A BILL TO BE ENTITLED
AN ACT to provide for constitutional requirements for reporting and regulation of electioneering communications, as approved by the United States supreme court; to adopt constitutional limits for corporate expenditures on mass mailings and telephone banks; and to repeal a duplicative requirement for out‑of‑state contributors.
The General Assembly of North Carolina enacts:
SECTION 1.  Chapter 163 of the General Statutes is amended by adding a new Article to read:
"Article 22E.
"Electioneering Communications.
"§ 163‑278.80. Definitions.
As used in this Article, the following terms have the following definitions:
(1)	The term 'disclosure date' means either of the following:
a.	The first date during any calendar year when an electioneering communication is aired after an entity has made disbursements for the direct costs of producing or airing electioneering communications aggregating in excess of ten thousand dollars ($10,000).
b.	Any other date during that calendar year by which an entity has made disbursements for the direct costs of producing or airing electioneering communications aggregating in excess of ten thousand dollars ($10,000) since the most recent disclosure date for that calendar year.
(2)	The term 'electioneering communication' means any broadcast, cable, or satellite communication that has all the following characteristics:
a.	Refers to a clearly identified candidate for a statewide office or the General Assembly.
b.	Is made within one of the following time periods:
1.	60 days before a general or special election for the office sought by the candidate, or 
2.	30 days before a primary election or a convention of a political party that has authority to nominate a candidate for the office sought by the candidate.
c.	Is targeted to the relevant electorate.
(3)	The term 'electioneering communication' does not include any of the following: 
a.	A communication appearing in a news story, commentary, or editorial distributed through the facilities of any broadcasting station, unless those facilities are owned or controlled by any political party, political committee, or candidate.
b.	A communication that constitutes an expenditure or independent expenditure under Article 22A of this Chapter.
c.	A communication that constitutes a candidate debate or forum conducted pursuant to rules adopted by the Board or that solely promotes that debate or forum and is made by or on behalf of the person sponsoring the debate or forum.
d.	A communication made while the General Assembly is in session which, incidental to advocacy for or against a specific piece of legislation pending before the General Assembly, urges the audience to communicate with a member or members of the General Assembly concerning that piece of legislation.
(4)	The term 'prohibited source' means any corporation, insurance company, labor union, or professional association. The term 'prohibited source' does not include an entity that meets all the criteria set forth in G.S. 163‑278.19(f).
(5)	The term 'targeted to the relevant electorate' means a communication which refers to a clearly identified candidate for statewide office or the General Assembly and which can be received by 50,000 or more individuals in the State in the case of a candidacy for statewide office and 7,500 or more individuals in the district in the case of a candidacy for General Assembly.
(6)	The term '501(c)(4) organization' means either of the following:
a.	An organization described in section 501(c)(4) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of that Code.
b.	An organization that has submitted an application to the Internal Revenue Service for determination of its status as an organization described in sub‑subdivision a. of this subdivision.
(7)	Except as otherwise provided in this Article, the definitions in Article 22A of this Chapter apply in this Article.
"§ 163‑278.81. Disclosure of Electioneering Communications.
(a)	Statement Required. – Every individual, committee, association, or any other organization or group of individuals that makes a disbursement for the direct costs of producing and airing electioneering communications in an aggregate amount in excess of ten thousand dollars ($10,000) during any calendar year shall, within 24 hours of each disclosure date, file with the Board a statement containing the information described in subsection (b) of this section.
(b)	Contents of Statement. – Each statement required to be filed by this section shall be made under the penalty of perjury in G.S. 14‑209 and shall contain the following information:
(1)	The identification of the entity making the disbursement, of any entity sharing or exercising direction or control over the activities of that entity, and of the custodian of the books and accounts of the entity making the disbursement. 
(2)	The principal place of business of the entity making the disbursement if the entity is not an individual.
(3)	The amount of each disbursement of more than one thousand dollars ($1,000) during the period covered by the statement and the identification of the entity to whom the disbursement was made.
(4)	The elections to which the electioneering communications pertain and the names, if known, of the candidates identified or to be identified.
(5)	If the disbursements were paid out of a segregated bank account that consists of funds contributed solely by individuals directly to that account for electioneering communications, the names and addresses of all contributors who contributed an aggregate amount of more than one thousand dollars ($1,000) during the period beginning on the first day of the preceding calendar year and ending on the disclosure date. Nothing in this subdivision is to be construed as a prohibition on the use of funds in such a segregated account for a purpose other than electioneering communications.
(6)	If the disbursements were paid out of funds not described in subdivision (5) of this subsection, the names and addresses of all contributors who contributed an aggregate amount of more than one thousand dollars ($1,000) to the entity making the disbursement during the period beginning on the first day of the preceding calendar year and ending on the disclosure date.
"§ 163‑278.82. Prohibition of corporate and labor disbursements for  electioneering communications.
(a)	Prohibition. – No prohibited source may make any disbursement for the costs of producing or airing any electioneering communication. No individual, committee, association, or any other organization or group of individuals, including but not limited to, a political organization (as defined in section 527(e)(1) of the Internal Revenue Code of 1986), which has received any payment from a prohibited source may make any disbursement for the costs of producing and airing any electioneering communication. For the purpose of this section, the term 'electioneering communication' does not include a communication by a section 501(c)(4) organization or a political organization (as defined in section 527(e)(1) of the Internal Revenue Code of 1986) if the communication is paid for exclusively by funds provided by individuals and the disbursements for costs of producing and airing the communication are paid out of a segregated bank account that consists of funds contributed solely by individuals directly to that account.
(b)	Direct or Indirect Disbursement. – An electioneering communication shall be treated as made by a prohibited source if the prohibited source directly or indirectly disburses any amount for any of the costs of the communication.
"§ 163‑278.83. Penalties.
Except as otherwise provided in this Article, a violation of this Article is a Class 2 misdemeanor. The State Board of Elections has the same authority to compel from any organization covered by this Article the disclosures required by this Article that the Board has to compel from a political committee the disclosures required by Article 22A of this Chapter. The civil penalties in G.S. 163‑278.34 shall apply to violations of this Article, and where those provisions apply to violations involving contributions and expenditures they shall apply in the same manner to payments and disbursements in violation of G.S. 163‑278.82."
SECTION 2.  Chapter 163 of the General Statutes is amended by adding a new Article to read:
"Article 22F.
"Mass Mailings and Telephone Banks: Electioneering Communications.
"§ 163‑278.90. Definitions.
As used in this Article, the following terms have the following definitions:
(1)	The term 'disclosure date' means either of the following:
a.	The first date during any calendar year when an electioneering communication is transmitted after an entity has made disbursements for the direct costs of producing or transmitting electioneering communications aggregating in excess of ten thousand dollars ($10,000).
b.	Any other date during that calendar year by which an entity has made disbursements for the direct costs of producing or transmitting electioneering communications aggregating in excess of ten thousand dollars ($10,000) since the most recent disclosure date for that calendar year.
(2)	The term 'electioneering communication' means any mass mailing or telephone bank that has all the following characteristics:
a.	Refers to a clearly identified candidate for a statewide office or the General Assembly.
b.	Is made within one of the following time periods:
1.	60 days before a general or special election for the office sought by the candidate, or 
2.	30 days before a primary election or a convention of a political party that has authority to nominate a candidate for the office sought by the candidate.
c.	Is targeted to the relevant electorate.
(3)	The term 'electioneering communication' does not include any of the following: 
a.	A communication appearing in a news story, commentary, or editorial distributed through any newspaper or periodical, unless that publication is owned or controlled by any political party, political committee, or candidate.
b.	A communication that constitutes an expenditure or independent expenditure under Article 22A of this Chapter.
c.	A communication that constitutes a candidate debate or forum conducted pursuant to rules adopted by the Board or that solely promotes that debate or forum and is made by or on behalf of the person sponsoring the debate or forum.
d.	A communication that is distributed by a corporation solely to its shareholders or employees, or by a labor union or professional association solely to its members.
e.	A communication made while the General Assembly is in session which, incidental to advocacy for or against a specific piece of legislation pending before the General Assembly, urges the audience to communicate with a member or members of the General Assembly concerning that piece of legislation.
(4)	The term 'mass mailing' means any mailing by United States mail or facsimile that is targeted to the relevant electorate and is made by a commercial vendor or made from any commercial list. Part 1A of Article 22A of this Chapter has its own internal definition of 'mass mailing' under the definition of 'print media,' and that definition does not apply in this Article.
(5)	The term 'prohibited source' means any corporation, insurance company, labor union, or professional association. The term 'prohibited source' does not include an entity that meets all the criteria set forth in G.S. 163‑278.19(f).
(6)	The term 'targeted to the relevant electorate' means a communication which refers to a clearly identified candidate for statewide office or the General Assembly and which:
a.	If transmitted by mail or facsimile in connection with a clearly identified candidate for statewide office, is transmitted to 50,000 or more addresses in the State, by the transmission of identical or substantially similar matter within any 30‑day period, or, in connection with a clearly identified candidate for the General Assembly, is transmitted to 5,000 or more addresses in the district, by the transmission of identical or substantially identical matter within any 30‑day period.
b.	If transmitted by telephone, in connection with a clearly identified candidate for statewide office, more than 50,000 telephone calls in the State of an identical or substantially similar nature within any 30‑day period, or in the case of a clearly identified candidate for the General Assembly, more than 5,000 calls in the district of an identical or substantially similar nature within any 30‑day period.
(7)	The term 'telephone bank' means telephone calls that are targeted to the relevant electorate, except when those telephone calls are made by volunteer workers, whether or not the design of the telephone bank system, development of calling instructions, or training of volunteers was done by paid professionals.
(8)	The term '501(c)(4) organization' means either of the following:
a.	An organization described in section 501(c)(4) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of that Code.
b.	An organization that has submitted an application to the Internal Revenue Service for determination of its status as an organization described in sub‑subdivision a. of this subdivision.
(9)	Except as otherwise provided in this Article, the definitions in Article 22A of this Chapter apply in this Article.
"§ 163‑278.91. Disclosure of Electioneering Communications.
(a)	Statement Required. – Every individual, committee, association, or any other organization or group of individuals who makes a disbursement for the direct costs of producing and transmitting electioneering communications in an aggregate amount in excess of ten thousand dollars ($10,000) during any calendar year shall, within 24 hours of each disclosure date, file with the Board a statement containing the information described in subsection (b) of this section.
(b)	Contents of Statement. – Each statement required to be filed by this section shall be made under the penalty of perjury in G.S. 14‑209 and shall contain the following information:
(1)	The identification of the entity making the disbursement, of any entity sharing or exercising direction or control over the activities of that entity, and of the custodian of the books and accounts of the entity making the disbursement. 
(2)	The principal place of business of the entity making the disbursement if the entity is not an individual.
(3)	The amount of each disbursement of more than one thousand dollars ($1,000) during the period covered by the statement and the identification of the entity to whom the disbursement was made.
(4)	The elections to which the electioneering communications pertain and the names, if known, of the candidates identified or to be identified.
(5)	If the disbursements were paid out of a segregated bank account that consists of funds contributed solely by individuals directly to that account for electioneering communications, the names and addresses of all contributors who contributed an aggregate amount of more than one thousand dollars ($1,000) during the period beginning on the first day of the preceding calendar year and ending on the disclosure date. Nothing in this subdivision is to be construed as a prohibition on the use of funds in such a segregated account for a purpose other than electioneering communications.
(6)	If the disbursements were paid out of funds not described in subdivision (5) of this subsection, the names and addresses of all contributors who contributed an aggregate amount of more than one thousand dollars ($1,000) to the entity making the disbursement during the period beginning on the first day of the preceding calendar year and ending on the disclosure date.
"§ 163‑278.92. Prohibition of corporate and labor disbursements for  electioneering communications.
(a)	Prohibition. – No prohibited source may make any disbursement for the costs of producing or airing any electioneering communication. No individual, committee, association, or any other organization or group of individuals, including but not limited to, a political organization (as defined in section 527(e)(1) of the Internal Revenue Code of 1986), which has received any payment from a prohibited source may make any disbursement for the costs of producing and airing any electioneering communication. For the purpose of this section, the term 'electioneering communication' does not include a communication by a section 501(c)(4) organization or a political organization (as defined in section 527(e)(1) of the Internal Revenue Code of 1986) if the communication is paid for exclusively by funds provided by individuals and the disbursements for costs of producing and airing the communication are paid out of a segregated bank account that consists of funds contributed solely by individuals directly to that account.
(b)	Direct or Indirect Disbursement. – An electioneering communication shall be treated as made by a prohibited source if the prohibited source directly or indirectly disburses any amount for any of the costs of the communication.
"§ 163‑278.93. Penalties.
Except as otherwise provided in this Article, a violation of this Article is a Class 2 misdemeanor. The State Board of Elections has the same authority to compel from any organization covered by this Article the disclosures required by this Article that the Board has to compel from a political committee the disclosures required by Article 22A of this Chapter. The civil penalties in G.S. 163‑278.34 shall apply to violations of this Article, and where those provisions apply to violations involving contributions and expenditures they shall apply in the same manner to payments and disbursements in violation of G.S. 163‑278.92."
SECTION 3.  G.S. 163‑278.6(6) reads as rewritten:
"(6)	The terms 'contribute' or 'contribution' mean any advance, conveyance, deposit, distribution, transfer of funds, loan, payment, gift, pledge or subscription of money or anything of value whatsoever, to a candidate to support or oppose the nomination or election of one or more clearly identified candidates, to a political committee, to a political party, or to a referendum committee, whether or not made in an election year, and any contract, agreement, promise or other obligation, whether or not legally enforceable, to make a contribution. These terms include, without limitation, such contributions as labor or personal services, postage, publication of campaign literature or materials, in‑kind transfers, loans or use of any supplies, office machinery, vehicles, aircraft, office space, or similar or related services, goods, or personal or real property. These terms also include, without limitation, the proceeds of sale of services, campaign literature and materials, wearing apparel, tickets or admission prices to campaign events such as rallies or dinners, and the proceeds of sale of any campaign‑related services or goods. Notwithstanding the foregoing meanings of "contribution," the word shall not be construed to include services provided without compensation by individuals volunteering a portion or all of their time on behalf of a candidate, political committee, or referendum committee. The term 'contribution' does not include an 'independent expenditure.' If:
a.	Any individual, person, committee, association, or any other organization or group of individuals, including but not limited to, a political organization (as defined in section 527(e)(1) of the Internal Revenue Code of 1986) makes, or contracts to make, any disbursement for any electioneering communication, as defined in G.S. 163‑278.80(2) and (3) and G.S. 163‑278.90(2) and (3); and
b.	That disbursement is coordinated with a candidate, an authorized political committee of that candidate, a State or local political party or committee of that party, or an agent or official of any such candidate, party, or committee
that disbursement or contracting shall be treated as a contribution to the candidate supported by the electioneering communication or that candidate's party and as an expenditure by that candidate or that candidate's party."
SECTION 4.  G.S. 163‑278.12A is repealed.
SECTION 5.(a)  G.S. 163‑278.8(c) is repealed.
SECTION 5.(b)  G.S. 163‑278.14(b) reads as rewritten:
"(b)	No entity shall give, and no candidate, committee or treasurer shall accept, any monetary contribution in excess of one hundred dollars ($100.00) unless such contribution be in the form of a check, draft, money order, credit card charge, debit, or other noncash method that can be subject to written verification. The State Board of Elections may prescribe guidelines as to the reporting and verification of any method of contribution payment allowed under this Article. For a contribution made by credit card, the credit card account number of a contributor is not a public record."
SECTION 5.(c)  This section applies to any contribution made on or after January 1, 2003.
SECTION 6.  The provisions of this act are severable. If any provision of this act is held invalid by a court of competent jurisdiction, the invalidity does not affect other provisions of the act that can be given effect without the invalid provision.
SECTION 7.  This act is effective when it becomes law, except as otherwise provided in this act, and except that any criminal penalty resulting from this act becomes effective October 1, 2004.