HB2297 - 522R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 16-311, Arizona Revised Statutes, as amended by Laws 2016, chapter 79, section 5, is amended to read:

START_STATUTE16-311. Nomination papers; filing; definitions

A. Any person desiring to become a candidate at a primary election for a political party and to have the person's name printed on the official ballot shall be a qualified elector of such party and, not less than ninety nor more than one hundred eighty twenty days before the primary election, shall sign and cause to be filed a nomination paper giving the person's actual residence address or description of place of residence and post office address, naming the party of which the person desires to become a candidate, stating the office and district or precinct, if any, for which the person offers the person's candidacy, stating the exact manner in which the person desires to have the person's name printed on the official ballot pursuant to subsection G of this section, and giving the date of the primary election and, if nominated, the date of the general election at which the person desires to become a candidate. A candidate for public office shall be a qualified elector at the time of filing and shall reside in the county, district or precinct that the person proposes to represent.

B. Any person desiring to become a candidate at any nonpartisan election and to have the person's name printed on the official ballot shall be at the time of filing a qualified elector of such county, city, town or district and, not less than ninety nor more than one hundred eighty twenty days before the election, shall sign and cause to be filed a nomination paper giving the person's actual residence address or description of place of residence and post office address, stating the office and county, city, town or district and ward or precinct, if any, for which the person offers the person's candidacy, stating the exact manner in which the person desires to have the person's name printed on the official ballot pursuant to subsection G of this section and giving the date of the election. A candidate for office shall reside at the time of filing in the county, city, town, district, ward or precinct that the person proposes to represent.

C. Notwithstanding subsection B of this section, any city or town may adopt by ordinance for its elections the time frame provided in subsection A of this section for filing nomination petitions. Such ordinance shall be adopted not less than one hundred twenty days before the first election to which it applies.

D. All persons desiring to become a candidate shall file with the nomination paper provided for in subsection A of this section a declaration, which shall be printed in a form prescribed by the secretary of state. The declaration shall include facts sufficient to show that, other than the residency requirement provided in subsection A of this section and the satisfaction of any monetary penalties, fines or judgments as prescribed in subsection I of this section, the candidate will be qualified at the time of election to hold the office the person seeks, and that for any monetary penalties, fines or judgments as prescribed in subsection I of this section, the candidate has made complete payment before the time of filing.

E. The nomination paper of a candidate for the office of United States senator or representative in Congress, for the office of presidential elector or for a state office, including a member of the legislature, or for any other office for which the electors of the entire state or a subdivision of the state greater than a county are entitled to vote, shall be filed with the secretary of state no later than 5:00 p.m. on the last date for filing.

F. The nomination paper of a candidate for superior court judge or for a county, district and precinct office for which the electors of a county or a subdivision of a county other than an incorporated city or town are entitled to vote shall be filed with the county elections officer no later than 5:00 p.m. on the last date for filing as prescribed by subsection A of this section. The nomination paper of a candidate for a city or town office shall be filed with the city or town clerk no later than 5:00 p.m. on the last date for filing. The nomination paper of a candidate for school district office shall be filed with the county school superintendent no later than 5:00 p.m. on the last date for filing.

G. The nomination paper shall include the exact manner in which the candidate desires to have the person's name printed on the official ballot and shall be limited to the candidate's surname and given name or names, an abbreviated version of such names or appropriate initials such as "Bob" for "Robert", "Jim" for "James", "Wm." for "William" or "S." for "Samuel". Nicknames are permissible, but in no event shall nicknames, abbreviated versions or initials of given names suggest reference to professional, fraternal, religious or military titles. No other descriptive name or names shall be printed on the official ballot, except as provided in this section. Candidates' abbreviated names or nicknames may be printed within quotation marks. The candidate's surname shall be printed first, followed by the given name or names.

H. A person who does not file a timely nomination paper that complies with this section is not eligible to have the person's name printed on the official ballot for that office. The filing officer shall not accept the nomination paper of a candidate for state or local office unless the person provides or has provided all of the following:

1. The financial disclosure statement as prescribed for candidates for that office.

2. The declaration of qualification and eligibility as prescribed in subsection D of this section.

I. Except in cases where the liability is being appealed, the filing officer shall not accept the nomination paper of a candidate for state or local office if the person is liable for an aggregation of one thousand dollars or more in fines, penalties, late fees or administrative or civil judgments, including any interest or costs, in any combination, that have not been fully satisfied at the time of the attempted filing of the nomination paper and the liability arose from failure to comply with or enforcement of chapter 6 of this title.

J. For the purposes of this title:

1. "Election district" means the state, any county, city, town, precinct or other political subdivision or a special district that is not a political subdivision, that is authorized by statute to conduct an election and that is authorized or required to conduct its election in accordance with this title.

2. "Nomination paper" means the form filed with the appropriate office by a person wishing to declare the person's intent to become a candidate for a particular political office. END_STATUTE

Sec. 2. Section 16-901, Arizona Revised Statutes, as added by Laws 2016, chapter 79, section 11, is amended to read:

START_STATUTE16-901. Definitions

In this chapter, unless the context otherwise requires:

1. "Advertisement" means information or materials, other than nonpaid social media messages, that are mailed, e‑mailed, posted, distributed, published, displayed, delivered, broadcasted or placed in a communication medium and that are for the purpose of influencing an election.

2. "Affiliate" means any organization that controls, is controlled by or is under common control with a corporation, limited liability company or labor organization.

3. "Agent" means any person who has actual authority, either express or implied, to represent or make decisions on behalf of another person.

4. "Ballot measure expenditure" means an expenditure made by a person that expressly advocates the support or opposition of a clearly identified ballot measure.

5. "Best effort" means that a committee treasurer or treasurer's agent makes at least one written effort, including an attempt by e-mail, text message, private message through social media or other similar communication, or at least one oral effort that is documented in writing to identify the contributor of an incomplete contribution.

6. "Calendar quarter" means a period of three consecutive calendar months ending on March 31, June 30, September 30 or December 31.

7. "Candidate" means an individual who receives contributions or makes expenditures or who gives consent to another person to receive contributions or make expenditures on behalf of that individual in connection with the candidate's nomination, election or retention for any public office.

8. "Candidate committee" includes the candidate.

9. "Clearly identified candidate" means that the name or a description, image, photograph or drawing of the candidate appears or the identity of the candidate is otherwise apparent by unambiguous reference.

10. "Committee" means a candidate committee, a political action committee or a political party.

11. "Contribution" means any money, advance, deposit or other thing of value that is made to a person for the purpose of influencing an election. Contribution includes:

(a) A contribution that is made to retire campaign debt from a previous election cycle.

(b) Money or the fair market value of anything that is directly or indirectly provided to an elected official for the specific purpose of defraying the expense of communications with constituents.

(d) A loan that is made to a committee for the purpose of influencing an election, to the extent the loan remains outstanding.

12. "Control" means to possess, directly or indirectly, the power to direct or to cause the direction of the management or policies of another organization, whether through voting power, ownership, contract or otherwise.

13. "Coordinate", "coordinated" or "coordination" means the coordination of an expenditure as proscribed by section 16-922.

14. "Coordinated party expenditures" means expenditures that are made by a political party to directly pay for goods or services on behalf of its nominee.

15. "District office" means an elected office established or organized pursuant to title 15 or title 48.

16. "Earmarked" means a designation, instruction or encumbrance between the transferor of a contribution and a transferee that requires the transferee to make a contribution to a clearly identified candidate.

17. "Election" means any election for any ballot measure in this state or any candidate election during a primary, general, recall, special or runoff election for any office in this state other than a federal office and a political party office prescribed by chapter 5, article 2 of this title.

18. "Election cycle" means the two-year period between successive statewide general elections or, for cities and towns, the two-year period between the scheduled date of the city's or town's second, runoff or general election and the scheduled date of the immediately following second, runoff or general election, however designated by the city or town. For purposes of a recall election, "election cycle" means the period between issuance of a recall petition serial number and the latest of the following:

(a) The date of the recall election that is called pursuant to section 19-209.

(b) The date that a resignation is accepted pursuant to section 19‑208.

(c) The date that the receiving officer provides notice pursuant to section 19-208.01 that the number of signatures is insufficient.

19. "Employee" means an individual who is entitled to compensation for labor or services performed for the individual's employer.

20. "Employer" means any person that pays compensation to and directs the labor or services of any individual in the course of employment.

21. "Enforcement officer" means the attorney general or the county, city or town attorney with authority to collect fines or issue penalties with respect to a given election pursuant to section 16-938.

22. "Entity" means a corporation, limited liability company, labor organization, partnership, trust, association, organization, joint venture, cooperative, unincorporated organization or association or other organized group that consists of more than one individual.

23. "Excess contribution" means a contribution that exceeds the applicable contribution limits for a particular election.

23. 24. "Exclusive insurance contract" means an insurance producer's contract with an insurer that does either of the following:

(a) Prohibits the producer from soliciting insurance business for any other insurer.

(b) Requires a first right of refusal on all lines of insurance business written by the insurer and solicited by the producer.

24. 25. "Expenditure" means any purchase, payment or other thing of value that is made by a person for the purpose of influencing an election.

25. 26. "Family contribution" means any contribution that is provided to a candidate's committee by the parent, grandparent, aunt, uncle, child or sibling of the candidate or the candidate's spouse, including the spouse of any of the listed family members, regardless of whether the relation is established by marriage or adoption.

26. 27. "Filing officer" means the secretary of state or the county, city or town officer in charge of elections for that jurisdiction who accepts statements and reports for those elections pursuant to section 16-928.

27. 28. "Firewall" means a written policy that precludes one person from sharing information with another person.

28. 29. "Identification" or "identify" means:

(a) For an individual, the individual's first and last name, residence location or street address and occupation and the name of the individual's primary employer.

(b) For any other person, the person's full name and physical location or street address.

29. 30. "Incomplete contribution" means any contribution that is received by a committee for which the contributor's complete identification has not been obtained.

30. 31. "Independent expenditure" means an expenditure by a person, other than a candidate committee, that complies with both of the following:

(a) Expressly advocates the election or defeat of a clearly identified candidate.

(b) Is not made in cooperation or consultation with or at the request or suggestion of the candidate or the candidate's agent.

31. 32. "In-kind contribution" means a contribution of goods, services or anything of value that is provided without charge or at less than the usual and normal charge.

32. 33. "Insurance producer" means a person that:

(a) Is required to be licensed to sell, solicit or negotiate insurance.

(b) Has an exclusive insurance contract with an insurer.

33. 34. "Itemized" means that each contribution received or expenditure made is set forth separately.

34. 35. "Labor organization" means any employee representation organization that exists for the purpose of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment or other conditions of employment.

35. 36. "Legislative office" means the office of representative in the state house of representatives or senator in the state senate.

36. 37. "Mega PAC status" means official recognition that a political action committee has received contributions from five hundred or more individuals in amounts of ten dollars or more in the four-year period immediately before application to the secretary of state.

37. 38. "Nominee" means a candidate who prevails in a primary election for partisan office and includes the nominee's candidate committee.

38. 39. "Person" means an individual or a candidate, nominee, committee, corporation, limited liability company, labor organization, partnership, trust, association, organization, joint venture, cooperative or unincorporated organization or association.

39. 40. "Personal monies" means any of the following:

(a) Assets to which the individual or individual's spouse has either legal title or an equitable interest.

(b) Salary and other earned income from bona fide employment of the individual or individual's spouse.

(d) Bequests to the individual or individual's spouse.

(e) Income to the individual or individual's spouse from revocable trusts for which the individual or individual's spouse is a beneficiary.

(f) Gifts of a personal nature to the individual or individual's spouse that would have been given regardless of whether the individual became a candidate or accepted a contribution.

(g) The proceeds of loans obtained by the individual or individual's spouse that are secured by collateral or security provided by the individual or individual's spouse.

(h) Family contributions.

40. 41. "Political action committee" means an entity that is required to register as a political action committee pursuant to section 16-905.

41. 42. "Political party" means a committee that meets the requirements for recognition as a political party pursuant to chapter 5 of this title.

42. 43. "Primary purpose" means an entity's predominant purpose. Notwithstanding any other law or rule, an entity is not organized for the primary purpose of influencing an election if all of the following apply at the time the contribution or expenditure is made:

(a) The entity has tax exempt status under section 501(a) of the internal revenue code.

(b) Except for a religious organization, assembly or institution, the entity has properly filed a form 1023 or form 1024 with the internal revenue service or the equivalent successor form designated by the internal revenue service.

(d) The entity remains in good standing with the corporation commission.

(e) The entity has properly filed a form 990 with the internal revenue service or the equivalent successor form designated by the internal revenue service in compliance with the most recent filing deadline established by internal revenue service regulations or policies.

43. 44. "Retention" means the election process by which a superior court judge, appellate court judge or supreme court justice is retained in office as prescribed by article VI, section 38 or 40, Constitution of Arizona.

44. 45. "Separate segregated fund" means a fund established by a corporation, limited liability company, labor organization or partnership that is required to register as a political action committee.

45. 46. "Social media messages" means forms of communication, including internet sites for social networking or blogging, through which users create a personal profile and participate in online communities to share information, ideas and personal messages.

46. 47. "Sponsor" means any person that establishes, administers or contributes financial support to the administration of a political action committee or that has common or overlapping membership or officers with that political action committee.

47. 48. "Standing committee" means a political action committee or political party that is active in more than one reporting jurisdiction in this state and that files a statement of organization in a format prescribed by the secretary of state.

48. 49. "Statewide office" means the office of governor, secretary of state, state treasurer, attorney general, superintendent of public instruction, corporation commissioner or mine inspector.

49. 50. "Surplus monies" means those monies of a terminating committee that remain after all of the committee's expenditures have been made, all debts have been extinguished and the committee ceases accepting contributions. END_STATUTE

Sec. 3. Section 16-907, Arizona Revised Statutes, as added by Laws 2016, chapter 79, section 12, is amended to read:

START_STATUTE16-907. Committee recordkeeping; treasurer; accounts

A. A committee treasurer is the custodian of the committee's books and accounts. A committee may not make a contribution, expenditure or disbursement without the authorization of the treasurer or the treasurer's designated agent.

B. All committee monies shall be deposited in one or more bank accounts held by the financial institutions listed in the committee's statement of organization. Committee bank accounts shall be segregated as follows:

1. Committee monies shall be segregated in different bank accounts from personal monies.

2. Contributions from individuals, and committees partnershipS, candidate committees, political action committees or political parties shall be segregated in different bank accounts from contributions from corporations, limited liability companies and labor organizations other donors.

3. Contributions to a political party to defray operating expenses or support party-building activities shall be segregated in different bank accounts from contributions used to support candidates.

4. For a committee that is a political party, the committee may commingle monies from any source in a single bank account if the account is maintained as prescribed in 11 Code of Federal Regulations section 106.7.

5. For contributions intended to influence a recall election, the committee shall segregate those contributions into bank accounts that are different from those intended to influence any other election and those recall contributions may not be used to influence any other election.

C. A committee shall exercise its best effort to obtain the required information for any incomplete contribution received that is required to be itemized and reported. The committee shall clearly ask for identification and inform the contributor that the committee is required by law to seek identification. The committee shall report in an amended report any contributor identification obtained after the contribution has been disclosed on a campaign finance report.

D. A committee shall keep records of the following:

1. All contributions made or received by the committee.

2. The identification of any contributor that contributes in the aggregate at least fifty dollars to the committee during the election cycle, the date and amount of each contribution and the date of deposit into the committee's account.

3. Cumulative totals contributed by each contributor during the election cycle.

4. The name and address of every person that receives a contribution, expenditure or disbursement from the committee, including the date and amount, and, for any expenditure or disbursement, the purpose of the expenditure or disbursement. A contribution is deemed made when tendered to the committee's possession. An expenditure or disbursement is deemed made when promised, obligated, contracted for or spent.

E. A committee may accept a cash contribution.

F. A committee may accept a contribution by written or electronic instrument, including a check, credit card, payroll deduction, online payment or electronic transfer, if the contributor is an account holder of the instrument. Unless designated as a joint contribution, a contribution shall be attributed to the account holder that signs the instrument or authorizes the transaction.

G. A committee shall preserve all records required to be kept by this section for two years following the end of the election cycle.

H. On request of the filing officer or enforcement officer, a committee that has filed a statement of organization shall produce any of the records required to be kept pursuant to this section to the filing officer or enforcement officer.

I. A person that qualifies as a committee as prescribed by section 16‑905 shall report all contributions, expenditures and disbursements that occurred before qualifying as a committee and shall maintain and produce records as prescribed by this section. END_STATUTE

Sec. 4. Section 16-912, Arizona Revised Statutes, as amended by Laws 2015, chapter 297, section 5, is amended to read:

START_STATUTE16-912. Candidates and independent expenditures; campaign literature and advertisement sponsors; identification; civil penalty

A. A political committee that makes an expenditure for campaign literature or advertisements that expressly advocate the election or defeat of any candidate or that make any solicitation of contributions to any political committee shall include on the literature or advertisement the words "paid for by" followed by the name of the committee that appears on its statement of organization or five hundred dollar exemption statement.

B. If the expenditure for the campaign literature or advertisements by a political committee is an independent expenditure, the political committee, in addition to the disclosures required by subsection A of this section, shall include on the literature or advertisement the names and telephone numbers of the up to three political committees making the largest contributions that in the aggregate for that political committee total twenty percent or more of the total amount of contributions to the political committee making the independent expenditure. if no political committee has contributed the requisite percentage, the names of the three political committees that have made the largest amount of aggregate contributions shall be disclosed. If an acronym is used to name any political committee outlined prescribed in this section, the name of any sponsoring organization of the political committee shall also be printed or spoken. For the purposes of determining the three contributors to be disclosed, only the contributions made during the calendar year in which the independent expenditure is made shall be considered.

C. Subsection A of this section does not apply to bumper stickers, pins, buttons, pens and similar small items on which the statements required in subsection A of this section cannot be conveniently printed or to signs paid for by a candidate with campaign monies or by a candidate's campaign committee or to a solicitation of contributions by a separate segregated fund from those persons it may solicit pursuant to sections 16‑920 and 16‑921.

D. The disclosures required pursuant to this section shall be printed clearly and legibly in a conspicuous manner. The disclosure statement shall include the words "paid for by" followed by the name of the entity making the expenditure and shall state that it is not authorized by any candidate or candidate's campaign committee. Disclosure statements shall also comply with the following:

1. If the communication is broadcast on radio, the disclosure shall be spoken at the end of the communication.

2. For printed material that is delivered or provided by hand or by mail, the disclosure shall be printed clearly and legibly in a conspicuous manner.

3. If the communication is broadcast on a telecommunications system, the following apply:

(a) The disclosure shall be both written and spoken at the end of the communication, except that if the written disclosure statement is displayed for at least five seconds of a thirty second communications broadcast or ten seconds of a sixty second communications broadcast, a spoken disclosure statement is not required.

(b) The written disclosure statement shall be printed in letters that are displayed in a height that is equal to or greater than four percent of the vertical picture height.

E. A person who violates this section is subject to a civil penalty of up to three times the cost of producing and distributing the literature or advertisement. This civil penalty shall be imposed as prescribed in section 16‑924. END_STATUTE

Sec. 5. Section 16-913, Arizona Revised Statutes, as added by Laws 2016, chapter 79, section 12, is amended to read:

START_STATUTE16-913. Candidate committee contribution limits; requirements

A. A candidate committee may not contribute more than the following amounts per election cycle to a candidate committee for another candidate:

1. Six thousand two hundred fifty dollars to a candidate committee for a candidate for city, town, county or district office.

2. Six thousand two hundred fifty dollars to a candidate committee for a candidate for legislative office.

3. Six thousand two hundred fifty dollars to a candidate committee for a candidate for statewide office.

A. A candidate committee shall not make contributions to a candidate committee for another candidate.

B. A candidate committee may transfer unlimited contributions to any one or more other candidate committees for the that same candidate without regard to the office sought under the following conditions:

1. Both candidate committees must be registered with an officer prescribed by subdivision (a) of this paragraph or both must be registered with an officer prescribed by subdivision (b) of this paragraph:

(a) A filing officer in charge of city, town, county or district elections for any one or more offices, including offices with different filing officers prescribed in this subdivision.

(b) The secretary of state, for any one or more offices for which the secretary of state is the filing officer.

1. A candidate committee for a city or town candidate shall not transfer contributions to that same candidate's campaign committee for a statewide, legislative or county office.

2. Contributions originally made to the transferring candidate committee are deemed to be contributions to the receiving candidate committee. On transfer, an individual's aggregate contributions to both candidate committees during the election cycle shall not exceed the individual's contribution limit for that candidate.

C. A candidate committee shall not knowingly accept contributions in excess of the contribution limits prescribed by law. A candidate committee that unknowingly accepts an excess contribution shall refund or reattribute any excess contributions contribution within sixty days after receipt of the contribution. A candidate committee may reattribute an excess contribution only if both of the following apply:

1. The excess contribution was received from an individual contributor.

2. The individual contributor authorizes the candidate committee to reattribute the excess amount to another individual who was identified as a joint account holder in the original instrument used to make the excess contribution.

D. A candidate committee may accept contributions only from an individual, a partnership, a candidate committee, a political action committee or a political party.

D. E. A candidate committee may make unlimited contributions to a person other than a candidate's committee.

E. F. A candidate may contribute unlimited personal monies to the candidate's own candidate committee. END_STATUTE

Sec. 6. Section 16‑914, Arizona Revised Statutes, as added by Laws 2016, chapter 79, section 12, is amended to read:

START_STATUTE16-914. Political action committee contribution limits; requirements

A. A political action committee without mega PAC status may not contribute more than the following amounts per election cycle:

1. Six thousand two hundred fifty dollars to a candidate committee for city, town, county or district office.

2. Six thousand two hundred fifty dollars to a candidate committee for legislative office.

3. Six thousand two hundred fifty dollars to a candidate committee for statewide office.

B. A political action committee with mega PAC status may contribute twice the amounts prescribed in subsection A of this section per election cycle if the political action committee provides the recipient candidate committee a copy of the political action committee's certification of mega PAC status.

C. A political action committee shall not may only contribute to a candidate committee using monies contributed by a corporation, limited liability company or labor organization an individual, a partnership, a candidate committee, a political action committee or a political party.

D. A political action committee may make unlimited contributions to persons other than candidate committees. END_STATUTE

Sec. 7. Section 16-915, Arizona Revised Statutes, as added by Laws 2016, chapter 79, section 12, is amended to read:

START_STATUTE16-915. Political party contribution limits; requirements

A. A political party may not contribute more than the following amounts per election cycle:

1. Ten thousand dollars to the party's nominee for a city, town, county or district office.

2. Ten thousand dollars to the party's nominee for legislative office.

3. One hundred thousand dollars to the party's nominee for statewide office.

B. A political party shall not may only contribute to nominees using monies contributed by a corporation, limited liability company or labor organization an individual, a partnership, a candidate committee, a political action committee or a political party.

C. A political party shall not contribute to candidate committees other than nominees.

D. A political party may make unlimited contributions to persons other than candidate committees and nominees. END_STATUTE

Sec. 8. Section 16‑927, Arizona Revised Statutes, as added by Laws 2016, chapter 79, section 12, is amended to read:

START_STATUTE16-927. Campaign finance reporting period

A. A political action committee and political party shall file a campaign finance report covering each reporting period as follows:

1. For a calendar quarter without an election, the political action committee or political party shall file a quarterly report. The quarterly report shall be:

(a) Filed not later than the fifteenth day after the calendar quarter.

(b) Complete through the last day of the calendar quarter.

2. For a calendar quarter with an election, the political action committee or political party shall file a preelection and postelection report as follows:

(a) A preelection report shall be:

(i) Filed not later than ten days before the election.

(ii) Complete from the first day of the applicable calendar quarter through the seventeenth day before the election.

(b) A postelection report shall be:

(i) Filed not later than the fifteenth day after the applicable calendar quarter.

(ii) Complete from the sixteenth day before the election through the last day of the applicable calendar quarter.

B. A candidate committee shall file a campaign finance report only during the four calendar quarters comprising the twelve‑month period preceding the general election for the office for which the candidate is seeking election, or for cities and towns, the city's or town's second, runoff or general election, however designated by the city or town. The reporting period for a candidate committee's first campaign finance report of the election cycle shall include the entire election cycle to date.

C. A committee shall file campaign finance reports until terminated. END_STATUTE

Sec. 9. Heading change

The article heading of title 16, chapter 6, article 1.5, Arizona Revised Statutes, as added by Laws 2016, chapter 79, section 12, is changed from "inflationary adjustments" to "biennial financial adjustments".

Sec. 10. Section 16-933, Arizona Revised Statutes, as added by Laws 2016, chapter 79, section 12, is amended to read:

START_STATUTE16-933. Transfer and disposal of committee monies; limitations

A. A committee that intends to terminate shall dispose of surplus monies as follows:

1. Return surplus monies to the contributor.

2. Contribute surplus monies pursuant to and within the limits prescribed in article 1.2 of this chapter.

3. In the case of a candidate committee, contribute surplus monies to a candidate committee for another candidate under the following conditions:

(a) The candidate committee makes the contribution after the time period for filing a nomination paper pursuant to section 16-311, subsection A.

(b) The candidate associated with the candidate committee that makes the contribution did not file a nomination paper to run for election in the current election cycle.

(c) In the case of a candidate committee for legislative office, the candidate committee makes the contribution when the legislature is not in regular legislative session.

(d) The candidate committee makes the contribution within the limits prescribed for individuals in section 16-912.

3. 4. Donate surplus monies to a nonprofit organization that has tax exempt status under section 501(c)(3) of the internal revenue code.

4. 5. In the case of a statewide or legislative candidate committee and subject to section 41-133, transfer surplus monies to the candidate's officeholder expense account.

B. Surplus monies shall not be used for or converted to personal use.

C. Any transfer of surplus monies shall comply with section 16‑913.

D. C. This section does not preclude the repayment of a loan to a committee. END_STATUTE

Sec. 11. Section 16-938, Arizona Revised Statutes, as added by Laws 2016, chapter 79, section 12, is amended to read:

START_STATUTE16-938. Enforcement authority; investigation; reasonable cause; notice of violation; administrative appeal

A. Notwithstanding section 16-1021, on receipt of a complaint from a third party, a filing officer is the sole public officer who is authorized to initiate an investigation into alleged violations of this article and articles 1, 1.1, 1.2, 1.3, 1.4, 1.5 and 1.6 of this chapter, including the alleged failure to register as a committee. A filing officer shall limit an investigation to violations that are within the filing officer's jurisdiction. If the filing officer declares a conflict of interest, the filing officer may refer the investigation to any other filing officer in this state who agrees to accept the referral.

B. The secretary of state shall establish guidelines in the instructions and procedures manual adopted pursuant to section 16-452 that outline the procedures, timelines and other processes that apply to investigations by all filing officers in this state.

C. If after providing the subject of an investigation a reasonable opportunity to respond, the filing officer has reasonable cause to believe a person violated this article or article 1, 1.1, 1.2, 1.3, 1.4, 1.5 or 1.6 of this chapter, the filing officer shall refer the matter to the enforcement officer as follows:

1. For matters investigated by the secretary of state, the secretary of state shall notify the attorney general.

2. For matters investigated by a county filing officer, the county filing officer shall notify the county attorney.

3. For matters investigated by a city or town filing officer, the city or town filing officer shall notify the city or town attorney.

D. Before a reasonable cause determination is made as prescribed in subsection C of this section, a filing officer, an enforcement officer and any other public officer or employee may not order a person to register as a committee and does not have audit or subpoena powers to compel the production of evidence or the attendance of witnesses concerning a potential campaign finance violation. A filing officer may request the voluntary production of evidence or attendance of witnesses in making a reasonable cause determination.

E. Only after receiving a referral from the filing officer, the enforcement officer may:

1. Conduct an investigation using the enforcement officer's subpoena powers, except that the enforcement officer shall not compel a person to file campaign finance reports unless the enforcement officer has determined that the person is a committee.

2. Serve the alleged violator with a notice of violation. The notice shall state with reasonable particularity the nature of the violation, shall specify the fine or penalty imposed and shall require compliance within twenty days after the date of issuance of the notice. The enforcement officer shall impose a presumptive civil penalty equal to the value or amount of money that has been received, spent or promised in violation of this article and articles 1, 1.1, 1.2, 1.3, 1.4, 1.5 and 1.6 of this chapter, except that after a finding of special circumstances, the enforcement officer may impose a penalty of up to three times the amount of the presumptive civil penalty, based on the severity, extent or wilful nature of the alleged violation. If the notice of violation requires a person to file campaign finance reports, the reports are not required to be filed until the enforcement officer's notice of violation has been upheld after any timely appeal.

3. Keep any nonpublic information gathered by the enforcement officer in the course of the committee status investigation confidential until the final disposition of any appeal of the enforcement order.

F. The enforcement officer has the sole and exclusive authority to initiate any applicable administrative or judicial proceedings to enforce an alleged violation of this article and articles 1, 1.1, 1.2, 1.3, 1.4, 1.5 and 1.6 of this chapter that have been referred by the filing officer.

G. If the alleged violator:

1. Takes corrective action within twenty days after the date of the issuance of the notice of violation by the enforcement officer, the alleged violator is not subject to any penalty.

2. Does not take corrective action within twenty days after the date of issuance of the notice of violation by the enforcement officer, the enforcement officer shall impose the penalty set forth in the notice and shall provide formal notice that the imposition of the penalty is an appealable agency action pursuant to sections 41-1092.03 and 41-1092.04.

H. Within thirty days after receiving the notice of violation from the enforcement officer the alleged violator may request a hearing pursuant to title 41, chapter 6, article 10.

I. After the conclusion of the administrative appeal process prescribed in title 41, chapter 6, article 10, the alleged violator may appeal to the superior court pursuant to title 12, chapter 7, article 6 for judicial review of the final administrative decision. END_STATUTE

Sec. 12. Title 16, chapter 7, article 1, Arizona Revised Statutes, is amended by adding section 16-1022, to read:

START_STATUTE16-1022. Campaign finance violations; classification

A. IT IS UNLAWFUL FOR A CORPORATION, LIMITED LIABILITY COMPANY OR LABOR ORGANIZATION TO MAKE A CONTRIBUTION TO A CANDIDATE COMMITTEE. A CORPORATION, LIMITED LIABILITY COMPANY OR LABOR ORGANIZATION THAT VIOLATES THIS SUBSECTION IS GUILTY OF A CLASS 2 MISDEMEANOR. THE INDIVIDUAL THROUGH WHOM THE VIOLATION IS EFFECTED IS GUILTY OF A CLASS 6 FELONY. THIS SUBSECTION DOES NOT APPLY TO A COMMITTEE THAT IS INCORPORATED OR ORGANIZED FOR LIMITATION OF LIABILITY.

B. IT IS UNLAWFUL FOR ANY PERSON TO MAKE A CONTRIBUTION IN THE NAME OF ANOTHER PERSON, KNOWINGLY PERMIT A PERSON'S NAME TO BE USED TO EFFECT A CONTRIBUTION IN THE NAME OF ANOTHER PERSON OR KNOWINGLY ACCEPT A CONTRIBUTION MADE BY A PERSON IN THE NAME OF ANOTHER PERSON. A PERSON WHO VIOLATES THIS SUBSECTION IS GUILTY OF A CLASS 6 FELONY.

C. IT IS UNLAWFUL FOR ANY PERSON TO MAKE A CONTRIBUTION OR EXPENDITURE USING MONEY OR ANYTHING OF VALUE SECURED BY PHYSICAL FORCE, JOB DISCRIMINATION OR FINANCIAL REPRISAL, INCLUDING THREATS OF ANY FORCE, DISCRIMINATION OR REPRISAL. A PERSON WHO VIOLATES THIS SUBSECTION IS GUILTY OF A CLASS 6 FELONY.

D. IT IS UNLAWFUL FOR ANY PERSON TO MAKE A CONTRIBUTION OR EXPENDITURE USING DUES, FEES OR OTHEr MONIES REQUIRED AS A CONDITION OF MEMBERSHIP IN A LABOR ORGANIZATION OR AS A CONDITION OF EMPLOYMENT. A PERSON WHO VIOLATES THIS SUBSECTION IS GUILTY OF A CLASS 6 FELONY. END_STATUTE

Sec. 13. Laws 2016, chapter 79, section 30 is amended to read:

Sec. 30. Effective date

This act is effective from and after December 31, 2016 the last day for filing a preelection campaign finance report for the november 2016 general election as prescribed by section 16‑913, subsection B, paragraph 2, Arizona Revised Statutes, as amended by Laws 2012, chapter 257, section 2, chapter 290, section 1 and chapter 361, section 18.

Sec. 14. Filing officers; committee termination and transition; March 2017 election

A. A political committee that is in existence on November 8, 2016 shall be terminated by its authorized officers on or before June 30, 2017. That political committee shall not conduct any activity after November 8, 2016 except for winding down its operations as prescribed in title 16, chapter 6, article 1.6, Arizona Revised Statutes, as added by Laws 2016, chapter 79, section 12.

B. For any political committee that has not terminated on or before June 30, 2017, the filing officer for that jurisdiction may administratively terminate the political committee or convert the political committee to the appropriate committee as prescribed in title 16, chapter 6, article 1.6, Arizona Revised Statutes, as added by Laws 2016, chapter 79, section 12, as follows:

1. For an exploratory committee, the filing officer may convert the committee to a candidate committee.

2. For a political organization, the filing officer may convert the committee to a political party.

3. For a recall committee, ballot measure committee, candidate campaign committee or independent expenditure committee, a separate segregated fund or any other type of committee that is defined as a political committee in section 16-901, Arizona Revised Statutes, as amended by Laws 2015, chapter 286, section 1 and chapter 297, section 1, the filing officer may convert the committee to a political action committee.

C. For any jurisdiction that conducts an election on March 14, 2017, the filing officer for that jurisdiction may reasonably adjust the campaign finance filing deadlines for that election if compliance with the new filing requirements prescribed in Laws 2016, chapter 79 would create a substantial hardship.

Sec. 15. Secretary of state's electronic campaign finance filing system; participation; costs

Notwithstanding section 16-928, subsection C, Arizona Revised Statutes, as added by Laws 2016, chapter 79, section 12, for any jurisdiction that opts into the secretary of state's electronic campaign finance filing system:

1. The jurisdiction shall not be charged any initial or ongoing fee until after December 31, 2018.

2. Subsequent costs for maintenance of or upgrades to the secretary of state's electronic campaign finance filing system may be charged to participating jurisdictions, but the secretary of state shall disclose those costs to the participating jurisdictions no later than December 1 in the year before the fiscal year in which those costs will be assessed, in order to allow for budget planning by participating jurisdictions.

Sec. 16. Effective date

Sections 1 through 3 and sections 5 through 15 of this act are effective from and after the last day for filing a preelection campaign finance report for the November 2016 general election as prescribed by section 16‑913, subsection B, paragraph 2, Arizona Revised Statutes, as amended by Laws 2012, chapter 257, section 2, chapter 290, section 1 and chapter 361, section 18.