North Carolina General Statutes 163-278.301. Creation of 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 than from that elected officer’s self, spouse, parents, brothers, or sisters, for any of the following purposes:
(1) To fund an existing legal action taken by or against the elected officer in that elected officer’s official capacity.
(2) To fund a potential legal action taken by or against an elected officer in that elected officer’s official capacity.
(b) This section shall not apply to any payment to the State or any of its political subdivisions.
(c) The legal expense fund shall comply with all provisions of this Article.
(d) If an elected officer funds legal actions entirely from that elected officer’s own legal expense donations or those of the elected officer’s spouse, parents, brothers, or sisters, that elected officer is not required to create a legal expense fund. If a legal expense fund accepts legal expense donations as described in subsection (a) of this section, that legal expense fund shall report the elected officer’s own legal expense donations and those of those family members along with the other legal expense donations in accordance with N.C. Gen. Stat. § 163-278.310
(e) No more than one legal expense fund shall be created by or for an elected officer for the same legal action. Legal actions arising out of the same set of transactions and occurrences are deemed the same legal action for purposes of this subsection. A legal expense fund created for one legal action or potential legal action may be kept open by or on behalf of the elected officer for subsequent legal actions or potential legal actions.
(f) Contractual arrangements, including liability insurance, or commercial relationships or arrangements made in the normal course of business if not made for the purpose of lobbying, are not “legal expense donations” for purposes of this Article. Use of such contractual arrangements to fund legal actions does not by itself require the elected officer to create a legal expense fund. If a legal expense fund has been created pursuant to subsection (a) of this section, such contractual arrangements shall be reported as expenditures.
(g) A violation of this Article shall be punishable as a Class 1 misdemeanor. ?(2007-349, s. 1; 2009-534, s. 2(b); 2017-6, s. 3; 2018-146, s. 3.1(a), (b).)
Attorney's Note
Under the N.C. Gen. Statutes, punishments for crimes depend on the classification. In the case of this section:| Class | Prison | Fine |
|---|---|---|
| Class 1 misdemeanor | up to 120 days |
Terms Used In North Carolina General Statutes 163-278.301
- Elected officer: Any individual serving in or seeking a public office. See North Carolina General Statutes 163-278.300
- following: when used by way of reference to any section of a statute, shall be construed to mean the section next preceding or next following that in which such reference is made; unless when some other section is expressly designated in such reference. See North Carolina General Statutes 12-3
- Legal action: A formal dispute in a judicial, legislative, or administrative forum, including but not limited to, a civil or criminal action filed in a court, a complaint or protest filed with a board of elections, an election contest filed under Article 3 of Chapter 120 of the N. See North Carolina General Statutes 163-278.300
- Legal expense donation: A legal expense donation means any advance, conveyance, deposit, distribution, transfer of funds, loan, payment, gift, subscription of money, or anything of value whatsoever, and any contract, agreement, or other obligation to make a contribution to a legal expense fund for a permitted use as provided in N. See North Carolina General Statutes 163-278.300
- Legal expense fund: Any collection of money for the purpose of funding a legal action, or a potential legal action, taken by or against an elected officer in that elected officer's official capacity. See North Carolina General Statutes 163-278.300
- Official capacity: Related to or resulting from the campaign for public office or related to or resulting from holding public office. See North Carolina General Statutes 163-278.300
- state: when applied to the different parts of the United States, shall be construed to extend to and include the District of Columbia and the several territories, so called; and the words "United States" shall be construed to include the said district and territories and all dependencies. See North Carolina General Statutes 12-3