AB 591

Under current law, corporations and cooperatives are prohibited from making

contributions or disbursements (expenditures) in campaigns for state or local office.

Violators are subject to a forfeiture (civil penalty) of not more than $500 for each

violation. Intentional violators are guilty of a Class I felony, which is punishable by

a fine of not more than $10,000 or imprisonment for three and one-half years, or

both, except that if a violation involves $100 or less, the violation is punishable as

a misdemeanor with a fine of not more than $1,000 or imprisonment for not more

than six months, or both. A recent decision of the U.S. Supreme Court has cast doubt

about whether this law is enforceable as it applies to disbursements. See

Citizens

United v. F.E.C.

, 130 S.Ct. 876 (2010).

This bill provides that if a court with jurisdiction in this state finds in a reported

decision, whether or not applicable in this state, that a prohibition against the

making of political expenditures by corporations or similar entities is not enforceable

for constitutional reasons, the Government Accountability Board (GAB) must

publish a finding to that effect. The bill then provides that, during a period when a

finding of unenforceability is in effect, before a corporation, cooperative, or labor

organization may make a disbursement or incur an obligation to make a

disbursement independently of a candidate, the corporation, cooperative, or labor

organization must obtain the express approval of a majority of the members of the

board of directors, executive council, or other governing body of the corporation,

cooperative, or labor organization by vote of that body taken during the 365-day

period preceding the date on which the disbursement is made or the obligation is

incurred. The bill also requires each financial report filed by the corporation,

cooperative, or labor organization that includes a report of any disbursement made,

or obligation to make a disbursement incurred, by the corporation, cooperative, or

labor organization independently of a candidate to also include a statement that a

majority of the members of the board of directors, executive council, or other

governing body of the corporation, cooperative, or labor organization has expressly

voted to authorize the disbursement or obligation during the 365-day period

preceding the date on which it is made or incurred.

Currently, individuals who accept contributions, organizations that make or

accept contributions, and individuals who or organizations that incur obligations or

make disbursements for the purpose of influencing an election for state or local office

are generally required to register with the appropriate filing officer and to file

financial reports with that officer, regardless of whether they act in conjunction with

or independently of any candidate who is supported or opposed.

With certain exceptions, this bill imposes registration and reporting

requirements, in addition, upon any individual who and organization that, within