Senate Study Bill 3210 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON STATE GOVERNMENT BILL BY CHAIRPERSON APPEL) A BILL FOR An Act relating to campaign finance, including political 1 campaign activities and independent expenditures by 2 corporations, and making penalties applicable. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 6210XC (6) 83 jr/rj

S.F. _____ Section 1. Section 68A.404, Code Supplement 2009, is 1 amended to read as follows: 2 68A.404 Independent expenditures. 3 1. As used in this section, “independent expenditure” means 4 one or more expenditures in excess of one hundred dollars in 5 the aggregate for a communication that expressly advocates 6 the nomination, election, or defeat of a clearly identified 7 candidate or the passage or defeat of a ballot issue that 8 is made without the prior approval or coordination with a 9 candidate, candidate’s committee, or a ballot issue committee. 10 2. A corporation, prior to making an independent 11 expenditure, shall obtain the approval of a majority of the 12 corporation’s shareholders for any independent expenditure 13 to influence public opinion on matters not related to the 14 corporation’s products or services. 15 2. 3. A person, other than a committee registered under 16 this chapter, that makes one or more independent expenditures 17 shall file an independent expenditure statement. 18 a. The requirement to file an independent expenditure 19 statement under this section does not by itself mean that 20 the person filing the independent expenditure statement is 21 required to register and file reports under sections 68A.201 22 and 68A.402. 23 b. This section does not apply to a candidate, candidate’s 24 committee, state statutory political committee, county 25 statutory political committee, or a political committee. 26 This section does not apply to a federal committee or an 27 out-of-state committee that makes an independent expenditure. 28 3. 4. a. An independent expenditure statement shall be 29 filed within forty-eight hours of the making of an independent 30 expenditure in excess of one hundred dollars in the aggregate. 31 b. An independent expenditure statement shall be filed with 32 the board and the board shall immediately make the independent 33 expenditure statement available for public viewing. 34 c. For purposes of this section, an independent expenditure 35 -1- LSB 6210XC (6) 83 jr/rj 1/ 9

S.F. _____ is made at the time that the cost is incurred. 1 4. 5. The independent expenditure statement shall contain 2 all of the following information: 3 a. Identification of the individuals or persons filing the 4 statement. In the case of a corporation, the statement shall 5 disclose the names and addresses of all individual shareholders 6 and the names and addresses of the shareholders in any 7 corporation which is itself a shareholder in the corporation 8 making the independent expenditure. 9 b. Description of the position advocated by the individuals 10 or persons with regard to the clearly identified candidate or 11 ballot issue. 12 c. Identification of the candidate or ballot issue benefited 13 by the independent expenditure. 14 d. The dates on which the expenditure or expenditures took 15 place or will take place. 16 e. Description of the nature of the action taken that 17 resulted in the expenditure or expenditures. 18 f. The fair market value of the expenditure or expenditures. 19 5. 6. Any person making an independent expenditure shall 20 comply with the attribution requirements of section 68A.405. 21 7. A person shall not make an independent expenditure if the 22 person: 23 a. Is a party to a contract with the state of Iowa. 24 b. Has been fined by the federal or state government for 25 fraud. 26 c. Has been found guilty of defrauding the federal or state 27 government in relation to federal emergency management agency 28 or state-funded disaster relief contracts. 29 d. Is a for-profit corporation that receives money from the 30 state or federal government. 31 8. A person making an independent expenditure shall not 32 engage or retain an advertising firm or consultant that has 33 also been engaged or retained by the candidate, candidate’s 34 committee, or ballot issue committee that is the subject of the 35 -2- LSB 6210XC (6) 83 jr/rj 2/ 9

S.F. _____ independent expenditure. 1 6. 9. a. The board shall develop, prescribe, furnish, and 2 distribute forms for the independent expenditure statements 3 required by this section. 4 b. The board shall adopt rules pursuant to chapter 17A for 5 the implementation of this section. 6 Sec. 2. Section 68A.405, Code Supplement 2009, is amended 7 to read as follows: 8 68A.405 Attribution statement on published material. 9 1. a. For purposes of this subsection: 10 (1) “Individual” includes a candidate for public office 11 who has not filed a statement of organization under section 12 68A.201. 13 (2) “Organization” includes an organization established to 14 advocate the passage or defeat of a ballot issue but that has 15 not filed a statement of organization under section 68A.201. 16 (3) “Published material” means any newspaper, magazine, 17 shopper, outdoor advertising facility, poster, direct mailing, 18 brochure, internet website, campaign sign, or any other form 19 of printed general public political advertising. “Published 20 material” includes television, video, or motion picture 21 advertising. 22 b. Except as set out in subsection 2, published material 23 designed to expressly advocate the nomination, election, 24 or defeat of a candidate for public office or the passage 25 or defeat of a ballot issue shall include on the published 26 material an attribution statement disclosing who is responsible 27 for the published material. 28 c. If the person paying for the published material is an 29 individual, the words “paid for by” and the name and address of 30 the person shall appear on the material. 31 d. If more than one individual is responsible, the words 32 “paid for by”, the names of the individuals, and either the 33 addresses of the individuals or a statement that the addresses 34 of the individuals are on file with the Iowa ethics and 35 -3- LSB 6210XC (6) 83 jr/rj 3/ 9

S.F. _____ campaign disclosure board shall appear on the material. 1 e. If the person responsible is an organization, the words 2 “paid for by”, the name and address of the organization, and 3 the name of one officer of the organization shall appear on the 4 material. 5 f. If the person responsible is a corporation the material 6 shall contain a statement that does all of the following: 7 (1) Identifies the chief executive officer of the 8 corporation by name. 9 (2) Identifies how much of the corporation’s general 10 treasury was expended in aggregate on the published material. 11 (3) Certifies the chief executive officer’s personal 12 conclusion that making the expenditure for the published 13 material from the corporation’s general operating funds 14 significantly advances the corporation’s business interest. 15 f. g. If the person responsible is a committee that has 16 filed a statement of organization pursuant to section 68A.201, 17 the words “paid for by” and the name of the committee shall 18 appear on the material. 19 2. The requirement to include an attribution statement does 20 not apply to any of the following: 21 a. The editorials or news articles of a newspaper or 22 magazine that are not paid political advertisements. 23 b. Small items upon which the inclusion of the statement is 24 impracticable including, but not limited to, campaign signs, 25 bumper stickers, pins, buttons, pens, political business cards, 26 and matchbooks. 27 c. T-shirts, caps, and other articles of clothing. 28 d. Any published material that is subject to federal 29 regulations regarding an attribution requirement. 30 e. Any material published by an individual, acting 31 independently, who spends one hundred dollars or less of the 32 individual’s own money to advocate the passage or defeat of a 33 ballot issue. 34 3. For television, video, or motion picture advertising, 35 -4- LSB 6210XC (6) 83 jr/rj 4/ 9

S.F. _____ the attribution statement shall be displayed on the screen in a 1 clearly readable manner for at least four seconds. 2 3. 4. The board shall adopt rules relating to the placing 3 of an attribution statement on published materials. 4 Sec. 3. Section 68A.503, Code Supplement 2009, is amended 5 by striking the section and inserting in lieu thereof the 6 following: 7 68A.503 Financial institution, insurance company, and 8 corporation contributions prohibited. 9 1. Except as provided in subsections 3, 4, 5, and 6, an 10 insurance company, savings and loan association, bank, credit 11 union, or corporation shall not make a monetary or in-kind 12 contribution to a candidate or candidate’s committee. 13 2. Except as provided in subsection 3, a candidate or 14 candidate’s committee shall not receive a monetary or in-kind 15 contribution from an insurance company, savings and loan 16 association, bank, credit union, or corporation. 17 3. An insurance company, savings and loan association, 18 bank, credit union, or corporation may use money, property, 19 labor, or any other thing of value of the entity for the 20 purposes of soliciting its stockholders, administrative 21 officers, and members for contributions to a political 22 committee sponsored by that entity and for financing the 23 administration of a political committee sponsored by that 24 entity. The entity’s employees to whom the foregoing authority 25 does not extend may voluntarily contribute to such a political 26 committee but shall not be solicited for contributions. A 27 candidate or candidate’s committee may solicit, request, 28 and receive money, property, labor, and any other thing of 29 value from a political committee sponsored by an insurance 30 company, savings and loan association, bank, credit union, or 31 corporation as permitted by this subsection. 32 4. The prohibitions in subsections 1 and 2 shall not apply 33 to an insurance company, savings and loan association, bank, 34 credit union, or corporation engaged in any of the following 35 -5- LSB 6210XC (6) 83 jr/rj 5/ 9

S.F. _____ activities: 1 a. Using its funds to encourage registration of voters and 2 participation in the political process or to publicize public 3 issues. 4 b. Using its funds to expressly advocate the passage or 5 defeat of ballot issues. 6 c. Using its funds to place campaign signs as permitted 7 under section 68A.406. 8 d. Using its funds for independent expenditures as provided 9 in section 68A.404. 10 5. The prohibitions in subsections 1 and 2 shall not 11 apply to media organizations when discussing candidacies, 12 nominations, public officers, or public questions. The board 13 shall adopt rules prohibiting the owner, publisher, or editor 14 of a sham newspaper from using the sham newspaper to promote 15 in any way the candidacy of such a person for any public 16 office. As used in this subsection, “sham newspaper” means 17 a newspaper that does not meet the requirements set forth in 18 section 618.3 and “owner” means a person having an ownership 19 interest exceeding ten percent of the equity or profits of the 20 newspaper. 21 6. The prohibitions in subsections 1 and 2 shall not 22 apply to a nonprofit organization communicating with its own 23 members. The board shall adopt rules pursuant to chapter 17A 24 to administer this subsection. 25 7. For purposes of this section “corporation” means a 26 for-profit or nonprofit corporation organized pursuant to the 27 laws of this state, the United States, or any other state, 28 territory, or foreign country. 29 Sec. 4. Section 490.120, Code 2009, is amended by adding the 30 following new subsection: 31 NEW SUBSECTION . 13. The document must contain a statement 32 that the corporation agrees to refrain from any campaign 33 activities prohibited under chapter 68A. 34 EXPLANATION 35 -6- LSB 6210XC (6) 83 jr/rj 6/ 9

S.F. _____ This bill relates to campaign finance, including independent 1 expenditures, published materials, and contributions by 2 corporations and other entities. 3 Code section 68A.404 currently contains restrictions 4 on independent political campaign expenditures. This bill 5 adds a number of provisions relating to such expenditures 6 by corporations and others. Prior to making an independent 7 expenditure, a corporation is required to obtain the approval 8 of a majority of the shareholders for any such expenditure not 9 related to the company’s products or services. Corporations 10 must file an independent expenditure statement with the ethics 11 and campaign finance disclosure board which discloses the names 12 and addresses of all individual shareholders and the names 13 and addresses of the shareholders in any corporation which is 14 itself a shareholder in the corporation making the independent 15 expenditure. 16 The bill prohibits any independent expenditure by a person 17 who is a party to a contract with the state of Iowa; has been 18 fined by the federal or state government for fraud; has been 19 found guilty of defrauding the federal or state government in 20 relation to federal emergency management agency or state funded 21 disaster relief contracts; or is a for-profit corporation that 22 receives money from the state or federal government. 23 The bill prohibits a person making an independent 24 expenditure from engaging or retaining an advertising firm 25 or consultant that has also been engaged or retained by the 26 candidate, candidate’s committee, or ballot issue committee 27 that is the subject of the independent expenditure. 28 Code section 68A.405 requires attribution statements on 29 certain campaign material. For corporations, the bill requires 30 these statements to identify the chief executive officer of the 31 corporation by name, identify how much of the corporation’s 32 general operating funds were expended in aggregate on the 33 published material, and certify the chief executive officer’s 34 personal conclusion that making the expenditure for the 35 -7- LSB 6210XC (6) 83 jr/rj 7/ 9

S.F. _____ published material from general treasury funds significantly 1 advances the corporation’s business interest. 2 The bill requires attribution statements on television, 3 video, or motion picture advertising. Such statements must be 4 displayed on the screen in a clearly readable manner for at 5 least four seconds. 6 Code section 68A.503 currently prohibits an insurance 7 company, savings and loan association, bank, credit union, 8 or corporation from making any contribution to a political 9 or candidate’s committee, or to expressly advocate for the 10 election or defeat of a candidate for public office. These 11 entities may request that stockholders, officers, and employees 12 contribute to a political action committee. Contributions on 13 franchise elections or ballot issues are allowed. Candidates 14 and committees are prohibited from accepting any contributions 15 from these entities. 16 Code Section 68A.503 is rewritten to prohibit an insurance 17 company, savings and loan association, bank, credit union, or 18 corporation from making a monetary or in-kind contribution to a 19 candidate or candidate’s committee, and prohibits a candidate 20 or candidate’s committee from receiving such a monetary or 21 in-kind contribution. 22 An insurance company, savings and loan association, bank, 23 credit union, or corporation may solicit its stockholders, 24 administrative officers, and members, but not its employees, 25 for contributions to a political committee that it sponsors 26 and for financing the administration of a political committee 27 sponsored by that entity. 28 An insurance company, savings and loan association, bank, 29 credit union, or corporation may use its funds to encourage 30 registration of voters and participation in the political 31 process or to publicize public issues; use its funds to 32 expressly advocate the passage or defeat of ballot issues; use 33 its funds to place campaign signs relating to ballot issues; 34 or use its funds to make independent expenditures as provided 35 -8- LSB 6210XC (6) 83 jr/rj 8/ 9

S.F. _____ in the bill. 1 Code section 490.120 sets out the requirements for filing 2 corporate documents with the secretary of state. The bill 3 requires that such documents contain a statement that the 4 corporation agrees to refrain from any prohibited campaign 5 activities. 6 Any person who willfully violates any provisions of Code 7 chapter 68A commits a serious misdemeanor. 8 -9- LSB 6210XC (6) 83 jr/rj 9/ 9