Senate Bill 346 – What You Should Know

 

As sent to Governor Perry, Senate Bill 346 requires that any “person or group of persons” making more than $25,000 in so-called “political expenditures” in a calendar year turn over to the government the identities of the sources of all “political contributions” over $1,000 (§ 254.253(a)).

 

In order to understand what this means, it is necessary to understand the manner in which and “political contributions” and “political expenditures” are used in SB346.

 

What is a “Political Expenditure” under SB346?

 

As used in SB346, the term “political expenditures” includes, but is not limited to, “campaign expenditures,” which are defined under Texas law as follows:

 

“Campaign expenditure” means an expenditure made by any person in connection with a campaign for an elective office or on a [ballot] measure. (251.001(7)) (emphasis added)

 

An “expenditure” is defined as follows:

 

“Expenditure” means a payment of money or any other thing of value and includes an agreement made or other obligation incurred, whether legally enforceable or not, to make a payment. (251.001(6)) (emphasis added)

 

 

What is a “Political Contribution” under SB346?

 

“Political contributions” are defined as payments for which:

 

“…the members or donors have reason to know that their payments may be used to make political contributions or political expenditures or may be commingled with other funds used to make political contributions or political expenditures.” (§ 254.281(c)) (emphasis added)

 

Thus, if an organization tenders money or any other thing of value, or agrees to do so, in connection with a campaign for elected office or a ballot measure, in excess of $25,000 in a calendar year, the organization is obligated to disclose to the government all donors tendering more than $1,000 in money or other value who had “reason to know” the money could potentially be used for such purposes.  This would be true even if the supporter did not actually know, but could have known.  This would be true even if the supporter expressly required that the donation not go toward election-related activity.  Actual knowledge or intent of the donor is not the operative factor.

 

What’s Next?

 

There is strong feeling within certain circles that the very purpose of SB346 is to scare off potential tea party supporters, by creating the threat that their identities will be turned over to the government.

 

If Governor Perry signs SB346, this will lead to enhanced scrutiny of grassroots groups in Texas and their supporters.  Supporters’ identities will have to be turned over if the groups are found to have tendered–or agreed to tender–more than $25,000 of value “in connection with” election-related activities in a calendar year, or tendered such value knowing that it could potentially be used “in connection with” such activities.  On its face, this is a very broad standard.

 

The metes and bounds of SB346 are not fully defined at this time, and may not be for some time.  If Governor Perry signs SB346 into law, all grassroots groups in Texas would be well-advised to seek competent legal counsel on this matter, in order to avoid legal liability for themselves and protect the privacy of their supporters.

 

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