The recent major revisions to Arizona’s campaign finance laws (passed in bills S.B. 1516, H.B. 2296 and H.B. 2297), which took effect late last year, modified the previous restrictions on corporate contributions to political action committees for state and local elections.

The campaign finance reforms streamlined the definition of committees in the new A.R.S. §§ 16-901, 16-905 and 16-908, so there are now only three types: (1) candidate committees; (2) political action committees (PACs), which also include Mega-PACs; and (3) political parties.

Under the new A.R.S. § 16-916, a corporation, limited liability company or labor organization may now make unlimited contributions to most “persons,” including PACs and political parties. Previously, these entities had more complex contribution requirements, including prohibitions against contributing to certain types of committees based on the committee’s primary purpose.

However, just as before (albeit in a different statutory section), corporations, limited liability companies and labor organizations still cannot contribute to a candidate committee, which includes both the candidate as well as any individuals authorized to receive contributions on behalf of the candidate for his or her nomination, election or retention for any public office.

As a result of this prohibition, Arizona PACs also face restrictions on how corporate contributions are spent. A PAC may now receive unlimited contributions from a corporation. However, the new A.R.S. § 16-914 also prevents the PAC from making any contribution to a candidate committee using a corporate contribution.

This restriction existed under the old statutes, but now applies to every Arizona PAC, regardless of type. As a result, the PAC must keep careful records and maintain separate bank accounts for contributions from corporations, limited liability companies and labor organizations to make sure these funds are not expended on any activities that contribute to a candidate committee.