Stricken language would be deleted from and underlined language would be added to present law.
Act 737 of the Regular Session
1 State of Arkansas As Engrossed: H3/30/21 H4/1/21
2 93rd General Assembly A Bill
3 Regular Session, 2021 HOUSE BILL 1675
4
5 By: Representative Evans
6 By: Senator J. English
7
8 For An Act To Be Entitled
9 AN ACT TO AMEND THE LAW CONCERNING CAMPAIGN FINANCE;
10 TO REPEAL THE PROVISIONS CONCERNING CARRYOVER FUNDS;
11 TO MODIFY THE USE OF CAMPAIGN FUNDS; TO AMEND
12 PORTIONS OF INITIATED ACT 1 OF 1990 AND INITIATED ACT
13 1 OF 1996; AND FOR OTHER PURPOSES.
14
15
16 Subtitle
17 TO AMEND THE LAW CONCERNING CAMPAIGN
18 FINANCE; TO REPEAL THE PROVISIONS
19 CONCERNING CARRYOVER FUNDS; TO MODIFY THE
20 USE OF CAMPAIGN FUNDS; AND TO AMEND
21 PORTIONS OF INITIATED ACT 1 OF 1990 AND
22 INITIATED ACT 1 OF 1996.
23
24
25 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
26
27 SECTION 1. Arkansas Code 7-6-201(3), concerning the definition of
28 "carryover funds" as applied to campaign financing and resulting from
29 Initiated Act 1 of 1990 and Initiated Act 1 of 1996, is repealed.
30 (3)(A) Carryover funds means the amount of campaign funds
31 retained from the last election by the candidate for future use but not to
32 exceed the annual salary, excluding expense allowances, set by Arkansas law
33 for the office sought.
34 (B) Carryover funds does not include campaign signs,
35 campaign literature, and other printed campaign materials that were:
36 (i) Purchased by the campaign;
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1 (ii) Reported on the appropriate contribution and
2 expenditure report for the campaign at the time of the purchase; and
3 (iii) Retained for use in a future campaign by the
4 same candidate;
5
6 SECTION 2. Arkansas Code 7-6-201(17)(A), concerning the definition
7 of "surplus campaign funds" as applied to campaign financing and resulting
8 from Initiated Act 1 of 1990 and Initiated Act 1 of 1996, is amended to read
9 as follows:
10 (17)(A) "Surplus Remaining campaign funds means any balance of
11 campaign funds over expenses incurred as of the day of the election except
12 for:
13 (i) Carryover funds; and
14 (ii) Any funds required to repay loans made by the
15 candidate from his or her personal funds to the campaign; or
16 (ii) to To repay loans made by financial
17 institutions to the candidate and applied to the campaign.
18
19 SECTION 3. Arkansas Code 7-6-203(f)(4)(A), concerning contribution,
20 limitation, acceptance, use as personal income, and disposition of campaign
21 funds and resulting from Initiated Act 1 of 1990 and Initiated Act 1 of 1996,
22 is amended to read as follows:
23 (4)(A)(i) For purposes of this subsection, a candidate or
24 officeholder, who uses campaign funds or carryover funds to fulfill any
25 commitment, obligation, or expense that would exist regardless of the
26 candidate's campaign or officeholder activity, shall be deemed to have taken
27 campaign funds as personal income.
28 (ii) Candidates or officeholders may use campaign
29 funds or carryover funds to fulfill any commitment, obligation, or expense
30 authorized by law, or permitted by an Arkansas Ethics Commission rule or
31 opinion at the time of the expenditure, or reasonably and legitimately
32 related to a campaign or officeholder activity.
33
34 SECTION 4. Arkansas Code 7-6-203(f)(5), concerning contribution,
35 limitation, acceptance, use as personal income, and disposition of campaign
36 funds and resulting from Initiated Act 1 of 1990 and Initiated Act 1 of 1996,
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1 is amended to read as follows:
2 (5) If a candidate loses an election or if an officeholder is no
3 longer in office, and after disposing of surplus funds, has carryover funds
4 remaining, personal use of campaign funds remains prohibited by this section
5 for expenses unless the expenses relate to a future candidacy and shall
6 comply with subdivision (f)(4) of this section.
7
8 SECTION 5. Arkansas Code 7-6-203(f)(7), concerning contribution,
9 limitation, acceptance, use as personal income, and disposition of campaign
10 funds and resulting from Initiated Act 1 of 1990 and Initiated Act 1 of 1996,
11 is amended to read as follows:
12 (7) It is an affirmative defense to a prosecution for taking
13 campaign funds as personal income if the candidate or officeholder shows by a
14 preponderance of the evidence that:
15 (A) If the personal property was retained as carryover
16 campaign funds, and the candidate or officeholder:
17 (i)(A) Reported the personal property as carryover
18 campaign funds; and
19 (ii)(B) Retained or disposed of the personal
20 property in the manner that is required by law for carryover campaign funds;
21 or
22 (B) If the personal property was retained as surplus
23 funds, the candidate or officeholder:
24 (i) Reported the personal property as surplus funds;
25 and
26 (ii) Retained or disposed of the personal property
27 in the manner that is required by law for surplus funds.
28
29 SECTION 6. Arkansas Code 7-6-203(g), concerning contribution,
30 limitation, acceptance, use as personal income, and disposition of campaign
31 funds and resulting from Initiated Act 1 of 1990 and Initiated Act 1 of 1996,
32 is amended to read as follows:
33 (g)(1) Within thirty (30) days following the end of the month in which
34 an election is held or a candidate has withdrawn, a A candidate shall may
35 turn over surplus campaign funds to either:
36 (A) The Treasurer of State for the benefit of the General
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1 Revenue Fund Account of the State Apportionment Fund;
2 (B) A political party as defined in 7-1-101 or a
3 political party caucus of the General Assembly, the Senate, or the House of
4 Representatives;
5 (C) A nonprofit organization that is exempt from taxation
6 under Section 501(c)(3) of the Internal Revenue Code;
7 (D) Cities of the first class, cities of the second class,
8 or incorporated towns; or
9 (E) The contributors to the candidate's campaign.
10 (2) If the candidate's campaign has not ended, disposal of
11 surplus campaign funds shall not be required and the candidate may carry
12 forward any remaining funds to the general primary election, general
13 election, or general runoff election for that same office.
14 (3)(A) If an unopposed candidate agrees not to solicit further
15 campaign contributions by filing an affidavit declaring such an agreement,
16 the candidate may dispose of any surplus campaign funds prior to a general
17 election as soon as the time has passed to declare an intent to be a write-in
18 candidate pursuant to 7-5-205.
19 (B) For an unopposed nonpartisan candidate, the affidavit
20 may be filed after the deadlines have passed to declare as a filing fee
21 candidate, petition candidate, or write-in candidate under 7-10-103.
22 (C) The affidavit shall be filed in the office in which
23 the candidate is required to file reports of contributions received and
24 expenditures made.
25 (D) Unopposed candidates and defeated candidates who file
26 the affidavit are exempt from further reporting requirements provided that
27 the affidavit contains:
28 (i) All campaign activity not previously reported;
29 and
30 (ii) A statement that the candidate's campaign fund
31 has a zero ($0.00) balance.
32 (4)(A)(2)(A) Carryover funds may be expended at any time for any
33 purpose not prohibited by this chapter and may be used as campaign funds for
34 seeking any public office Remaining campaign funds may be maintained after an
35 election and used to run for election or re-election.
36 (B) Nothing shall prohibit a person at any time from
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1 disposing of all or any portion of his or her carryover campaign funds in the
2 same manner as for surplus campaign funds manner set out under subdivision
3 (g)(1) of this section. However, the candidate shall not take the funds as
4 personal income or as income for his or her spouse or dependent children.
5 (B)(i) When a person having carryover funds files as a
6 candidate for public office, his or her carryover funds shall be transferred
7 to the person's active campaign fund. Once transferred, the funds will no
8 longer be treated as carryover funds.
9 (ii) This subdivision (g)(4)(B) shall not apply to
10 carryover funds from an election held prior to July 1, 1997.
11 (iii) This subdivision (g)(4)(B) shall not apply to
12 a campaign debt.
13 (C)(i) If carryover funds are expended prior to
14 transferring the funds to an active campaign fund, the expenditures shall be
15 reported pursuant to this subdivision (g)(4)(C). A person shall file an
16 expenditure report concerning carryover funds if, since the last report
17 concerning the carryover funds, the person has expended in excess of five
18 hundred dollars ($500). The report shall be filed at the office in which the
19 candidate was required to file his or her campaign contribution and
20 expenditure reports for the previous campaign not later than fifteen (15)
21 days after a calendar quarter in which a report becomes required. No report
22 is required in any calendar quarter in which the cumulative expenditure limit
23 has not been exceeded since the person's last report.
24 (ii) The person shall also file an expenditure
25 report for the calendar quarter in which he or she transfers the carryover
26 funds to an active campaign fund.
27 (iii)(a) A person who retains carryover funds shall
28 file an annual report outlining the status of the carryover fund account as
29 of December 31 unless the person has filed a quarterly report during the
30 calendar year pursuant to subdivisions (g)(4)(C)(i) and (ii) of this section.
31 (b) The annual report shall be due by January
32 31 of each year.
33 (c) A person who retains carryover funds from
34 a general election held in November or a runoff election held in November is
35 not required to file an annual report for the year of the general election or
36 runoff election from which carryover funds were retained.
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1 (iv) The carryover fund reports of a candidate for
2 school district, township, municipal, or county office shall be filed with
3 the county clerk of the county in which the election was held.
4 (v)(a) The carryover fund reports of a candidate for
5 state or district office shall be filed with the Secretary of State.
6 (b) The carryover fund reports of a candidate
7 for state or district office filed with the Secretary of State shall be filed
8 in electronic form through the official website of the Secretary of State.
9 The Arkansas Ethics Commission shall approve the format used by the Secretary
10 of State for the filing of carryover fund reports in electronic form under
11 this subdivision (g)(4)(C)(v)(b) to ensure that all required information is
12 requested. The official website of the Secretary of State shall allow for
13 searches of carryover fund report information required to be filed in
14 electronic form under this subdivision (g)(4)(C)(v)(b).
15 (D)(i)(C)(i) Carryover Campaign funds may be retained by a
16 person for not more than ten (10) years after the last election at which he
17 or she was a candidate, or if applicable, not more than ten (10) years after
18 the last day that the person held office, and any remaining carryover
19 campaign funds shall be disposed of in the same manner as for surplus
20 campaign funds manner set out under subdivision (g)(1) of this section.
21 (ii)(a) The officer with whom the person last filed
22 a final campaign report shall provide the person timely notice of the
23 requirements of this subdivision (g)(4)(D)(g)(2)(C) prior to the expiration
24 of the ten-year period.
25 (b) However, failure to provide the notice
26 does not relieve the person of his or her obligation under this subsection.
27 (E)(i)(D)(i) The use of carryover campaign funds to pay an
28 elected candidate's own personal expenses for food, lodging, conference fees,
29 or travel to attend a conference related to the performance of his or her
30 responsibilities as an elected official shall not be considered a taking of
31 campaign funds as personal income.
32 (ii) The reimbursement of expenses shall be a result
33 of travel and the source of the reimbursement shall be authorized under the
34 rules of the House of Representatives or the Senate and used to reimburse the
35 carryover campaign account.
36 (iii) The reimbursement amount shall be reported in
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1 the elected candidate's carryover campaign fund report.
2 (5)(3) After the date of an election at which the person is a
3 candidate for nomination or election, the person shall not accept campaign
4 contributions for that election except for the sole purpose of raising funds
5 to retire campaign debt.
6 (6)(4) Surplus Campaign funds or remaining Surplus campaign
7 funds or carryover funds given to a political party caucus shall be
8 segregated in an account separated from other caucus funds and shall not be
9 used:
10 (A) By the political party caucus to make a campaign
11 contribution; or
12 (B) To provide any personal income to any candidate who
13 donated surplus campaign funds or remaining campaign funds or carryover
14 funds.
15
16 SECTION 7. Arkansas Code 7-6-207(a)(1), concerning reports of
17 contributions by candidates for state or district office and resulting from
18 Initiated Act 1 of 1990 and Initiated Act 1 of 1996, is amended to add an
19 additional subdivision to read as follows:
20 (F) If a candidate keeps remaining campaign funds after an
21 election, the candidate shall continue filing the reports required by this
22 subsection.
23
24 SECTION 8. Arkansas Code 7-6-207(b)(1), concerning reports of
25 contributions by candidates for state or district office and resulting from
26 Initiated Act 1 of 1990 and Initiated Act 1 of 1996, is amended to add an
27 additional subdivision to read as follows:
28 (H) The total amount of all nonitemized expenditures made
29 during the filing period; and
30 (I) A list of all disbursements made under 7-6-
31 203(g)(1); and
32 (J) The current balance of campaign funds.
33
34 SECTION 9. Arkansas Code 7-6-207(b)(2), concerning reports of
35 contributions by candidates for state or district office and resulting from
36 Initiated Act 1 of 1990 and Initiated Act 1 of 1996, is amended to read as
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1 follows:
2 (2)(A) When the If a candidate's campaign has ended and the
3 candidate does not retain remaining campaign funds, the final report shall
4 also indicate which