Colorado § 1-45-107.5 - Independent expenditures - restrictions on foreign corporations - registration - disclosure - disclaimer requirements - definitions.

§ 1-45-107.5. Independent expenditures - restrictions on foreign corporations - registration - disclosure - disclaimer requirements - definitions.

(1) Notwithstanding any other provision of law, no natural person who is not a citizen of the United States, foreign government, or foreign corporation may expend money on an independent expenditure in connection with an election of a candidate in the state, and no independent expenditure committee may knowingly accept a donation from any natural person who is not a citizen of the United States, any foreign government, or any foreign corporation.

(2) In accordance with the decision of the supreme court of Colorado in the case of In re Interrogatories Propounded by Governor Bill Ritter, Jr., Concerning the Effect of Citizens United v. Federal Election Comm'n, 558 U.S. ___ (2010), on Certain Provisions of Article XXVIII of the Constitution of the State of Colorado, 227 P.3d 892 (Colo. 2010), notwithstanding sections 3 (4)(a) and 6 (2) of article XXVIII of the state constitution, corporations and labor organizations shall not be prohibited from making independent expenditures. All such expenditures shall be disclosed in accordance with the requirements of this article and article XXVIII of the state constitution. For purposes of this article and article XXVIII of the state constitution, any use of the word "person" shall be construed to include, without limitation, any corporation or labor organization.

(3) (a) Any person that accepts a donation that is given for the purpose of making an independent expenditure in excess of one thousand dollars or that makes an independent expenditure in excess of one thousand dollars shall register with the appropriate officer within two business days of the date on which an aggregate amount of donations accepted or expenditures made reaches or exceeds one thousand dollars.

(b) The registration required by paragraph (a) of this subsection (3) shall include a statement listing:

(I) The person's full name, spelling out any acronyms used therein;

(II) A natural person authorized to act as a registered agent;

(III) A street address and telephone number for the principal place of operations; and

(IV) The aggregate ownership interest in the person held by foreign persons calculated as of the time the person registers with the appropriate officer under paragraph (a) of this subsection (3).

(c) If the person identified in subparagraph (I) of paragraph (b) of this subsection (3) is a corporation, a subsidiary may register on behalf of its parent corporation or for other subsidiaries of the parent corporation, and the parent corporation may register on behalf of all of its subsidiaries. In each such case, the registered agent of the person registering shall serve as the registered agent for all such affiliated corporations. Registration of a subsidiary shall include the name of its parent corporation as well as any names under which the subsidiary does business.

(d) If the person identified in subparagraph (I) of paragraph (b) of this subsection (3) is a labor organization, a local labor organization may register on behalf of any affiliated local, national, or international labor organization that will be making independent expenditures, and a national or international labor organization may register on behalf of any affiliated local labor organization that will be making independent expenditures. In each such case, the registered agent of the labor organization that is registering shall serve as the registered agent for each affiliated local, national, or international labor organization.

(4) (a) In addition to any other applicable disclosure requirements specified in this article or in article XXVIII of the state constitution, any person making an independent expenditure in an aggregate amount in excess of one thousand dollars in any one calendar year shall report the following to the appropriate officer:

(I) The person's full name, or, if the person is a subsidiary of a parent corporation, the full name of the parent corporation, spelling out any acronyms used therein;

(II) All names under which the person does business in the state if such names are different from the name identified pursuant to subparagraph (I) of this paragraph (a);

(III) The address of the home office of the person, or, if the person is a subsidiary of a parent corporation, the home office of the parent corporation; and

(IV) The name and street address in the state of its registered agent.

(b) (I) Any person who expends an aggregate amount in excess of one thousand dollars or more per calendar year for the purpose of making an independent expenditure shall report to the appropriate officer, in accordance with the requirements of this section, the name and address of any person that, for the purpose of making an independent expenditure, donates more than two hundred fifty dollars per year to the person expending one thousand dollars or more on an independent expenditure.

(II) If the person making the donation of two hundred fifty dollars or more is a natural person, the disclosure required by subparagraph (I) of this paragraph (b) shall also include the donor's occupation and employer.

(III) If the person making the donation of two hundred fifty dollars or more is not a natural person, the disclosure required by this paragraph (b) shall also include:

(A) The donor's full name, or, if the donor is a subsidiary of a parent corporation, the full name of the parent corporation, spelling out any acronyms used therein;

(B) All names under which the donor does business in the state if such names are different from the name identified pursuant to subparagraph (I) of this paragraph (b);

(C) The address of the home office of the donor, or, if the donor is a subsidiary of a parent corporation, the home office of the parent corporation; and

(D) The name and street address in the state of the donor's registered agent.

(c) The information required to be disclosed pursuant to paragraph (a) of this subsection (4) must be reported in accordance with the schedule specified in section 1-45-108 (2) for political committees; except that any person making an independent expenditure in excess of one thousand dollars within thirty days before a primary, general, or regular biennial school election shall provide such report within forty-eight hours after obligating moneys for the independent expenditure.

(5) (a) In addition to any other applicable requirements provided by law, and subject to the provisions of this section, any communication that is broadcast, printed, mailed, delivered; placed on a website, streaming media service, or online forum for a fee; or that is otherwise distributed that constitutes an independent expenditure for which the person making the independent expenditure expends in excess of one thousand dollars on the communication shall include in the communication a statement that:

(I) The communication has been "paid for by (full name of the person paying for the communication)"; and

(II) Identifies a natural person who is the registered agent if the person identified in subsection (5)(a)(I) of this section is not a natural person.

(b) In the case of a broadcast or online video or audio communication, the statement required by subsection (5)(a) of this section shall satisfy all applicable requirements promulgated by the federal communications commission for size, duration, and placement.

(c) In the case of a nonbroadcast communication, including an online communication, the secretary of state shall, by rule, establish size and placement requirements for the disclaimer statement. If the size, format, or display requirements of the communication make it impracticable to include a disclaimer statement on the communication, the rules must require that the disclaimer statement be available by means of a direct link from the communication to the web page or application screen containing the statement.

(6) Any person that expends an aggregate amount in excess of one thousand dollars on an independent expenditure in any one calendar year shall deliver written notice to the appropriate officer that shall list with specificity the name of the candidate whom the independent expenditure is intended to support or oppose. Where the independent expenditure is made within thirty days before a primary, general, or regular biennial school election, the notice required by this subsection (6) must be delivered within forty-eight hours after the person obligates moneys for the independent expenditure.

(7) Any person that accepts any donation that is given for the purpose of making an independent expenditure or expends any moneys on an independent expenditure in an aggregate amount in excess of one thousand dollars in any one calendar year shall establish a separate account in a financial institution, and the title of the account shall indicate that it is used for such purposes. All such donations accepted by such person for the making of any such independent expenditures shall only be deposited into the account, and any moneys expended for the making of such independent expenditure shall only be withdrawn from the account. As long as the person uses a separate account for the purposes of this subsection (7), in any complaint relating to the use of the person's account, no discovery may be made of information relating to the identity of the person's members and general donors and any discovery is limited to the sources, amounts, and uses of donations deposited into and expenditures withdrawn from the account.

(8) Any person that expends moneys on an independent expenditure in excess of one thousand dollars, regardless of the medium of the communication produced by the expenditure, shall disclose to the secretary of state, in accordance with the schedule specified in section 1-45-108 (2) for political committees, any donation in excess of twenty dollars given in that reporting period for the purpose of making an independent expenditure.

(9) Repealed.

(10) Any earmarked donation given for the purpose of making an independent expenditure in excess of one thousand dollars shall be disclosed as a donation from both the original source of the donation and the person transferring the donation.

(11) On reports it files with the appropriate official, an independent expenditure committee that obligates in excess of one thousand dollars for an independent expenditure shall disclose a good faith estimate of the fair market value of the expenditure if the committee does not know the actual amount of the expenditure as of the date that a report is required to be filed with the appropriate official.

(12) All information required to be disclosed to the secretary of state under this section shall be posted on the website of the secretary within two business days after its receipt by the secretary.

(13) Notwithstanding any other provision of this section, any requirement contained in this section that is applicable to a corporation shall also be applicable to a labor organization.

(14) (a) Any covered organization that contributes, donates, or transfers ten thousand dollars or more to any person, earmarked for the purpose of making an independent expenditure or electioneering communication, during any one calendar year, shall provide to the recipient of the contribution, donation, or transfer an affirmation, in writing, that includes the information listed in subsection (14)(d) of this section. After reaching the ten thousand dollar threshold, the covered organization shall provide a new affirmation statement for each qualifying subsequent contribution, donation, or transfer during that calendar year.

(b) Any covered organization that transfers ten thousand dollars or more to any person, earmarked for the purpose of that person making a contribution, donation, or transfer to pay for an independent expenditure or electioneering communication, during any one calendar year, shall provide to the recipient of the transfer an affirmation, in writing, that includes the information listed in subsection (14)(d) of this section. After reaching the ten thousand dollar threshold, the covered organization shall provide a new affirmation statement for each qualifying subsequent transfer during that calendar year.

(c) A person shall not accept a contribution, donation, or transfer as described in subsection (14)(a) or (14)(b) of this section from a covered organization unless the covered organization provides a written affirmation to the recipient satisfying the requirements of subsection (14)(d) of this section. The recipient shall include the written affirmation when reporting the independent expenditure or electioneering communication to the appropriate filing officer and shall retain the written affirmation for not less than one year following the date of the end of the election cycle during which the affirmation was received.

(d) The affirmation required by this subsection (14) must include:

(I) The name of the covered organization and its principal place of business;

(II) The amount of the contribution, donation, or transfer and the name of the person who received the contribution, donation, or transfer;

(III) (A) If the covered organization is a for-profit corporation, each beneficial owner's name and current residence or business address and, if a listed beneficial owner exercises control over the entity through another legal entity, such as a corporation, partnership, limited liability company, or trust, each such other legal entity and each such beneficial owner who will use that other entity to exercise control over the entity.

(B) For purposes of this subsection (14)(d)(III), "beneficial owner" means a corporation's officers, directors, and owners of more than five percent of the corporation.

(IV) (A) If the covered organization is not a for-profit corporation but is subject to disclosure under subsection (14)(a) or (14)(b) of this section, a list of any person who transferred five thousand dollars or more to the covered organization and who earmarked that transfer of funds for the purpose of making an independent expenditure or electioneering communication as determined by the earlier of either the preceding twelve-month period that ends on the date of the transmission of the independent expenditure or electioneering communication or that ends on the date of the transfer.

(B) A covered organization is not required to include a natural person's name if disclosure of that person would lead to a reasonable probability of harm, threats, harassment, or reprisals to the person or to individuals affiliated with that person.

(C) A covered organization may only redact a person's name from its report under subsection (14)(d)(IV)(B) of this section if the person has affirmed on a form provided by the secretary of state, under oath, that the person believes there is a reasonable probability that they will be subject to harm, threats, harassment, or reprisal if disclosed. The covered organization shall retain the affirmation for not less than one year and shall produce the affirmation to the secretary of state's office in response to a request for information related to any investigation of a campaign finance violation. The affirmation must remain confidential during the pendency of any investigation and complaint with a hearing officer under section 1-45-117.5. Following a final agency decision finding that the individual whose name was redacted does not meet the requirements of this subsection (14)(d)(IV)(C), including the applicable period for appeal, the affirmation is no longer confidential and is subject to public review.

(D) If the contribution, donation, or transfer under subsection (14)(a) or (14)(b) of this section is from another covered organization, the covered organization shall provide a list of persons who transferred to that covered organization consistent with subsections (14)(d)(IV)(B) and (14)(d)(IV)(C) of this section.

(V) A covered organization need not include a transfer made for a commercial transaction in the ordinary course of any trade or business conducting by the covered organization.

(VI) A certification by the chief executive officer or person who is the head of the covered organization stating that the contribution, donation, or transfer is not made in cooperation, consultation, or concert with or at the request or suggestion of a candidate, authorized committee, or agent of a candidate, political party, or agent of a political party.

(e) For purposes of this subsection (14), "covered organization" means a corporation, including an entity organized under section 501(c) or 527 of the internal revenue code, a labor organization, or an independent expenditure committee. It does not include a small donor committee, political party committee, or candidate committee.

(f) For purposes of this subsection (14), "transfer", "donate", or "contribute" does not include the provision of funds to a vendor or in payment of a contract for goods or services.

Source: L. 2010: Entire section added, (SB 10-203), ch. 269, p. 1231, § 4, effective May 25. L. 2016: (4)(c) and (6) amended, (HB 16-1282), ch. 267, p. 1106, § 2, effective August 10. L. 2018: (9) repealed, (HB 18-1047), ch. 155, p. 1092, § 3, effective April 23. L. 2019: (1) and (5) amended and (14) added, (HB 19-1318), ch. 328, p. 3042, § 3, effective August 2. L. 2023: (1) amended, (SB 23-276), ch. 399, p. 2395, § 49, effective June 6.

Cross references: For the legislative declaration in the 2010 act adding this section, see section 1 of chapter 269, Session Laws of Colorado 2010.

ANNOTATION

Registered agent disclosure requirement imposed on issue committees is unconstitutional. The requirement imposed by subsection (5) and § 1-45-108.3 that an issue committee disclose the identity of the registered agent of the entity paying for the communication on certain election-related communications distributed to the voting public is unconstitutional and violates the free speech clause of the first amendment to the United States Constitution. No on EE v. Beall, 2024 COA 79, 558 P.3d 671.

An independent expenditure committee operating without the control or coordination of a political party is able to collect contributions or make independent expenditures — expenditures not controlled by or coordinated with any candidate — that are not subject to the source and contribution limits that restrict political parties under § 3(3) of article XXVIII of the state constitution and under this act. Colo. Republican Party v. Williams, 2016 COA 26, 370 P.3d 650.

Independent expenditure committee not required to disclose payments made by state political party on its behalf as donations unless they were given for the purpose of making an independent expenditure. The payments were made to satisfy committee's administrative penalties and costs. Thus, payments were not given for the purpose of making an independent expenditure. Campaign Integrity v. Colo. Rep. Party, 2017 COA 32, 395 P.3d 1192.

Nor is the independent expenditure committee required to report the payments as contributions. This section does not require an independent expenditure committee to disclose a "contribution". The definition of contribution does not include payments made to or for the benefit of an independent expenditure committee. Campaign Integrity v. Colo. Rep. Party, 2017 COA 32, 395 P.3d 1192.

Nor is the independent expenditure committee required to report the payments as expenditures. An "expenditure" generally means payments "expressly advocating the election or defeat of a candidate or supporting or opposing a ballot issue or ballot question." The payments were not expressly advocating the election or defeat of a candidate or supporting or opposing a ballot issue or ballot question; therefore, they did not satisfy the general definition of expenditure. Campaign Integrity v. Colo. Rep. Party, 2017 COA 32, 395 P.3d 1192.