HB0261

HOUSE BILL 261

52nd legislature - STATE OF NEW MEXICO - second session, 2016

INTRODUCED BY

G. Andres Romero

AN ACT

RELATING TO CAMPAIGN REPORTING; REQUIRING CROSS-REFERENCING BETWEEN AND UNIFORM LANGUAGE USE IN REPORTS OF POLITICAL CONTRIBUTIONS AND LOBBYING EXPENDITURES; CLARIFYING THE REQUIREMENTS OF ELECTRONIC DISCLOSURE OF CAMPAIGN AND LOBBYING REPORTS; PROVIDING FOR AN INITIAL REVIEW BY THE SECRETARY OF STATE OF CAMPAIGN REPORTS; PROVIDING SUBPOENA POWER TO THE SECRETARY OF STATE; REQUIRING MULTIPLE METHODS OF NOTICE TO REPORT VIOLATIONS TO REPORTING INDIVIDUALS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 1-19-27 NMSA 1978 (being Laws 1979, Chapter 360, Section 3, as amended) is amended to read:

"1-19-27. REPORTS REQUIRED--PROPER FILING OFFICER.--

A. Except for those candidates and public [officals] officials who file a statement of no activity, all reporting individuals shall file with the proper filing officer a report of expenditures and contributions on a prescribed form. The form shall provide, to the maximum extent practicable, for cross-references to matching entries on the expenditure reports forms required by Section 2-11-6 NMSA 1978 and descriptive language for required information that is uniform or consistent with descriptive language in the expenditure report forms required by Section 2-11-6 NMSA 1978.

B. The proper filing officer for filing reports of expenditures and contributions by a political committee is the secretary of state.

C. The proper filing officer for filing reports of expenditures and contributions or statements of no activity is the secretary of state for all candidates and public officials.

D. The secretary of state shall develop or contract for services to develop an electronic reporting system for receiving and for public inspection of reports of expenditures and contributions and statements of no activity [to] as required by the Campaign Reporting Act. The electronic reporting system shall:

(1) enable a person to file reports online by filling out forms on the secretary of state's [web site] website; and

(2) provide for encrypted transmissions.

E. All reports, statements and registration information required by the Campaign Reporting Act shall be available to the public on the secretary of state's website. The information shall be downloadable and be in a format that is searchable and sortable to the maximum extent practicable, including by date, contributor, person receiving a contribution, contribution amount, expenditure, person receiving an expenditure, employer, occupation, street address, mailing address, city and state.

F. The secretary of state shall maintain adequate staff to provide technical assistance to all individuals required to file reports pursuant this section."

SECTION 2. Section 1-19-32.1 NMSA 1978 (being Laws 1981, Chapter 331, Section 9, as amended) is amended to read:

"1-19-32.1. REPORTS EXAMINATION--FORWARDING OF

REPORTS.--

A. As each report is filed by a reporting individual and prior to any action taken pursuant to Subsections C through G of Section 1-19-34.4 NMSA 1978, the secretary of state shall review the report, notify the reporting individual of potential violations of the Campaign Reporting Act and provide the reporting individual with a ten-day period from the date of notice to correct any potential violations. Notice shall be in writing by certified mail, return receipt; by electronic communication; and orally by telephone, either directly to the person or by voice mail.

[A.] B. The secretary of state shall contract with an independent auditor approved by the state auditor to conduct a thorough examination of at least [ten] twenty percent of all reports filed during a year by reporting individuals, selected at random at least forty days after the general election and ten days after the April reports are filed in a non-election year, to determine compliance with the provisions of the Campaign Reporting Act. The examination may include an investigation of any discrepancies, including a cross-reference to reports filed by any other reporting individual. The secretary of state or the secretary of state on behalf of an independent auditor if requested by the auditor may subpoena a reporting individual's bank records for the reporting period being audited. A reporting individual shall be notified in writing by certified mail, return receipt; by electronic communication; and orally by telephone, either directly to the person or by voice mail, if a discrepancy is found in the report filed and shall be permitted to file a written explanation for the discrepancy within ten [working] days of the date of the notice. The notice, penalty and arbitration provisions set forth in Section 1-19-34.4 NMSA 1978 shall apply to examinations conducted under this section.

[B.] C. After the date stated in the notice of final action for submission of a written explanation, the secretary of state shall prepare an annual report of [any unresolved discrepancies found after] the examination of the random sample provided for in Subsection [A] B of this section. A copy of this report shall be transmitted to the attorney general for enforcement pursuant to the provisions of Section 1-19-36 NMSA 1978. This report is a public record open to public inspection and subject to the retention and destruction provisions set forth in Section 1-19-32 NMSA 1978. The report shall be available for inspection on the secretary of state's website as soon as it is published."

SECTION 3. Section 1-19-34.4 NMSA 1978 (being Laws 1993, Chapter 46, Section 15, as amended) is amended to read:

"1-19-34.4. EDUCATION AND VOLUNTARY COMPLIANCE--INVESTIGATIONS--BINDING ARBITRATION--REFERRALS FOR ENFORCEMENT.--

A. The secretary of state shall advise and seek to educate all persons required to perform duties under the Campaign Reporting Act of those duties. This includes advising all known reporting individuals at least annually of that act's deadlines for submitting required reports and statements of [exception] no activity. The secretary of state, in consultation with the attorney general, shall issue advisory opinions, when requested in writing to do so, on matters concerning that act. All prescribed forms prepared shall be clear and easy to complete.

B. The secretary of state may initiate investigations to determine whether any provision of the Campaign Reporting Act has been violated. Additionally, any person who believes that a provision of that act has been violated may file a written complaint with the secretary of state any time prior to ninety days after an election, except that no complaints from the public may be filed within eight days prior to an election. The secretary of state shall adopt uniform procedures for issuing advisory opinions and processing complaints and notifications of violations.

C. The secretary of state shall at all times seek to ensure voluntary compliance with the provisions of the Campaign Reporting Act. If the secretary of state determines that a provision of that act for which a penalty may be imposed has been violated, the secretary of state shall by written notice by certified mail, return receipt; by electronic communication; and orally by telephone, either directly to the person or by voice mail, set forth the violation and the fine imposed and inform the reporting individual that [he] the individual has ten [working] days from the date of the letter to correct the matter and to provide a written explanation, under penalty of perjury, stating any reason why the violation occurred or why the determination of the secretary of state is incorrect. If a timely explanation is filed and the secretary of state determines that good cause exists to waive the fine imposed, the secretary of state may by a written notice of final action partially or fully waive any fine imposed [for any late, incomplete or false report or statement of exception]. A written notice of final action shall be sent by certified mail, return receipt.

D. Upon receipt of the notice of final action, the person against whom the penalty has been imposed may protest the secretary of state's determination [including an advisory opinion] by submitting on a prescribed form a written request for binding arbitration to the secretary of state within ten [working] days of the date of the notice of final action. Any fine imposed shall be due and payable within ten [working] days of the date of notice of final action. No additional fine shall accrue pending the issuance of the arbitration decision. Fines paid pursuant to a notice of final action that are subsequently reduced or dismissed shall be reimbursed with interest within ten [working] days after the filing of the arbitration decision with the secretary of state. Interest on the reduced or dismissed portion of the fine shall be the same as the rate of interest earned by the secretary of state's escrow account to be established by the department of finance and administration.

E. An arbitration hearing shall be conducted by a single arbitrator selected within ten days by the person against whom the penalty has been imposed from a list of five arbitrators provided by the secretary of state. Neither the secretary of state nor a person subject to the Campaign Reporting Act, Lobbyist Regulation Act or Financial Disclosure Act may serve as an arbitrator. Arbitrators shall be considered to be independent contractors, not public officers or employees, and shall not be paid per diem and mileage.

F. The arbitrator shall conduct the hearing within thirty days of the request for arbitration. The arbitrator may impose any penalty the secretary of state is authorized to impose. The arbitrator shall state the reasons for [his] the arbitrator's decision in a written document that shall be a public record. The decision shall be final and binding. The decision shall be issued and filed with the secretary of state within thirty days of the conclusion of the hearing. Unless otherwise provided for in this section or by rule or regulation adopted by the secretary of state, the procedures for the arbitration shall be governed by the Uniform Arbitration Act. No arbitrator shall be subject to liability for actions taken pursuant to this section.

G. The secretary of state may refer a matter to the attorney general or a district attorney for a civil injunctive or other appropriate order or for criminal enforcement."

SECTION 4. Section 1-19-35 NMSA 1978 (being Laws 1979, Chapter 360, Section 11, as amended) is amended to read:

"1-19-35. REPORTS AND STATEMENTS--LATE FILING

PENALTY--FAILURE TO FILE.--

A. Except for the report required to be filed and delivered the Thursday prior to the election and any supplemental report, as required in Paragraph (5) of Subsection B of Section 1-19-29 NMSA 1978, that is due prior to the election, and subject to the provisions of Section 1-19-34.4 NMSA 1978, if a statement of no activity or a report of expenditures and contributions contains false or incomplete information or is filed after any deadline imposed by the Campaign Reporting Act, the responsible reporting individual or political committee, in addition to any other penalties or remedies prescribed by the Election Code, shall be liable for and shall pay to the secretary of state fifty dollars ($50.00) per day for each [regular] working day after the time required by the Campaign Reporting Act for the filing of statements of no activity or reports of expenditures and contributions until the complete or true statement or report is filed, up to a maximum of five thousand dollars ($5,000).

B. If any reporting individual files a false, [intentionally] incomplete or late report of expenditures and contributions due on the Thursday prior to the election, the reporting individual or political committee shall be liable

and pay to the secretary of state five hundred dollars ($500) for the first working day and fifty dollars ($50.00) for each subsequent working day after the time required for the filing of the report until the true and complete report is filed, up to a maximum of five thousand dollars ($5,000).

C. If a reporting individual fails to file or files a late supplemental report of expenditures and contributions as required in Paragraph (5) of Subsection B of Section 1-19-29 NMSA 1978, the reporting individual or political committee shall be liable for and pay to the secretary of state a penalty equal to the amount of each contribution received or pledged after the Tuesday before the election that was not timely filed.

D. All sums collected for the penalty shall be deposited in the state general fund. A report or statement of [exception] no activity shall be deemed timely filed only if it is received by the proper filing officer by the date and time prescribed by law.

E. Any candidate who fails or refuses to file a report of expenditures and contributions or statement of no activity or to pay a penalty imposed by the secretary of state as required by the Campaign Reporting Act shall not, in addition to any other penalties provided by law:

(1) have the candidate's name printed upon the ballot if the violation occurs before and through the final date for the withdrawal of candidates; or

(2) be issued a certificate of nomination or election, if the violation occurs after the final date for withdrawal of candidates or after the election, until the candidate satisfies all reporting requirements of the Campaign Reporting Act and pays all penalties owed.

F. Any candidate who loses an election and who failed or refused to file a report of expenditures and contributions or a statement of no activity or to pay a penalty imposed by the secretary of state as required by the Campaign Reporting Act shall not be, in addition to any other penalties provided by law, permitted to file a declaration of candidacy or nominating petition for any future election until the candidate satisfies all reporting requirements of that act and pays all penalties owed."

SECTION 5. Section 2-11-6 NMSA 1978 (being Laws 1977, Chapter 261, Section 6, as amended) is amended to read:

"2-11-6. EXPENDITURE REPORT TO BE FILED--CONTENTS--REPORTING PERIODS.--

A. Each lobbyist or lobbyist's employer who makes or incurs expenditures or political contributions for the benefit of or in opposition to a state legislator or candidate for the state legislature, a state public officer or candidate for state public office, a board or commission member or state employee who is involved in an official action affecting the lobbyist's employer or in support of or in opposition to a ballot issue or pending legislation or official action shall file an expenditure report with the secretary of state on a prescribed form or in an electronic format approved by the secretary of state and published by the secretary of state in accordance with Section 2-11-7 NMSA 1978. The report shall provide, to the maximum extent practicable, cross-references to matching entries on the expenditure reports required by Section 1-19-27 NMSA 1978 and descriptive language for required information that is uniform or consistent with descriptive language in the expenditure reports required by Section 1-19-27 NMSA 1978. The expenditure report shall include a sworn statement that sets forth:

(1) the cumulative total of the expenditures made or incurred by the employer or lobbyist during the covered reporting period, indicating the amount spent and a description of the expenditure. The list shall be separated into the following categories:

(a) meals and beverages;

(b) other entertainment expenditures;

(d) other expenditures;

(2) each political contribution made, identified by amount, date and name of the candidate or ballot issue supported or opposed, and whether the contribution is from the lobbyist's employer or the lobbyist on the lobbyist's own behalf; and

(3) the names, addresses, employers and occupations of other contributors and the amounts of their [separate] political contributions if the lobbyist or lobbyist's employer [delivers directly or indirectly separate] delivered contributions from those contributors [in excess of five hundred dollars ($500) in the aggregate for each election] to a candidate, a campaign committee or anyone authorized by a candidate to receive funds on the candidate's behalf.

B. [If the] The expenditure report [is] shall be filed electronically [the report] and shall be electronically authenticated by the lobbyist or the lobbyist's employer using an electronic signature as prescribed by the secretary of state in conformance with the Electronic Authentication of Documents Act and the Uniform Electronic Transactions Act. For the purposes of the Lobbyist Regulation Act, a report that is electronically authenticated in accordance with the provisions of this subsection shall be deemed to have been subscribed and sworn to by the lobbyist or the lobbyist's employer that is required to file the report.

C. In identifying expenditures pursuant to the provisions of Paragraph (1) of Subsection A of this section, any individual expenditure that is more than the threshold level established in the Internal Revenue Code of 1986, as amended, that must be reported separately to claim a business expense deduction, as published by the secretary of state, shall be identified by amount, date, purpose, type of expenditure and name of the person who received or was benefited by the expenditure; provided, in the case of special events, including parties, dinners, athletic events, entertainment and other functions, to which all members of the legislature, to which all members of either house or any legislative committee or to which all members of a board or commission are invited, expenses need not be allocated to each individual who attended, but the date, location, name of the body invited and total expenses incurred shall be reported.

D. The reports required pursuant to the provisions of the Lobbyist Regulation Act shall be filed:

(1) by January 15 for all expenditures and political contributions made or incurred during the preceding year and not previously reported;

(2) within forty-eight hours for each separate expenditure made or incurred during a legislative session that was for five hundred dollars ($500) or more; and

(3) by May 1 for all expenditures and political contributions made or incurred through April 25 of the current year and not previously reported.

E. A lobbyist's personal living expenses and the expenses incidental to establishing and maintaining an office in connection with lobbying activities or compensation paid to a lobbyist by a lobbyist's employer need not be reported.

F. A lobbyist or lobbyist's employer shall obtain and preserve all records, accounts, bills, receipts, books, papers and documents necessary to substantiate the financial statements required to be made under the Lobbyist Regulation Act for a period of two years from the date of filing of the report containing such items. When the lobbyist is required under the terms of the lobbyist's employment to turn over any such records to the lobbyist's employer, responsibility for the preservation of them as required by this section and the filing of reports required by this section shall rest with the employer. Such records shall be made available to the secretary of state or attorney general upon written request.

[G. A lobbyist's employer who also engages in lobbying shall also comply with the provisions of this section.

H.] G. An organization of two or more persons, including an individual who makes any representation as being an organization, that within one calendar year expends funds in excess of two thousand five hundred dollars ($2,500) not otherwise reported under the Lobbyist Regulation Act to conduct an advertising campaign for the purpose of lobbying shall register with the secretary of state within forty-eight hours after expending two thousand five hundred dollars ($2,500). Such registration shall indicate the name of the organization and the names, addresses and occupations of any of its principals, organizers or officers and shall include the name of any lobbyist or lobbyist's employer who is a member of the organization. Within fifteen days after a legislative session, the organization shall report the contributions, pledges to contribute, expenditures and commitments to expend for the advertising campaign for the purpose of lobbying, including the names, addresses, employers and occupations of the contributors, to the secretary of state on a prescribed form."

SECTION 6. Section 2-11-7 NMSA 1978 (being Laws 1977, Chapter 261, Section 7, as amended) is amended to read:

"2-11-7. REGISTRATION AND EXPENDITURE STATEMENT--PRESERVATION AS PUBLIC RECORD--ONLINE REPORTS.--

A. Each registration and expenditure statement as required by the Lobbyist Regulation Act shall be archived and accessible on the secretary of state's [lobbyist disclosure web site] website for a period of at least ten years from the date of filing as a public record, open to public inspection at any reasonable time. Unless an action or prosecution is pending that requires preserving the report, it may be destroyed ten years after the date of filing.

B. Lobbyist registrations and expenditure statements shall be kept and maintained on the secretary of state's [lobbyist disclosure web site] website and shall be available in searchable and downloadable formats. The secretary of state shall update the [web site] website no less than monthly [throughout the year] and as expeditiously as possible when the legislature is in session.

C. [For the purposes of this section, "accessible" means] With respect to the secretary of state's [lobbyist disclosure web site that] website, all items in the records [are] shall be easily searchable, sortable and downloadable by the public to the maximum extent practicable. The website shall include the information contained in the registrations and reports, and the information in the reports shall be searchable and sortable to the maximum extent practicable, including by date, lobbyist name, lobbyist employer, person receiving a political contribution, political contribution amount, person benefited by an expenditure, employer, occupation, street address, city and state.

D. The secretary of state shall ensure that contributions reported by persons pursuant to the Lobbyist Regulation Act are reported in a manner that is non-duplicative and as consistent as practicable with the reporting requirements of the Campaign Reporting Act."

SECTION 7. Section 2-11-8.2 NMSA 1978 (being Laws 1977, Chapter 261, Section 4, as amended) is amended to read:

"2-11-8.2. COMPLIANCE WITH ACT--ENFORCEMENT OF ACT--BINDING ARBITRATION--CIVIL PENALTIES.--

A. The secretary of state shall advise and seek to educate all persons required to perform duties pursuant to the Lobbyist Regulation Act of those duties. This includes advising all registered lobbyists at least annually of the Lobbyist Regulation Act's deadlines for submitting required reports. The secretary of state, in consultation with the attorney general, shall issue advisory opinions, when requested to do so in writing, on matters concerning the Lobbyist Regulation Act. All prescribed forms prepared shall be clear and easy to complete.

B. The secretary of state may conduct thorough examinations of reports and initiate investigations to determine whether the Lobbyist Regulation Act has been violated. Additionally, any person who believes that a provision of that act has been violated may file a written complaint with the secretary of state. The secretary of state shall adopt procedures for issuing advisory opinions, processing complaints and notifications of violations.

C. The secretary of state shall at all times seek to ensure voluntary compliance with the provisions of the Lobbyist Regulation Act. If the secretary of state determines that a provision of that act for which a penalty may be imposed has been violated, the secretary of state shall by written notice by certified mail, return receipt; by electronic communication; and orally by telephone, either directly to the person or by voice mail, set forth the violation and the fine imposed and inform the person that [he] the person has ten [working] days to provide a written explanation, under penalty of perjury, stating any reason the violation occurred or why the determination of the secretary of state is in error. If a timely explanation is filed and the secretary of state determines that good cause exists, the secretary of state may by a written notice of final action partially or fully waive any fine imposed. A written notice of final action shall be sent by certified mail, return receipt.

D. If the person charged disputes the secretary of state's determination, [including an advisory opinion] the person charged may request binding arbitration within ten [working] days of the date of the final action. Any penalty imposed shall be due and payable within ten [working] days of the notice of final action. No additional penalty shall accrue pending issuance of the arbitration decision. Fines paid pursuant to a notice of final action that are subsequently reduced or dismissed shall be reimbursed with interest within ten [working] days after the filing of the arbitration decision with the secretary of state. Interest on the reduced or dismissed portion of the fine shall be the same as the rate of interest earned by the secretary of state's escrow account to be established by the department of finance and administration.

E. An arbitration hearing shall be conducted by a single arbitrator selected within ten days by the person against whom the penalty has been imposed from a list of five arbitrators provided by the secretary of state. Neither the secretary of state nor a person subject to the Lobbyist Regulation Act, Campaign Reporting Act or Financial Disclosure Act may serve as an arbitrator. Arbitrators shall be considered to be independent contractors, not public officers or employees, and shall not be paid per diem and mileage.

F. The arbitrator may impose any penalty and take any action the secretary of state is authorized to take. The arbitrator shall state the reasons for [his] the arbitrator's decision in a written document that shall be a public record. The decision shall be final and binding. The decision shall be issued and filed with the secretary of state within thirty days of the conclusion of the hearing. Unless otherwise provided for in this section, or by rule or regulation adopted by the secretary of state, the procedures for the arbitration shall be governed by the Uniform Arbitration Act. No arbitrator shall be subject to liability for actions taken pursuant to this section.

G. Any person who files a report after the deadline imposed by the Lobbyist Regulation Act, or any person who files a false or incomplete report, shall be liable for and shall pay to the secretary of state fifty dollars ($50.00) per day for each regular working day after the time required for the filing of the report until the complete report is filed, up to a maximum of five thousand dollars ($5,000).

H. The secretary of state may refer a matter to the attorney general or a district attorney for a civil injunctive or other appropriate order or enforcement."