First Substitute S.B. 131

Senator Karen Hale proposes the following substitute bill:

1 PERSONAL USE OF CAMPAIGN FUNDS
2 2002 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: Karen Hale
5 This act modifies the Election Code to address the use and disposition of campaign funds,
6 provides a civil penalty for certain violations, and makes technical corrections.
7 This act affects sections of Utah Code Annotated 1953 as follows:
8 AMENDS:
9 20A-11-101, as last amended by Chapters 45 and 93, Laws of Utah 1999
10 20A-11-201, as last amended by Chapter 355, Laws of Utah 1997
11 20A-11-301, as last amended by Chapter 355, Laws of Utah 1997
12 20A-11-402, as last amended by Chapter 355, Laws of Utah 1997
13 20A-11-1301, as enacted by Chapter 355, Laws of Utah 1997
14 Be it enacted by the Legislature of the state of Utah:
15 Section 1. Section 20A-11-101 is amended to read:
16 20A-11-101. Definitions.
17 As used in this chapter:
18 (1) "Address" means the number and street where an individual resides or where a
19 reporting entity has its principal office.
20 (2) "Ballot proposition" includes initiatives, referenda, proposed constitutional
21 amendments, and any other ballot propositions submitted to the voters that are authorized by the
22 Utah Code Annotated 1953.
23 (3) "Candidate" means any person who:
24 (a) files a declaration of candidacy for a public office; or
25 (b) receives contributions, makes expenditures, or gives consent for any other person to

26 receive contributions or make expenditures to bring about the person's nomination or election to
27 a public office.
28 (4) "Chief election officer" means:
29 (a) the lieutenant governor for state office candidates, legislative office candidates,
30 officeholders, political parties, political action committees, corporations, political issues
31 committees, and state school board candidates; and
32 (b) the county clerk for local school board candidates.
33 (5) "Continuing political party" means an organization of voters that participated in the last
34 regular general election and polled a total vote equal to 2% or more of the total votes cast for all
35 candidates for the United States House of Representatives.
36 (6) (a) "Contribution" means any of the following when done for political purposes:
37 (i) a gift, subscription, donation, loan, advance, or deposit of money or anything of value
38 given to the filing entity;
39 (ii) an express, legally enforceable contract, promise, or agreement to make a gift,
40 subscription, donation, unpaid or partially unpaid loan, advance, or deposit of money or anything
41 of value to the filing entity;
42 (iii) any transfer of funds from another reporting entity or a corporation to the filing entity;
43 (iv) compensation paid by any person or reporting entity other than the filing entity for
44 personal services provided without charge to the filing entity;
45 (v) remuneration from any organization or its directly affiliated organization that has a
46 registered lobbyist to compensate a legislator for a loss of salary or income while the Legislature
47 is in session;
48 (vi) salaries or other remuneration paid to a legislator by any agency or subdivision of the
49 state, including school districts, for the period the Legislature is in session; and
50 (vii) goods or services provided to or for the benefit of the filing entity at less than fair
51 market value.
52 (b) "Contribution" does not include:
53 (i) services provided without compensation by individuals volunteering a portion or all of
54 their time on behalf of the filing entity; or
55 (ii) money lent to the filing entity by a financial institution in the ordinary course of
56 business.

57 (7) (a) "Corporation" means a domestic or foreign, profit or nonprofit, business
58 organization that is registered as a corporation or is authorized to do business in a state and makes
59 any expenditure from corporate funds for:
60 (i) political purposes; or
61 (ii) the purpose of influencing the approval or the defeat of any ballot proposition.
62 (b) "Corporation" does not mean:
63 (i) a business organization's political action committee or political issues committee; or
64 (ii) a business entity organized as a partnership or a sole proprietorship.
65 (8) "Detailed listing" means:
66 (a) for each contribution or public service assistance:
67 (i) the name and address of the individual or source making the contribution or public
68 service assistance;
69 (ii) the amount or value of the contribution or public service assistance; and
70 (iii) the date the contribution or public service assistance was made; and
71 (b) for each expenditure:
72 (i) the amount of the expenditure;
73 (ii) the person or entity to whom it was disbursed;
74 (iii) the specific purpose, item, or service acquired by the expenditure; and
75 (iv) the date the expenditure was made.
76 (9) "Election" means each:
77 (a) regular general election;
78 (b) regular primary election; and
79 (c) special election at which candidates are eliminated and selected.
80 (10) (a) "Expenditure" means:
81 (i) any disbursement from contributions, receipts, or from the separate bank account
82 required by this chapter;
83 (ii) a purchase, payment, donation, distribution, loan, advance, deposit, gift of money, or
84 anything of value made for political purposes;
85 (iii) an express, legally enforceable contract, promise, or agreement to make any purchase,
86 payment, donation, distribution, loan, advance, deposit, gift of money, or anything of value for
87 political purposes;

88 (iv) compensation paid by a corporation or filing entity for personal services rendered by
89 a person without charge to a reporting entity;
90 (v) a transfer of funds between the filing entity and a candidate's personal campaign
91 committee; or
92 (vi) goods or services provided by the filing entity to or for the benefit of another reporting
93 entity for political purposes at less than fair market value.
94 (b) "Expenditure" does not include:
95 (i) services provided without compensation by individuals volunteering a portion or all of
96 their time on behalf of a reporting entity;
97 (ii) money lent to a reporting entity by a financial institution in the ordinary course of
98 business; or
99 (iii) anything listed in Subsection [(5)] (10)(a) that is given by a corporation or reporting
100 entity to candidates for office or officeholders in states other than Utah.
101 (11) "Filing entity" means the reporting entity that is filing a report required by this
102 chapter.
103 (12) "Financial statement" includes any summary report, interim report, or other statement
104 disclosing contributions, expenditures, receipts, donations, or disbursements that is required by this
105 chapter.
106 (13) "Governing board" means the individual or group of individuals that determine the
107 candidates and committees that will receive expenditures from a political action committee.
108 (14) "Incorporation" means the process established by Title 10, Chapter 2, Part 1,
109 Incorporation, by which a geographical area becomes legally recognized as a city or town.
110 (15) "Incorporation election" means the election authorized by Section 10-2-111 .
111 (16) "Incorporation petition" means a petition authorized by Section 10-2-109 .
112 (17) "Individual" means a natural person.
113 (18) "Interim report" means a report identifying the contributions received and
114 expenditures made since the last report.
115 (19) "Legislative office" means the office of state senator, state representative, speaker of
116 the House of Representatives, president of the Senate, and the leader, whip, and assistant whip of
117 any party caucus in either house of the Legislature.
118 (20) "Legislative office candidate" means a person who:

119 (a) files a declaration of candidacy for the office of state senator or state representative;
120 (b) declares himself to be a candidate for, or actively campaigns for, the position of
121 speaker of the House of Representatives, president of the Senate, or the leader, whip, and assistant
122 whip of any party caucus in either house of the Legislature; and
123 (c) receives contributions, makes expenditures, or gives consent for any other person to
124 receive contributions or make expenditures to bring about the person's nomination or election to
125 a legislative office.
126 (21) "Newly registered political party" means an organization of voters that has complied
127 with the petition and organizing procedures of this chapter to become a registered political party.
128 (22) "Officeholder" means a person who holds a public office.
129 (23) "Party committee" means any committee organized by or authorized by the governing
130 board of a registered political party.
131 (24) "Person" means both natural and legal persons, including individuals, business
132 organizations, personal campaign committees, party committees, political action committees,
133 political issues committees, labor unions, and labor organizations.
134 (25) "Personal campaign committee" means the committee appointed by a candidate to act
135 for the candidate as provided in this chapter.
136 (26) (a) "Personal use" means an expenditure that provides a benefit of any kind to a
137 candidate, legislative office candidate, or officeholder that is not reasonably related to political
138 purposes or to fulfilling the duties of the office to which they were elected.
139 (b) "Personal use" does not mean an expenditure for political purposes.
140 [(26)] (27) (a) "Political action committee" means an entity, or any group of individuals
141 or entities within or outside this state, that solicits or receives contributions from any other person,
142 group, or entity or makes expenditures for political purposes. A group or entity may not divide or
143 separate into units, sections, or smaller groups for the purpose of avoiding the financial reporting
144 requirements of this chapter, and substance shall prevail over form in determining the scope or size
145 of a political action committee.
146 (b) "Political action committee" includes groups affiliated with a registered political party
147 but not authorized or organized by the governing board of the registered political party that receive
148 contributions or makes expenditures for political purposes.
149 (c) "Political action committee" does not mean:

150 (i) a party committee;
151 (ii) any entity that provides goods or services to a candidate or committee in the regular
152 course of its business at the same price that would be provided to the general public;
153 (iii) an individual;
154 (iv) individuals who are related and who make contributions from a joint checking
155 account;
156 (v) a corporation; or
157 (vi) a personal campaign committee.
158 [(27)] (28) "Political convention" means a county or state political convention held by a
159 registered political party to select candidates.
160 [(28)] (29) (a) "Political issues committee" means an entity, or any group of individuals
161 or entities within or outside this state, that solicits or receives donations from any other person,
162 group, or entity or makes disbursements to influence, or to intend to influence, directly or
163 indirectly, any person to:
164 (i) assist in placing a statewide ballot proposition on the ballot, assist in keeping a
165 statewide ballot proposition off the ballot, or refrain from voting or vote for or vote against any
166 statewide ballot proposition; or
167 (ii) sign or refuse to sign an incorporation petition or refrain from voting, vote for, or vote
168 against any proposed incorporation in an incorporation election.
169 (b) "Political issues committee" does not mean:
170 (i) a registered political party or a party committee;
171 (ii) any entity that provides goods or services to an individual or committee in the regular
172 course of its business at the same price that would be provided to the general public;
173 (iii) an individual;
174 (iv) individuals who are related and who make contributions from a joint checking
175 account; or
176 (v) a corporation, except a corporation whose apparent purpose is to act as a political
177 issues committee.
178 [(29)] (30) (a) "Political issues contribution" means any of the following:
179 (i) a gift, subscription, unpaid or partially unpaid loan, advance, or deposit of money or
180 anything of value given to a political issues committee;

181 (ii) an express, legally enforceable contract, promise, or agreement to make a political
182 issues donation to influence the approval or defeat of any ballot proposition;
183 (iii) any transfer of funds received by a political issues committee from a reporting entity;
184 (iv) compensation paid by another reporting entity for personal services rendered without
185 charge to a political issues committee; and
186 (v) goods or services provided to or for the benefit of a political issues committee at less
187 than fair market value.
188 (b) "Political issues contribution" does not include:
189 (i) services provided without compensation by individuals volunteering a portion or all of
190 their time on behalf of a political issues committee; or
191 (ii) money lent to a political issues committee by a financial institution in the ordinary
192 course of business.
193 [(30)] (31) (a) "Political issues expenditure" means any of the following:
194 (i) any payment from political issues contributions made for the purpose of influencing the
195 approval or the defeat of a statewide ballot proposition;
196 (ii) a purchase, payment, distribution, loan, advance, deposit, or gift of money made for
197 the purpose of influencing the approval or the defeat of a statewide ballot proposition;
198 (iii) an express, legally enforceable contract, promise, or agreement to make any political
199 issues expenditure;
200 (iv) compensation paid by a reporting entity for personal services rendered by a person
201 without charge to a political issues committee; or
202 (v) goods or services provided to or for the benefit of another reporting entity at less than
203 fair market value.
204 (b) "Political issues expenditure" does not include:
205 (i) services provided without compensation by individuals volunteering a portion or all of
206 their time on behalf of a political issues committee; or
207 (ii) money lent to a political issues committee by a financial institution in the ordinary
208 course of business.
209 [(31)] (32) "Political purposes" means an act done with the intent or in a way to influence
210 or tend to influence, directly or indirectly, any person to refrain from voting or to vote for or
211 against any candidate for public office at any caucus, political convention, primary, or election.

212 [(32)] (33) "Primary election" means any regular primary election held under the election
213 laws.
214 [(33)] (34) "Public office" means the office of governor, lieutenant governor, state auditor,
215 state treasurer, attorney general, state or local school board member, state senator, state
216 representative, speaker of the House of Representatives, president of the Senate, and the leader,
217 whip, and assistant whip of any party caucus in either house of the Legislature.
218 [(34)] (35) (a) "Public service assistance" means the following when given or provided to
219 an officeholder to defray the costs of functioning in a public office or aid the officeholder to
220 communicate with the officeholder's constituents:
221 (i) a gift, subscription, donation, unpaid or partially unpaid loan, advance, or deposit of
222 money or anything of value to an officeholder; or
223 (ii) goods or services provided at less than fair market value to or for the benefit of the
224 officeholder.
225 (b) "Public service assistance" does not include:
226 (i) anything provided by the state;
227 (ii) services provided without compensation by individuals volunteering a portion or all
228 of their time on behalf of an officeholder;
229 (iii) money lent to an officeholder by a financial institution in the ordinary course of
230 business;
231 (iv) news coverage or any publication by the news media; or
232 (v) any article, story, or other coverage as part of any regular publication of any
233 organization unless substantially all the publication is devoted to information about the
234 officeholder.
235 [(35)] (36) "Publicly identified class of individuals" means a group of 50 or more
236 individuals sharing a common occupation, interest, or association that contribute to a political
237 action committee or political issues committee and whose names can be obtained by contacting
238 the political action committee or political issues committee upon whose financial report they are
239 listed.
240 [(36)] (37) "Receipts" means contributions and public service assistance.
241 [(37)] (38) "Registered lobbyist" means a person registered under Title 36, Chapter 11,
242 Lobbyist Disclosure and Regulation Act.

243 [(38)] (39) "Registered political action committee" means any political action committee
244 that is required by this chapter to file a statement of organization with the lieutenant governor's
245 office.
246 [(39)] (40) "Registered political issues committee" means any political issues committee
247 that is required by this chapter to file a statement of organization with the lieutenant governor's
248 office.
249 [(40)] (41) "Registered political party" means an organization of voters that:
250 (a) participated in the last regular general election and polled a total vote equal to 2% or
251 more of the total votes cast for all candidates for the United States House of Representatives for
252 any of its candidates for any office; or
253 (b) has complied with the petition and organizing procedures of this chapter.
254 [(41)] (42) "Report" means a verified financial statement.
255 [(42)] (43) "Reporting entity" means a candidate, a candidate's personal campaign
256 committee, an officeholder, and a party committee, a political action committee, and a political
257 issues committee.
258 [(43)] (44) "School board office" means the office of state school board or local school
259 board.
260 [(44)] (45) (a) "Source" means the person or entity that is the legal owner of the tangible
261 or intangible asset that comprises the contribution.
262 (b) "Source" means, for political action committees and corporations, the political action
263 committee and the corporation as entities, not the contributors to the political action committee or
264 the owners or shareholders of the corporation.
265 [(45)] (46) "State office" means the offices of governor, lieutenant governor, attorney
266 general, state auditor, and state treasurer.
267 [(46)] (47) "State office candidate" means a person who:
268 (a) files a declaration of candidacy for a state office; or
269 (b) receives contributions, makes expenditures, or gives consent for any other person to
270 receive contributions or make expenditures to bring about the person's nomination or election to
271 a state office.
272 [(47)] (48) "Summary report" means the year end report containing the summary of a
273 reporting entity's contributions and expenditures.

274 [(48)] (49) "Supervisory board" means the individual or group of individuals that allocate
275 expenditures from a political issues committee.
276 Section 2. Section 20A-11-201 is amended to read:
277 20A-11-201. State office candidate -- Separate bank account for campaign funds.
278 (1) (a) Each state office candidate or the candidate's personal campaign committee shall
279 deposit each contribution and public service assistance received in one or more separate campaign
280 accounts in a financial institution.
281 (b) (i) The state office candidate or the candidate's personal campaign committee may use
282 the monies in those accounts only for political purposes.
283 (ii) The state office candidate or the candidate's personal committee may not use the
284 monies in those accounts for personal use.
285 (2) A state office candidate or the candidate's personal campaign committee may not
286 deposit or mingle any contributions received into a personal or business account.
287 (3) If a person [who] withdraws or is eliminated in a convention, primary, or regular
288 general election, or is no longer a state office candidate [chooses not to expend the monies
289 remaining in his campaign account], the person shall dispose of monies remaining in the person's
290 campaign account by:
291 (a) donating the monies to a registered political party or political action committee;
292 (b) donating the monies to the state General Fund;
293 (c) expending the monies for political purposes;
294 (d) donating the monies to a tax-exempt, nonprofit entity;
295 (e) repaying documented loans to the state office candidate's campaign;
296 (f) donating the monies to another candidate's campaign account;
297 (g) transferring the monies to an escrow account for the person to use as a candidate for
298 public office; or
299 (h) some combination of Subsections (3)(a) through (g).
300 (4) (a) The person shall continue to file the year-end summary report required by Section
301 20A-11-203 until the statement of dissolution and final summary report required by Section
302 20A-11-205 are filed with the lieutenant governor.
303 (b) Any person who fails to file the report required by this Subsection (4) is subject to an
304 administrative penalty of up to $1,000 for each violation.

305 Section 3. Section 20A-11-301 is amended to read:
306 20A-11-301. Legislative office candidate -- Campaign requirements.
307 (1) Each legislative office candidate shall deposit each contribution and public service
308 assistance received in one or more separate accounts in a financial institution that are dedicated
309 only to that purpose.
310 (2) A legislative office candidate may not deposit or mingle any contributions or public
311 service assistance received into a personal or business account.
312 (3) (a) A legislative office candidate may not make any political expenditures prohibited
313 by law.
314 (b) A legislative office candidate may not use monies in the accounts required by this
315 section for personal use.
316 (4) If a person [who] withdraws or is eliminated in a convention, primary, or regular
317 general election, or is no longer a legislative candidate [chooses not to expend the monies
318 remaining in his campaign account], the person shall dispose of monies remaining in the person's
319 campaign account by:
320 (a) donating the monies to a registered political party or political action committee;
321 (b) donating the monies to the state General Fund;
322 (c) expending the monies for political purposes;
323 (d) donating the monies to a tax-exempt, nonprofit entity;
324 (e) repaying documented loans to the legislative candidate's campaign;
325 (f) donating the monies to another candidate's campaign account;
326 (g) transferring the monies to an escrow account for the person to use as a candidate for
327 public office; or
328 (h) some combination of Subsections (3)(a) through (g).
329 (5) (a) The person shall continue to file the year-end summary report required by Section
330 20A-11-302 until the statement of dissolution and final summary report required by Section
331 20A-11-304 are filed with the lieutenant governor.
332 (b) Any person who fails to file the report required by this Subsection (5) is subject to an
333 administrative penalty of up to $1,000 for each violation.
334 Section 4. Section 20A-11-402 is amended to read:
335 20A-11-402. Officeholder financial reporting requirements -- Termination of duty

336 to report.
337 (1) An officeholder is active and subject to reporting requirements until the officeholder
338 has filed a statement of dissolution with the lieutenant governor stating that:
339 (a) the officeholder is no longer receiving contributions or public service assistance and
340 is no longer making expenditures;
341 (b) the ending balance on the last summary report filed is zero and the balance in the
342 separate bank account required by Sections 20A-11-201 and 20A-11-301 is zero; and
343 (c) a final summary report in the form required by Section 20A-11-401 showing a zero
344 balance is attached to the statement of dissolution.
345 (2) A statement of dissolution and a final summary report may be filed at any time.
346 (3) (a) Each officeholder shall continue to file the year-end summary report required by
347 Section 20A-11-401 until the statement of dissolution and final summary report required by this
348 section are filed with the lieutenant governor.
349 (b) Any person who fails to file the report required by this Subsection (3) is subject to an
350 administrative penalty of up to $1,000 for each violation.
351 (4) When an officeholder leaves office, the person shall dispose of monies remaining in
352 the person's campaign accounts required by Sections 20A-11-201 and 20A-11-301 by:
353 (a) donating the monies to a registered political party or political action committee;
354 (b) donating the monies to the state General Fund;
355 (c) expending the monies for political purposes;
356 (d) donating the monies to a tax-exempt, nonprofit entity;
357 (e) repaying documented loans to the officeholder's campaign;
358 (f) donating the monies to another candidate's campaign account;
359 (g) transferring the monies to an escrow account for the person to use as a candidate for
360 public office; or
361 (h) some combination of Subsections (4)(a) through (g).
362 Section 5. Section 20A-11-1301 is amended to read:
363 20A-11-1301. School board office candidate -- Campaign requirements.
364 (1) Each school board office candidate shall deposit each contribution and public service
365 assistance received in one or more separate accounts in a financial institution that are dedicated
366 only to that purpose.

367 (2) (a) A school board office candidate may not deposit or mingle any contributions or
368 public service assistance received into a personal or business account.
369 (b) The school board office candidate may not use the monies in those accounts for
370 personal use.
371 (3) A school board office candidate may not make any political expenditures prohibited
372 by law.
373 (4) If a person [who] withdraws or is eliminated in a regular general election or is no
374 longer a school board candidate [chooses not to expend the monies remaining in his campaign
375 account], the person shall dispose of monies remaining in the person's campaign account by:
376 (a) donating the monies to a registered political party or political action committee;
377 (b) donating the monies to the state General Fund;
378 (c) expending the monies for political purposes;
379 (d) donating the monies to a tax-exempt, nonprofit entity;
380 (e) repaying documented loans to the school board office candidate's campaign;
381 (f) donating the monies to another candidate's campaign account;
382 (g) transferring the monies to an escrow account for the person to use as a candidate for
383 public office; or
384 (h) some combination of Subsections (4)(a) through (g).
385 (5) (a) The person shall continue to file the year-end summary report required by Section
386 20A-11-1302 until the statement of dissolution and final summary report required by Section
387 20A-11-1304 are filed with:
388 [(a)] (i) the lieutenant governor in the case of a state school board candidate; and
389 [(b)] (ii) the county clerk, in the case of a local school board candidate.
390 (b) Any person who fails to file the report required by this Subsection (5) is subject to an
391 administrative penalty of up to $1,000 for each violation.