HB127 By Representative Sorrell RFD Ethics and Campaign Finance Rd 1 04-FEB-20

SYNOPSIS: Under existing law, a candidate, public official, or principal campaign committee may accept, solicit, or receive campaign contributions for a period of 120 days following an election for the purpose of paying down campaign debt.

This bill would require a candidate, public official, or principal campaign committee who accepts, solicits, or receives campaign contributions during the 120-day period after the election in order to pay down campaign debt to report the campaign debt to the appropriate filing official and would prohibit a candidate from accepting contributions that exceed the amount reported.

This bill would create the Campaign Debt Clarification Act.

A BILL TO BE ENTITLED AN ACT

Relating to campaign finance; to amend Sections 17-5-2, 17-5-7, 17-5-8, and 17-5-9, Code of Alabama 1975; to create the Campaign Debt Clarification Act; to require a candidate, public official, or principal campaign committee who accepts, solicits, or receives campaign contributions to pay down campaign debt during the 120-day period after the election to report the campaign debt to the appropriate filing official; and to limit a candidate, public official, or principal campaign committee from accepting, soliciting, or receiving campaign contributions in excess of the amount of campaign debt reported.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. This act shall be known and may be cited as the Campaign Debt Clarification Act.Section 2. Sections 17-5-2, 17-5-7, 17-5-8, and 17-5-9, Code of Alabama 1975, are amended to read as follows:

§17-5-2.

"(a) For purposes of this chapter, the following terms shall have the following meanings:

"(1) CANDIDATE. An individual who has done any of the following:

"a. Taken the action necessary under the laws of the state to qualify himself or herself for nomination or for election to any state office or local office or in the case of an independent seeking ballot access, on the date when he or she files a petition with the judge of probate in the case of county offices, with the appropriate qualifying municipal official in the case of municipal offices, or the Secretary of State in all other cases.

"b. Received contributions or made expenditures in excess of one thousand dollars ($1,000), or given his or her consent for any other person or persons to receive contributions or make expenditures in excess of one thousand dollars ($1,000), with a view to bringing about his or her nomination or election to any state office or local office.

"(2) COMMISSION. The State Ethics Commission created pursuant to Section 36-25-3.

"(3) CONTRIBUTION.

"a. Any of the following shall be considered a contribution:

"1. A gift, subscription, loan, advance, deposit of money or anything of value, a payment, a forgiveness of a loan, or payment of a third party, made for the purpose of influencing the result of an election.

"2. A contract or agreement to make a gift, subscription, loan, advance, or deposit of money or anything of value for the purpose of influencing the result of an election.

"3. Any transfer of anything of value received by a political committee from another political committee, political party, or other source.

"4. The payment of compensation by any person for the personal services or expenses of any other person if the services are rendered or expenses incurred on behalf of a candidate, political committee, or political party without payment of full and adequate compensation by the candidate, political committee, or political party. Provided, however, that the payment of compensation by a corporation for the purpose of establishing, administering, or soliciting voluntary contributions to a separate, segregated fund as permitted in this chapter, shall not constitute a contribution.

"b. The term "contribution" does not include:

"1. The value of services provided without compensation by individuals who volunteer a portion or all of their time on behalf of a candidate or political committee.

"2. The use of real or personal property and the cost of invitations, food, or beverages, voluntarily provided by an individual to a candidate or political committee in rendering voluntary personal services on the individual's residential or business premises for election-related activities.

"3. The sale of any food or beverage by a vendor for use in an election campaign at a charge to a candidate or political committee less than the normal comparable charge, if the charge to the political committee for use in an election campaign is at least equal to the cost of the food or beverage to the vendor.

"4. Any unreimbursed payment for travel expenses made by an individual who, on his or her own behalf, volunteers personal services to a candidate or political committee.

"5. The payment by a state or local committee of a political party of the cost of preparation, display, or mailing or other distribution incurred by the committee with respect to a printed slate card or sample ballot, or other printed listing of two or more candidates for any public office for which an election is held in the state, except that this subparagraph shall not apply in the case of costs incurred by the committee with respect to a display of the listing made on broadcasting stations, or in newspapers, magazines, or other similar types of general public political advertising.

"6. The value or cost of polling data and voter preference data and information if provided to a candidate or political committee, unless the information was compiled with the advance knowledge of and approval of the candidate or the political committee.

"c. For purposes of reporting contributions as required by this chapter, the date of receipt of a contribution shall be the first date the recipient of the contribution is able to make use of the contribution. In the case of a contribution in the form of a check, the date of receipt is the earlier of either of the following:

"1. Ten days from the date that the check came within the recipient's control.

"2. The date that the check was deposited into the recipient's account.

"(4) DESIGNATED FILING AGENT. An individual appointed and authorized as attorney in fact to electronically submit any report or other filing required by this chapter on behalf of a candidate, his or her principal campaign committee, or a political action committee.

"(5) ELECTION. Unless otherwise specified, any general, special, primary, or runoff election, or any convention or caucus of a political party held to nominate a candidate, or any election at which a constitutional amendment or other proposition is submitted to the popular vote.

"(6) ELECTIONEERING COMMUNICATION. Any communication disseminated through any federally regulated broadcast media, any mailing, or other distribution, electronic communication, phone bank, or publication which (i) contains the name or image of a candidate; (ii) is made within 120 days of an election in which the candidate will appear on the ballot; (iii) the only reasonable conclusion to be drawn from the presentation and content of the communication is that it is intended to influence the outcome of an election; and (iv) entails an expenditure in excess of one thousand dollars ($1,000).

"(7) EXPENDITURE.

"a. The following shall be considered expenditures:

"1. A purchase, payment, distribution, loan, advance, deposit, or gift of money or anything of value made for the purpose of influencing the result of an election.

"2. A contract or agreement to make any purchase, payment, distribution, loan, advance, deposit, or gift of money or anything of value, for the purpose of influencing the result of an election.

"3. The transfer, gift, or contribution of funds of a political committee to another political committee.

"4. The payment of any qualifying fee or other cost associated with qualifying to run for office.

"b. The term "expenditure" does not include:

"1. Any news story, commentary, or editorial prepared by and distributed through the facilities of any broadcasting station, newspaper, magazine, or other periodical publication, unless the facilities are owned or controlled by any political party or political committee.

"2. Nonpartisan activity designed to encourage individuals to register to vote, or to vote.

"3. Any communication by any membership organization to its members or by a corporation to its stockholders and employees if the membership organization or corporation is not organized primarily for the purpose of influencing the result of an election.

"4. The use of real or personal property and the cost of invitations, food, or beverages, voluntarily provided by an individual in rendering voluntary personal services on the individual's residential or business premises for election-related activities.

"5. Any unreimbursed payment for travel expenses made by an individual who, on his or her own behalf, volunteers personal services to a candidate or political committee.

"6. Any communication by any person which is not made for the purposes of influencing the result of an election.

"7. The payment by a state or local committee of a political party of the cost of preparation, display, or mailing or other distribution incurred by the committee with respect to a printed slate card or sample ballot, or other printed listing of two or more candidates for any public office for which an election is held in the state, except that this subparagraph shall not apply in the case of costs incurred by the committee with respect to a display of the listing made on broadcasting stations, or in newspapers, magazines, or other similar types of general public political advertising.

"c. For purposes of reporting expenditures as required by this chapter, the date an expenditure is made is the date the instrument authorizes the expenditure. In the case of an expenditure made by check or electronic payment, the date of expenditure is the date of the check or electronic payment.

"(8) IDENTIFICATION. The full name and complete address.

"(9) LOAN. A transfer of money, property, or anything of value in consideration of a promise or obligation, conditional or not, to repay in whole or part.

"(10) LOCAL OFFICE. Any office under the constitution and laws of the state, except circuit, district, or legislative offices, filled by election of the registered voters of a single county or municipality, or by the voters of a division contained within a county or municipality.

"(11) PERSON. An individual, partnership, committee, association, corporation, labor organization, or any other organization or group of persons.

"(12) PERSONAL AND LEGISLATIVE LIVING EXPENSES. Household supplies, personal clothing, tuition payments, mortgage, rent, or utility payments for a personal residence; admission to an entertainment event or fees for a country club or social club, unless tied to a specific campaign event or functions involving constituents; and any other expense, excluding food and beverages, that would exist irrespective of the candidate's campaign or duties as a legislator. Personal and legislative living expenses shall not include expenses for food, beverages, travel, or communications incurred by the legislator in the performance of the office held.

"(13) POLITICAL ACTION COMMITTEE. Any committee, club, association, political party, or other group of one or more persons, whether in-state or out-of-state, which receives or anticipates receiving contributions and makes or anticipates making expenditures to or on behalf of any Alabama state or local elected official, proposition, candidate, principal campaign committee or other political action committee. For the purposes of this chapter, a person who makes a political contribution shall not be considered a political action committee by virtue of making such contribution.

"(14) POLITICAL PARTY. A political party as defined in Section 17-13-40.

"(15) PRINCIPAL CAMPAIGN COMMITTEE. The principal campaign committee designated by a candidate under Section 17-5-4. A political action committee established primarily to benefit an individual candidate or an individual elected official shall be considered a principal campaign committee for purposes of this chapter.

"(16) PROPOSITION. Any proposal for submission to the general public for its approval or rejection, including proposed as well as qualified ballot questions.

"(17) PUBLIC OFFICIAL. Any person elected to public office, whether or not that person has taken office, by the vote of the people at the state, county, or municipal level of government or their instrumentalities, including governmental corporations, and any person appointed to a position at the state, county, or municipal level of government or their instrumentalities, including governmental corporations. For purposes of this chapter, a public official includes the chairs and vice chairs or the equivalent offices of each state political party as defined in Section 17-13-40.

"(18) QUALIFYING CAMPAIGN DEBT. Any debt or obligation incurred by a candidate's principal campaign committee, either before or after an election, that is related to the candidate's campaign for the election of the candidate or the winding down of the campaign after that election. The term excludes the principal campaign committee's cash or other assets on hand and any commitments or obligations of the principal campaign committee for future goods or services which may be cancelled, such as monthly contracts for goods or services.

"(18)(19) STATE. The State of Alabama.

"(19)(20) STATE OFFICE. All offices under the constitution and laws of the state filled by election of the registered voters of the state or of any circuit or district and shall include legislative offices.

"(b) The words and terms used in this chapter shall have the same meanings respectively ascribed to them in Section 36-25-1.

§17-5-7.

"(a) Except as provided in subsection (d) and in Section 17-5-7.1, a candidate, public official, or treasurer of a principal campaign committee as defined in this chapter, may only use campaign contributions, and any proceeds from investing the contributions that are in excess of any amount necessary to defray expenditures of the candidate, public official, or principal campaign committee, for the following purposes:

"(1) Necessary and ordinary expenditures of the campaign.

"(2) Expenditures that are reasonably related to performing the duties of the office held. For purposes of this section, expenditures that are reasonably related to performing the duties of the office held do not include personal and legislative living expenses, as defined in this chapter.

"(3) Donations to the State General Fund, the Education Trust Fund, or equivalent county or municipal funds.

"(4) Donations to an organization to which a federal income tax deduction is permitted under subparagraph (A) of paragraph (1) of subsection (b) of Section 170 of the Internal Revenue Code of 1986, as amended, or any other charitable, educational, or eleemosynary cause of Section 501 of Title 26 of the U. S. Code.

"(5) Inaugural or transitional expenses.

"(6) Donations to a legislative caucus organization registered under this chapter which does not operate as a political action committee.

"(7) Legal fees and costs associated with any civil action, criminal prosecution, or investigation related to conduct reasonably related to performing the duties of the office held.

"(b) Notwithstanding any other provision of law, including, but not limited to, Section 13A-10-61, a candidate, public official, or principal campaign committee may only accept, solicit, or receive contributions:

"(1) To influence the outcome of an election.

"(2) For a period of 12 months before an election in which the person intends to be a candidate. Provided, however, candidates for legislative and statewide office and their principal campaign committees may not accept, solicit, or receive contributions during the period when the Legislature is convened in session. For purposes of this section, the Legislature is convened in session at any time from the opening day of the special or regular session and continued through the day of adjournment sine die for that session. However, this subdivision shall not apply within 120 days of any primary, runoff, or general election, and shall not apply to the candidates or their principal campaign committees participating in any special election as called by the Governor. This subdivision shall not apply to a loan from a candidate to his or her own principal campaign committee.

"(3) For a period of 120 days after the election in which the person was a candidate, but only to the extent of any campaign debt of the candidate or principal campaign committee of the candidate as indicated on the campaign financial disclosure form or to the extent of reaching the threshold that is required for qualification as a candidate for the office which he or she currently holds, or both provided, the contributions may not exceed either or both of the following:

"a. The amount of qualifying campaign debt of the candidate's principal campaign committee, as disclosed in the qualifying campaign debt disclosure form pursuant to subsection (d) of Section 17-5-8.

"b. The amount necessary to reach the threshold that is required for qualification as a candidate.

"(4) For the purpose of paying all expenses associated with an election challenge including, but not limited to, quo warranto challenges.

"(c) Notwithstanding any other provision of law, including, but not limited to, Section 13A-10-61, a candidate, public official, or principal campaign committee shall not accept, solicit, or receive contributions for any of the following reasons:

"(1) As a bribe, as defined by Sections 13A-10-60 to 13A-10-63, inclusive.

"(2) For the intention of corruptly influencing the official actions of the public official or candidate for public office.

"(d) Notwithstanding any other provision of law, a principal campaign committee, during a two-year period commencing on the day after each regularly scheduled general election and ending on the day of the next regularly scheduled general election, may pay qualifying fees to a political party and in addition thereto, during that period, may expend up to a cumulative total of five thousand dollars ($5,000) of campaign contributions, and any proceeds from investing the contributions, for the following purposes:

"(1) Tickets for political party dinners or functions.

"(2) State or local political party dues or similar expenses incurred by independent or write-in candidates.

§17-5-8.

"(a) The treasurer, designated filing agent, or candidate, shall file with the Secretary of State or judge of probate appropriate filing official, as designated in subsection (a) of Section 17-5-9, periodic reports of contributions and expenditures at the following times once a principal campaign committee files its statement under Section 17-5-4 or a political action committee files its statement of organization under Section 17-5-5:

"(1) Beginning after the 2012 election cycle, regardless Regardless of whether a candidate has opposition in any election, monthly reports not later than the second business day of the subsequent month, beginning 12 months before the date of any primary, special, runoff, or general election for which a political action committee or principal campaign committee receives contributions or makes expenditures with a view toward influencing such election's result. A monthly report shall include all reportable transactions for the previous full month period. Reports shall be required as provided in subdivisions (2) and (3).

"(2) With regard to a primary, special, runoff, or general election, a report shall be required weekly on the Monday of the succeeding week for each of the four weeks before the election that includes all reportable activities for the previous week.

"(3)a. In addition to the reporting dates specified in subdivisions (1) and (2), reports required to be filed with the Secretary of State shall be filed with the Secretary of State reports shall be filed on the eighth, seventh, sixth, fifth, fourth, third, and second day preceding a legislative, state school board, or other statewide primary, special, runoff, or general election, and by 12:01 p.m. on the day preceding a legislative, state school board, or statewide, primary, special, runoff, or general election if any principal campaign committee or political action committee receives or spends in the aggregate five thousand dollars ($5,000) or more on that day with a view toward influencing an election's results. If a daily report is required pursuant to this subdivision, the report shall include all reportable activity occurring on the day of the report as well as all reportable activity that has occurred on each day since the most recent prior report. Principal campaign committees and political action committees that are exempt from electronic filing and principal campaign committees and political action committees required to make daily reports pursuant to this subdivision for the 2012 election cycle may file reports by facsimile (FAX) transmission provided they keep proper documentation in their office.

"b. Electronic filing on the Secretary of State's website may be implemented sooner than the 2014 election cycle as an alternative method of reporting; however, electronic filing shall be required beginning with the 2014 election cycle. Electronic filings shall be available to the public on a searchable database maintained on the Secretary of State's website.

"(b) Except as provided in subsection (k)(i), each principal campaign committee, political action committee, and elected state and local official covered under the provisions of this chapter who has not closed his or her principal campaign committee, shall annually file with the Secretary of State or judge of probate, as designated in Section 17-5-9, reports of contributions and expenditures made during that year. No annual report is required to be filed by a person who holds office because he or she was appointed to serve the remainder of a term vacated by another person, until the person serving has created a principal campaign committee. The annual reports required under this subsection shall be made on or before January 31 of the succeeding year.

"(c) Each report under this section subsections (a) and (b) shall disclose:

"(1) The amount of cash or other assets on hand at the beginning of the reporting period and forward until the end of that reporting period and disbursements made from same.

"(2) The identification of each person who has made contributions to such committee or candidate within the calendar year in an aggregate amount greater than one hundred dollars ($100), together with the amount and date of all such contributions; provided, however, in the case of a political action committee identification shall mean the name and city of residence of each person who has made contributions within the calendar year in an aggregate amount greater than one hundred dollars ($100).

"(3) The total amount of other contributions received during the calendar year but not reported under subdivision (c)(2) of this section.

"(4) Each loan to or from any person within the calendar year in an aggregate amount greater than one hundred dollars ($100), together with the identification of the lender, the identification of the endorsers, or guarantors, if any, and the date and amount of such loans.

"(5) The total amount of receipts from any other source during such calendar year.

"(6) The grand total of all receipts by or for such committee during the calendar year.

"(7) The identification of each person to whom expenditures have been made by or on behalf of such committee or elected official within the calendar year in an aggregate amount greater than one hundred dollars ($100), the amount, date, and purpose of each such expenditure, and, if applicable, the designation of each constitutional amendment or other proposition with respect to which an expenditure was made.

"(8) The identification of each person to whom an expenditure for personal services, salaries, and reimbursed expenses greater than one hundred dollars ($100) has been made, and which is not otherwise reported or exempted from the provisions of this chapter, including the amount, date, and purpose of such expenditure.

"(9) The grand total of all expenditures made by such committee or elected official during the calendar year.

"(10) The amount and nature of debts and obligations owed by or to the committee or elected official, together with a statement as to the circumstances and conditions under which any such debt or obligation was extinguished and the consideration therefor.

"(d)(1) In addition to the mandatory reports under subsections (a) and (b), any candidate, principal campaign committee, or public official who accepts, solicits, or receives contributions during the 120-day period after the election, pursuant to paragraph a. of subdivision (3) of subsection (b) of Section 17-5-7, shall file a qualifying campaign debt disclosure form with the appropriate filing official, as designated in subsection (a) of Section 17-5-9. The report may be filed at any time during the 120-day period, and if filed earlier than the last day of the 120-day period, may be amended at any time during the 120-day period.

"(2) A candidate, principal campaign committee, or public official is not required to file a qualifying campaign debt disclosure form if the candidate, principal campaign committee, or public official does not accept, solicit, or receive contributions during the 120-day period after the election, pursuant to paragraph a. of subdivision (3) of subsection (b) of Section 17-5-7.

"(3) The report shall include an itemized list of the amount and a description of qualifying campaign debt that is outstanding or was outstanding at any time during the 120-day period, including the amount of qualifying campaign debt that was reduced or defrayed during the 120-day period and by what amount.

"(4) Failure to disclose all qualifying campaign debt in a report made under this subsection does not constitute a violation, unless the contributions accepted or received under paragraph a. of subdivision (3) of subsection (b) of Section 17-5-7 exceed the amount of qualifying campaign debt disclosed on the qualifying campaign debt disclosure form and the excess amount is not returned to the contributor within 10 days of receiving the excess amount.

"(d)(e) Each report required by this section shall be signed and filed by the elected official or on behalf of the political action committee by its chair or treasurer and, if filed on behalf of a principal campaign committee, by the candidate represented by such committee. There shall be attached to each such report an affidavit subscribed and sworn to by the official or chair or treasurer and, if filed by a principal campaign committee, the candidate represented by such committee, setting forth in substance that such report is to the best of his or her knowledge and belief in all respects true and complete, and, if made by a candidate, that he or she has not received any contributions or made any expenditures which are not set forth and covered by such report.

"(e) Commencing with the 2014 election cycle, electronic filing of contributions and expenditures for any legislative, state school board, and statewide primary, special, runoff, or general election shall be mandatory, except as provided in subsection (g). The Secretary of State may provide electronic reporting sooner than the 2014 election cycle. Electronic filing shall satisfy any filing requirements of this chapter and no paper filing is required for any report filed electronically.

"(f) In the 2012 election cycle the provisions for the time of filing contained in subsection (a) shall apply to the paper or facsimile (FAX) filings for any legislative, state school board, or statewide primary, special, runoff, or general election.

"(g) Electronic filing of reports shall not apply to any campaign, principal campaign committee, or political action committee receiving five thousand dollars ($5,000) or less per election cycle.

"(h)(f) In connection with any electioneering communication paid for by a person, nonprofit corporation, entity, principal campaign committee, or other political committee or entity, the payor shall disclose its contributions and expenditures in accordance with this section. The disclosure shall be made in the same form and at the same time as is required of political action committees in this section; provided, however, no duplicate reporting shall be required by a political committee.

"(i)(g) Notwithstanding any disclosure requirements of subsection (h)(f), churches are exempt from the requirements of this section unless the church's expenditures are used to influence the outcome of an election. Nothing herein shall require a church to disclose the identities, donations, or contributions of members of the church. As used in this section, the term church is defined in accordance with and recognized by Internal Revenue Service guidelines and regulations.

"(j)(h) Notwithstanding the disclosure requirements of this section, the provisions of this section shall not be interpreted to nor shall they require any disclosure for expenses incurred for any electioneering communication used by any membership or trade organization to communicate with or inform its members, its members' families, or its members' employees or for any electioneering communication by a business entity of any type to its employees or stockholders or their families.

"(k)(i) Each report required by this section shall include all reportable transactions occurring since the most recent prior report; however, duplicate reporting is not required by this section. A political action committee or principal campaign committee that is required to file a daily report is not required to also file a weekly report for the week preceding an election specified in subdivision (3) of subsection (a); a committee required to file a weekly report is not required to also file a monthly report in the month in which the election is held; and a committee required to file a monthly report is not required to also file an annual report in the year in which the election is held. The monetary balance in a report of each committee shall begin at the monetary amount appearing in the most recent prior report.

"(j)(1) Except as provided in subdivision (2), all filings made pursuant to this section shall be made electronically. Electronic filings shall be available to the public on a searchable database maintained on the Secretary of State's website.

"(2) Electronic filing of reports shall not apply to any campaign, principal campaign committee, or political action committee receiving five thousand dollars ($5,000) or less per election cycle.

"(l)(k) The Secretary of State may promulgate administrative adopt rules pursuant to the Alabama Administrative Procedure Act as are necessary to implement and administer the changes made to this section by Act 2012-477 this section.

§17-5-9.

"(a) All statements and reports, including amendments, required of principal campaign committees and political action committees under the provisions of this chapter shall be filed with the Secretary of State, in the case of candidates for state office or state elected officials, and in the case of candidates for local office or local elected officials, except any principal campaign committee for a candidate running for a municipal office, or any political action committee existing solely to influence the election of a candidate or candidates in a single municipality or to influence a proposition regarding a single municipality, shall file with the judge of probate of the county in which the office is sought for the 2016 election cycle municipality is located.

"(b) Political action committees, which seek to influence an election for local office or to influence a proposition regarding a single county, shall file all reports and statements, including amendments, with the judge of probate of the county affected. All other political action committees, except as provided in subsection (a) above, shall file reports and statements with the Secretary of State.

"(c) (b) In the case of candidates for a municipal office where the municipality is located in more than one county, the statements and reports shall be filed in the county where the city hall of the municipality is located. The judge of probate of the county where the report is filed, if the municipality is located in more than one county, shall provide a copy of the report to the judge of probate of the other county or counties where the municipality is located.

"(d) For the 2014 and 2016 election cycles, all principal campaign committees and political action committees that file with the judge of probate, other than candidates for municipal office, may choose instead to file electronically with the Secretary of State pursuant to this chapter. Any such principal campaign committee or political action committee that chooses to file electronically with the Secretary of State shall first provide notice to the appropriate judge of probate, in a manner prescribed by the judge of probate, indicating that choice and shall continue to file electronically with the Secretary of State until terminated or dissolved pursuant to this chapter.

"(e) Commencing with the 2018 election cycle, all principal campaign committees and political action committees that file with the judge of probate, other than candidates for municipal office, shall file electronically with the Secretary of State pursuant to this chapter."

Section 3. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

Campaign Finances

Campaign Contributions

Public Officials

Elections

Secretary of State

Judge, Probate

Code Amended