Political disbursements and obligations by corporations, cooperative associations, and labor organizations and the scope of regulated activity and reporting of certain activity under the campaign finance law

, 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 60 days of an election, makes any mass communication, including an electronic communication, a mass distribution, or a mass telephoning, that includes a reference to a candidate at that election. In addition, the bill requires an individual who or organization that becomes subject to a registration requirement by making such a communication to report, upon registration, the information that would have been required to be reported if the individual or organization had been registered with respect to any obligation incurred or disbursement made for the purpose of making such a communication prior to registration. The bill, however, does not require registration and reporting if the communication is made by a corporation, cooperative, or nonpolitical voluntary association and is limited to the corporation's, cooperative's, or association's members, shareholders, or subscribers.

The change in the scope of reportable activity under the bill also applies to contribution and disbursement (spending) limitations and restrictions by causing reportable "contributions," "obligations," and "disbursements" to include the cost of all reportable communications.

The bill also requires a special report by any campaign finance registrant who makes or incurs an obligation to make a mass communication that becomes reportable under the bill within 60 days of a primary or other election in an amount greater than $500 cumulatively since the date of the registrant's last report. The special report must be made within 24 hours after the date that disbursements or obligations that exceed $500 cumulatively are made or incurred and must include the information that would otherwise be reported on the registrant's next regular report in the form prescribed by GAB.

Violators of registration and reporting requirements are subject to a forfeiture (civil penalty) of not more than $500 for each violation. In addition, any person who is delinquent in filing a report is subject to a forfeiture of not more than $50 or 1 percent of the annual salary of the office for which a candidate is being supported or opposed, whichever is greater, for each day of delinquency. Intentional violators of the registration requirements and persons who intentionally file false reports or statements may be fined not more than $1,000 or imprisoned for not more than six months, or both, if the violation involves less than $100 in amount or value, and may be fined not more than $10,000 or imprisoned for not more than three years and six months, or both, if the violation involves more than $100 in amount or value.