Panel hears bill aimed at restricting public dollars used to influence ballot measures; critics warn of legal and practical problems

The House Industry, Business and Labor Committee heard testimony on House Bill 1141, a proposal intended to limit how political subdivisions, agencies and other public entities may use public funds to influence state or local ballot measures or candidates.

Sponsor Nathan Thalmann said the bill’s purpose is “to close a loophole where a political subdivision can be a member of an organization, and then that organization in turn could use that those membership dollars to...lobby for or against ballot measures or support or oppose candidates.” He said the goal is to prevent taxpayer funds from being used to influence elections while preserving legitimate education and training activities.

Supporters pointed to recent campaigns as examples of funds flowing through intermediary organizations. Dustin Gavrilo of the North Dakota Watchdog Network and other witnesses cited a 2015 example involving school-bond materials and recent debate around measure 4 as instances that drove the sponsor’s proposals.

Opposition was substantial and broad. The Association of Counties, the Greater North Dakota Chamber, the North Dakota School Boards Association, the North Dakota League of Cities and numerous education and local-government organizations urged caution or opposed the bill outright. Their objections focused on vagueness in key terms — “private organization,” “contribute,” and “public funds” — and on the bill’s retroactive 10-year look-back provision.

The organizations warned the bill would chill speech, create First Amendment and equal-protection risks, expand the Ethics Commission’s enforcement role, and open government to litigation. Aaron Burst of the Association of Counties told the committee the measure “absolutely” raises First Amendment and equal-protection concerns and said the bill could force voluntary associations that receive dues from public entities to limit participation or choose between advocacy and membership revenue.

Several presenters described routine, prosaic activities that could be affected: educational conferences, auditor certification, workforce grants, conferences partially funded by sponsorships, and joint training programs convened by state agencies and member associations. Executives from school and city associations emphasized that much of the associations’ revenue is non-dues funding (sponsorships, registration fees) and that they use non-dues funds to support advocacy when they have a policy position.

The Ethics Commission’s executive director, Rebecca Binstock, urged the committee to consider how enforcement would work under the bill. She said the commission is moving to replace its complaint-driven, criminal-referral processes with an education-first civil enforcement model, and warned that the bill’s mandatory criminal-referral language would conflict with that work.

Committee members debated scope and practicality. Several said they wanted to avoid unintended consequences, and multiple members suggested holding the bill for further study and possible redrafting. No committee vote was taken; the committee chose to carry the bill over to allow additional research and possible amendments.