SALT LAKE CITY – The Utah Taxpayers Association and Libertas Institute, represented by attorneys from the Center for Competitive Politics, have reached a mutually agreeable settlement with the state of Utah over a legal challenge to state law that, in effect, silences non-profit organizations from the constitutional right to participate in the political process.

The lawsuit, filed in November of 2015, challenged House Bill 43 which was passed by the Utah Legislature in the 2013 General Session. The legislation required that non-profit organizations, for whom political activity is not a primary purpose, disclose detailed information about their private donors if they spent more than $750 on political activity.

In the settlement with the state of Utah, the state recognized and agreed that the law is unconstitutional when applied to these organizations. The state also agreed that the legislation would not be enforced on similar organizations that engage in “constitutionally protected political advocacy and political issues advocacy.”

“Our judicial challenge came from the need to gain clarity for all non-profits that engage in a limited amount of political activity in our state,” said Billy Hesterman, vice president of the Utah Taxpayers Association. “If the law had been left in place, an individual’s first amendment right of free speech and association would have been in question, creating a chilling effect on Utah’s non-profit and charitable organizations. This would have required those that chose to involve in specific political speech to disclose their donors. We are pleased with the outcome of this settlement.”

Details of the settlement:

– The state will not enforce HB 43 against non-profit organizations who engage “in constitutionally protected political advocacy and political issues advocacy,” recognizing that doing so would be “unconstitutional unless those organizations are political action committees or political issues committee for which such advocacy is their major purpose.” In other words, non-profit organizations that engage in political advocacy on a limited, infrequent basis are exempt from prosecution.

– Exempted organizations in Utah, not just our organizations as plaintiffs, will not be fined or criminally charged for failing to comply with the provisions of HB 43.

– By the end of 2016, the state’s publications, websites and other information about disclosure requirements will be changed to not indicate in any way that exempted organizations are required to disclose the information required in HB 43.

– Past, current or future violations of HB 43 by our organizations will not be prosecuted.

– The consent decree (settlement) is an enforceable contract that can be used by us or another organization in the future as may be necessary, should the state violate its agreement not to enforce the law.

Both the Utah Taxpayers Association and Libertas Institute look forward to working with the Legislature to amend the law to reflect the settlement and the position taken by the defendants when the legislature meets in the 2017 General Session.


You can view the settlement document by clicking here.