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Lisa Farnum

Lisa Farnum

Remember Campaign Finance Changes!

April 8, 2016

Changes to the Michigan Campaign Finance Act

What Committees Need to Know About P.A. 269 of 2015

Governor Rick Snyder signed Senate Bill 571—creating Public Act 269—on January 6, 2016, making this the second time in a little over two years that the Michigan Campaign Finance Act (MCFA) rules for political committees have been changed.  Among the changes there were several that impact political committee filing dates, rules for the administration of Separate Segregated Funds and Candidate Committee debt payments.  Now that the dust has settled, the following is an overview of how the new rules impact your committee’s filings.

Changes affecting PAC administration for Separate Segregated Fund’s (SSF’s)

 New Definitions:

“Connected Organization”Screen Shot 2016-04-07 at 7.26.10 PM

A Connected organization is a corporation organized on a for-profit or nonprofit basis, a joint stock company, a domestic dependent sovereign, or a labor organization formed under the laws of this or another state or foreign country, or a member of any such entity that is not an individual.

 

The Act allows a connected organization to make expenditures for the establishment or administration of—and solicitation, collection, or transfer of contributions to—a separate segregated fund to be used for political purposes.

“Commingling Exception”

A contribution by an individual to a separate segregated fund that is aggregated with another payment to a connected organization may be payable first to the connected organization for subsequent transfer to the fund.  Contributions are not considered commingled if:

  • There is proof, electronic or in writing, that payment (or portion) was specifically for a contribution to the SSF
  • Individual or aggregated contributions are accompanied by information required for disclosure of each individual contributor (i.e.: Name & address, add employer information and occupation for amounts over $100.01)
  • The person making the contribution is the original source of the contribution
  • The contribution is not otherwise in violation of the MCFA (i.e: Anonymous, by a prohibited source, cash over $20, etc.)

As an example, a contribution by an individual to a separate segregated fund can now be combined with a dues or other payment to the connected organization of the SSF.  It may be collected by, or made payable first to, the connected organization, and then be split for transfer to the PAC.  However, commingling of the political committee funds with funds of another “person” (not a connected organization) is still prohibited.  The connected organization and the SSF are required to have a written policy governing the handling, accounting and method of transfer of these the contributions.

Operational Changes For SSF’s:

 “Annual Affirmative Consent”

The annual “opt-in” signature requirement was eliminated.  If your connected organization uses payroll deduction to collect contributions, you no longer need to update the signature annually.

Contributions may be solicited or obtained from a specified individual on an automatic basis, including a payroll deduction plan, only if the individual who is contributing to the fund affirmatively consents to the contribution. The Act still requires a person to affirmatively consent in writing, but only once. Even so, SSF’s should make sure consent forms include the following:

  • Contributors first, middle and last name
  • Date, amount to be withheld and method of receipt
  • Frequency of the withholding
  • Name of the Committee funds are to be transferred to
  • Language that states the contribution is not obtained through coercion, force, a condition of employment, membership or a threat
  • Signature/date line, can be in the form of a written or electronic signature

Even if you collected annual signatures as recently as December, 2015 or January, 2016, it’s a good idea to have contributors sign the new form at least once and then retain it in your files.

A member of a nonprofit corporation is allowed to pay expenses associated with administration and solicitation of contributions to the nonprofit’s SSF, as long as it’s the connected nonprofit’s SSF of which the corporation is a member.

Note: Corporations are not permitted to administer the PAC of their employees’ labor unions through the corporation’s payroll system. 

Filing Date Changes Affecting Political & Ballot Committees:

         “Political Action Committees”

  • The February filing deadline for PACs has been changed to January 31st
  • Reports are now due in January, April, July & October

         “Ballot Question Committees (BQC’s)”

Campaign Finance Reporting dates vary by committee type.  To see your committee’s filing dates for 2016 look up your committee type here: http://www.michigan.gov/documents/sos/CFR_Quick_Dates_513001_7.pdf

Other significant changes 

Candidate Committees & Debt Payments:

Candidates may use contributions to pay down debts from previous election cycles, with or without     consent in writing.

With Consent

  • A contribution can be designated in writing by the contributor to pay off debt for a previous election cycle
  • The contribution limit for the designated cycle can not be exceeded as a result of the designated contribution for that contributor
  • The contribution is not more than the outstanding debts for the designated election cycle

Without Consent

  • The contribution is considered to be made in the election cycle that corresponds to the date the contribution was made
  • Contribution limits for the current election cycle apply to the contribution/contributor
  • The contribution is not more than the outstanding debts for the election cycle in which the debt is being paid

All Political Committees:

Political and Candidate committees are now required to provide an email address on the committee’s Statement of Organization, if one is available.

Local and County PAC’s and Candidate Committees:

Filing dates were changed for local & county candidate committees and local PAC’s.  Committees filing on the County level, and not with the State Bureau of Elections, should check with their county Clerk’s office to confirm filing dates.

This article is a summation and not intended to be a complete list of the changes.  Of course, the content above is meant to serve only as a guide.  Every filing situation is different and you should always call or email your questions (517/482-5311 or Lfarnum1@gmail.com), visit the Bureau of Elections for more information (http://www.michigan.gov/sos/0,4670,7-127-1633_8723—,00.html), and consult with your attorney.

Lisa Farnum, MPP is President of L Farnum, Incorporated.  L Farnum, Inc. is a firm that specializes in PAC & Lobby compliance, research and association management.  Lisa has been helping clients resolve campaign finance issues and maintain compliance for more than 16 years.  She earned a Bachelor of Arts in Business Administration from Northwood University and a Master of Public Policy from the University of Michigan, Dearborn.  Ms. Farnum has over 25 years of experience in business and association management.

 

 

April 7, 2016 · Filed under Lisa Farnum

1 response so far ↓

  • 1 Steve Mitchell // Apr 9, 2016 at 12:57 pm

    Great article, Lisa!


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