SB111: Bill Text

LRB-1801/7

JTK/JK/MES:kg:km

1999 - 2000 LEGISLATURE

1999 Senate BILL 111

April 7, 1999 - Introduced by Senator Burke, cosponsored by Representative Freese. Referred to Committee on Agriculture, Environmental Resources and Campaign Finance Reform.

SB111,2,13 An Act to repeal 11.26 (9) (b) and (c), 11.31 (2m), 11.31 (3m), 11.31 (4), 11.31 (7) (d), 11.50 (2) (h), 11.50 (2m), 11.50 (6) (title) and 13.625 (1) (c) 1. and 2.; to renumber 11.24 (2), 11.50 (1) (a) 1. and 11.50 (7) (a) to (d); to renumber and amend 11.16 (1) (d), 11.26 (9) (a), 11.50 (1) (a) 2., 11.50 (2) (a), 11.50 (5), 11.50 (6), 11.50 (9) and 13.625 (1) (c) (intro.); to amend 11.01 (5m), 11.06 (1) (a), 11.06 (1) (d) and (L), 11.06 (2), 11.06 (11) (c), 11.10 (1), 11.12 (1) (c), 11.14 (1), 11.14 (2), 11.21 (15), 11.25 (2) (a), 11.25 (2) (b), 11.26 (1) (intro.), 11.26 (1) (a), (b) and (c), 11.26 (2) (intro.), 11.26 (2) (a), (b) and (c), 11.26 (4), 11.26 (10), 11.26 (12m), 11.26 (13), 11.31 (1) (intro.), 11.31 (1) (a) to (d), 11.31 (1) (e) and (f), 11.31 (2), 11.31 (3), 11.31 (7) (a) to (c), 11.50 (2) (b) 5., 11.50 (2) (g), 11.50 (2) (i), 11.50 (3) (a) (intro.), 11.50 (3) (a) 1. and 2., 11.50 (3) (b), 11.50 (4) (a), 11.50 (4) (c), 11.50 (4) (cm), 11.50 (4) (d), 11.50 (7) (intro.), 11.50 (8), 11.50 (11) (e), 11.50 (11) (g), 13.625 (1) (b) 3., 13.625 (2), 13.625 (6), 20.510 (1) (q), 20.510 (1) (q), 20.855 (4) (b), 25.42, 71.10 (3) (a), 71.10 (3) (b), 71.10 (3) (b), 71.26 (1) (a) and chapter 77 (title); and to create 7.08 (2) (cs), 11.01 (9m), 11.05 (14), 11.16 (1) (d) 2., 11.21 (17), 11.22 (11), 11.24 (1s), 11.24 (4), 11.25 (4), 11.31 (1) (de), 11.31 (1m), 11.31 (9), 11.50 (1) (a) 1. (intro.), 11.50 (1) (a) 2., 11.50 (1) (am), 11.50 (1) (bm) and (cm), 11.50 (2) (a) 1. and 2., 11.50 (2) (b) 3m., 11.50 (2m), 11.50 (2s), 11.50 (2w), 11.50 (5) (c), 11.50 (7) (c), 11.50 (14), 11.60 (4m), 11.70, 20.566 (3) (f), 20.855 (4) (ba), 20.855 (4) (bb), 71.05 (6) (a) 21., 71.07 (5) (a) 8., 71.26 (2) (b) 1g., 71.26 (3) (e) 4., 71.34 (1) (ad), 71.45 (2) (a) 15., 71.80 (21) and subchapter XIII of chapter 77 [precedes 77.997] of the statutes; relating to: campaign financing, political contributions by lobbyists, refunds for certain political contributions, imposition of a campaign treasury surplus earnings tax, income and franchise tax deductions for certain business expenses related to lobbying, providing an exemption from emergency rule procedures, granting rule-making authority, requiring the exercise of rule-making authority, making appropriations and providing penalties.

Analysis by the Legislative Reference Bureau

This bill makes numerous changes in the campaign finance law, authorizes a state refund for certain political contributions, imposes a tax on the earnings of campaign treasury surpluses and eliminates a corporate income and franchise tax deduction for certain lobbying expenses. Significant changes include:

Disbursement limitations

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 who declines to accept one and declines to file an affidavit of voluntary compliance with disbursement and contribution limitations. 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.

This 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. Provides that the disbursement limitation for a candidate who seeks an office for the first time, and has not previously been a candidate for any other national, state or local office in a jurisdiction or district which includes at least one-third of the residents who reside in the jurisdiction or district in which the candidate seeks office, is 110% of the amount provided for other candidates for that office.

4. Creates a biennial cost-of-living adjustment that causes the statutory disbursement levels to be adjusted biennially, beginning in 2002, in accordance with a formula tied to the "consumer price index" determined by the U.S. department of labor, with the result in turn adjusted by the rate of increase or decrease in the voting age population of this state, as determined by the federal election commission.

5. Deletes current law that permits a candidate who does not accept a grant to continue to bind an opponent to disbursement and contribution limitations by filing an affidavit of voluntary compliance.

Currently, the campaign of a candidate, for purposes of the applicability of disbursement limitations, extends from July 1 preceding the date of a spring primary or election at which the candidate seeks office or January 1 preceding the date of a September primary or general election at which the candidate seeks office or the date of the candidate's public announcement of candidacy, whichever is earlier, through the last day of the month following the month of the primary or election at which the candidate seeks office, except that orders placed for goods or services to be provided for a campaign are included within the campaign regardless of when the goods or services are paid for, and debts incurred for goods or services received during a campaign period are included within the campaign regardless of when the debts are retired. Under this bill, the campaign of a candidate, for purposes of disbursement limitations, begins on the day after the date on which the previous campaign of the candidate ends or the date on which the candidate becomes a candidate at a future election, whichever is earlier (except as to goods or services provided for the campaign and paid for before that date), and ends at the same time as currently provided. The effect of the change is to include all disbursements within the limitation applicable to a current or former campaign.

Other disbursement restrictions

Currently, a personal campaign committee may make contributions to candidates other than the candidate whom it is organized to support, subject to applicable contribution limitations. If a candidate dies or ceases to be a candidate, the personal campaign committee remains subject to the same limitations. However, if the committee thereafter files a statement affirming under oath its independence from any candidate, the committee may, in addition to making contributions, make disbursements in an unlimited amount to advocate the election or defeat of a candidate.

This bill provides that, if a candidate dies or ceases to be a candidate, and the candidate's personal campaign committee thereafter files a statement affirming under oath its independence of any candidate, the committee may not make any disbursement to advocate the election or defeat of a clearly identified candidate that is derived in whole or in part from contributions received by the committee prior to filing the statement in an amount or value exceeding the maximum contribution that the committee is permitted to make to that candidate under contribution limitations currently prescribed by law.

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.

This bill changes contribution limitations applicable to individuals and committees making contributions to candidates for the office of governor, lieutenant governor, secretary of state, state treasurer, attorney general, state superintendent of public instruction, justice of the supreme court, state senator or representative to the assembly per campaign, as follows: - See PDF for table

The bill also creates a new contribution limitation which prohibits any candidate for state or local office from accepting total contributions from all political committees, including political party and legislative campaign committees and committees serving as conduits (see below), equal, in the aggregate, to more than 25% of the value of the statutory disbursement level specified for the office which the candidate seeks.

Other contribution restrictions

This bill creates the following new prohibitions on contributions:

1. It prohibits contributions from special interest ("political action") committees, including conduit committees, and from individuals operating as conduits 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 to an incumbent who is a candidate for state office at a special election during the period beginning on the date that a special election is ordered and ending on the date of the special election.

2. It prohibits any lobbyist from making a contribution to a partisan elective state official or candidate for a partisan elective state office or to such an official's or candidate's personal campaign committee. Currently, a lobbyist may make such a contribution in the year that an official or candidate seeks election between June 1 and the day of the general election.

3. It prohibits any candidate from making a contribution to another candidate except to dispose of residual contributions in the candidate's campaign treasury upon termination of registration. The bill also prohibits any candidate from accepting a contribution made by another candidate except upon termination of registration by the other candidate. Currently, a candidate is generally permitted to make a contribution for any political purpose that is not specifically prohibited by law.

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.

This bill requires the campaign finance 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. Subjecting contributions from conduits to the same limitations that currently apply to the amount of contributions that a candidate may accept from any committee other than a political party or legislative campaign committee and to the new limitation upon receipt of aggregate contributions from committees imposed under the bill.

Mass media and telephoning activities

Currently, individuals who accept contributions, organizations which make or accept contributions, or individuals who or organizations which incur obligations or make disbursements for the purpose of influencing an election for state or local office are generally required to register with the appropriate filing officer and to file financial reports with that officer, regardless of whether they act in conjunction with or independently of any candidate who is supported or opposed. Currently, when a person is alleged to have violated registration and reporting requirements, the state has the burden of proving that the violation occurred.

This bill provides that, whenever any person publishes, disseminates or broadcasts any communication that includes a reference to a candidate for an office to be filled at an election, during the 60-day period preceding that election or during the 30-day period preceding any primary for that election, and the communication is substantially directed toward the electorate for that election, it is presumed that the communication is made for the purpose of influencing the election or nomination for election of that candidate, unless the person making the communication establishes, by a preponderance of the evidence, that the communication was not made for that purpose.

Wisconsin election campaign fund:

I. 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 at the general or a special election 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. Grants at special elections are funded by reallocating moneys set aside to provide grants to candidates at the general election, to the extent that moneys are available.

This bill:

1. Increases the amount of the individual income tax checkoff for the Wisconsin election campaign fund from $1 to $5. Under the bill, individuals filing a joint return may separately choose whether to make the $5 checkoff. The bill also permits individuals to determine whether to designate their checkoffs for a "general account", which is distributed in the same manner as currently provided, or for the account of an eligible political party (see below).

2. Provides a sum sufficient appropriation from general purpose revenue to supplement the amounts otherwise available for campaign financing through the Wisconsin election campaign fund equal to $3,000,000 in each fiscal year plus, in each fiscal year, the amount determined by the secretary of revenue to have been collected by the state from the campaign treasury surplus earnings tax imposed under this bill, and the elimination of the corporate income and franchise tax deduction for lobbying expenses under this bill (see below).

3. Directs the state elections board to set aside 5% of the moneys transferred to the Wisconsin election campaign fund in each of the six years following the year in which the bill becomes law in order to provide public information concerning the purpose and effect of designations to the fund. The bill directs the department of revenue to cooperate in providing such public information. Currently, no moneys in the fund are authorized to be used for this purpose.

II. 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 whether a candidate who applies for a grant meets the following eligibility requirements:

1. If the candidate seeks a partisan state office at a general election, the candidate must have received at least 6% of the total votes cast in the primary and won the primary. If the candidate seeks a partisan state office at a special election, the candidate 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.