85R2285 EES-D

By: Cook H.J.R. No. 112

A JOINT RESOLUTION

proposing a constitutional amendment requiring certain persons or groups to report certain contributions and political expenditures.

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

SECTION 1. Article XVI, Texas Constitution, is amended by adding Section 75 to read as follows:

Sec. 75. (a) In this section:

(1) "Campaign contribution" means a contribution to a candidate or political committee that is offered or given with the intent that it be used in connection with a campaign for elective office or on a measure. Whether a contribution is made before, during, or after an election does not affect its status as a campaign contribution.

(2) "Campaign expenditure" means an expenditure made by any person in connection with a campaign for an elective office or on a measure. Whether an expenditure is made before, during, or after an election does not affect its status as a campaign expenditure.

(3) "Candidate" means a person who knowingly and willingly takes affirmative action for the purpose of gaining nomination or election to public office or for the purpose of satisfying financial obligations incurred by the person in connection with the campaign for nomination or election. Examples of affirmative action include:

(A) the filing of a campaign treasurer appointment, except that the filing does not constitute candidacy or an announcement of candidacy for purposes of the automatic resignation provisions of Section 65 of this article or Section 11, Article XI;

(B) the filing of an application for a place on a ballot;

(C) the filing of an application for nomination by convention;

(D) the filing of a declaration of intent to become an independent candidate or a declaration of write-in candidacy;

(E) the making of a public announcement of a definite intent to run for public office in a particular election, regardless of whether the specific office is mentioned in the announcement;

(F) before a public announcement of intent, the making of a statement of definite intent to run for public office and the soliciting of support by letter or other mode of communication;

(G) the soliciting or accepting of a campaign contribution or the making of a campaign expenditure; and

(H) the seeking of the nomination of an executive committee of a political party to fill a vacancy.

(4) "Commission" means the Texas Ethics Commission.

(5) "Contribution" means a direct or indirect transfer of money, goods, services, or any other thing of value and includes an agreement made or other obligation incurred, whether legally enforceable or not, to make a transfer. The term includes a loan or extension of credit, other than those expressly excluded by this subdivision, and a guarantee of a loan or extension of credit, including a loan described by this subdivision. The term also includes dues and gifts. The term does not include:

(A) a loan made in the due course of business by a corporation that is legally engaged in the business of lending money and that has conducted the business continuously for more than one year before the loan is made;

(B) a commercial transaction involving the transfer for consideration of anything of value pursuant to a contract or agreement that reflects the usual and normal business practice of an industry; or

(C) an expenditure required to be reported in a lobbying activities report filed with the commission.

(6) "Contribution in connection with campaign activity" means a contribution from a donor to a person or group that, at the time that the donor makes the contribution, the donor knows or has reason to know may be used to make a political contribution or political expenditure or may be commingled with other funds used to make a political contribution or political expenditure. A donor who signs a statement indicating that the donor's contribution to the person or group may not be used to make a political contribution or political expenditure does not have reason to know that the donor's contribution may be used to make a political contribution or political expenditure.

(7) "Direct campaign expenditure" means a campaign expenditure that does not constitute a campaign contribution by the person making the expenditure.

(8) "Donor" means a person who makes a contribution to a person or group to whom this section applies, regardless of whether the person making the contribution is a member of the person or group that accepts the contribution.

(9) "Expenditure" means a payment of money or any other thing of value and includes an agreement made or other obligation incurred, whether legally enforceable or not, to make a payment.

(10) "General-purpose committee" means a political committee that has among its principal purposes:

(A) supporting or opposing:

(i) two or more candidates who are unidentified or are seeking offices that are unknown; or

(ii) one or more measures that are unidentified; or

(B) assisting two or more officeholders who are unidentified.

(11) "Labor organization" means an agency, committee, or any other organization in which employees participate that exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.

(12) "Measure" means a question or proposal submitted in an election for an expression of the voters' will and includes the circulation and submission of a petition to determine whether a question or proposal is required to be submitted in an election for an expression of the voters' will.

(13) "Officeholder contribution" means a contribution to an officeholder or political committee that is offered or given with the intent that it be used to defray expenses that:

(A) are incurred by the officeholder in performing a duty or engaging in an activity in connection with the office; and

(B) are not reimbursable with public money.

(14) "Officeholder expenditure" means an expenditure made by any person to defray expenses that:

(A) are incurred by an officeholder in performing a duty or engaging in an activity in connection with the office; and

(B) are not reimbursable with public money.

(15) "Political committee" means a group of persons that has as a principal purpose accepting political contributions or making political expenditures.

(16) "Political contribution" means a campaign contribution or an officeholder contribution.

(17) "Political expenditure" means a campaign expenditure or an officeholder expenditure.

(18) "Reportable activity" means a political contribution, political expenditure, or other activity required to be reported under state law regulating political funds and campaigns.

(b) This section applies only to a person or group that:

(1) is not a political committee;

(2) accepts one or more contributions in connection with campaign activity from a person that in the aggregate exceed $2,000 during a reporting period; and

(3) makes one or more political expenditures that in the aggregate exceed $25,000 during a calendar year, excluding:

(A) a direct campaign expenditure that a corporation or labor organization makes from its own property for the purpose of communicating directly with its stockholders or members, as applicable, or with the families of its stockholders or members;

(B) an expenditure that a corporation or labor organization makes to finance nonpartisan voter registration and get-out-the-vote campaigns aimed at its stockholders or members, as applicable, or at the families of its stockholders or members;

(C) a political expenditure that a corporation or labor organization, acting alone or with one or more other corporations or labor organizations, as applicable, makes to finance the establishment or administration of a general-purpose committee;

(D) a political expenditure that a corporation or labor organization makes to finance the solicitation of political contributions from the stockholders, members, or employees, or families of stockholders, members, or employees of one or more corporations or labor organizations, as applicable to a general-purpose committee described by Paragraph (C) of this subdivision; and

(E) a contribution made by a corporation or labor organization from its own property to a political party to be used by the political party only to:

(i) defray normal overhead and administrative or operating costs incurred by the party; or

(ii) administer a primary election or convention held by the party.

(c) Except as otherwise provided by this section, a person or group shall comply with the requirements and procedures for reporting political contributions and political expenditures established by the legislature as if the person or group were the campaign treasurer of a general-purpose committee that does not file monthly reports.

(d) A person or group is not required to file a campaign treasurer appointment for accepting contributions or making political expenditures for which reporting is required under this section, unless the person or group is otherwise required to file a campaign treasurer appointment under state law.

(e) A person or group is not required to file a report under this section if:

(1) the person or group is required to disclose the contributions and political expenditures in another report of political contributions and political expenditures required by state law within the time applicable under this section for reporting the contributions and political expenditures; or

(2) no reportable activity occurs during the reporting period.

(f) Disclosure of a contribution in the manner provided by the legislature for reports of political contributions and political expenditures by general-purpose committees is required in a report under this section only if:

(1) the contribution is a contribution in connection with campaign activity; and

(2) the aggregate amount of contributions in connection with campaign activity accepted from a person exceeds $2,000 during the reporting period.

(g) A report required under this section is not required to include:

(1) any contributions accepted by the person or group that are not contributions in connection with campaign activity;

(2) the total amount of unitemized political contributions accepted by the person or group;

(3) the total amount of political contributions maintained by the person or group;

(4) any expenditures made by the person or group that are not political expenditures;

(5) the total amount of unitemized political expenditures made by the person or group; or

(6) the principal amount of all of the person's or group's outstanding loans.

(h) The first report required to be filed in a calendar year in which the $2,000 or $25,000 threshold under Subsection (b) of this section is exceeded must include all contributions in connection with campaign activity accepted from a person that in the aggregate exceed $2,000 and all political expenditures made in the 12 months immediately preceding the acceptance of the contribution in connection with campaign activity or the making of the political expenditure that triggers the reporting requirements of this section and not previously reported as required under this section.

(i) A contribution consisting of personal travel expense incurred by an individual is not required to be reported under this section if the individual receives no reimbursement for the expense.

(j) A contribution consisting of an individual's personal service is not required to be reported under this section if the individual receives no compensation for the service.

(k) A person to whom this section applies and who, not acting in concert with another person, makes one or more direct campaign expenditures in an election from the person's own property is not required to comply with any requirements or procedures established by the legislature for separately reporting the direct campaign expenditures.

(l) Any state law generally applicable to reports of political contributions and political expenditures filed with the commission, including any penalty provision for untimely or incomplete reports, is applicable to a report filed under this section.

SECTION 2. The following temporary provision is added to the Texas Constitution:

TEMPORARY PROVISION. (a) This temporary provision applies to the constitutional amendment proposed by the 85th Legislature, Regular Session, 2017, requiring certain persons or groups who are not political committees to report certain contributions and political expenditures.

(b) The constitutional amendment takes effect January 1, 2018.

(c) The change in law made by this amendment applies only to the reporting of a contribution in connection with campaign activity or political expenditure made on or after the effective date of the amendment. A contribution or expenditure made before the effective date of the amendment is governed by the law in effect when the contribution or expenditure was made, and the former law is continued in effect for that purpose.

(d) This temporary provision expires January 1, 2019.

SECTION 3. This proposed constitutional amendment shall be submitted to the voters at an election to be held November 7, 2017. The ballot shall be printed to provide for voting for or against the proposition: "The constitutional amendment requiring certain persons or groups to report certain contributions and political expenditures."