North Carolina’s General Assembly has approved sweeping elections law changes. Making good on promises when Republicans assumed control of both the State House and Senate for the first time since Reconstruction, legislative leaders have adopted a multitude of revisions to existing state elections laws. These changes are found in House Bill 589, which passed the House and the Senate late last week and currently awaits Governor McCrory’s signature or veto. Although the bill includes other, more headline-grabbing components, including a requirement for voters to provide government issued photo identification at polls, a shortened early voting period, the end of straight party ticket voting and same-day registration, and a requirement that voters register or make changes to their registration information at least 25 days in advance of an election, the bill also includes several provisions could have significant effects on corporations and political action committees (“PACs”).
First, the bill raises the amounts that individuals can contribute to candidates and PACs and the amounts that PACs can contribute to candidates from $4,000 to $5,000 per election. Importantly, this dollar amount will be indexed to increase in odd numbered years beginning in 2015 based on the consumer price index. The bill also changes the time periods for an “election cycle,” extending it through the end of the calendar year after an election. Therefore, contributors who have reached their maximum contribution limits cannot provide additional support for debt reduction immediately following the election. Additionally, the bill repeals the $1,000 limit for contributions to candidates for superior or district court judge positions and eliminates the public funding program for appellate court elections.
However, the General Assembly narrowed a few traditional loopholes. The bill limits family members who may give unlimited amounts to candidates. Previously, a candidate’s spouse, parents, brothers and sisters were exempt from the contribution limits. Now, only a candidate’s spouse may donate unlimited amounts to the candidate. HB 589 also attempts to prescribe the use of money given for a political party “building fund.” Donations to these funds were previously unlimited, which made them a long-standing avenue for soft money. HB 589 seeks to change that by limiting the expenditure of money given for a building fund to use for a principal headquarters building and prohibits the use of those funds for headquarters equipment, other than fixtures, personnel compensation, or travel/fundraising expense. It does allow funds to be used for up to three administrative personnel who meet certain requirements.
Several key changes to the rules governing mass communications were included. The bill repeals Articles 22G and 22H defining candidate-specific communications and requiring disclosure statements to be filed with the State Board of Elections for candidate-specific communications in broadcast, cable, satellite, mass mailings or telephone banks. The bill clarifies that electioneering communications will be defined as those communications aired or transmitted after September 7 for November general elections. Most importantly, the bill strikes the previous requirement for sponsors of printed independent expenditure communications and electioneering communications to disclose the names of the five largest donors within the prior 6-month period, providing additional cover to those who donate to independent expenditures and electioneering communications.
The legislation clarifies that lobbyists can not collect from one or multiple contributors whereas the previous law strictly referred to bundling multiple contributors. This section also strengthens the term “recipient” to include both a candidate and candidate campaign committee. This particular portion of the bill becomes effective October 1, 2013.
Finally, the legislation clarifies that raffles may be administered by candidates and political committees. Receipts and expenditures from raffles will be reported on campaign finance reports, and ticket purchases will be considered contributions for reporting purposes.
Additional changes may be on the way in either a special session or the 2014 short session. During the interim, the legislation directs the Joint Legislative Election Oversight Committee to study a number of other changes, including the thresholds for the creation of political committees, standardizing the reporting schedules for political committees, electioneering communications, and independent expenditures, and eliminating the 48-hour campaign finance reporting obligations in periods leading up to the elections.
Unless otherwise noted, the above provisions of the bill become effective January 1, 2014, except for the voter identification requirement, which becomes effective on January 1, 2016. Governor McCrory has until August 26 to sign the bill, veto it, or allow it to become law without his signature.
