Rule 4.14
Secretary of State Rules Concerning Campaign and Political Finance

Basis and Purpose

This statement pertains to the adoption of new Rule 4.14 of the Secretary of State Rules Concerning Campaign and Political Finance for the administration of Constitutional Amendment 27, which enacted Article XXVIII of the Colorado State Constitution, and Article 45, Title 1 of the Colorado Revised Statutes, and for the uniform and proper administration and enforcement of the election laws of the State of Colorado.

This rule is mandated by, and is necessary for the implementation of, the above Constitutional Amendment, passed by a vote of the people of the State of Colorado in the General Election held on November 5, 2002. The Constitutional Amendment 27, which enacted Article XXVIII of the Constitution of the State of Colorado, went into effect on December 6, 2002.

In addition, Colorado State Constitution Article XXVIII, Section 6(2) states: “it shall be unlawful for a corporation or labor organization to provide funding for an electioneering communication; except that any political committee or small donor committee established by such corporation or labor organization may provide funding for an electioneering communication.”

The United States Supreme Court has held that limitations included in Section 6(2) cannot be applied to a corporation that (1) is formed for the purpose of promoting political ideas and cannot engage in business activities, (2) has no shareholders with a claim on its assets or other income, and (3) was not established by, and does not accept contributions from business corporations or labor organizations. McConnell v. Federal Election Commission, 124 S. Ct. 619 (2003). The Court has narrowly interpreted federal law to exclude such groups. McConnell v. Federal Election Commission; Federal Election Commission v. Massachusetts Citizens for Life, Inc., 479 U.S. 238 (1986).

In view of the rulings of the Unites States Supreme Court at the time Colorado voters passed Article XXVIII, the Secretary of State interprets Section 6(2) to exclude groups that meet the criteria stated above. The adoption of this rule addresses important questions about the interpretation and implementation of Amendment 27 with regard to the U.S. Supreme Court’s ruling. The Secretary of State finds that the adoption and enactment of this rule is necessary because the 2004 General Election cycle is well underway, and candidates, parties, and committees are in immediate need of guidance concerning their obligations under Amendment 27.

The Secretary of State therefore finds that in order to ensure the uniform and proper administration and enforcement of the election laws and this Constitutional Provision, the permanent adoption of the new Rule 4.14 is necessary both to comply with law and to preserve the public welfare generally.

Statutory and Constitutional Authority

Additions and amendments to the “Secretary of State Rules Concerning Campaign and Political Finance” are adopted pursuant to the following statutory and constitutional provisions:

· Section 1-1-107(2)(a), C.R.S., which authorizes the Secretary of State “to promulgate, publish, and distribute…such rules as the secretary of state finds necessary for the proper administration and enforcement of the election laws…”

· Section 1-45-111.5(1), C.R.S., which authorizes the Secretary of State to “promulgate such rules…as may be necessary to enforce and administer any provision of” Article 45 of Title 1 of the Colorado Revised Statutes.

· Article XXVIII, Section 9(1)(b), Colorado State Constitution, which authorizes the Secretary of State to “promulgate such rules, in accordance with article 4 of title 24, C.R.S., or any successor section, as may be necessary to administer and enforce any provision of” Article XXVIII of the Colorado State Constitution.