SB46: Bill Text

LRB-1151/2

JTK&MES:jld:rs

2005 - 2006 LEGISLATURE

2005 Senate BILL 46

February 8, 2005 - Introduced by Senators Ellis, Risser, Harsdorf, Schultz, A. Lasee, Lassa and Cowles, cosponsored by Representatives Freese, Kaufert, Musser, Zepnick and Albers. Referred to Committee on Campaign Finance Reform and Ethics.

SB46,3,2 An Act to repeal 11.01 (12s), 11.01 (12w), 11.01 (14), 11.01 (16) (a) 3., 11.01 (17g) and (17r), 11.05 (2r), 11.05 (3) (o), 11.06 (1) (cm) and (dm), 11.06 (3r), 11.06 (3w), 11.06 (11) (bm), 11.20 (8) (am), 11.21 (17), 11.24 (1w), 11.26 (1m) and (1t), 11.26 (2) (ae), 11.26 (2) (as), 11.26 (2) (av), 11.26 (2m) and (2t), 11.26 (8n) and (8r), 11.26 (9) (am), 11.26 (9m), 11.26 (10a), 11.265, 11.31 (2m), 11.385, 11.50 (1) (a) 2., 11.50 (2) (b) 6., 11.50 (2) (i), 11.50 (2) (j), 11.60 (3r), 71.07 (6s) and 71.10 (4) (gw); to renumber 11.24 (2); to amend 5.05 (1) (e), 11.05 (12) (title), 11.29 (1), 11.30 (4) and 11.50 (13); to repeal and recreate 5.02 (13), 5.05 (2), 7.08 (2) (c) and (cm), 8.30 (2), 8.35 (4) (a) 1. a. and b., 8.35 (4) (c) and (d), 11.001 (2m), 11.01 (4m), 11.01 (13), 11.05 (1), 11.05 (2), 11.05 (3) (c), 11.05 (3) (m), 11.05 (3) (r), 11.05 (5), 11.05 (9) (title), 11.05 (9) (b), 11.05 (12) (b), 11.05 (13), 11.06 (1) (intro.), 11.06 (1) (e), 11.06 (2), 11.06 (2m) (title) and (a), 11.06 (2m) (b) to (d), 11.06 (3) (b) (intro.), 11.06 (4) (b), 11.06 (5), 11.06 (7m) (a), 11.06 (7m) (b), 11.06 (7m) (c), 11.07 (1), 11.07 (5), 11.09 (3), 11.10 (1), 11.12 (2), 11.12 (4), 11.12 (5), 11.12 (6), 11.12 (8) and (9), 11.14 (3), 11.16 (2), 11.16 (5), 11.19 (title), 11.19 (1), 11.20 (1), 11.20 (2), 11.20 (7), 11.20 (8) (intro.), 11.20 (8) (a), 11.20 (9), 11.20 (10) (a), 11.20 (12), 11.21 (2), 11.21 (15), 11.21 (16), 11.22 (3), 11.23 (1), 11.23 (2), 11.24 (4), 11.26 (1) (intro.), 11.26 (2) (intro.), 11.26 (2) (a), 11.26 (2) (am), 11.26 (3), 11.26 (4), 11.26 (5), 11.26 (6), 11.26 (8), 11.26 (9) (a), 11.26 (9) (b), 11.26 (10), 11.26 (15), 11.26 (17) (a), 11.31 (1) (intro.), 11.31 (1) (a) to (d), 11.31 (1) (de), 11.31 (1) (e) and (f), 11.31 (2), 11.31 (3), 11.31 (3p), 11.31 (9), 11.38 (1) (a) 2., 11.38 (6), 11.38 (8) (b), 11.50 (1) (a) 1., 11.50 (1) (a) 2m., 11.50 (1) (am), 11.50 (1) (bm) and (cm), 11.50 (2) (a), 11.50 (2) (b) 3., 11.50 (2) (b) 4., 11.50 (2) (b) 5., 11.50 (2) (c), 11.50 (2) (f), 11.50 (2) (g), 11.50 (2) (h), 11.50 (2s), 11.50 (2w), 11.50 (3), 11.50 (4), 11.50 (5), 11.50 (6), 11.50 (7) (intro.), 11.50 (8), 11.50 (9), 11.50 (10m), 11.50 (11) (e), 11.50 (14), 11.60 (4), 11.61 (1) (a), 25.42, 71.10 (3) and 806.04 (11m); to create 7.08 (2) (cs), 11.01 (14m), 11.01 (16) (c), 11.05 (5r), 11.065, 11.12 (2m), 11.26 (2) (ad), 11.26 (2) (au), 11.26 (8m), 11.31 (3r), 11.50 (1) (e), 11.50 (2) (bm), 11.50 (4e), 11.50 (10), 11.60 (3s), (3t) and (3u), 71.07 (6n) and 71.10 (4) (ds) of the statutes; and to affect 2001 Wisconsin Act 109, section 9115 (2v), (2w) and (2x), 2001 Wisconsin Act 109, section 9115 (2y), 2001 Wisconsin Act 109, section 9132 (4v), 2001 Wisconsin Act 109, section 9215 (3v), 2001 Wisconsin Act 109, section 9244 (6v), 2001 Wisconsin Act 109, section 9315 (2v) and (2w), 2001 Wisconsin Act 109, section 9344 (2v) and 2001 Wisconsin Act 109, section 9415 (1zx); relating to: campaign financing, designations for the Wisconsin election campaign fund by individuals filing state income tax returns, creating a nonrefundable individual income tax credit for contributions to the Public Integrity Endowment, candidate time on public broadcasting television stations and public access channels, statewide voter registration, staffing of the Elections Board, providing exemptions from emergency rule procedures, granting rule-making authority, and providing penalties.

Analysis by the Legislative Reference Bureau

This bill makes numerous changes in the campaign financing law. The bill also makes changes to the income tax laws, the lobbying regulation law and the staffing of the Elections Board.

2001 Wisconsin Act 109 made comprehensive changes to campaign finance, ethics, lobbying regulation, income tax, public broadcasting, and cable television laws. Included in the changes were an authorization for the Elections Board to use a portion of the moneys in the Wisconsin election campaign fund (see below) to provide public information regarding the purpose and effect of the fund. Most changes made by Act 109 took effect on July 1, 2003. With the exception of provisions requiring candidate time on public broadcasting stations and public access channels at public expense, these provisions were made nonseverable so that if a court found that any of the provisions were unconstitutional all of the provisions would then be invalid. In Wisconsin Realtors Association et al. v. Ponto et al., 299 F.Supp.2d 889 (2002), the U.S. District Court found that one provision of Act 109 relating to advance reporting of certain independent disbursements before obligations are incurred to make those disbursements violates the First and Fourteenth amendments. This decision apparently precludes enforcement and administration of the Act 109 changes as of December 11, 2002. The Act 109 changes, however, currently remain in the statutes.

This bill deletes all of the changes described above made by Act 109, including the changes not affected by the nonseverability provision, but not including the changes concerning public information relating to the Wisconsin election campaign fund, and also makes other changes to campaign finance and income tax and the staffing of the Elections Board. Unlike Act 109, the bill does not affect the code of ethics for state and local public officials. The following is a description of the changes made by the bill to the statutes in effect before July 1, 2003, and, in each case, a notation as to whether the change was contained in Act 109:

Filing of campaign finance reports

Exemptions from registration and reporting

Currently, with certain limited exceptions, any individual who accepts contributions, makes disbursements, or incurs obligations, and any committee or group that makes or accepts contributions, makes disbursements, or incurs obligations, in connection with one or more elections for state or local office or one or more state or local referenda exceeding $25 cumulatively within a calendar year must register and file reports with the appropriate filing officer or agency identifying contributions received and disbursements made and providing certain other information.

This bill provides that no reporting is required under current reporting requirements for, and no registration is required solely on account of, the making of an expenditure, other than by a candidate or personal campaign, candidate support, or political party committee, for a mass communication which does not expressly advocate the election, defeat, recall, or retention of a clearly identified candidate or a particular result in a referendum. The bill, however, establishes new reporting requirements for persons making expenditures for certain mass communications (see below).

The bill also provides that no individual who or organization which is subject to a registration requirement may make any contribution prior to the date of registration. In addition, the bill provides that no registrant may accept any contribution from any individual who or organization which is subject to a registration requirement prior to the date of registration of that individual or organization.

None of the above changes was included in Act 109.

Currently, a nonresident registrant need report only contributions and other income received from sources in this state and disbursements made and obligations incurred with respect to an election for state or local office in this state. This bill deletes this exception.

This change was included in Act 109.

Currently, with certain exceptions, a registrant who or which is required to register with a filing officer in this state must file regular reports identifying contributions received and disbursements made and providing certain other information. However, a national political party committee need not file reports for any period covered in a report filed by the committee with the Federal Election Commission. In addition, a state political party committee which is registered with the Federal Election Commission and which makes contributions to candidates for national office, as well as contributions to other state political party committees, need not file reports for any period covered by a report filed by the committee with the Federal Election Commission if the Elections Board receives a copy of that report and the committee makes no contributions to any individual who or organization which is required to register with a filing officer under Wisconsin law. This bill deletes these exceptions to state reporting requirements.

The above changes were not included in Act 109.

Reporting thresholds

The bill also provides that an individual who accepts contributions, makes disbursements, or incurs obligations or a group that makes or accepts contributions, makes disbursements, or incurs obligations in connection with one or more referenda is not subject to registration and reporting requirements until the individual or group engages in activity exceeding $100 cumulatively within a calendar year.

In addition, the bill permits an individual or committee to claim an exemption from reporting requirements if the individual or committee does not accept contributions, make disbursements, or incur obligations exceeding $1,000 cumulatively within a calendar year with respect to an election for state office, and does not accept contributions, other than contributions made by a candidate to his or her own campaign, exceeding $100 from a single source cumulatively within a calendar year. If an individual or committee does not accept contributions, make disbursements, or incur obligations with respect to an election for any state office but accepts contributions, makes disbursements, or incurs obligations independently of any candidate with respect to an election for local office, the bill permits the individual or committee to claim an exemption from reporting requirements if the individual or committee does not accept contributions, make disbursements, or incur obligations exceeding $100 cumulatively within a calendar year.

The above changes were included in Act 109.

Mass communications

Currently, individuals who accept contributions, organizations which make or accept contributions, or individuals who or organizations which incur obligations or make disbursements (expenditures) 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.

With certain exceptions, this bill imposes reporting requirements, in addition, upon any individual who or organization that, during the period beginning on the 30th day before a primary election for an office to be filled at a general, special, or spring election and the date of that general, special, or spring election or, if no primary is held, during a similar 60-day period preceding a general, special, or spring election and by means of a printed advertisement, commercial billboard, radio or television advertisement, mass mailing, telephone call, or similar means, makes any expenditure independently of a candidate for the purpose of making one or more communications which include the name, photograph, or drawing of, or an unambiguous reference to, a candidate for a state office other than court of appeals judge, circuit judge, or district attorney to be filled at that election. This requirement applies to expenditures to finance what is commonly referred to as "issue advocacy" and to certain independent disbursements by individuals other than candidates and organizations that are not primarily organized for a political purpose that are exempt from reporting under current law. The reporting requirement does not apply unless the individual or organization makes one or more expenditures for these communications exceeding $500 cumulatively with respect to an election. In addition, the reporting requirement does not apply to bona fide news or editorial coverage, or to a communication made by a corporation, cooperative, or nonpolitical voluntary association that is limited to the organization's members, shareholders, or subscribers.

The report required under the bill must be made within 24 hours after the date on which a communication is made (regardless of whether it has been paid for at that time) and must include the name, address, and telephone number of the individual or organization that makes the expenditure or expenditures, the name of each candidate identified in each communication, a statement as to whether the communication is intended to support or oppose that candidate (and, if so, an identification of the candidate who is supported or opposed), the total amount or value of the expenditure used to fund the communication, and the cumulative total expenditures made by the individual or organization with respect to that election. The bill permits the board to obtain a copy of any reported communication, under certain circumstances, in order to determine whether the communication was intended to support or oppose a candidate. Any such determination applies for purposes of granting exemptions from disbursement limits (see below) and to potentially enable an opposing candidate to qualify for a matching grant from the Wisconsin election campaign fund (see below).

Act 109 contained similar but not identical provisions.

Special reporting by certain registrants

Currently, a committee making contributions or a candidate or other individual or committee accepting contributions, making disbursements, or incurring obligations in support of or opposition to a candidate is generally required to file a report no later than the eighth day before a primary or election at which the candidate seeks nomination or election to office. The report must disclose contributions made or accepted, disbursements made, and obligations incurred through the 14th day prior to the primary or election. Currently, if a candidate for state office receives one or more contributions from a single contributor aggregating $500 or more during the 14-day period preceding an election, the candidate must report to the Elections Board the information currently required to be disclosed pertaining to contributions received by the candidate no later than 24 hours following receipt of any such contribution or contributions.

This bill requires each candidate at the general or a special election for a major state office (the office of governor, lieutenant governor, attorney general, secretary of state, state treasurer, superintendent of public instruction, justice of the supreme court, state senator, or representative to the assembly) who does not accept a grant from the Wisconsin election campaign fund (see below) and who makes any disbursement after the candidate has accumulated cash in his or her campaign depository or has made disbursements in his or her campaign exceeding a combined total of 90 percent of the amount of the disbursement limitation for the office that the candidate seeks, to file daily reports, by electronic mail or facsimile transmission, with the Elections Board and with each candidate whose name appears on the ballot for the office in connection with which the disbursement is made. The reports must be filed no later than 24 hours after the date on which each disbursement is made, and must specify the amount of the disbursement. The reports must be filed during the period beginning with the date on which a disbursement is made or the 7th day after the applicable primary election or the date on which a primary would be held, if required, whichever is later, and ending with date of the election at which the candidate seeks office.

The bill also creates additional reporting requirements applicable to special interest committees, other than conduits, that make disbursements independently of a candidate for the purpose of advocating the election or defeat of a clearly identified candidate for a major state office at the general or a special election or any applicable primary election during the period beginning on the 30th day before a primary election for an office to be filled at a general, special, or spring election and the date of that general, special, or spring election or, if no primary is held, during a similar 60-day period preceding a general, special, or spring election. These additional reporting requirements do not apply to communications that are made by a corporation, cooperative, or nonpolitical voluntary association and that are limited to the corporation's, cooperative's, or association's members, shareholders, or subscribers. Under the bill, special interest committees must file these additional reports within 24 hours after a reportable transaction occurs. The reports must include the name of each candidate who is supported or opposed by each disbursement and the total amount of disbursements made for such a purpose in support of or opposition to that candidate on the date on which the disbursement is made and the cumulative total of such disbursements made by the committee with respect to that election.

Act 109 established similar requirements, but required certain reporting to occur before a transaction was permitted to occur.

Timeliness in filing reports

Currently, where a requirement is imposed under the campaign finance law for filing of a report by a specified date, the requirement may be satisfied by depositing the report with the U.S. Postal Service no later than the date provided by law for receipt of the report.

This bill permits satisfaction of the filing requirement only by delivering a report to the appropriate filing officer or agency on or before the date provided by law for receipt of the report or by depositing the report with the U.S. postal service no later than the third day before that date.

This change was included in Act 109.

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. A candidate for state office who accepts a grant from the Wisconsin election campaign fund and who agrees to be bound by the disbursement limitation applicable to the office which the candidate seeks may receive a grant equal to 45 percent of that disbursement limitation, less contributions accepted by the candidate from committees other than political party and legislative campaign committees, 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 file reports with the appropriate filing officer within 24 hours of making such a disbursement, if the disbursement is made less than 15 days before a primary or election and if the cumulative amount of such disbursements exceeds $20.

This bill does the following:

1. It revises the current disbursement levels applicable to candidates for the offices shown below as follows: - See PDF for table

Act 109 also increased disbursement levels, but in some cases by different amounts.

2. It creates a biennial cost-of-living adjustment that causes the statutory disbursement levels to be adjusted biennially, beginning in 2006, in accordance with a formula tied to the "consumer price index" determined by the U.S. Department of Labor.

This change was included in Act 109.

3. It provides that the current provision requiring reports of cumulative independent disbursements exceeding $20 made later than 15 days prior to a primary or election does not apply to a committee or individual that is required to file a special report concerning the same disbursement (see above), nor to a committee or individual that is subject to an electronic filing requirement (see above).

Act 109 also required reporting of obligations, but subject to a different threshold.

4. It increases the disbursement limitation of any candidate who accepts a public grant by certain amounts for which matching grants from the Wisconsin election campaign fund are potentially available (see grant eligibility requirements and amounts, below). Under the bill, the disbursement limitation of the candidate accepting the grant is increased by a total amount equal to: 1) the amount or value of disbursements made by an opponent in excess of the disbursement limitation; 2) the amount or value of independent disbursements made to expressly advocate the defeat of the candidate or the election of his or her opponents by special interest committees during election campaign periods, as reported to the Elections Board; and 3) the amount or value of expenditures made by individuals or organizations for mass communications in opposition to the candidate or in support of his or her opponent during election campaign periods, as reported to the Elections Board.

Act 109 made similar but not identical changes.