COLORADO SECRETARY OF STATE
[8 CCR 1505-6]
RULES CONCERNING CAMPAIGN AND POLITICAL FINANCE

Preliminary Draft of Proposed Rules

July 30, 2010

Disclaimer:  This draft is not yet final.  The proposed changes to be considered at the public rulemaking hearing may be different than the proposed changes in this draft.  This draft is submitted to the Department of Regulatory Agencies for the purpose of complying with section 24-4-103(2.5), C.R.S., which requires that a draft be submitted to the Department at the time that a notice of proposed rulemaking is filed with the Secretary of State.

A final copy of the proposed rule changes will be available to the public no later than August 26, 2010, and a copy will be posted on the Department of State’s web site, in compliance with the requirement of section 24-4-103(4)(a), C.R.S., that “[a]ny proposed rule or revised proposed rule by an agency which is to be considered at the public hearing . . . shall be made available to any person at least five days prior to said hearing.”

Proposed additions to the current rules are reflected in small caps.  Proposed deletions from current rules are shown in stricken type.   Annotations may be included.
Rule 1.5 would be amended as follows:
1.5	“Foreign Corporation”, as used in Article XXVIII, Section 3(12)(c), means a corporation organized under the laws of another country.  The term does not apply to a corporation organized under the laws of another state.  “Foreign Corporation,” as used in Title 1, Article 45, C.R.S., shall have the same meaning as set forth in section 1-45-103 (10.5).
Rule 1.13 would be amended as follows:
1.13	A registered agent or a committee or party treasurer for the purposes of Title 1, Article 45, C.R.S., shall be an individual or candidate designated to receive mailings and to address concerns and/or questions regarding the candidate committee, the political committee, the small donor committee, the issue committee, the independent expenditure committee, or the political party.  [Section 1-45-108(3)(b) and 1-45-109(4)(b), C.R.S.]
Rule 1.16 would be adopted as follows:
1.16	“non-public information” means confidential material in any form that is not available to the general public, including a non-public campaign plan, communications plan, campaign budget, specification of unmet and potentially unmet campaign needs, proposed or actual media buy, list or description of households or voters who are to receive or have received materials under a mailing or other distribution program, polling or focus group results, or other propriety material; provided that any such information is material to the creation, production, or dissemination of independent expenditures or electioneering communications.  However, “non-public information” excludes communications dealing solely with candidate positions on legislative or policy issues.
Rule 2.1 would be amended as follows:
2.1	When a committee registration form is received and deemed complete by the appropriate filing officer, an identification number will be assigned and a letter or email of acknowledgement will be sent by the appropriate filing officer to the registered agent on file.  The registered agent for any issue committee, political committee, small donor committee, independent expenditure committee, or political party shall sign the committee’s registration form and all disclosure reports.  [Section 1‑45-108(3), (4), (5), and (6), C.R.S.]
Rule 2.3 would be amended as follows:
2.3	A registered agent resigning from a political committee, issue committee, small donor committee, independent expenditure committee, or political party shall file a letter of resignation with the appropriate filing officer and the committee or party via certified mail.  A registered agent for a candidate committee, who is not the candidate, shall file a letter of resignation with the appropriate filing officer and the candidate of the candidate committee via certified mail.  The letter of resignation to the appropriate filing officer shall be filed within seven business days of resignation and shall include the certified mail receipt number sent to the committee or party and the contact information for the committee or party.  In accordance with Rule 3.1, the committee or party shall file an amended committee registration form within five days of receipt of the letter of resignation.  If the registered agent does not provide the committee notice of resignation as required by this rule, the committee shall file the amended committee registration form within five days of becoming aware that the agent has resigned.  [Section 1-45-108(3)(b), C.R.S.]
Rule 2.4 would be amended as follows:
2.4	The purpose or nature of interest of the committee or party shall be included.  A candidate committee shall identify the name of the candidate and the specific elective office sought upon registration.  A political committee, independent expenditure committee, or small donor committee shall identify the types of candidates being supported or opposed, such as party affiliation or public policy position, and if known, the specific candidates being supported or opposed.  Terms describing types of candidates shall be descriptive in providing disclosure of the committee’s purpose.  It is not sufficient to identify candidate types by listing the jurisdiction or office sought, such as “legislative candidates” or “statewide candidates.”
Rule 2.6 would be amended as follows:
2.6   	Issue committees shall not contribute to political parties, political committees, independent expenditure committees, or candidate committees.  An issue committee shall not contribute to, or accept contributions from, other issue committees that do not support or oppose issues supported or opposed by the issue committee making the contribution. [Article XXVIII, Section 2(10)(b)]
Rule 2.9 would be amended as follows:
2.9 	A corporation or labor organization may establish both a political committee, an independent expenditure committee, and a small donor committee.  Each committee is subject to the individual contribution and expenditure limits for that committee, if applicable. [Article XXVIII, Section 2(14)(b)]
Rule 3 would be amended as follows:
3	Responsibilities of Candidate Committees, Issue Committees, Political Committees, Small Donor Committees, independent expenditure committees, and Political Parties
3.9	Contributions Where the Identity of the Contributor is Unknown.  
a.	Contributions received by a candidate committee, political committee, political party committee, or small donor committee, or donations received by an independent expenditure committee, of any amount, where the identity of the contributor or donor is unknown, shall not be retained.  Such contributions or donations must, within thirty (30) days, be donated to any charitable organization recognized by the Internal Revenue Service, or transmitted to the State Treasurer for deposit into the unclaimed property fund or such other fund as the State Treasurer may direct.
Rule 4.3 would be amended as follows:
4.3	Contributions and donations – when counted.
a.	A contribution or donation is considered made or received as of the date that it is accepted by the committee or party.  In the case of a contribution or donation by check or credit card, the date accepted is, at the latest, the date that the contribution or donation is deposited by the committee or party into its account.  Any contribution or donation in the form of a check received by a committee or 527 political organization at least five business days prior to the end of a reporting period must be deposited or returned to the contributor by the close of that reporting period.
Rule 4.4 would be amended as follows:
4.4	All committees and political parties must keep a record of all expenditures, contributions, and donations.  All expenditures made by a committee or political party of $20 or more during a reporting period shall be listed individually on the contribution and expenditure report.  All other expenditures, contributions, and donations under $20 during a reporting period may be reported in total as non-itemized expenditures.  [Section 1-45-108(1), C.R.S.]
Rule 4.14 would be amended as follows:
4.14	Membership dues transferred to small donor committees, independent expenditure committees, and political committees
a.	Membership organizations transferring a portion of a member’s dues to a small donor committee, independent expenditure committee, or political committee shall provide the respective committee with the member’s name, address, amount of dues transferred, and the date of the dues transfer.
b.	Each small donor committee, independent expenditure committee, and political committee shall keep records of all contributions or donations received in the form of membership dues transferred by a membership organization to the committee.  Such records shall include each contributing or donating member’s name, address, and amount of the dues transferred. [C.R.S. Section 1-45-108(1)(a)(I), C.R.S.]
c.	Each small donor committee and political committee shall itemize and report the name and address of each person who has contributed $20 or more in a reporting period, including but not limited to contributions received in the form of membership dues transferred by a membership organization to the committee. [Article XXVIII, Section 2(14)(a); C.R.S. Section 1-45-108(1)(a), C.R.S.]
d.	On each disclosure report, the candidate or registered agent of a candidate committee, political party committee, political committee, small donor committee, independent expenditure committee, or issue committee shall certify and declare, under penalty of perjury, that to the best of his or her knowledge or belief all contributions or donations received in a reporting period, including contributions or donations received in the form of membership dues transferred by a membership organization, are from permissible sources.  [Article XXVIII, Section 3.]
Rule 4.16 would be amended as follows:
4.16	Until terminated in accordance with these rules, a committee shall file a disclosure report for every reporting period, even if the committee has no activity (donations, expenditures, or contributions) to report during the reporting period.
Rule 4.19 would be amended as follows:
4.19	Investment of funds
4.19.1 a.	A candidate committee, issue committee, political committee, small donor committee, independent expenditure committee, or political party may invest the committee’s funds in any type of account or instrument of a government regulated financial institution.  
4.19.2 b. 	Any change in the balance of funds resulting solely from the accrual of interest or dividends to the account and/or the automatic deduction of periodic service fees is not a contribution, donation, or an expenditure and shall not be subject to contribution limits, but shall be disclosed as miscellaneous income or expense on any disclosure report for which the interest, dividend, or service fee was received or charged.
Rule 4.20 would be amended as follows:
4.20	Political organizations.  In the case of political organizations as defined in section 1-45-103(14.5), C.R.S.:
4.20.1 a.	Pursuant to Section 1-45-108.5, C.R.S., political organizations shall only report contributions, and expenditures for the purpose of “influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any state or local public office.”
4.20.2 b.	Political organizations shall file according to the filing schedules set forth in section 1-45-108(2), C.R.S.  
a. i.	For the purposes of this Rule, “off-election year” for a political organization shall mean every odd numbered year.
b. ii.	For the purposes of this Rule, “major election” shall mean an election held in November of an even numbered year.
4.20.3 c.	Political organizations shall not be required to file disclosure reports for reporting periods when no contributions were received and spending was less than twenty dollars ($20).
4.20.4 d.	Political organizations shall file all applicable disclosure reports required by section 1-45-103(14.5), C.R.S., with the appropriate filing officer.  For the purposes of this rule, the appropriate filing officer shall be the same for political organizations as for political committees as outlined in section 1-45-109, C.R.S. 
	[Section 1-45-108.5, C.R.S.]

e. 	Political organizations engaging in express advocacy shall register as a political committee or an independent expenditure committee, as appropriate, pursuant to the definitions of those entities contained in Article XXVIII Section 2 (12)(a) and section 1-45-103 (11.5), C.R.S.
Rule 9.6 would be repealed as follows:
9.6	In accordance with the decision of the Supreme Court of the United States in the case of Citizens United v. Federal Elections Commission, 558 U.S.        , (2010), and the decision of the Supreme Court of Colorado in In re: Interrogatories Propounded by Governor Bill Ritter, Jr., Concerning the Effect of Citizens United v. Federal Election Commission, 558 U.S. 	 (2010) on Certain Provisions of Article XX[V]III of the Constitution of the State of Colorado,  notwithstanding Article XXVIII, section 3(4)(a) and section 6(2) of the Colorado Constitution, corporations and labor organizations shall not be prohibited from making independent expenditures or from providing funding for electioneering communications.  Such expenditures shall be reported in accordance with section 1-45-108(2), C.R.S., and this rule. Repealed.
Rule 14.1 would be repealed as follows:
14.1 	For purposes of complying with the requirement of Article XXVIII, Section 5, that a notice of independent expenditure include “a detailed description of the use of such independent expenditure”, such notice is sufficient if it includes an identification of the payee of the expenditure, the medium used for the communication, the date or dates for broadcast, delivery, or publication of the communication, and either the complete written text or transcript of the communication produced by the expenditure or a summary of the major points contained within the communication. Repealed.
Rule 14.2 would be repealed as follows:
14.2	For the purposes of section 5, Article XXVIII, a candidate committee, political committee, small donor committee, political party, or 527 political organization that is registered with the Secretary of State that obligates funds exceeding $1,000 for any single independent expenditure more than 30 days prior to a primary or general election shall notify the Secretary of State by disclosing such expenditure on the committee’s or organization’s regularly scheduled disclosure report for that reporting period. Repealed.
Rule 14.3 would be repealed as follows:
14.3	For the purposes of section 5, article XXVIII, any person who is otherwise not required to file reports with the Secretary of State or county clerk and who obligates funds exceeding $1,000 for any single independent expenditure more than 30 days prior to a primary or general election shall deliver notice to the Secretary of State in accordance with the reporting schedule established for political parties in section 1-45-108 (2), C.R.S. Repealed.
Rule 14.4 would be repealed as follows:
14.4	Notwithstanding rules 14.1 and 14.2, any person (including a natural person, entity, candidate committee, political committee, small donor committee, political party, or 527 political organization) who obligates funds in any amount for an independent expenditure, fewer than 31 days before a primary or general election, shall deliver notice to the Secretary of State within 48 hours of obligating funds for such expenditure. Repealed.
Rule 14.5 would be adopted as follows:
14.5	Any nonbroadcast communication that constitutes an independent expenditure and is subject to the requirements of section 1-45-107.5(5), C.R.S., shall contain the name of the person making the expenditure and the specific statement that the advertisement of material is not authorized by any candidate. Such disclosure shall be printed on the bottom of the last page of the communication in no smaller than 8 point font. [Section 1-45-107.5, C.R.S.]
Rule 14.6 would be adopted as follows:
14.6	The registration of a committee as an independent expenditure committee does not exempt the committee from existing statutory and constitutional provisions limiting the source or use of funds, nor does such registration exempt a committee from statutory and constitutional provisions relating to coordination.
Rule 14.7 would be adopted as follows:

14.7	For the purpose of determining whether an expenditure is an independent expenditure as defined in Article XXVIII, Section 2(9), expenditures and spending are coordinated with a candidate committee or political party if:

a. 	a person makes an expenditure or engages in spending at the request, suggestion, or direction of, in consultation with, or under the control of:

i. 	that candidate committee or political party; 

ii.	an agent, employee, board member, director, or officer of that candidate committee or political party; or

iii.  	a common consultant who provides, or has provided during the election cycle, professional services to that candidate committee or political party and the person making the expenditure or engaging in the spending; 

b. 	that candidate's or political party's non-public information is given to:

i. 	the person making the expenditure or engaging in the spending;

ii. 	an agent, employee, board member, director, or officer of the person making the expenditure or engaging in the spending; or

iii. 	a common consultant who provides, or has provided during the election cycle, professional services to the person making the expenditure or engaging in the spending, as well as the candidate committee or political party.

c.	This rule shall not apply to an attorney, accountant, bookkeeper, or registered agent who provides services within the scope of his or her profession.

d. 	An expenditure is not coordinated if effective barriers (i.e., “firewalls”) to transmission of non-public information are placed between:
i. 	the candidate committee or political party; and 
ii.	the person making an independent expenditure or engaging in spending.   
 
Such firewalls shall be physical or technological, or both, shall include appropriate security measures, and shall be set forth in a written policy that is distributed to all affected agents, employees, board members, directors, officer, and consultants.  The existence of the firewalls does not make an expenditure independent if non-public information is nonetheless directly or indirectly transmitted to the person making an expenditure or engaging in spending.