Sub. S.B. 240
128th General Assembly
(As Passed by the Senate)
Sens. Husted, Grendell, Wagoner, Jones, Cafaro, Faber, Gibbs, Harris, R. Miller, Morano, Sawyer, Schaffer, Smith, Strahorn, Turner, Widener, Wilson, Carey, Kearney
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.
· Permits corporations, nonprofit corporations, and labor organizations to make political communications to members, employees, and officers without being required to report those communications as independent expenditures, similar to how those entities may make communications under current law.
· 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 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.
· Prohibits a foreign national from making any disbursement for the direct costs of producing and airing electioneering communications.
· Requires the reporting of independent expenditures only if the amount spent is $500 or more.
· Specifies that an independent expenditure of $10,000 or more made between the filing deadline and the general election in support of or opposition to a candidate must be deemed an electioneering communication and reported in accordance with the Electioneering Communication Law, which requires an initial report within 24 hours of the expenditure and weekly reports thereafter, as long as any additional money is spent.
· Increases the threshold for an independent expenditure to contain a disclaimer that it was not produced by the campaign to $500, regardless of the type of independent expenditure.
· Eliminates current language that requires an electioneering communication made during the 30 days before an election to be reported as an expenditure or an independent expenditure.
· Revises the definition of "political action committee" to apply only to an entity that has more than $2,500 in its treasury and makes contributions and expenditures in excess of $1,000 in a calendar year, and eliminates an exception for "political clubs," since they do not meet the new monetary thresholds.
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. The bill continues to allow corporations and labor organizations to make political communications to their stockholders, members, donors, trustees, officers, directors, and their family members. Although political communications generally are required to be reported by the bill, political communications to these specific individuals are exempt from the reporting requirements. Thus, corporations and labor organizations may continue to make political communications to related individuals as under existing law, without being required to report those communications. (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 an independent expenditure of $10,000 or more that is made during the 90 days preceding a primary or general election must be reported as an electioneering communication (see "Reporting independent expenditures in excess of $10,000," below). (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)(d)).
The bill prohibits 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)).
Continuing law prohibits a foreign national from making independent expenditures either directly or indirectly. The bill expands this prohibition to also prohibit a foreign national from making any disbursement for the direct costs of producing or airing electioneering communications. (R.C. 3517.13(W)).
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.)
Current law requires any individual or entity that makes an independent expenditure in support of or opposition to a candidate to file a statement detailing that independent expenditure. An individual or entity that makes an independent expenditure related to a ballot issue must report the independent expenditure if that expenditure exceeds $100. The bill establishes a $500 reporting threshold for all independent expenditures, regardless of whether they support or oppose a candidate or ballot issue. Thus, under the bill, an individual or entity that makes an independent expenditure of $500 or more must file campaign finance statements regarding that independent expenditure. (R.C. 3517.105.)
Current law requires independent expenditures to be reported at the same times as other campaign finance statements are required to be filed. A separate provision of the Revised Code, the Electioneering Communication Law, requires expenditures for making certain broadcast communications in the period immediately preceding an election to be reported within 24 hours. If disbursements for the purpose of making electioneering communications exceeding $10,000 are made during the period immediately preceding an election, the disbursement must be reported within 24 hours. Thereafter, the entity making the disbursement must file weekly reports, if additional disbursements are made during the week. (R.C. 3517.1011.)
The bill specifies that an independent expenditure of $10,000 or more in support of or opposition to a candidate that is made during the period beginning 90 days before the primary election and ending on the day of the general election must be deemed an electioneering communication and reported in accordance with the Electioneering Communication Law. Therefore, the expenditure must be reported within 24 hours after it is made, and the entity making the expenditure must make weekly reports thereafter, as long as any additional money is spent during that time. (R.C. 3517.105(B)(2)(c).)
Under continuing law, if public political advertising is made through an independent expenditure, the advertising must contain a disclaimer if the cost of that advertising exceeds specified amounts. The disclaimer must specify that the advertising is not authorized by the applicable campaign committee and must identify the entity that made the independent expenditure. Currently, the disclaimer must be included on advertising regarding local candidates and ballot issues if the independent expenditure exceeds $100, on advertising regarding candidates for the office of member of the General Assembly if the independent expenditure exceeds $250, and on advertising regarding statewide candidates and ballot issues if the independent expenditure exceeds $500. The bill establishes a uniform $500 threshold for including the required disclaimer. Thus, under the bill, any public political advertising arising from an independent expenditure must include a disclaimer if the independent expenditure was for $500 or more. (R.C. 3517.105.)
Current law requires an electioneering communication made during the 30 days preceding an election to be reported as an expenditure or an independent expenditure. The bill eliminates this requirement as part of its other changes to the reporting requirements for independent expenditures and electioneering communications. (R.C. 3517.01.)
Current law defines a "political action committee" as a combination of two or more persons, the primary or major purpose of which is to support or oppose any candidate, political party, or issue, or to influence the result of any election through express advocacy, and that is not a political party, a campaign committee, a political contributing entity, or a legislative campaign fund. Expressly exempted from this definition are (1) a continuing association that makes disbursements for the direct costs of producing or airing electioneering communications and that does not engage in express advocacy and (2) a political club that is formed primarily for social purposes and that consists of 100 members or less, has officers and periodic meetings, has less than $2,500 in its treasury at all times, and makes an aggregate total contribution of $1,000 or less per calendar year.
The bill eliminates the exception for political clubs and specifies that an entity is a political action committee only if it has more than $2,500 in its treasury and makes contributions and expenditures in excess of $1,000 in a calendar year. (R.C. 3517.01.)
HISTORY
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ACTION |
DATE |
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Introduced |
03-16-10 |
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Reported, S. State & Local Gov't & Veterans Affairs |
05-27-10 |
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Passed Senate (32-0) |
05-27-10 |
S0240-PS-128.docx/jc
[1] For the purpose of this prohibition, the bill uses the federal tax law definition of a "foreign corporation" (26 U.S.C. 7701) (R.C. 3517.13(AA)).