§ 163-278.301. Creation of legal expense funds.
§ 163‑278.301. Creationof legal expense funds.
(a) An elected officer,or another individual or group of individuals on the elected officer's behalf,shall create a legal expense fund if given a legal expense donation, other thanfrom that elected officer's self, spouse, parents, brothers, or sisters, forany of the following purposes:
(1) To fund an existinglegal action taken by or against the elected officer in that elected officer'sofficial capacity.
(2) To fund a potentiallegal action taken by or against an elected officer in that elected officer'sofficial capacity.
(b) This section shallnot apply to any payment to the State or any of its political subdivisions.
(c) The legal expensefund shall comply with all provisions of this Article.
(d) If an electedofficer funds legal actions entirely from that elected officer's own legalexpense donations or those of the elected officer's spouse, parents, brothers,or sisters, that elected officer is not required to create a legal expensefund. If a legal expense fund accepts legal expense donations as described insubsection (a) of this section, that legal expense fund shall report theelected officer's own legal expense donations and those of those family membersalong with the other legal expense donations in accordance with G.S. 163‑278.310.
(e) No more than onelegal expense fund shall be created by or for an elected officer for the samelegal action. Legal actions arising out of the same set of transactions andoccurrences are deemed the same legal action for purposes of this subsection. Alegal expense fund created for one legal action or potential legal action maybe kept open by or on behalf of the elected officer for subsequent legalactions or potential legal actions.
(f) Contractualarrangements, including liability insurance, or commercial relationships orarrangements made in the normal course of business if not made for the purposeof lobbying, are not "legal expense donations" for purposes of thisArticle. Use of such contractual arrangements to fund legal actions does not byitself require the elected officer to create a legal expense fund. If a legalexpense fund has been created pursuant to subsection (a) of this section, suchcontractual arrangements shall be reported as expenditures.
(g) A violation of thisArticle shall be punishable as a Class 1 misdemeanor. (2007‑349, s. 1; 2009‑534,s. 2(b).)