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colorado > Colorado Electoral Code > Fair Campaign Practices Act

1-45-103.7. Contribution limits – treatment of independent expenditure committees – contributions from limited liability companies – voter instructions on spending limits – definitions

Overview of Statute

Corporation and labor organizations may still contribute to political committees, despite any restrictions in this section or in the state constitution. The committees may accept the donations without separating the money from their general account, and may disburse the money to a candidate committee or political party. Independent expenditure committees are treated differently than political committees, and contribution limits imposed by the state contribution will not apply. Additional limitations also apply to candidate committees established for major and minor political party candidates during both primary and general elections.

However, no limited liability companies that include a corporation, labor organization, entity owned by individuals who are not United States citizens, foreign governments, lobbyists, or individuals otherwise prohibited by law from making a contribution may contribute to a candidate committee or political party. Other restrictions also apply to certain types of limited liability companies. Entities who receive contributions from limited liability companies are also restricted, and subject to guidelines, for how that money may be spent. Colorado voters also instruct the Colorado legislature to propose and support any amendment to the United States Constitution that allows Congress and the states to limit campaign contributions and spending.

Statute

(1) Nothing in article XXVIII of the state constitution or this article shall be construed to prohibit a corporation or labor organization from making a contribution to a political committee.

(2) A political committee may receive and accept moneys contributed to such committee by a corporation or labor organization pursuant to subsection (1) of this section for disbursement to a candidate committee or political party without depositing such moneys in an account separate from the account required to be established for the receipt and acceptance of all contributions by all committees or political parties in accordance with section 3 (9) of article XXVIII of the state constitution.

(2.5) An independent expenditure committee shall not be treated as a political committee and, therefore, shall not be subject to the requirements of section 3 (5) of article XXVIII of the state constitution.

(3) A candidate committee established in the name of a candidate affiliated with either a major political party or a minor political party who is running in a primary election may accept:

(a) The aggregate contribution limit specified in section 3 (1) of article XXVIII of the state constitution for a primary election at any time after the date of the primary election in which the candidate in whose name the candidate committee is accepting contributions is on the primary election ballot; or

(b) The aggregate contribution limit specified in section 3 (1) of article XXVIII of the state constitution for a general election at any time prior to the date of the primary election in which the candidate in whose name the candidate committee is accepting contributions is on the primary election ballot.

(4) A candidate committee established in the name of a candidate affiliated with either a major political party or a minor political party running in a primary election may expend contributions received and accepted for a general election prior to the date of the primary election in which the candidate in whose name the candidate committee is accepting contributions is on the primary election ballot. A candidate committee established in the name of a candidate affiliated with a major political party or a minor political party running in a primary election who wins the primary election may expend contributions received and accepted for a primary election in the general election.

(4.5) (a) A candidate committee established in the name of a candidate who is a write-in candidate, an unaffiliated candidate, or the candidate of a minor political party who is not running in a primary election may accept from any one person the aggregate contribution limit specified in section 3 (1) of article XXVIII of the state constitution applicable to the office he or she is seeking at any point during the election cycle in which the candidate in whose name the candidate committee is accepting contributions is on the general election ballot.

(b) A candidate committee established in the name of a candidate who is a write-in candidate, an unaffiliated candidate, or the candidate of a minor political party who is not running in a primary election may expend contributions received and accepted in accordance with paragraph (a) of this subsection (4.5) at any point during the election cycle in which the candidate in whose name the candidate committee is accepting contributions is on the general election ballot.

(5) (a) No limited liability company shall make any contribution to a candidate committee or political party if one or more of the individual members of the limited liability company is:

(I) A corporation;

(II) A labor organization;

(III) A natural person who is not a citizen of the United States;

(IV) A foreign government;

(V) A professional lobbyist, volunteer lobbyist, or the principal of a professional or volunteer lobbyist, and the contribution is prohibited under section 1-45-105.5 (1); or

(VI) Otherwise prohibited by law from making the contribution.

(b) No limited liability company shall make any contribution to a political committee if one or more of the individual members of the limited liability company is:

(I) An entity formed under and subject to the laws of a foreign country;

(II) A natural person who is not a citizen of the United States; or

(III) A foreign government.

(c) Notwithstanding any other provision of this subsection (5), no limited liability company shall make any contribution to a candidate committee or political party if either the limited liability company has elected to be treated as a corporation by the internal revenue service pursuant to 26 CFR 301.7701-3 or any successor provision or the shares of the limited liability company are publicly traded. A contribution by a limited liability company with a single natural person member that does not elect to be treated as a corporation by the internal revenue service pursuant to 26 CFR 301.7701-3 shall be attributed only to the single natural person member.

(d) (I) Any limited liability company that is authorized to make a contribution shall, in writing, affirm to the candidate committee, political committee, or political party to which it has made a contribution, as applicable, that it is authorized to make a contribution, which affirmation shall also state the names and addresses of all of the individual members of the limited liability company. No candidate committee, political committee, or political party shall accept a contribution from a limited liability company unless the written affirmation satisfying the requirements of this paragraph (d) is provided before the contribution is deposited by the candidate committee, political committee, or political party. The candidate committee, political committee, or political party receiving the contribution shall retain the written affirmation for not less than one year following the date of the end of the election cycle during which the contribution is received.

(II) Any contribution by a limited liability company, and the aggregate amount of contributions from multiple limited liability companies attributed to a single member of any such company under this subparagraph (II), shall be subject to the limits governing such contributions under section 3 of article XXVIII of the state constitution. A limited liability company that makes any contribution to a candidate committee, political committee, or political party shall, at the time it makes the contribution, provide information to the recipient committee or political party as to the amount of the total contribution attributed to each member of the limited liability company. The attribution shall reflect the capital each member of the limited liability company has invested in the company relative to the total amount of capital invested in the company as of the date the company makes the campaign contribution, and for a single member limited liability company, the contribution shall be attributed to that single member. The limited liability company shall then deduct the amount of the contribution attributed to each of its members from the aggregate contribution limit applicable to multiple limited liability companies under this subparagraph (II) for purposes of ensuring that the aggregate amount of contributions from multiple limited liability companies attributed to a single member does not exceed the contribution limits insection 3 of article XXVIII of the state constitution. Nothing in this subparagraph (II) shall be construed to restrict a natural person from making a contribution in his or her own name to any committee or political party to the extent authorized by law.

(6) No nondomestic corporation may make any contribution under article XXVIII of the state constitution or this article that a domestic corporation is prohibited from making under article XXVIII of the state constitution or this article.

(7) (a) Any person who believes that a violation of subsection (5) or (6) of this section has occurred may file a written complaint with the secretary of state no later than one hundred eighty days after the date of the alleged violation. The complaint shall be subject to all applicable procedures specified in section 9 (2) of article XXVIII of the state constitution.

(b) Any person who has violated any of the provisions of paragraph (a), (b), or (c) of subsection (5) or subsection (6) of this section shall be subject to a civil penalty of at least double and up to five times the amount contributed or received in violation of the applicable provision.

(c) Any person who has violated any of the provisions of subparagraph (I) of paragraph (d) of subsection (5) of this section shall be subject to a civil penalty of fifty dollars per day for each day that the written affirmation regarding the membership of a limited liability company has not been filed with or retained by the candidate committee, political committee, or political party to which a contribution has been made.

(8) As used in this section, “limited liability company” includes any form of domestic entity as defined in section 7-90-102 (13), C.R.S., or foreign entity as defined in section 7-90-102 (23), C.R.S.; except that, as used in this section, “limited liability company” shall not include a domestic corporation, a domestic cooperative, a domestic nonprofit association, a domestic nonprofit corporation, a foreign corporation, a foreign cooperative, a foreign nonprofit association, a foreign nonprofit corporation, as those terms are defined in section 7-90-102, C.R.S., a nondomestic corporation as defined in section 1-45-103 (7), or a foreign corporation as defined in section 1-45-103 (10.5).

(9) (a) The voters instruct the Colorado congressional delegation to propose and support, and the Colorado state legislature to ratify, an amendment to the United States Constitution that allows Congress and the states to limit campaign contributions and spending, to ensure that all citizens, regardless of wealth, can express their views to one another and their government on a level playing field.

(b) The provisions of this subsection shall take effect on January 1, 2013, and be applicable thereafter.

(10) For purposes of this section, the terms “unaffiliated”, “major political party”, and “minor political party” have the same meanings as specified in the “Uniform Election Code of 1992”, articles 1 to 13 of this title.

 

 

Source: L. 2003: Entire section added, p. 2160, § 6, effective June 3.L. 2004: Entire section amended, p. 863, § 1, effective May 21.L. 2007: (5), (6), (7), and (8) added, p. 1766, § 2, effective June 1.L. 2008: (5)(d)(II) amended, p. 440, § 1, effective April 14.L. 2010: (2.5) added and (6) and (8) amended, (SB 10-203), ch. 269, p. 1230, § 3, effective May 25.Initiated 2012, (Amendment 65): (9) added, L. 2013, p. 3301, effective upon proclamation of the Governor, January 1, 2013.L. 2014: IP(3) and (4) amended and (4.5) and (10) added, (HB 14-1335), ch. 145, p. 494, § 2, effective May 2.

 

Editor’s note: Subsection (9) was added by initiative in 2012. The vote count on the measure at the general election held November 6, 2012, was as follows:

FOR:1,276,432

AGAINST:988,542

Cross references: (1) For the legislative declaration in the 2010 act adding subsection (2.5) and amending subsections (6) and (8), see section 1 of chapter 269, Session Laws of Colorado 2010.

(2) For the legislative declaration in HB 14-1335, see section 1 of chapter 145, Session Laws of Colorado 2014.
 
ANNOTATION

The classification in former subsections (3) and (4) (now subsections (3), (4), and (4.5)) violates the right to equal protection for individuals wishing to contribute to write-ins, unaffiliated candidates, and minor-party candidates when each candidate runs unopposed for the nomination. This statute does not set contribution limits based on who has a primary and who does not. It creates different contribution limits for individuals running against one another. It allows Republican and Democratic candidates to collect and spend $400 after the primary. Thus, a Republican or Democratic candidate can obtain $400 from a single contributor and spend all of the money in the general election. For the same general election, a write-in candidate can obtain only $200 from a single contributor. Riddle v. Hickenlooper, 742 F.3d 922 (10th Cir. 2014) (decided prior to 2014 amendment).

Under section 9(2)(a) of article XXVIII of the state constitution, a complaint alleging that a contribution exceeds the applicable limit, either on its own or when aggregated with previous contributions, must be filed within 180 days of that excess contribution. Lambert v. Ritter Inaugural Comm., Inc., 218 P.3d 1115 (Colo. App. 2009).

To give effect to both the contribution limit in section 3 of article XXVIII and the time limit in section 9(2)(a) of article XXVIII, a complaint may seek relief only as to contributions that, standing alone or aggregated, exceed the limit and are made within the preceding 180-day period, and the relief available under section 10(1) of article XXVIII or subsection (7)(b) of this section is limited to those excess contributions as to which the complaint is timely. Lambert v. Ritter Inaugural Comm., Inc., 218 P.3d 1115 (Colo. App. 2009).

 

Annotation: April 22, 2016 5:23 pm

Riddle v. Hickenlooper 742 F.3d 922 (10th Cir.) In 2010, three individuals ran for the Colorado House of Representatives. One candidate was a write-in candidate, one was the Democratic nominee, and one was the Republican nominee. Under Colorado law (Colorado Constitution Amendment XVIII and § 1-45-103.74(4), C.R.S.), individual contributions to the write-in candidate were capped at $200 per person while individual contributions to each of her opponents were capped at $400 per person.
The Secretary of State interpreted the law to allow candidates with primaries (generally major party candidates) to receive up to $400 from a single contributor ($200 for the primary election and $200 for the general election) and spend it before or after the primary but disallowed this flexibility for candidates without primaries (generally write-in candidates, unaffiliated candidates, and nominees for minor parties).

Definition [Corporation]

A domestic corporation incorporated under and subject to the “Colorado Business Corporation Act”, articles 101 to 117 of title 7, C.R.S., a domestic nonprofit corporation incorporated under and subject to the “Colorado Revised Nonprofit Corporation Act”, articles 121 to 137 of title 7, C.R.S., or any corporation incorporated under and subject to the laws of another state. For purposes of this article, “domestic corporation” shall mean a for-profit or nonprofit corporation incorporated under and subject to the laws of this state, and “nondomestic corporation” shall mean a corporation incorporated under and subject to the laws of another state or foreign country. For purposes of this article, “corporation” includes the parent of a subsidiary corporation or any subsidiaries of the parent, as applicable. C.R.S. § 1-45-103.

Definition [Expenditure]

Any purchase, payment, distribution, loan, advance, deposit, or gift of money by any person for the purpose of expressly advocating the election or defeat of a candidate or supporting or opposing a ballot issue or ballot question. An expenditure is made when the actual spending occurs or when there is a contractual agreement requiring such spending and the amount is determined.

(b) “Expenditure” does not include:

(I) Any news articles, editorial endorsements, opinion or commentary writings, or letters to the editor printed in a newspaper, magazine or other periodical not owned or controlled by a candidate or political party;

(II) Any editorial endorsements or opinions aired by a broadcast facility not owned or controlled by a candidate or political party;

(III) Spending by persons, other than political parties, political committees and small donor committees, in the regular course and scope of their business or payments by a membership organization for any communication solely to members and their families;

(IV) Any transfer by a membership organization of a portion of a member’s dues to a small donor committee or political committee sponsored by such membership organization; or payments made by a corporation or labor organization for the costs of establishing, administering, or soliciting funds from its own employees or members for a political committee or small donor committee.

Section 2(8) of article XXVIII of the state constitution.

Definition [Contribution]

(a) (I) The payment, loan, pledge, gift, or advance of money, or guarantee of a loan, made to any candidate committee, issue committee, political committee, small donor committee, or political party;

(II) Any payment made to a third party for the benefit of any candidate committee, issue committee, political committee, small donor committee, or political party;

(III) The fair market value of any gift or loan of property made to any candidate committee, issue committee, political committee, small donor committee or political party;

(IV) Anything of value given, directly or indirectly, to a candidate for the purpose of promoting the candidate’s nomination, retention, recall, or election.

(b) “Contribution” does not include services provided without compensation by individuals volunteering their time on behalf of a candidate, candidate committee, political committee, small donor committee, issue committee, or political party; a transfer by a membership organization of a portion of a member’s dues to a small donor committee or political committee sponsored by such membership organization; or payments by a corporation or labor organization for the costs of establishing, administering, and soliciting funds from its own employees or members for a political committee or small donor committee.

Section 2(5) of article XXVIII of the state constitution.

 

C.R.S. § 1-45-103 further adds:

(b) “Contribution” includes, with regard to a contribution for which the contributor receives compensation or consideration of less than equivalent value to such contribution, including, but not limited to, items of perishable or nonpermanent value, goods, supplies, services, or participation in a campaign-related event, an amount equal to the value in excess of such compensation or consideration as determined by the candidate committee.

(c) “Contribution” also includes:

(I) Any payment, loan, pledge, gift, advance of money, or guarantee of a loan made to any political organization;

(II) Any payment made to a third party on behalf of and with the knowledge of the political organization; or

(III) The fair market value of any gift or loan of property made to any political organization.

C.R.S. § 1-45-103.

Definition [United States]

Used in the territorial sense, means the several states, the District of Columbia, Puerto Rico, the United States Virgin Islands, and any territory or insular possession subject to the jurisdiction of the United States. C.R.S. § 1-8.3-102.

Definition [Election Cycle]

Either:

(a) The period of time beginning thirty-one days following a general election for the particular office and ending thirty days following the next general election for that office;

(b) The period of time beginning thirty-one days following a general election for the particular office and ending thirty days following the special legislative election for that office; or

(c) The period of time beginning thirty-one days following the special legislative election for the particular office and ending thirty days following the next general election for that office.

Section 2(6) of article XXVIII of the state constitution.

Definition [Political party]

Any group of registered electors who, by petition or assembly, nominate candidates for the official general election ballot. “Political party” includes affiliated party organizations at the state, county, and election district levels, and all such affiliates are considered to be a single entity for the purposes of this article, except as otherwise provided in section 7. Section 2(13) of article XXVIII of the state constitution.

Definition [Candidate committee]

A person, including the candidate, or persons with the common purpose of receiving contributions or making expenditures under the authority of a candidate. A contribution to a candidate shall be deemed a contribution to the candidate’s candidate committee. A candidate shall have only one candidate committee. A candidate committee shall be considered open and active until affirmatively closed by the candidate or by action of the secretary of state. Section 2(3) of article XXVIII of the state constitution.

Definition [Foreign corporation]

(a) A parent corporation or the subsidiary of a parent corporation formed under the laws of a foreign country that is functionally equivalent to a domestic corporation;

(b) A parent corporation or the subsidiary of a parent corporation in which one or more foreign persons hold a combined ownership interest that exceeds fifty percent;

(c) A parent corporation or the subsidiary of a parent corporation in which one or more foreign persons hold a majority of the positions on the corporation’s board of directors; or

(d) A parent corporation or the subsidiary of a parent corporation whose United States-based operations, or whose decision-making with respect to political activities, falls under the direction or control of a foreign entity, including the government of a foreign country.

 

C.R.S. § 1-45-103

Definition [Political committee]

Any person, other than a natural person, or any group of two or more persons, including natural persons that have accepted or made contributions or expenditures in excess of $200 to support or oppose the nomination or election of one or more candidates.

(b) “Political committee” does not include political parties, issue committees, or candidate committees as otherwise defined in this section.

(c) For the purposes of this article, the following are treated as a single political committee:

(I) All political committees established, financed, maintained, or controlled by a single corporation or its subsidiaries;

(II) All political committees established, financed, maintained, or controlled by a single labor organization; except that, any political committee established, financed, maintained, or controlled by a local unit of the labor organization which has the authority to make a decision independently of the state and national units as to which candidates to support or oppose shall be deemed separate from the political committee of the state and national unit;

(III) All political committees established, financed, maintained, or controlled by the same political party;

(IV) All political committees established, financed, maintained, or controlled by substantially the same group of persons.

Section 2(12) of article XXVIII of the state constitution.

Definition [Independent expenditure]

An expenditure that is not controlled by or coordinated with any candidate or agent of such candidate. Expenditures that are controlled by or coordinated with a candidate or candidate’s agent are deemed to be both contributions by the maker of the expenditures, and expenditures by the candidate committee. Section 2(9) of article XXVIII of the state constitution.

Definition [Independent expenditure committee]

One or more persons that make an independent expenditure in an aggregate amount in excess of one thousand dollars or that collect in excess of one thousand dollars from one or more persons for the purpose of making an independent expenditure. C.R.S. § 1-45-103.

Definition [State]

A state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. C.R.S. § 1-8.3-102.

Definition [Ballot]

(a) A federal write-in absentee ballot;

(b) A ballot specifically prepared or distributed for use by a covered voter in accordance with this article; or

(c) A ballot cast by a covered voter in accordance with this article.

(2) “Covered voter” means:

(a) A uniformed-service voter defined in paragraph (a) of subsection (9) of this section who is a resident of this state but who is absent from this state by reason of active duty and who otherwise satisfies this state’s voter eligibility requirements;

(b) An overseas voter who, before leaving the United States, was last eligible to vote in this state and, except for a state residency requirement, otherwise satisfies this state’s voter eligibility requirements;

(c) An overseas voter who, before leaving the United States, would have been last eligible to vote in this state had the voter then been of voting age and, except for a state residency requirement, otherwise satisfies this state’s voter eligibility requirements; or

(d) An overseas voter who was born outside the United States, is not described in paragraph (b) or (c) of this subsection (2), and, except for a state residency requirement, otherwise satisfies this state’s voter eligibility requirements if the last place where a parent, legal guardian, spouse, or civil union partner of the voter was, or under this article would have been, eligible to vote before leaving the United States is within this state.

C.R.S. § 1-8.3-102.

Definition [Person]

Any natural person, partnership, committee, association, corporation, labor organization, political party, or other organization or group of persons. Section 2(11) of article XXVIII of the state constitution.

Definition [Election]

Any election under the “Uniform Election Code of 1992” or the “Colorado Municipal Election Code of 1965”, article 10 of title 31, C.R.S. C.R.S. § 1-7.5-103.

Definition [Spending]

Funds expended influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any state or local public office in the state and includes, without limitation, any purchase, payment, distribution, loan, advance, deposit, or gift of money or anything of value by any political organization, a contract, promise, or agreement to expend funds made or entered into by any political organization, or any electioneering communication by any political organization. C.R.S. § 1-45-103.

Definition [Secretary]

The Colorado secretary of state. C.R.S. § 1-1.5-102.

Definition [Committee]

The committee of signers described in section 1-12-108(2). C.R.S. § 1-12-100.5.

Definition [Candidate]

Any person who seeks nomination or election to any state or local public office that is to be voted on in this state at any primary election, general election, school district election, special district election, or municipal election. “Candidate” also includes a judge or justice of any court of record who seeks to be retained in office pursuant to the provisions of section 25 of article VI. A person is a candidate for election if the person has publicly announced an intention to seek election to public office or retention of a judicial office and thereafter has received a contribution or made an expenditure in support of the candidacy. A person remains a candidate for purposes of this article so long as the candidate maintains a registered candidate committee. A person who maintains a candidate committee after an election cycle, but who has not publicly announced an intention to seek election to public office in the next or any subsequent election cycle, is a candidate for purposes of this article. Section 2(2) of article XXVIII of the state constitution.

Cases

colorado Cases

Out-of-State Cases

Federal Cases

Case Name: Riddle v. Hickenlooper

Citation: 742 F.3d 922 (10th Cir. 2014)

Federal Circuit Court: 10th Circuit Court

Year: 2014

Case URL: https://www.ravellaw.com/opinions/099efed8d517e98a9e9ab6ca7faa5de8?query=742%20F[...]

Case Summary: Holding that disfavored contributors to campaign of unaffiliated write-in candidate were similarly situated to favored contributors supporting her Republican and Democratic opponents; classification in statute violated the fundamental right to contribute as form of political expression; and statutory classification also violated the right to equal protection.

Regulations & Guidance

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