WEST virginia Legislature
2018 regular session
Senate Bill 40
By Senators Romano, Ojeda, Baldwin, and Woelfel
10, 2018; Referred
to the Committee on Government Organization; and then 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 48 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:
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 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 pertains, 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 §11-15-8a(e) of this code;
(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 §11-15-2b of this code 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
provisions of §29A-1-1 et seq. 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 §11-15-12 of this code, 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 §11-15-12 of this code;
(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 §11-15-2 of this code, then it shall disclose in the filing required by §11‑15-2 of this code, all of the information required by §11-15-2 of this code 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 §11‑15‑2b of this code, then it shall disclose in the filing required by §11-15-2b of this code, all of the information required by §11-15-2 of this code 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 §29A-1-1 et seq. 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.