The Disclosure Digest: February 25, 2019
Explore the laws governing nonprofit donor disclosure with Ballotpedia. Each weekly edition of The Disclosure Digest will highlight noteworthy legislation, pending litigation, and major activities by advocacy groups.
Nonprofit organizations do not distribute surplus revenues as profits or dividends to shareholders. Instead, nonprofits use revenues for self-preservation or expansion. Tax-exempt nonprofits are regulated under Section 501 of the Internal Revenue Code. States may subject nonprofits to additional regulations beyond those imposed by the federal government. Under federal law, nonprofits are generally not required to disclose to the public information about their donors. State laws, however, may require such disclosure. Some say expanded donor disclosure provisions minimize the potential for fraud and establish public accountability. Meanwhile, others say that disclosing information about donors violates privacy rights and can inhibit charitable activity.
This week, we take a closer look at HR1, a federal bill that would expand donor disclosure requirements for nonprofit groups making political expenditures.
Federal update: House Democrats consider expanded campaign finance, donor disclosure requirements
On Jan. 3, HR1 was introduced in the House. This wide-ranging bill would make changes to federal election laws, ethics laws, and campaign finance disclosure requirements. The Committee on House Administration will markup the bill Feb. 26 at 1 p.m. EST. In a markup session, a committee considers, and possibly amends, a bill before recommending it for consideration by the full House. (Sources: Congress.gov, Committee on House Administration)
- What does the bill propose? We’re focused on the bill’s campaign finance and donor disclosure requirements, which are also referred to as the DISCLOSE Act.
- The bill would establish donor disclosure requirements for covered organizations making campaign-related disbursements equaling or exceeding $10,000 total in an election cycle.
- A "campaign-related disbursement" would be defined by the law as any of the following:
- An independent expenditure expressly advocating for the election or defeat of a candidate for federal office
- Any communication that expresses support of or opposition to a candidate without expressly advocating for or against his or her election
- An electioneering communication or covered transfer as defined by existing law
- A covered organization would be defined by the law as any of the following:
- A corporation or limited liability corporation
- A nonprofit organized under section 501(c) of the Internal Revenue Code
- This would include 501(c)4 organizations, which are not required to disclose donors under existing law.
- A labor union
- A political organization organized under section 527 of the Internal Revenue Code (also known as a super PAC)
- Such organizations are not generally required to disclose their donors under existing law.
- Who sponsored it? Rep. John Sarbanes, a Democrat representing Maryland's 3rd District. The bill has 227 Democratic co-sponsors. No Republicans have co-sponsored the bill. For a complete list of co-sponsors click here.
- What comes next? If HR1 wins committee approval, it will be at the discretion of Speaker Nancy Pelosi whether and at what time the bill is taken up by the House as a whole. Although Democrats control the House, Republicans control both the United States Senate and the presidency, making it unlikely that HR1 would be enacted into law.
- What are the responses?
- Sarbanes said, "The bold, transformative set of reforms that we introduced today will strengthen our democracy and return political power to the people by making it easier, not harder, to vote, ending the dominance of big money in our politics and ensuring that public officials actually serve the public."
- Adam Brandon, CEO of FreedomWorks, criticized the bill's donor disclosure requirements in an op-ed for the Washington Times: "H.R. 1 would force 501(c)(4) charity organizations to publicly release their donor lists. Americans have a reasonable right to privacy, and a violation of this magnitude would have a chilling effect on political speech. The conservative groups targeted and persecuted by Lois Lerner and the IRS would be the tip of the iceberg compared to what would come next."
What we're reading
- NJTV News, "‘Dark money’ bill breezes through Senate but may face legal and political issues," Feb. 22, 2019
- Nonprofit Quarterly, "Money Laundering, a Golf Junket, and Donor Disclosure: A New Mexico Case," Feb. 20, 2019
- Colorado Watchdog, "Critics: Colorado judge rules against the First Amendment in donor privacy case," Feb. 14, 2019
The big picture
Number of relevant bills by state: So far this year, we're tracking 57 pieces of legislation dealing with donor disclosure. On the map below, a darker shade of green indicates a greater number of relevant bills. Click here for a complete list of all the bills we're tracking.
Number of relevant bills by current legislative status
Number of relevant bills by partisan status of sponsor(s)
Recent legislative actions
Below is a complete list of legislative actions taken on relevant bills in the past week. Bills are listed in alphabetical order, first by state then by bill number. Know of any legislation we're missing? Please email us so we can include it on our tracking list.
- Florida H0181: This bill would amend the definition of a contribution under the state's campaign finance laws. This bill would also revise disclosure requirements for candidates, political committees, and electioneering communications organizations.
- Withdrawn Feb. 21.
- Idaho S1113: This bill would expand existing disclosure requirements to local elections and campaigns.
- Read for a second time Feb. 22.
- Idaho S1114: This bill would expand disclosure requirements for electioneering communications and independent expenditures.
- State Affairs Committee hearing Feb. 22.
- Kansas HB2169: This bill would expand the definition of an electioneering communication for the purposes of campaign finance disclosure.
- Elections Committee hearing Feb. 21.
- Montana HB307: This bill would revise contribution reporting requirements for candidate, ballot issue, political party, independent, and incidental committees.
- State Administration Committee tabled measure Feb. 20
- New Hampshire HB152: This bill would raise the dollar threshold for disclosure requirements as they apply to political committees.
- Election Law Committee killed the bill Feb. 19.
- New Hampshire SB105: This bill would establish disclosure requirements for certain contributions made to inaugural committees.
- Election Law and Municipal Affairs Committee reported favorably Feb. 20.
- New Jersey S1500: This bill would require disclosure of donors to 501(c)(4)s, super PACs, and other similar entities who contribute $10,000 or more.
- Senate approved Feb. 21.
- North Dakota HB1037: This bill would re-enact previously rescinded disclosure requirements for contributions made to ballot measure campaigns.
- Introduced in Senate and referred to the Government and Veterans Affairs Committee. Feb. 18. House approved the bill Feb. 12.
- Oklahoma SB809: This bill would expand the definition of a contribution to include cryptocurrency for the purposes of campaign finance disclosure requirements.
- Rules Committee reported favorably as amended Feb. 20.
- Utah HB0319: This bill would establish disclosure requirements for entities spending money on ballot proposition advertisements.
- Government Operations Committee reported favorably Feb. 22.
- Virginia HB1719: This bill would extend the provisions of the state's Campaign Finance Disclosure Act to candidates for local office who accept contributions or make expenditures in excess of $25,000.
- House Speaker and Senate President signed Feb. 20. Governor must sign before the bill becomes law.
- Washington SB5221: This bill would amend a state law requiring that entities producing political advertisements publicly disclose their top five donors.
- Introduced in House and referred to the State Government and Tribal Relations Committee Feb. 21. Senate approved the bill Feb. 20.
- Washington SB5309: This bill would extend the state's campaign contribution regulations to candidates for special purpose districts if those districts are authorized to provide freight and passenger transfer and terminal facilities.
- Considered at executive session of State Government and Tribal Relations Committee Feb. 20.
See also
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