PART 2. TEXAS ETHICS COMMISSION
CHAPTER 18. GENERAL RULES CONCERNING REPORTS
The Texas Ethics Commission (the Commission) proposes amendments to Texas Ethics Commission Rules in Chapter 18. Specifically, the Commission proposes amendments to §18.10, regarding Guidelines for Substantial Compliance for a Corrected/Amended 8-day Pre-election Report.
This proposal amends the rules used to determine whether an otherwise timely filed 8-day pre-election report will be considered late by virtue of correction. If a filer makes a correction to an 8-day pre-election report, the law requires the Commission to review the correction to see if the report substantially complied with the law as originally filed. Tex. Gov't Code § 571.0771(c). If a substantial correction is made to the report, the report is considered filed as of the day of the correction. Since 8-day reports are subject to an accruing penalty of $500 for the first day late and $100 for each additional day after that up to $10,000, a voluntary correction to an 8-day pre-election report can trigger substantial fines. The filer must also affirm that the report was filed in good faith and within 14 business days of learning of the error or omission for the correction not to trigger a late penalty. Id.
The 8-day reports are considered "critical" reports which provide voters important information immediately before an election. The law is designed to prevent a filer from filing an incomplete or inaccurate report only to correct it later while evading any late filing penalty. However, the Commission has an interest in encouraging voluntary corrections to good-faith errors or omissions in reports. Knowing that a correction may trigger a hefty fine could dissuade some filers from correcting their reports. The proposed rule amendment attempts to strike a balance of encouraging corrections for good-faith mistakes while preventing a person from filing an inaccurate or incomplete report before an election.
The Commission currently decides whether a report substantially complied as originally filed by using TEC Rule 18.10. If a corrected 8-day report is determined to be late by virtue of correction, a filer may request that the fine be waived or reduced. TEC Rule 18.10 provides a special set of criteria for reductions or waivers of fines of 8-day reports that are late due to correction. The general rules for late reports, TEC Rule §18.23 through 18.26, are also applied to 8-day reports that are considered late due to correction. The filer is given the more generous outcome.
The proposed amendment raises the monetary threshold of what would constitute a substantial correction. It also moves criteria that would qualify a corrected report or a waiver into the determination of whether the report will be considered late because of the correction. This provides a filer the waiver it would be entitled to under the current rules without having to file an affidavit of defense.
This proposal is submitted concurrently with the proposed repeal of §18.11, regarding Guidelines for Waiver or Reduction of a Late Fine for a Corrected/Amended 8-day Pre-election Report, so that waivers or reductions will be determined by the general rules for late reports. This will clear up the ambiguity as to which set of rules apply and create a simpler, more uniform set of rules for late reports.
James Tinley, General Counsel, has determined that for the first five-year period the proposed amended rule is in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the proposed amended rule.
The General Counsel has also determined that for each year of the first five years the proposed amended rule is in effect, the public benefit will be consistency and clarity in the Commission's rules regarding late fines for 8-day pre-election reports. There will not be an effect on small businesses, microbusinesses or rural communities. There is no anticipated economic cost to persons who are required to comply with the proposed amended rule.
The General Counsel has determined that during the first five years that the proposed amended rule is in effect, it will not: create or eliminate a government program; require the creation of new employee positions or the elimination of existing employee positions; require an increase in future legislative appropriations to the agency; require an increase or decrease in fees paid to the agency; expand, limit, or repeal an existing regulation; create a new regulation; increase or decrease the number of individuals subject to the rules' applicability; or positively or adversely affect this state's economy.
The Commission invites comments on the proposed amended rule from any member of the public. A written statement should be emailed to public_comment@ethics.state.tx.us, or mailed or delivered to J.R. Johnson, Executive Director, Texas Ethics Commission, P.O. Box 12070, Austin, Texas 78711-2070. A person who wants to offer spoken comments to the Commission concerning the proposed amended rule may do so at any Commission meeting during the agenda item relating to the proposed amended rule. Information concerning the date, time, and location of Commission meetings is available by telephoning (512) 463-5800 or on the Commission's website at www.ethics.state.tx.us.
The amended rule is proposed under Texas Government Code §571.062, which authorizes the Commission to adopt rules to administer Title 15 of the Election Code and Chapter 571 of the Government Code.
The proposed amended rule affects Title 15 of the Election Code and Chapter 571 of the Government Code.
§18.10.Guidelines for Substantial Compliance for a Corrected/Amended 8-day Pre-election Report.
(a) A corrected/amended 8-day pre-election report substantially complies with the applicable law and will not be assessed a late fine under §18.9 of this title (relating to Corrected/Amended Reports) if:
(1) The original report was filed in good faith and the corrected/amended report was filed not later than the 14th business day after the date the filer learned of the errors or omissions; and
(2) The only corrections/amendments needed were to correct the following types of errors or omissions:
(A) a technical, clerical, or de minimis error, including a typographical error, that is not misleading and does not substantially affect disclosure;
(B) an error in or omission of information that is solely required for the commission's administrative purposes, including a report type or filer identification number;
(C) an error that is minor in context and that, upon correction/amendment, does not result in changed monetary amounts or activity disclosed, including a descriptive change or a change to the period covered by the report;
(D) one or more errors in disclosing contributions that, in total:
(i) do not exceed $3,000 [2,000]; or
(ii) do not exceed the lesser of 10% of the total contributions on the corrected/amended report or $10,000;
(E) one or more errors in disclosing expenditures that, in total:
(i) do not exceed $3,000 [2,000]; or
(ii) do not exceed the lesser of 10% of the total expenditures on the corrected/amended report or $10,000;
(F) one or more errors in disclosing loans that, in total:
(i) do not exceed $3,000 [2,000]; or
(ii) do not exceed the lesser of 10% of the amount originally disclosed or $10,000; or
(G) an error in the amount of total contributions maintained that:
(i) does not exceed $3,000 [250]; or
(ii) does not exceed the lesser of 10% of the amount
originally disclosed or $10,000 [2,500].
(H) The only correction/amendment by a candidate or officeholder was to add to or delete from the outstanding loans total an amount of loans made from personal funds;
(I) The only correction/amendment by a political committee was to add the name of each candidate supported or opposed by the committee, when each name was originally disclosed on the appropriate schedule for disclosing political expenditures;
(J) The only correction/amendment was to disclose the actual amount of a contribution or expenditure, when:
(i) the amount originally disclosed was an overestimation;
(ii) the difference between the originally disclosed amount and the actual amount did not vary by more than 10%; and
(iii) the original report clearly included an explanation of the estimated amount disclosed and the filer's intention to file a correction/amendment as soon as the actual amount was known; or
(K) The only correction/amendment was to delete a duplicate entry.
(b) The executive director shall determine whether an 8-day pre-election report as originally filed substantially complies with applicable law by applying the criteria provided in this section.
(c) In this section, "8-day pre-election report" means a report due eight days before an election filed in accordance with the requirements of §§20.213(d), 20.325(e), or 20.425(d) of this title (relating to a candidate, a specific-purpose committee, or a general-purpose committee, respectively) and §§254.064(c), 254.124(c), or 254.154(c) of the Election Code (relating to a candidate, a specific-purpose committee, or a general-purpose committee, respectively).
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on October 27, 2023.
TRD-202303948
James Tinley
General Counsel
Texas Ethics Commission
Earliest possible date of adoption: December 10, 2023
For further information, please call: (512) 463-5800
The Texas Ethics Commission (the Commission) proposes the repeal of a rule in Texas Ethics Commission Chapter 18. Specifically, the Commission proposes the repeal of §18.11, regarding Guidelines for Waiver or Reduction of a Late Fine for a Corrected/Amended 8-day Pre-election Report.
This proposal, along with the amendments to §18.10 which are submitted concurrently with this proposal, amends the rules used to determine whether an otherwise timely filed 8-day pre-election report will be considered late by virtue of correction. This proposal repeals TEC Rule §18.11 so that waivers or reductions will be determined by the general rules for late reports. This will clear up the ambiguity as to which set of rules apply and create a simpler, more uniform set of rules for late reports.
James Tinley, General Counsel, has determined that for the first five-year period the proposed repealed rule is in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the proposed repealed rule.
The General Counsel has also determined that for each year of the first five years the proposed repealed rule is in effect, the public benefit will be consistency and clarity in the Commission’s rules regarding late fines for campaign finance reports. There will not be an effect on small businesses, microbusinesses or rural communities. There is no anticipated economic cost to persons who are required to comply with the proposed repealed rule.
The General Counsel has determined that during the first five years that the proposed repealed rule is in effect, it will not: create or eliminate a government program; require the creation of new employee positions or the elimination of existing employee positions; require an increase in future legislative appropriations to the agency; require an increase or decrease in fees paid to the agency; expand, limit, or repeal an existing regulation; create a new regulation; increase or decrease the number of individuals subject to the rules' applicability; or positively or adversely affect this state's economy.
The Commission invites comments on the proposed repealed rules from any member of the public. A written statement should be emailed to public_comment@ethics.state.tx.us, or mailed or delivered to J.R. Johnson, Executive Director, Texas Ethics Commission, P.O. Box 12070, Austin, Texas 78711-2070. A person who wants to offer spoken comments to the Commission concerning the proposed repealed rule may do so at any Commission meeting during the agenda item relating to the proposed repealed rule. Information concerning the date, time, and location of Commission meetings is available by telephoning (512) 463-5800 or on the Commission’s website at www.ethics.state.tx.us.
The repealed rule is proposed under Texas Government Code §571.062, which authorizes the Commission to adopt rules to administer Title 15 of the Election Code and Chapter 571 of the Government Code.
The proposed repealed rule affects Title 15 of the Election Code and Chapter 571 of the Government Code
§18.11.Guidelines for Waiver or Reduction of a Late Fine for a Corrected/Amended 8-day Pre-election Report.
The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.
Filed with the Office of the Secretary of State on October 27, 2023.
TRD-202303947
James Tinley
General Counsel
Texas Ethics Commission
Earliest possible date of adoption: December 10, 2023
For further information, please call: (512) 463-5800