SB 413

This bill prohibits corporations and cooperative associations from making any

contribution or expenditure, or incurring any obligation to make a contribution or

expenditure, for the purpose of influencing an election for state or local office. The

bill does, however, allow a corporation or cooperative association to make

expenditures or incur obligations for such a purpose under certain circumstances.

Current law prohibits corporations, cooperative associations, labor

organizations, and American Indian Tribes from making contributions to any

candidate committee, legislative campaign committee, political action committee,

political party, or recall committee. Such entities may, however, make contributions

to independent expenditure committees and referendum committees. The entities

may also make contributions to a segregated fund established by a political party or

legislative campaign committee to use for purposes other than making contributions

to a candidate committee or making disbursements for express advocacy. In

addition, consistent with U.S. Supreme Court cases, these entities may make

independent expenditures for political purposes. See

Citizens United v. F.E.C.

, 130

S. Ct. 876 (2010).

Under the bill, if a court with jurisdiction in this state finds that a law

prohibiting corporations and cooperative associations from making expenditures

and incurring obligations to influence an election for state or local office is not

enforceable for constitutional reasons, the Ethics Commission 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 or cooperative association may

make an expenditure or incur an obligation for the purpose of influencing an election

for state or local office, the corporation or association must register as a political

action committee and file with its registration statement a document that indicates

that the corporation or association received the approval of a majority of its voting

shareholders to make expenditures or incur obligations or a document that indicates

that the corporation or association has no shareholders.

The bill also provides that no owner, officer, employee, or agent of a corporation

or cooperative association may cause or authorize the corporation or association to

make an expenditure or incur an obligation prohibited under the bill. If an owner,

officer, employee, or agent causes or authorizes such a violation, an action to enforce

the law must be brought against the owner, officer, employee, or agent personally and

the corporation or association is not financially liable for the violation. In addition,

no corporation or cooperative association is permitted to reimburse an owner, officer,

employee, or agent for any financial liability incurred by the owner, officer, employee,

or agent.