Connecticut Seal

General Assembly

File No. 485

    February Session, 2018

Substitute Senate Bill No. 498

Senate, April 12, 2018

The Committee on Government Administration and Elections reported through SEN. FLEXER of the 29th Dist. and SEN. MCLACHLAN, M. of the 24th Dist., Chairpersons of the Committee on the part of the Senate, that the substitute bill ought to pass.

AN ACT CONCERNING THE ESTABLISHMENT OF COMPLIANT ACCOUNTS BY PARTY COMMITTEES FOR EXPENDITURES ON STATE ELECTIONS.

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

Section 1. Section 9-601 of the general statutes is amended by adding subdivisions (32) to (34), inclusive, as follows (Effective January 1, 2019):

(NEW) (32) "Federal-only account" means a depository account established or controlled by a party committee, which depository account is subject to the disclosure and contribution limits provided under the Federal Election Campaign Act of 1971, as amended from time to time.

(NEW) (33) "State-only account" means a depository account established or controlled by a party committee, which depository account is subject to the disclosure and contribution limits provided under chapters 155 to 157, inclusive.

(NEW) (34) "Compliant account" means a depository account established or controlled by a party committee (A) that is completely segregated from any other account established or controlled by the party committee, (B) that contains only funds raised in compliance with both the Federal Election Campaign Act of 1971, as amended from time to time, and chapters 155 to 157, inclusive, and does not contain any funds transferred from a federal-only account established or controlled by the party committee or from a committee registered with the Federal Election Commission, and (C) from which all expenditures are made in full compliance with both the Federal Election Campaign Act of 1971, as amended from time to time, and chapters 155 to 157, inclusive.

Sec. 2. Section 9-617 of the general statutes is amended by adding subsection (e) as follows (Effective January 1, 2019):

(NEW) (e) A party committee may establish a compliant account, as defined in section 9-601, as amended by this act. For the purposes of chapters 155 to 157, inclusive, including limits for contributions, expenditures and organization expenditures, any compliant account of a party committee will be aggregated with the state-only account, as defined in section 9-601, as amended by this act, if any, of such party committee.

Sec. 3. Subdivision (25) of section 9-601 of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2019):

(25) "Organization expenditure" means an expenditure by a party committee [,] from its state-only account or compliant account, by a legislative caucus committee or by a legislative leadership committee, for the benefit of a candidate or candidate committee for:

(A) The preparation, display or mailing or other distribution of a party candidate listing. As used in this subparagraph, "party candidate listing" means any communication that meets the following criteria: (i) The communication lists the name or names of candidates for election to public office, (ii) the communication is distributed through public advertising such as broadcast stations, cable television, newspapers or similar media, or through direct mail, telephone, electronic mail, publicly accessible sites on the Internet or personal delivery, and (iii) the communication is made to promote the success or defeat of any candidate or slate of candidates seeking the nomination for election, or election or for the purpose of aiding or promoting the success or defeat of any referendum question or the success or defeat of any political party, provided such communication is not a solicitation for or on behalf of a candidate committee;

(B) A document in printed or electronic form, including a party platform, an electronic page providing merchant account services to be used by a candidate for the collection of on-line contributions, a copy of an issue paper, information pertaining to the requirements of this title, a list of registered voters and voter identification information, which document is created or maintained by a party committee, legislative caucus committee or legislative leadership committee for the general purposes of party or caucus building and is provided (i) to a candidate who is a member of the party that has established such party committee, or (ii) to a candidate who is a member of the party of the caucus or leader who has established such legislative caucus committee or legislative leadership committee, whichever is applicable;

(C) A campaign event at which a candidate or candidates are present; or

(D) The retention of the services of an advisor to provide assistance relating to campaign organization, financing, accounting, strategy, law or media.

Sec. 4. Subsection (c) of section 9-608 of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2019):

(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. In the case of a party committee with a compliant account established pursuant to subsection (e) of section 9-617, as amended by this act, the treasurer of such party committee shall report whether any such contribution, expenditure, expense incurred but not paid or receipt was to or from the state-only account or compliant account of such party committee. 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, including such party committee's state-only account and, if applicable, compliant account established pursuant to subsection (e) of section 9-617, as amended by this act, 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; 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 commission, against such treasurer for the receipt of such contribution.

(4) 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) 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) When a party committee makes or incurs an expenditure for a communication, each statement filed by such party committee shall indicate in the itemized accounting of expenditures (A) whether the costs of the communication were allocated among such party committee's state-only account, compliant account established pursuant to subsection (e) of section 9-617, as amended by this act, or any other account, and (B) if so, the percentages of such allocation paid from such state-only account or compliant account.

[(6)] (7) 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) 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)] (8) Statements filed in accordance with this section shall remain public records of the state for five years from the date such statements are filed.

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

Section 1

January 1, 2019

9-601

Sec. 2

January 1, 2019

9-617

Sec. 3

January 1, 2019

9-601(25)

Sec. 4

January 1, 2019

9-608(c)

Statement of Legislative Commissioners:

In Section 2, in the last sentence, references to "party committee" were inserted for clarity; and in Section 4(c)(6), "include" was changed to "indicate" for accuracy.

GAE

Joint Favorable Subst. -LCO

 

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


OFA Fiscal Note

State Impact: None

Municipal Impact: None

Explanation

The bill establishes state-only and federal-only accounts for candidate committees and allows them to establish compliant accounts from which state election expenditures may be made. The bill also requires candidate committees comply with state and federal campaign laws.

There is no fiscal impact as the State Elections Enforcement Commission previously adapted their electronic reporting system to accommodate the account system.

The Out Years

State Impact: None

Municipal Impact: None

OLR Bill Analysis

SB 498

AN ACT CONCERNING THE ESTABLISHMENT OF COMPLIANT ACCOUNTS BY PARTY COMMITTEES FOR EXPENDITURES ON STATE ELECTIONS.

SUMMARY

This bill establishes state-only, federal-only, and compliant accounts for party committees (i.e., state central and town committees) and requires that they comply with state campaign finance laws, federal campaign finance laws, and both, respectively. It requires a party committee's campaign finance statements to reflect state-only and compliant account activity. It also prohibits party committees from making organization expenditures from their federal-only accounts (see BACKGROUND).

The bill also makes technical changes.

EFFECTIVE DATE: January 1, 2019

DEFINITIONS

Under the bill, "state-only account" means a depository account that is established or controlled by a party committee and subject to disclosure and contribution limits under state campaign finance laws. "Federal-only account" means a depository account that is established or controlled by a party committee and subject to disclosure and contribution limits under the Federal Election Campaign Act of 1971.

"Compliant account" means a party committee's depository account that:

CAMPAIGN FINANCE STATEMENTS

By law, party committees must file periodic campaign finance statements with the State Elections Enforcement Commission according to specified schedules. Among other things, the statements must include an itemized accounting of contributions received, expenditures made, expenses incurred, and certain receipts (e.g., for fundraising affairs).

The bill requires party committee treasurers to report whether any contribution, expenditure, expense incurred but not paid, or receipt was to or from the state-only or compliant account. When party committees make or incur expenditures for communications, the bill requires that their campaign finance statements also indicate in the itemized expenditure accounting whether the costs were allocated among the state-only, compliant, or any other account. If there was an allocation among accounts, the statement must disclose the percentage from the state-only and compliant accounts, as applicable.

AGGREGATE LIMITS: STATE-ONLY AND COMPLIANT ACCOUNTS

For party committees with a compliant account, the bill requires that state campaign finance limits on contributions, expenditures, and organization expenditures be aggregated with the state-only account. For example, existing law places a $10,000 calendar year limit on contributions from state central committees to legislative caucus or legislative leadership committees. Under the bill, the $10,000 limit applies to total contributions from both the state-only and compliant accounts.

BACKGROUND

Organization Expenditures

By law, organization expenditures are made by legislative caucus, legislative leadership, or party committees for the benefit of candidates or their committees (CGS 9-601(25)). They are not considered campaign contributions, but the law places restrictions and limits on those made to benefit legislative candidates participating in the Citizens' Election Program.

COMMITTEE ACTION

Government Administration and Elections Committee

Joint Favorable

Yea

17

Nay

0

(03/23/2018)

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