PA 08-2—sHB 5505

Government Administration and Elections Committee

AN ACT CONCERNING THE CITIZENS' ELECTION PROGRAM

SUMMARY: This act changes state election laws addressing the State Elections Enforcement Commission (SEEC), campaign finance, and the Citizens' Election Program. Specifically, it expands the SEEC's authority by allowing it, among other things, to issue cease and desist orders for violations of statutes or regulations under its jurisdiction and order improper campaign contributions remitted to the Citizens' Election Fund (CEF).

Concerning campaign finance laws, the act makes changes to the registration forms for political committees (known as PACs) and expands the law granting individuals the right to incur legal expenses to contest or maintain the results of an election. It subjects party candidate listings for written communications to the attribution requirement and repeals a requirement for certain mailings to bear a photograph of the candidate for office.

The act exempts from the contractor contribution and solicitation ban all principals of state and prospective state contractors who are elected officials. It makes other minor and technical changes to that ban and the similar ban affecting lobbyists. It also transfers from the SEEC to the State Contracting Standards Board (SCSB), the responsibility for studying subcontracts for state contracts.

With respect to the Citizens' Election Program, the act establishes grant application deadlines and a corresponding schedule for payments from the CEF. It revises the process for reporting excess receipts and expenditures and receiving and spending supplemental grant money. The act eliminates the requirement that a participating candidate keep supplemental grant money in escrow until his or her opponent's excess spending reaches specified thresholds. Instead, it allows such a candidate to incur an obligation to make additional expenditures once the SEEC determines that he or she is entitled to this additional money. The act also requires individuals who give qualifying contributions of over $50 to certify the name of their employer.

The act extends the definitions of terms under state election law to the Citizens' Election Program. These terms include major party, minor party, primary, municipal office, and state office.

The act makes several minor, technical, and conforming changes. It also eliminates obsolete provisions. Specifically, it eliminates references to the secretary of the state as the filing repository for campaign finance reports and replaces her with the SEEC, thus codifying current practice. It similarly eliminates a requirement for the secretary of the state to submit to the SEEC a biennial PAC registration report since, by law, these committees register with commission. It eliminates a provision concerning a primary for delegates to a U. S. senatorial or congressional district convention, which no longer exists. Finally, the act eliminates references to penalties for lobbyists who fail to file campaign finance reports since they are no longer required to file with the SEEC because the law prohibits them from contributing to most committees.

EFFECTIVE DATE: Upon passage, except for the provision limiting the sessional ban on contributions from lobbyists to contributions from client lobbyists, which is effective October 1, 2008.

SEEC'S POWERS AND DUTIES

The act authorizes the SEEC to issue cease and desist orders and act to compel compliance with any law or regulation under its jurisdiction.

With regard to the Citizens' Election Program, it authorizes the SEEC to:

1. order any improper campaign finance contribution remitted to the CEF;

2. issue an order, after providing an opportunity for a hearing, upon a finding that there has been an intentional violation;

3. attempt to secure voluntary compliance by informal methods;

4. issue, upon request, and publish advisory opinions in the Connecticut Law Journal on the program's requirements; and

5. refer evidence of violations to the chief state's attorney.

In addition, the act expands the SEEC's authority with respect to organization expenditures made to participating candidates by authorizing it to:

1. impose civil penalties of $2,000 per offense or twice the amount of any improper payment, whichever is greater, after providing an opportunity for a hearing;

2. issue an order to a participating candidate committee, after providing an opportunity for a hearing; and

3. adopt and publish regulations.

By law, organization expenditures are expenditures made by legislative caucus, legislative leadership, or party committees for the benefit of candidates or their committees.

The act also specifies that the commission may inspect or audit the accounts or records of candidates who participate in the Citizens' Election Program. Absent a complaint, the law restricts when and for how long the commission may audit a candidate who is currently seeking election and ran in the previous election.

The act allows the SEEC to ask the Hartford Superior Court to order compliance with an SEEC order concerning the Citizens' Election Program. It authorizes that court to order compliance with an SEEC order concerning the program.

CAMPAIGN FINANCE

PAC Registration

By law, a PAC must register with the SEEC within 10 days after its organization date (that is, the date when it first solicits or receives contributions or funds, or makes or incurs expenditures, whichever is earlier). The act changes the name of the form PACs must submit from “statement of organization” to “registration statement,” thus codifying current practice.

In addition, the act gives the SEEC broader authority regarding the registration statement's contents. It authorizes the SEEC to require PACs to furnish any information the commission needs to facilitate compliance with campaign finance laws or the Citizens' Election Program.

Legal Expenses

By law, a person who exercises his or her right to incur legal expenses to contest or maintain the results of an election does so without violating campaign finance laws. The act extends the same protection to primaries and to individuals under the Citizens' Election Program. The act specifies that only contributions from eligible sources may pay for a candidate's legal expenses. This means that candidates who participate in the Citizens' Election Program (participating candidates) may use only contributions from individuals. Candidates who do not participate in the program (nonparticipating candidates) may use contributions from individuals, most PACs, and state and prospective state contractors, other than pre-qualified contractors, that do not have a state contract or state contract solicitation with the branch of government in which they are seeking office.

Campaign Finance Statements

The law requires each campaign treasurer of a committee, other than a state central committee, to file a campaign finance statement with the SEEC according to a specified schedule. The act conforms the schedule for PACs and party committees that receive or spend $1,000 or less in a calendar year to such committees that receive or spend more than $1,000 in a year. It requires those that receive or spend $1,000 or less to file campaign finance statements on the 10th calendar day, rather than the second Thursday, in January. By law, committees that receive or spend more than $1,000 file on the 10th calendar days in January, April, July, and October, and both types of committees file on the seventh day preceding an election.

When a treasurer files a campaign finance statement it must include, among other things, information about individuals who have contributed over $1,000 in the aggregate to the committee. The act repeals the requirement that these individuals disclose whether they or their associated businesses have a state contract valued at more than $5,000. (By law, individuals who contribute over $50 to most candidates and committees must already certify that they are not a principal of a state or prospective state contractor or a communicator lobbyist or such a lobbyist's immediate family member. )

Attribution Requirement

By law, political communications paid for by people or committees cooperating with, in consultation with, or acting at the request of a candidate or his or her agent or committee to promote or defeat a candidate must include an attribution.

The act expands the attribution law. It subjects organization expenditures for party candidate listings that are written communications, including those that are web-based, to the attribution requirement. Under prior law, this type of party candidate listing, like other organization expenditures, was not considered a campaign finance expenditure and thus was not subject to the attribution law.

The act also narrows the attribution law. It eliminates the requirement that mailings promoting the success or defeat of a candidate include (1) a photograph of the candidate who conducts the mailing and (2) his or her name in a size font no smaller than the font used in the mailing's narrative.

Lobbyists

The law completely bans communicator lobbyists, their immediate family members, and PACs they establish or control from making or soliciting contributions to (1) exploratory or candidate committees for statewide or legislative office candidates, (2) PACs these candidates establish or control, (3) legislative caucus or legislative leadership committees, or (4) party committees. It also bans contributions when the General Assembly is in session from client and communicator lobbyists to committees associated with candidates for statewide or legislative office.

Since the former provision supersedes the latter with respect to communicator lobbyists, the act limits the sessional ban to client lobbyists. The act also eliminates references to PACs established “on behalf of” lobbyists.

The act reinserts a provision that was inadvertently omitted when PA 06-137 was engrossed. The provision bans communicator lobbyists from soliciting the purchase of advertising space in a fundraising program sponsored by a town committee.

State and Prospective State Contractors

The law imposes a ban on political contributions made or solicited by state and prospective state contractors, pre-qualified contractors, and their principals that is similar to the ban on lobbyists. However, the prohibition on giving and receiving contributions between candidates and contractors, other than pre-qualified contractors, applies when the contractor has a contract with the branch of government in which the candidate is seeking office, except for the Judicial Branch.

The law creates an exception for candidates under both the contractor and lobbyist bans. The act makes a technical change, conforming the contractor ban to the lobbyist ban with respect to candidates' campaigns. It further exempts from the contractor ban all principals of state and prospective state contractors who are elected officials. (By law, “principals” include the spouses and dependent children of individuals covered by the ban. ) The lobbyist ban already exempts lobbyists' immediate family members who are elected officials, but not lobbyists themselves since the law prohibits them from holding state public office.

In addition, the act specifies that the contractor contribution and solicitation ban applies to state and prospective state contractors with either state contracts or state contract solicitations, not only to those with state contract solicitations (see BACKGROUND).

Lastly, the act transfers, from the SEEC to the SCSB, the responsibility for studying subcontracts for state contracts. Under the act, the SCSB must submit proposed legislation to the Government Administration and Elections Committee by February 1, 2010 with recommendations for extending the provisions of the state contractor contribution and solicitation ban to subcontractors. Under prior law, the SEEC was required to do so by February 1, 2009. PA 07-1, September Special Session, established the SCSB effective January 1, 2009.

CITIZENS' ELECTION PROGRAM

The Citizens' Election Program is a system of public campaign financing under which statewide and legislative candidates who receive qualifying contributions, agree to abide by certain spending limits, and comply with other requirements are eligible to receive state grants to fund their campaigns.

Qualifying Contributions

The act gives campaign treasurers the option of returning to the contributor or transmitting to the SEEC contributions that are not valid qualifying contributions. It requires the SEEC to deposit in the CEF any contribution it receives in this manner. Under prior law, campaign treasurers had to return contributions that did not qualify under the Citizens' Election Program to their contributors. The act specifies that a contribution under $5 is not a valid qualifying contribution.

By law, individuals who contribute more than $50 to a participating candidate must include a certification with their qualifying contribution. The act requires these individuals to include their employer's name in the certification. Prior law already required them to certify that they are not a communicator lobbyist, immediate family member of such a lobbyist, or a principal of a state or prospective state contractor.

The act also directs these individuals to follow the same procedures as individuals follow when they contribute to nonparticipating candidates under CGS 9-608(c)(3).

Grants from the Citizens' Election Fund

Application Deadline and Payment Schedule. The act establishes grant application deadlines and a corresponding payment schedule; however, it has no effect on when candidates are initially authorized to apply for a grant.

For a primary or general election, participating candidates submit grant applications by (1) 5: 00 p. m. on the third Thursday in May of the year in which they are seeking nomination at a primary or election or (2) by 5: 00 p. m. on a subsequent Thursday. The SEEC may not accept applications later than 5: 00 p. m. on or after the fourth to last Friday before the primary or election.

Within four business days following Thursday or Friday submissions (i. e. , by the following Wednesday or Thursday), the SEEC must review the applications it has received and determine whether to approve or reject each one. In the event of a national, regional, or local emergency or disaster, the SEEC must make this determination “as soon thereafter as is practicable. ” The act requires the SEEC to disburse the funds by the 12th business day before the primary or election.

During state election years, the act requires the SEEC to meet twice a week from the third week of June until the third week of July to review any pending applications.

For special elections, participating candidates must submit applications to the SEEC by 5: 00 p. m. on the 10th business day preceding the special election. Within three business days following the deadline, the SEEC must review the applications it has received and determine whether to approve or reject each one. In the event of a national, regional, or local emergency or disaster, the SEEC must make this determination as soon thereafter as is practicable. The act requires the SEEC to disburse the funds by the seventh business day before the special election.

The SEEC must publish its meeting and application review schedules on its website and with the secretary of the state.

Prior law did not specify application deadlines. It required the SEEC to review each application and, within three business days of receiving one, determine whether a candidate qualified for a grant.

Written Certifications and Cumulative Itemized Accounting. By law, the candidate and campaign treasurer must sign the grant application. The application must include certain written certifications and a cumulative itemized accounting of campaign finances.

The act expands one of the certifications by requiring campaign treasurers to attest that they will comply with all state campaign finance laws, not only the Citizens' Election Program. It also requires treasurers to certify that they will maintain and furnish all records required under any campaign finance law, the Citizens' Election Program, or related regulation.

In addition, the act requires the cumulative itemized accounting to show expenditures as of three days before the applicable application deadline, rather than the date when the application is signed. By law, the treasurer signs the accounting under penalty of false statement.

Ballot Status. If the SEEC cannot conclude whether a candidate who applies for a CEF grant qualifies for the applicable full grant because the secretary of the state has not determined a candidate's “ballot status,” the commission must approve the “lesser applicable partial initial grant. ” Presumably, “ballot status” indicates whether a candidate (1) qualifies for access to the ballot, (2) will run in a primary campaign, and (3) will run opposed or unopposed in the general election. To determine a participating candidate's grant amount, whether full or “lesser applicable partial initial grant,” the SEEC must receive this information from the secretary.

If a candidate receives a “lesser applicable partial initial grant,” the act directs the SEEC to authorize payment for the remaining portion of the applicable grant after receiving knowledge of the opposing candidates' ballot status in the primary or general election.

Excess Expenditures and Supplemental Grants

By law, participating candidates are entitled to additional money from the CEF if their opponents exceed certain spending limits, that is, if they make excess expenditures. The act revises the procedure for reporting excess expenditures, establishes the same one for reporting excess contributions, and changes the process for receiving and spending supplemental grant money.

Reporting. Under prior law, if a candidate in a primary or general election campaign with at least one participating candidate made or became obligated to make an expenditure exceeding 90% of the applicable grant for that campaign, his or her campaign treasurer had to file a supplemental campaign finance statement with the SEEC within 48 hours of doing so. After filing the initial supplemental statement, the candidate and opposing candidate or candidates had to file weekly supplemental statements according to a specified schedule.

Under the act, if a candidate in a primary or general election campaign with at least one participating candidate receives contributions, loans, or other funds or makes or obligates to make an expenditure that in the aggregate exceeds 90% of the applicable spending limit for the primary or general election period, his or her campaign treasurer must file a supplemental campaign finance statement with the SEEC. If a candidate receives such funds or makes or obligates to make such an expenditure more than 20 days before the primary or general election, his or her treasurer must file an initial supplemental campaign finance disclosure statement with the commission within 48 hours of doing so. If a candidate receives such funds or makes or obligates to make such an expenditure 20 or fewer days before the primary or election, the treasurer must file the initial supplemental campaign finance disclosure statement with the commission within 24 hours.

Thereafter, the campaign treasurer filing the initial supplemental statement and the campaign treasurers for all opposing candidates must file periodic supplemental campaign finance statements. If the applicable primary or general election is more than five weeks away, they must file periodic statements every other Thursday, beginning with the second Thursday after the initial statement filing. If it is five or fewer weeks away, they file according to the statutory schedule, except, in the case of a general election, they must continue to file until the Thursday after, rather than before, the election.

The act additionally requires the campaign treasurer of a candidate in a primary or general election campaign with at least one participating candidate to file a declaration of excess receipts or expenditures statement when the candidate committee receives contributions, loans, or other funds, or makes or obligates to make, an expenditure that in the aggregate exceeds 100% of the applicable spending limit. The treasurer must do the same if the candidate has receipts or expenditures that, in the aggregate, exceed 125%, 150%, or 175% of the applicable spending limit for the primary or general election.

If a candidate committee reaches one of these thresholds more than 20 days before the primary or general election, the treasurer must file the declaration of excess receipts or expenditures with the commission within 48 hours of the occurrence. If a candidate reaches one of these thresholds 20 or fewer days before the primary or election, the treasurer must file the declaration of excess receipts or expenditures within 24 hours. Under prior law, treasurers had to file a declaration of excess expenditures within these deadlines.

Finally, the act expands the mandatory contents of supplemental statements. It requires them to disclose, as of the day before the filing deadline, campaign contributions, loans, and other funds received, not only expenditures made or obligated during the primary or general election campaign, whichever is applicable.

Threshold. The act redefines “excess expenditure” as an expenditure made or obligated by a nonparticipating or participating candidate who faces at least one participating candidate in a primary or general election that exceeds the applicable spending limit for the participating candidate and that is the sum of (1) the qualifying contributions the participating candidate must receive and (2) 100% of the applicable full grant for a major party candidate for the primary or general election. Under prior law, the term meant expenditures made or obligated in excess of the applicable spending limit.

Processing Payments. The act changes the administrative procedure for processing payments (“supplemental grant money”) to candidates whose opponents make excess expenditures. Under prior law, the SEEC had to notify each participating candidate, in addition to the state comptroller, when it determined that a nonparticipating candidate made or became obligated to make an expenditure exceeding 90% of the applicable grant. The SEEC had to direct the comptroller to hold the funds in escrow until it determined that the nonparticipating candidate made or became obligated to make an expenditure exceeding 100% of the grant. The same process occurred when a nonparticipating candidate made or obligated to make an expenditure exceeding 115%, 140%, and 165% of the applicable grant.

Under the act, if the SEEC determines that a nonparticipating candidate has received contributions, loans, or other funds, or has made or become obligated to make expenditures, that in the aggregate exceed 100% of the applicable spending limit for the primary or general election, it must process a voucher payment for each opposing participating candidate. By law, the SEEC must process the voucher using the comptroller's accounting system within two business days of making this determination. Within three business days of receiving the authorized voucher, the comptroller must draw an order on the state treasurer to electronically transfer the payment into each participating candidate's account.

The law, unchanged by the act, authorizes a participating candidate to receive a supplemental grant of 25% of the applicable primary or general election grant, provided he or she has not spent more than the sum of (1) the applicable qualifying contributions and (2) 100% of the applicable full grant for the primary or general election. But under the act, a candidate committee may incur an obligation to make additional expenditures, up to the amount of the supplemental grant, once the SEEC determines that the participating candidate is entitled to this additional money. Prior law required participating candidates to receive the additional money before spending it and limited them to spending an amount equal to the excess expenditure rather than the supplemental grant.

The same process occurs when the SEEC determines that a nonparticipating candidate has received contributions, loans, or other funds, or has made or obligated to make expenditures, that in the aggregate exceed 125%, 150%, and 175% of the applicable spending limit for the primary or general election campaign.

The act makes a similar change to the way payments are processed when a participating candidate who is opposed by at least one other participating candidate exceeds the applicable spending limit. The act directs the SEEC to process a voucher payment using comptroller's accounting system if it determines that a participating candidate has made or obligated to make an expenditure exceeding the sum of the required qualifying contributions and the applicable grant. The voucher payment must equal the excess expenditure. Under the act, a participating candidate committee may incur an obligation to make expenditures, up to the amount of the additional money, once the SEEC determines that the candidate is entitled to it. Under prior law, candidates had to wait until they received the additional money before they could spend it.

By law, the maximum aggregate amount that a participating candidate can receive to match an opponent's excess spending is an amount equal to (1) the total excess spending or (2) the original grant, whichever is less.

Notices Within 96 hours of a Primary or an Election. Under the act, if, during the 96-hour period beginning at 5 p. m. on the Thursday preceding a primary or an election, the SEEC receives a notice from a participating candidate that his or her opponent has received contributions, loans, or other funds, or made or obligated to make expenditures, exceeding 100%, 125%, 150%, or 175% of the applicable spending limit for the primary or general election campaign that are not yet reported, it must immediately review the notice. The SEEC must notify the comptroller, who must process the voucher using her accounting system. The amount of the supplemental grant is equal to 25% of the applicable grant for the primary or general election campaign.

Once the SEEC determines that a participating candidate is entitled to this additional money, the candidate committee may incur an obligation to make additional expenditures up to the amount of the approved supplemental grant.

Under prior law, if the SEEC received a notice during the 96-hour period from a participating candidate that his or her opponent had made or became obligated to make an excess expenditure that was not yet reported, it had to immediately review the notice. The SEEC then had to notify the comptroller and direct her to pay the qualified candidate committee, or a person the candidate's treasurer chose, an amount equal to the estimated or confirmed excess expenditures.

BACKGROUND

Definitions

By law, “state contract” means an agreement or contract with the state or any state or quasi-public agency, let through the procurement process or otherwise, with a value of $50,000 or more, or a combination of contracts with a value of $100,000 or more in a calendar year for (1) the rendering of services; (2) the furnishing of goods, supplies, or items of any kind; (3) the construction, alteration, or repair of any public building or public work; (4) the acquisition, sale, or lease of any land or building; (5) a licensing agreement; or (6) a grant, loan, or loan guarantee. “State contract solicitation” means a request by a state agency or quasi-public agency, in whatever form issued, including an invitation to bid; request for proposals; request for information or quotes; or inviting quotes or other types of submittals. The definition includes requests made within or outside the competitive procurement process as authorized by law.

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