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PAG LIN 1 1 Section 1. TITLE. This Act shall be known as the 1 2 Political Reform Act of 1998. 1 3 Sec. 2. LEGISLATIVE INTENT. 1 4 1. The general assembly finds and declares each of the 1 5 following: 1 6 a. Monetary contributions to political campaigns are a 1 7 legitimate form of participation in the American political 1 8 process, but the financial strength of individuals or 1 9 organizations should not permit them to exercise a controlling 1 10 influence on the election of candidates. 1 11 b. The rapidly increasing costs of political campaigns 1 12 have forced many candidates to raise larger and larger 1 13 percentages of money from interest groups with a specific 1 14 financial stake in matters before state and local government. 1 15 2. This Act is intended to accomplish the following 1 16 separate but related purposes: 1 17 a. To ensure that individuals and interest groups in our 1 18 society have a fair and equitable opportunity to participate 1 19 in the elective and governmental processes. 1 20 b. To minimize the potentially corrupting influence and 1 21 appearance of corruption caused by excessive contributions and 1 22 expenditures in campaigns by providing for reasonable 1 23 contribution and spending limits for candidates. 1 24 c. To reduce the influence of large contributors with a 1 25 specific financial stake in matters before government by 1 26 severing the link between lobbying and campaign fundraising. 1 27 d. To lessen the potentially corrupting pressures on 1 28 candidates and officeholders for fundraising by establishing 1 29 sensible time periods for soliciting and accepting campaign 1 30 contributions. 1 31 e. To limit overall expenditures in campaigns, thereby 1 32 allowing candidates and officeholders to spend a lesser 1 33 proportion of their time on fundraising and a greater 1 34 proportion of their time communicating issues of importance to 1 35 voters and constituents. 2 1 f. To provide impartial and noncoercive incentives that 2 2 encourage candidates to voluntarily limit campaign 2 3 expenditures. 2 4 g. To meet the citizens' right to know the sources of 2 5 campaign contributions, expenditures, and political 2 6 advertising. 2 7 h. To enact tough penalties that will deter persons from 2 8 violating this Act and chapter 56. 2 9 Sec. 3. Section 56.2, Code 1997, is amended by adding the 2 10 following new subsections: 2 11 NEW SUBSECTION. 2A. "Calendar year" means the period of 2 12 time from January 1 through December 31 of a single year. 2 13 NEW SUBSECTION. 12A. "Election campaign cycle" means the 2 14 period of time between a general or special election for a 2 15 public office and continuing through the next general election 2 16 for that office, commencing on the day following the previous 2 17 general or special election for that office and continuing 2 18 through election day. 2 19 NEW SUBSECTION. 18A. "Small contributor political 2 20 committee" means any political committee that meets all of the 2 21 following criteria: 2 22 1. Membership of at least one hundred individuals. 2 23 2. Contributions received from any one individual in a 2 24 calendar year, in the aggregate, total fifty dollars or less. 2 25 3. The political committee has been in existence for at 2 26 least six months prior to making any expenditures. 2 27 NEW SUBSECTION. 21. "Statewide office" means those 2 28 offices listed in section 39.9. 2 29 NEW SUBSECTION. 22. "Two-year period" means the period 2 30 commencing with January 1 of an odd-numbered year and ending 2 31 with December 31 of the next even-numbered year. 2 32 Sec. 4. Section 56.2, subsection 9, Code 1997, is amended 2 33 by adding the following new unnumbered paragraph: 2 34 NEW UNNUMBERED PARAGRAPH. Contributions by a husband and 2 35 wife shall not be aggregated. Contributions by children under 3 1 eighteen shall be attributed equally to each parent or 3 2 guardian. 3 3 Sec. 5. Section 56.3, Code 1997, is amended by adding the 3 4 following new subsection: 3 5 NEW SUBSECTION. 2A. The treasurer of a committee shall 3 6 not deposit contributions in excess of ten dollars without 3 7 having information required by subsection 3, paragraph "b", on 3 8 file. 3 9 Sec. 6. Section 56.3, subsection 3, paragraph b, Code 3 10 1997, is amended to read as follows: 3 11 b. The name and mailing address of every person making 3 12 contributions in excess of ten dollars, and the date and 3 13 amount of the contribution; and the name, address, occupation, 3 14 and employer of each person making a contribution exceeding 3 15 one hundred dollars or more. 3 16 Sec. 7. Section 56.3A, Code 1997, is amended to read as 3 17 follows: 3 18 56.3A FUNDS FROM UNKNOWN SOURCE – ESCHEAT. 3 19 1. The expenditure of funds from an unknown or 3 20 unidentifiable source received by a candidate or committee is 3 21 prohibited. Such funds received by a candidate or committee 3 22 shall escheat to the state. Any candidate or committee 3 23 receiving such contributions shall remit such contributions to 3 24 the director of revenue and finance for deposit in the general 3 25 fund of the state. 3 26 2. Persons requested to make a contribution at a 3 27 fundraising event shall be advised that it is illegal to make 3 28 a contribution in excess of ten dollars unless the person 3 29 making the contribution also provides the person's name and 3 30 address, and that it is illegal to make a contribution of one 3 31 hundred dollars or more unless the name, address, occupation, 3 32 and employer of the contributor are provided. 3 33 Sec. 8. Section 56.6, subsection 3, paragraph e, Code 3 34 1997, is amended to read as follows: 3 35 e. (1) Each loan to any person or committee within the 4 1 calendar year in an aggregate amount in excess of those 4 2 amounts enumerated in the schedule in paragraph "b"of this4 3subsection, together with the name and mailing address of the 4 4 lender and endorsers, the date and amount of each loan 4 5 received, and the date and amount of each loan repayment. 4 6 Loans received and loan repayments shall be reported on a 4 7 separate schedule. 4 8 (2) Extensions of credit for a period of more than thirty 4 9 days, other than loans from financial institutions given in 4 10 the normal course of business, are subject to all contribution 4 11 limitations. 4 12 (3) The guarantor of any loan shall be subject to all 4 13 contribution limitations. 4 14 Sec. 9. Section 56.12, Code 1997, is amended to read as 4 15 follows: 4 16 56.12 CONTRIBUTION IN NAME OF ANOTHER–PROHIBITED – 4 17 OTHER RESTRICTIONS ON CONTRIBUTIONS. 4 18 1. A person shall not make a contribution or expenditure 4 19 in the name of another person, and a person shall not 4 20 knowingly accept a contribution or expenditure made by one 4 21 person in the name of another. For the purpose of this 4 22 section, a contribution or expenditure made by one person 4 23 which is ultimately reimbursed by another person who has not 4 24 been identified as the ultimate source or recipient of the 4 25 funds is considered to be an illegal contribution or 4 26 expenditure in the name of another. 4 27 2. Any person who accepts a contribution which is not from 4 28 the person listed on the check or the subsequent campaign 4 29 disclosure report shall be liable to pay the state the entire 4 30 amount of the contribution. The statute of limitations shall 4 31 not apply to this subsection, and repayments to the state 4 32 shall be made as long as the person or any committee 4 33 controlled by such a person has any funds sufficient to pay 4 34 the state. 4 35 3. Contributions made directly or indirectly to or on 5 1 behalf of a particular candidate through an intermediary or 5 2 conduit shall be treated as contributions from the contributor 5 3 and the intermediary or conduit to the candidate for the 5 4 purposes of this limitation unless the intermediary or conduit 5 5 is one of the following: 5 6 a. The candidate or a representative of the candidate 5 7 receiving contributions on behalf of the candidate. However, 5 8 the representative shall not include the following persons: 5 9 (1) A committee other than the candidate's committee. 5 10 (2) An officer, employee, or agent of a committee other 5 11 than the candidate's committee. 5 12 (3) A person registered as a lobbyist with the 5 13 governmental agency for which the candidate is running or is 5 14 an officeholder. 5 15 (4) An officer, employee, or agent of a corporation or 5 16 labor organization acting on behalf of the corporation or 5 17 organization. 5 18 b. A volunteer, who otherwise does not fall under 5 19 paragraph "a", hosting a fundraising event outside the 5 20 volunteer's place of business. 5 21 4. A person shall not make and a person, other than a 5 22 candidate or the candidate's committee, shall not accept any 5 23 contribution on the condition or with the agreement that it 5 24 will be contributed to any particular candidate. The 5 25 expenditure of funds received by a person shall be made at the 5 26 sole discretion of the person. 5 27 5. Any candidate or committee receiving funds, the 5 28 original source of which was a loan, shall be required to list 5 29 the lender as a contributor. No candidate or committee shall 5 30 knowingly receive funds from a contributor who has borrowed 5 31 the money without listing the original source of said money. 5 32 Sec. 10. Section 56.13, subsection 1, Code 1997, is 5 33 amended to read as follows: 5 34 1. a. Action involving a contribution or expenditure 5 35 which must be reported under this chapter and which is taken 6 1 by any person, candidate's committee, or political committee 6 2 on behalf of a candidate, if known and approved by the 6 3 candidate, shall be deemed action by the candidate and 6 4 reported by the candidate's committee. It shall be presumed 6 5 that a candidate approves the action if the candidate had 6 6 knowledge of it and failed to file a statement of disavowal 6 7 with the commissioner or board and take corrective action 6 8 within seventy-two hours of the action. 6 9 b. A person that makes contributions to a candidate or to 6 10 the candidate's committee aggregating one hundred dollars or 6 11 more in any election cycle shall be considered to be acting in 6 12 concert with that candidate and shall not make independent 6 13 expenditures or contributions that exceed the applicable 6 14 limitations in this chapter. 6 15 c. An expenditure shall not be considered independent, and 6 16 shall be treated as a contribution from the person making the 6 17 expenditure to the candidate on whose behalf, or for whose 6 18 benefit, the expenditure is made if the expenditure is made 6 19 either: 6 20 (1) With the cooperation of, or in consultation with, any 6 21 candidate or candidate's committee or an agent of the 6 22 candidate. 6 23 (2) In concert with, or at the request or suggestion of, 6 24 any candidate or candidate's committee or an agent of the 6 25 candidate. 6 26 (3) Under any arrangement, coordination, or direction with 6 27 respect to the candidate or the candidate's agent and the 6 28 person making the expenditure. 6 29 (4) By a candidate or officeholder supporting another 6 30 candidate or officeholder of the same political party. 6 31 For purposes of this paragraph, the person making the 6 32 expenditure shall include any officer, director, employee, or 6 33 agent of that person. 6 34 d. A person, candidate's committee, or political committee 6 35 takingsuchactionindependentlyin support of or in 7 1 opposition to a candidate involving a contribution or 7 2 expenditure of one thousand dollars or more that is action 7 3 independent ofthatany candidate's committee shall notify 7 4thatthe favorably affected candidate's committee, all 7 5 candidates running for the same office, and the board in 7 6 writing by facsimile transmission or overnight delivery within 7 7 twenty-four hoursof taking the actioneach time that the 7 8 threshold is met. The notification shall provide the cost of 7 9 the promotion at fair market value. 7 10The notification shall provide that candidate's committee7 11with the cost of the promotion at fair market value. A copy7 12of the notification shall be sent to the board.7 13 e. Notwithstanding any provision to the contrary, any 7 14 committee that makes independent expenditures of one thousand 7 15 dollars or more in support of or in opposition to any 7 16 candidate shall not accept a contribution from any person that 7 17 exceeds two hundred fifty dollars per elections cycle. 7 18 f.AnyNotwithstanding the other provisions of this 7 19 subsection, any person who makes expenditures or incurs 7 20 indebtedness, other than incidental expenses incurred in 7 21 performing volunteer work, in support or opposition of a 7 22 candidate for public office shall notify the appropriate 7 23 committee and provide necessary information for disclosure 7 24 reports. 7 25 Sec. 11. NEW SECTION. 56.14A DISCLOSURES IN 7 26 ADVERTISEMENTS. 7 27 1. For purposes of this section: 7 28 a. "Advertisement" means any general or public 7 29 advertisement which is authorized and paid for by a person or 7 30 committee for the purpose of supporting or opposing a 7 31 candidate for public office or a ballot issue or issues. 7 32 "Advertisement" does not include a communication from an 7 33 organization other than a national political party to its 7 34 members, a campaign button smaller than ten inches in 7 35 diameter, a bumper sticker smaller than sixty square inches, 8 1 or other advertisement as determined by rules of the board. 8 2 b. "Cumulative contributions" means the cumulative 8 3 contributions to a committee beginning the first day the 8 4 statement of organization is filed under section 56.5 and 8 5 ending within seven days of the time the advertisement is sent 8 6 to the printer or broadcast station. 8 7 2. Any advertisement for or against any ballot issue shall 8 8 include a disclosure statement identifying any person whose 8 9 cumulative contributions are ten thousand dollars or more. 8 10 3. Any committee that supports or opposes one or more 8 11 ballot issues shall name and identify itself using a name or 8 12 phrase that clearly identifies the economic or other special 8 13 interest of its major donors of ten thousand dollars or more. 8 14 a. If the major donors of ten thousand dollars or more 8 15 share a common employer, the identity of the employer shall 8 16 also be disclosed. 8 17 b. Any committee which supports or opposes a ballot issue 8 18 shall print or broadcast its name as provided in this section 8 19 as part of any advertisement or other paid public statement. 8 20 c. If a candidate or the candidate's committee, as a group 8 21 or individually, meets the contribution thresholds for a 8 22 person, they shall be identified by the candidate's name. 8 23 4. The committee placing an advertisement or persons 8 24 acting in concert with that committee shall be prohibited from 8 25 creating or using a political committee or statutory political 8 26 committee to avoid, or that results in the avoidance of, the 8 27 disclosure of any individual, industry, business entity, or 8 28 committee as a major funding source. 8 29 5. If the expenditure for a broadcast or mass mailing 8 30 advertisement that expressly advocates the election or defeat 8 31 of any candidate or any ballot issue is an independent 8 32 expenditure, the committee shall include on the advertisement 8 33 the names of the two persons making the largest contributions 8 34 to the committee making the independent expenditure. If an 8 35 acronym is used to specify any committee names required by 9 1 this section, the names of any sponsoring organization of the 9 2 committee shall be printed on print advertisements or spoken 9 3 in broadcast advertisements. For the purposes of determining 9 4 the two contributors to be disclosed, the contributions of 9 5 each person to the committee making the independent 9 6 expenditure during the one-year period before the election 9 7 shall be aggregated. 9 8 6. Any disclosure statement required by this section shall 9 9 be printed clearly and legibly in no less than ten point type 9 10 and in a conspicuous manner as defined by rule by the board 9 11 or, if the communication is broadcast, the information shall 9 12 be spoken so as to be clearly audible and understood by the 9 13 intended public and otherwise appropriately conveyed for the 9 14 hearing-impaired. 9 15 7. The committee shall be required to disclose, in 9 16 addition to the committee name, only its highest major 9 17 contributor in any advertisement which is either of the 9 18 following: 9 19 a. An electronic broadcast of fifteen seconds or less. 9 20 b. A newspaper, magazine, or other public print media 9 21 advertisement which is twenty square inches or less. 9 22 8. When a committee files an amended campaign statement, 9 23 the committee shall change its advertisements to reflect the 9 24 changed disclosure information. 9 25 9. Any person who violates this section is liable for a 9 26 fine of up to three times the cost of the advertisement, 9 27 including placement costs. 9 28 Sec. 12. NEW SECTION. 56.15B LIMITATIONS ON CONTRIBUTION 9 29 AMOUNTS. 9 30 1. a. An individual or political committee other than a 9 31 small contributor political committee shall not make 9 32 contributions to a candidate or the candidate's committee 9 33 that, during any election campaign cycle, in the aggregate, 9 34 exceed two hundred fifty dollars. 9 35 b. A candidate or the candidate's committee shall not 10 1 accept contributions from any individual or political 10 2 committee other than a small contributor political committee 10 3 that, during any election campaign cycle, in the aggregate, 10 4 exceed two hundred fifty dollars. 10 5 2. a. A person shall not make contributions to a 10 6 political committee that, during any calendar year, in the 10 7 aggregate, exceed five hundred dollars. 10 8 b. A political committee shall not accept contributions 10 9 from any person that, during any calendar year, in the 10 10 aggregate, exceed five hundred dollars. 10 11 3. a. A small contributor political committee shall not 10 12 make contributions to a candidate or the candidate's committee 10 13 that, during any election campaign cycle, in the aggregate, 10 14 exceed five hundred dollars. 10 15 b. A candidate or candidate's committee shall not accept 10 16 contributions from any small contributor political committee 10 17 that, during any election campaign cycle, in the aggregate, 10 18 exceed five hundred dollars. 10 19 4. a. A person shall not make contributions to a 10 20 statutory political committee that, during any calendar year, 10 21 in the aggregate, exceed five thousand dollars. 10 22 b. A statutory political committee shall not accept 10 23 contributions from any person that, during any calendar year, 10 24 in the aggregate, exceed five thousand dollars. 10 25 c. This subsection does not apply to transfers of funds 10 26 from a candidate's account pursuant to section 56.42. 10 27 5. A person other than a statutory political committee 10 28 shall not make contributions that, during any two-year period, 10 29 in the aggregate, exceed twenty-five thousand dollars to all 10 30 candidates, candidate's committees, and statutory political 10 31 committees. 10 32 Sec. 13. NEW SECTION. 56.15C TIME RESTRICTIONS FOR 10 33 CONTRIBUTIONS. 10 34 1. Except as provided in subsection 2, a candidate or the 10 35 candidate's committee shall not accept contributions except 11 1 during the six months before any primary, general, or special 11 2 election in which the candidate is listed on the ballot or is 11 3 campaigning as a write-in candidate. Notwithstanding this 11 4 limitation, if a candidate is not required to participate in a 11 5 primary election, then the candidate or the candidate's 11 6 committee shall not accept contributions except during the six 11 7 months before the general or special election. 11 8 2. If a candidate or the candidate's committee has 11 9 outstanding bills or debts after an election that exceed the 11 10 funds available for paying such bills or debts, the candidate 11 11 or candidate's committee may accept contributions for up to 11 12 ninety days following the election, provided that such 11 13 contributions are used only to pay outstanding bills or debts. 11 14 Sec. 14. Sections 56.31 through 56.34 are enacted as a new 11 15 subchapter of chapter 56, entitled "Voluntary Expenditure 11 16 Limits". 11 17 Sec. 15. NEW SECTION. 56.31 LIMITS AND REGISTRATION. 11 18 1. A candidate for legislative or statewide office, 11 19 including the candidate's committee, who voluntarily accepts 11 20 expenditure ceilings pursuant to this subchapter shall not 11 21 make campaign expenditures above the following amounts: 11 22 a. For a candidate for state representative, fifty 11 23 thousand dollars in any election campaign cycle. 11 24 b. For a candidate for state senator, one hundred thousand 11 25 dollars in any election campaign cycle. 11 26 c. For a candidate for statewide office, other than 11 27 candidates for governor and lieutenant governor, five hundred 11 28 thousand dollars in any election campaign cycle. 11 29 d. For candidates for governor and lieutenant governor, 11 30 two million dollars combined in any election campaign cycle. 11 31 2. a. Each candidate for office shall file a statement of 11 32 acceptance or rejection of the voluntary expenditure ceilings 11 33 in subsection 1 before accepting any contributions. 11 34 b. If the candidate agrees to accept the expenditure 11 35 ceilings, the candidate shall not be subject to the 12 1 contribution limitations in section 56.15B, but shall be 12 2 subject to the contribution limitations in section 56.32. 12 3 If a candidate declines to accept the voluntary expenditure 12 4 ceilings in subsection 1, the candidate shall be subject to 12 5 the contribution limitations in section 56.15B. 12 6 c. Any candidate who declined to accept the voluntary 12 7 expenditure ceilings but who nevertheless did not exceed the 12 8 recommended spending limits prior to the official notice for 12 9 the general election may file a statement of acceptance of the 12 10 spending limits for the election campaign cycle, according to 12 11 time requirements set by rule, and receive all the benefits 12 12 accompanying such an agreement specified in this subchapter. 12 13 Sec. 16. NEW SECTION. 56.32 CONTRIBUTION LIMITS FOR 12 14 QUALIFIED CANDIDATES. 12 15 1. a. If a candidate for the general assembly accepts the 12 16 expenditure ceilings in section 56.31, a person, other than a 12 17 small contributor political committee or a statutory political 12 18 committee, shall not make to any such candidate or the 12 19 candidate's committee contributions that, in any election 12 20 campaign cycle, in the aggregate, exceed five hundred dollars. 12 21 b. If a candidate for statewide office accepts the 12 22 expenditure ceilings in section 56.31, a person, other than a 12 23 small contributor political committee or a statutory political 12 24 committee, shall not make to any such candidate or the 12 25 candidate's committee contributions that, in any election 12 26 campaign cycle, in the aggregate, exceed one thousand dollars. 12 27 2. a. A candidate for the general assembly who has 12 28 accepted the expenditure limitations in section 56.31, or the 12 29 candidate's committee, shall not accept contributions from any 12 30 person other than a small contributor political committee 12 31 that, during any election campaign cycle, in the aggregate, 12 32 exceed five hundred dollars. 12 33 b. A candidate for statewide office who has accepted the 12 34 expenditure limitations in section 56.31, or the candidate's 12 35 committee, shall not accept contributions from any person 13 1 other than a small contributor political committee that, 13 2 during any election campaign cycle, in the aggregate, exceed 13 3 one thousand dollars. 13 4 3. For purposes of the expenditure ceilings, qualified 13 5 campaign expenditures made at any time up to the date of the 13 6 general election shall be considered expenditures for that 13 7 election. However, in the event that payments are made but 13 8 the goods or services are not used during the period 13 9 purchased, the payments shall be considered qualified campaign 13 10 expenditures for the time period in which the goods or 13 11 services are used. Payments for goods and services used in 13 12 both periods shall be prorated. 13 13 4. If a candidate declines to accept voluntary expenditure 13 14 ceilings and receives contributions, has cash on hand, or 13 15 makes qualified expenditures equal to seventy-five percent or 13 16 more of the recommended expenditure ceiling for that office, 13 17 the voluntary expenditure ceiling shall be three times the 13 18 limit specified in section 56.31 for any candidate running for 13 19 the same legislative office, and two times the limit specified 13 20 in section 56.31 for any candidate running for the same 13 21 statewide office. Any candidate running for that office who 13 22 originally accepted voluntary expenditure ceilings shall be 13 23 exempt from the limits that statutory political committees may 13 24 contribute to a candidate, and such candidates shall be 13 25 permitted to continue receiving contributions at the amounts 13 26 set forth in this section. 13 27 5. If a committee or committees in the aggregate spend in 13 28 support or opposition to a candidate more than fifty percent 13 29 of the applicable voluntary expenditure ceiling, the voluntary 13 30 expenditure ceiling shall be three times the limit specified 13 31 in section 56.31 for any candidate running for the same 13 32 office. Any candidate running for that office who originally 13 33 accepted voluntary expenditure ceilings shall be exempt from 13 34 the limits that statutory political committees may contribute 13 35 to a candidate, and such candidates shall be permitted to 14 1 continue receiving contributions at the amounts set forth in 14 2 this section. Statutory political committees may contribute 14 3 to a candidate, and such candidates shall be permitted to 14 4 continue receiving contributions at the amounts set forth in 14 5 this section. 14 6 6. The board shall require, by rule, candidates and 14 7 committees to provide sufficient notice to the board and to 14 8 all candidates for the same office that they are approaching 14 9 and exceeding the thresholds set forth in this section. 14 10 Sec. 17. NEW SECTION. 56.33 ELECTION NOTICE. 14 11 1. a. All candidates for statewide office who voluntarily 14 12 choose to limit their campaign expenditures in accordance with 14 13 this subchapter may make, free of charge, a campaign statement 14 14 in the notice of election under section 49.53 of one hundred 14 15 words in primary and special elections, and two hundred words 14 16 in general elections. Candidates for statewide office not 14 17 choosing to limit their campaign expenditures in accordance 14 18 with this subchapter may also publish a campaign statement of 14 19 similar length and format in the notice of election, but shall 14 20 be charged the pro rata cost of printing, handling, 14 21 translating, and mailing the campaign statement. Such 14 22 candidate statements shall not include any references to a 14 23 candidate's opponent or opponents and may include a photograph 14 24 of the candidate. 14 25 b. All candidates for the general assembly who voluntarily 14 26 choose to limit their campaign expenditures may make, free of 14 27 charge, a campaign statement in the notice of election under 14 28 section 49.53 of one hundred words in primary and special 14 29 elections, and two hundred words in general elections. 14 30 Candidates for the general assembly not choosing to limit 14 31 their campaign expenditures in accordance with this subchapter 14 32 may also publish a campaign statement of similar length and 14 33 format but shall be charged the pro rata cost of printing, 14 34 handling, translating, and mailing the campaign statement. 14 35 Such candidate statements shall not include any references to 15 1 a candidate's opponent or opponents and may include a 15 2 photograph of the candidate. 15 3 2. The commissioner shall prominently designate on the 15 4 ballot and in the notice of election those candidates who have 15 5 voluntarily agreed to expenditure ceilings. The board shall 15 6 prescribe by rule the method or methods for such designation. 15 7 Sec. 18. NEW SECTION. 56.34 ENFORCEMENT AND PENALTIES. 15 8 1. The board may conduct investigations and hold hearings 15 9 on alleged violations of this subchapter pursuant to the 15 10 board's powers under chapter 68B. 15 11 2. Any person who knowingly or willfully violates any 15 12 provision of this subchapter is guilty of a serious 15 13 misdemeanor. 15 14 3. In addition to other penalties provided by law, a civil 15 15 fine of up to the greater of ten thousand dollars or three 15 16 times the amount the person failed to report properly or 15 17 unlawfully contributed, expended, given, or received shall be 15 18 imposed upon conviction for each violation of this subchapter, 15 19 during the sentencing for the criminal violation. 15 20 Sec. 19. Section 56.46, Code 1997, is amended by striking 15 21 the section and inserting in lieu thereof the following; 15 22 56.46 OFFICEHOLDER EXPENSE ACCOUNT. 15 23 1. For the purpose of meeting expenses associated with the 15 24 duties of office, including constituency services, an elected 15 25 officeholder may establish one segregated account for 15 26 officeholder expenses. 15 27 2. a. Aggregate contributions to an officeholder expense 15 28 account shall not exceed ten thousand dollars within any 15 29 calendar year. 15 30 b. A person shall not make contributions to an 15 31 officeholder expense account that, during any calendar year, 15 32 in the aggregate, exceed two hundred fifty dollars. 15 33 c. An elected officeholder or officeholder expense account 15 34 shall not accept contributions that, during any calendar year, 15 35 in the aggregate, exceed two hundred fifty dollars. 16 1 d. A registered lobbyist shall not make or facilitate the 16 2 making of a contribution to an officeholder expense account. 16 3 e. Contributions to officeholder expense accounts shall 16 4 not be considered campaign contributions. 16 5 3. All contributions and expenditures related to an 16 6 officeholder expense account are subject to the disclosure 16 7 requirements of this chapter. 16 8 4. Any funds remaining in an officeholder account after 16 9 the elected officeholder has left office shall be distributed 16 10 pursuant to the provisions of section 56.42. 16 11 Sec. 20. SEVERABILITY. If any provision of this Act is 16 12 held invalid, the remainder of the Act shall continue to be 16 13 applicable to the extent to which it can be given effect. 16 14 Sec. 21. EFFECTIVE DATE. This Act shall become effective 16 15 January 1, 1999. 16 16 EXPLANATION 16 17 This bill amends Code chapter 56, regarding campaign 16 18 finance. 16 19 Several new definitions are added to Code section 56.2, as 16 20 well as new limitations on the definition of "contribution". 16 21 Code sections 56.3 and 56.3A are amended to require the 16 22 disclosure of the name, address, occupation, and employer of 16 23 each contributor of $100 or more prior to depositing such 16 24 funds in a candidate's committee's account. 16 25 Code section 56.6 is amended to provided that extensions of 16 26 credit for more than 30 days, except for loans from a 16 27 financial institution, are subject to contribution limitations 16 28 contained elsewhere in the bill. A guarantor of a loan is 16 29 also subject to such limitations. 16 30 Code section 56.12 is amended to provide that a 16 31 contribution by a person other than the person listed on the 16 32 check or disclosure statement must be turned over to the 16 33 state. It also provides certain guidelines for the 16 34 attribution of contributions to particular individuals. 16 35 Contributions cannot be "earmarked" for the use of a 17 1 particular candidate. 17 2 Code section 56.13 is amended to provide that a contributor 17 3 of $100 or more during a campaign is deemed to act in concert 17 4 with the candidate for the purposes of "independent" 17 5 expenditures. Other guidelines are also added for judging if 17 6 an expenditure is truly independent. A $1,000 threshold is 17 7 added for independent expenditures, which requires written 17 8 notification to the candidate, the candidate's opponents, and 17 9 the Iowa ethics and campaign disclosure board within 24 hours 17 10 of each crossing of the threshold. 17 11 New Code section 56.14A is added, regarding certain 17 12 disclosures that must be made in political advertisements. 17 13 The name of a committee supporting any ballot issue must 17 14 clearly identify the special interests of its major donors, 17 15 and donors of $10,000 or more must be listed, except in 17 16 certain instances when only the highest donor must be 17 17 indicated. The two largest donors must be disclosed in 17 18 independent expenditures related to candidates. 17 19 New Code section 56.15B adds one set of contribution limits 17 20 which apply to candidates who do not agree to the voluntary 17 21 expenditure limits contained elsewhere in the bill. 17 22 Individuals and most political committees are limited to 17 23 contributions of $250 to a candidate during an election 17 24 campaign cycle. Small contributor political committees, 17 25 composed of at least 100 members who have donated $50 or less, 17 26 are limited to a $500 contribution to a candidate during an 17 27 election campaign cycle. Contributions to political 17 28 committees are limited to $500, and contributions to political 17 29 parties (statutory political committees) are limited to $5,000 17 30 in a calendar year. Aggregate contributions to all candidates 17 31 and committees cannot exceed $25,000 in any two-year period. 17 32 New Code section 56.15C places restrictions on the time 17 33 period when contributions may be accepted. A candidate may 17 34 accept contributions only during the six-month period prior to 17 35 an election, unless the candidate has outstanding bills after 18 1 an election, in which case the candidate can continue to 18 2 accept contributions for up to 90 days after an election, to 18 3 the extent necessary to pay the outstanding debt. 18 4 A new subchapter is added to Code chapter 56 regarding 18 5 voluntary expenditure limits. Candidates for state 18 6 representative are limited to $50,000, and candidates for 18 7 state senator are limited to $100,000 in any election campaign 18 8 cycle. Candidates for statewide office other than governor 18 9 are limited to $500,000, and candidates for governor and 18 10 lieutenant governor together are limited to $2 million in any 18 11 election campaign cycle. Candidates must file an acceptance 18 12 or rejection of the limits prior to accepting any 18 13 contributions. A candidate may initially decline the 18 14 limitation, but may opt in prior to the general election, 18 15 according to rule, if the candidate has not exceeded the 18 16 spending limits for the election campaign cycle. 18 17 Candidates who accept these expenditure limitations are 18 18 entitled to higher contribution limits from donors: $500 for 18 19 general assembly candidates, and $1,000 for statewide office 18 20 candidates. If a candidate declines the voluntary expenditure 18 21 limits, and spends a certain amount during the campaign, the 18 22 candidate's opponents are not bound by the limitations. 18 23 Independent expenditures of a certain level may also result in 18 24 certain candidates being released from expenditure 18 25 limitations. 18 26 Candidates who accept the expenditure limitations are 18 27 entitled to publish a free, limited campaign statement in the 18 28 official notice of election. Candidates who do not agree to 18 29 the limits may publish such a statement at pro rata cost. 18 30 Enforcement of the expenditure limit provisions is handled 18 31 pursuant to the board's investigation and hearing powers under 18 32 Code chapter 68B. Violations of the new subchapter are 18 33 serious misdemeanors. Additionally, civil penalties can range 18 34 up to $10,000 or three times the amount of an unreported 18 35 contribution or expenditure. 19 1 Code section 56.46 is replaced to permit each elected 19 2 officeholder to establish a segregated officeholder expense 19 3 account that may accept contributions of up to $10,000 per 19 4 year, in increments of $250 per contributor. Contributions 19 5 are not considered campaign contributions, and may not be made 19 6 by lobbyists. Contributions and expenditures to the account 19 7 must be disclosed under Code chapter 56. Funds remaining in 19 8 an account when an official leaves office may be transferred 19 9 according to the provisions of Code section 56.42. 19 10 The Act contains an effective date of January 1, 1999, and 19 11 also contains a severability clause. 19 12 LSB 3502SS 77 19 13 jls/sc/14
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