Pursuant to C.R.S. 1-1-107(2)(a) and the rulemaking provisions of the State Administrative Procedure Act, C.R.S. 24-4-103, I, Donetta Davidson, Colorado Secretary of State, do hereby adopt and give NOTICE of the temporary adoption this 24th day of March, 2003, of Rule 27, Rule 28, and the amendment of Rule 21.2 of the Secretary of State Rules Concerning Fair Campaign Practices Act, to be effective March 24, 2003.

Donetta Davidson
Secretary of State

Statements of Basis, Purpose and Specific Statutory Authority

Office of the Secretary of State Secretary of State
Rule 27, Rule 28, and an Amendment to Rule 21.2 Concerning The Fair Campaign Practices Act

Basis and Purpose

These temporary additions and amendments to the rules are based on recommendations received from election officials, interested citizens, and the Attorney General's opinion offered to the Secretary of State. (Opinion of the Attorney General No. 03-1, January 13, 2003)

Rule 27 is necessary to clarify the enforcement of the provisions of Article XXVIII of the Colorado State Constitution in relation to home rule counties and home rule municipalities.

The purpose of new Rule 27.1 is to clarify that the provisions of Article XXVIII of the Colorado State Constitution and Article 45 of the Colorado Revised Statutes do not apply to home rule counties or home rule municipalities with charters, ordinances, or resolutions that address matters covered in Article XXVIII or Article 45.

The purpose of new Rule 27.2 is to clarify that Section 3(4) of Article XXVIII of the Colorado State Constitution relating to contributions and expenditures of corporations and labor unions to candidates for state and local public office shall apply to all such public offices, except local public offices in home rules counties or home rule municipalities with charters, ordinances, or resolutions that address any of the matters covered by Article XXVIII or Article 45.

The purpose of new Rule 27.3 is to clarify that the provisions of section 1-45-105.5, relating to the prohibition of lobbyist contributions during the legislative session to members of the General Assembly, apply to members of the General Assembly who are candidates for all state or local offices, including local offices in home rule counties or home rule municipalities that have charters, ordinances, or resolutions that address any of the matters addressed in Article XXVIII or Article 45.

The purpose of new Rule 27.4 is to clarify that the definition of "political party" in Section 2(13) of Article XXVIII does not apply to any political organizations at the level of a home rule county or home rule municipality that have adopted charters, ordinances, or resolutions of any home rule county or home rule municipality that deal with any of the matters covered in Article XXVIII or Article 45.

The purpose of new Rule 28 is to clarify the provisions of Sections 2(5)(b) and 3(4)(a) of Article XXVIII of the Colorado State Constitution in relation to corporate contributions.

The purpose of new Rule 28.1 is to clarify that, in accordance with Section 3(4)(a) of Article XXVIII of the Colorado State Constitution, a corporation or labor organization may not make any contribution to a political committee or a small donor committee, including any political or small donor committee established by the corporation or labor organization.

The purpose of Rule 28.2 is to clarify that, in accordance with Section 2(5)(b) of Article XXVIII of the Colorado State Constitution, a corporation or labor organization may only pay for the cost of establishing and soliciting funds for any political committee or small donor committee establishing such a political or small donor committee. Payments to other political or small donor committees not established by that corporation or labor organization are considered "contributions', and therefore prohibited.

The purpose of Rule 28.3 is to clarify that, in accordance with Section 2(5)(b) of Article XXVIII of the Colorado State Constitution, a corporation or labor organization may make contributions to any membership organization or other association to which it belongs, other than a political committee or small donor committee. Any such member organization shall not be considered a "conduit" as such term is defined in Article XXVIII, Section 2(4).

The purpose of the amendments to Rule 21.2 is to revise the definition of "corporation" to reflect the definition set forth in Articles 101 and 117 of Title 7, C.R.S.

Statutory Authority

Additions and amendments to the "Secretary of State Rules Concerning Fair Campaign Practices Act" are adopted pursuant to the following statutes:

· Section 1-1-107(2)(a), C.R.S., which authorizes the Secretary of State "to promulgate, publish, and distribute…such rules as the secretary of state finds necessary for the proper administration and enforcement of the election laws…"

· Section 1-45-111(1)(a.5), C.R.S., which authorizes the Secretary of State to "promulgate such rules…as may be necessary to administer and enforce any provision of" Article 45 of Title 1 of the Colorado Revised Statutes.

· Article XXVIII, Section 9(1)(b), Colorado State Constitution, which authorizes the Secretary of State to "promulgate such rules, in accordance with article 4 of title 24, C.R.S., or any successor section, as may be necessary to administer and enforce any provision of" Article XXVIII of the Colorado State Constitution.

Statement of Justification and Reasons for the Adoption of Temporary Rules

New Rules 27 & 28, and the Amended Rule 21.2
Rules Concerning the Fair Campaign Practices Act

This statement pertains to Secretary of State Fair Campaign Practices Act Temporary Rule 27, Temporary Rule 28, and the temporary amendment of Rule 21.2 for the Administration of Constitutional Amendment 27, which enacted Article XXVIII of the Colorado State Constitution, and Article 45, Title 1 of the Colorado Revised Statutes, and for the uniform and proper administration and enforcement of the election laws of the State of Colorado.

These rules are mandated by, and are necessary for the implementation of, the above Constitutional Amendment, passed by a vote of the people of the State of Colorado in the General Election held on November 5, 2002. The Constitutional Amendment 27, which enacted Article XXVIII of the Constitution of the State of Colorado, went into effect on December 6, 2002. Since the proposed adopted rules concern the application of Article XXVIII of the Colorado State Constitution and Article 45 of the Colorado Revised Statutes in relation to Home Rule Counties and Home Rule Municipalities, the Secretary of State finds that the immediate adoption and enactment of these temporary rules is necessary prior to the Municipal Election scheduled for May 6, 2003, in the City and County of Denver, the state's largest Home Rule Municipality.

The Secretary of State therefore finds that in order to ensure the uniform and proper administration and enforcement of the election laws and this Constitutional Provision, the adoption of Temporary Rules 27 and 28, and the temporary amendment of Rule 21.2 is necessary both to comply with law and to preserve the public welfare generally.

Temporary Rules

The Secretary of State's "Rules Concerning Fair Campaign Practices Act" [8 CCR 1505-6] are amended by the addition of a new rule, as follows:

27. Applicability of Constitutional and Statutory Provisions to Local Offices and Home Rule Elections

27.1 The requirements of article XXVIII of the state constitution and of article 45 of title 1, Colorado Revised Statutes, shall not apply to home rule counties or home rule municipalities that have adopted charters, ordinances, or resolutions that address any of the matters covered by article XXVIII or article 45.

27.2 The provisions of section 3 (4) of article XXVIII of the state constitution relating to contributions and expenditures of corporations and labor unions apply to elections to every state and local public office, except local public offices in home rule counties or home rule municipalities that have adopted charters, ordinances, or resolutions that address any of the matters covered by article XXVIII or article 45.

27.3 The provisions of section 1-45-105.5, relating to a prohibition on lobbyist contributions to members of the General Assembly during legislative sessions, apply to members of the General Assembly who are candidates for any state or local office, including any office in home rule counties or home rule municipalities that have adopted charters, ordinances, or resolutions that address any of the matters covered by article XXVIII or article 45.

27.4 A political party, as defined in section 2 (13) of article XXVIII of the state constitution, at the level of a home rule county or home rule municipality that has adopted a charter, ordinance, or resolution that addresses any of the matters covered by article XXVIII or article 45, may establish a separate account that is used solely for contributions made to the party, and expenditures made by the party, for the purpose of supporting the party's candidates for offices within the county or municipality. Contributions to and expenditures from such account shall not be included for purposes of any limitations or reporting contained in article XXVIII or article 45.

The Secretary of State's "Rules Concerning Fair Campaign Practices Act" [8 CCR 1505-6] are amended by the addition of a new rule, as follows:

28. Expenditures by corporations and labor organizations

28.1 A corporation or labor organization may not make any contribution to a political committee or small donor committee, including a political committee or small donor committee established by the corporation or labor organization.

28.2 A corporation or labor organization may make payments for the costs of establishing a political committee or small donor committee and for the costs of soliciting funds from its own employees or members for a political committee or small donor committee established by the corporation or labor organization. Such payments are not "contributions" as such term is defined in Article XXVIII, section 2(5). Any payments made by a corporation or labor organization for the costs of soliciting funds for any political committee or small donor committee not established by that corporation or labor organization are "contributions" and are therefore prohibited.

28.3 A corporation or labor organization may make payments to any membership organization or other association to which it belongs, other than a political committee or small donor committee, regardless of whether such membership organization or association makes contributions. A membership organization or association that accepts such payments from a corporation or labor organization and that makes contributions shall not be considered a "conduit" as such term is defined in Article XXVIII, section 2(4).

Rule 21.2 of the Secretary of State's "Rules Concerning Fair Campaign Practices Act" [8 CCR 1505-6] is amended as follows:

21.2 "Corporation", means any business association which is recognized by law as the subject of rights and duties, and includes but is not limited to a corporation, general partnership, cooperative, limited liability company, limited partnership, limited liability partnership, limited partnership association, business trust, joint stock company, or investment company A DOMESTIC CORPORATION INCORPORATED UNDER AND SUBJECT TO THE "COLORADO BUSINESS CORPORATION ACT", ARTICLES 101 TO 117 OF TITLE 7, C.R.S.