Iowa lawmakers consider bill limiting disclosure of nonprofit donor information

Last month, we spotlighted three states (Iowa, Nebraska, and Tennessee) considering bills that would bar public agencies from publicly disclosing identifying information about nonprofit donors. This week, we take a closer look at the Iowa legislation. 

What the bill proposes

Iowa SSB1036 would bar any public agency (including state and municipal government units and courts) from:

• Requiring a tax-exempt nonprofit to furnish the agency with identifying information about the nonprofit's donors. 
• Disclosing any identifying donor information that the agency might possess "without the express, written permission of every member, supporter, volunteer, and donor" of the nonprofit. 
• Requiring a current or prospective government contractor to provide the agency with a list of the nonprofits the contractor has supported. 

The legislation would not prohibit disclosures made pursuant to court warrants. It would also allow for disclosures if a public agency and a nonprofit mutually agree to such disclosures. 

Under the proposal, an individual alleging a violation of the law could bring a civil action seeking damages of at least $2,500 for each violation. For intentional violations, this amount would increase to a maximum of $7,500. The legislation also defines criminal penalties for knowing violations of the law: imprisonment for up to 90 days, a fine of up to $1,000, or both

Legislative status  

Introduced on Jan. 13 and referred to the Senate Judiciary Committee, SSB1036 was assigned to a subcommittee comprising Sens. Craig Johnson (R), Joe Bolkcom (D), and Tom Shipley (R). On Jan. 27, the subcommittee unanimously recommended passage of the bill. 

A companion bill, HSB28, was introduced in the House on Jan. 13 and referred to the House Judiciary Committee, where it was assigned to a subcommittee. That subcommittee, comprising Reps. Brian Lohse (R), Christina Bohannan (D), and Steven Holt (R), reported favorably on the bill on Jan. 21. 

Reactions  

At a subcommittee hearing on Jan. 27, Pete McRoberts, policy director for the Iowa affiliate of the American Civil Liberties Union, spoke in favor of the bill: "There is a long history of people using donor information to get people fired, or their businesses boycotted or worse. This is why the U.S. Supreme Court in 1958 ruled unanimously in the landmark First and Fourteenth amendment case that the state of Alabama could not require the NAACP to turn over its membership lists." 

Chuck Hurley, vice president and chief counsel of Family Leader, and Keenan Crow, policy director of One Iowa, also supported the bill. Family Leader is a nonprofit whose self-described mission is to "strengthen families by inspiring Christ-like leadership in the home, the church, and the government." One Iowa, another nonprofit, says it "advances, empowers, and improves the lives of LGBTQ Iowans statewide." 

In their testimony, both Hurley and Crow noted the ideological diversity of the groups supporting the legislation. Hurley said, "We’re on the opposite sides of a lot of issues, but we have the same sort of existential threat from those who don’t like us." Crow said, "We are in support of this bill as well, I think it’s always a very interesting position that we’re in, we’re on the same side as the Family Leader and several other groups." 

News reports do not indicate whether anyone spoke against the bill. In general, opponents of bills like SSB1036 argue that donor disclosure provisions minimize the potential for fraud and establish public accountability, particularly for politically active nonprofits. For example, the Campaign Legal Center's Erin Cholpak wrote the following in opposition to a similar bill in Michigan in 2018: "While other states have been working to close loopholes that have allowed the increasing role of dark money in election campaigns, SB 1176 would codify those loopholes as enforceable law in Michigan. … And even if SB 1176 ultimately exempts campaign finance disclosure requirements from its broad disclosure ban, the bill will still make it easier for Michigan lawmakers to hide any conflicts of interest and could facilitate a rise of pay-to-play politics by shielding such arrangements from public scrutiny."

What comes next  

Having cleared the subcommittee, SSB1036 next goes to the full Senate Judiciary Committee for consideration. The same is true for HSB28, which will now advance to the full House Judiciary Committee. It is not clear when the committees will meet to consider their respective versions of the legislation. 

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What We're Reading

• Iowa Capital Dispatch, "Bill to protect donor privacy brings together conservative and progressive groups," Jan. 27, 2021
• The Nonprofit Times, "U.S. Supreme Court To Hear Donor Disclosure Cases," Jan. 25, 2021
• Tax Notes, "Senator to Revive EO Donor Disclosure Bills," Jan. 25, 2021

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The Big Picture

Number of relevant bills by state: We're currently tracking 20 pieces of legislation dealing with donor disclosure. On the map below, a darker shade of green indicates a greater number of relevant bills. Click here for a complete list of all the bills we're tracking.

Number of relevant bills by current legislative status:


 

Number of relevant bills by partisan status of sponsor(s): 

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Recent Legislative Actions

For complete information on all of the bills we are tracking, click here. 

• New Hampshire HB105: This bill would require that political contributions from domestic or foreign limited liability companies be allocated to their individual members on campaign finance reports.
  • Democratic sponsorship.
  • House Election Law Committee hearing scheduled for Feb. 5.
• New York S03090: This bill would require that identifying information be reported for contributions made by intermediaries to political candidates or committees.
  • Democratic sponsorship.
  • Introduced and referred to Senate Elections Committee Jan. 27.
• South Dakota SB103: This bill would prohibit public agencies from requiring any person or nonprofit to provide identifying information about a nonprofit's donors. It would also prohibit the disclosure of any such information currently in the possession of a public agency.
  • Republican sponsorship.
  • Introduced and referred to Senate Commerce and Energy Committee Jan. 26.

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