83R8944 CAE-F

By: Villalba H.B. No. 3258

A BILL TO BE ENTITLED

AN ACT

relating to political contributions and expenditures; providing civil and criminal penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 251.001, Election Code, is amended by amending Subdivisions (8), (12), and (16) and adding Subdivisions (21), (22), (23), (24), and (25) to read as follows:

(8) "Independent [Direct campaign] expenditure" means a campaign expenditure by a person for a communication expressly advocating the election or defeat of a clearly identified candidate that is not made in cooperation or consultation, or at the request or suggestion of, a candidate, a candidate's campaign committee, the agent of a candidate or candidate's campaign committee, a political party committee, or the agent of a political party. An independent expenditure [that] does not constitute a campaign contribution by the person making the expenditure.

(12) "Political committee" means any committee, club, association, or other combination of two or more persons, the major purpose of which is to support or oppose one or more ballot measures, candidates, or political parties through [a group of persons that has as a principal purpose accepting] political contributions or [making] political expenditures. A major purpose includes:

(A) a committee, club, association, or other combination of two or more persons designating itself as a political organization in its filings with the Internal Revenue Service or specifically identifying support or opposition to one or more ballot measures, candidates, or political parties as its primary objective in its organizing document, fund-raising appeals, or public statements; or

(B) the making of a political expenditure to support or oppose ballot measures, candidates, and political parties constituting a majority of its total spending during any election cycle.

(16) "Political advertising" means a communication expressly advocating the election or defeat of a clearly identified candidate or expressly advocating support for or opposition to a measure by means of a broadcast, cable, or satellite communication, newspaper, magazine, outdoor advertising facility, electronic communication, mailing, telephone bank to the general public, text message, or any other form of general public political advertising. Political advertising does not include:

(A) Internet communications, except for communications placed for a fee on another person's website; or

(B) electronic communications or text messages of an identical or substantially similar nature sent to fewer than 25 recipients within any 30-day period [supporting or opposing a candidate for nomination or election to a public office or office of a political party, a political party, a public officer, or a measure that:

[(A) in return for consideration, is published in a newspaper, magazine, or other periodical or is broadcast by radio or television; or

[(B) appears:

[(i) in a pamphlet, circular, flier, billboard or other sign, bumper sticker, or similar form of written communication; or

[(ii) on an Internet website].

(21) "Clearly identified candidate" means the candidate's name, nickname, photograph, or drawing appears, or the identity of the candidate is otherwise apparent through an unambiguous reference, including a reference to the candidate's status as a candidate.

(22) "Coordinated" means in cooperation or consultation, or at the request or suggestion of, a candidate, a candidate's campaign committee, the agent of the candidate or candidate's campaign committee, a political party committee, or the agent of a political party committee.

(23) "Coordinated expenditure" means an expenditure by a person for a communication expressly advocating the election or defeat of a clearly identified candidate that is coordinated with a candidate, a candidate's campaign committee, the agent of the candidate or candidate's campaign committee, a political party committee, or the agent of a political party committee.

(24) "Election cycle" means the two-year period beginning January 1 of an odd-numbered year and ending on December 31 of the subsequent even-numbered year.

(25) "Express advocacy" means any communication that in context can have no other reasonable meaning than to urge the election or defeat of one or more clearly identified candidates or to urge support for or opposition to a measure.

SECTION 2. Section 251.004(a), Election Code, is amended to read as follows:

(a) Venue for a criminal offense prescribed by this title is in the county of residence of the defendant, unless the defendant is not a Texas resident, in which case venue is in Travis County. The residence of a person other than an individual is the county in which the defendant's principal place of business is located.

SECTION 3. Section 252.001, Election Code, is amended to read as follows:

Sec. 252.001. APPOINTMENT OF CAMPAIGN TREASURER REQUIRED. Each candidate and each political committee shall appoint a campaign treasurer as provided by this chapter. An individual shall file a campaign treasurer appointment not later than the 10th day after the date the individual becomes a candidate. A political committee shall file a campaign treasurer appointment not later than the 10th day after the date the committee accepts campaign contributions in excess of $500 or makes or authorizes campaign expenditures in excess of $500. Notwithstanding this section, an unregistered political committee shall file a campaign treasurer appointment not later than 24 hours after making or authorizing a campaign expenditure that requires the committee to file a special report as required by Section 254.039.

SECTION 4. Sections 252.003(a) and (d), Election Code, are amended to read as follows:

(a) In addition to the information required by Section 252.002, a campaign treasurer appointment by a general-purpose committee must include:

(1) the full name, and any acronym of the name that will be used in the name of the committee as provided by Subsection (d), of each corporation, labor organization, association, limited liability company, limited liability partnership, or partnership [or other association or legal entity] that directly establishes, administers, or controls the committee, if applicable, or the name of each person who determines to whom the committee makes contributions or the name of each person who determines for what purposes the committee makes expenditures;

(2) the full name and address of each general-purpose committee to whom the committee intends to make political contributions; and

(3) the name of the committee and, if the name is an acronym, the words the acronym represents.

(d) The name of a general-purpose committee must include the name of each corporation, labor organization, association, limited liability company, limited liability partnership, or partnership [or other association or legal entity other than an individual] that directly establishes, administers, or controls the committee. The name of an entity that is required to be included in the name of the committee may be a commonly recognized acronym by which the entity is known.

SECTION 5. Section 253.031, Election Code, is amended by amending Subsections (a) and (b) and adding Subsection (c-1) to read as follows:

(a) Once a candidate has filed a campaign treasurer appointment, the [A] candidate may not knowingly accept a campaign contribution or make or authorize a campaign expenditure at a time when a campaign treasurer appointment for the candidate is not in effect.

(b) Once a [A] political committee has filed a campaign treasurer appointment, the political committee may not knowingly accept a political contribution [contributions totaling more than $500] or make or authorize a political expenditure [expenditures totaling more than $500] at a time when a campaign treasurer appointment for the committee is not in effect.

(c-1) Subsection (c) does not apply to a general-purpose committee that, after knowingly making or authorizing a political contribution or political expenditure, files a special report in accordance with Section 254.039.

SECTION 6. Section 253.037, Election Code, is amended by adding Subsection (a-1) to read as follows:

(a-1) Subsection (a) does not apply to a general-purpose committee that, after knowingly making or authorizing a political contribution or political expenditure, files a special report in accordance with Section 254.039.

SECTION 7. Section 253.091, Election Code, is amended to read as follows:

Sec. 253.091. CORPORATIONS AND OTHER ENTITIES COVERED. This subchapter applies only to corporations that are governed under Title 2, Business Organizations Code, entities that can be characterized as corporations organized under federal law or the law of another state, and associations, limited liability companies, limited liability partnerships, and partnerships [organized under the Texas Business Corporation Act, the Texas For-Profit Corporation Law, the Texas Non-Profit Corporation Act, the Texas Nonprofit Corporation Law, federal law, or law of another state or nation].

SECTION 8. Sections 253.100(a), (b), and (d), Election Code, are amended to read as follows:

(a) A corporation, association, limited liability company, limited liability partnership, or partnership [acting alone or with one or more other corporations,] may make one or more political expenditures to finance the establishment or administration of a general-purpose committee. In addition to any other expenditure that is considered permissible under this section, a corporation, association, limited liability company, limited liability partnership, or partnership may make an expenditure for the maintenance and operation of a general-purpose committee that it establishes or administers, including an expenditure for:

(1) office space maintenance and repairs;

(2) telephone and Internet services;

(3) office equipment;

(4) utilities;

(5) general office and meeting supplies;

(6) salaries for routine clerical, data entry, and administrative assistance necessary for the proper administrative operation of the committee;

(7) legal and accounting fees for the committee's compliance with this title;

(8) routine administrative expenses incurred in establishing and administering a general-purpose political committee;

(9) management and supervision of the committee, including expenses incurred in holding meetings of the committee's governing body to interview candidates and make endorsements relating to the committee's support;

(10) the recording of committee decisions;

(11) expenses incurred in hosting candidate forums in which all candidates for a particular office in an election are invited to participate on the same terms; or

(12) expenses incurred in preparing and delivering committee contributions.

(b) A corporation, association, limited liability company, limited liability partnership, or partnership may make political expenditures to finance the solicitation of political contributions to a general-purpose committee assisted under Subsection (a) from its [the] stockholders, employees, or families of stockholders or employees [of one or more corporations].

(d) A corporation, [or] labor organization, association, limited liability company, limited liability partnership, or partnership may not make expenditures under this section for:

(1) political consulting to support or oppose a candidate;

(2) telephoning or telephone banks to communicate with the public;

(3) brochures and direct mail supporting or opposing a candidate;

(4) partisan voter registration and get-out-the-vote drives;

(5) political fund-raising other than from its stockholders or members, as applicable, or the families of its stockholders or members;

(6) voter identification efforts, voter lists, or voter databases that include persons other than its stockholders or members, as applicable, or the families of its stockholders or members;

(7) polling designed to support or oppose a candidate other than of its stockholders or members, as applicable, or the families of its stockholders or members; or

(8) recruiting candidates.

SECTION 9. Section 253.132(a), Election Code, is amended to read as follows:

(a) A corporation or labor organization that knowingly makes a campaign contribution to a political committee or an independent [a direct campaign] expenditure in violation of Subchapter D is liable for damages as provided by this section to each political committee of opposing interest in the election in connection with which the contribution or expenditure is made.

SECTION 10. Section 253.157(e)(1), Election Code, is amended to read as follows:

(1) "Law firm" means a partnership, limited liability partnership, limited liability company, professional limited liability company, or professional corporation organized for the practice of law.

SECTION 11. The heading to Section 253.171, Election Code, is amended to read as follows:

Sec. 253.171. CONTRIBUTION FROM OR INDEPENDENT [DIRECT CAMPAIGN] EXPENDITURE BY POLITICAL PARTY.

SECTION 12. Section 253.171(a), Election Code, is amended to read as follows:

(a) Except as provided by Subsection (b), a political contribution to or an independent [a direct campaign] expenditure on behalf of a complying candidate that is made by the principal political committee of the state executive committee or a county executive committee of a political party is considered to be a political expenditure by the candidate for purposes of the expenditure limits prescribed by Section 253.168.

SECTION 13. Sections 254.031(a) and (a-1), Election Code, are amended to read as follows:

(a) Except as otherwise provided by this chapter, each report filed under this chapter must include:

(1) the amount of cash on hand at the beginning of the reporting period;

(2) for the reporting period, the total amount of all receipts actually received by the candidate, officeholder, or political committee, and the total amount of all receipts actually received by the candidate, officeholder, or political committee in the following categories:

(A) contributions from persons;

(B) for a candidate, officeholder, or specific-purpose committee supporting a candidate or assisting an officeholder, loans made by or guaranteed by the candidate or officeholder;

(C) all other loans;

(D) rebates, refunds, and other offsets to operating expenditures; and

(E) dividends, interest, and other forms of receipts;

(3) the identification of each:

(A) individual who makes a contribution to the candidate, officeholder, or political committee during the reporting period, whose contributions have an aggregate amount or value in excess of $50 within the reporting period, or in any lesser amount if the candidate, officeholder, or political committee elects, together with the date and amount of the contribution;

(B) person, other than an individual, who makes a contribution to the candidate, officeholder, or political committee during the reporting period, together with the date and amount of any contribution;

(C) person who makes a loan to the candidate, officeholder, or political committee during the reporting period, together with the identification of any endorser or guarantor of a loan, and the date and amount of value of the loan;

(D) person who provides a rebate, refund, or other offset to operating expenditures to the candidate, officeholder, or political committee in an aggregate amount or value in excess of $50 within the reporting period, together with the date and amount of the offset; and

(E) person who provides any dividend, interest, or other receipt to the candidate, officeholder, or political committee in an aggregate value or amount in excess of $50 within the reporting period, together with the date and amount of the receipt;

(4) for the reporting period, the total amount of all disbursements actually made by the candidate, officeholder, or political committee, and all disbursements actually made by the candidate, officeholder, or political committee in the following categories:

(A) expenditures made to meet the candidate's, officeholder's, or political committee's operating expenses;

(B) for a candidate, officeholder, or specific-purpose committee supporting a candidate or assisting an officeholder, the repayment of loans made by or guaranteed by the candidate or officeholder;

(C) repayment of all other loans;

(D) contribution refunds and other offsets to contributions;

(E) contributions made by the candidate, officeholder, or political committee;

(F) loans made by the candidate, officeholder, or political committee;

(G) independent expenditures made by the candidate, officeholder, or political committee; and

(H) any other disbursements;

(5) the name and address of each:

(A) person to whom a disbursement in an aggregate amount or value in excess of $50 within the reporting period is made by the candidate, officeholder, or political committee, together with the date, amount, and purpose of the disbursement;

(B) person who receives any disbursement during the reporting period in an aggregate amount or value in excess of $50 in connection with an independent expenditure by the candidate, officeholder, or political committee, together with the date, amount, and purpose of the independent expenditure, and a statement that indicates whether the independent expenditure is in support of, or in opposition to, a candidate, as well as the name of and office sought by the candidate;

(C) person who has received a loan from the candidate, officeholder, or political committee during the reporting period, together with the date and amount of the loan;

(D) person who receives a loan repayment from the candidate, officeholder, or political committee during the reporting period, together with the date and amount of the loan repayment; and

(E) person who receives a contribution refund or other offset to contributions from the candidate, officeholder, or political committee in which the contribution was reported under Subdivision (3)(A), together with the date and amount of the offset;

(6) the amount and nature of outstanding debts and obligations owed by or to a candidate, officeholder, or political committee, the date incurred, and if the debts and obligations are settled for less than the reported amount or value, a statement as to the circumstances and conditions under which the debts or obligations were settled and the consideration for that settlement;

(7) the amount of reported cash on hand at the end of the reporting period, as calculated by adding the reported cash on hand at the beginning of the reporting period with total receipts and offsets to disbursements, less disbursements and offsets to receipts during the reporting period; and

(8) the amount of funds and assets in the candidate's, officeholder's, or political committee's bank depositories at the end of the reporting period [political contributions from each person that in the aggregate exceed $50 and that are accepted during the reporting period by the person or committee required to file a report under this chapter, the full name and address of the person making the contributions, and the dates of the contributions;

[(2) the amount of loans that are made during the reporting period for campaign or officeholder purposes to the person or committee required to file the report and that in the aggregate exceed $50, the dates the loans are made, the interest rate, the maturity date, the type of collateral for the loans, if any, the full name and address of the person or financial institution making the loans, the full name and address, principal occupation, and name of the employer of each guarantor of the loans, the amount of the loans guaranteed by each guarantor, and the aggregate principal amount of all outstanding loans as of the last day of the reporting period;

[(3) the amount of political expenditures that in the aggregate exceed $100 and that are made during the reporting period, the full name and address of the persons to whom the expenditures are made, and the dates and purposes of the expenditures;

[(4) the amount of each payment made during the reporting period from a political contribution if the payment is not a political expenditure, the full name and address of the person to whom the payment is made, and the date and purpose of the payment;

[(5) the total amount or a specific listing of the political contributions of $50 or less accepted and the total amount or a specific listing of the political expenditures of $100 or less made during the reporting period;

[(6) the total amount of all political contributions accepted and the total amount of all political expenditures made during the reporting period;

[(7) the name of each candidate or officeholder who benefits from a direct campaign expenditure made during the reporting period by the person or committee required to file the report, and the office sought or held, excluding a direct campaign expenditure that is made by the principal political committee of a political party on behalf of a slate of two or more nominees of that party;

[(8) as of the last day of a reporting period for which the person is required to file a report, the total amount of political contributions accepted, including interest or other income on those contributions, maintained in one or more accounts in which political contributions are deposited as of the last day of the reporting period;

[(9) any credit, interest, rebate, refund, reimbursement, or return of a deposit fee resulting from the use of a political contribution or an asset purchased with a political contribution that is received during the reporting period and the amount of which exceeds $100;

[(10) any proceeds of the sale of an asset purchased with a political contribution that is received during the reporting period and the amount of which exceeds $100;

[(11) any investment purchased with a political contribution that is received during the reporting period and the amount of which exceeds $100;

[(12) any other gain from a political contribution that is received during the reporting period and the amount of which exceeds $100; and

[(13) the full name and address of each person from whom an amount described by Subdivision (9), (10), (11), or (12) is received, the date the amount is received, and the purpose for which the amount is received].

(a-1) A de minimis error in calculating or reporting a cash balance or bank depository balance under Subsection (a)(1), (7), or (8) [(a)(8)] is not a violation of this section.

SECTION 14. The heading to Section 254.034, Election Code, is amended to read as follows:

Sec. 254.034. TIME OF RECEIVING [ACCEPTING] CONTRIBUTION.

SECTION 15. Section 254.034, Election Code, is amended by adding Subsection (a-1) to read as follows:

(a-1) For any political contribution that is received and accepted by a candidate, officeholder, or political committee, the date the political contribution was received is the date the contributor relinquished control of the contribution, if the date is readily determinable. If the candidate, officeholder, or political committee is unable to readily determine the date the contributor relinquished control of the contribution, the date the political contribution was received is the date the contribution is actually received by the candidate, officeholder, or political committee.

SECTION 16. The heading to Section 254.035, Election Code, is amended to read as follows:

Sec. 254.035. TIME OF MAKING EXPENDITURE OR INCURRING DEBT OR OBLIGATION.

SECTION 17. Section 254.035, Election Code, is amended by amending Subsections (a) and (b) and adding Subsection (a-1) to read as follows:

(a) For purposes of reporting under this chapter, a political expenditure is not considered to have been made until the candidate, officeholder, or political committee relinquishes control of the funds [amount is readily determinable by the person making the expenditure, except as provided by Subsection (b)].

(a-1) For purposes of reporting under this chapter, a debt or obligation is not considered to be owed until the amount is readily determinable by the person that owes the debt or obligation.

(b) If the character of a debt or obligation [an expenditure] is such that under normal business practice the amount is not disclosed until receipt of a periodic bill, the debt or obligation [expenditure] is not considered owed [made] until the date the bill is received.

SECTION 18. Section 254.038(c), Election Code, is amended to read as follows:

(c) A report under this section shall be filed electronically, by telegram or telephonic facsimile machine, or by hand, in the form required by Section 254.036. The commission must receive a report under this section filed by telegram, telephonic facsimile machine, or hand not later than 5 p.m. of the first business day after the date the contribution is received [accepted]. The commission must receive a report under this section filed electronically not later than midnight of the first business day after the date the contribution is received [accepted]. A report under this section is not required to be accompanied by the affidavit required under Section 254.036(h) or to be submitted on a form prescribed by the commission. A report under this section that complies with Section 254.036(a) must be accompanied by an affidavit under Section 254.036(c)(1) unless the candidate or committee has submitted an affidavit under Section 254.036(c)(1) with another report filed in connection with the election for which a report is required under this section.

SECTION 19. The heading to Subchapter J, Chapter 254, Election Code, is amended to read as follows:

SUBCHAPTER J. REPORTING BY CERTAIN PERSONS MAKING INDEPENDENT

[DIRECT CAMPAIGN] EXPENDITURES

SECTION 20. The heading to Section 254.261, Election Code, is amended to read as follows:

Sec. 254.261. INDEPENDENT [DIRECT CAMPAIGN] EXPENDITURE EXCEEDING $100.

SECTION 21. Section 254.261, Election Code, is amended by amending Subsection (a) and adding Subsections (e) and (f) to read as follows:

(a) A person [not acting in concert with another person] who makes one or more independent [direct campaign] expenditures in an election from the person's own property shall comply with this chapter as if the person were the campaign treasurer of a general-purpose committee that does not file monthly reports under Section 254.155.

(e) When evaluating a political expenditure to determine whether the expenditure constitutes an independent expenditure or a coordinated expenditure, there is a rebuttable presumption that a political expenditure for political advertising is a coordinated expenditure if:

(1) the political expenditure is made by a person in cooperation or consultation with, at the request, suggestion, or direction of, or pursuant to a general or particular understanding with:

(A) a candidate or political party committee; or

(B) a consultant or other agent acting on behalf of a candidate or political party committee;

(2) the political expenditure is made by a person for the production, dissemination, distribution, or publication, in whole or in substantial part, of any political advertising prepared by:

(A) a candidate or political party committee; or

(B) a consultant or other agency acting on behalf of a candidate or political party committee;

(3) the political expenditure is made by a person based on nonpublic information about a candidate's or political party committee's plans, projects, or needs that has been provided by:

(A) a candidate or political party committee; or

(B) a consultant or other agent acting on behalf of a candidate or political party committee, with the intent that the expenditure be made;

(4) the political expenditure is made by, or at the direction or advice of, an individual or vendor who, in the same election cycle, is providing services or has provided services to the candidate benefiting from the expenditure or a state or local political party committee in the state in the following capacities:

(A) development of strategic content of political advertising and media strategy, including the selection or purchasing of advertising slots;

(B) selection of audiences;

(C) polling;

(D) fund-raising;

(E) producing a public communication;

(F) identifying voters or developing voter lists, mailing lists, or donor lists; or

(G) selecting personnel, contractors, or subcontractors;

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

(6) the person making the political expenditure provides nonpublic information to the candidate who benefits from the expenditure or political party committee regarding the contents, timing, intended audience, location, or frequency of dissemination of the political advertising.

(f) A communication disseminated to the public in which a candidate or officeholder is clearly identified only in the candidate's or officeholder's capacity as the owner or operator of a business is not a coordinated communication with respect to the clearly identified candidate if:

(1) the medium, timing, content, and geographic distribution of the communication are consistent with similar communications made before the candidacy or consistent with communications made by similar businesses; and

(2) the communication does not promote, support, attack, or oppose the candidate or another candidate who seeks the same office as the candidate.

SECTION 22. Section 254.262, Election Code, is amended to read as follows:

Sec. 254.262. TRAVEL EXPENSE. An independent [A direct campaign] expenditure consisting of personal travel expenses incurred by a person may be made without complying with Section 254.261.

SECTION 23. Sections 252.0011 and 254.035(c) and (d), Election Code, are repealed.

SECTION 24. (a) The changes in law made by this Act apply only to a political contribution or political expenditure made on or after September 1, 2013. A political contribution or political expenditure made before September 1, 2013, is governed by the law in effect immediately before that date, and the former law is continued in effect for that purpose.

(b) Section 254.031, Election Code, as amended by this Act, applies only to a report under Chapter 254, Election Code, that covers a reporting period that begins on or after January 1, 2014. A report under Chapter 254, Election Code, that covers a reporting period that begins before January 1, 2014, is governed by Section 254.031, Election Code, as it existed before amendment by this Act, and the former law is continued in effect for that purpose.

(c) The change in law made by this Act applies only to an offense committed on or after September 1, 2013. For purposes of this section, an offense is committed before September 1, 2013, if any element of the offense occurs before that date.

(d) An offense committed before September 1, 2013, is covered by the law in effect when the offense was committed, and the former law is continued in effect for that purpose.

SECTION 25. This Act takes effect September 1, 2013.