidate shall repay to the fund any such moneys that are not expended in accordance with subsection (g) of section 9-607 and said regulations, (3) that the candidate and the treasurer shall comply with the provisions of subdivision (1) of subsection (a) of section 9-711, and (4) stating the candidate's status as a major party, minor party or petitioning party candidate and, in the case of a major party or minor party candidate, the name of such party. The written certification described in subdivision (3) of this subsection shall be made by both the candidate and the treasurer of the candidate committee for said candidate. A candidate for nomination or election to any such office shall file such affidavit not later than four o'clock p.m. on the twenty-fifth day before the day of a primary, if applicable, or on the [fortieth day before the day of the election for such office] day set forth in section 9-423, as applicable to such office, in the year in which the election for such office is held, except that in the case of a special election for the office of state senator or state representative, the candidate shall file such affidavit not later than four o'clock p.m. on the twenty-fifth day before the day of such special election. Notwithstanding the provisions of this subsection, a candidate who is not required to form a candidate committee pursuant to subdivision (3) or (4) of subsection (b) of section 9-604, files a certification with the commission pursuant to subsection (c) of section 9-603 and does not intend to participate in the Citizens' Election Program shall not be required to file such affidavit of intent not to abide by the expenditure limits of said program. Any such candidate shall be referred to as a nonparticipating candidate, in accordance with subsection (b) of this section.

Sec. 21. Section 9-452 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2017):

All minor parties nominating candidates for any elective office shall make such nominations and certify and file a list of such nominations, as required by this section, not later than [the sixty-second day prior to the day of the election at which such candidates are to be voted for] four o'clock p.m. on the day set forth in section 9-423, as applicable to such office, in the year in which the election for such office is held. A list of nominees in printed or typewritten form that includes each candidate's name as authorized by each candidate to appear on the ballot, the signature of each candidate, the full street address of each candidate and the title and district of the office for which each candidate is nominated shall be certified by the presiding officer of the committee, meeting or other authority making such nomination and shall be filed by such presiding officer with the Secretary of the State, in the case of any state, district or municipal office to be voted upon at a state election, or with the clerk of the municipality, in the case of any municipal office to be voted upon at a municipal election, not later than the sixty-second day prior to the day of the election. The registrars of voters of such municipality shall promptly verify and correct the names on any such list filed with him, or the names of nominees forwarded to the clerk of the municipality by the Secretary of the State, in accordance with the registry list of such municipality and endorse the same as having been so verified and corrected. For purposes of this section, a list of nominations shall be deemed to be filed when it is received by the Secretary of the State or clerk of the municipality, as appropriate. If such certificate of a party's nomination is not received by the Secretary of the State or clerk of the municipality, as appropriate, by such time, such certificate shall be invalid and such party, for purposes of sections 9-460, 9-461 and 9-462, shall be deemed to have neither made nor certified any nomination of any candidate for such office. A candidacy for nomination by a minor party to a district or municipal office may be filed on behalf of any person whose name appears on the last-completed registry list of the district or municipality represented by such office, as the case may be. A candidacy for nomination by a minor party to a state office may be filed on behalf of any person whose name appears on the last-completed registry list of the state.

Sec. 22. Subsection (a) of section 9-453i of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2017):

(a) Each page of a nominating petition proposing a candidate for an office to be filled at a regular election shall be submitted to the appropriate town clerk or to the Secretary of the State not later than four o'clock p.m. on the [ninetieth day preceding the day of the regular election] day set forth in section 9-423, as applicable to such office, in the year in which the election for such office is held.

Sec. 23. Subdivision (2) of subsection (a) of section 9-705 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2017):

(2) The qualified candidate committee of a candidate for the office of Governor who has been nominated, or who has qualified to appear on the election ballot in accordance with the provisions of subpart C of part III of chapter 153, shall be eligible to receive a grant from the fund for the general election campaign in the amount of six million dollars, provided (A) any such committee shall receive seventy-five per cent of said amount if such committee applies for such grant, in accordance with section 9-706, on or after the seventieth day but before the fifty-sixth day preceding the election, (B) any such committee shall receive sixty-five per cent of said amount if such committee so applies on or after the fifty-sixth day but before the forty-second day preceding the election, (C) any such committee shall receive fifty-five per cent of said amount if such committee so applies on or after the forty-second day but before the twenty-eighth day preceding the election, (D) any such committee shall receive forty per cent of said amount if such committee so applies on or after the twenty-eighth day preceding the election, and (E) in the case of an election held in 2014, or thereafter, said amount shall be adjusted under subsection (d) of this section.

Sec. 24. Subdivision (2) of subsection (b) of section 9-705 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2017):

(2) The qualified candidate committee of a candidate for the office of Attorney General, State Comptroller, Secretary of the State or State Treasurer who has been nominated, or who has qualified to appear on the election ballot in accordance with the provisions of subpart C of part III of chapter 153, shall be eligible to receive a grant from the fund for the general election campaign in the amount of seven hundred fifty thousand dollars, provided (A) any such committee shall receive seventy-five per cent of said amount if such committee applies for such grant, in accordance with section 9-706, on or after the seventieth day but before the fifty-sixth day preceding the election, (B) any such committee shall receive sixty-five per cent of said amount if such committee so applies on or after the fifty-sixth day but before the forty-second day preceding the election, (C) any such committee shall receive fifty-five per cent of said amount if such committee so applies on or after the forty-second day but before the twenty-eighth day preceding the election, (D) any such committee shall receive forty per cent of said amount if such committee so applies on or after the twenty-eighth day preceding the election, and (E) in the case of an election held in 2014, or thereafter, said amount shall be adjusted under subsection (d) of this section.

Sec. 25. Subdivision (2) of subsection (e) of section 9-705 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2017):

(2) The qualified candidate committee of a candidate for the office of state senator who has been nominated, or has qualified to appear on the election ballot in accordance with subpart C of part III of chapter 153, shall be eligible to receive a grant from the fund for the general election campaign in the amount of eighty-five thousand dollars, provided (A) any such committee shall receive seventy-five per cent of said amount if such committee applies for such grant, in accordance with section 9-706, on or after the seventieth day but before the fifty-sixth day preceding the election, (B) any such committee shall receive sixty-five per cent of said amount if such committee so applies on or after the fifty-sixth day but before the forty-second day preceding the election, (C) any such committee shall receive fifty-five per cent of said amount if such committee so applies on or after the forty-second day but before the twenty-eighth day preceding the election, (D) any such committee shall receive forty per cent of said amount if such committee so applies on or after the twenty-eighth day preceding the election, and (E) in the case of an election held in 2010, or thereafter, said amount shall be adjusted under subsection (h) of this section.

Sec. 26. Subdivision (2) of subsection (f) of section 9-705 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2017):

(2) The qualified candidate committee of a candidate for the office of state representative who has been nominated, or has qualified to appear on the election ballot in accordance with subpart C of part III of chapter 153, shall be eligible to receive a grant from the fund for the general election campaign in the amount of twenty-five thousand dollars, provided (A) any such committee shall receive seventy-five per cent of said amount if such committee applies for such grant, in accordance with section 9-706, on or after the seventieth day but before the fifty-sixth day preceding the election, (B) any such committee shall receive sixty-five per cent of said amount if such committee so applies on or after the fifty-sixth day but before the forty-second day preceding the election, (C) any such committee shall receive fifty-five per cent of said amount if such committee so applies on or after the forty-second day but before the twenty-eighth day preceding the election, (D) any such committee shall receive forty per cent of said amount if such committee so applies on or after the twenty-eighth day preceding the election, and (E) in the case of an election held in 2010, or thereafter, said amount shall be adjusted under subsection (h) of this section.

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

9-607(g)(1)

Sec. 4

from passage

9-608(c)

Sec. 5

from passage

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

Sec. 6

from passage

9-612(a)

Sec. 7

from passage

9-613

Sec. 8

from passage

9-614

Sec. 9

from passage

9-615

Sec. 10

from passage

9-618(a)

Sec. 11

from passage

9-619(a)

Sec. 12

from passage

9-620

Sec. 13

from passage

New section

Sec. 14

from passage

9-605(a)

Sec. 15

from passage

9-601

Sec. 16

from passage

New section

Sec. 17

from passage

9-601d(c)

Sec. 18

from passage

9-601d(a)

Sec. 19

from passage

9-621(h) to (m)

Sec. 20

October 1, 2017

9-703(a)

Sec. 21

October 1, 2017

9-452

Sec. 22

October 1, 2017

9-453i(a)

Sec. 23

October 1, 2017

9-705(a)(2)

Sec. 24

October 1, 2017

9-705(b)(2)

Sec. 25

October 1, 2017

9-705(e)(2)

Sec. 26

October 1, 2017

9-705(f)(2)

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:

Agency Affected

Fund-Effect

FY 18 $

FY 19 $

Resources of the Citizen's Election Fund

Citizens' Election Fund - Potential Savings

See Below

See Below

State Elections Enforcement Commission

GF - Potential Cost

See Below

See Below

Note: GF=General Fund

Municipal Impact: None

Explanation

The bill modifies laws affecting elections, campaign finance, the State Elections Enforcement Commission (SEEC), and the Citizens' Elections Program (CEP). Specifically, the bill modifies statutes regarding covered transfers, campaign-related disbursements, foreign-influenced entities making covered transfers or independent expenditures, political advertising disclaimers, and candidate grant amounts.

The bill reduces candidate grants based on when applications are submitted. This may result in savings to the Citizens Election Fund. However, it is anticipated that candidates will file applications earlier to receive the full grant amount. This may result in a workload increase for SEEC staff at the full grant deadline date. SEEC may need additional resources to cover overtime costs. Currently, grant applications are received over a longer period of time.

House “B" strikes the underlying bill and its associated fiscal impact. The substitute language results in the fiscal impact described above.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

OLR Bill Analysis

sHB 5589 (as amended by House "B")*

AN ACT CONCERNING CAMPAIGN FINANCE REFORM.

SUMMARY

This bill modifies laws affecting election administration and campaign finance, including the Citizens' Election Program (CEP), which is the state's voluntary public campaign financing system. Principally, it:

By law, “political committee” means

Violators of the bill are subject to SEEC's enforcement authority. Among other things, SEEC may levy civil penalties or refer matters to the chief state's attorney.

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

*House Amendment “B” replaces the underlying bill and adds the provisions on (1) uniform candidate deadlines, (2) CEP grants, (3) political committee chairpersons, and (4) certain internet advertisements. It eliminates provisions on (1) “coordinated spenders”; (2) the rebuttable presumption for IEs; and (3) source and amount of IE disclosures by persons, other than IE-only committees, making IEs.

Finally, the amendment (1) increases, from $4,000 to $10,000, the threshold at which certain governing boards must vote to pre-authorize campaign-related disbursements and (2) for IE-only PACs, applies the $70,000 aggregate limit on accepting covered transfers to each person that makes a transfer, rather than collectively to all persons making transfers, during a calendar year.

EFFECTIVE DATE: Upon passage, except for the provisions on uniform candidate deadlines and CEP grants, which are effective October 1, 2017.

1 - 3, 5-12 & 18 — IE-ONLY PACS

The bill codifies “independent expenditure political committee” (IE-only PAC) 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 make only (1) IEs and (2) contributions to other IE-only PACs.

The bill makes several conforming changes, including specifying that (1) individuals, business entities, and labor unions may make contributions to IE-only PACs and (2) various types of IE-only PACs, such as those formed for a single election or primary, are prohibited from making contributions, other than to other IE-only PACs (see BACKGROUND: IE-Only PACs). It also establishes disclosure requirements for these PACs (see below: Disclosures by IE-Only PACs).

Lawful Purposes ( 3)

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, candidate committee, party committee, PAC (other than an IE-only PAC), or agent of such a candidate or committee.

Surplus Distributions ( 5)

By law, candidate committees and PACs, other than exploratory committees or PACs organized for ongoing political activities, 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, other than those formed for ongoing activities. 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.

Limit on Acceptance of Covered Transfers ( 18)

The bill prohibits IE-only PACs from accepting covered transfers of more than $70,000, in the aggregate, from any one person during a calendar year. Under current law, any person, including an IE-only PAC may accept unlimited covered transfers. (It appears that limiting covered transfers in this way may conflict with recent federal court decisions (see BACKGROUND: Federal Court Decisions on Covered Transfer Limits).)

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 that makes IEs (CGS 9-601(29)).

4 & 17 — REPORTING IEs AND COVERED TRANSFERS

By law, a person must disclose information about IEs it makes that exceed $1,000 in the aggregate by filing certain reports with SEEC. If the IE (1) is made or obligated to be made during a primary or general election campaign and (2) promotes the success or defeat of a statewide office or legislative candidate, the person must file the report electronically within 24 hours after making or obligating to make it.

The bill expands IE disclosure requirements for IE-only PACs and persons that make IEs without forming a PAC (known as “incidental spenders”). A “person” is an individual, committee, firm, partnership, organization, association, syndicate, company trust, corporation, limited liability company, or any other legal entity (other than the state or its political or administrative subdivisions) (CGS 9-601(10)).

Disclosures by IE-Only PACs ( 4)

Existing law requires PACs to disclose information about IEs they make by filing campaign finance statements with SEEC (i.e., SEEC Form 20 for regular PACs and SEEC Form 40 for IE-only PACs). Under the bill, an IE-only PAC must include additional information in these statements if any of its contributors received covered transfers that exceed $5,000, in the aggregate, during the 12-month period preceding the applicable primary or election. The requirement applies when persons contribute more than $1,000 in the aggregate.

Dedicated Accounts. Under the bill, a person that makes a contribution that exceeds $1,000, in the aggregate, to an IE-only PAC from a dedicated IE-expenditure account must provide the source and amount of each donation, transfer, or payment that exceeds $5,000, in the aggregate, to the account. The treasurer must include this information in the periodic campaign finance statements the PAC files with SEEC. A “dedicated IE-account” is one that is segregated from any other account the person controls.

The bill creates parameters for dedicated IE-accounts. It (1) allows such an account to receive covered transfers directly from any person, other than the person establishing it, and (2) prohibits the account from receiving covered transfers from any other account the person who established it controls, with one exception. A covered transfer can be moved to a dedicated account from another account that person controls, upon a covered transfer-maker's request, for the purpose of making IEs. In that case, it must be treated as a covered transfer directly to the dedicated IE-account.

Other Sources. A person that makes a contribution that exceeds $1,000, in the aggregate, to an IE-only PAC from a source other than a dedicated IE-expenditure account must provide the source and amount of each donation, transfer, or payment that exceeds $5,000, in the aggregate, to the person during the 12 months before the primary or election for which the IE is made. The treasurer must include this information in the periodic campaign finance statements the PAC files with SEEC.

Additional Requirements. The bill prohibits (1) recipients of covered transfers that exceed $5,000 in the aggregate from knowingly making a contribution to an IE-maker without disclosing the source and amount information described above and (2) IE-only PAC treasurers from accepting contributions that exceed $1,000 in the aggregate, unless the information is disclosed.

Under the bill, a person that makes contributions to an IE-only PAC that separately, or in the aggregate, exceed $1,000 per calendar year must provide the IE-only PAC with a statement, signed under penalty of false statement, if it receives covered transfers that separately, or in the aggregate, exceed $5,000. By law, the penalty for false statement is a class A misdemeanor, punishable by up to one year in prison, up to a $2,000 fine, or both.

The statement must include:

The bill requires SEEC to prepare a sample form for the above certification and make it available to treasurers and contributors. The sample form must explain (1) the terms "covered transfer" and “campaign-related disbursement” and (2) prior authorization notice requirements for boards making such disbursements (see below: Board Authorizations for Campaign-Related Disbursements). IE-only PACs must include the sample form's information in any written solicitation they conduct.

A treasurer must (1) send a request by certified mail, return receipt requested, within three business days after receiving a contribution without a certification and (2) refrain from making the deposit until obtaining it. If the contributor still does not provide the certification, the treasurer must return the contribution at the end of the reporting period in which it was received or within 14 days after the treasurer's written request, whichever is later.

The bill provides treasurers a complete defense to any action taken against them, including an investigation by SEEC, concerning a contribution they deposit based on a signed certification later determined to be false.

Disclosures by Incidental Spenders ( 17)

Existing law requires persons, other than PACs (as discussed above), to disclose information about IEs they make using SEEC's long- and short-form reports (i.e., SEEC Form 26) (see BACKGROUND: Long- and Short-Form IE-Reports). The bill expands the information these IE-makers must disclose in their reports.

The bill requires IE-makers that are not human beings to disclose in the long-form report the name of the individual who had direct, extensive, and substantive decision-making authority over the IE or IEs being disclosed. It also requires the individual who files the long-form report to certify, under penalty of false statement, that due inquiry was made by the chief executive or chief financial officer, or equivalent officer, to determine that the IE-maker was not a foreign-influenced entity on the date when the IE was made or obligated to be made (see below: Foreign-Influenced Entities).

13 & 15-17 — ENTITIES

The bill makes various changes affecting “entities,” which, by law, are organizations (i.e., unions), profit and nonprofit corporations, cooperative associations, limited partnerships, professional associations, limited liability companies and partnerships, 501(c) tax-exempt organizations, and 527 tax-exempt political organizations (CGS 9-601(19)).

Board Authorizations for Campaign-Related Disbursements ( 13 & 15)

The bill requires the governing board, if any, of an entity incorporated, organized, or operating in Connecticut to vote to pre-authorize each campaign-related disbursement it makes of more than $10,000, in the aggregate, during a calendar year. Under the bill, “campaign-related disbursement” means a covered transfer to an IE-only PAC or an IE.

Prior to the vote, the board must be informed of the money's specific use, including whether it may be used for an IE to target or benefit a candidate. The entity must disclose individual board members' votes and details on the expenditures (1) publicly on its website no later than 48 hours after the vote and (2) electronically with SEEC in a manner the commission prescribes.

Foreign-Influenced Entities ( 15-17)

Federal law generally prohibits foreign nationals from making contributions, donations, or IEs in connection with federal, state, or local elections (see BACKGROUND: Foreign Nationals and Related Federal Law). The bill additionally prohibits foreign-influenced entities from making IEs or contributions to an IE-only PAC.

Penalties. The bill subjects violators of its foreign-influenced entity prohibitions to a SEEC civil penalty of up to $5,000 or three times the amount of any improper IE or contribution, whichever is greater. However, under the bill, no violation occurs if and only if the chief executive, chief financial, or equivalent officer made due inquiry to determine that the entity was not a foreign-influenced entity (as described above). Due inquiry must have been made before making the IE or contribution to the IE-only PAC (see above: Disclosures by Persons Making IEs).

Definitions. Under the bill, a "foreign-influenced entity" means an entity that:

A “foreign owner” is a (1) foreign national, as defined in federal law, or (2) business entity of which a foreign national holds, owns, controls, or otherwise has directly or indirectly acquired beneficial ownership of equity or voting shares of at least 50% of the total equity or outstanding voting shares (see BACKGROUND: Foreign Nationals and Related Federal Law).

19 — POLITICAL ADVERTISING

By law, printed, video, and audio political advertisements must include certain attributions, known as “disclaimers.” Among other things, they must identify the person making the expenditure and indicate that additional information is available on SEEC's website. For IEs made during the 90 days before a primary or election, the disclaimers must identify names of the five persons that made the five largest aggregate covered transfers of $5,000 or more to the person making the communication during the 12 months before the applicable primary or election (i.e., “top five transferors”).

Expanded Requirements for Entities

The bill expands the disclaimer requirements for entities, as shown in Table 1.

Table 1: Expanded Disclaimer Requirements for IEs Made by Entities

Type of Advertisement

for Which IE Is Made

New Information Required Under the Bill

Written communication, including one that is typed, on a billboard, printed, or web-based

The name of the entity's chief executive officer, or equivalent, and principal business address

Video advertising broadcast by television, Internet, or satellite

The end of the advertisement must air, for at least four seconds, (1) a clearly identifiable video, photographic, or similar image of the chief executive officer or equivalent and (2) the following personal audio message: “I am… (name of entity's chief executive officer or equivalent), … (title) of … (entity). This message was made independent of any candidate or political party, and I approved its content.”

Audio advertising broadcast by radio, internet, or satellite

The end of the advertisement must air the following personal audio message: “I am… (name of entity's chief executive officer or equivalent), … (title) of … (entity). This message was made independent of any candidate or political party, and I approved its content.”

Telephone calls (including Robo calls)

The narrative of the telephone call must identify the entity's chief executive officer or equivalent.

Reporting Covered Transfers Identified in Advertisements

By law, if a person identified in a political advertisement 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 eliminates provisions in current law that prohibits certain disclosures in these reports.

Specifically, the bill lifts the current prohibition on 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.)

It also lifts the prohibition on disclosing the name of any person that made a covered transfer to a top five transferor if (1) the recipient accepts covered transfers from 100 or more different sources and (2) no 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.

The bill also specifies that a person is not required to list in a disclaimer any other person that made a covered transfer to it of less than $5,000, in the aggregate, during the 12 months immediately preceding a referendum for which an IE is made. This provision already applies to primaries and elections.

Internet Advertisements

Under current law, the top five transferors need not be listed on a disclaimer for an internet text advertisement (1) that appears based on the result of an internet search and (2) has 200 or fewer characters in its text. But in that case, the communication must (1) include a link to a website disclosing the names of the top five transferors and (2) contain the other disclaimer statements required by law and under the act.

The bill limits this disclaimer requirement to Internet text advertisements that are IEs. Additionally, the bill exempts from all disclaimer requirements the internet text advertisements described above if they are made by participating CEP candidates.

The bill also exempts certain internet text communications from the requirement that a disclaimer appear on their face. The exemption applies to internet text communications if (1) they are transmitted from, appear on, or are otherwise generated by a social media account or website of a candidate or candidate's agent; (2) they contain a link to another political advertisement covered by the law; and (3) the other advertisement complies with the law's disclaimer requirements.

20-22 — CANDIDATE DEADLINES

As shown in Table 2, the bill aligns certain deadlines associated with (1) minor party nominations and certifications, (2) nominating petitions, and (3) affidavits of intent to participate or not participate in the CEP (see BACKGROUND: CEP Affidavits of Intent).

Table 2: Candidate Deadlines

Event

Current Deadline

(2016 Example)

Deadline Under the Bill

(2016 Example)

Certifying minor party nominations

62nd day before the election

(September 7, 2016)

Day of the primary

(August 9, 2016)

Submitting nominating petitions

90th day before the election

(August 10, 2016)

Day of the primary

(August 9, 2016)

Filing affidavits of intent under the CEP for candidates not in a primary

40th day before the election to the day of the primary

(September 29, 2016)

Day of the primary

(August 9, 2016)

By law, minor party nomination certificates and CEP affidavits are due by 4:00 p.m. on the day of the deadline. The bill establishes the same requirement for nominating petitions.

23-26—CEP GRANTS

Under the CEP, statewide and legislative office candidates who receive qualifying contributions, agree to abide by certain spending limits, and comply with other requirements, are eligible to receive state grants to fund their campaigns. The bill establishes a four-step grant reduction schedule under which candidate committees receive reduced grants, beginning 70 days before the election, the closer to the election that they submit their application.

The schedule applies to general election grants for major party candidates who are currently eligible for (1) a full grant when they are opposed by a major party candidate, (2) 60% of the applicable grant when they are opposed by a minor or petitioning party candidate, or (3) 30% of the applicable grant when they are unopposed.

It similarly applies to minor and petitioning party candidates. Currently, minor party candidates may receive a general election grant equal to the full grant for a major party candidate if the candidate for the same office representing the same minor party at the last regular election received at least 20% of the votes cast for that office. An eligible petitioning candidate may receive a full grant for the general election if his or her petition is signed by a number of qualified electors equal to at least 20% of the number of votes cast for the same office at the last regular election. Both receive a one-third grant by meeting a 10% threshold or a two-thirds grant by meeting a 15% threshold.

Table 3 shows the bill's grant reduction schedule.

Table 3: CEP Grant Reduction Schedule

Days Before Election When Application Received

% of Applicable Grant Received

70 through 57 days

75%

56 through 43 days

65%

42 through 29 days

55%

28 days through the last day that SEEC accepts applications

40%

By law, for a general election, SEEC accepts grant applications starting on the third Wednesday in May in the election year (e.g., May 18, 2016), and every subsequent Wednesday, through the fourth to last Friday before the election (e.g., October 14, 2016) (CGS 9-706(g)(1)).

BACKGROUND

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.

Federal Court Decisions on Covered Transfer Limits

In New York Progress and Protection PAC (NYPPP) v. Walsh, et al., 733 F.3d 483 (2013), the Second Circuit Court of Appeals found that a New York law limiting political contributions to an independent expenditure political committee violated NYPPP's First Amendment right to political speech. Relying on several other circuit court decisions, the court stated that because the government has no anti-corruption interest in limiting independent expenditures, it follows that “a donor to an independent expenditure committee such as NYPPP is even further removed from political candidates and may not be limited in his ability to contribute to such committees.”

Long- and Short-Form IE-Reports

As part of these reports, a person must 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. This requirement applies if the IE (for which the report is being filed) is made or obligated to be made 180 or fewer days before the primary or election.

Foreign Nationals and Related Federal Law

Foreign Nationals. Federal law defines a “foreign national” as any of the following:

Prohibited Activities. Federal law prohibits a foreign national from, among other things, directly or indirectly making:

It similarly prohibits a person from soliciting, accepting, or receiving any contribution or donation described above from a foreign national (52 U.S.C. 30121 and 11 C.F.R. 110.20).

CEP Affidavits of Intent

With one exception, the law requires candidates to file an Affidavit of Intent to Abide or an Affidavit of Intent Not to Abide by the CEP's spending limits. Candidates do not have to file an affidavit if they will not receive or spend more than $1,000 from outside sources. These candidates are considered “nonparticipating candidates.”

Candidates who intend to participate must file the Affidavit of Intent to Abide only once, at which point they are considered “participating candidates.” Those who file before a primary and win the party endorsement are not required to re-file before the general election. The affidavit must include certain certifications from the candidate and his or her treasurer.

Related Bills

SB 582, reported favorably by the House Government Administration and Elections (GAE) Committee, contains the same provisions on foreign-influenced entities (except that it uses the term “foreign-influenced business entities”) and prohibits any person, not just an IE-only PAC, from accepting covered transfers of more than $70,000.

sSB 934, reported favorably by the GAE Committee, also modifies campaign finance laws and contains provisions expanding political advertising disclosure requirements.

COMMITTEE ACTION

Government Administration and Elections Committee

Joint Favorable

Yea

9

Nay

8

(03/27/2017)

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