HB3256 98TH GENERAL ASSEMBLY

LRB098 10735 HLH 41079 b

98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB3256

Introduced , by Rep. Elaine Nekritz

SYNOPSIS AS INTRODUCED:

10 ILCS 5/9-1.15
10 ILCS 5/9-7.6 new
10 ILCS 5/9-10	from Ch. 46, par. 9-10
10 ILCS 5/9-11	from Ch. 46, par. 9-11

Amends the Disclosure and Regulation of Campaign Contributions and Expenditures Article of the Election Code. Provides that there is a rebuttable presumption that specified expenditures do not qualify as independent expenditures. Requires a nonprofit organization, except for a labor union, that accepts contributions, makes contributions, or makes expenditures during any 12-month period in an aggregate amount exceeding $5,000 on behalf of or in opposition to public officials, candidates for public office, or a question of public policy or for electioneering communications to register with the State Board of Elections in accordance with the Board's rules and file contribution and expenditure reports and imposes certain requirements regarding the reports. Changes requirements for reports filed by a political committee that makes independent expenditures and provides that the Board shall impose a civil penalty for failure to file a report. Provides that quarterly report of campaign contributions, expenditures, and independent expenditures shall disclose the beneficial owner of any entity that contributes more than $10,000 to a ballot initiative committee or an independent expenditure committee during any election period. Effective immediately.

A BILL FOR

AN ACT concerning State government.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Election Code is amended by changing Sections 9-1.15, 9-10, and 9-11 and by adding Section 9-7.6 as follows:

(10 ILCS 5/9-1.15)

Sec. 9-1.15. Independent expenditure. "Independent expenditure" means any payment, gift, donation, or expenditure of funds (i) by a natural person or political committee for the purpose of making electioneering communications or of expressly advocating for or against the nomination for election, election, retention, or defeat of a clearly identifiable public official or candidate or for or against any question of public policy to be submitted to the voters and (ii) that is not made in connection, consultation, or concert with or at the request or suggestion of the public official or candidate, the public official's or candidate's designated political committee or campaign, or the agent or agents of the public official, candidate, or political committee or campaign. There shall be a rebuttable presumption that the following expenditures do not qualify as independent expenditures:

(1) an expenditure made by a person in cooperation, consultation, or concert with, at the request, suggestion or direction of, or pursuant to a general or particular understanding with (A) a candidate, candidate political committee, political action committee, or political party committee, or (B) a consultant or other agent acting on behalf of a candidate, candidate political committee, political action committee, or political party committee;

(2) an expenditure made by a person for the production, dissemination, distribution, or publication, in whole or in substantial part, of any broadcast or any written, graphic, or other form of political advertising or campaign communication prepared by (A) a candidate, candidate political committee, political action committee, or political party committee, or (B) a consultant or other agent acting on behalf of a candidate, candidate political committee, political action committee, or political party committee;

(3) an expenditure made by a person based on information about a candidate's, political action committee's, or political party committee's plans, projects, or needs, provided by (A) a candidate, candidate political committee, political action committee, or political party committee, or (B) a consultant or other agent acting on behalf of a candidate, candidate political committee, political action committee, or political party committee, with the intent that such expenditure be made;

(4) an expenditure made by an individual who, in the same election cycle, is serving or has served as the chairman or treasurer of a candidate, candidate political committee, political action committee, or political party committee, benefiting from such expenditure, or in any other executive or policymaking position, including as a member, employee, fundraiser, consultant, or other agent of a candidate, candidate political committee, political action committee, or political party committee;

(5) an expenditure made by a person whose officer, director, member, employee, fundraiser, consultant, or other agent who serves the person in an executive or policymaking position also serves as or has served in the same election cycle as the candidate or the chairman or treasurer of a candidate political committee, political action committee, or political party committee, benefiting from such expenditure, or in any other executive or policymaking position of a candidate political committee, political action committee, or political party committee;

(6) an expenditure made by a person for fundraising activities (A) with or for a candidate, candidate political committee, political action committee, or political party committee, or a consultant or other agent acting on behalf of a candidate, candidate political committee, political action committee, or political party committee, or (B) for the solicitation or receipt of contributions on behalf of a candidate, candidate political committee, political action committee, or political party committee, or a consultant or other agent acting on behalf of a candidate, candidate political committee, political action committee, or political party committee;

(7) an expenditure made by a person based on information about a candidate's campaign plans, projects, or needs that is directly or indirectly provided by a candidate, the candidate's candidate political committee, political action committee, or political party committee, or a consultant or other agent acting on behalf of such candidate, candidate political committee, political action committee, or political party committee, to the person making the expenditure or such person's agent, with an express or tacit understanding that such person is considering making the expenditure;

(8) an expenditure made by a person for a communication that clearly identifies a candidate during an election campaign, if the person making the expenditure, or such person's agent, has informed the candidate who benefits from the expenditure, that candidate's candidate political committee, political action committee, or political party committee, or a consultant or other agent acting on behalf of the benefiting candidate, candidate political committee, political action committee, or political party committee, concerning the communication's contents, or of the intended audience, timing, location, or mode or frequency of dissemination;

(9) an expenditure made by a person or an entity for consultant or creative services, including, but not limited to, services related to communications strategy or design or campaign strategy, to be used to promote or oppose a candidate's election to office if the provider of such services is also providing consultant or creative services to such candidate, such candidate's candidate political committee, or to any opposing candidate in the same primary or election, or to such opposing candidate's candidate political committee. For purposes of this subdivision, communications strategy or design does not include the costs of printing or costs for the use of a medium for the purpose of communications;

(10) an expenditure made by a person or an entity on or after January 1 in the year of an election in which a candidate is seeking office that benefits such candidate when such person or entity has hired an individual as an employee or consultant and such individual was an employee of or consultant to such candidate during any part of the 18-month period preceding such expenditure; and

(11) an expenditure made by a person or an entity on or after January 1 in the year of an election in which a candidate is seeking office that benefits such candidate when such person or entity making the expenditure has hired a campaign-related vendor that has been hired by such candidate during the same election cycle. For purposes of this subdivision, "campaign-related vendor" includes, but is not limited to, vendors that provide the following services: polling, mail design, mail strategy, political strategy, general campaign advice, or telephone banking.

(Source: P.A. 96-832, eff. 7-1-10; 97-766, eff. 7-6-12.)

(10 ILCS 5/9-7.6 new)

Sec. 9-7.6. Nonprofit organization registration and disclosure.

(a) Each nonprofit organization, except for a labor union, that accepts contributions, makes contributions, or makes expenditures during any 12-month period in an aggregate amount exceeding $5,000 (i) on behalf of or in opposition to public officials, candidates for public office, or a question of public policy or (ii) for electioneering communications shall register with the State Board of Elections. The Board by rule shall prescribe the registration procedure and form. The registration form shall require the following information:

(1) The registrant's name, address, and purpose.

(2) The name, address, and position of each custodian of the registrant's financial books, accounts, and records.

(3) The name, address, and position of each of the registrant's principal officers.

(b) Each nonprofit organization required to register under subsection (a) shall file contribution and expenditure reports with the Board. The Board by rule shall prescribe the form, which shall require the following information:

(1) The organization's name, address, and purpose.

(2) The amount of funds on hand at the beginning of the reporting period.

(3) The full name and address of each person who has made one or more contributions to or for the organization within the reporting period in an aggregate amount or value in excess of $150, together with the amount and date of the contributions, and if a contributor is an individual who contributed more than $500, the occupation and employer of the contributor or, if the occupation and employer of the contributor are unknown, a statement that the organization has made a good faith effort to ascertain this information.

(4) The total sum of individual contributions made to or for the organization during the reporting period and not reported in item (3).

(5) The name and address of each organization and political committee from which the reporting organization received, or to which that organization made, any transfer of funds in an aggregate amount or value in excess of $150, together with the amounts and dates of the transfers.

(6) The total sum of transfers made to or from the organization during the reporting period and not reported in item (5).

(7) Each loan to or from any person within the reporting period by or to the organization in an aggregate amount or value in excess of $150, together with the full names and mailing addresses of the lender and endorsers, if any, and the date and amount of the loans, and if a lender or endorser is an individual who loaned or endorsed a loan of more than $500, the occupation and employer of the individual or, if the occupation and employer of the individual are unknown, a statement that the organization has made a good faith effort to ascertain this information.

(8) The total amount of proceeds received by the organization from (i) the sale of tickets for each dinner, luncheon, cocktail party, rally, and other fundraising event, (ii) mass collections made at those events, and (iii) sales of items such as buttons, badges, flags, emblems, hats, banners, literature, and similar materials.

(9) Each contribution, rebate, refund, or other receipt in excess of $150 received by the organization not otherwise listed under items (3) through (8), and if a contributor is an individual who contributed more than $500, the occupation and employer of the contributor or, if the occupation and employer of the contributor are unknown, a statement that the organization has made a good faith effort to ascertain this information.

(10) The total sum of all receipts by or for the organization during the reporting period.

(11) The full name and mailing address of each person to whom expenditures have been made by the organization within the reporting period in an aggregate amount or value in excess of $150, the amount, date, and purpose of each expenditure, and the question of public policy on behalf of which the expenditure was made.

(12) The full name and mailing address of each person to whom an expenditure for personal services, salaries, and reimbursed expenses in excess of $150 has been made and which is not otherwise reported, including the amount, date, and purpose of the expenditure.

(13) The total sum of expenditures made by the organization during the reporting period.

(14) The full name and mailing address of each person to whom the organization owes debts or obligations in excess of $150 and the amount of the debts or obligations.

The State Board by rule shall define a "good faith effort".

(c) The reports required under subsection (b) shall be filed at the same times and for the same reporting periods as reports of campaign contributions and semi-annual reports of campaign contributions and expenditures required by this Article of political committees. The reports required under subsection (b) shall be available for public inspection and copying in the same manner as reports filed by political committees. The Board may charge a fee that covers the costs of copying and distribution, if any.

(d) An organization required to file reports under subsection (b) shall include a statement on all literature and advertisements soliciting funds stating the following:

"A copy of our report filed with the State Board of Elections is (or will be) available for purchase from the State Board of Elections, Springfield, Illinois".

(10 ILCS 5/9-10) (from Ch. 46, par. 9-10)

Sec. 9-10. Disclosure of contributions and expenditures.

(a) The treasurer of every political committee shall file with the Board reports of campaign contributions and expenditures as required by this Section on forms to be prescribed or approved by the Board.

(b) Every political committee shall file quarterly reports of campaign contributions, expenditures, and independent expenditures. The reports shall cover the period January 1 through March 31, April 1 through June 30, July 1 through September 30, and October 1 through December 31 of each year. A political committee shall file quarterly reports no later than the 15th day of the month following each period. Reports of contributions and expenditures must be filed to cover the prescribed time periods even though no contributions or expenditures may have been received or made during the period. The Board shall assess a civil penalty not to exceed $5,000 for failure to file a report required by this subsection. The fine, however, shall not exceed $1,000 for a first violation if the committee files less than 10 days after the deadline. There shall be no fine if the report is mailed and postmarked at least 72 hours prior to the filing deadline. When considering the amount of the fine to be imposed, the Board shall consider whether the violation was committed inadvertently, negligently, knowingly, or intentionally and any past violations of this Section.

(c) A political committee shall file a report of any contribution of $1,000 or more electronically with the Board within 5 business days after receipt of the contribution, except that the report shall be filed within 2 business days after receipt if (i) the contribution is received 30 or fewer days before the date of an election and (ii) the political committee supports or opposes a candidate or public question on the ballot at that election or makes expenditures in excess of $500 on behalf of or in opposition to a candidate, candidates, a public question, or public questions on the ballot at that election. The State Board shall allow filings of reports of contributions of $1,000 or more by political committees that are not required to file electronically to be made by facsimile transmission. The Board shall assess a civil penalty for failure to file a report required by this subsection. Failure to report each contribution is a separate violation of this subsection. The Board shall impose fines for willful or wanton violations of this subsection (c) not to exceed 150% of the total amount of the contributions that were untimely reported, but in no case shall it be less than 10% of the total amount of the contributions that were untimely reported. When considering the amount of the fine to be imposed for willful or wanton violations, the Board shall consider the number of days the contribution was reported late and past violations of this Section and Section 9-3. The Board may impose a fine for negligent or inadvertent violations of this subsection not to exceed 50% of the total amount of the contributions that were untimely reported, or the Board may waive the fine. When considering whether to impose a fine and the amount of the fine, the Board shall consider the following factors: (1) whether the political committee made an attempt to disclose the contribution and any attempts made to correct the violation, (2) whether the violation is attributed to a clerical or computer error, (3) the amount of the contribution, (4) whether the violation arose from a discrepancy between the date the contribution was reported transferred by a political committee and the date the contribution was received by a political committee, (5) the number of days the contribution was reported late, and (6) past violations of this Section and Section 9-3 by the political committee.

(d) For the purpose of this Section, a contribution is considered received on the date (i) a monetary contribution was deposited in a bank, financial institution, or other repository of funds for the committee, (ii) the date a committee receives notice a monetary contribution was deposited by an entity used to process financial transactions by credit card or other entity used for processing a monetary contribution that was deposited in a bank, financial institution, or other repository of funds for the committee, or (iii) the public official, candidate, or political committee receives the notification of contribution of goods or services as required under subsection (b) of Section 9-6.

(e) A political committee that makes independent expenditures at any time of $1,000 or more for goods to be delivered or services to be performed during (i) a quarterly disclosure the period that contains 30 days or fewer before an election or (ii) during the first quarter of the calendar year, if made in relation to a candidate seeking election in the consolidated election in that same year, shall electronically file a report with the Board within 5 business days after making the independent expenditure. The report shall contain the information required in Section 9-11(c) of this Article. The Board shall assess a civil penalty for failure to file a report required by this subsection. Failure to report each expenditure is a separate violation of this subsection. The Board shall impose fines for willful or wanton violations of this subsection (e) not to exceed 150% of the total amount of the expenditures that were untimely reported, but in no case shall it be less than 10% of the total amount of the expenditures that were untimely reported. When considering the amount of the fine to be imposed for willful or wanton violations, the Board shall consider the number of days the expenditure was reported late and past violations of this Section and Section 9-3. The Board may impose a fine for negligent or inadvertent violations of this subsection not to exceed 50% of the total amount of the expenditures that were untimely reported, or the Board may waive the fine. When considering whether to impose a fine and the amount of the fine, the Board shall consider the following factors: (1) whether the political committee made an attempt to disclose the expenditure and any attempts made to correct the violation, (2) whether the violation is attributed to a clerical or computer error, (3) the amount of the expenditure, (4) the number of days the expenditure was reported late, and (5) past violations of this Section and Section 9-3 by the political committee.

(e-5) An independent expenditure committee that makes an independent expenditure supporting or opposing a public official or candidate that, alone or in combination with any other independent expenditure made by that independent expenditure committee supporting or opposing that public official or candidate during the election cycle, equals an aggregate value of more than (i) $250,000 for statewide office or (ii) $100,000 for all other elective offices must file a written disclosure with the State Board of Elections within 2 business days after making any expenditure that results in the independent expenditure committee exceeding the applicable threshold. The Board shall assess a civil penalty against an independent expenditure committee for failure to file the disclosure required by this subsection equal to 5% of the unreported expenditure for each day the report is filed late, but not to exceed 150% of the unreported expenditure not to exceed (i) $500 for an initial failure to file the required disclosure and (ii) $1,000 for each subsequent failure to file the required disclosure.

(f) A copy of each report or statement filed under this Article shall be preserved by the person filing it for a period of two years from the date of filing.

(Source: P.A. 96-832, eff. 1-1-11; 97-766, eff. 7-6-12.)

(10 ILCS 5/9-11) (from Ch. 46, par. 9-11)

Sec. 9-11. Financial reports.

(a) Each quarterly report of campaign contributions, expenditures, and independent expenditures under Section 9-10 shall disclose the following:

(1) the name and address of the political committee;

(2) the name and address of the person submitting the report on behalf of the committee, if other than the chairman or treasurer;

(3) the amount of funds on hand at the beginning of the reporting period;

(4) the full name and mailing address of each person who has made one or more contributions to or for the committee within the reporting period in an aggregate amount or value in excess of $150, together with the amounts and dates of those contributions, and, if the contributor is an individual who contributed more than $500, the occupation and employer of the contributor or, if the occupation and employer of the contributor are unknown, a statement that the committee has made a good faith effort to ascertain this information;

(5) the total sum of individual contributions made to or for the committee during the reporting period and not reported under item (4);

(6) the name and address of each political committee from which the reporting committee received, or to which that committee made, any transfer of funds in the aggregate amount or value in excess of $150, together with the amounts and dates of all transfers;

(7) the total sum of transfers made to or from the committee during the reporting period and not reported under item (6);

(8) each loan to or from any person, political committee, or financial institution within the reporting period by or to the committee in an aggregate amount or value in excess of $150, together with the full names and mailing addresses of the lender and endorsers, if any; the dates and amounts of the loans; and, if a lender or endorser is an individual who loaned or endorsed a loan of more than $500, the occupation and employer of that individual or, if the occupation and employer of the individual are unknown, a statement that the committee has made a good faith effort to ascertain this information;

(9) the total amount of proceeds received by the committee from (i) the sale of tickets for each dinner, luncheon, cocktail party, rally, and other fund-raising events; (ii) mass collections made at those events; and (iii) sales of items such as political campaign pins, buttons, badges, flags, emblems, hats, banners, literature, and similar materials;

(10) each contribution, rebate, refund, income from investments, or other receipt in excess of $150 received by the committee not otherwise listed under items (4) through (9) and, if the contributor is an individual who contributed more than $500, the occupation and employer of the contributor or, if the occupation and employer of the contributor are unknown, a statement that the committee has made a good faith effort to ascertain this information;

(11) the total sum of all receipts by or for the committee or candidate during the reporting period;

(12) the full name and mailing address of each person to whom expenditures have been made by the committee or candidate within the reporting period in an aggregate amount or value in excess of $150; the amount, date, and purpose of each of those expenditures; and the question of public policy or the name and address of, and the office sought by, each candidate on whose behalf that expenditure was made;

(13) the full name and mailing address of each person to whom an expenditure for personal services, salaries, and reimbursed expenses in excess of $150 has been made and that is not otherwise reported, including the amount, date, and purpose of the expenditure;

(14) the value of each asset held as an investment, as of the final day of the reporting period;

(15) the total sum of expenditures made by the committee during the reporting period; and

(16) the full name and mailing address of each person to whom the committee owes debts or obligations in excess of $150 and the amount of those debts or obligations; and .

(17) the beneficial owner of any entity, other than a political committee or a natural person, that contributes more than $10,000 to a ballot initiative committee or an independent expenditure committee during any election period; if the entity does not have a beneficial owner, the recipient shall so declare.

For purposes of reporting campaign receipts and expenses, income from investments shall be included as receipts during the reporting period they are actually received. The gross purchase price of each investment shall be reported as an expenditure at time of purchase. Net proceeds from the sale of an investment shall be reported as a receipt. During the period investments are held they shall be identified by name and quantity of security or instrument on each semi-annual report during the period.

(b) Each report of a campaign contribution of $1,000 or more required under subsection (c) of Section 9-10 shall disclose the following:

(1) the name and address of the political committee;

(2) the name and address of the person submitting the report on behalf of the committee, if other than the chairman or treasurer; and

(3) the full name and mailing address of each person who has made a contribution of $1,000 or more.

(c) Each quarterly report shall include the following information regarding any independent expenditures made during the reporting period: (1) the full name and mailing address of each person to whom an expenditure in excess of $150 has been made in connection with an independent expenditure; (2) the amount, date, and purpose of such expenditure; (3) a statement whether the independent expenditure was in support of or in opposition to a particular candidate; (4) the name of the candidate; (5) the office and, when applicable, district, sought by the candidate; and (6) a certification, under penalty of perjury, that such 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 committee. The report shall also include (I) the total of all independent expenditures of $150 or less made during the reporting period and (II) the total amount of all independent expenditures made during the reporting period.

(d) The Board shall by rule define a "good faith effort".

The reports of campaign contributions filed under this Article shall be cumulative during the reporting period to which they relate.

(e) Each report shall be verified, dated, and signed by either the treasurer of the political committee or the candidate on whose behalf the report is filed and shall contain the following verification:

"I declare that this report (including any accompanying schedules and statements) has been examined by me and, to the best of my knowledge and belief, is a true, correct, and complete report as required by Article 9 of the Election Code. I understand that willfully filing a false or incomplete statement is subject to a civil penalty of up to $5,000.".

(f) A political committee may amend a report filed under subsection (a) or (b). The Board may reduce or waive a fine if the amendment is due to a technical or inadvertent error and the political committee files the amended report, except that a report filed under subsection (b) must be amended within 5 business days. The State Board shall ensure that a description of the amended information is available to the public. The Board may promulgate rules to enforce this subsection.

(Source: P.A. 96-832, eff. 1-1-11.)

Section 99. Effective date. This Act takes effect upon becoming law.