INDEPENDENT EXPENDITURE COMMITTEE; ETC. S.B. 638 (S-2):
SUMMARY AS PASSED BY THE SENATE
Senate Bill 638 (Substitute S-2 as passed by the Senate)
Sponsor: Senator Dave Robertson
Committee: Elections and Government Reform
CONTENT
The bill would amend the Michigan Campaign Finance Act to do the following:
-- Permit the creation of independent expenditure committees.
-- Allow an independent expenditure committee to make unlimited contributions to another such committee, a ballot question committee, or a person or account not subject to the Act, or for any other lawful purpose.
-- Provide that an independent expenditure committee would not lose its independent nature if it used an attorney or other vendor also used by another type of committee, if certain conditions were met.
-- Require an independent expenditure committee to file campaign statements according to a schedule that applies to an independent committee, and delete the February date from that schedule.
-- Allow a corporation, joint stock company, labor organization, or domestic dependent sovereign to make an independent expenditure; contribute to an independent expenditure committee; and make an expenditure in any amount for the establishment or administration, or solicitation of contributions to, an independent expenditure committee.
-- Require such entity to file a report of an independent expenditure, and provide that an entity making a contribution to or an expenditure for an independent expenditure committee would have no reporting obligations.
-- Redefine "independent expenditure".
-- Allow a separate segregated fund to make contributions to, and expenditures on behalf of, an independent expenditure committee.
Independent Expenditure Committee
The bill would allow one or more people to create and maintain an independent expenditure committee. "Independent expenditure committee" would mean a committee that receives contributions and makes independent expenditures pursuant to the Act, expenditures authorized under the Act, or disbursements not prohibited by the Act.
The Act defines "independent expenditure" as an expenditure by a person if the expenditure is not made at the direction of, or under the control of, another person and if the expenditure is not a contribution to a committee. The bill would define the term, instead, as an expenditure by a person if the expenditure is not made in concert or cooperation with, or at the request or suggestion of, a ballot question committee or a candidate, a candidate committee or its agents, or a political party committee or its agents, and is not a contribution made directly to a candidate committee or a political party committee.
A person creating an independent expenditure committee would have to file a statement of organization. If the person were a corporation, joint stock company, domestic dependent sovereign, or labor organization, the name of the committee would have to contain the name of the person, or its acronym if the acronym reasonably identified the person.
In addition to any independent expenditures, an independent expenditure committee could make unlimited contributions to another independent expenditure committee, to a ballot question committee, to a person or account not subject to the Act, or for any other lawful purpose.
An independent expenditure committee could receive contributions from any person, except a person prohibited from making a contribution under 52 USC 30121 (i.e., a foreign national). Within 30 days after receiving a contribution from a person prohibited from making one, the committee would have to return it.
An independent expenditure committee could use an attorney or other vendor that also was used by a ballot question committee, candidate, candidate committee, or political party committee that was the subject or beneficiary of the independent expenditure, without defeating the independent nature of the independent expenditure committee, if the attorney or vendor did not convey material information to the committee about the campaign plans, projects, activities, or needs of the other committee.
An independent expenditure would not be precluded under either of the following:
-- Where a candidate or his or her agent, a candidate committee or its agent, or a political party committee or its agent solicited contributions on behalf of a person that could finance independent expenditures on behalf of candidates and political parties.
-- Where an independent expenditure committee or person engaged agents or vendors of candidates, candidate committees, or political party committees to assist that independent expenditure committee or person in areas unrelated to preparing an independent expenditure subject to the Act.
Filing Campaign Statements
Currently, an independent committee, or a political committee other than a House or Senate political party caucus committee required to file with the Secretary of State (SOS), must file campaign statements required by the Act according to the following schedule:
-- By February 15 each year with a closing date of February 10.
-- By April 25 each year with a closing date of April 20.
-- By July 25 of each year with a closing date of July 20.
-- By October 25 of each year with a closing date of October 20.
The bill would delete the February 15 reporting date, and would extend the filing requirement to an independent expenditure committee.
Under the Act, if an independent expenditure is made within 45 days before a special election by an independent committee, or a political party committee required to file a campaign statement with the SOS, the committee must file a report of the expenditure with the SOS within 48 hours after the expenditure. The bill would extend this requirement to an independent expenditure committee.
Currently, in addition to any other requirements of the Act for filing a campaign statement, a committee, other than an independent committee or a political committee required to file with the SOS, must file a campaign statement by January 31 of each year. The bill would excuse an independent expenditure committee from this requirement.
Expenditure/Contribution by Corporation, Joint Stock Company, or Labor Organization
Section 54 of the Act prohibits a corporation, joint stock company, labor organization, or domestic dependent sovereign from making a contribution or expenditure, subject to certain exceptions. The bill would make an additional exception, as described below.
The bill would permit a corporation, joint stock company, labor organization, or domestic dependent sovereign to do any of the following:
-- Make an independent expenditure.
-- Make a contribution to an independent expenditure committee.
-- Make an expenditure for the establishment or administration of, or solicitation of contributions to, an independent expenditure committee in any amount.
A corporation, joint stock company, labor organization, or domestic dependent sovereign that made an independent expenditure would not for that reason become a committee, but would be required to file a report of any independent expenditure in accordance with Section 51. (That section requires a person, other than a committee, to file a report of an independent expenditure if a person makes an independent expenditure of 100.01 or more advocating the election or defeat of a candidate or the qualification, passage, or defeat of a ballot question.)
A corporation, joint stock company, labor organization, or domestic dependent sovereign that made a contribution to an independent expenditure committee, or an expenditure for the establishment or administration of, or solicitation of funds to, an independent expenditure committee, would have no reporting obligations under the Act.
(A person who knowingly violates Section 54 is guilty of a felony punishable by a maximum fine of $5,000 and/or imprisonment for up to three years if the violator is an individual, or a maximum fine of $10,000 if the violator is not an individual.)
Separate Segregated Fund
Under the Act, a corporation organized on a for-profit or nonprofit basis, a joint stock company, a labor organization, or a domestic dependent sovereign may make an expenditure for the establishment and administration of, and solicitation of contributions to, a separate segregated fund to be used for political purposes. The fund must be limited to making contributions to, and expenditures on behalf of, candidate committees, ballot question committees, political party committees, political committees, independent committees, and other separate segregated funds.
The bill also would allow a separate segregated fund to make contributions to, and expenditures on behalf of, independent expenditure committees.
MCL 169.203 et al. Legislative Analyst: Suzanne Lowe
FISCAL IMPACT
The bill would have an indeterminate fiscal impact on State and local government. The bill would allow a corporation, joint stock company, labor organization, or domestic dependent sovereign to make independent expenditures and contributions to independent expenditure committees. It also would, however, add reporting requirements for an entity that made an independent expenditure, and a violation would be a felony. It is unknown whether the combination of these provisions would lead to more or fewer arrests and convictions under the Act.
An increase in felony arrests and convictions could increase resource demands on local court systems, law enforcement, and prisons. For any increase in prison intakes, in the short term, the marginal cost to State government would be approximately $3,764 per prisoner per year. In the long term, if the increased intake of prisoners increased the total prisoner population enough to require the Department of Corrections to open a housing unit or an entire facility, the marginal cost to State government would be approximately $34,550 per prisoner per year. Any associated increase in fine revenue would increase funding to public libraries.
Conversely, to the extent that the bill prevented misdemeanor or felony arrests and convictions, costs would be avoided.
The bill would have a negligible impact on the Department of State regarding reporting requirements.
Bill Bowerman
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.