TagDisclosure Digest

Treasury Department, IRS finalize modifications to nonprofit donor disclosure rules

On May 26, the United States Treasury Department and the Internal Revenue Service issued a final regulation exempting select nonprofits from disclosing donor information on annual returns they file with the IRS. Under the regulation, which takes effect retroactively to returns filed after Sept. 6, 2019, only 501(c)(3) and 527 groups are required to report the names and addresses of their donors. Donor information reported to the IRS is not released to the public.

501(c)(3) entities are charitable, religious, and educational organizations. 527 groups are nonprofits operating primarily for the purpose of influencing the election or selection of candidates for political office.

Other 501(c) groups that had been required to disclose donor information are now not required to do so. Now-exempted organizations include the following:

  • 501(c)(4) groups: social welfare organizations (e.g., American Civil Liberties Union, National Rifle Association)
  • 501(c)(5) groups groups (e.g., labor unions)
  • 501(c)(6) groups (e.g., business leagues)

Background

On July 16, 2018, the IRS issued Revenue Procedure 2018-38, which exempted 501(c) nonprofits from reporting the names and addresses of their donors to the agency. The rule change did not apply to 501(c)(3) organizations. On July 30, 2019, Judge Brian Morris, of the U.S. District Court for the District of Montana, struck down the procedure, ruling that the federal government had failed to comply with the public notice-and-comment process required under the Administrative Procedure Act. Morris was appointed to the bench by Pres. Barack Obama (D).

On Sept. 10, 2019, the Treasury Department and the IRS issued its proposed regulation exempting some nonprofits from existing donor disclosure requirements. The public comment period closed on Dec. 9, 2019. The proposed regulation received 8,387 written and electronic comments. A public hearing was held on Feb. 7.

Reactions

  • Brent Gardner, from Americans for Prosperity, said, “All citizens should be able to join together to hold their government accountable. These reforms make it easier for Americans to support causes and join groups without being monitored and intimidated by those in power. When people are free to stand alongside others who share their deeply held beliefs, they’re able to amplify their individual voices—contributing to a diverse public square and continued social progress.”
  • Trevor Potter, president of the Campaign Legal Center, said, “At a time when over $10 billion total is expected to be spent during this election season, the requirement that organizations (like the National Rifle Association) report their donors to the IRS was key to ensuring that the foreign-money ban on elections was enforced. Now the Federal Election Commission (FEC) and the Department of Justice (DOJ) are left without another tool to enforce the campaign finance laws under-girding our democracy. Voters expect and deserve more.”
  • In a 2018 speech, Majority Leader Sen. Mitch McConnell (R) said the following in support of Revenue Procedure 2018-38: “It’s bad enough to wield government power to chill political speech and invite harassment of citizens – based on what an angry mob might assume their opinions are, based on their private financial records. It’s even more egregious to pursue that nakedly political goal while calling it ‘good government.’ In this country, good government means protecting citizens’ First Amendment rights to participate in the competition of ideas – not trying to shut down that competition. We persuade; we don’t intimidate.”
  • Oregon Sen. Ron Wyden (D), ranking member on the Senate Finance Committee, said, “The Trump administration has opened the floodgates to dark money pouring into our election system just months before Donald Trump is on the ballot. We’re in the midst of a global pandemic and once-in-a-lifetime economic crisis and the Trump administration is prioritizing boosting the president’s political prospects with shady cash. In finalizing this rule, the Treasury Department ignored the concerns of election security experts — anything to allow hostile foreign interests and groups like the NRA to further undermine our democracy.”

What we’ve been reading

The big picture

Number of relevant bills by state: We’re currently tracking 47 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.

Disclosure Digest map June 1, 2020.png

Number of relevant bills by current legislative status

Disclosure Digest status chart June 1, 2020.png

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

Disclosure Digest partisan chart June 1, 2020.png

Recent legislative actions

Below is a complete list of legislative actions taken on relevant bills since our last issue. Bills are listed in alphabetical order, first by state then by bill number.

  • Tennessee HB2665: This bill would prohibit public agencies from requiring 501(c) entities to furnish them with personal information about donors.
    • Republican sponsorship.
    • House Judiciary Committee hearing scheduled for June 2.
  • Tennessee SB2886: This bill would prohibit public agencies from requiring 501(c) entities to furnish them with personal information about donors.
    • Republican sponsorship.
    • Senate State and Local Government Committee hearing scheduled for June 2.


Oklahoma House advances bill barring public agencies from requiring donor information from 501(c)s

On April 6, Oklahoma House Speaker Charles McCall (R) placed SB1491, which would bar public agencies from requiring 501(c) nonprofits to provide them with personal information about their donors, directly on the calendar for floor consideration. The legislation had previously been waiting for action in the House Judiciary Committee. The Oklahoma State Senate, which originated the legislation, approved it unanimously on March 3.

What does the bill propose?

SB1491 would bar any public agency from requiring a nonprofit 501(c) group to provide the agency with personal affiliation information about its donors. The legislation would also prohibit a public agency from publicly disclosing any such information it might have and exempt personal affiliation information from disclosure under the state’s open records law.

The legislation defines “public agencies” and “personal affiliation information” as follows:

  • “Public agency” definition: any state or local governmental unit.
  • “Personal affiliation information” definition: any “list, record, register, registry, roll, roster, or other compilation of data of any kind that directly or indirectly identifies a person as a member, supporter or volunteer of, or donor of financial or nonfinancial support to, any entity organized under Section 501(c) of the Internal Revenue Code.”

Under SB1491, a knowing violation of these provisions would constitute a misdemeanor punishable by a maximum $1,000 fine, imprisonment for up to 90 days, or both.

What is the political context, and what comes next?

Oklahoma is a Republican trifecta, meaning Republicans control the governorship and majorities in both chambers of the state legislature.

The legislature suspended its regular session effective March 23. Governor Kevin Stitt (R) called the legislature into a special session, which convened on April 6, to consider legislation addressing the COVID-19 outbreak. The legislature reconvened its regular session on May 4.

  • Oklahoma’s legislature is one of several whose regular operations have been upended as a result of the outbreak. To date, 23 states have suspended their session (in five of those states, sessions have since reconvened). For more information, see this article.

The regular session is set to reconvene today. Adjournment is slated to occur on May 29. It is unclear when SB1491 will be brought to the floor for consideration.

Have other states considered similar legislation? What were the reactions?

Last month, the legislatures of Utah and West Virginia enacted similar bills. Similar legislation is up for consideration in Louisiana and Tennessee.

Michigan lawmakers approved a comparable bill, SB1176, in 2018. Governor Rick Snyder (R) vetoed it; the legislature did not override the veto.

  • In an op-ed for The Detroit News, Sean Parnell, vice-president of public policy for the Philanthropy Roundtable, wrote: “Michiganians are no stranger to anonymous giving, whether it’s the tens of millions of dollars given to support the Kalamazoo Promise or the numerous small anonymous gifts made through sites like GoFundMe.com. The Personal Privacy Protection Act ensures these and countless other acts of kindness can remain private if the giver wishes, while doing nothing to undermine Michigan’s laws regarding disclosure of campaign donations or punishing fraud by nonprofits. If Michigan wants to continue to encourage philanthropic giving, passage of this bill should be a priority..”
  • Opposing the bill, the Campaign Legal Center’s Erin Cholpak wrote, “While other states have been working to close loopholes that have allowed the increasing role of dark money in election campaigns, SB 1176 would codify those loopholes as enforceable law in Michigan. … And even if SB 1176 ultimately exempts campaign finance disclosure requirements from its broad disclosure ban, the bill will still make it easier for Michigan lawmakers to hide any conflicts of interest and could facilitate a rise of pay-to-play politics by shielding such arrangements from public scrutiny.”

The big picture

Number of relevant bills by state: We’re currently tracking 47 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.

Disclosure Digest map May 4, 2020.png

Number of relevant bills by current legislative status

Disclosure Digest status chart May 4, 2020.png

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

Disclosure Digest partisan chart May 4, 2020.png

Recent legislative actions

Below is a complete list of legislative actions taken on relevant bills since our last issue. Bills are listed in alphabetical order, first by state then by bill number.

  • Oklahoma SB1491: This bill would prohibit public agencies from requiring 501(c) entities to furnish them with personal information about donors.
    • Republican sponsorship.
    • Withdrawn from House Judiciary Committee and directed to calendar April 6.
  • Virginia SB979: This bill extends the applicability of the state’s campaign finance disclosure act to candidates for directors or soil and water conservation districts.
    • Republican sponsorship.
    • Signed into law April 7.


Utah, West Virginia enact bills barring public agencies from disclosing personal information about 501(c) donors

Last month, Utah and West Virginia enacted legislation restricting public agencies from disclosing identifying information about donors to select nonprofit groups.

Utah SB171

SB171 prohibits a public agency from:

  • Requiring an individual to provide the agency with personal information
  • Requiring a tax-exempt entity under Section 501(c) of the federal Internal Revenue Code to provide the agency with personal information about its donors
  • Releasing or otherwise publicly disclosing any personal information the agency might possess
  • Requiring a current or prospective contractor to provide the agency with a list of 501(c) groups to which the contractor has provided financial or non-financial support

Any person who knowingly violates any provision of this law is guilty of a misdemeanor, punishable by imprisonment for up to 90 days, a maximum fine of $1,000, or both.

The Utah State Senate voted 26-0 in favor of SB171 on March 2. Three senators did not vote. The Utah House of Representatives approved an amended version of the bill 68-0, with seven members not voting, on March 12. The Senate concurred in the House amendments by a vote of 27-0, with two members not voting, on March 12. Governor Gary Herbert (R) signed SB171 into law on March 30.

West Virginia SB16

SB16 prohibits a public agency from:

  • Requiring a tax-exempt entity under Section 501(c) of the federal Internal Revenue Code to provide the agency with donor or membership information
  • Releasing any information that identifies an individuals’ association with, or financial or non-financial support of, a 501(c) group without the express written consent of the group and the individual, or at the individual’s request

The West Virginia State Senate voted 34-0 in favor of SB16 on Jan. 20. The West Virginia House of Delegates voted 75-22 in favor of the bill on Feb. 13. Three members did not vote. Governor Jim Justice (R) signed the SB16 into law on March 2.

The big picture

Number of relevant bills by state: We’re currently tracking 47 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.

Disclosure Digest map April 7, 2020.png

Number of relevant bills by current legislative status

Disclosure Digest status chart April 7, 2020.png

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

Disclosure Digest partisan chart April 7, 2020.png

Recent legislative actions

Below is a complete list of legislative actions taken on relevant bills since our last issue. Bills are listed in alphabetical order, first by state then by bill number.

  • Utah SB0171: This bill would prohibit public agencies from disclosing identifying information about donors to 501(c) groups.
    • Republican sponsorship.
    • Signed into law March 30.
  • Virginia HB849: This bill would subject political campaign communications made via online platforms to the same disclosure requirements currently applied to print media, television, and radio advertisements.
    • Democratic sponsorship.
    • Signed into law March 31.


Policy under review: donor disclosure requirements on independent expenditure and electioneering communication disclaimers

Last month, we explored donor disclosure requirements for non-PAC entities making independent expenditures. This week, we examine donor disclosure requirements on independent expenditure and electioneering communication disclaimers.

An independent expenditure is an advertisement that explicitly advocates for the election or defeat of a clearly identified political candidate. An independent expenditure originates outside of a candidate’s own election organization and is not coordinated with that candidate’s campaign, authorized candidate committee, or political party committee. Because these advertisements explicitly advocate for or against a candidate, they are a form of express advocacy.

An electioneering communication is any broadcast, cable, or satellite transmission that refers to a clearly identified candidate within a specified time period preceding a primary or general election. Although electioneering communications refer to a specific candidate, they do not explicitly advocate for that candidate’s election or defeat. This makes an electioneering communication a form of issue advocacy.

Individuals, corporations, labor unions, and select nonprofits (such as 501(c)(4) groups) can make both independent expenditures and electioneering communications.

Independent expenditures and electioneering communications must generally include a disclaimer identifying the individual or entity sponsoring the advertisement. Seven states establish donor disclosure requirements for these disclaimers. This means that, under select circumstances, the entities sponsoring independent expenditures and/or electioneering communications must disclose identifying information about their donors. These states are shaded in green on the map below. Further details about the requirements in each are provided below the map.

DyLGb-are-entities-making-independent-expenditures-or-electioneering-communications-required-to-disclose-donor-information-on-advertisement-disclaimers-.png
  • California: Identification of donors who gave $50,000 or more to the sponsor.
  • Connecticut: Identification of the top five donors who made the largest aggregate covered transfers to the sponsor in the 12-month period immediately preceding the primary or election (applies to independent expenditures made during the 90-day period immediately preceding a primary or election).
    • A covered transfer is defined as “any donation, transfer, or payment of funds by a person to another person if the person receiving the donation, transfer, or payment makes independent expenditures or transfers funds to another person who makes independent expenditures.”
    • Statutory citation: General Statutes of Connecticut, Section 9-621(h)(1)
  • Hawaii: Identification of the top three donors who gave $10,000 or more to the sponsor for the purpose of funding the communication.
  • Maine: Identification of the top three donors who gave $1,000 or more to the sponsor since the most recent general election (applies to all independent expenditures costing more than $250).
  • Rhode Island: Identification of the top five donors who made the largest total donations in the 12-month period preceding the date of the advertisement (applies to 501(c) entities).
  • South Dakota: Identification of the top five donors who made the largest total donations to the sponsor in the 12-month period preceding the advertisement.
  • Washington: Identification of the top five donors who made the largest total contributions exceeding $700 in the 12-month period preceding the advertisement.

Political context: Six of these seven states are Democratic trifectas. The seventh, South Dakota, is a Republican trifecta.

The big picture

Number of relevant bills by state: We’re currently tracking 45 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.

Disclosure Digest map March 31, 2020.png

Number of relevant bills by current legislative status

Disclosure Digest status chart March 31, 2020.png

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

Disclosure Digest partisan chart March 31, 2020.png

Recent legislative actions

No legislative actions have been taken on relevant bills since our last issue.



Oklahoma lawmakers advance bill barring public agencies from requiring donor information from 501(c)s

On March 3, the Oklahoma State Senate voted unanimously to approve SB1491, which would bar public agencies from requiring 501(c) nonprofits to provide them with personal information about their donors.

What does the bill propose?

SB1491 would bar any public agency from requiring a nonprofit 501(c) group to provide the agency with personal affiliation information about its donors. The legislation would also prohibit a public agency from publicly disclosing any such information it might have and exempt personal affiliation information from disclosure under the state’s open records law.

The legislation defines “public agencies” and “personal affiliation information” as follows:

  • “Public agency” definition: any state or local governmental unit.
  • “Personal affiliation information” definition: any “list, record, register, registry, roll, roster, or other compilation of data of any kind that directly or indirectly identifies a person as a member, supporter or volunteer of, or donor of financial or nonfinancial support to, any entity organized under Section 501(c) of the Internal Revenue Code.”

Under SB1491, a knowing violation of these provisions would constitute a misdemeanor punishable by a maximum $1,000 fine, imprisonment for up to 90 days, or both.

What is the political context, and what comes next?

Oklahoma is a Republican trifecta, meaning Republicans control the governorship and majorities in both chambers of the state legislature.

On March 4, the Senate sent SB1491 to the Oklahoma House of Representatives where it was read for the first time. On March 17, it was read for a second time and referred to the House Judiciary Committee.

Have other states considered similar legislation? What were the reactions?

Michigan lawmakers approved a similar bill, SB1176, in 2018. Governor Rick Snyder (R) vetoed it; the legislature did not override the veto.

  • In an op-ed for The Detroit News, Sean Parnell, vice-president of public policy for the Philanthropy Roundtable, wrote: “Michiganians are no stranger to anonymous giving, whether it’s the tens of millions of dollars given to support the Kalamazoo Promise or the numerous small anonymous gifts made through sites like GoFundMe.com. The Personal Privacy Protection Act ensures these and countless other acts of kindness can remain private if the giver wishes, while doing nothing to undermine Michigan’s laws regarding disclosure of campaign donations or punishing fraud by nonprofits. If Michigan wants to continue to encourage philanthropic giving, passage of this bill should be a priority..”
  • Opposing the bill, the Campaign Legal Center’s Erin Cholpak wrote, “While other states have been working to close loopholes that have allowed the increasing role of dark money in election campaigns, SB 1176 would codify those loopholes as enforceable law in Michigan. … And even if SB 1176 ultimately exempts campaign finance disclosure requirements from its broad disclosure ban, the bill will still make it easier for Michigan lawmakers to hide any conflicts of interest and could facilitate a rise of pay-to-play politics by shielding such arrangements from public scrutiny.”

The big picture

Number of relevant bills by state: We’re currently tracking 45 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.

Disclosure Digest map March 24, 2020.png

Number of relevant bills by current legislative status

Disclosure Digest status chart March 24, 2020.png

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

Disclosure Digest partisan chart March 24, 2020.png

Recent legislative actions

Below is a complete list of legislative actions taken on relevant bills since our last issue. Bills are listed in alphabetical order, first by state then by bill number.

  • Oklahoma SB1491: This bill would prohibit public agencies from requiring 501(c) entities to furnish them with personal information about donors.
    • Referred to House Judiciary Committee March 17.
    • Republican sponsorship.
  • Tennessee HB2665: This bill would prohibit public agencies from requiring 501(c) entities to furnish them with personal information about donors.
    • House Constitutional Protections and Sentencing Subcommittee hearing scheduled for March 17 canceled.
    • Republican sponsorship.


Federal judge strikes down New Jersey donor disclosure law

On March 11, Judge Brian R. Martinotti, of the United States District Court for the District of New Jersey, signed orders permanently barring New Jersey from enforcing a state law requiring select nonprofits to disclose identifying information about their donors.

Multiple organizations challenged the law in court, including the American Civil Liberties Union (ACLU), Americans for Prosperity, and the Illinois Opportunity Project challenged the legislation in court. President Barack Obama (D) appointed Martinotti to the court in 2016.

What is at issue? Under the law enacted 2019, 501(c)(4) and 527 entities that spent $3,000 or more annually to influence or provide political information about the outcome of any election or policy proposal were required to disclose the identities of their donors who contributed $10,000 or more.

What are the reactions?

  • Jeanne LoCicero, legal director for the New Jersey chapter of the ACLU, said, “This court order halts the enforcement of a law that hindered the freedom of assembly, hampered the right to petition government, and compromised privacy rights. All nonprofits should be able to communicate about issues of public concern without fear of being subject to invasive disclosure rules.”
  • Patrick Hughes, president of the Liberty Justice Center, which represented the Illinois Opportunity Project, said, “Adopted under the guise of transparency, these laws are designed to allow opponents of advocacy groups to intimidate and harass the organizations’ supporters. All Americans should be free to support causes they believe in without an invasion into their privacy through excessive government reporting requirements or retribution from their opponents.”
  • In a statement issued March 4, in anticipation of Martinotti’s order, Senator Troy Singleton (D) and Assemblyman Andrew Zwicker (D) said, “We have already begun working with the legislative leadership on the next steps and we believe there is a clear path forward. With the presidential and congressional elections later this year, we expect tens of millions of ‘dark money’ dollars to be spent in an attempt to influence the outcomes. We will continue to fight to ensure that those organizations that accept anonymous large donations are forced to disclose their sources. We must shine a light on who is working secretly to change the course of our elections. The people of New Jersey deserve nothing less than the fairness and transparency our legislation will provide.”

What comes next? It is unclear whether an appeal will be filed. At the time of Martinotti’s order, both the governor’s office and the office of the attorney general declined to comment.

Additional coverage:

The big picture

Number of relevant bills by state: We’re currently tracking 45 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.

Disclosure Digest map March 16, 2020.png

Number of relevant bills by current legislative status

Disclosure Digest status chart March 16, 2020.png

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

Disclosure Digest partisan chart March 16, 2020.png

Recent legislative actions

Below is a complete list of legislative actions taken on relevant bills since our last issue. Bills are listed in alphabetical order, first by state then by bill number.

  • New Hampshire HB1525: This bill would alter the definition of a political advocacy organization for the purposes of campaign finance reporting.
    • House Election Law Committee approved March 12.
    • Democratic sponsorship.
  • Tennessee HB2665: This bill would prohibit public agencies from requiring 501(c) entities to furnish them with personal information about donors.
    • House Constitutional Protections and Sentencing Subcommittee scheduled March 17.
    • Republican sponsorship.
  • Virginia SB979: This bill extends the applicability of the state’s campaign finance disclosure act to candidates for directors or soil and water conservation districts.
    • Delivered to governor March 12. Governor’s action deadline April 11.
    • Republican sponsorship.


Gov. Cuomo includes donor disclosure requirements in New York state budget proposal

Gov. Andrew Cuomo (D) has included amendments to New York’s nonprofit donor disclosure laws in his fiscal year 2021 budget proposal.

Part UU of the executive budget proposes that a nonprofit group disclose the following for any donation of $1,000 or more earmarked to pay, in whole or in part, for political communications: the name and address of the donor, the date and amount of the donation, and a description of any restriction placed on the donation.

The amendments come in response to a federal court order striking down portions of A10742, donor disclosure laws enacted by the state legislature in 2016. On Sept. 30, 2019, Judge Denise Cote, of the United States District Court for the Southern District of New York, struck down Section 172-f of the law, which required nonprofits to disclose the identities of donors who contributed more than $1,000 if the nonprofit spent $10,000 or more per calendar year on political communications. Cote wrote, “Section 172-f sweeps far more broadly than any disclosure law that has survived judicial scrutiny.” President Bill Clinton (D) appointed Cote to the court in 1994.

What are the reactions?

  • Jason Conwall, a spokesman for the governor, said, “The public has a right to know who is backing these organizations so voters can better understand the sources for their positions and make decisions with full knowledge of the facts. Everyone supports transparency until it shows up at their own front door. The proposal advanced in the Executive Budget is more narrowly tailored [than the 2016 law] and we are confident it will withstand judicial scrutiny.”
  • Chai Jindasurat, policy director at Nonprofit New York, said, “Donors have legitimate and personal reasons for why they wouldn’t want to be disclosed or labeled [and] why they would want to give anonymously. If it is a problem, we’re happy to try and figure out a way to address transparency for all types of nonprofits. We just don’t know if it’s actually an issue.”

What comes next? Cuomo’s proposal is part of the larger budgeting process. With the governor having submitted his executive budget proposal, it now falls to the state legislature to assemble and adopt a final budget. The governor can execute line-item vetoes on the budget adopted by the legislature. New York’s new fiscal year begins April 1. Negotiations between lawmakers and the governor are currently ongoing. New York is a Democratic trifecta; Democrats hold the governorship and majorities in both chambers of the state legislature.

What we’re reading

The big picture

Number of relevant bills by state: We’re currently tracking 45 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.

Disclosure Digest map March 9, 2020.png

Number of relevant bills by current legislative status

Disclosure Digest status chart March 9, 2020.png

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

Disclosure Digest partisan chart March 9, 2020.png

Recent legislative actions

Below is a complete list of legislative actions taken on relevant bills since our last issue. Bills are listed in alphabetical order, first by state then by bill number.

  • Connecticut HB05406: This bill would establish disclosure requirements for independent expenditures supporting or opposing incumbents before they form committees.
    • House Government Administration and Elections hearing scheduled March 6.
    • Committee sponsorship.
  • Connecticut HB05410: This bill would increase disclosure of independent expenditures and prohibit such expenditures by foreign-influenced entities.
    • House Government Administration and Elections hearing scheduled March 6.
    • Committee sponsorship.
  • New Hampshire HB1525: This bill would alter the definition of a political advocacy organization for the purposes of campaign finance reporting.
    • House Election Law Committee approved March 4.
    • Bipartisan sponsorship.
  • Oklahoma SB1491: This bill would prohibit public agencies from requiring 501(c) entities to furnish them with personal information about donors.
    • Senate approved March 3. First House reading March 4.
    • Republican sponsorship.
  • Virginia SB979: This bill extends the applicability of the state’s campaign finance disclosure act to candidates for directors or soil and water conservation districts.
    • House approved March 7 (Senate approved Jan. 27) .
    • Republican sponsorship.


SCOTUS asks solicitor general to weigh in on Calif. law requiring nonprofits to disclose donors

On Feb. 24, the United States Supreme Court called on United States Solicitor General Noel John Francisco to file a brief expressing the federal government’s views on two suits challenging a California law requiring nonprofits to disclose identifying information about their donors. The lawsuit names and docket numbers are Americans for Prosperity Foundation v. Becerra (19-251) and Thomas More Law Center v. Becerra (19-255).

What does it mean when the Supreme Court calls on the Solicitor General to submit a brief, and what comes next? These orders are generally referred to as “Calls for the View of the Solicitor General” (CVSGs). Four of the Supreme Court’s nine justices must concur in order to issue a CVSG. Before becoming a federal appellate court judge in 2013, Patricia Millett wrote, “CVSGs are a unique feature of Supreme Court practice, and they underscore the special position of the Solicitor General in Supreme Court litigation. The Court is seeking the views of a non-party, not on the merits of the case, but on whether the Court should exercise its discretionary certiorari jurisdiction to hear the case at all.”

In its Feb. 24 order, the Supreme Court did not set a deadline for the brief. According to Millett, “The Solicitor General’s Office strives to file pending CVSGs in time to meet the Court’s traditional cut-off dates for action each Term.”

More about the Solicitor General: The office of the United States Solicitor General is an agency of the U.S. Department of Justice that argues on behalf of the federal government before the Supreme Court and in all federal appellate courts. The federal government is involved either as a party or as an amicus curiae in approximately two-thirds of all cases before the Supreme Court.

What is at issue? California law requires nonprofits to file copies of their IRS 990 forms with the state. Schedule B of this form includes the names and addresses of all individuals who donated more than $5,000 to the nonprofit in a given tax year. The California law requires that nonprofits give the state copies of their Schedule B forms. Although the law does not allow public access of Schedule B information, court documents indicate inadvertent disclosures have occurred.

Americans for Prosperity Foundation v. Becerra (19-251) and Thomas More Law Center v. Becerra (19-255): In 2014, Americans for Prosperity Foundation (AFPF), a 501(c)(3) nonprofit, filed suit in U.S. district court, alleging violations of their First Amendment associational rights. In 2016, Judge Manuel Real, of the United States District Court for the Central District of California, found in favor of AFPF and enjoined the state from collecting Schedule B information from the group. Real was appointed to the court by Pres. Lyndon Johnson (D).

In 2015, Thomas More Law Center (TMLC), also a 501(c)(3) nonprofit, filed a similar suit in the same U.S. district court. In a separate 2016 ruling, Real also found in favor of TMLC and enjoined the state from collecting Schedule B information from the group.

The two suits were combined on appeal. A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit unanimously overturned Real’s rulings in 2018. Judges Raymond Fisher, Richard Paez, and Jacqueline Nguyen issued the ruling. Fisher and Paez were appointed to the court by President Bill Clinton (D). Nguyen was appointed by President Barack Obama (D). The plaintiffs petitioned the Ninth Circuit for en banc review. That petition was rejected March 29, with five judges dissenting. On Aug. 26, 2019, the plaintiffs appealed this decision to the Supreme Court.

What we’re reading

The big picture

Number of relevant bills by state: We’re currently tracking 44 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.

Disclosure Digest map February 29, 2020.png

Number of relevant bills by current legislative status

Disclosure Digest status chart February 29, 2020.png

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

Disclosure Digest partisan chart February 29, 2020.png

Recent legislative actions

Below is a complete list of legislative actions taken on relevant bills since our last issue. Bills are listed in alphabetical order, first by state then by bill number.

  • Connecticut HB05406: This bill would establish disclosure requirements for independent expenditures supporting or opposing incumbents before they form committees.
    • Introduced and referred to Joint Government Administration and Elections Committee Feb. 28.
    • Committee sponsorship.
  • Connecticut HB05410: This bill would, among other things, increase disclosure of independent expenditures and prohibit such expenditures by foreign-influenced entities.
    • Introduced and referred to Joint Government Administration and Elections Committee Feb. 28.
    • Committee sponsorship.
  • Kentucky HB522: This bill would establish reporting and disclosure requirements for internet announcements that expressly advocate for the election or defeat of a candidate or group of candidates.
    • Introduced Feb. 27.
    • Democratic sponsorship.
  • Tennessee HB2665: This bill would prohibit public agencies from requiring 501(c) entities to furnish them with personal information about donors.
    • Subcommittee on Constitutional Protections and Sentencing action deferred from Feb. 25 to March 3.
    • Republican sponsorship.
  • Virginia HB849: This bill would subject political campaign communications made via online platforms to the same disclosure requirements currently applied to print media, television, and radio advertisements.
    • House approved Senate substitute Feb. 25.
    • Democratic sponsorship.
  • Virginia SB979: This bill extends the applicability of the state’s campaign finance disclosure act to candidates for directors or soil and water conservation districts.
    • House Privileges and Elections Committee advanced Feb. 28.
    • Republican sponsorship.


Policy under review: donor disclosure requirements for non-PAC groups making independent expenditures

Last month, we explored state donor disclosure requirements for groups that sponsor electioneering communications. This week, let’s take a closer look at donor disclosure requirements for non-PAC groups making independent expenditures.

An independent expenditure is any money spent on political advertising supporting or opposing a particular candidate for elective office. An independent expenditure originates outside of a candidate’s own election organization and is not coordinated with that candidate’s campaign, authorized candidate committee, or political party committee.

Individuals, political action committees (PACs), super PACs, select nonprofits (such as 501(c)(4) groups), corporations, and labor unions can make independent expenditures. States cannot limit the dollar amounts of independent expenditures. States can, however, impose disclosure requirements on groups making these expenditures.

A total of 33 states require non-PACs making independent expenditures to disclose identifying donor information in required reports. Of these states, 22 require groups to disclose all donors meeting certain contribution amount thresholds, regardless of whether their contributors were earmarked for political spending. These states are shaded in dark green on the map below. The remaining 11 require disclosure only of those donors whose contributions were earmarked for political spending. These states are shaded in light green on the map below.

  • Political context: Of these 33 states, 10 are Democratic trifectas, 14 are Republican trifectas, and nine are divided governments.
    • Of the 11 states that require disclosure only of those donors whose contributions were earmarked for political spending, one is a Democratic trifectas, six are Republican trifectas, and four are divided governments.
    • Of the 22 states that require groups to disclose all donors meeting certain contribution amount thresholds, regardless of whether their contributors were earmarked for political spending, nine are Democratic trifectas, eight are Republican trifectas, and five are divided governments.

Remember]: This discussion deals only with disclosures required as part of regular campaign finance reporting. Disclosures made directly on advertisements, known as disclaimers, are a separate matter.

15gKG-donor-disclosure-requirements-for-non-pac-groups-making-independent-expenditures.png

What we’re reading

The big picture

Number of relevant bills by state: We’re currently tracking 41 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.

Disclosure Digest map February 24, 2020.png

Number of relevant bills by current legislative status

Disclosure Digest status chart February 24, 2020.png

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

Disclosure Digest partisan chart February 24, 2020.png

Recent legislative actions

Below is a complete list of legislative actions taken on relevant bills since our last issue. Bills are listed in alphabetical order, first by state then by bill number.

  • New Hampshire HB1525: This bill would alter the definition of a political advocacy organization for the purposes of campaign finance reporting.
    • House Election Law Committee work session scheduled Feb. 18.
    • Bipartisan sponsorship.
  • Oklahoma SB1491: This bill would prohibit public agencies from requiring 501(c) entities to furnish them with personal information about donors.
    • Approved by Senate Judiciary Committee Feb. 19.
    • Republican sponsorship.
  • Virginia HB849: This bill would subject political campaign communications made via online platforms to the same disclosure requirements currently applied to print media, television, and radio advertisements.
    • Senate approved substitute Feb. 21. House approved its own version of the bill Jan. 30.
    • Democratic sponsorship.
  • Virginia SB979: This bill extends the applicability of the state’s campaign finance disclosure act to candidates for directors or soil and water conservation districts.
    • House Campaign Finance Subcommittee hearing scheduled Feb. 20.
    • Republican sponsorship.


Federal judge will uphold San Francisco donor disclosure rules

On Feb. 14, Judge Charles Breyer, of the U.S. District Court for the Northern District of California, said he would uphold most provisions of a San Francisco ordinance establishing donor disclosure requirements for all committees producing campaign advertisements.

What is at issue? On Nov. 5, 2019, San Francisco voters approved Proposition F, establishing the following donor disclosure requirements for all committees producing campaign advertisements supporting or opposing any candidate for city office or any city ballot initiative:

  • Printed advertisements must include a disclaimer with the names and contribution amounts of the committee’s top three donors.
  • Audio and video advertisements must include a spoken disclaimer at the beginning of the advertisement listing the committee’s top three donors.
  • In any case where a top-three contributor is a secondary independent committee, the advertisement (print, audio, or video) must also disclose the identities of the top two donors to the secondary committee.

These requirements apply to contributors who give $5,000 or more to a committee.

Who are the parties to the suit? The plaintiffs are “Yes on Prop B,” a committee advocating for the passage of a bond issue to fund earthquake safety and emergency services in San Francisco, and its treasurer, Todd David. The defendant is the consolidated city and county government of San Francisco.

What are the plaintiffs’ allegations? The plaintiffs allege the disclosure requirements violate their First Amendment rights “by requiring their core political speech to carry disclaimers that will consume significant portions of those communications and in some cases entirely consume those communications.” The plaintiffs had asked the court to bar enforcement of the rules: “The new disclaimer rules effectively drown out plaintiffs’ message on their selected forms of communication, making their participation in the March election infeasible unless the new disclaimer rules are enjoined.”

What did Breyer say? Breyer said, “[The ordinance] is geared to making sure that when voters exercise their franchise, they have as good an understanding … that it’s all right out there.” While Breyer said he would uphold most of the ordinance’s requirements, he will issue a partial injunction against its disclosure requirements for small-print and short-length advertisements. Breyer said the disclosure requirements for these advertisements would “clearly just overwhelm the message,” violating the producers’ First Amendment rights.

It is unclear when Breyer will issue a formal order and full opinion. The Proposition B election is scheduled for March 3. As of Feb. 17, the plaintiffs have not indicated whether they intend to appeal Breyer’s decision.

Case information: Breyer was appointed to the court by President Bill Clinton (D). The case name and number are Yes on Prop B v. San Francisco, 3:20-cv-00630-CRB.

What we’re reading

The big picture

Number of relevant bills by state: We’re currently tracking 41 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.

Disclosure Digest map February 17, 2020.png

Number of relevant bills by current legislative status

Disclosure Digest status chart February 17, 2020.png

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

Disclosure Digest partisan chart February 17, 2020.png

Recent legislative actions

Below is a complete list of legislative actions taken on relevant bills since our last issue. Bills are listed in alphabetical order, first by state then by bill number.

  • Minnesota HF2050: This bill would amend the definitions of express advocacy and electioneering communication and revise disclosure requirements.
    • House Government Operations Committee hearing scheduled Feb. 13.
    • Democratic sponsors.
  • New Hampshire HB1525: This bill would alter the definition of a political advocacy organization for the purposes of campaign finance reporting.
    • House Election Law Committee work session rescheduled from Feb. 12 to Feb. 18.
    • Bipartisan sponsors.
  • Tennessee HB2396: This bill would prohibit public agencies from requiring 501(c) entities to furnish them with personal information about donors.
    • Referred to House Constitutional Protections and Sentencing Sub-committee Feb. 11.
    • Republican sponsors.
  • Tennessee HB2665: This bill would prohibit public agencies from requiring 501(c) entities to furnish them with personal information about donors.
    • Referred to House Constitutional Protections and Sentencing Sub-committee Feb. 11.
    • Republican sponsors.
  • Virginia HB849: This bill would subject political campaign communications made via online platforms to the same disclosure requirements currently applied to print media, television, and radio advertisements.
    • Senate Privileges and Elections Committee hearing scheduled Feb. 18.
    • Democratic sponsors.
  • Virginia SB979: This bill extends the applicability of the state’s campaign finance disclosure act to candidates for directors or soil and water conservation districts.
    • Referred to House Privileges and Elections Committee Feb. 13.
    • Republican sponsors.


Bitnami