GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2001
S	2
SENATE BILL 8
Judiciary I Committee Substitute Adopted 4/24/01

Short Title:	Restrict National Soft Money.	()	
Sponsors:	     	
Referred to:	     	
January 25, 2001

A BILL TO BE ENTITLED
AN ACT TO restrict THE FLOW OF NATIONAL PARTY POLITICAL CONTRIBUTIONS INTO NORTH CAROLINA CAMPAIGNS.

The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 163‑278.7A reads as rewritten:
"§ 163‑278.7A.  Gifts from federal political committees.
(a)	Purpose. – The purpose of this section is to protect the integrity of North Carolina's election process and to mitigate against the appearance or reality of corruption by regulating contributions to North Carolina candidates, political committees, and parties from non-North Carolina political parties and committees. The public has grown increasingly concerned about the influence on North Carolina elections of national 'soft money' - contributions given in unlimited amounts from almost any source, including sources barred from giving in North Carolina. Such funds pose a multiple threat in that they allow the circumvention of North Carolina contribution limits, the infusion of money made possible by contributions from banned sources, the encouragement of money swapping between candidates, parties or other entities, the blurring of accountability between original contributor and ultimate recipient, and the use of money meant for generic party-building activities to promote instead the success of specific candidates. While preserving a way for the national parties to contribute to North Carolina affiliates through their federal or 'hard money' accounts, the General Assembly finds it necessary to provide for strict and rigorous regulation of the flow and use of nonfederal or 'soft' money.
(b)	Federal Committee Contributions Permitted. – It shall be permissible for a federal political committee, organized and subject to contribution limitations provided under the Federal Election Campaign Act and regulations adopted pursuant thereto, to make contributions to a North Carolina candidate or political committee registered under this Article with the State Board of Elections provided that the contributing  committee complies with all of the following provisions:
(1)	Is registered with the State Board of Elections consistent with the provisions of this Article.
(2)	Complies with reporting requirements specified by the State Board of Elections.
(3)	Makes its contributions within the limits specified in this  Article. 
(4)	Appoints an assistant or deputy treasurer who is a resident of North Carolina and stipulates to the State Board of Elections that the designated in‑State resident assistant or deputy treasurer shall be authorized to produce whatever records reflecting political activity in North Carolina the State Board of Elections deems necessary.
(5)	Is permitted to make direct contributions to candidates for federal elective office.
(c)	Contributions From National Political Parties Restricted. – Except as provided in subsection (b) or (d) of this section, no contribution shall be made to any candidate, political committee, or political party by any unit of a national political party, nor shall any candidate, political committee, or political party accept any contribution from any unit of a national political party, except as permitted in subsection (b) or (d) of this section.
(d)	Non-Federal Committee Contributions Permitted to State Parties Only for Non-Candidate Activities. – A national political party may contribute to the State executive committee of a political party, and that committee may accept the contribution from a non federal committee, account, or unit not permitted to make direct contributions to a candidate for federal elective office, but only according to the provisions of this subsection. That contribution is permitted only if it meets all the following conditions:
(1)	The contribution of the national party shall be drawn from a separate segregated account into which no contributions are commingled which would violate the requirements of G.S. 163-278.19 if solicited, accepted, or contributed under North Carolina law.
(2)	The State party executive committee receiving the national party's contribution places it in a separate segregated account and does not transfer, deposit, or commingle the contribution with other funds of the State party executive committee, except that those funds may be transferred and used for rent or mortgage payments, salaries, employee benefits, utilities, telephones, office equipment, and similar direct administrative expenses of a State political party only, provided that no such administrative expense can be directly attributable to any one candidate. The State party executive committee shall not transfer any of those funds to a party committee in another State or to a national party committee, except to refund all or a portion of the money received from any donor to that donor. 
(3)	The State party executive committee receiving the contribution shall expend from that separate segregated fund only for noncandidate party activities. As used in this section, the term noncandidate party activities' means activities that support the general operations of the party or promote the interests of the party, but do not include any of the following: 
a.	Contributions to candidates or political committees.
b.	Expenditures to support or oppose the nomination or election of a clearly identified candidate or candidates.
c.	Communications to any entity other than individuals affiliated by voter registration with the party, provided that the term 'noncandidate party activities' does include communications exhorting individuals to register to vote as long as the communication does not clearly refer to a candidate or candidates. 
(e)	Rules by State Board of Elections. – The State Board of Elections shall adopt rules or issue opinions for transfers and expenditures pursuant to this section. Every entity making or receiving transfers or expenditures covered by this section shall abide by those rules. The State Board shall include in those rules all of the following:
(1)	Accounting and record-keeping procedures to ensure that North Carolina law is not violated. 
(2)	A detailed definition of non candidate party activities' consistent with subdivision (d)(3) of this section. In writing that definition, the State Board may be guided by the corresponding regulations adopted pursuant to the Federal Election Campaign Act, but the State Board may promulgate rules more restrictive than those federal regulations.
(3)	Registration and reporting requirements.
(f)	No Independent Expenditure From Non-Federal Committee. – No independent expenditure shall be made from a nonfederal committee, account, or unit of a national political party."SECTION 2.  G.S. 163‑278.13(e) reads as rewritten:
"(e)	This section shall not apply to any State, district or county executive committee of any political party in North Carolina. For the purposes of this section only, the term 'political party' means only those political parties officially recognized under G.S. 163-96 and organized in North Carolina. Except for a national political party entity subject to G.S. 163-278.7A, no political party entity that is not organized in North Carolina under G.S. 163-96 shall make any contribution to any candidate, political committee, referendum committee, or political party entity, nor shall any candidate, political committee, referendum committee, or political party entity solicit or accept any contribution from a political party entity not organized in North Carolina under G.S. 163-96."
SECTION 3.  	This act is effective when it becomes law.