Public Disclosure Commission.
The Public Disclosure Commission (PDC) was created in 1972 by Initiative 276. The PDC regulates many financial aspects of political campaigns, including contributions to candidates and expenditures related to ballot measures, as well as political advertisements and electioneering communications.
Political and Incidental Committees.
Among the entities that the PDC regulates are political committees, which are groups, except for candidates, that have the expectation of receiving contributions or making expenditures in support of or in opposition to any candidate or ballot measure. The PDC also regulates incidental committees, which are nonprofit organizations that incidentally make contributions or expenditures in excess of $25,000 and receive at least $10,000 from a single source.
Political committees and incidental committees must file a statement of organization with the PDC that includes names, addresses, and contact information for certain people associated with the committee. For political committees, this statement is generally due within two weeks after organization or two weeks after the committee first expects to receive contributions or make expenditures, whichever is earlier. For incidental committees, the statement is generally due within two weeks after the committee first expects to make expenditures above $25,000, and the committee is required to disclose any payment received. However, if a political committee is formed, or an incidental committee is first required to file, beginning in the last three weeks before an election, they must file a statement of organization within three business days.
Contributions and Expenditure Reports.
Candidates and political committees must file reports with the PDC detailing all contributions received and expenditures made as of the end of one business day before the report is filed. Incidental committees must also file such reports on the day they file a statement of organization. These reports are due 21 and 7 days immediately preceding an election, and the tenth day of the first full month after an election. This timeline applies to primaries and general and special elections. Sponsors of independent expenditures must also file expenditure reports on those dates. Reports also must be filed each month a candidate or committee spends at least $200.
Special Reports.
Special reports are also required for many types of election-related activity in the days immediately preceding an election. For example, the sponsor of political advertising must file a special report to the PDC within a working day of the ad's first presentation to the public. Special reports are also required when a candidate receives, or a political committee makes, contributions of $1,000 or more from or to a single entity in the 21 days preceding a general election.
Commercial Advertisers.
Any person or entity who sells the service of communicating messages or producing material for the general public is considered a commercial advertiser and is subject to regulation by the PDC. A commercial advertiser who has accepted or provided political advertising or electioneering communications during an election campaign must maintain current books of account that are open for public inspection. The documents must specify information about the sponsors of political advertising or electioneering communications, including their identity and the cost of the services. A commercial advertiser must provide this information to the PDC upon request.
Statements of Organization.
A political or incidental committee must file its statement of organization with the PDC within three business days if it is organized or first required to file within the period beginning the first day of the last full month before an election, rather than the three weeks before the election.
Contributions and Expenditures Reports.
Contributions and expenditures reports for candidates and political committees are due 20 and 6 days preceding any election, rather than 21 and 7, and an additional report is due 34 days before a general election. Those reports must include all contributions received and expenditures made through the end of two calendar days before the filing, rather than one business day. The same date changes are made to independent expenditure reports.
Special Reports.
The threshold contribution amount to trigger the requirement to file a special report is increased to more than the contribution limit to a candidate for state office other than legislative office, which is currently $2,000, rather than $1,000 or more. The special reporting period is modified to the beginning of the last full month preceding an election, rather than the 21 days preceding an election. Special reports are no longer required for political advertising if the advertising is otherwise required to be reported in a contributions and expenditures report.
Commercial Advertisers.
Any person who purchases political advertising or electioneering communications from a commercial advertiser must disclose, upon request from the commercial advertiser, that the purchase includes political advertising or electioneering communications, as well as any other information that the commercial advertiser is required by the PDC to maintain. A sponsor's failure to provide this information is a violation punishable by the PDC, but it does not relieve the commercial advertiser of its own responsibilities under the law.
Other minor technical changes are made.
The amended bill removes provisions that: (1) repealed the prohibition on contributions and expenditures by foreign nationals; and (2) replaced them with a prohibition on candidates accepting contributions from a foreign-influenced corporation.
(In support) The parts of this bill requested by the PDC are designed to increase transparency and public trust in elections. The adjustments to the reporting deadlines will bring more information to voters earlier in the process, and it has been negotiated to be workable with campaign treasurers. The provisions related to commercial advertising are a win-win by making it easier for social media companies to comply with state disclosure laws while also increasing transparency in advertising. Provisions that were in House Bill 1677 about allowing the PDC to have greater control over its account funds should be added back into the bill. The provisions about foreign-influenced corporations were not requested by the PDC. The previous law related to foreign nationals prohibited noncitizens from participation in state politics and this would remove that barrier.
(Opposed) This bill about transparency was hijacked by the Senate to add an unpopular provision to keep businesses out of the political process. A local family business that does all of its business in-state is suddenly considered a foreign-influenced corporation if a mere 1 percent of its stock is purchased by a foreign hedge fund. The bill effectively creates a presumption that a business is foreign-influenced that the business must rebut by certifying otherwise. That is a bad standard to put into state law. Any business would be terrified about contributing to a candidate because they may not be able to figure out whether they are foreign-influenced under the standard in the bill. The requirements in this bill affect every corporation, not just large multinational corporations. It would create additional bureaucracy for corporations because every time they make a donation, they must recheck to see whether just 1 percent of their stock ownership has changed. The previous law was much more workable because organizations that had foreign members would just prohibit the members from participating in their political activity.
(Other) The PDC-requested provisions in this bill are supported by campaign treasurers. The provisions in this bill about foreign-influenced corporations create concern. The 1 percent threshold for a corporation to be considered foreign-influenced is too low. Requiring the CEO to certify citizenship information about the corporation's ownership is problematic because companies do not have mechanisms to check the citizenship of their shareholders. It will also increase the work of volunteer campaign treasurers if they have to verify that corporations do not have foreign ownership before accepting contributions.