CAMPAIGN FINANCE AND BALLOT MEASURE GUIDE
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1 VIRGINIA CAMPAIGN FINANCE AND BALLOT MEASURE GUIDE These resources are current as of 11/5/2014: We o our best to perioically upate these resources an welcome any comments or questions regaring new evelopments in the law. Please us at avocacy@afj.org. This guie summarizes key aspects of state campaign finance law an regulations. It is not intene to provie legal avice or to serve as a substitute for legal avice In some jurisictions, city an/or county regulations may also apply to certain political activities. Check with the appropriate local jurisiction before unertaking any activity. CONTRIBUTION LIMITS AND SOURCE RESTRICTIONS. To Caniates To Committees From: Iniviuals PACs Corporation s Statewi e Legislativ e Local Political Committee s Parties Ballot Measure s Contribution Restrictions: Aggregation: There is no limit on the total an iniviual may contribute for political purposes. 1
2 Legislative Session: During the regular legislative session, legislators an statewie office-holers may not accept or solicit contributions, nor may any person or political committee promise to make a contribution to any of these officials uring the regular session. The prohibition lasts from the first ay of the session until ajournment sine ie, but oes not cover a reconvene session or any special legislative sessions. VA. CODE ANN Earmarking: Donors to a political committee may esignate that some or all of their contribution must be given by the PAC to a particular caniate. The PAC reports the receipt of the contribution coming from that onor, an it reports the isbursement of the funs to the esignate caniate; the caniate, in turn, reports receiving the contribution from the original onor who earmarke the funs, along with require isclosure information for contributions greater than $100. VA. CODE ANN (B)(3). In-kin contributions: A goo or service provie for free or at less than the usual cost is an in-kin contribution. In-kin contributions inclue expenitures that are coorinate with or mae with the authorization of a caniate. VA. CODE ANN (A) (efining in-kin contribution ). New items are value at the retail price, use items at the fair-market value, an services at the actual cost per hour. Personal services are not an in-kin contribution when they are provie voluntarily, without any compensation requeste or receive. In-kin contributions are treate the same as monetary contributions. In-kin contributions must be itemize an isclose when the value of any onor s in-kin an monetary contributions totals $100 or more. VA. CODE ANN (B)(2); (B)(2). Corporate Contributions: Corporations may make unlimite contributions, incluing irect monetary an in-kin contributions. A corporation may contribute irectly; through a corporate-fune PAC; or, it may ivie its contributions between the two. While corporate contributions are permissible uner state law, the contributions may subject the corporation to feeral tax if the organization has investment income. Aitionally, the corporation may risk its tax status if political activity becomes its primary purpose. 2
3 COMMUNICATIONS Issue avocacy versus express avocacy Corporations, state PACs an other section 527 organizations may make unlimite issue-avocacy communications without being subject to registration or reporting, as long as the communications o not contain express avocacy. See Virginia Society for Human Life v. Calwell, 256 Va. 151, (1998). The efinitions of contribution an expeniture an the reporting requirements for inepenent expenitures were all amene in 2007 specifically to reach only express avocacy activities. See 2007 House Bill 2650; Va. Coe , The statute oes not efine express avocacy. The Virginia Supreme Court previously hel that the campaign finance laws i not reach communications unless they expressly avocate the election or efeat of a clearly ientifie caniate. Virginia Society for Human Life at 160. Generally, express avocacy will inclue the so-calle magic wors such as vote for or efeat, an may also inclue wors or phrases not susceptible to any other meaning, although the state has not given guiance or an inication how it will enforce this efinition. Membership communications: Communications containing express avocacy are expenitures, whether sent to an organization s members or to the general public. See VA. CODE ANN (A) (efining expeniture ). If the communication is part of an in-kin contribution, the costs must be reporte to the caniate whom the communication benefite; if it was an inepenent expeniture, it must be reporte as escribe below. Inepenent expenitures: An inepenent expeniture is an expeniture mae by a person, campaign committee or political committee that is not controlle by, coorinate with or mae with the authorization of a caniate or the caniate s campaign. I. at (A) (efining inepenent expeniture ). o Note that an entity may not simply avoi reporting a communication as an inepenent expeniture by eclaring that it is a coorinate in-kin contribution. Coorination is efine as incluing only expenitures mae at the caniate s or campaign s express request or suggestion, or with the material involvement of the caniate or campaign in evising the expeniture s strategy, content, issemination metho or timing. I. at (efining coorination ). 3
4 A corporation, political committee or out-of-state PAC may make unlimite inepenent expenitures. Recorkeeping an Reporting An entity must maintain recors an file reports if it makes inepenent expenitures totaling $1,000 or more for any statewie office uring an election cycle. For all other offices, the reporting threshol is $200 per election cycle. I. at (A). o Reports are ue an nee to be receive within 24 hours of when the funs are expene or when the materials are publishe or broacast, whichever occurs first. I. at (B). o The report must etail the expeniture, incluing the ate, amount an the payee, along with the names of the caniates supporte or oppose. The report must state the percentage of the expeniture that supporte or oppose each caniate. The report form is available at: Disclaimers Inepenent expenitures must inclue a isclosure statement, as escribe in the section below. Disclaimers: o Raio, TV an print meia communications must inclue isclaimers isplaye conspicuously. Print meia inclues billboars, newspaper an magazine as, mailings, fliers, an websites. Printe pieces consisting of more than one page nee bear the isclaimer only on one page or face. VA. CODE ANN (efining print meia ). Print meia: Pai for by [name of entity]. If the avertisement supports or opposes the nomination or election of a clearly ientifie caniate, it must also state either, Authorize by [name of caniate], caniate for [name of office] or Not authorize by a caniate. VA. CODE ANN If the avertisement opposes a clearly ientifie caniate, the sponsor must also isclose the name of the caniate it is supporting. VA. CODE ANN (3). TV avertisement: o Non-PACs: The chief executive must say the following statement: [Name of entity] sponsore this a. I. at o PACs: The chief executive or treasurer must say the following statement: The [name of PAC] 4
5 sponsore this a. During that statement, the speaker s image either vieo or still photo must appear on the screen. Aitionally, the wors Pai for by [name of PAC] must appear on the screen at least 20 scan lines in size. I. at Raio avertisement: o Non-PACs: The chief executive must say the following statement: [Name of entity] sponsore this a. I. at o PACs: The chief executive or treasurer must say the following statement: This a was pai for by [Name of political action committee]. This statement must last at least two secons an be spoken so as to be easily unerstoo. I. at Telephone calls: 1 The caller must ientify the name of the entity that authorize an is paying for the calls before the call ens, unless the recipient hangs up first. If the call is authorize by a political committee, the caller must state its full name an its State Boar of Elections registration number; if the call is from an entity other than one registere with the State Boar of Elections, the caller must state the full name an resience aress of the iniviual responsible for the calls. I. at o Jointly sponsore avertisements must inclue the names of each entity that pai for the communication. o Note that the require isclaimers iffer slightly for communications jointly sponsore by a caniate an another entity, such as a corporation or PAC. If sponsoring a communication with a caniate, check VA. CODE ANN et seq. for guiance. o As note above, a communication is coorinate only if mae at the express request or suggestion of the caniate or caniate s committee, or with the caniate or his or her committee s material involvement in the communication s strategy, content, 1 Telephone calls are covere only when they are part of a series of calls mae 1) to 25 or more phone numbers in Virginia, 2) uring the 180 ays before a general or special election or the 90 ays before a primary election or other nominating event, 3) conveying or soliciting relating to the election or nominating event, an 4) using pai (not volunteer) callers. VA. CODE ANN (efining campaign telephone calls ). 5
6 COORDINATION issemination metho or timing. See i. at (efining coorinate ). Corporations an PACs may coorinate with caniates an campaigns to conuct express avocacy or other activities. Coorinate activities must be reporte as an in-kin contribution receive by the benefiting caniate, an also as an expeniture, if mae by a PAC rather than by a corporation. With corporations an PACs permitte to give caniates unlimite contributions, entities have greater latitue to conuct coorinate expenitures than in many other states. REGISTRATION AND REPORTING REQUIREMENTS Types of PACs Virginia istinguishes between political committees base in the state ( instate PACs ) an those political committees covere by 527 of the Internal Revenue Coe that are base in other states ( out-of-state PACs ). The salient factor is whether the organization makes most of its contributions to Virginia caniates an political committees, or to those outsie of Virginia. An entity is an in-state PAC only if half or more of the money it contributes goes to Virginia caniates an PACs; the committee s aministrative expenses an the transfer of funs between affiliate organizations are not factore into this calculation. The contribution percentage is to be calculate base on the entirety of the committee s registration, an not on only one report or election cycle. See VA. CODE ANN (A) (efining primary purpose ). Informal avice from the State Boar of Elections inicates that if a PAC has been in existence prior to registering in Virginia, its primary purpose will be calculate base on the contributions uring the entirety of its existence, an not only on its activities while registere in Virginia. This is not formal guiance, however, an appears to contraict the statutory language. In-State PACs: An in-state PAC is an entity that receives contributions an spens money for the primary purpose of expressly avocating the election or efeat of a clearly ientifie caniate. As note above, an entity is an in-state PAC only if 50 percent or more of the money it contributes goes to Virginia nonfeeral caniates or PACs. Otherwise, the entity must register as an out-of-state PAC. 6
7 Registration: Within ten ays of anticipating that it will spen more than $200 in a calenar year, an in-state PAC must file a statement of organization, available at: On its statement of organization, an in-state PAC must state that its primary purpose is to influence the outcome of nonfeeral elections in Virginia; the State Boar of Elections is prohibite by law from registering any PAC that fails to o so. VA. CODE ANN (A). o The statement of organization also must inclue the name of a Virginia resient who will maintain the entity s financial recors, along with the aress in Virginia where the books will be kept. I. (5). The treasurer may be liste as the custoian of the recors. Recorkeeping an Aministration: Bank Account: o The bank account of an in-state PAC must be opene at a bank branch in the Commonwealth of Virginia. I. At (7). Treasurer: o The treasurer must be a Virginia resient. The PAC s statement of organization must list the treasurer s resiential an business aresses. I. at (4). Aministrative Expenses: o A corporation may pay to aminister its affiliate PAC. The PAC must report these costs as in-kin contributions. PAC Solicitations: o A corporation may spen unlimite amounts to solicit contributions to its affiliate PAC. Further, the corporation or the PAC itself may solicit both members an non-members alike, without limit. o All solicitations for a PAC must inform the target of the solicitation at the time of the solicitation: 1. he or she has the right to refuse to contribute without facing any reprisal; an 2. the political purposes of the committee.. I. at (2). PAC Reporting A PAC must etail its receipts an expenitures as follows: o Receipts: 7
8 The total number of contributors whose contributions have aggregate $100 or less uring the calenar year, along with a total of these unitemize contributions; an An itemize list of all onors whose aggregate year-to-ate contributions (incluing monetary an in-kin) have totale more than $100, incluing each onor s name, liste alphabetically; aress; occupation, employer an the locality where the onor is employe; the amount of the contribution; their aggregate contributions to the PAC for that year; an the ate of their last contribution. Itemizations for onors who are not iniviuals must inclue the principal type of business an place of business. o Expenitures: All expenitures must be itemize, isclosing the payee s name an aress, the purpose of the expeniture, the name of the person contracting for or arranging the expeniture, an the ate an amount of the expeniture. VA. CODE ANN Reporting scheule: o Quarterly: A state PAC must etail its receipts an expenitures in quarterly reports. Reports are ue on the 15 th of the month following the close of the calenar quarter. I. at C. o Large Contribution Reports: In aition to its regularly file quarterly reports, a state PAC must file a large ollar contribution report within three business ays of receiving any single contribution or loan of $10,000 or more, regarless of when uring the year the PAC receives the contribution. Large contributions or loans must also be reporte on the next quarterly report. I. at o Reporting must continue until the PAC files a termination report. A PAC may terminate only if it has ispose of all of its surplus funs. The statute ientifies the categories of entities that may receive surplus funs. Money may not be converte to anyone s personal use. I. at See below for further iscussion of the permissible entities to receive surplus funs. o Reporting forms are available at: Reporting metho: o A PAC must file electronically if it accepts contributions or makes expenitures of more than $10,000 in the current or previous calenar year. However, if the PAC expects its activity to be less than $10,000 8
9 in the upcoming calenar year, it may request a waiver to permit it to file on paper. This request must be submitte before its first report of the year is ue. I. at (B). Information on electronic filing, incluing Virginia s customize software, is available at: Reporting authority: o All reports are file with the State Boar of Election. I. at Out-of-State PACs: o An out-of-state PAC is a political organization 2 that 1) gives Virginia state caniates an committees less than half of the total money it contributes, an 2) is not a PAC registere with the Feeral Election Commission. See VA. CODE ANN (A) (efining out-ofstate political committee an primary purpose ). o Virginia requires an out-of-state PAC to register an report if it gives a total of $10,000 or more to Virginia caniates an committees in a calenar year. A political organization oes not nee to register or report if its contributions total less than $10,000 per year. o As note uner Types of PACs, above, the statute states that the organization s contributions are measure over the entirety of the committee s registration. However, informal avice from the State Boar of Elections inicates that for an out-of-state PAC in existence prior to registering, all of the PAC s activity will be consiere when evaluating whether more or less than half of its contributions have gone to Virginia caniates, as measuring only the activity uring its registration is likely to cause the PAC to be classifie erroneously as an in-state PAC. Bank Account: o The bank account for an out-of-state PAC oes nee not to be in a Virginia bank. I. at :1(B). Registration: o An out-of-state 527 must register with the SBE on or before the ate on which its aggregate contributions to Virginia caniates an political committees reach or excee $10,000 for the calenar year. See i. at :1(A). It registers by submitting a Statement of Organization, available at: ees/outofstate/soo_-_out-of-state.pf. 2 A political organization is an entity covere by section 527 of the Internal Revenue Coe. 9
10 Registration as an out-of-state 527 expires automatically at the en of the calenar year; committees making contributions in future years must re-register. o On its registration statement, the out-of-state PAC must list most of the information require of an in-state PAC, plus its taxpayer ientification number, the names of the states in which it files reports, an its campaign-finance registration numbers in each state where it reports. VA. CODE ANN :1. o Because all out-of-state PACs are automatically terminate at the en of the calenar year, an out-of-state PAC must re-register for each year in which it has activity. Reporting: o Reporting for an out-of-state PAC is base on the timing of its contributions to Virginia caniates an committees, an is not tie to the regular reporting calenar. o On the ay it registers with Virginia, an out-of-state PAC must report the following information: o For each contributor whose year-to-ate contributions total $2,500 or more, report the onor s name, aress, occupation, employer, business location, an the ates an amounts of each contribution; an o A list of all contributions mae to Virginia caniates an committees since the preceing January 1. VA. CODE ANN :1(D). This report oes not nee to be file electronically. o With each subsequent contribution it makes in Virginia, regarless of the amount, the out-of-state PAC must report: o The new contribution to a Virginia caniate or committee; an o All onors who have contribute $2,500 or more in the aggregate since the previous filing. I. at :2(C). This report must be file electronically. I. at (B). This reporting regime may result in an out-of-state PAC filing reports more regularly than an in-state PAC. o Chain-reaction reporting In aition to the reporting require by an out-of-state PAC, some contributors to the out-of-state PAC also must register an report: o At the time an out-of-state PAC registers, any section 527 organization that has contribute an aggregate of $50,000 or more to the out-of-state PAC uring the current calenar year must itself file a statement of organization in Virginia an list its own contributors an expenitures. I. at :1(E). 10
11 (Then, any 527s that have given $50,000 or more to that newly registere out-of-state PAC must themselves register, setting off a potential chain reaction.) After an entity registers as an out-of-state PAC, any contributions of $10,000 or more from another non-feeral, non-virginia 527 organization will trigger registration an reporting in Virginia for that secon 527, regarless of whether there is any intent to use the money in Virginia. Prior to accepting contributions aggregating $10,000 or more from the other non-feeral 527, the first committee must ask the secon for its Virginia State Boar of Elections registration number, an then verify that number with the State Boar of Elections. See i. at :3. Prior to accepting contributions aggregating $10,000 or more from a feeral political action committee, the first committee must also request the feeral political action committee s registration number an verify that number with the State Boar of Elections. See i. at :4. Feeral PACs: Registration: o Within 10 ays of giving $200 or more in a calenar year to Virginia committees or non-feeral caniates, a Feeral PAC must register with the State Boar of Elections by submitting a Statement of Organization. I. at (A,C). The Statement of Organization is available at /PAC/SOO_-_FEC.pf o The Feeral PAC must supply its name an aress, its FEC ientification number, an the name an aress of its treasurer. I. at (C). o An amene Statement of Organization must be submitte within 10 ays if any of the information on the form changes. o The State Boar of Elections will provie a link to the PAC s FEC reports. Reporting: o Other than submitting the Statement of Organization, no aitional reporting is require of a Feeral PAC. Accessibility: o All reports file electronically by in-state an out-of-state PACs are available on-line at Reports are searchable by onor name, occupation an zip coe, among other criterion. 11
12 Termination: o In-state PACs An in-state PAC may terminate after it etermines it will no longer receive contributions or make expenitures aggregating more than $200 in a calenar year. To terminate, the in-state PAC must file a final report, isclosing: o all contributions an expenitures not previously reporte; o all ebts an the manner in which they will be retire; an o how any surplus funs will be istribute. o The state limits the ways in which surplus funs may be ispose. An in-state PAC may ispose of its funs only by: o transferring the money to the PAC s affiliate organization; o returning funs to contributors, as long as the refuns o not excee the amount of the onor s original contribution; o contributing the funs to any organization escribe in 170(c) of the Internal Revenue Coe; o contributing the funs to Virginia caniates, political committees or political parties; or o paying the PAC s expenses. Funs or intangible personal property may not be converte to anyone s personal use. VA. CODE ANN o Out-of-state PACs The State Boar of Elections automatically terminates all out-of-state PACs automatically at the en of the calenar year. An out-of-state PAC oes not nee to take any steps to terminate. To make contributions in future years, however, it must re-register. ENFORCEMENT AND PENALTIES o Complaints of reporting or isclaimer violations shoul be mae to the State Boar of Elections. If the Boar etermines a PAC is in violation, it will forwar the complaint to the appropriate Commonwealth s Attorney, who will initiate civil proceeings to collect civil penalties, or criminal proceeings in the case of a willful violation. See i. at o There is a rebuttable presumption that a failure to file a large pre-election report was willful. See i. at (C). Willful violations are punishable as Class 1 misemeanors. See i. at o Virginia law sets a etaile scheule of fines for late or missing campaignfinance reports. See VA. CODE ANN et seq. Importantly, entities will face lower fines if they file reports late but before the state sens notice of their tariness. Aitionally, committees that make best efforts are treate as filing complete reports. Best efforts inclues sening a written request to the contributor asking for the require 12
13 information. The State Boar of Elections oes not consier a report complete if require information is missing for more than 10% of the total number of contributors. See State Boar of Elections, Caniate Campaign Committee Summary at 24 (revise July 1, 2007). Fines escalate the later the report is file an with subsequent violations. o Violations of the state s isclaimer requirements for TV, raio, print or telephonic communications also are subject to a scheule of fines, with higher fines impose on violations occurring in the last two weeks before an election. See i. at REFERENDUM COMMITTEES Contribution Limits: o Referenum committees may accept unlimite amounts from any iniviual, corporation or political committee, an they may spen unlimite amounts on their activities. Registration: o Any entity, incluing a corporation or a political committee, that seeks to influence the outcome of a referenum must register as a referenum committee if it spens more than the following amounts to avocate the passage or efeat of a referenum: Statewie referenum: $10,000; Referenum being hel in more than one city or county: $5,000; or Referenum being hel in only one city or county: $1,000. The entity must register within 10 ays of having reason to believe it will excee these limits. I. at (A), o As written, the law requires a corporation to register as a referenum committee even if its only involvement is to give monetary contributions over the threshol to an existing referenum committee. Reporting: o A referenum committee must etail its receipts an expenitures as follows: Receipts: The total number of contributors whose contributions have aggregate $100 or less uring the calenar year, along with a total of these unitemize contributions; an An itemize list of all onors whose aggregate yearto-ate contributions (incluing monetary an in-kin) have totale more than $100, incluing each onor s 13
14 Expenitures: name, liste alphabetically; aress; occupation, employer an the locality where the onor is employe or where his business is locate; the amount of the contribution; their aggregate contributions to the referenum committee for that year; an the ate of their last contribution. All expenitures must be itemize, isclosing the payee s name an aress, the purpose of the expeniture, the name of the person contracting for or arranging the expeniture, an the ate an amount of the expeniture. VA. CODE ANN Reporting scheule: o Referenum committees must report their ballot measure activity each year in accorance with the reporting ealines. Scheules are available at: o Large contribution reports within three business ays of receiving any single contribution or loan of $10,000 or more, a referenum committee must electronically file a large ollar contribution report with the State Boar of Elections. I. at o Termination within six months after the referenum is ecie, the committee must either file a final report or else amen its Statement of Organization to become a Political Action Committee an file on the appropriate scheule. I. at (B). CONTACT INFORMATION FOR STATE AND LOCAL AGENCIES Virginia Department of Elections Washington Builing, First Floor, 1100 Bank Street, Richmon Telephone: Toll Free: FAX: info@elections.virginia.gov Web site: Chris Piper, Aministrator (804) Direct Line Chris.piper@elections.virginia.gov 14
15 Tina Emons, Compliance Specialist Rise Miller, Political Committee Specialist Marian Mines, Caniate Committee Specialist FOR FURTHER ASSISTANCE For assistance regaring these resources or for more information about feeral law, please contact our attorney one-on-one counseling service: Telephone: NPLOBBY ( ) Jay Myerson wrote the first eition of the Virginia Campaign Finance State Law Resource, publishe by Alliance for Justice in This eition has been revise an upate by: Trister, Ross, Schaler & Gol, PLLC 1666 Connecticut Avenue, N.W., Fifth Floor Washington, D.C (phone) (fax) Copyright These materials are copyrighte an may not be reprouce without permission. 15
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