SENATE BILL 1060
By Lowe
HOUSE BILL 888
By Todd
HB0888
001075
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AN ACT to amend Tennessee Code Annotated, Title 2,
Chapter 10, relative to certain political campaign
committees.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 2, Chapter 10, is amended by adding
the following as a new part:
2-10-501.
As used in this part:
(1) "Directly or indirectly" means acting either alone or jointly with,
through, or on behalf of a political campaign committee, organization, person, or
other entity;
(2) "Foreign national" means:
(A) An individual who is not a citizen or lawful permanent resident
of the United States;
(B) A government, or subdivision, of a foreign country or
municipality thereof;
(C) A foreign political party;
(D) An entity, such as a partnership, association, corporation,
organization, or other combination of persons, that is organized under the
laws of, or has its principal place of business in, a foreign country; or
(E) A United States entity, such as a partnership, association,
corporation, or organization that is wholly or majority owned by a foreign
national, unless:
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(i) Any contribution or expenditure it makes is derived
entirely from funds generated by the United States entity's
operations in this country; and
(ii) All decisions concerning the contribution or expenditure
are made by individuals who are United States citizens or
permanent residents, except for setting overall budget amounts;
(3) "Independent expenditure" means an expenditure by a person for a
communication expressly advocating in support or opposition of a measure that
is not made with the cooperation or with the prior consent of, or in consultation
with, or at the request of, or suggestion of, a political campaign committee
created to support or oppose a measure;
(4) "Preliminary activity" includes, but is not limited to, conducting a poll,
drafting ballot measure language, utilizing a focus group, telephone calls, and
travel;
(5) "Prohibited sources" include contributions from or expenditures by a
foreign national; and
(6) "Tax-exempt organization":
(A) Means an organization that is described in section 501(c) of
the Internal Revenue Code of 1986 (26 U.S.C. § 501(c)) and is exempt
from taxation under section 501(a) of such code (26 U.S.C. § 501(a)); and
(B) Does not include political organization under section 527 of
Internal Revenue Code of 1986 (26 U.S.C. § 527).
2-10-502.
(a) When a political campaign committee is created to support or oppose a
measure, the treasurer of the committee shall file with the registry of election finance an
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accompanying certification that no preliminary activity was funded by prohibited sources,
whether directly or indirectly.
(b) After a political campaign committee is created to support or oppose a
measure, the committee shall not knowingly or willfully receive, solicit, or accept
contributions or expenditures from a prohibited source, whether directly or indirectly.
(c) A political campaign committee created to support or oppose a measure, and
a person who makes an independent expenditure in support of or in opposition to a
political campaign committee created to support or oppose a measure, shall keep
records of any contribution or expenditure and retain such records for at least two (2)
years after the date of the election to which the records refer.
2-10-503.
(a) When a political campaign committee created to support or oppose a
measure receives a contribution, the treasurer shall obtain from the donor an affirmation
that the donor is not a foreign national and has not knowingly or willfully accepted funds
aggregating in excess of one hundred thousand dollars ($100,000) from prohibited
sources within the four-year period immediately preceding the date the contribution is
made.
(b) Within forty-eight (48) hours of making an independent expenditure
supporting or opposing a measure, the person making the expenditure must certify to
the registry of election finance that the person has not knowingly or willfully accepted
funds aggregating in excess of one hundred thousand dollars ($100,000) from prohibited
sources within the four-year period immediately preceding the date the expenditure is
made and that it will not do so through the remainder of the calendar year in which the
measure will appear on the ballot.
2-10-504.
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(a) A foreign national shall not direct, dictate, control, or directly or indirectly
participate in the decision-making process of any person with regard to that person's
activities to influence a measure, such as decisions concerning the making of
contributions or expenditures to influence a measure.
(b) A foreign national shall not solicit, directly or indirectly, the making of a
donation, contribution, or expenditure by another person to influence a measure.
2-10-505.
(a) The registry of election finance may bring a civil action to enforce this part.
(b) In all actions brought pursuant to subsection (a), the burden of proof is on the
registry of election finance.
(c) Prior to discovery, the court shall set a hearing to determine if there is
probable cause to believe that a political campaign committee or person has violated this
part.
(d) If, after the hearing pursuant to subsection (c), the court determines:
(1) That no probable cause exists to believe that a violation of this part
has occurred, the court shall enter an order of dismissal with prejudice; or
(2) That probable cause exists to believe that a violation of this part has
occurred, the court shall enter an order to that effect and the case should
proceed to trial on an expedited basis.
(e) Subject to § 2-10-506, the person alleged to have violated this part may, at a
time to be determined by the court prior to the scheduling of trial, present evidence
sufficient to rebut the probable cause finding by making an ex parte presentation of
records to the court for an in camera review.
(f) A losing party under subdivision (d)(2) has the right to:
(1) An interlocutory expedited appeal; and
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(2) A stay of proceedings in the trial court.
(g)
(1) Within thirty (30) days of a finding that a political campaign committee
has violated this part, the committee shall refund the contribution to the original
contributor. If the finding is appealed, the contribution must be placed in escrow,
after which the funds must be disbursed in accordance with the final order.
(2) If the political campaign committee is unable to return the funds, the
directors, officers, or executive members of the committee are liable in their
personal capacity, jointly and severally, for the refund of said funds.
(h)
(1) Within thirty (30) days of a finding that a person making an
independent expenditure has violated this part, the entity making the
independent expenditure shall disgorge to the registry of election finance funds in
an amount equal to the reported cost of the independent expenditure.
(2) If the person is unable to disgorge the requisite funds, the person, or
the directors, officers, or executive members of the person if the person is an
entity, are liable in their personal capacities, jointly and severally, for the payment
of the amount due. If the finding is appealed, the funds subject to disgorgement
must be placed in escrow, after which they must be disbursed in accordance with
the final order.
(i) If the registry of election finance prevails in an action brought under
subsection (a), the court shall award:
(1) Injunctive relief sufficient to prevent the political campaign committee
or person from violating this part or engaging in acts that aid or abet violations of
this part; and
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(2) Statutory damages up to twice the amount of the prohibited
contribution or expenditure.
(j) In addition to the penalties in subsection (i) and any other remedies provided
by law, if the court finds a knowing or willful violation of this part, the court may assess a
penalty of up to three (3) times the statutory damages.
2-10-506.
(a) Lawful donors to a tax-exempt organization possess a right of privacy in their
donations. An investigation of an alleged violation of this part or a lawful court order in
an action brought under § 2-10-505 must occur in a manner that shields the identity of
lawful donors. A state or local governmental entity, court, or officer of the court shall not
collect or require the submission of information on the identity of any donor to a tax-
exempt organization other than those directly related to an alleged violation of this part.
(b) A state or local governmental entity, court, or officer of the court shall not
disclose to the public, or another government official not directly involved in the
investigation, information revealing the identity of any donor to a tax-exempt
organization, unless the information is regarding the identity of a donor that engaged in
conduct prohibited by this part after a final determination has been made that the donor
violated this part. Knowing or willful violations of this subsection (b) are punishable as a
Class A misdemeanor.
SECTION 2. This act takes effect upon becoming a law, the public welfare requiring it.