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WEST virginia Legislature
2017 regular session
By
[
to the Committee on the Judiciary
A BILL to amend and
reenact §3-8-2 of the Code of West Virginia, 1931, as amended; and to amend
said code by adding thereto a new section, designated §3-8-8a, all relating to
requiring certain disclosures of election expenditures; clarifying when
contributions are required to be disclosed; creating exceptions; clarifying
that certain federal entities must make certain state disclosures; requiring
disclosure of covered transfers; stating legislative findings; defining terms;
providing requirements for disclosure of donations related to the transfer of
certain sums of money related to campaign-related disbursements; requiring
certain disclosures be made within forty-eight hours; specifying information
required in the disclosures; clarifying the relationship between covered
transfers and other regulated areas of election expenditures; creating a
misdemeanor offense; and authorizing rulemaking.
Be it enacted by the
Legislature of West Virginia:
That §3-8-2 of the Code
of West Virginia, 1931, as amended, be amended and reenacted; and that said
code be amended by adding thereto a new section, designated §3-8-8a, all to
read as follows:
ARTICLE 8. REGULATION
AND CONTROL OF ELECTIONS.
§3-8-2. Accounts for
receipts and expenditures in elections; requirements for reporting independent
expenditures.
(a) Except for: (1)
Candidates for party committeeman and committeewoman; and (2) federal
committees required to file under the provisions of 2 U.S.C. §434, all
candidates for nomination or election and all persons supporting, aiding or
opposing the nomination, election or defeat of any candidate shall keep for a
period of six months records of receipts and expenditures which are made for
political purposes. All of the receipts and expenditures are subject to
regulation by the provisions of this article. Verified financial statements of
the records and expenditures shall be made and filed as public records by all
candidates and by their financial agents, representatives or any person acting
for and on behalf of any candidate and by the treasurers of all political party
committees.
(b) (1) In addition to any
other reporting required by the provisions of this chapter, any person who
makes independent expenditures in an aggregate amount or value in excess of $1,000
during a calendar year shall file a disclosure statement, on a form prescribed
by the Secretary of State, that contains all of the following information:
(A) The name of:
(i) The person making the
expenditure;
(ii) The name of any person
sharing or exercising direction or control over the activities of the person
making the expenditure; and
(iii) The name of the
custodian of the books and accounts of the person making the expenditure;
(B) If the person making
the expenditure is not an individual, the principal place of business of the
partnership, corporation, committee, association, organization, or group
or other entity which made the expenditure;
(C) The amount of each
expenditure of more than $1,000 made during the period covered by the statement
and the name of the person to whom the expenditure was made;
(D) The elections to which
the independent expenditure pertain, the names, if known, of the candidates
referred to or to be referred to therein, whether the expenditure is intended
to support or oppose the identified candidates and the amount of the total
expenditure reported pursuant to paragraph (C) of this subdivision spent to
support or oppose each of the identified candidates;
(E) The name and address of
any person who contributed a total of more than $250 to the entity making
the expenditure between the first day of the preceding calendar year, and
the disclosure date: and whose contributions were made for the purpose of
furthering the expenditure Provided,
That any contribution placed into a separate segregated account that is not
used for campaign-related expenditures, any money received in the ordinary
course of any trade or business or any contribution that is explicitly made for
a nonpolitical purpose is not required to be reported.
(F) With regard to the
contributors required to be listed pursuant to paragraph (E) of this
subdivision, the statement shall also include:
(i) The month, day and year
that the contributions of any single contributor exceeded $250;
(ii) If the contributor is
a political action committee, the name and address the political action
committee registered with the Secretary of State, county clerk or municipal
clerk;
(iii) If the contributor is
an individual, the name and address of the individual, his or her occupation,
the name and address of the individual's
current employer, if any, or, if the individual is self-employed, the name and
address of the individual's business, if
any;
(iv) If the contributor
is an entity other than a registered political action committee subject to the
requirements of this article or an individual, the information required by
subsection (e), section eight-a of this article;
(iv) (v) A description of the contribution, if
other than money; and
(v) (vi) The value
in dollars and cents of the contribution.
(G)(1) A certification that
such independent expenditure was not made in cooperation, consultation, or
concert, with, or at the request or suggestion of, any candidate or any
authorized committee or agent of such candidate.
(2) Any person who makes a
contribution for the purpose of funding an independent expenditure under this
subsection shall, at the time the contribution is made, provide his or her
name, address, occupation, his or her current employer, if any, or, if the
individual is self-employed, the name of his or her business, if any, to the
recipient of the contribution.
(3) The Secretary of State
shall expeditiously prepare indices setting forth, on a candidate-by-candidate
basis, all independent expenditures separately, made by, or on behalf of, or
for, or against each candidate, as reported under this subsection, and for
periodically publishing such indices on a timely preelection basis.
(c) (1) A person, including
a political committee, who makes or contracts to make independent expenditures
aggregating $1,000 or more for any statewide, legislative or multicounty
judicial candidate or $500 or more for any county office, single-county judicial
candidate, committee supporting or opposing a candidate on the ballot in more
than one county, or any municipal candidate on a municipal election ballot,
after the fifteenth day, but more than twelve hours, before the date of an
election, shall file a report on a form prescribed by the Secretary of State,
describing the expenditures within twenty-four hours: Provided, That a
person making expenditures in the amount of $1,000 or more for any statewide or
legislative candidate on or after the fifteenth day but more than twelve hours
before the day of any election shall report such expenditures in accordance
with section two-b of this article and shall not file an additional report as
provided herein.
(2) Any person who files a
report under subdivision (1) of this subsection, shall file an additional
report within twenty-four hours after each time the person makes or contracts
to make independent expenditures aggregating an additional $500 with respect to
the same election, for any county office, single-county judicial candidate,
committee supporting or opposing a candidate on the ballot in more than one
county, or any municipal candidate on a municipal election ballot, as that to
which the initial report relates.
(d) (1) A person, including
a political committee, who makes or contracts to make independent expenditures
aggregating $10,000 or more at any time up to and including the fifteenth day
before the date of an election shall file a report on a form prescribed by the
Secretary of State, describing the expenditures within forty-eight hours.
(2) A person who files a
report under subdivision (1) of this subsection, the person shall file an
additional report within forty-eight hours after each time the person makes or
contracts to make independent expenditures aggregating an additional $10,000
with respect to the same election as that to which the initial report relates.
(e) Any communication paid
for by an independent expenditure must include a clear and conspicuous public
notice that:
(1) Clearly states that the
communication is not authorized by the candidate or the candidate's committee; and
(2) Clearly identifies the
person making the expenditure: Provided, That if the communication
appears on or is disseminated by broadcast, cable or satellite transmission,
the statement required by this subsection must be both spoken clearly and
appear in clearly readable writing at the end of the communication.
(f) Any person who has
spent a total of $5,000 or more for the direct costs of purchasing, producing
or disseminating electioneering communications during any calendar year shall
maintain all financial records and receipts related to such expenditure for a
period of six months following the filing of a disclosure pursuant to
subsection (a) of this section and, upon request, shall make such records and
receipts available to the Secretary of State or county clerk for the purpose of
an audit as provided in section seven of this article.
(g) Any person who
willfully fails to comply with this section is guilty of a misdemeanor and,
upon conviction thereof, shall be fined not less than $500, or confined in jail
for not more than one year, or both fined and confined.
(h) (1) Any person who is
required to file a statement under this section may file the statement by
facsimile device or electronic mail, in accordance with such rules as the
Secretary of State may promulgate.
(2) The Secretary of State
shall make any document filed electronically pursuant to this subsection
accessible to the public on the Internet not later than twenty-four hours after
the document is received by the secretary.
(3) In promulgating a rule
under this subsection, the secretary shall provide methods, other than
requiring a signature on the document being filed, for verifying the documents covered
by the rule. Any document verified under any of the methods shall be treated
for all purposes, including penalties for perjury, in the same manner as a
document verified by signature.
(i) This section does not
apply to candidates for federal office, but it does apply to any federal
political action committee that makes state level independent expenditures or
engages in state level electioneering communications.
(j) The Secretary of State
may promulgate emergency and legislative rules, in accordance with the
provisions of chapter twenty-nine-a of this code, to establish guidelines for
the administration of this section.
§3-8-8a. Disclosure
requirements for covered transfers.
(a) The Legislature
finds that:
(1) An informed public
is critical for the government of this state to function successfully as a true
democracy;
(2) There has been a
dramatic influx of “dark money” political advertising in recent election cycles
that make it difficult or sometimes impossible for the public to determine who
is funding campaign-related disbursements for or against certain candidates;
(3) The United States
Supreme Court has found that campaign-related disbursements are protected
speech under the First Amendment and, therefore, states have a limited ability
to restrict campaign-related disbursements;
(4) The United States
Supreme Court has found, on the other hand, that requiring reasonable
disclosures does not violate the First Amendment because the disclosure
requirements do not restrict the speech, but rather help inform the public
about the speech;
(5) It is now common
practice for the money used to fund campaign-related disbursements to be
transferred through multiple entities in an effort to sidestep state and
federal campaign finance disclosure laws, thereby creating the so-called dark
money;
(6) The prevalence of
dark money funding political advertising, combined with the increase in dubious
and misleading names for these organizations, serves to potentially mislead the
voting public by eliminating the public’s ability to know who funded the
communication and, therefore, who is exercising their First Amendment protected
speech; and
(7) Requiring greater
disclosures of covered transfers, as defined in this section, will serve the
state’s interest and the public’s interest in shining light on dark money and
ensuring that the voters of this state will know who pays for campaign-related
disbursements made by these currently unknown organizations.
(b) For the purposes of
this section:
(1) “Affiliate” means
two or more persons where:
(A) The governing
instrument of one person is required to be bound by decisions of the other
person;
(B) The governing board
of one person includes individuals who are specifically designated
representatives of the other person or are members of the governing board,
officers or paid executive staff members of the other person, or whose service
on the governing board is contingent upon the approval of the other person; or
(C) The person is
chartered by the other person;
(2) “Campaign-related
disbursement” means an independent expenditure consisting of a public
communication or an electioneering communication, as those terms are defined in
this article;
(3) “Covered transfer”
means any transfer or payment of funds by a person to another person if:
(A) The person making
the transfer designates, requests or suggests that the amounts be used for one
or more campaign-related disbursements or for making a transfer to another
person for the purpose of making or paying for one or more campaign-related
disbursements;
(B) The person made the
transfer or payment in response to a solicitation or other request for donation
or payment for the making of or paying for one or more campaign-related
disbursements or for making a transfer to another person for the purpose of
making or paying for one or more campaign-related disbursements; or
(C) The person engaged
in discussions with the recipient of the transfer or payment regarding the
making of or paying for campaign-related disbursements or donating or
transferring any amount of that transfer or payment to another person for the
purpose of making or paying for one or more campaign-related disbursements;
(4) “Covered transfer”
does not include:
(A) A disbursement made
by a person in the ordinary course of any trade or business or in the form of
investment; or
(B) A disbursement made
by a person if the person prohibited, in writing, the use of that disbursement
for campaign-related disbursements and the recipient of the funds agreed to
follow the prohibition and deposited the disbursement in an account which is
segregated from any account used to make campaign-related disbursements; and
(5) “Person” means an
individual, corporation, partnership, committee, association and any other
legal entity, organization or group of individuals, including, but not limited
to, an organization described in section 501(c) of the Internal Revenue Code of
1986 and any political organization under section 527 of the Internal Revenue
Code of 1986, other than a political committee with an account established
under this article that complies with the contribution limits and source
prohibitions of this article with respect to accounts established for that
purpose.
(c) When a person
receives a covered transfer of $10,000 or more, the recipient shall notify the
contributor that the contributor must submit the information required in
subsection (d) of this section within forty-eight hours of the transfer: Provided,
That if the contributor and the recipient of the covered transfer are
affiliates then this subsection only applies to transfers of $50,000 or
more. The recipient of the covered
transfer may not make a covered transfer of funds or a campaign-related
disbursement until it receives the information required by subsection (d) of
this section from the contributor. If
the contributor of the covered transfer fails to send the information required
by subsection (d) of this section, then the recipient shall return the covered
transfer funds to the contributor or immediately transfer the funds into
another account that is not used to campaign-related expenditures in this
state.
(d) All persons making
covered transfers that meet the thresholds set forth in subsection (c) of this
section, shall submit within forty-eight hours of the covered transfer the
following information to the recipient:
(1) The name and address
of any person who contributed a total of more than the maximum contribution
amount that an individual may make to a political candidate, as stated in
section twelve of this article, to the person making the covered transfer
within the previous twelve months;
(2) The month, day, and
year that the contributions of any single contributor exceeded the maximum
contribution amount that an individual may make to a political candidate, as
stated in section twelve of this article;
(3) If the person is a
political action committee, the name and address the political action committee
registered with the Secretary of State, county clerk or municipal clerk;
(4) If the person is an
individual, the person’s name, occupation, employer name, if any, and if the
individual is self-employed, the name of the individual’s business and address
of the business; and
(5) A description of the
contribution, if other than money, and the value in dollars and cents of the
contribution.
(e) If a person makes a
campaign-related disbursement that is an independent expenditure regulated by
section two of this article, then it shall disclose in the filing required by
section two of this article, all of the information required by section two of
this article and all of the information received pursuant to subsections (c)
and (d) of this section from any covered transfer received in the twenty-four
months prior to the campaign-related disbursement. If a person makes a campaign-related
disbursement that is an electioneering communication regulated by section two-b
of this article, then it shall disclose in the filing required by section two-b
of this article, all of the information required by section two of this article
and all of the information received pursuant to subsections (c) and (d) of this
section from any covered transfer received in the twenty-four months prior to
the campaign-related disbursement.
(f) Any person who
willfully fails to comply with this section is guilty of a misdemeanor and,
upon conviction thereof, shall be fined not less than $1,000 and not more than
$100,000, or confined in jail for not more than one year, or both fined and
confined.
(g) The Secretary of
State may promulgate emergency rules and propose legislative rules, in
accordance with the provisions of chapter twenty-nine-a of this code, to
implement the provisions of this section.
NOTE: The purpose of this bill is
to require disclosure of dark money political expenditures to allow the public
to know who is paying for political advertisements.
Strike-throughs indicate language
that would be stricken from a heading or the present law, and underscoring
indicates new language that would be added.
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