Current through Register 1531, September 27, 2024
(1)
General
Applicability. 970 CMR 1.22 is issued to:
(a) Define contribution limits that apply to
organizations that are not political committees.
(b) Define when an organization must register
as a "political committee", and provide rules for groups that do not engage in
political fundraising, but which make expenditures or contributions from their
existing funds to support or oppose Massachusetts state or local candidates,
PACs, party committees or ballot questions (for purposes of 970 CMR 1.22,
"expenditures" or "contributions"); and.
(c) Establish rules to ensure disclosure
required of transfers of money or other things of value by individuals or
organizations that are formed and operate as tax exempt organizations as well
as by any other entity that is not organized as a Massachusetts political
committee, where funds are ultimately used to make expenditures or
contributions.
(2)
Limits on Contributions by Organizations Prior to Exceeding the
Incidental Threshold. Prior to exceeding the incidental threshold
defined in 970 CMR 1.22(3)(b), an organization may contribute up to the
following amounts in a calendar year: $1,000 to a candidate's committee; $500
to a PAC (other than an independent expenditure PAC); and $5,000 in the
aggregate during a calendar year to all political party committees of any one
political party. Such contributions may not be made by business entities
prohibited from contributing by M.G.L. c. 55, § 8, or by associations
funded, in whole or in part, by such entities.
(3)
When an Organization Must
Register as a Political Committee. An organization must register
as a political committee if it: receives contributions, as defined in 970 CMR
1.22(3)(a) or makes contributions to candidates, PACs (other than independent
expenditure PACs) or party committees that exceed the incidental threshold
defined in 970 CMR 1.22(3)(b).
(a)
Becoming a Political Committee - Receipt of
Contributions. An organization, including a political committee
registered in a non-Massachusetts jurisdiction, that receives money or anything
of value to make contributions to Massachusetts candidates or political
committees, including ballot question committees or independent expenditure
PACs, or to make independent expenditures, is a political committee pursuant to
M.G.L. c. 55, § 1. Such an entity shall organize as a political committee
and file campaign finance reports disclosing all contributions received, all
expenditures made, and all liabilities incurred for the purpose of making
contributions or independent expenditures. A determination of whether an
organization has received contributions and is required to organize and file
campaign finance reports as a political committee may depend on an assessment
of various factors including, but not limited to, the timing and content of
solicitations and the timing of receipts.
(b)
Becoming a Political
Committee - Making Contributions in Excess of the Incidental
Threshold. If an organization does not receive money or anything
of value to make contributions to Massachusetts candidates or political
committees, including ballot question committees or independent expenditure
PACs, or to make independent expenditures, but uses its existing funds to make
contributions that are more than incidental when compared to the organization's
revenues, it must register as a political committee and comply with 970 CMR
1.22(4). "More than incidental", for purposes of 970 CMR 1.22, means making
contributions in any calendar year that exceed, in the aggregate, either
$15,000 or 10% of the organization's gross revenues for the previous year,
whichever is less.
(c)
Political Activity Excluded from Incidental Threshold
Analysis. The following activity by an organization is not
included in calculating whether the organization has made contributions in
excess of the incidental threshold: independent expenditures, contributions to
independent expenditure PACs, expenditures to support or oppose ballot
questions, contributions to ballot question committees, or contributions or
expenditures made to influence a federal election or election for office in
another state.
(4)
Consequences of Making Contributions in Excess of the Incidental
Threshold.
(a)
Registration. An organization that is not a registered
political committee, which makes contributions to candidates, political action
committees (not including independent expenditure PACs) and political party
committees that exceed the incidental threshold defined in 970 CMR 1.22(3)(b),
must register as a PAC immediately upon exceeding the threshold.
(b)
Disclosure.
After exceeding the incidental threshold, the organization must file reports as
a PAC to itemize all contributions received and expenditures made, as those
terms are defined by M.G.L. c. 55, for the calendar year in which the threshold
was exceeded as well as during the following calendar year, and must remain
organized as a PAC until the first year after the calendar year in which its
contributions do not exceed the incidental threshold. In addition, receipts and
disbursements of the organization, that are not contributions or expenditures
as defined by M.G.L. c. 55, must also be disclosed, in the aggregate (not
itemized), in the new PAC's campaign finance reports.
(c)
Non-political
Expenditures. An organization that exceeds the incidental
threshold defined in 970 CMR 1.22(3)(b), but that does not receive
contributions, may make expenditures other than for political purposes without
restriction under 970 CMR 1.22.
(d)
Limits. The new PAC would be subject, during the
remainder of the calendar year in which the incidental threshold is exceeded,
and at least for the next calendar year, to the limits on contributions that
may be made by PACs, as defined in M.G.L. c. 55, § 6, including the $500
limit on the amount that PACs may contribute to a candidate, and to all other
limits and disclosure requirements that apply to PACs. For example, an
organization that exceeds the incidental threshold in 2019 may contribute:
1. $1,000 to a particular candidate in 2019
prior to exceeding the threshold;
2. no more than an additional $500 to the
candidate during 2019 after exceeding the threshold (for a total contribution
that year of $1,500); and
3. may
also contribute no more than $500 to any candidate during 2020. If the
incidental threshold in contributions made by the PAC is not exceeded in 2020,
then the PAC may dissolve as of December 31, 2020.
If the PAC dissolves as of December 31, 2020, the organization
may again make contributions subject to the threshold in 2021 and would not,
during 2021, be subject to the $500 contribution limit that applies to PACs,
unless the incidental threshold is exceeded in 2021.
(5)
Required
Verifications.
(a)
Statements regarding Preceding Year's Revenues. An
organization that is not a political committee may be required by OCPF to
complete and file a written disclosure that affirms that, during the year in
which it made contributions, the organization did not make contributions
exceeding the incidental threshold, as defined in 970 CMR 1.22(3)(b). The
statement, if required, shall indicate the organization's gross annual revenue
for the year prior to the year in which the contributions were made, and the
amount of contributions made during the year.
(b)
Statements regarding Source
of Funds. A political committee that receives a contribution from
an organization, whether the organization is existing in Massachusetts or in
another state, may be required by OCPF to obtain a written statement from the
organization. The written statement shall verify that the organization made the
contribution solely from general treasury funds and not in any part from funds
received for political purposes, i.e., not received to support
or oppose a candidate or candidates, a political party or a ballot question,
whether in Massachusetts or elsewhere. In addition, the statement shall certify
that funds provided do not, except as allowed by M.G.L. c. 55, include money
derived from business or professional corporations or partnerships. If a
statement is not provided to the political committee in response to its
request, OCPF may require the committee to return the contribution.
(c)
Form and Review of
Statements. The statements required by 970 CMR 1.22 must be
submitted under penalties of perjury. All statements and reports filed by
organizations under 970 CMR 1.22 shall be verified by an officer of the
organization with knowledge of the organization's financial activities. The
organization submitting a statement shall be entitled to a presumption that the
statement is accurate, and the organization may submit additional evidence and
argument in support of that statement. OCPF shall be entitled to request or
subpoena evidence from the organization with respect to the accuracy of the
statement. OCPF may conclude that the statement is not credible and require
that a contribution be returned only upon a written finding, based on
substantial evidence, and only after having provided the organization both
notice and an opportunity to be heard.
(6)
Organizations Receiving
Contributions to Influence Ballot Questions. An organization that
receives money or other things of value to support or oppose a ballot question
must organize as a ballot question committee.
(7)
Organizations Receiving
Donations to Make Electioneering Communications. If an
organization receives money or other things of value to make electioneering
communications, it must disclose its donors and electioneering communication
expenditures in the organization's reports of electioneering communications
filed in accordance with M.G.L. c. 55, § 18F, and
970 CMR
1.14. Such an Organization, however, is not a
political committee and does not have to register as such.
(8)
Independent Expenditure
PACs. An organization, whether existing in Massachusetts or in
another state, that receives money or other things of value to make independent
expenditures in Massachusetts, or for the purpose of allowing another
individual, group, association, corporation, labor union or other entity to
make independent expenditures in Massachusetts after transfer of the money or
things of value to such individual or entity, is an independent expenditure
political action committee.
(a)
Registration and Disclosure. Independent Expenditure
PACs must organize prior to soliciting or receiving any money or other things
of value for that purpose, pursuant to M.G.L. c. 55, and
970 CMR
2.17 and 2.22. Such independent expenditure
political action committees are required to file campaign finance reports
disclosing all contributions received, all expenditures made, and all
liabilities incurred for the purpose of making contributions or independent
expenditures in Massachusetts, and must also maintain detailed accounts of all
campaign finance activity pursuant to M.G.L. c. 55, §§ 5, 18 and
18A.
(b)
Contributions
by Independent Expenditure PACs to Other Independent Expenditure
PACs. An independent expenditure PAC may contribute to another
independent expenditure PAC if making the contribution is consistent with the
donating committee's statement of purpose. The independent expenditure PAC
making the contribution to the recipient independent expenditure PAC must file
seven-business day and 24-hour IE PAC reports, based on the date of the
contribution to the IE PAC, with the director in accordance with the
requirements of M.G.L. c. 55, § 18A(d).
(9)
True Source of Contributions
Must Be Disclosed. No organization or individual may directly or
indirectly make a contribution or independent expenditure, or an electioneering
communication, in any manner for the purpose of disguising the true origin of
the contribution, independent expenditure, or electioneering
communication.
(10)
Identification of Contributors and Donors.
(a)
Funds Used to Make
Contributions or Independent Expenditures. There shall be a
rebuttable presumption that a donor "knows or has reason to know" that a
donor's funds will be used to make a contribution or independent expenditure
if:
1. Such donations are received within 30
days prior to an organization's making a contribution or an independent
expenditure; and
2. The
organization's general treasury account as of the date of the donation's
receipt contained insufficient funds to cover the contribution or independent
expenditure.
(b)
Funds Used to Make Electioneering Communications.
There shall be a rebuttable presumption that funds received by an organization
making electioneering communications were received by the organization for the
purpose of making electioneering communications if:
1. Such donations are received within 30 days
prior to an organization's making an electioneering communication;
and
2. The organization's general
treasury account as of the date the donation's receipt contained insufficient
funds to cover the electioneering communication.
(c)
Rebuttal of
Presumption. Prior to requiring disclosure of donations in
accordance with M.G.L. c. 55 §§ 18, 18A or 18F, and 970 CMR 1.22(10),
OCPF shall provide the donor and organization with an opportunity to provide
evidence and argument to rebut the presumption and to establish that it is more
likely than not that the donor did not know the general treasury account
balance of the organization and did not intend that the donation be used to
make a contribution, independent expenditure, or electioneering
communication.
(11)
Identification of Contributors and Donors When General Treasury
Funds Are Insufficient.
(a) If
an organization makes a contribution, electioneering communication, or
independent expenditure that is not fully paid from general organizational
income, it must identify additional donors to the extent that general treasury
funds and those donors described in 970 CMR 1.22(10) did not provide the full
balance of the funds used to make the contribution, electioneering
communication, or independent expenditure. In such cases the organization shall
identify and report donors using a "last in, first out" accounting method,
until a sufficient number of donors have been identified and reported to
account for the full balance of the contribution, electioneering communication
or independent expenditure.
(b) An
organization that makes independent expenditures or contributions need not
report a donor in accordance with M.G.L. c. 55, §§ 18 and 18A, if the
organization has evidence clearly establishing that the donor did not intend
that the payment would be used to make a contribution or independent
expenditure.
(c) An organization
receiving funds to make an electioneering communication must disclose each
donor providing funds used to make the electioneering communication, in
accordance with M.G.L. c. 55, § 18F, if the donor provides in excess of
$250 in the aggregate during a calendar year.
(12)
Required
Recordkeeping. Detailed accounts of all campaign finance activity
shall be maintained pursuant to M.G.L. c. 55, §§ 5 and 18. Such
accounts must be provided to the director upon request. An organization or
individual making independent expenditures or electioneering communications, or
soliciting or receiving money or anything of value to make contributions,
independent expenditures or electioneering communications in Massachusetts must
maintain detailed records regarding the funds raised, expenditures, or
electioneering communications made using funds or in-kind contributions raised,
including all records necessary to demonstrate the source of the funds. This
recordkeeping requirement exists whether the funds or things of value used to
make contributions, independent expenditures, or electioneering communications
are contributions received for that purpose or funds from the organization's
general treasury.
