SB7: Bill Text

LRB-1012/2

JTK/JS/MES:kmg:ch

1997 - 1998 LEGISLATURE

1997 Senate BILL 7

January 15, 1997 - Introduced by Senators Adelman, Wineke, Clausing, Burke and Jauch, cosponsored by Representatives Bock, Notestein, Black, Vander Loop and R. Young. Referred to Committee on Judiciary, Campaign Finance Reform and Consumer Affairs.

SB7,2,17 An Act to repeal 8.16 (5), 11.01 (12s), 11.05 (3) (o), 11.265, 11.31 (4), 15.07 (1) (a) 2. and 19.42 (10) (a); to renumber 11.24 (2); to renumber and amend 11.12 (6), 11.26 (9) (c) and 11.50 (9); to amend 5.02 (13), 5.05 (1) (b), 7.08 (2) (c) and (cm), 8.35 (4) (a) 1. a. and b., 10.02 (3) (b) 2m., 11.05 (3) (c), 11.05 (9) (b), 11.06 (1) (a), 11.06 (1) (e), 11.06 (2), 11.06 (7m) (a), 11.06 (7m) (c), 11.06 (11) (c), 11.07 (5), 11.12 (2), 11.16 (2), 11.16 (5), 11.19 (title) and (1), 11.21 (15), 11.23 (2), 11.26 (1) (intro.), 11.26 (2) (intro.), 11.26 (4), 11.26 (8), 11.26 (9) (a) and (b), 11.26 (12m), 11.31 (1) (a) to (d), (e) and (f), 11.31 (2), 11.31 (3), 11.38 (6), 11.50 (1) (a) 1. and 2., 11.50 (2) (b) 5., 11.50 (2) (c) and (d), 11.50 (2) (f), 11.50 (2) (i), 11.50 (3) (a) (intro.), 11.50 (3) (a) 1. and 2., 11.50 (4) (c), (cm) and (d), 11.50 (6), 11.60 (1), 11.61 (1) (a), 13.14 (3), 13.20 (1), 15.61, 20.510 (1) (q), 20.923 (6) (h), 25.42, 71.10 (3) (a), 71.26 (1) (a) and 230.08 (2) (f); to repeal and recreate 11.31 (3m); and to create 11.05 (3) (m), 11.05 (3) (q) and (r), 11.095, 11.12 (6) (b), 11.19 (1m) and (6), 11.21 (16), 11.24 (3) and (4), 11.26 (9) (c) 2., 11.31 (1m), 11.31 (9), 11.50 (2) (bm), 11.50 (2m), 11.50 (3) (c), 11.50 (4) (e), 11.50 (9) (b), 11.60 (3m), 20.510 (1) (d), 20.510 (1) (i), 71.05 (6) (a) 20., 71.07 (5) (a) 8., 71.26 (2) (b) 1g., 71.26 (3) (e) 4., 71.34 (1) (ad) and 71.45 (2) (a) 15. of the statutes; relating to: designations for the Wisconsin election campaign fund by individuals filing state income tax returns, income and franchise tax deductions for certain business expenses related to lobbying, public information related to the Wisconsin election campaign fund, eligibility requirements for and the amounts of grants from the Wisconsin election campaign fund, disbursement levels for candidates for certain state offices, independent disbursements in support of or opposition to candidates for certain state offices, contribution restrictions and limitations, treatment of legislative campaign committees, disposition of residual or excess campaign funds, regulation of certain telephoning activities pertaining to elections, information provided on campaign finance registration statements, electronic filing of campaign finance reports with the elections board, composition of the elections board, elimination of legislative partisan caucus staffs, providing an exemption from emergency rule procedures, granting rule-making authority, making appropriations and providing a penalty.

Analysis by the Legislative Reference Bureau

This bill makes numerous changes in the campaign financing law. Significant changes include:

Disbursement limitations and independent disbursements

Under current law, disbursement (expenditure) levels are specified for candidates for various state and local offices. These levels become a binding limitation upon any candidate for state office who accepts a state grant from the Wisconsin election campaign fund or who agrees to be bound by the limitation, unless the candidate is opposed by a major opponent who could have qualified for a grant but declines to accept one. Additionally, the disbursement levels for candidates for the offices of state senator and representative to the assembly are subdivided between the primary and election campaign periods in such a way that only about 60% of the total applicable disbursement level for either office may be allocated by a candidate to either the primary or the election campaign period. A candidate for state office who accepts a grant from the Wisconsin election campaign fund and who agrees to be bound by the disbursement limit applicable to the office which the candidate seeks may receive a grant equal to 45% of that disbursement limit, less certain committee contributions accepted by the candidate, if there are sufficient moneys in the fund to finance the full amount of grants for which candidates qualify.

Current law also imposes registration and financial reporting requirements on committees and individuals making disbursements independently of a candidate in support of or in opposition to a candidate for a state or local office. One requirement is the obligation of the committee or individual to inform the appropriate filing officer within 24 hours of making such a disbursement, if the cumulative amount of such disbursements made by the committee or individual later than 15 days prior to a primary or election exceeds $20.

The bill:

1. Eliminates the disbursement limitation, applicable to candidates for the offices of state senator and representative to the assembly, that requires the overall limitation to be subdivided between the primary and election campaign periods in such a way that only about 60% of the statutory disbursement level is allocated to either the primary or election campaign period.

2. Revises the current disbursement levels applicable to candidates for the offices shown in the following chart: - See PDF for table

3. Increases disbursement levels for candidates who are challenging incumbent officeholders to 125% of the statutory disbursement levels. This additional authorization does not increase the maximum grant which a candidate may receive from the Wisconsin election campaign fund.

4. Authorizes a candidate to make disbursements exceeding statutory disbursement limits to the extent of independently incurred obligations and disbursements in opposition to his or her candidacy or in support of his or her opponent, if the obligations and disbursements exceed $250 cumulatively.

5. Replaces the provision requiring reports of cumulative independent disbursements exceeding $20 made later than 15 days prior to a primary or election with a provision that requires a committee which or an individual who makes disbursements or incurs obligations independently of a candidate to inform the appropriate filing officer no later than 21 days (14 days in the case of a primary or election that is not held concurrently with the spring or September primary or spring or general election) prior to the activity which the committee or individual intends to fund with cumulative disbursements or obligations of more than $250.

6. Creates a biennial cost-of-living adjustment that causes the statutory disbursement levels to be adjusted biennially, beginning in 1999, in accordance with a formula tied to the "consumer price index" determined by the U.S. department of labor.

Contribution limitations

Current law specifies limitations on the maximum amount of contributions which may be given to and accepted by a candidate for state or local office. Current law also limits the total contributions that a candidate for state or local office may accept from all political committees, including political party and legislative campaign committees, and from the Wisconsin election campaign fund to 65% of the value of the statutory disbursement level specified for the office which the candidate seeks. The total amount that a candidate may accept from committees other than political party and legislative campaign committees and from the Wisconsin election campaign fund is limited to 45% of that disbursement level.

The bill changes the current limitation on total contributions of 45% of a candidate's disbursement level, for the office which the candidate seeks, that a candidate may accept from committees other than political party and legislative campaign committees to a limitation of 15% of a candidate's disbursement level that a candidate may accept from committees other than political party committees. However, the bill does not change the limitation on the total grant that a candidate for state office may receive from the Wisconsin election campaign fund. Under the bill, grants from the Wisconsin election campaign fund are not subject to the 15% limitation.

Treatment of legislative campaign committees

Currently, the adherents of any political party in either house of the legislature may organize a "legislative campaign committee" to support the candidacy of members of their party for legislative office. Committees other than legislative campaign committees and political party committees are generally subject to a limitation upon the contributions that they may make to candidates for legislative office or to political parties. Legislative campaign committees are subject only to overall limitations on the aggregate contributions that may be accepted by a candidate from entities other than individuals.

The bill eliminates the special status of legislative campaign committees, thus treating them in the same manner as other special interest committees for the purpose of contribution limitations.

Other Contribution Restrictions

The bill creates the following new prohibitions on contributions:

1. It prohibits contributions by individuals under the age of 18 years to any candidate for a statewide office, state senator or representative to the assembly.

2. It prohibits contributions to incumbents who are seeking reelection to a partisan state office from the first Monday in January of each odd-numbered year through the enactment of the biennial budget act and, thereafter, during any floorperiod, including any special or extraordinary session floorperiod. The prohibition does not apply to contributions made to an incumbent who is subject to a recall election from the date on which the petition for a recall election is filed until the date of the recall election.

Contributions through conduits

Under current law, a "conduit" is an individual or organization that receives a contribution and transfers the contribution to another individual or organization without exercising discretion as to the amount that is transferred and the individual to whom or the organization to which the transfer is made. When a conduit transfers a contribution, the conduit is required to identify itself in writing to the transferee as a conduit and to report to the transferee information about the original contributor. The conduit must include this information in its financial reports for the date on which the contribution was received and transferred. The campaign financing reports filed by the candidate identify only the original contributor, not the conduit. A contribution from a conduit is considered to be a contribution from the original contributor and, for the purpose of contribution limitations, a contribution of money received from a conduit which is properly identified and reported is considered to be a contribution received from the original contributor. Contributions received by a candidate for state office from an individual through a conduit may be used to qualify for a grant from the Wisconsin election campaign fund.

The bill requires the campaign financing reports filed by candidates to identify any conduit from whom a contribution is received, as well as the original contributor.

The bill also treats conduits in the same manner as "political action committees" by:

1. Not allowing contributions made by an individual through a conduit to be used to qualify for a grant from the Wisconsin election campaign fund.

2. Applying to contributions transferred by conduits the proposed 15% limit which applies to cumulative contributions that a candidate may accept from all committees other than political party committees.

3. Reducing the maximum grant that a candidate may receive from the Wisconsin election campaign fund by the total amount of all contributions received by the candidate through conduits.

Disposition of residual or excess funds

Under current law, residual funds remaining when a person who is required to register under the campaign financing law disbands or ceases incurring obligations, making disbursements or accepting contributions or excess funds received by a registrant that may not be legally expended may generally be used for any lawful political purpose, returned to the original contributors or donated to a charitable organization or the common school fund.

The bill allows residual or excess funds to be transferred to the Wisconsin election campaign fund. The bill also requires residual contributions received by a personal campaign committee formed to support the campaign of a partisan state officeholder who seeks election to another office and, subsequently, decides not to run for that other office, which exceed 10% of the statutory disbursement level for the office that the candidate holds, to be either returned to the donors or transferred to the Wisconsin election campaign fund. In addition, the bill limits the amount of contributions which remain unencumbered after December 31 of an even-numbered year that a candidate for partisan state office or such a candidate's personal campaign committee may carry over from a general election campaign to another campaign to not more than15% of the candidate's disbursement level. Under the bill, contributions in excess of that amount must be transferred to the Wisconsin election campaign fund.

Persuasive telephoning

The bill requires all persons (including political committees and groups) who engage in or retain a telephone bank operator to engage in persuasive telephoning with respect to an election to disclose certain information to the appropriate filing officer or agency for campaign finance reporting purposes. The bill defines "persuasive telephoning" as "contacting, by telephone, potential voters for the purpose of presenting them with information or viewpoints which could influence the attitudes of the voters toward candidates or referenda". Information that must be reported includes the name and address of the person; the name and address of any telephone bank operator who is retained; the amount paid to any such operator for the telephoning services; the total amount expended by the person to conduct persuasive telephoning; and if the person engaged in or retained an operator to engage in persuasive telephoning in more than one legislative district, the amount expended by the person within each legislative district for persuasive telephoning on behalf of each candidate or each personal campaign committee of a candidate for legislative office in that district.

The bill requires the information to be reported at the same time as regular campaign finance reports are filed. In addition, before beginning persuasive telephoning, any person who proposes to engage in or to retain a telephone bank operator to engage in such telephoning must file with the appropriate filing officer or agency a report that the person will be conducting persuasive telephoning. That officer is then directed to contact each candidate who is opposed by the telephoning to provide that information. The report must be filed before the telephoning is begun or, if an election is scheduled within 3 days of that time, at least 24 hours before the telephoning is begun.

The bill requires every person who engages in or retains a telephone bank operator to engage in persuasive telephoning to provide to the elections board, upon request, a copy of any question that was asked, in substantially identical form, of more than one individual during the telephoning.

The bill requires each campaign finance registrant who or which does not engage in or retain any other person to engage in persuasive telephoning to file a statement to that effect with the appropriate filing officer or agency.

Under current law, the amount paid for any telephoning services done for the purpose of influencing the election or nomination of a candidate at an election is generally subject to disclosure by the person making payment for the services, together with the name and address of the payee. The disclosure is made to the appropriate filing officer or agency on regular campaign finance reports.

The bill also requires each candidate or personal campaign committee of a candidate to disclose to the appropriate filing officer or agency the telephone number and facsimile transmission number, if any, at which the candidate may be contacted.

In addition, the bill empowers the elections board, upon showing of probable cause to believe there is a violation of the campaign finance law, to obtain a search warrant to inspect records of a telecommunications utility. Currently, the board has no such authority.

Any person who violates these provisions in respect to a telephone communication in which the caller engages in persuasive telephoning is subject to a forfeiture (civil penalty) of $1,000, or $1 for each communication that is subject to disclosure which the person fails to disclose in a timely manner, whichever is greater.

Wisconsin election campaign fund: sources and uses of funds

Under current law, the Wisconsin election campaign fund is financed through an individual income tax "checkoff". Every individual filing a state income tax return who has a tax liability or is entitled to a tax refund may direct that $1 of general purpose revenue be transferred to the fund. Individuals filing a joint return may separately choose whether to direct that the $1 transfer be made. All moneys transferred to the fund are placed in accounts for specified state offices, and candidates for those offices may qualify for grants from the fund to be used for specified campaign expenses. No moneys in the fund may be used for any other purpose.

The bill:

1. Increases the amount of the individual income tax checkoff for the Wisconsin election campaign fund from $1 to $3. Under the bill, individuals filing a joint return may separately choose whether to make the $3 checkoff.

2. Eliminates a current state income and franchise tax deduction for certain business expenses that lobbyists incur. Currently, this deduction may be claimed for expenses incurred in direct connection with: a) appearances before, submission of statements to, or sending communications to a federal, state or local legislative body, a legislative committee or an individual legislator with respect to legislation or proposed legislation of direct interest to a taxpayer; or b) communications between a taxpayer and an organization of which the taxpayer is a member with respect to legislation or proposed legislation of direct interest to the taxpayer and the organization. Under the bill, dues paid to any organization remain deductible to the extent that they are attributable to expenses of these activities.

3. Authorizes the state elections board to set aside an amount not exceeding 5% of the moneys transferred to the Wisconsin election campaign fund in each year, before distributions are made to candidate office accounts, to provide public information concerning the purpose and effect of the fund and the income tax checkoff for the fund. As part of the public information program, the board must prepare an easily understood description of the purpose and effect of the fund and the tax checkoff. The department of revenue is required to include and highlight the description in its income tax preparation instructions related to the tax checkoff.

4. Provides a sum sufficient appropriation from general purpose revenue to supplement the amounts otherwise available for campaign financing through the Wisconsin election campaign fund so as to enable all eligible candidates to receive the maximum grants for which they qualify.

The tax changes made by the bill first apply to tax returns for taxable years commencing on or after January 1, 1998.

Grant Eligibility Requirements and Amounts

Under current law, public financing from the Wisconsin election campaign fund is available to eligible candidates for the offices of state senator, representative to the assembly, governor, lieutenant governor, attorney general, state treasurer, secretary of state, justice of the supreme court and superintendent of public instruction. To receive a grant, a candidate must file an application with the state elections board no later than the deadline for filing nomination papers. Following the primary election or the date on which a primary would be held, if required, the board determines which applicants meet the following eligibility requirements:

1. A candidate for a partisan state office at a general election must have received at least 6% of the total votes cast in the primary and won the primary. A candidate for a partisan state office at a special election must either: a) appear on the ballot or in the column of a political party whose candidate for the same office at the preceding general election received at least 6% of the vote; or b) receive at least 6% of the votes cast at the special election.

2. The candidate must have an opponent in the election.

3. The candidate must receive, during a specified time period, a specified amount through contributions from individuals of $100 or less. For a candidate for the office of governor, lieutenant governor, secretary of state, state treasurer, attorney general, justice of the supreme court or superintendent of public instruction, the amount is 5% of the authorized disbursement level for the office which the candidate seeks. For a candidate for the office of state senator or representative to the assembly, the amount is 10% of the authorized disbursement level for the office which the candidate seeks.

Under current law, a candidate for any office who accepts a grant must comply with statutorily prescribed contribution and disbursement limitations, unless one or more of the candidate's opponents who receive at least 6% of the votes cast for all candidates for that office at the primary, if a primary was held, do not accept a grant and do not voluntarily comply with the contribution and disbursement limitations for that office. The maximum grant that a candidate may receive is that amount which, when added to all other contributions accepted from sources other than individuals, political party committees and legislative campaign committees, is equal to 45% of the authorized disbursement level for the office which the candidate seeks.

The bill:

1. Eliminates the requirement that, to be eligible to receive a grant from the Wisconsin election campaign fund, a candidate for a partisan state office must receive at least 6% of the total votes cast in the primary election. Also, it eliminates the 6% vote requirement for such a candidate at a special election.

2. Provides that the contributions of $100 or less from individuals used to determine eligibility for a grant from the Wisconsin election campaign fund must be made by individuals who reside in the state.