§ 163-278.15. No acceptance of contributions made by corporations, foreign and domestic, or other prohibited sources.
Overview of Statute
Section mandates that a candidate, political committee, political party, affiliated party committee, or treasurer shall not accept contributions made by any corporation, business entity, labor union, professional association, or insurance company, unless the subsequent provisions are met.
Statute
(a) No candidate, political committee, political party, affiliated party committee, or treasurer shall accept any contribution made by any corporation, foreign or domestic, regardless of whether such corporation does business in the State of North Carolina, or made by any business entity, labor union, professional association, or insurance company. This section does not apply with regard to entities permitted to make contributions by G.S. 163-278.19(h).
(b) A candidate or political committee may accept a contribution knowing that the contribution is the proceeds of a loan made in the ordinary course of business by a financial institution if all of the following conditions are met:
(1) The full amount of the loan is secured by collateral placed, or by guaranties given, by one or more individuals or entities who are not prohibited by this Article from making contributions to the candidate or political committee. The value of the collateral posted by each individual or entity, or the amount of each guaranty, may not exceed the contribution limitations applicable under this Article to each individual or entity. The value of collateral posted may exceed the contribution limitations applicable under this Article in cases where the amount of the loan secured by that collateral does not exceed the contribution limitations applicable to the individual or entity.
(2) During the time that any loan remains outstanding and unpaid, then the value of any collateral posted, or the amount of each guaranty, for that loan shall be considered to be a contribution by the individual or entity securing the loan. If the loan, or any portion of the loan, is repaid to the financial institution by the candidate or political committee to whom the loan was made during the contribution limitation period for the same “election” as defined in G.S. 163-278.13(e) in which the loan was made, the individual or entity securing the loan shall be eligible to further contribute to that candidate or political committee up to the amount of the repayment. If multiple individuals or entities secured the loan that is repaid to the financial institution by the candidate or political committee, then the amount repaid shall be prorated amongst the multiple individuals or entities.
(3) If the loan is to the candidate or political committee, only the candidate, the candidate’s spouse, or the political committee to whom the loan was made may repay the loan.
The State Board of Elections shall develop forms for reporting the proceeds of loans in a full and accurate manner.
(1973, c. 1272, s. 1; 1999-31, s. 5(e); 2006-195, s. 6; 2006-262, s. 4.1(c); 2015-258, s. 3(l); 2017-6, s. 3; 2018-146, s. 3.1(a), (b).)
- Cross-References:
- Campaign Finance
1. Definition for contribute
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, made to, or in coordination with, 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, to an affiliated party committee, or to a referendum committee, whether or not made in an election year, and any contract, agreement, or other obligation to make a contribution. An expenditure forgiven by a person or entity to whom it is owed shall be reported as a contribution from that person or entity. 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 this section; 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, an affiliated party committee, 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.
§ 163A-1411 (13). Definitions.
2. Definition for individual
The term “individual” means a single individual or more than one individual.
3. Definition for corporation
The term “corporation” means any corporation established under either domestic or foreign charter, and includes a corporate subsidiary and any business entity in which a corporation participates or is a stockholder, a partner or a joint venturer. The term applies regardless of whether the corporation does business in the State of North Carolina.
4. Definition for labor union
The term “labor union” means any union, organization, combination or association of employees or workmen formed for the purposes of securing by united action favorable wages, improved labor conditions, better hours of labor or work-related benefits, or for handling, processing or righting grievances by employees against their employers, or for representing employees collectively or individually in dealings with their employers. The term includes any unions to which Article 10, Chapter 95 applies.
5. Definition for contribution
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, made to, or in coordination with, 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, to an affiliated party committee, or to a referendum committee, whether or not made in an election year, and any contract, agreement, or other obligation to make a contribution. An expenditure forgiven by a person or entity to whom it is owed shall be reported as a contribution from that person or entity. 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 this section; 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, an affiliated party committee, 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.
§ 163A-1411 (13). Definitions.
6. Definition for business entity
The term “business entity” means any partnership, joint venture, joint-stock company, company, firm, or any commercial or industrial establishment or enterprise.
7. Definition for political party
The term “political party” means any political party organized or operating in this State, whether or not that party is recognized under the provisions of G.S. 163A-950. A special definition of “political party organization” that applies only in Part 2 of this Article is set forth in G.S. 163A-1475. An affiliated party committee is deemed a political party for this Article as set forth in G.S. 163A-1416 and G.S. 163A-1417.
8. Definition for insurance company
The term “insurance company” means any person whose business is making or underwriting contracts of insurance, and includes mutual insurance companies, stock insurance companies, and fraternal beneficiary associations.
9. Definition for political committee
The term “political committee” means a combination of two or more individuals, such as any person, committee, association, organization, or other entity that makes, or accepts anything of value to make, contributions or expenditures and has one or more of the following characteristics:
a. Is controlled by a candidate;
b. Is a political party or executive committee of a political party or is controlled by a political party or executive committee of a political party;
c. Is created by a corporation, business entity, insurance company, labor union, or professional association pursuant to G.S. 163A-1436(d); or
d. Has the major purpose to support or oppose the nomination or election of one or more clearly identified candidates; [or]
e. Is an affiliated party committee. Supporting or opposing the election of clearly identified candidates includes supporting or opposing the candidates of a clearly identified political party. If the entity qualifies as a “political committee” under sub-subdivision a., b., c., or d. of this subdivision, it continues to be a political committee if it receives contributions or makes expenditures or maintains assets or liabilities. A political committee ceases to exist when it winds up its operations, disposes of its assets, and files its final report. The term “political committee” includes the campaign of a candidate who serves as his or her own treasurer. Special definitions of “political action committee” and “candidate campaign committee” that apply only in Part 2 of this Article are set forth in G.S. 163A-1475.
§ 163A-1411 (74). Definitions.
10. Definition for professional association
The term “professional association” means any trade association, group, organization, association, or collection of persons or individuals formed for the purposes of advancing, representing, improving, furthering or preserving the interests of persons or individuals having a common vocation, profession, calling, occupation, employment, or training.
11. Definition for affiliated party committee
The term “affiliated party committee” means a General Assembly affiliated party committee as established by G.S. 163A-1416 or Council of State affiliated party committee as established by G.S. 163A-1417.
12. Definition for made
A contribution is “made” during regular session if the check or other instrument is dated during the session, or if the check or other instrument is delivered to the limited contributee during session, or if the limited contributor pledges during the session to deliver the check or other instrument at a later time.
§ 163A-1426. Limitation on fund-raising during legislative session. (a) Definitions (4)
13. Definition for board
The term “board” means the State Board with respect to all candidates for State, legislative, and judicial offices and the county board of elections with respect to all candidates for county and municipal offices. The term means the State Board with respect to all statewide referenda and the county board of elections conducting all local referenda.
14. Definition for Board
Board. – Any State board, commission, council, committee, task force,
authority, or similar public body, however denominated, created by statute or
executive order, as determined and designated by the State Board, except for
those public bodies that have only advisory authority.
15. Definition for State
“State” means 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.
16. Definition for election
The term “election” means any general or special election, a first or second primary, a run-off election, or an election to fill a vacancy. The term “election” shall not include any local or statewide referendum.
17. Definition for Election
“Election” means the event in which voters cast votes in ballot items concerning proposals or candidates for office in this State or the United States. The term includes primaries, general elections, referenda, and special elections.
18. Definition for Business
Business. – Any of the following organized for profit:
a. Association.
b. Business trust.
c. Corporation.
d. Enterprise.
e. Joint venture.
f. Organization.
g. Partnership.
h. Proprietorship.
i. Vested trust.
j. Every other business interest, including ownership or use of land for
income.
19. Definition for candidate
The term “candidate” means any individual who, with respect to a public office listed in G.S. 163A-1411(80), has taken positive action for the purpose of bringing about that individual’s nomination, retention, or election to public office. Examples of positive action include any of the following:
a. Filing a notice of candidacy, filing a notice to be retained, or a petition requesting to be a candidate.
b. Being certified as a nominee of a political party for a vacancy.
c. Otherwise qualifying as a candidate in a manner authorized by law.
d. Making a public announcement of a definite intent to run for public office in a particular election.
e. Receiving funds or making payments or giving the consent for anyone else to receive funds or transfer anything of value for the purpose of bringing about that individual’s nomination or election to office. Transferring anything of value includes incurring an obligation to transfer anything of value. Status as a candidate for the purpose of this Article continues if the individual is receiving contributions to repay loans or cover a deficit or is making expenditures to satisfy obligations from an election already held. Special definitions of “candidate” and “candidate campaign committee” that apply only in Part 2 of this Article are set forth in G.S. 163A-1475.
20. Definition for treasurer
The term “treasurer” means an individual appointed by a candidate, political committee, or referendum committee as provided in G.S. 163A-1412 or G.S. 163A-1496. (1973, c. 1272, s. 1; 1975, c. 798, ss. 5, 6; 1979, c. 500, s. 1; c. 1073, ss. 1-3, 19, 20; 1981, c. 837, s. 1; 1983, c. 331, s. 6; 1985, c. 352, ss. 1-3; 1997-515, ss. 4(a)-(c), 7(b)-(d); 1999-31, ss. 1(a), (b), 2(a)-(c), 3, 4(a); 1999-424, s. 6(a), (b); 2002-159, s. 55(n); 2003-278, s. 5; 2004-125, s. 3; 2004-127, s. 15; 2004-203, s. 12(b); 2005-430, s. 10; 2006-264, s. 23; 2007-391, s. 3; 2008-150, s. 6(a); 2008-187, s. 33(a); 2009-534, ss. 1, 3(a), (b); 2010-170, s. 1; 2011-31, s. 20; 2013-381, s. 50.1; 2015-66, s. 8(a); 2015-258, ss. 3(b), (b1); 2015-264, ss. 81(c), (d); 2017-6, s. 3.)
21. Definition for Committee
Committee. – The Legislative Ethics Committee as created in Part 3 of Article
14 of Chapter 120 of the General Statutes.
22. Definition for Candidate
“Candidate” means any individual who, with respect to a public office listed in G.S. 163A-1411(80), has filed a notice of candidacy, notice of retention, or a petition requesting to be a candidate, or has been certified as a nominee of a political party for a vacancy, or has otherwise qualified as a candidate in a manner authorized by law, or has filed a statement of organization under G.S. 163A-1412 and is required to file periodic financial disclosure statements under G.S. 163A-1418.