CategoryNewsletters

On May 13, Governor Phil Murphy (D) conditionally vetoed S1500, legislation that would require 501(c)(4)s, super PACs, and other entities to disclose their donors who contribute $10,000 or more.

In his veto statement, Murphy said, “I commend my colleagues in the Legislature for seeking to ensure that so-called ‘dark money’ is brought out into the open. However, I am mindful that such efforts must be carefully balanced against constitutionally protected speech and association rights. Because certain provisions of Senate Bill No. 1500 (Fifth Reprint) may infringe on both, and because the bill does not go far enough in mandating disclosures of political activity that can be constitutionally required, I cannot support it in its current form.”

• What comes next? With his conditional veto, Murphy delineated his objections to the bill and proposed amendments to address them. This differs from an absolute veto (i.e., an outright gubernatorial rejection of a proposed law). Should the legislature adopt an amended version of the bill, it will return to Murphy’s desk for his consideration.

  The legislature can also, by a two-thirds majority vote in each chamber, override Murphy’s veto and enact the bill. The Senate approved the bill 33-to-0, with seven members not voting. The Assembly approved the bill 60-to-1, with two members not voting and 17 abstaining. Democrats control both chambers of the state legislature, with a 26-to-14 majority in the Senate and a 54-to-26 majority in the Assembly.     

• The bill’s sponsors, Sen. Troy Singleton (D) and Asm. Andrew Zwicker (D), said: “The governor says that this bill ‘falls short’ of the goal to bring greater transparency to our political process. That is a gross misrepresentation of months and, frankly, years of hard work. The only thing that fell short today was the governor’s will to truly address the behemoth of dark money that has eroded the public’s trust in our government.”
• What does the legislation propose?
• As adopted, S1500 would define an independent expenditure committee as any person or group of persons organized under sections 501(c)(4) or 527 of the Internal Revenue Code spending $3,000 or more annually to influence or provide political information about any of the following:
• “the outcome of any election or the nomination, election, or defeat of any person to any state or local elective public office”
• “the passage or defeat of any public question, legislation, or regulation”
• Under S1500, independent expenditure committees would be required to disclose all expenditures exceeding $3,000. These committees would also be required to disclose the identities of donors contributing $10,000 or more.

What we’re reading

• Tulsa World, “Does Citizens United apply to Cherokee elections? Candidates for chief weigh in on this and other issues at televised forum,” May 17, 2019
• RealClearPolicy, “Selling Dark Money as Grassroots Transparency,” May 16, 2019
• Nonprofit Quarterly, “501c4 Nonprofits’ Image Problem Is a Problem for All of Us,” May 15, 2019

The big picture

Number of relevant bills by state: We’re currently tracking 72 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

Below is a complete list of legislative actions taken on relevant bills in the past week. Bills are listed in alphabetical order, first by state then by bill number. Know of any legislation we’re missing? Please email us so we can include it on our tracking list.

• Massachusetts H686: This bill would require groups producing electioneering communications to disclose to the public certain information about donations coming from foreign sources.
• Joint Committee on Election Laws hearing May 15.
• Missouri HB394: This bill would require any entity not a defined as a committee under the state’s campaign finance laws that spends $500 or more to support or oppose candidates or ballot measures to file quarterly donor reports. Included in those reports would be the names and addresses of donors who gave more than $50 to the entity in that quarter.
• Referred to House General Laws Committee May 17.
• Missouri HB513: This bill would require any committees that receive contributions or make expenditures for inaugural activities to file disclosure reports with the Missouri Ethics Commission.
• Referred to House General Laws Committee May 17.
• Missouri HB886: This bill would lower the disclosure threshold for contributors to ballot measure campaigns from $500 in aggregate to $25 or more in aggregate during an election cycle.  
• Referred to House Elections and Elected Officials Committee May 17.
• New Hampshire SB105: This bill would establish disclosure requirements for certain contributions made to inaugural committees.
• House Election Law Committee executive session May 16.
• New Hampshire SB156: This bill would require that political contributions made by limited liability companies be allocated to individual members in order to determine whether individuals have exceeded contribution limits.
• House Election Law Committee executive session May 16.
• New Jersey S1500: This bill would require disclosure of donors to 501(c)(4)s, super PACs, and other similar entities who give $10,000 or more.
• Conditionally vetoed May 13.

On May 13, attorneys general in five states – California, Connecticut, Massachusetts, Oregon, and Washington – filed suit in U.S. District Court against the U.S. Department of Health and Human Services (HHS). They seek to overturn an HHS final rule, issued May 6 barring states from making Medicaid payments to third parties on behalf of individual home health care providers. The rule applies to voluntary payroll deductions made to pay union dues    

• Who are the parties to the suit? The plaintiffs include the attorneys general for California, Connecticut, Massachusetts, Oregon, and Washington (Xavier Becerra, William Tong, Maura Healey, and Ellen Rosenblum, respectively). Oregon Governor Kate Brown also joined the suit as a plaintiff. The defendants are the U.S. Department of Health and Human Services and its secretary, Alex Azar.
• Political context: In all five states, the attorneys general are Democrats. Four of the five states – California, Connecticut, Oregon, and Washington – are Democratic trifectas (in Massachusetts, a Republican controls the governorship, but Democrats control both chambers of the state legislature).
• What are the responses?
  • In their initial complaint, the plaintiffs said, “[The] Final Rule would undermine laws and agreements that have improved the provision of homecare to the States’ residents. It would disrupt well-established collective bargaining relationships and weaken an organized workforce infrastructure that the States have authorized as a result of provider self-organization and in order to channel labor relations in a productive and cooperative manner that contributes to the building, training, and mobilization of Medicaid homecare workforces.”
  • In commentary accompanying the complete text of the final rule, the Centers for Medicare and Medicaid Services said: “This rule merely forecloses the ability of a practitioner to assign a portion of his or her Medicaid payment to a union. However, other means remain available. A provider may voluntarily agree to automatic credit card or bank account deductions to pay for union dues once 100 percent of reimbursement has been received.”
• The case, California v. Azar (case number 4:19-cv-02552), was filed in the U.S. District Court for the Northern District of California.

The big picture

Number of relevant bills by state: We are currently tracking 100 pieces of legislation dealing with public-sector employee union policy. 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

Below is a complete list of legislative actions taken in the last week. Bills are listed in alphabetical order, first by state then by bill number.

• California AB314: This bill would require employers to grant employees paid time for certain union activities.
• Assembly Appropriations Committee hearing May 16.
• Oregon HB2016: This bill would require public employers to grant paid time to employees participating in certain union activities. It would also require employers to furnish unions with access to employees.
• Senate Workforce Committee work session scheduled for May 21.
• Oregon HB3009: This bill would require public employers to provide unions with access to new employees. It would also permit individuals who are not members to make payments in lieu of dues to unions.
• Senate Workforce Committee work session scheduled for May 23.

On May 6, 2019, New Jersey Attorney General Letitia James (D) and New York Attorney General Gurbir Grewal (D) sued the U.S. Department of the Treasury and the Internal Revenue Service (IRS). They are seeking information as to how the agency arrived at its decision to stop requiring donor information from select nonprofit groups. (Sources: Associated Press, Nonprofit Quarterly) 

• What is at issue? On July 16, 2018, the IRS issued Revenue Procedure 2018-38, which exempts 501(c) nonprofit entities from reporting the names and addresses of their contributors to the IRS. The rule modification does not apply to 501(c)(3) organizations.
• In a separate suit filed on April 17, 2019, Montana Governor Steve Bullock (D), the Montana Department of Revenue, and the state of New Jersey asked a federal judge to overturn the rule. The case name and number are Bullock v. Internal Revenue Service, 4:18-cv-00103.
• Who are the parties to the suit, and what are they saying?
• The plaintiffs are James and Grewal. In a press release, James said, “Not only was this policy change made without notice, the Treasury and the IRS are now refusing to comply with the law to release information about the rationale for these changes. No one is above the law – not even the federal government – and we will use every tool to ensure they comply with these regulations to provide transparency and accountability.”
• The defendants are the U.S. Department of the Treasury and the Internal Revenue Service. Neither agency had commented publicly on the suit at the time of its filing. Upon adoption of the rule change, Secretary of the Treasury Steven Mnuchin said, ” Americans shouldn’t be required to send the IRS information that it doesn’t need to effectively enforce our tax laws, and the IRS simply does not need tax returns with donor names and addresses to do its job in this area. It is important to emphasize that this change will in no way limit transparency.  The same information about tax-exempt organizations that was previously available to the public will continue to be available, while private taxpayer information will be better protected.”
• The suit was filed in the U.S. District Court for the Southern District of New York. The case name and number are State of New York et al. v. U.S. Department of the Treasury et al., 1:19-cv-04024.

What we’re reading

• The Colorado Independent, “Capitol Review: Lawmakers expanded voter access, took aim at dark money,” May 10, 2019
• Politico, “Sources: Murphy to conditionally veto ‘dark money’ bill, potentially dooming it,” May 9, 2019
• Real Clear Politics, “Dems’ Campaign Finance Bill Could Be a Privacy Nightmare,” May 9, 2019

The big picture

Number of relevant bills by state: We’re currently tracking 72 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

Below is a complete list of legislative actions taken on relevant bills in the past week. Bills are listed in alphabetical order, first by state then by bill number. Know of any legislation we’re missing? Please email us so we can include it on our tracking list.

• Massachusetts H686: This bill would require groups producing electioneering communications to disclose certain information about donations coming from foreign sources.
• Joint Election Laws Committee hearing scheduled May 15.
• New Hampshire SB105: This bill would establish disclosure requirements for certain contributions made to inaugural committees.
• House Election Law Committee executive session May 16.
• New Hampshire SB156: This bill would require that political contributions made by limited liability companies be allocated to individual members in order to determine whether individuals have exceeded contribution limits.
• House Election Law Committee executive session May 16.