S.B. 240
128th General Assembly
(As Introduced)
Sens. Husted, Grendell, Wagoner, Jones
BILL SUMMARY
· Generally eliminates the prohibitions against corporations and labor organizations making independent expenditures and electioneering communications.
· Generally regulates independent expenditures and electioneering communications made by corporations and labor organizations in the same manner as they are regulated under existing law for other entities.
· Requires corporations and labor organizations making independent expenditures to report those expenditures on a weekly basis during the 90 days before a primary or general election.
· Requires corporations and labor organizations making independent expenditures to identify the source of any amounts the corporation or labor organization receives during the filing period that exceeds $5,000 and that is not received in the ordinary course of business or in exchange for goods and services.
· Prohibits a foreign corporation and a subsidiary of a foreign corporation from making an independent expenditure, making an electioneering communication, or making a contribution for the purpose of funding an electioneering communication, and requires a corporation that violates this ban to be fined an amount equal to three times the amount expended, disbursed, or contributed.
CONTENT AND OPERATION
Ohio law currently contains prohibitions against corporations and labor organizations making independent expenditures and electioneering communications in support of or opposition to a candidate (R.C. 3517.105, 3517.1011, and 3599.03). Pursuant to a recent United States Supreme Court case, those prohibitions appear to be unenforceable. In Citizens United v. Federal Elections Comm'n, 130 S.Ct. 876 (2010), the Court determined that corporations generally cannot be prohibited from making independent expenditures. It invalidated, on First Amendment grounds, federal prohibitions substantially similar to those currently existing in Ohio law.
The bill eliminates the current prohibitions against corporations and labor organizations making independent expenditures and electioneering communications in support of or in opposition to candidates for office (R.C. 3517.1011 and 3599.03). The bill also eliminates the related penalties (R.C. 3517.992(CC)). Instead, the bill regulates corporate and labor independent expenditures and electioneering communications similar to how they are regulated under existing law for other entities.
Continuing law defines an independent expenditure as an expenditure by a person advocating the election or defeat of an identified candidate, that is not made with the consent of, in coordination, cooperation, or consultation with, or at the request or suggestion of any candidate or of the campaign committee or agent of the candidate. The bill includes corporations and labor organizations in the list of "persons" who may make an independent expenditure. (R.C. 3517.01(B)(17).)
An electioneering communication is a broadcast, cable, or satellite communication that refers to a clearly identified candidate and that is made during the 30 days before the primary or general election. An electioneering communication, like an independent expenditure, cannot be coordinated with a candidate's campaign committee. Existing law prohibits any electioneering communication from being made using a contribution from a corporation or labor organization. The bill eliminates this prohibition. (R.C. 3517.1011.)
Under existing law, corporations and labor organizations that otherwise are prohibited from making independent expenditures are permitted to communicate the corporation's or labor organization's political standpoint if the recipients of the communication are stockholders, members, donors, trustees, officers, directors, or their family members. Because the bill eliminates the general prohibition against corporations and labor organizations making independent expenditures, the bill also eliminates the related exception permitting only this one type of political communication. (R.C. 3599.03(F).)
Instead of banning independent expenditures by corporations and labor organizations, the bill regulates them similar to how other independent expenditures are regulated. Under the bill, a corporation or labor organization that makes an independent expenditure must include a notice in the advertising resulting from the expenditure that it is not authorized by the candidate or campaign committee and specifying who paid for that advertising. The corporation or labor organization also must file a statement itemizing all independent expenditures it makes. The statement must be filed at the same time as other statements are filed under the Campaign Finance Law, except that, during the 90 days preceding a primary or general election, a corporation or labor organization that is required to file independent expenditure statements must file those statements on a weekly basis. (R.C. 3517.105(B) and 3599.03(C)(2).)
If a corporation or labor organization makes independent expenditures and thus is required to file a statement itemizing those expenditures, the corporation or labor organization also must identify the source of any amounts the corporation or labor organization received during the period since the most recently filed statement that, in the aggregate, exceed $5,000 and that were not received in the ordinary course of business and were not received in exchange for goods or services provided by the corporation or labor organization (R.C. 3517.105(B)(2)(b)).
The bill prohibits a foreign corporation and a subsidiary of a foreign corporation from making an independent expenditure, making a disbursement for the direct costs of producing and airing electioneering communications, or making a contribution to another entity for the purpose of funding the direct costs of producing and airing electioneering communications[1] (R.C. 3517.13(AA)). A corporation that knowingly violates this prohibition must be fined an amount equal to three times the amount expended, disbursed, or contributed in violation of the law (R.C. 3517.992(DD)).
Two provisions of the Tax Law require corporations and public utilities to file statements regarding their political activity. Under existing law, those statements generally require the corporations and public utilities to state that they have not supported or opposed a candidate or spent money for any political purpose. Since the bill permits corporations and public utilities to make independent expenditures, the bill changes these statements to specify that the corporations or public utilities have not expended money in violation of Title XXXV of the Revised Code, which includes the Election Law. (R.C. 5727.61 and 5733.27.)
HISTORY
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ACTION |
DATE |
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Introduced |
03-16-10 |
s0240-i-128.docx/kl
[1] For the purpose of this prohibition, the bill uses the federal tax law definition of a "foreign corporation" (26 U.S.C. 7701). The bill defines a "subsidiary of a foreign corporation" as a domestic corporation the majority of the stock with voting rights of which is owned or controlled, directly or indirectly, by one or more foreign corporations. (R.C. 3517.13(AA).)