This is an action for judicial review and declaratory judgment regarding arulemaking by the Colorado Secretary of State. The Secretary has exceeded his authority toadminister and enforce campaign finance laws by dramatically increasing the constitutionalthreshold for regulation of issue committees. Purportedly in response to a decision of the TenthCircuit Court of Appeals on an as-applied challenge to campaign finance disclosure provisions of article XXVIII of the Colorado Constitution, the Secretary adopted a rule that nullifies provisionsof the Colorado Constitution and duly enacted statutes and replaces them with weaker disclosurerules enacted by the Secretary. Plaintiffs ask the Court to set aside the Secretary’s unlawfulaction.10.
Article XXVIII, § 1 of the Colorado Constitution states that the “interests of thepublic are best served by ... providing for full and timely disclosure of campaign contributions.”Consistent with this purpose, Section 7 affirms and extends disclosure requirements set forth inthe Fair Campaign Practices Act to, among other persons and entities, issue committees.11.
The definition of “issue committee” in Article XXVIII provides that a person ororganization becomes an issue committee, among other things, when it “has accepted or madecontributions or expenditures
in excess of two hundred dollars
to support or oppose any ballotissue or ballot question.” Colo. Const. art. XXVIII, § 2(10)(a)(II) (emphasis added). Issuecommittees are required to disclose all contributions and expenditures. Colo. Const. art. XXVIII,§ 7; C.R.S. § 1-45-108(1)(a)(I).12.
On November 5, 2010, the Tenth Circuit Court of Appeals issued its decision in
Sampson v. Buescher
, Case Nos. 08-1398 and 08-1415, determining that, as applied to the factspresented in that case (involving a municipal annexation election), the $200 threshold forregulation as an issue committee was unduly burdensome. The
case did not decide thatColorado Constitution article XXVIII, §2(10)(a)(II) was unconstitutional on its face.13.
Respondent initiated the rulemaking process for Rule 4.27 by issuance of a Noticeof Rulemaking Hearing and Proposed Statement of Basis, Purpose and Specific StatutoryAuthority dated December 10, 2010 (“December 10 Notice”). The December 10 Notice indicatedthat the addition of a new Rule 4.27 was intended to provide guidance in light of the ruling in theSampson case. A hearing pursuant to the December 10 Notice was held on January 26, 2011.14.
On March 30, 2011, Respondent issued a Notice of Second Rulemaking Hearingand Revised Proposed Statement of Basis, Purpose, and Specific Statutory Authority (“March 30Notice”). The revised proposed Rule 4.27 raised the threshold for regulation as an issuecommittee from $200 to $5,000 and exempted issue committees from all disclosure requirementsfor any contributions or expenditures up to $5,000. A second rulemaking hearing was held onMay 6, 2011.15.
CCC and Ethics Watch participated in the rulemaking proceedings before theSecretary leading to the adoption of Rule 4.27, including the submission of written comments on