HOUSE FILE 359

BY  ISENHART, WITTNEBEN, HUNTER, WINCKLER, and KAJTAZOVIC

A BILL FOR

An Act relating to the public financing for elections to the general assembly, establishing spending limits, making penalties applicable, providing an appropriation and an income tax exemption, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  NEW SECTION.  68A.801  Public financing for elections to the Iowa house and senate.
   1.  A candidate for election to the Iowa senate or house of representatives may, subject to the availability of funds, receive equal matching funds from the fair elections fund. The match shall equal the sum of all contributions by individuals, up to one hundred dollars per individual per election campaign period. Funding is available for both the primary and general election campaign period.
   a.  The maximum amount that can be matched for each election period is ten thousand dollars for a candidate for the house of representatives and fifteen thousand dollars for the senate.
   b.  The primary election campaign period is the period beginning ninety days before the primary election and ending on the day before the primary election. The general election campaign period is the period beginning the day after the primary election and ending on the day before the general election.
   2.  The amount that can be matched does not include the monetary value of in-kind contributions.
   3.  A candidate is eligible for matching funds for contributions received by the candidate or candidate’s committee during the primary election campaign period and October 14 prior to the general election.
   4.  Matching funds may be prorated if sufficient funds are not available.
   Sec. 2.  NEW SECTION.  68A.802  Qualifications.
   1.  A candidate for the house of representatives is eligible for matching funds from the fair elections fund for the primary election campaign period, if opposed, and the general election campaign period, if opposed, when the candidate or the candidate’s committee has received, during either period, cash contributions of at least five dollars from one hundred fifty or more identified electors who are not related to the candidate within the third degree of consanguinity or affinity and who reside in the district in which the candidate stands for election.
   2.  A candidate for the senate is eligible for matching funds from the fair elections fund for the primary election campaign period, if opposed, and the general election campaign period, if opposed, when the candidate or the candidate’s committee has received, during either period, cash contributions of at least five dollars from two hundred twenty-five or more identified electors who are not related to the candidate within the third degree of consanguinity or affinity and who reside in the district in which the candidate stands for election.
   Sec. 3.  NEW SECTION.  68A.803  Restrictions on campaign fund use.
   A candidate for the general assembly receiving matching funds from the fair elections fund is subject to the following restrictions:
   1.  All campaign funds shall be expended directly by the candidate or the candidate’s committee and may not be forwarded to a political committee or candidate’s committee of a different candidate.
   2.  A candidate shall not use any campaign funds or in-kind contributions on a communication that refers directly or indirectly to the candidate’s opponent, unless that communication is in response to a communication made by the candidate’s opponent or made by an independent expenditure that refers directly or indirectly to the candidate receiving public support.
   3.
  a.  Candidates receiving matching funds are limited to spending limits of thirty thousand dollars for each of the primary and general election campaign periods for an election to the house of representatives and forty-five thousand dollars for each of the primary and general election campaign periods for an election to the senate. The spending limit includes the monetary value of in-kind contributions.
   b.  A candidate who is opposed by a person or political committee making an independent expenditure may spend amounts exceeding the limit equal to two times the independent expenditures as reported to the board. Funds used to respond to independent expenditures may be received from any source authorized by law.
   Sec. 4.  NEW SECTION.  68A.804  Iowa fair elections fund —— nature and purposes.
   1.  An Iowa fair elections fund is established as a separate fund within the office of the state treasurer, under the control of the board, for the following purposes:
   a.  Providing financing for the election campaigns of eligible candidates to the general assembly during primary election and general election campaign periods.
   b.  Paying for the administrative and enforcement costs of the board in relation to this subchapter.
   2.
  a.  The fund shall consist of moneys received pursuant to section 68A.805 and moneys appropriated by the general assembly. Notwithstanding section 8.33, unencumbered or unobligated moneys credited to the fund and, notwithstanding section 12C.7, any interest earned on moneys in the fund, as of June 30 of any fiscal year shall not revert to the general fund of the state but shall remain in the fund and be available for expenditure in subsequent years.
   b.  Moneys in the fund are appropriated to the board for the purposes of subsection 1.
   Sec. 5.  NEW SECTION.  68A.805  Funding —— Iowa fair elections fund.
   In addition to any moneys appropriated by the general assembly to the Iowa clean elections fund established in section 68A.804, the following moneys shall be deposited in the fund:
   1.  Civil penalties levied by the board against candidates for violations of this subchapter.
   2.  Voluntary donations made directly to the fund.
   3.  Any other sources of revenue designated by the general assembly.
   Sec. 6.  NEW SECTION.  68A.806  Powers and procedures.
   The board shall have the following powers and procedures in addition to those granted in this chapter and chapter 68B when administering this subchapter:
   1.  After every primary and general election, the board may conduct random audits and investigations to ensure compliance with this subchapter. The subjects of audits and investigations shall be selected on the basis of impartial criteria established by rule.
   2.  The board may investigate anonymous complaints. The identity of a complainant may be kept confidential if the complainant states in the complaint that revealing the identity of the complainant could reasonably result in disciplinary action or loss of employment.
   3.  The board may levy civil penalties for violations of this subchapter. Civil penalties levied and collected shall be deposited in the Iowa fair elections fund.
   4.  The board shall adopt rules pursuant to chapter 17A as necessary to administer this subchapter.
   Sec. 7.  Section 422.7, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  54.  Subtract, to the extent not otherwise excluded, up to fifty percent of the amount contributed to the fair elections fund pursuant to section 68A.804. The exemption is limited to one hundred dollars per individual return and two hundred dollars per joint return. The contribution to the fair elections fund, for which the exemption is claimed, may be made at the same time the tax return is filed.
   Sec. 8.  Section 422.35, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  25.  Subtract, to the extent not otherwise excluded, up to fifty percent of the amount contributed to the fair elections fund pursuant to section 68A.804. The exemption is limited to five hundred dollars on corporate returns. The contribution to the fair elections fund, for which the exemption is claimed, may be made at the same time the tax return is filed.
   Sec. 9.  APPROPRIATION.
   1.  There is appropriated from the general fund of the state to the Iowa ethics and campaign disclosure board for deposit in the Iowa fair elections fund for the fiscal year beginning July 1, 2012, and ending June 30, 2013, the following amount, to be used for the purposes set out in section 68A.804:
.................................................. $  2,000,000
   2.  It is the intent of the general assembly that, in subsequent fiscal years, there be appropriated funds sufficient to restore the fund to $4,000,000 on January 1 in fiscal years in which a primary election is held and to restore the fund to $2,000,000 on July 1 in years in which a general election is held.
   Sec. 10.  EFFECTIVE DATE.  This Act takes effect July 1, 2012.
EXPLANATION
   This bill provides for public funding for legislative election campaigns. The bill provides a dollar-for-dollar state match of individual contributions made by electors residing in the candidate’s district. Funding is available for both the primary and general election. The maximum amount that can be matched for each election period is $10,000 for a candidate for the house of representatives and $15,000 for the senate.
   To be eligible for funding, a candidate for the house of representatives must receive, during the campaign period, cash contributions of at least $5 from 150 or more identified, unrelated electors who live in the district. A candidate for the senate must receive $5 from 300 unrelated electors.
   The bill places restrictions on expenditure of campaign funds. All campaign funds must be expended directly by the candidate or the candidate’s committee and may not be forwarded to a political committee or candidate’s committee of a different candidate. A candidate cannot use any campaign funds or in-kind contributions on a communication that refers directly or indirectly to the candidate’s opponent, unless that communication is in response to a communication made by the candidate’s opponent or made pursuant to an independent expenditure.
   Candidates receiving matching funds are limited to spending limits of $30,000 for each of the primary and general election campaign periods for an election to the house of representatives and $45,000 for each of the primary and general election campaign periods for an election to the senate. 
   As provided in Code section 68A.701, a willful violation of any provision of the campaign finance chapter is a serious misdemeanor punishable by confinement for not more than one year and a fine of at least $315 but not more than $1,875. A variety of civil remedies are also available in Code section 68B.32D for a violation of Code chapter 68A or rules of the ethics and campaign disclosure board, ranging from a reprimand to a civil penalty of not more than $2,000.
   The bill creates an Iowa fair elections fund, controlled by the Iowa ethics and campaign disclosure board. The bill establishes a separate, nonreverting fund in the state treasury for the Iowa fair elections fund, and provides sources of revenue. 
   The bill creates an individual and corporate tax exemption for contributions to the fund.
   The bill appropriates $2 million in FY 2012-2013 to the Iowa fair elections fund. For subsequent fiscal years, the bill provides that it is the intent of the general assembly to appropriate sufficient funds to restore the fund to $4 million on January 1 in years in which a primary election is held and to restore the fund to $2 million on July 1 in years in which a general election is held.
   The bill has an effective date of July 1, 2012.