Legislative Matter

Miami-Dade Legislative Item
File Number: 161546

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Clerk's Official Copy

File Number: 161546

File Type: Ordinance

Status: Adopted

Version: 0

Reference: 16-75.

Control: Board of County Commissioners

File Name: POLITICAL PARTIES SOLICITATIONS

Introduced: 6/23/2016

Requester: NONE

Cost:

Final Action: 7/6/2016

Agenda Date: 7/6/2016

Agenda Item Number: 7C

Notes:

Title:

ORDINANCE CREATING SECTION 12-14.2.1 OF THE CODE OF MIAMI-DADE COUNTY, FLORIDA, TO PROVIDE FOR REPORTING REQUIREMENTS FOR COUNTY AND MUNICIPAL ELECTED OFFICERS AND CANDIDATES REGARDING SOLICITATION OF CONTRIBUTIONS FOR ORGANIZATIONS EXEMPT FROM TAXATION UNDER SECTION 501(C)(4) OF THE INTERNAL REVENUE CODE AND POLITICAL PARTIES; PROVIDING PENALTIES FOR FAILURE TO REPORT; PROVIDING FOR ENFORCEMENT BY THE COMMISSION ON ETHICS AND PUBLIC TRUST; PROVIDING SEVERABILITY, INCLUSION IN THE CODE AND AN EFFECTIVE DATE [SEE ORIGINAL ITEM UNDER FILE NO. 160428]

Indexes:	ELECTED OFFICIALS
	SOLICITATIONS

Sponsors:	Juan C. Zapata, Prime Sponsor
	Daniella Levine Cava, Co-Sponsor

Sunset Provision: No

Effective Date:

Expiration Date:

Registered Lobbyist:

None Listed

Legislative History
Acting Body	Date	Agenda Item	Action	Sent To	Due Date	Returned	Pass/Fail

Board of County Commissioners	7/6/2016	7C	Adopted				P
REPORT:	First Assistant County Attorney Geri Bonzon-Keenan read the foregoing proposed ordinance into the record. Commissioner Heyman inquired whether this legislation required that each County or municipal officer filed a report on a monthly basis. Commissioner Zapata reported that the report was only required one time. Hearing no further questions or comments, the Board proceeded to vote on the foregoing proposed ordinance, as presented.

County Attorney	6/23/2016		Assigned	Oren Rosenthal	6/24/2016

Strategic Planning & Government Operations Cmte	6/14/2016	2D AMENDED	Forwarded to BCC with a favorable recommendation with committee amendment(s)				P
REPORT:	Assistant County Attorney Jess McCarty read the foregoing proposed resolution title into the record. Chairman Zapata relinquished the chair to Vice Chairwoman Sosa. He explained the purpose of this Item regarding the 501 (c) (4) and the political parties’ components. It was moved by Commissioner Zapata that the foregoing proposed resolution be forwarded to the Board of County Commissioners with a favorable recommendation. This motion was seconded by Commissioner Levine Cava, followed by a discussion. Commissioner Heyman expressed her concern that this item included County officials and municipal officials in addition to candidates when fundraising for 501(c) (4) organizations. She noted that the transparency of political parties for elections and political action committees was not an issue, but expressed concern over monthly reporting requirements. Commissioner Heyman further noted her concern that funds might be contributed to an event that was hosted within the County as well as to solicit sponsors. In response to comments made by Commissioner Heyman, Commissioner Levine Cava clarified that in a non-profit organization there were different categories and those mentioned were 501 (c) (3) organizations. She explained that a 501 (c) (4) was a social welfare organization and the primary purpose of that organization was not be political, but it may be additionally related. Commissioner Levine Cava noted some organizations had both 501 (c)(3) and 501 (c)(4) designations, such as United Way, and the solicitation of funds were for the 501 (c)(3). Commissioner Heyman concurred with Commissioner Levine Cava, but noted that when this involved reporting, taxing, or how fundraising was performed, there were some social justice entities and similar clauses or events that would make it a non-profit organization. She noted her concern about the impact this would have for these types of organizations. Commissioner Heyman expressed her concern regarding the restrictions for people wanting to solicit for these organizations. She spoke about her past experience being on the host committee and later finding out that she was expected to help raise funds for the organization. Commissioner Heyman commented on the required monthly reporting requirement, noting she hired a campaign treasurer when running for office to ensure she complied with Internal Revenue Service regulations. She emphasized that providing a monthly solicitation report would affect her willingness to help groups by using her name. In conclusion, Commissioner Heyman said that this Item could have adverse consequences for organizations that solicited politicians and other individuals for name recognition. Chairman Zapata mentioned that the majority of organizations that he had been involved with were 501 (c)(3)s during his time serving on the Commission; however, he worked with a 501 (c)(4) when the Hispanic Legislative Caucus was created. He indicated that in this instance, the State of Florida required changes in the reporting process and this was in line with the State law. Chairman Zapata pointed out that 501 (c) (4) organizations had different practices from 501 (c) (3) s in terms of funding mechanisms. He noted concern that there would be a 501 (c) (4) vehicle to raise funds in the next election cycle, because of a gaping hole that would allow fundraising to exist without transparency or accountability, if this item was not approved. Chairman Zapata noted he believed the requirements were not as bad and without this, it would become the default mechanism for fundraising. He said it would require a yearly registration form and it should be a part of the public domain. Chairman Zapata commented that it would also stop the ability to push fundraising into a dark pool, which was the potential of 501 (c) (4) s in political elections. He explained that the legislation would be in line with the item sponsored by Commissioner Levine Cava’s amended item presented at today’s (6/14) SPGOC meeting. In response to Commissioner Sosa’s inquiry regarding the 501 (c)(4) and whether it included organizations such as United Way, Autism, or Christie’s House, Assistant County Attorney Michael Valdes advised there were two different classifications of non-profits as Commissioner Levine Cava pointed out earlier. He said that he could not speak on how any particular organization was structured; however, clarified that a 501 (c)(3) required the organization to be engaged in charitable, religious, educational, scientific, or literary purpose versus a 501 (c)(4) being a social welfare organization. Commissioner Levine Cava noted that 501 (c) (4) s would be involved in the political arena. Discussion ensued among the SPGOC regarding how to determine the difference between a 501 (c) (3) and 501 (c) (4) organization and to ensure that this Item would limit the ability of an organization the Commission supported. There was also discussion regarding the Internal Revenue Service Code that categorized 501 (c) (4) social welfare organizations; civic leagues or non-profit organizations operated exclusively for the promotion of social welfare. Commissioner Heyman expressed her concern that under social welfare there would be loop holes made on a monthly basis although she was in agreement with the political side of this policy, such as Homeowners Associations. Discussion ensued among the SPGOC regarding the amendment to the proposed resolution, the reporting process, and other ways of making donations. There was also discussion over the need to close the loopholes and for the County Attorney’s Office to work out the mechanics to accomplish this. Chairman Zapata pointed out a concern that if financial support was given to a 501 (c) (4) which did not report donations, that entity could also work in a political activity. He mentioned there were other classifications for not-for-profits, such as 501 (c) (6) with different designations. Commissioner Heyman reiterated her concerns regarding the 501 (c) (4), the tax and reporting process, and the ultimate financial impact on some of the organizations. She noted that she would not be supportive. Commissioner Sosa stated it was unfair and unlawful that 501 (c) (4) organizations could have political fundraisers independent of the fact there was no knowledge about the source of donations. She requested that additional information be submitted to the full Commission in order to make some exceptions, such as exempting homeowners associations. Chairman Zapata agreed to exempt homeowners associations. He stated that his intent for this legislation was to project a higher level of transparency, noting a 501 (c) (4) organization could be used for political purposes. He pointed out that the inconvenience of complying with the reporting requirement was minimal when compared to the benefit of having a transparent political process. Chairman Zapata said that 501 (c) (4) organizations should be included in this proposal. Assistant County Attorney Michael Valdes advised that the foregoing proposed resolution providing reporting requirements regarding solicitation for political committees and electioneering organizations. He said that this item applied those same reporting requirements to 501 (c) (4) organizations and political parties; that the original ordinance (Ordinance 16-46) was amended and changed from its original form; and that this new amendment would establish the same reporting requirements for the original ordinance. Assistant County Attorney Valdes indicated that the requirements included a one-time report when directly or indirectly soliciting on behalf of a 501 (c) (4) organization or a political party. He added that the item would be amended so that the first violation would result in a warning letter with educational instructions pertaining to the provisions of that section, rather than a fine followed by a letter of reprimand for a second violation, along. Hearing no further questions or comments the SPGOC proceeded to vote that the foregoing proposed ordinance be forwarded to the BCC with a favorable recommendation as amended.

Legislative Text

TITLE
ORDINANCE CREATING SECTION 12-14.2.1 OF THE CODE OF MIAMI-DADE COUNTY, FLORIDA, TO PROVIDE FOR REPORTING REQUIREMENTS FOR COUNTY AND MUNICIPAL ELECTED OFFICERS AND CANDIDATES REGARDING SOLICITATION OF CONTRIBUTIONS FOR ORGANIZATIONS EXEMPT FROM TAXATION UNDER SECTION 501(c)(4) OF THE INTERNAL REVENUE CODE AND POLITICAL PARTIES; PROVIDING PENALTIES FOR FAILURE TO REPORT; PROVIDING FOR ENFORCEMENT BY THE COMMISSION ON ETHICS AND PUBLIC TRUST; PROVIDING SEVERABILITY, INCLUSION IN THE CODE AND AN EFFECTIVE DATE

BODY
WHEREAS, this Board believes that transparency and accountability in government is fundamental to the public�s faith in the democratic process; and
WHEREAS, this Board desires that campaign fundraising activities by candidates and public officials be transparent and accessible by all residents of Miami-Dade County; and
WHEREAS, fundraising through organizations exempt from taxation under Section 501(c)(4) of the Internal Revenue Code (�501(c)(4) Organizations�) and political parties create the potential for anonymous campaign fundraising that can function as a barrier between citizens and those seeking to represent them in elective office; and
WHEREAS, state law and the rules of the Florida legislature currently require that some state officers and legislators disclose when they fundraise for a 501(c)(4) Organizations;�and
WHEREAS, this Board desires to establish similar requirements for County and municipal officials and candidates within Miami-Dade County as they relate to both 501(c)(4) Organizations and political parties; and
WHEREAS, requiring public officials and candidates to publicly disclosure their fundraising activities for 501(c)(4) Organizations and political parties would provide needed sunlight in the campaign fundraising process and allow voters to make informed decision about candidates,
NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF COUNTY COMMISSIONERS OF MIAMIDADE COUNTY, FLORIDA:
Section 1. Section 12-14.2.1 of the Code of Miami-Dade County, Florida, is hereby created to read as follows:
Sec. 12-14.2.1 County and Municipal Elected Officer and Candidate Reporting Requirements for Organizations Exempt Under Section 501(c)(4) of the Internal Revenue Code or Political Party Solicitations.

(1) >>Effective January 1, 2017, each candidate for County or municipal office in Miami-Dade County shall insure that their designated campaign treasurer shall, within five (5) days of commencing solicitation activities, either directly or indirectly, on behalf of an organization exempt under Section 501(c)(4) of the Internal Revenue Code except for home owners associations (�501(c)(4) Organization�) or a political party, file a one-time report with the Supervisor of Elections or other applicable filing officer indicating that the candidate is undertaking solicitation activities on behalf of such 501(c)(4) Organization or political party. The report shall identify the name of the 501(c)(4) Organization or political party on behalf of whom such funds are being solicited and a description of the relationship between the candidate and the 501(c)(4) Organization or political party.<< 1 [[Each candidate for County or municipal office in Miami-Dade County shall insure that their designated campaign treasurer shall, at the time of filing any contribution or expenditure reports otherwise required by law, file an additional electronic report with the Supervisor of Elections or other applicable filing officer regarding solicitation activities on behalf of any organization exempt from taxation under Section 501(c)(4) of the Internal Revenue Code (�501(c)(4) Organization�) or political party. The report shall identify each contribution successfully solicited, directly or indirectly, by the candidate, the name of the person or entity contributing the funds, the name of the 501(c)(4) Organization or political party on behalf of whom such funds were solicited, the amount of the contribution, and a description of the relationship between the candidate and the 501(c)(4) Organization or political party, if any.]] The report shall be filed on a form created by the Supervisor of Elections for such purpose. [[A candidate may comply with the reporting requirements of this subsection by filing a one-time report indicating that all contributions to an identified 501(c)(4) Organization or political party were solicited either directly or indirectly by the candidate. Upon filing such report, no further reports shall be required under this subsection for solicitations on behalf the identified 501(c)(4) Organization or political party during any reporting period.]]

(2) >>Effective January 1, 2017, upon commencement of any solicitation activities undertaken on behalf of a 501(c)(4) Organization or a political party, each County or municipal elected officer in Miami-Dade County who is not also a candidate for another County or municipal office shall, within five (5) days of commencing solicitation activities, either directly or indirectly, on behalf of a 501(c)(4) Organization or a political party, file a one-time report with the Supervisor of Elections or other applicable filing officer indicating that the officer is undertaking solicitation activities on behalf of such 501(c)(4) Organization or political party. The report shall identify the name of the 501(c)(4) Organization or political party on behalf of whom such funds are being solicited and a description of the relationship between the officer and the 501(c)(4) Organization or political party.<< [[Upon commencement of any solicitation activities undertaken on behalf of any 501(c)(4) Organization or political party, each County or municipal elected officer in Miami-Dade County who is not also a candidate for another County or municipal office shall, on a monthly basis for the remainder of the officer�s term of office, file an electronic report with the Supervisor of Elections or other applicable filing officer regarding such solicitation activities during the preceding month. The report shall identify each contribution successfully solicited, directly or indirectly, by the officer, the name of the person or entity contributing the funds, the name of the 501(c)(4) Organization or political party on behalf of whom such funds were solicited, the amount of the contribution, and a description of the relationship between the officer and the 501(c)(4) Organization or political party, if any.]] The report shall be filed on a form created by the Supervisor of Elections for such purpose. [[A County or municipal elected official may comply with the reporting requirements of this subsection by filing a one-time report indicating that all contributions to an identified 501(c)(4) Organization or political party were solicited either directly or indirectly by the County or municipal elected official. Upon filing such report, no further reports shall be required under this subsection for solicitations on behalf the identified 501(c)(4) Organization or political party during the remainder of the County or municipal elected official�s term.]]

(3) Any County or municipal elected officer or candidate who fails to file a report as required by this section on the designated due date shall >>, for the first violation, be sent a letter of instruction regarding the provisions of this Section, and for each subsequent violation, << be subject to a fine of $50 per day for the first three (3) days and, thereafter, $500 per day for each day late not to exceed $5,000. Such fine shall not be an allowable campaign expense and shall be paid only from the personal funds of the candidate or officer. Any candidate or officer may appeal or dispute the fine to the Miami-Dade County Commission on Ethics and Public Trust based upon, but not limited to, unusual circumstances surrounding the failure to file on the designated due date, and may request, and shall be entitled to, a hearing before the Commission on Ethics and Public Trust, which shall have the authority to waive the fine in whole or in part. Any such appeal or dispute shall be made within twenty (20) days after receipt of notice from the Supervisor of Elections that payment is due or such appeal or dispute shall be waived.

Section 2. If any section, subsection, sentence, clause or provision of this ordinance is held invalid, the remainder of this ordinance shall not be affected by such invalidity.
Section 3. It is the intention of the Board of County Commissioners, and it is hereby ordained that the provisions of this ordinance, including any sunset provision, shall become and be made a part of the Code of Miami-Dade County, Florida. The sections of this ordinance may

be renumbered or relettered to accomplish such intention, and the word "ordinance" may be changed to "section," "article," or other appropriate word.
Section 4. This ordinance shall become effective ten (10) days after the date of enactment unless vetoed by the Mayor, and if vetoed, shall become effective only upon an override by this Board.

1 Committee amendments are indicated as follows: Words stricken through and/or [[double bracketed]] are deleted, words underscored and/or >>double arrowed<< are added.