Arkansas enacts nonprofit donor disclosure bill

By

Jerrick Adams

Arkansas enacts nonprofit donor disclosure bill

On April 30, Gov. Asa Hutchinson (R) signed SB535 into law. The bill bars state agencies and officials from implementing disclosure requirements on nonprofits that are “more stringent, restrictive, or expansive” than those already in force. It also prohibits state and local public agencies from requiring, requesting, or disclosing information about a nonprofit’s donors.

What the bill does

SB535 bars state agencies and officials from imposing annual filing or reporting requirements on nonprofits that are “more stringent, restrictive, or expansive than the requirements authorized by state statute,” except as required or authorized by federal law. This provision does not apply to: 

  • State grants and contracts.
  • Fraud investigations.
  • “Regulation or licensing of entities by the Department of Human Services.”
  • “Regulation or licensing by the Department of Labor and Licensing.” 

The bill also prohibits public agencies (defined as state and local government entities) from: 

  • Requiring a person to provide a public agency with personal information (defined as a “list, record, register, registry, roll, roster, or other compilation of data that identifies a person as a member, supporter, volunteer of, or donor of financial or nonfinancial support to” a tax-exempt nonprofit).
  • Requiring a nonprofit to provide a public agency with personal information.
  • Releasing, publishing, or otherwise disclosing any personal information a public agency already has.
  • Requesting or requiring a current or prospective contractor to provide a public agency with information about the contractor’s financial or nonfinancial support of a nonprofit. 

These provisions do not apply to the disclosure of personal information:

  • “Required under a specific requirement relating to reporting campaign contributions, campaign expenditures, lobbying disclosures, or lobbying expenditures.” 
  • As part of a public comment in a public meeting or “in another manner that is publicly accessible.” 
  • In accordance with a warrant or court order.
  • Used in a legal proceeding. 
  • Used by the Department of Finance and Administration for the “administration of tax or motor vehicle laws.”
  • Used by any public agency “with oversight function over a government program for the purpose of an audit specific to the grant program,” provided that the “information accessed is limited to information related to the public agency grant program or grant program funds.” 
  • Used by the State Securities Department for administration of the Arkansas Securities Act.

Legislative history   

State Sen. Breanne Davis (R) and Reps. David Ray (R) and Austin McCollum (R) introduced SB535 in the Senate on March 15. The Senate approved the original version of the bill 29-1 on April 7. Sen. Stephanie Flowers (D) cast the lone dissenting vote. 

The House State Agencies and Governmental Affairs Committee recommended the House approve an amended version of the bill. On April 20, the House approved the amended version of the bill 74-12. Reps. Nicole Clowney, Andrew Collins, Denise Jones Ennett, Vivian Flowers, Denise Garner, Megan Godfrey, Ashley Hudson, Stephen Magie, Reginald Murdock, Jay Richardson, Joy Springer, and David Whitaker, all Democrats, voted against the bill. On April 26, the Senate approved the House amendments by a vote of  33-1. Sen. Flowers against dissented. 

The original and enacted bills are largely the same. For example, both versions bar state agencies and officials from imposing annual filing or reporting requirements on nonprofits that are “more stringent, restrictive, or expansive” than those already required by statute. The original version of the bill specifies that this provision does not apply “to state grants and contracts, fraud investigations, and shall not restrict enforcement actions against specific nonprofit organizations.” The current version strikes the last of these three, replacing it with several specific exempt regulatory actions (e.g., “regulation or licensing of entities by the Department of Human Services”). 

Political context: Arkansas is a Republican trifecta, meaning Republicans control the governorship and majorities in both chambers of the state legislature. Arkansas has been a Republican trifecta since 2015.

What other states are doing

State lawmakers in Iowa, Nebraska, North Carolina, Tennessee, West Virginia, and Wyoming have considered similar legislation this year. Five of these states are Republican trifectas (the sixth, North Carolina, has a divided government, with a Democratic governor and Republican majorities in both chambers of the state legislature). 

South Dakota, a Republican trifecta, was the first state to enact similar legislation this year.

The big picture

Number of relevant bills by state: We’re currently tracking 38 pieces of legislation dealing with donor disclosure. On the map below, a darker shade of green indicates a greater number of relevant bills. Click here for a complete list of all the bills we’re tracking. 

Number of relevant bills by current legislative status: 

Number of relevant bills by partisan status of sponsor(s): 

Recent legislative actions

For complete information on all of the bills we are tracking, click here. 

  • Arkansas SB535: This bill would prohibit a public agency from disclosing identifying information about a nonprofit’s donors.
    • Republican sponsorship.
    • Signed into law on April 30.
  • California AB236: This bill would require campaign finance committees to report the name of “each individual who owns or controls, or controls the contributions and expenditures of, a limited liability company or a foreign limited liability company from which the committee received a campaign contribution.”
    • Democratic sponsorship.
    • Read for a second time in the Assembly and ordered to a third reading on April 29.
  • California SB686: This bill would require a limited liability company that qualifies as a committee or a sponsor of a committee under the state’s campaign finance laws to file a statement of members with the Secretary of State. The statement of members must include a list of everyone with a membership interest in the limited liability company of at least 10% or who made a cumulative capital contribution of at least $1,000 to the company after it qualified as a committee or sponsor of a committee, or within the 2 calendar years before it qualified.
    • Democratic sponsorship.
    • Senate Appropriations Committee hearing scheduled for May 3.
  • Tennessee HB0159: This bill would prohibit a public agency from disclosing identifying information about a nonprofit’s donors.
    • Republican sponsorship.
    • The House adopted on April 26 and transmitted to the Senate.
  • Tennessee SB1608: This bill would prohibit a public agency from disclosing identifying information about a nonprofit’s donors.
    • Republican sponsorship.
    • Placed on the Senate regular calendar for May 3.

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