SB 1225 — AN ACT CONCERNING REFERENDA, INDEPENDENT EXPENDITURES, STATE ELECTIONS ENFORCEMENT COMMISSION COMPLAINTS AND REPAYMENT OF SURPLUS CITIZENS' ELECTION PROGRAM GRANT FUNDS.

630 to state or municipal governments or agencies or to any organization which is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended.

(3) chief executive officer of a town, city or borough, in excess of one thousandLCO dollars;{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0111 of 30 R02-SB.docx } Substitute Bill No.

(4)1225 statethousand senatordollars; or probate judge, in excess of one sSB1225 / File No.

630(4) 11state sSB1225senator Fileor No.probate judge, in excess of one thousand dollars;

630 thousand dollars;

(2) a candidate or a committee supporting or opposing any candidate's campaign for electionLCO to{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0112 anyof office;30 R02-SB.docx } Substitute Bill No.

1225 election to any office;

or (5) a party committee in any sSB1225calendar /year. File No.

630 12 sSB1225 File No.

630 calendar year.

With respect to a political committee establishedLCO by{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0113 an organization which has complied with the provisions of subsection30 (b)R02-SB.docx or} (c)Substitute ofBill section 9-614, as amended by this act, and has elected to receive contributions, no individual other than a member of sSB1225 / File No.

6301225 13established sSB1225by Filean No.organization which has complied with the provisions of subsection (b) or (c) of section 9-614, as amended by this act, and has elected to receive contributions, no individual other than a member of the organization may make contributions to the committee, in which case the individual may contribute not more than seven hundred fifty dollars in any one calendar year to such committee or for the benefit of such committee pursuant to its authorization or request.

630 the organization may make contributions to the committee, in which case the individual may contribute not more than seven hundred fifty dollars in any one calendar year to such committee or for the benefit of such committee pursuant to its authorization or request.

(a)[No]Except asprovidedinsubsection(f)of thisthissection,a section,a business entity shall not make any contributions or expenditures (1) to, or for the benefit of, any candidate's campaign (A) for election to any public office or position subject to this chapter, or (B) for nomination at a primary for any such office or position, or (2) to promote the defeat of any candidate for any such office or position.

Nonmonetary contributions byLCO a{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0114 business entity which are incidental in nature and are directly attributable to the administration of such30 politicalR02-SB.docx committee} shallSubstitute beBill exemptNo. from the reporting requirements of this chapter.

sSB12251225 /by Filea No.business entity which are incidental in nature and are directly attributable to the administration of such political committee shall be exempt from the reporting requirements of this chapter.

630[(c) 14The sSB1225provisions Fileof No.this section shall not preclude a business entity from making contributions or expenditures to promote the success or defeat of a referendum question.] [(d) A] (c) Except as provided in subsection (f) of this section, a political committee organized by a business entity shall not make a contribution or contributions to or for the benefit of any candidate's campaign for nomination at a primary or any candidate's campaign for election to the office of:

630 [(c) The provisions of this section shall not preclude a business entity from making contributions or expenditures to promote the success or defeat of a referendum question.] [(d) A] (c) Except as provided in subsection (f) of this section, a political committee organized by a business entity shall not make a contribution or contributions to or for the benefit of any candidate's campaign for nomination at a primary or any candidate's campaign for election to the office of:

[(e) No] (d) A political committee organized by a business entity shall not make a contribution or contributions to (1) a state central committee of a political party, in excess of seven thousand five hundred dollars in any calendar year, (2) a town committee of any political party, in excess of one thousand five hundred dollars in any calendar year, (3) an exploratory committee in excess of three hundred seventy-five dollars, orLCO (4){\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-01215 any other kind of political30 committee,R02-SB.docx in} excessSubstitute ofBill twoNo. thousand dollars in any calendar year.

[(f)]1225 (e)or As(4) usedany other kind of political committee, in thisexcess subsection,of "investmenttwo services"thousand meansdollars sSB1225in /any Filecalendar No.year.

630[(f)] 15(e) sSB1225As Fileused No.in this subsection, "investment services" means investment legal services, investment banking services, investment advisory services, underwriting services, financial advisory services or brokerage firm services.

630 investment legal services, investment banking services, investment advisory services, underwriting services, financial advisory services or brokerage firm services.

[The] Unless such political committee is an independent expenditure political committee, the political committee shall then be authorized to (1) receive funds (A) exclusively from the organization's treasury or from voluntary contributions made by its members,LCO but{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0116 notof both,30 (B)R02-SB.docx from} anotherSubstitute politicalBill committee,No. or [,] (C) from a candidate committee distributing a surplus, and [(1) to] (2) make (A) contributions or expenditures to, or for the benefit of, a candidate's campaign or a political party, or [(2) to make] (B) contributions to another political committee.

[No]1225 Anmembers, organizationbut shall not formboth, more(B) sSB1225from /another Filepolitical No.committee, or [,] (C) from a candidate committee distributing a surplus, and [(1) to] (2) make (A) contributions or expenditures to, or for the benefit of, a candidate's campaign or a political party, or [(2) to make] (B) contributions to another political committee.

630[No] 16An sSB1225organization Fileshall No.not form more than one political committee.

630 than one political committee.

Sec.LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-012217 of 30 R02-SB.docx } Substitute Bill No.

1225 Sec.

(a) [No] A political committee established by an organization shall not make a contribution or contributions to, or for the benefit of, any sSB1225candidate's /campaign Filefor No.nomination at a primary or for election to the office of:

630 17 sSB1225 File No.

630 candidate's campaign for nomination at a primary or for election to the office of:

or (3) any political committee, other than an exploratory committeeLCO or{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0118 a committee formed solely to aid or promote the success or defeat of a30 referendumR02-SB.docx question,} inSubstitute excessBill ofNo. two thousand dollars.

(e)1225 Contributionscommittee toor a political committee establishedformed bysolely anto organizationaid shallor bepromote subjectthe tosuccess theor provisionsdefeat of sectiona 9-618,referendum asquestion, amended by this act, in theexcess case of atwo committeethousand formeddollars. for ongoing sSB1225 / File No.

630(e) 18Contributions sSB1225to Filea No.political committee established by an organization shall be subject to the provisions of section 9-618, as amended by this act, in the case of a committee formed for ongoing political activity or section 9-619, as amended by this act, in the case of a committee formed for a single election or primary.

630 political activity or section 9-619, as amended by this act, in the case of a committee formed for a single election or primary.

(2) An independent expenditure political committee organized for ongoingLCO political{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0119 activitiesof shall30 notR02-SB.docx make} anySubstitute contributionBill unlessNo. such contribution is to another independent expenditure political committee.

1225 ongoing political activities shall not make any contribution unless such contribution is to another independent expenditure political committee.

sSB1225(a) /[No] File(1) No.A political committee established for a single primary or election shall not make contributions to a national committee, or a committee of a candidate for federal or out-of-state office.

630 19 sSB1225 File No.

630 (a) [No] (1) A political committee established for a single primary or election shall not make contributions to a national committee, or a committee of a candidate for federal or out-of-state office.

(a) [A political committee formed solely to aid or promote the success or defeat of a referendum question shall not make contributions to, or for the benefit of, a party committee, a political committee, a national committee, a committee of a candidate for federal or out-of-state office or a candidate committee, except in the distribution of a surplus, as provided in subsection (e) of section 9-608] Subject to the provisions of this chapter, any person may establish an independent expenditure political committee that may only make expenditures without the consent,LCO coordination{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0120 or consultation of, a candidate or agent of the30 candidate,R02-SB.docx candidate} committee,Substitute partyBill committeeNo. or political committee.

1225 consent, coordination or consultation of, a candidate or agent of the candidate, candidate committee, party committee or political committee.

(b) [A political committee formed solely to aidor promote the success or defeat of a referendum question shall not receive contributions from sSB1225a /national Filecommittee No.or from a committee of a candidate for federal or out-of-state office] Any person may establish an independent expenditure political committee solely to aid or promote the success or defeat of a single referendum question, or of multiple referendum questions submitted to a vote on the same date.

630 20 sSB1225 File No.

630 a national committee or from a committee of a candidate for federal or out-of-state office] Any person may establish an independent expenditure political committee solely to aid or promote the success or defeat of a single referendum question, or of multiple referendum questions submitted to a vote on the same date.

(d)Notwithstanding theprovisionsofsubsections(a)to (c),inclusive, of this section, an independent expenditure political committee may make contributions to another independent expenditure political committee, make donations to any organization which is a tax-exempt organization under Sections 501(c)(3) and 501(c)(19) of the Internal RevenueLCO Code,{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0121 asof amended30 fromR02-SB.docx time} toSubstitute time,Bill andNo. refund contributions to contributors.

1225 Revenue Code, as amended from time to time, and refund contributions to contributors.

(c) (1) No business entity, organization, association, committee, or groupoftwo or more individuals who have joinedsolely to promote the sSB1225success /or Filedefeat No.of a referendum question shall make or incur any expenditure for any written, typed or other printed communication whichpromotesthesuccessordefeatofanyreferendumquestionunless such communication bears upon its face, as a disclaimer, the words "paid for by" and the following:

630 21 sSB1225 File No.

630 success or defeat of a referendum question shall make or incur any expenditure for any written, typed or other printed communication whichpromotesthesuccessordefeatofanyreferendumquestionunless such communication bears upon its face, as a disclaimer, the words "paid for by" and the following:

(A) A video broadcast by television, satellite or Internet which promotes the success or defeat of any referendum question unless such video is accompanied by the disclaimer described in subdivision (2) of subsectionLCO (h){\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0122 of this30 section;R02-SB.docx } Substitute Bill No.

1225 subsection (h) of this section;

or (C) Telephone calls which promote the success or defeat of any referendum question unless such telephone calls are accompanied by the disclaimer described in subdivision (4) of subsection (h) of this sSB1225section. / File No.

630 22 sSB1225 File No.

630 section.

(g) In the event a treasurer of a candidate committee is replaced pursuant to subsection (c) of section 9-602, nothing in this section shall beLCO construed{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0123 to prohibit the candidate committee from distributing any printed communication subject to the provisions of this30 sectionR02-SB.docx that} hasSubstitute alreadyBill beenNo. printed or otherwise produced, even though such communication does not accurately designate the successor treasurer of such candidate committee.

(h)1225 (1)be Noconstrued personto shallprohibit makethe orcandidate incurcommittee anfrom independentdistributing expenditureany forprinted anycommunication written,subject typedto orthe otherprovisions printedof communication,this includingsection onthat ahas billboard,already been printed or anyotherwise web-based,produced, writteneven communication,though whichsuch communication promotesdoes thenot successaccurately ordesignate defeatthe ofsuccessor anytreasurer candidate'sof sSB1225such /candidate Filecommittee. No.

630(h) 23(1) sSB1225No Fileperson No.shall make or incur an independent expenditure for any written, typed or other printed communication, including on a billboard, or any web-based, written communication, which communication promotes the success or defeat of any candidate's campaign for nomination at a primary or election, unless such communication bears upon its face, as a disclaimer, the words "Paid for by" and the name of such person and the following statement:

630 campaign for nomination at a primary or election, unless such communication bears upon its face, as a disclaimer, the words "Paid for by" and the name of such person and the following statement:

"This message was paid for by (person making the communication) and made independent of any candidate or political party.".party.".In the case of aperson making or incurring such an independent expenditure during the ninety-day period immediately prior to the primary or election for which the independent expenditure is made, LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0124 of 30 R02-SB.docx } Substitute Bill No.

In1225 the case of aperson making or incurring such an independent expenditure during the ninety-day period immediately prior to the primary or election for which the independent expenditure is made, such communication shall also list the names of the five persons who made the five largest aggregate covered transfers to the person making such communication during the twelve-month period immediately prior to such primary or election, as applicable.

(3) In addition to the requirements of subdivision (1) of this subsection, no person shall make or incur an independent expenditure for an audio communication broadcast by radio, satellite or Internet, sSB1225unless /the Fileadvertising No.ends with a disclaimer that is a personal audio statement by such person's agent (A) identifying the person paying for the expenditure, and (B) indicating that the message was made independent of any candidate or political party, using the following form:

630 24 sSB1225 File No.

630 unless the advertising ends with a disclaimer that is a personal audio statement by such person's agent (A) identifying the person paying for the expenditure, and (B) indicating that the message was made independent of any candidate or political party, using the following form:

(4) In addition to the requirements of subdivision (1) of this subsection, no person shall make or incur an independent expenditure for telephone calls, unless the narrative of the telephone call identifies the person making the expenditure and during the ninety-day period immediately prior to the primary or election for which the independent expenditure is made, such communication shall state the names of the five persons who made the five largest aggregate covered transfers to theLCO person{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0125 makingof such30 communicationR02-SB.docx during} theSubstitute twelve-monthBill periodNo. immediately prior to such primary or election, as applicable.

1225 the person making such communication during the twelve-month period immediately prior to such primary or election, as applicable.

(i) In any [print, television or social media promotion of a slate of] organization expenditure for a party candidate listing of a candidate or candidates by a party committee, [the party] legislative caucus committeeorlegislativeleadershipcommittee,such committeeshalluse applicable disclaimers pursuant to theprovisionsofthis sectionfor such [promotion] organization expenditure, and no individual candidate sSB1225disclaimers /shall Filebe No.required.

630 25 sSB1225 File No.

630 disclaimers shall be required.

(3) The name of any person who made a covered transfer to a person whose name is included on a disclaimer pursuant to the provisions of this section shall not be disclosed pursuant to the provisions of subdivision(1)ofthissubsectioniftherecipient ofsuchcoveredtransfer acceptsLCO covered{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0126 transfers from at least one hundred different sources, provided no such source accounts for ten per cent or more of the30 totalR02-SB.docx amount} ofSubstitute coveredBill transfersNo. accepted by the recipient during the twelve-month period immediately prior to the primary or election, as applicable.

1225 accepts covered transfers from at least one hundred different sources, provided no such source accounts for ten per cent or more of the total amount of covered transfers accepted by the recipient during the twelve-month period immediately prior to the primary or election, as applicable.

sSB1225(l) /Notwithstanding Filethe No.provisions of subsections (a) to (k), inclusive, of this section, no person making an independent expenditure for a communication shall be required to list as part of any disclaimer pursuant to this section any person whose covered transfers to the maker of the communication are not in an aggregate amount of five thousand dollars or more during the twelve-month period immediately prior to the primary, [or] election or referendum, as applicable, for which such independent expenditure is made.

630 26 sSB1225 File No.

630 (l) Notwithstanding the provisions of subsections (a) to (k), inclusive, of this section, no person making an independent expenditure for a communication shall be required to list as part of any disclaimer pursuant to this section any person whose covered transfers to the maker of the communication are not in an aggregate amount of five thousand dollars or more during the twelve-month period immediately prior to the primary, [or] election or referendum, as applicable, for which such independent expenditure is made.

Subdivision (1) of subsection (g) of section 9-7a of the general statutes is repealed and the following is substituted in lieu thereof (EffectiveLCO from{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0127 passage):of 30 R02-SB.docx } Substitute Bill No.

(g)(1)(A)Inthecaseofawrittencomplaint1225 filedwiththecommission(Effective pursuantfrom topassage): section 9-7b, commission staff shall conduct and complete a preliminary examination of such complaint by the fourteenth day following its receipt, atwhich time such staff shall, at its discretion, [(A)] (i) dismiss the complaint for failure to allege any substantial violation of state election law supported by evidence, [(B)] (ii) engage the respondent in discussions in an effort to speedily resolve any matter pertaining to a de minimis violation, or [(C)] (iii) investigate and docket the complaint for a determination by the commission that probable cause or no probable cause exists for any such violation.

If(g)(1)(A)Inthecaseofawrittencomplaintfiledwiththecommission pursuant to section 9-7b, commission staff dismissesshall conduct and complete a preliminary examination of such complaint pursuantby tothe subparagraphfourteenth day following its receipt, atwhich time such staff shall, at its discretion, [(A)] (A)(i)(i) dismiss the complaint for failure to allege any substantial violation of thisstate sSB1225election /law Filesupported No.by evidence, [(B)] (ii) engage the respondent in discussions in an effort to speedily resolve any matter pertaining to a de minimis violation, or [(C)] (iii) investigate and docket the complaint for a determination by the commission that probable cause or no probable cause exists for any such violation.

630If 27commission sSB1225staff Filedismisses No.a complaint pursuant to subparagraph [(A)] (A)(i) of this subdivision, such staff shall provide a brief written statement concisely setting forth the reasons for such dismissal.

630If subdivision,commission staff engages a respondent pursuant to subparagraph [(B)] (A)(ii) of this subdivision but is unable to speedily resolve any such matter described in said subparagraph by the forty-fifth day following receipt of the complaint, such staff shall providedocket such complaint for a briefdetermination writtenby statementthe conciselycommission settingthat forthprobable cause or no probable cause exists for any violationofstate electionlaw.If thecommissiondoesnot,by thesixtieth day following receipt of the reasonscomplaint, either issue a decision or render its determinationthatprobable cause or no probable cause exists for suchany dismissal.violation of state election laws, the complainant or respondent may apply to the superior court for the judicial district of Hartford for an order to show cause why the commission has not acted upon the complaint and to provide evidence that the commission has unreasonably delayed action.

If(B)(i)ForanycomplaintreceivedonorafterJanuary1,2018, commissionbutprior staff engages a respondent pursuant to subparagraphJuly [(B)]1, (A)(ii)2023, ofif thisthe subdivisioncommission butdoes isnot, unable to speedily resolve any such matter described in said subparagraph by theone forty-fifthyear day following receipt of thesuch complaint, suchissue staff shall docket such complaint for a determinationdecision bythereon, the commission thatshall probabledismisssuch causecomplaint, orprovidedthelengthoftime noofany probabledelay causecaused existsby for[(i)] any(I) violationofstate electionlaw.If the commissiondoesnot,bycommission thesixtieth day following receipt of the complaint, either issue a decision or rendercommission itsstaff determinationthatprobablegranting cause or no probable cause exists for any violationextension ofor statecontinuance electionto laws,a the complainant or respondent mayprior apply to the superiorissuance courtof forany thesuch judicialLCO district{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0128 of Hartford30 forR02-SB.docx an} orderSubstitute toBill showNo. cause why the commission has not acted upon the complaint and to provide evidence that the commission has unreasonably delayed action.

(B)(i)ForanycomplaintreceivedonorafterJanuary1,2018,butprior1225 to July 1, 2023, if the commission does not, by one year following receipt of such complaint, issue a decision thereon, the commission shall dismisssuch complaint, providedthelengthoftime ofany delay caused by [(i)] (I) the commission or commission staff granting any extension or continuance to a respondent prior to the issuance of any such decision, [(ii)] (II) any subpoena issued in connection with such complaint, [(iii)] (III) any litigation in state or federal court related to such complaint, or [(iv)] (IV) any investigation by, or consultation of the commission or commission staff with, the Chief State's Attorney, the Attorney General, the United States Department of Justice or the United States Attorney for Connecticut related to such complaint, shall be added to such one year.

(ii) For any complaint received on or after July 1, 2023, if the commission does not, by one year following receipt of such complaint, find reason to believe that a violation of state election law has been committed and commence a contested case, as defined in section 4-166, the commission shall dismiss such complaint, provided the length of time of any delay caused by (I) the commission or commission staff sSB1225granting /any Fileextension No.or continuance to a respondent prior to the issuance of any such decision, (II) any subpoena issued in connection with such complaint, (III) any litigation in state or federal court related to such complaint, (IV) any investigation by the commission or commission staff involving a potential violation of state election law by a foreign national, as defined in 52 USC 30121(b), as amended from time to time, or of section 9-601c or 9-601d, as amended by this act, or (V) any investigation by, or consultation of the commission or commission staff with, the Chief State's Attorney, the Attorney General, the United States Department of Justice or the United States Attorney for Connecticut related to such complaint, shall be added to such one year.

630 28 sSB1225 File No.

630 granting any extension or continuance to a respondent prior to the issuance of any such decision, (II) any subpoena issued in connection with such complaint, (III) any litigation in state or federal court related to such complaint, (IV) any investigation by the commission or commission staff involving a potential violation of state election law by a foreign national, as defined in 52 USC 30121(b), as amended from time to time, or of section 9-601c or 9-601d, as amended by this act, or (V) any investigation by, or consultation of the commission or commission staff with, the Chief State's Attorney, the Attorney General, the United States Department of Justice or the United States Attorney for Connecticut related to such complaint, shall be added to such one year.

A person is guilty of failure to repay surplus Citizens' Election Fund grant funds when such person fails to return to the Citizens' Election Fund any surplus funds from a grant made pursuant to sections 9-700 to 9- 716, inclusive, [not later than ninety days after the primary or election for which the grant is made] within the time prescribed for the distributionLCO of{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-0129 surplus under subdivision (1) of subsection30 (e)R02-SB.docx of} sectionSubstitute 9-608,Bill asNo. amended by this act.

1225 distribution of surplus under subdivision (1) of subsection (e) of section 9-608, as amended by this act.

2 from passage 9-601(3) from passage Sec.

3 from passage 9-601c(e) Sec.

9 from passage 9-612(a) and (b) from passage Sec.

10 9-613from sSB1225passage /9-613 FileSec. No.

630 29 sSB1225 File No.

630 Sec.

17 from passage 9-7a(g)(1) from passage Sec.

18 from passage 53a-119(18) StatementGAE ofJoint LegislativeFavorable Commissioners:Subst.

InJUD SectionJoint 4(i),Favorable "[the]LCO such{\\PRDFS1\SCOUSERS\FORZANOF\WS\2023SB-01225- person"30 wasof changed30 toR02-SB.docx "the} person" in Subdiv.

(2) for clarity, and "chairman" was changed to "chairperson" in Subdiv.

(3)(A)(i) for consistency with standard drafting conventions;

in Section 5(b)(10), "an" was added before "individual", and "the [entity or organization] person" was changed to "[the entity or organization] such person", for clarity;

in Section 14(a)(1), references to "election or primary" were changed to "primary or election [or primary]" for consistency;

and in Section 16(c)(2)(B), "section;

and" was changed to "section;

or" for clarity.

GAE Joint Favorable Subst.

sSB1225 / File No.

630 30 sSB1225 File No.

630 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

Agency Affected Fund-Effect FY 24 $ FY 25 $ Elections Enforcement GF - Potential See Below See Below Commission Cost Elections Enforcement GF - Potential See Below See Below Commission Revenue Gain Note:

GF=General Fund Municipal Impact:

None Explanation This bill results in both potential revenue and potential costs to the State Elections Enforcement Commission through fines and penalties imposed, and the additional requirements created by this bill.

The primary purpose of this bill codifies Independent Expenditure Political Action Committees (IE-PAC) as a separate category of political action committees (PAC) with different rules established.

The bill makes several changes regarding applicable expenses, as well as requiring attribution for advertising over a certain level of funding and adding additional reporting requirements for campaigns.

The bill formalizes the policy of eliminating aggregate contribution limits for certain PAC's and the bill also criminalizes failure to return surplus Citizens Election Program (CEP) grant funding to the state within a certain timeframe.

The bill narrows the circumstances under which the State Elections Enforcement Committee (SEEC) must dismiss a complaint within one year.

This could increase the existing costs for the SEEC depending on sSB1225 / File No.

630 31 sSB1225 File No.

630 the number of cases that would be held beyond one year as a result of this bill.

Fines and Penalties The bill may result in additional revenue to the SEEC by empowering them to impose fines and penalties in line with the current structure for failing to file an IE-PAC report to IE's that support referendums.

The bill also increases maximum penalties for failing to file an IE report to (1) IE-PACs made or obligated 90 days or fewer before a primary or general election from $20,000 to $20,000 or twice the unreported mount whichever is greater.

(2) Knowing and willful failure to file increases penalties from $50,000 to $50,000 or 10 times the unreported expenditure whichever is greater.

The increased penalties created by the bill could result in additional revenue for the SEEC depending on the number and scale of violations.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to the number of violations and fines imposed.

sSB1225 / File No.

630 32 sSB1225 File No.

630 OLR Bill Analysis sSB 1225 AN ACT CONCERNING REFERENDA, INDEPENDENT EXPENDITURES, STATE ELECTIONS ENFORCEMENT COMMISSION COMPLAINTS AND REPAYMENT OF SURPLUS CITIZENS' ELECTION PROGRAM GRANT FUNDS.

SUMMARY This bill changes laws affecting campaign finance and elections.

Principally, it does the following:

1.

codifies “independent expenditure political committee” (known as an IE-only PAC) as a type of political committee (PAC) and requires IE-only PACs to register with the State Elections Enforcement Commission (SEEC) (§§ 1-3, 6-7 & 9-15);

2.

classifies referendum PACs as IE-only PACs and makes conforming changes (§ 15);

3.

expands independent expenditure (IE) disclosure requirements (§ 4);

4.

increases the maximum penalties for failing to file IE reports (§ 4);

5.

modifies PAC registration requirements, including expanding the contents of the registration statement (§ 5);

6.

in conformity with current practice, eliminates aggregate individual contribution limits to certain committees (§ 8);

7.

expands disclaimer requirements for referenda and party candidate listings (§ 16);

8.

narrows the circumstances under which SEEC must dismiss a sSB1225 / File No.

630 33 sSB1225 File No.

630 complaint within one year after receiving it (§ 17);

and 9.

modifies the deadline by which a person must return surplus funds from the Citizens’ Election Fund (CEF) before he or she is guilty of larceny (§ 18).

The bill also makes minor, technical, and conforming changes.

EFFECTIVE DATE:

Upon passage §§ 1-3, 6-7 & 9-15 — IE-ONLY PACS The law authorizes persons (including individuals, entities, and committees) to make unlimited IEs and defines “independent expenditure” as an expenditure made without the consent, coordination, or consultation of a (1) candidate or candidate’s agent, (2) candidate committee, (3) PAC, or (4) party committee (CGS § 9-601c).

The bill codifies “independent expenditure political committee” (known as an IE-only PAC) as a type of PAC under Connecticut’s campaign finance laws and, like other committees that make IEs, requirestheir registrationwithSEEC.It definesthemas PACsthat make only (1) IEs and (2) contributions to other IE-only PACs (see BACKGROUND).

It also allows these PACs to (1) coordinate with other IE-only PACs to make IEs and (2) make donations to tax-exempt 501(c)(3) (nonprofit) and 501(c)(19) (veterans) organizations and refund contributor contributions.

The bill makes several conforming changes, including specifying that (1) individuals, business entities, and labor unions may make contributions to IE-only PACs and (2) various types of IE-only PACs, such as those formed for a single election or primary, may not make contributions except to other IE-only PACs.

It also classifies referendum PACs as IE-only PACs.

Lawful Purposes (§ 6) The bill defines “lawful purposes of the committee” for IE-only PACs as promoting the following:

sSB1225 / File No.

630 34 sSB1225 File No.

630 1.

a political party, 2.

the success or defeat of candidates for nomination or election to a public office or position regulated by state campaign finance laws, or 3.

the success or defeat of referendum questions.

Existing law generally allows PACs to pay specific expenses to accomplish their lawful purposes.

Surplus Distributions (§ 7) By law, candidate committees and PACs, other than exploratory committees or PACs organized for ongoing political activities, must generally spend or distribute surplus funds (1) within 90 days after (a) a primary when a candidate loses or (b) an election or referendum not held in November or (2) by March 31 following an election or a referendum held in November.

The bill establishes a surplus distribution procedure for IE-only PACs, other than those formed for ongoing activities.

Specifically, it requires them to distribute surplus funds, according to the schedule outlined above, to (1) their contributors, on a prorated basis;

(2) state or municipal governments or agencies;

or (3) tax-exempt 501(c)(3) and 501(c)(19) organizations.

Referendum PACs (§§ 7 & 15) The bill classifies referendum PACs as IE-only PACs and makes conforming changes.

Specifically,it allowsany persontoestablishanIE- only PAC for a single referendum question or multiple questions submitted to a vote on the same day.

Under the bill, the committee may make IEs only for these purposes.

Relatedly, the bill eliminates provisions in current law that establish surplus distributions for referendum PACs and instead subjects them to the bill’s procedure for IE-only PACs.

§ 4 — REPORTING IEs AND COVERED TRANSFERS sSB1225 / File No.

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630 By law, persons must disclose information about IEs they make that exceed $1,000 in the aggregate by filing certain reports.

A “person” is an individual, committee, firm, partnership, organization, association, syndicate, company trust, corporation, limited liability company, or any other legal entity (other than the state or its political or administrative subdivisions) (CGS § 9-601(10)).

The bill does the following:

1.

changestheperiodduring whichIE disclosure reportsare subject to a 24-hour electronic filing deadline;

2.

expands disclosure requirements for persons that make IEs without forming aPAC (knownas“incidentalspenders”)andfor IE-only PACs;

and 3.

conforms law to practice by requiring that, to disclose IEs, (a) incidental spenders use SEEC’s long- and short-form reports and (b) PACs, including IE-only PACs, use SEEC’s campaign finance forms for PACs formed in Connecticut.

As under existing law, IEs made for or against (1) statewide office or legislative candidates, or statewide referenda, must be filed with SEEC and(2)municipaloffice candidatesor municipalreferendamust befiled with town clerks.

24-Hour Report Filing Deadline Under current law, a person must electronically file a disclosure report within 24 hours after making or obligating to make an IE that (1) is made or obligated during a primary or general election campaign and (2) promotes the success or defeat of a statewide office or legislative candidate.

The bill instead applies the 24-hour electronic filing requirement to these IEs made or obligated to be made during the period (1) beginning June 1 in a regular election year or, in the case of a special election for state senator or state representative, the day the governor issues writs sSB1225 / File No.

630 36 sSB1225 File No.

630 of election, and (2) ending on the day after the primary or general election for which the IE is made or incurred.

In the case of a special election, a person that makes or obligates to make an IE that exceeds $1,000 in the aggregate before the governor issues the writs must electronically file the IE report within 24 hours after the governor issues the writs.

Additionally, the bill applies the 24-hour reporting requirement to IEs within this timeframe that promote the success or defeat of a referendum question proposing a constitutional amendment, convention, or revision.

For any other IEs (those not subject to 24-hour reporting requirements), the bill requires that IE reports be filed according to the same schedule as the periodic statements filed by PACs.

Disclosures by Incidental Spenders Existing law requires persons, other than PACs (as described above), to disclose information about IEs they make using SEEC’s long- and short-form reports (i.e., SEEC Form 26) (see BACKGROUND).

The bill adds to the information that these IE-makers must disclose in these reports.

Under the bill, they must additionally disclose the following in the long-form report:

1.

the name of the human being who had direct, extensive, and substantive decision-making authority over the IE being disclosed, as well as his or her mailing address, telephone number, and e-mail;

2.

a certification that the person making the IE is not a foreign national, as defined in federal law (see BACKGROUND);

3.

for the person making or obligating to make the IE, a statement indicating if the person files a report with the Federal Election Commission (FEC), IRS, or any similar out-of-state agency, and sSB1225 / File No.

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630 identifying information under which the filing is made;

4.

generally, any street address that differs from any mailing address required by the form;

and 5.

for a referendum, its date, the question’s text, and whether the IE supported or opposed it.

Under the bill, the short-form report must also disclose, for a referendum, the question’s text and an allocation of the expenditure in support or opposition to it.

Disclosing Covered Transfers.

As part of both the long- and short- form reports, the law requires a person to disclose the source and amount of any covered transfer of $5,000 or more, in the aggregate, received during the 12 months before the applicable primary or election if the IE (for which the report is being filed) is made or obligated to be made 180 or less days before the primary or election.

The bill extends the requirement to covered transfers made to promote or oppose a referendum question proposing a constitutional amendment, convention, or revision.

The law exempts from this disclosure requirement a person that discloses the source and amount of a covered transfer in a report it files with the FEC or the IRS, as long as the person includes a copy of the report inthestatementit fileswithSEEC.The billextendstheexemption to persons that include in their IE reports information sufficient for SEEC to find their FEC or IRS filing.

The bill also extends this exemption to apply to similar out-of-state agency reports.

Under current law if a person makes the IE from a dedicated IE account, the IE report and disclaimer (see below) may include only persons that made covered transfers to it directly.

The bill requires that the report and disclaimer include this information but removes a provision limiting it to only this information.

By law, a “covered transfer”is,withcertainexceptions, any donation, transfer, or payment of funds by a person to a recipient that (1) makes sSB1225 / File No.

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630 IEs or (2) transfers funds to another person that makes IEs (CGS § 9- 601(29)).

Penalties for Failure to File an IE Report The bill increases the maximum civil penalties SEEC may impose for failure to file certain required IE reports.

It also subjects IEs that support or oppose referendum questions to these penalties.

Specifically, existing law allows SEEC to impose a maximum penalty of $10,000 for failing to file a report for an IE that is made or obligated more than 90 days before a primary or general election.

The bill extends this penalty and the penalties described below to IEs that support or oppose a referendum.

For IEs made or obligated 90 days or fewer before a primary or general election, SEEC may currently impose a maximum penalty of $20,000 for failing to file areport.The billinsteadallowsSEECto impose a penalty of up to $20,000 or twice the amount of any unreported IE, including for a referendum, whichever is greater.

Currently, a knowing and willful failure to file an IE report is punishable by an additional fine of up to $50,000.

The bill instead allows SEEC to impose an additional civil penalty of up to $50,000 or 10 times the amount of any unreported expenditure, whichever is greater.

In addition, the bill establishes personal liability for a civil penalty that remains unpaid after the later of one year after the date when (1) SEEC imposed it or (2) a final judgment is issued following any judicial review of SEEC’s action.

Specifically, the bill makes the following individuals personally liable:

1.

in the case of a committee, the chairperson and any officer, or 2.

in the case of a person other than a committee, (a) the CEO, CFO, or equivalent;

(b) any other officer;

and (c) any manager who had direct, extensive, and substantive decision-making authority over the IE or IEs made or obligated to be made.

sSB1225 / File No.

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630 § 5 — PAC REGISTRATIONS By law, most PACs must register with SEEC and designate a treasurer.

They may also designate a deputy treasurer.

The registration statement must include, among other things, the committee’s name and purpose.

The bill expands the required contents of the PAC registration statement.

Under current law, for a committee that files reports with the FEC or an out-of-state agency, the registration must include a statement to that effect and the agency’s name.

The bill expands this provision to include reports filed with the IRS and also requires that the statement include identifying information under which those filings are made.

In addition, if a committee is established or controlled by a person or individual acting as an agent for a person, the statement must indicate the person’s name.

If a committee is established or controlled by a person other than a human being, the statement must indicate the name of the CEO or an equivalent and a certification that the person making the expenditure is not a foreign national (as defined in federal law, see BACKGROUND).

Current law requires only that a PAC established by a business entity or organization (i.e., a labor union) indicate the name of the entity or organization.

§ 8 — AGGREGATE CONTRIBUTION LIMIT FOR INDIVIDUALS Statelawgenerallylimitstheamount thatindividualsmay contribute to a specific candidate committee, party committee, or political committee.

The bill conforms the law to SEEC practice by eliminating an aggregate limit on certain contributions by an individual.

Under this limit, an individual may not contribute more than $30,000 in the aggregate during a single primary and election to (1) candidate committees, (2) exploratory committees, and (3) slate committees for justice of the peace (in a primary).

In practice, SEEC does not enforce this aggregate limit (see BACKGROUND).

§ 16 — POLITICAL ATTRIBUTIONS Disclaimer Exceptions sSB1225 / File No.

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630 By law, printed, video, and audio political communications (both IEs and non-IEs) must include certain attributions, known as “disclaimers.” Among other things, they must identify the person making the expenditure for the communication.

The bill exempts from the law’s IE disclaimer requirements (1) editorials, news stories, or commentaries published independently and without compensation in any newspaper, magazine, or journal;

(2) banners;

(3) political paraphernalia, including pins, buttons, badges, emblems, hats, or bumper stickers;

and (4) signs with a surface area of not more than32 square feet.These communicationsare already exempt from the disclaimer requirements that the law establishes for non-IE spending.

Referenda Under current law, only the disclaimer requirements for printed communications apply to expenditures made for a referendum.

The bill extends, to IEs promoting a referendum question’s success or defeat, existing law’sdisclaimer requirementsfor election-and primary-related IEs made for video and audio communications and telephone calls.

Generally, each of these disclaimers must (1) include the name of the IE- maker and a statement that the expenditure was made independent of any candidate or political party and (2) state that additional information about the IE-maker is available on SEEC’s website.

Additionally, communications made within 90 days before the primary or election must also state the names of the five persons that made thefive largest coveredtransferstotheIE-maker,intheaggregate, during the 12 months immediately before the referendum.

As under existing law for other communications, these disclaimers for referendum IEs may omit any person that made covered transfers to it of less than $5,000, in the aggregate, during the 12 months immediately before the referendum.

Party Candidate Listings Current law requires that party committees (i.e., state central and sSB1225 / File No.

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630 town) use the appropriate disclaimer in any print, television, or social media promotion of a slate of candidates (disclaimers by individual candidates are not required).

The bill instead requires that organization expenditures for party candidate listings by a party committee, legislative caucus committee, or legislative leadership committee use the appropriate disclaimer.

By law, a “party candidate listing” is a communication that (1) lists the name or names of candidates for election;

(2) is distributed through public advertising (e.g., cable television, newspapers, or similar media), direct mail, telephone, electronic mail, publicly accessible Internet sites, or personal delivery;

and (3) is made to promote the success or defeat of a candidate or slate of candidates seeking nomination or election, or to aid or promote the success or defeat of a referendum question or a political party.

The communication may not be a solicitation for or on behalf of a candidate committee (CGS § 9-601(25)(A)).

§ 17 — SEEC INVESTIGATIONS By law, SEEC receives complaints from the secretary of the state, registrars of voters, town clerks, and individuals under oath about alleged election law violations.

It investigates and holds hearings as it deems appropriate (CGS § 9-7b(a)(1)).

The bill narrows the circumstances under which SEEC must dismiss a complaint within one year after receiving it.

Time Limit Currently, SEEC must dismiss a complaint it receives on or after January 1, 2018, if it does not issue a final decision on it within one year after receiving the complaint.

However, the deadline must be extended if specified actions delay the final decision’s issuance.

The bill relaxes this requirement for SEEC complaints received on or after July 1, 2023.

It instead requires the commission to dismiss after one year any complaint for which it has not (1) found reason to believe a state election law violation occurred and (2) initiated a contested case proceeding.

sSB1225 / File No.

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630 The bill also (1) requires that the deadline for making this finding be extended for the same reasons that the final decision deadline must be extended under current law and (2) establishes additional reasons for extending this deadline (see below).

As under current law, the one-year deadline must be extended by the length of the delay.

Extensions Under current law, the one-year deadline for SEEC to issue a final decision must be extended if its issuance is delayed for any of the following reasons:

1.

extension or continuance granted to a respondent by SEEC or its staff before issuing the decision;

2.

issuance of a subpoena in connection with the complaint;

3.

litigation in state or federal court related to the complaint;

or 4.

consultation with the chief state’s attorney, attorney general, U.S.

Department of Justice, or U.S.

attorney for Connecticut.

The bill similarly requires an extension, for these same reasons, of the one-year deadline for finding reason to believe that an election law violation occurred and initiating a contested case.

(SEEC regulations generally prohibit the commission from proceeding with a contested case unless it finds, by a majority vote of a quorum, reason to believe that a violation occurred (Conn.

Agencies Regs., § 9-7b-35).) The bill also requires an extension if the finding and commencement are delayed because of an investigation by SEEC or its staff involving a potential state electionlaw violation (1) by a foreign national (as defined in federal law, see BACKGROUND) or (2) involving independent expenditures (e.g., making or reporting them).

§ 18 — FAILURE TO RETURN SURPLUS CEF FUNDS By law, candidates participating in the Citizens’ Election Program receive a grant from the Citizens’ Election Fund (CEF).

Under current law, a person is guilty of larceny if he or she does not repay surplus CEF sSB1225 / File No.

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630 funds within 90 days following the election or primary for which the grant is made.

Thebillinsteadalignsthisdeadlinewithstatecampaignfinancelaw’s deadline for distributing surplus funds.

The campaign finance law sets several surplus distribution deadlines that exceed 90 days after an election or primary.

For example, the surplus distribution deadline for candidates in a November election is the following March 31 if the candidate’s committee is not audited by SEEC or June 30 if it is audited (CGS § 9-608(e)(1)).

BACKGROUND Related Bills sHB 6904 (File 543, § 3), reported favorably by the Government Administration and Elections (GAE) Committee, also narrows the circumstances under which SEEC must dismiss a complaint within one year after receiving it.

sSB 1188, reported favorably by the GAE Committee, explicitly prohibits foreign nationals from making contributions or expenditures under state campaign finance laws and defines “foreign national” for purposes of these laws.

Foreign Nationals and Related Federal Law Foreign Nationals.

Federal campaign finance law defines a “foreign national” as any of the following:

1.

a government of a foreign country and a foreign political party;

2.

a person outside of the United States unless it is established that thepersonis(a) anindividualandaU.S.citizendomiciled within the United States or (b) not an individual, has its principal place of business in the United States, and is organized under, or created by, theUnitedStates, a state, or otherplace subject to U.S.

jurisdiction;

3.

a partnership, association, corporation, organization, or other sSB1225 / File No.

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630 combination of persons organized under the laws of, or having its principal place of business in, a foreign country;

or 4.

an individual who is not a U.S.

citizen or national and is not a lawful permanent resident (52 U.S.C.

§ 30121(b) & 22 U.S.C.

§ 611(b)).

Prohibited Activities.

Federal law prohibits a foreign national from, among other things, directly or indirectly making:

1.

inconnectionwithafederal,state,orlocalelection,acontribution or donation of money or anything of value;

an express or implied promise to make a contribution or donation;

or an expenditure or IE;

or 2.

a contribution or donation to a federal, state, or local political party’s committee.

It similarly prohibits a person from soliciting, accepting, or receiving any contribution or donation described above from a foreign national (52 U.S.C.

§ 30121 & 11 C.F.R.

§ 110.20).

Aggregate Contribution Limits In McCutcheon et al.

v.

Federal Election Commission, 134 S.

Ct.

1434 (2014), the U.S.

Supreme Court held that aggregate limits on contributions by individuals to federal candidates, political parties, and PACs were unconstitutional under the First Amendment.

In Advisory Opinion 2014-03, SEEC announced that, unless it received further guidance from the legislature or a court of competent jurisdiction, it would no longer enforce current law’s $30,000 aggregate limit on contributions by individuals during a single primary and electionto (1)candidate committees,(2)exploratory committees,and(3) slate committees for justice of the peace (in a primary).

IE-Only PACs In Declaratory Ruling 2013-02, SEEC ruled that, in light of a line of cases ruling that contribution limits to IE-Only PACs are sSB1225 / File No.

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630 unconstitutional, it would no longer enforce contribution limits to PACs that receive and spend funds only for IEs unless it received further guidance from the legislature or a court.

Long- and Short-Form IE-Reports As part of these reports, a person must disclose the source and amount of any covered transfer of $5,000 or more in the aggregate that it received during the 12 months before the applicable primary or election.

This requirement applies if the IE (for which the report is being filed) is made or obligated to be made 180 days or less before the primary or election (CGS § 9-601d(f)).

COMMITTEE ACTION Government Administration and Elections Committee Joint Favorable Substitute Yea 13 Nay 6 (03/27/2023) sSB1225 / File No.

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