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To: Senate Ethics Committee
From: Christopher T. Dodson, Executive Director
Subject: House Bill 1521 - Implementation of Article XIV
Date: March 12, 2019

The North Dakota Catholic Conference supports House Bill 1521 as a reasonable step toward implementing the new Article XIV of the North Dakota Constitution. Although it may not be perfect and may not address all the possible constitutional problems with the new article, HB 1521 addresses two of the conference’s main concerns about Measure 1. First, it makes clear that individuals who donate to the general operation of a church or charity will not have their privacy unduly infringed. Second, it provides some parameters as to what will be allowed and not allowed, thereby possibly restoring some of the public’s confidence that they can participate in the democratic process without unknowingly or wrongly running afoul of the law.

Disclosure/Transparency Provisions

Each year approximately 20,600 Catholics prayerfully choose to give to the Catholic dioceses of Bismarck and Fargo. Their contributions support ministries like education, seminarian formation, communications, and Catholic schools. None of this money is used to support political candidates. None of it goes to contributions to politicians. None of it is used to help political parties.

Like other churches and charities, however, the Catholic Church participates in the public square and expresses opinions on legislation and ballot measures. Doing so typically amounts to spending less than one percent of its total budget.

If Measure 1 was implemented as written, the dioceses or the conference would have to disclose the names of every one of those parishioners whenever we spent over two hundred dollars for lobbying or taking a position on a ballot measure, even if the parishioner gave one dollar. During the campaign, proponents for the measure stated that the legislature would have the authority to make sure this did not occur. HB 1521 adopts the proponents’ position and places common sense parameters on the disclosure provisions.
The definitions of “ultimate and true source” on pages 6 and 38 address the concerns while still implementing letter and spirit of the measure. They state that the “ultimate and true source” of funds means the person who knowingly contributed over two hundred dollars solely to a campaign, to lobby, or to influence state government action.

The definition includes two crucial features. First, it clarifies that people who donate less than two hundred dollars will not be subject to disclosure. This makes sense. Subsection 2 of Section 1 of Article XIV requires disclosure only for expenditures over two hundred dollars. For that reason, it makes sense that the disclosure requirement should only apply to contributions over two hundred dollars.

Second, requiring that the contribution be knowingly and solely for one of the triggering purposes makes it clear that organizations would not have to reveal the names of individuals, such as parishioners, who give toward the general operation of the organization. Churches, like many nonprofits, engage in numerous activities of which legislative advocacy may constitute only a tiny fraction. It would be unduly burdensome and extreme overreach beyond the purpose of Article XIV to require disclosure of all sources of funding merely because some of the money was used for engaging in public policy advocacy.

House Bill 1521 also addresses our concerns about the disclosure provision by using practical definitions for “lobby” and “influence state government action.”

Article XIV does not define “lobby.” During the campaign people raised concerns that the lack of a definition meant that any individual communicating to a legislator could be subject to the disclosure provision. Proponents of the measure, however, claimed that the provisions only encompassed actual lobbyists. Presumably, this means that “lobby” is intended to mean lobbying as defined in the North Dakota Century Code, which applies to advocating or opposing the passage of legislation or a decision by Legislative Management on behalf of someone else. Building on existing law, HB 1521 incorporates that definition for purposes of the disclosure requirement.

Similarly, Measure 1 lacked a definition of “influence state government action.” During the campaign the North Dakota Catholic Conference and others expressed concern that “influence state government action” could encompass acts such as Catholic Charities discussing and negotiating the contract for the corporate guardianship program or an adoption agency submitting paperwork to be approved as a child placement agency. People also raised questions about seeking professional licenses or permits. Supporters of Measure 1 indicated that the measure was not supposed to encompass those acts and the legislature would be charged with defining “state government action.”

Although Article XIV does not define “influence state government action,” we can conclude as a matter of grammar that it is something different from lobbying or campaign engagement. In other words, it must by elimination refer to executive branch actions. HB 1521 apparently recognizes this by defining “influencing state government action” as promoting or opposing the final adoption of a rule by an administrative agency. It is difficult to imagine what other official executive branch actions exist. If the phrase is not defined as the adoption of a rule by an executive office, “influencing state government action” could encompass practically all communications and interactions with state agencies. In addition to being unnecessarily overbroad and reaching non-official actions, such an open-ended scope would likely be unconstitutional.

To summarize, by defining “lobby” and “influence state government action,” and by defining “ultimate and true source,” HB 1521 addresses our concerns about the potential scope of the disclosure requirement. At the same time, the bill addresses and requires disclosure for all three of the types of activities that require disclosure under Article XIV — campaign contributions, lobbying, and influencing state government actions.

Admittedly, at first glance, the exceptions on pages 38 and 39 might appear to gut the disclosure requirement. However, closer inspection reveals that the exceptions mostly reflect the directives given by Article XIV itself. The exceptions are mostly just a restatement of the exceptions to the “gifting” prohibition in Section 2(1) of Article XIV. Common sense dictates that if these actions are not problematic “gifts” under the article they should not be considered actions of lobbying, influencing elections, or influencing state government action. That should eliminate subsections (a),(b), (e), and (f) as matters of concern.

The remaining subsections, (c) and (d), exempt reimbursement for travel, meal, and refreshment for educational opportunities germane to the official duties of the public official. Some could argue that these are activities that should be scrutinized. Perhaps, but nothing in HB 1521 prevents the ethics commission from creating rules related to such activities. What is important to recognize for this particular bill is that these activities are not attempts to secure the passage or defeat of legislation or the adoption of an administrative rule, so they do not, by Article XIV’s own language, fall within the disclosure requirements of Section 1(2) of the article. This committee should also keep in mind that, according to Article XIV itself and the proponents’ own statements, the legislature is supposed to define the scope of the disclosure requirement.

The disclosure provisions of HB 1521 are reasonable and consistent with purpose of Measure 1. If the national office of the Knights of Columbus gives over two hundred dollars to the North Dakota Catholic Conference for the purpose of helping us pass a ballot measure, we would have to disclose that donation. People can argue whether that requirement is good public policy or constitutional, but the fact remains that the people of North Dakota put that requirement into the state constitution. HB 1521, rather than undermining or delaying the requirement, puts it into statute with clear parameters consistent with the declared intent of the proponents. (See addendum citing proponents’ statements that the Legislative Assembly has the authority to define and limit the disclosure requirements of Section 1(2).)

Guidelines and Certainty

The second broad area of concern the North Dakota Catholic Conference had about Measure 1 related to its possible chilling effect on participation in the public square. People have a right to participate in the political process. The measure, in our opinion, contained too many undefined terms, procedures, and areas of confusion that could deter participation in the democratic process, especially by nonprofits, small organizations, and average citizens.

House Bill 1521 addresses many of these concerns without running afoul of the measure’s requirements. Some of these have already been discussed as they relate to the disclosure requirements. HB 1521 also:

Uses existing and already familiar definitions where possible, such as for “lobby” and “campaign contribution,” and campaign “conduit;”
Employs existing mechanisms and time periods for reporting;
Sets out due process requirements for complaints;
Provides definite effective dates;
Clarifies that organizations like the North Dakota Catholic Conference can have their church service and appreciation dinner for public officials without violating the anti-gifting provisions; and
Specifies a rulemaking process that gives the public advance notice of meetings and an opportunity to provide public input, just like any other rulemaking body.

These provisions provide the public with some clarity and certainty after a heated campaign marked by differing interpretations of the new provisions. The people of North Dakota have a right to know, now rather than later, that they can participate in the political process without transgressing the new provisions. In addition, by specifying the disclosure requirements now rather than later, individuals can be assured that they can continue to donate to their favorite charity without having to sacrifice their privacy.

The North Dakota Catholic Conference believes that ethical behavior should be the hallmark of our political process. No action by anyone in the process is immune from the command to do what is right and to do it honestly. While we may have disagreed with the proponents of Measure 1 about the measure itself, its implementation, subject to constitutional limitations, should not be in dispute and we do not support intentionally frustrating or unnecessarily delaying its implementation. Although there are portions of HB 1521 about which the conference does not have a position, the bill addresses most of our concerns about the measure in a manner that is consistent with the letter and spirit of the measure itself.

We urge a Do Pass recommendation.