OPINION NUMBER - 109

ADOPTED - 1987/12/11

SUBJECT - Reporting requirements of corporation challenging state law through court action.

REQUESTED BY: John H. Albin of DeCamp Legal Services on behalf of Nebraskans for Another Look, Inc.

QUESTION: Are there reporting requirements under the Act which apply to a corporation using funds to challenge a state law through court action?

CONCLUSION

No.

FACTS

You indicate that you are one of the attorneys for Nebraskans for Another Look, Inc. (N.F.A.L.) which will be supporting lobbying efforts and encouraging and supporting legal challenges to Article XII, Section 8 of the Nebraska Constitution. This particular provision is often referred to as initiative 300 which generally prohibits corporate ownership of agricultural land in the state of Nebraska. You state the N.F.A.L. will maintain two funds. One fund will be used for lobbying efforts. The second fund will be used to hire attorneys to file legal challenges to Initiative 300 or to help pay the legal costs incurred by others in their legal challenges of Initiative 300. According to you, both of these funds will accept contributions. In fact, N.F.A.L. will actively solicit contributions. You have indicated that the contributor will specifically designate to which fund his or her contribution will go. You state that money will not be transferred from one fund to the other. Your letter acknowledges that expenditures made from the lobbying fund and the actions of the paid lobbyist you intend to hire are subject to the reporting requirements of the Act governing lobbyists. However, you wish to know whether the activities of participating in or funding court challenges to Initiative 300 will trigger any reporting requirements for the legal fund.

ANALYSIS

Requirements to file reports under the Nebraska Political Accountability and Disclosure Act generally occur when one is engaged in lobbying activity or making expenditures or contributions as defined by the Act. You have already acknowledged that the expenditures made from your lobbying fund are subject to the reporting requirements of the Act.

However, we must first determine if your proposed use of the legal fund also constitutes lobbying activity.

Section 49-1433 defines lobbying as "the practice of promoting or opposing for another person, as defined in Section 49-1438, the introduction or enactment of legislation or resolutions before the legislature or the committees or members thereof, and shall also include the practice of promoting or opposing executive approval of legislation or resolutions". The purpose for which you propose to use the legal fund does not fall within the definition of lobbying and, therefore, N.F.A.L. will have no reporting obligations under the lobbying sections of the Act for use of the legal fund in the manner which you described.

Contribution is generally defined in Section 49-1415 as "a payment . . . made for the purpose of influencing the nomination or election of a candidate, or for the qualification, passage, or defeat of a ballot question." Expenditure is defined in Section 49-1419 as "a payment . . . in assistance of, or in opposition to, the nomination or election of a candidate, or the qualification, passage, or defeat of a ballot question." Your description of the use to which you plan to put the legal fund does not include assistance of, or opposition to, the nomination or election of a candidate nor does it include the qualification, passage, or defeat of a ballot question. Therefore, N.F.A.L. will have no reporting obligations under the campaign practices section of the Act for use of the legal fund in the manner in which you described.

Since your question as to required reporting only concerns the legal fund, you are cautioned that this opinion only applies to your stated proposed use of the legal fund. You are further cautioned that a departure from the activities you described or the commingling of the legal fund with money not specifically contributed to the legal fund could result in N.F.A.L. being required to make certain reports under the Act.