House File 359 - Introduced HOUSE FILE 359 BY ISENHART , WITTNEBEN , HUNTER , WINCKLER , and KAJTAZOVIC A BILL FOR An Act relating to the public financing for elections to the 1 general assembly, establishing spending limits, making 2 penalties applicable, providing an appropriation and 3 an income tax exemption, and including effective date 4 provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 1358HH (9) 84 jr/sc

H.F. 359 Section 1. NEW SECTION . 68A.801 Public financing for 1 elections to the Iowa house and senate. 2 1. A candidate for election to the Iowa senate or house 3 of representatives may, subject to the availability of funds, 4 receive equal matching funds from the fair elections fund. The 5 match shall equal the sum of all contributions by individuals, 6 up to one hundred dollars per individual per election campaign 7 period. Funding is available for both the primary and general 8 election campaign period. 9 a. The maximum amount that can be matched for each election 10 period is ten thousand dollars for a candidate for the house of 11 representatives and fifteen thousand dollars for the senate. 12 b. The primary election campaign period is the period 13 beginning ninety days before the primary election and ending 14 on the day before the primary election. The general election 15 campaign period is the period beginning the day after the 16 primary election and ending on the day before the general 17 election. 18 2. The amount that can be matched does not include the 19 monetary value of in-kind contributions. 20 3. A candidate is eligible for matching funds for 21 contributions received by the candidate or candidate’s 22 committee during the primary election campaign period and 23 October 14 prior to the general election. 24 4. Matching funds may be prorated if sufficient funds are 25 not available. 26 Sec. 2. NEW SECTION . 68A.802 Qualifications. 27 1. A candidate for the house of representatives is eligible 28 for matching funds from the fair elections fund for the 29 primary election campaign period, if opposed, and the general 30 election campaign period, if opposed, when the candidate or 31 the candidate’s committee has received, during either period, 32 cash contributions of at least five dollars from one hundred 33 fifty or more identified electors who are not related to the 34 candidate within the third degree of consanguinity or affinity 35 -1- LSB 1358HH (9) 84 jr/sc 1/ 6

H.F. 359 and who reside in the district in which the candidate stands 1 for election. 2 2. A candidate for the senate is eligible for matching funds 3 from the fair elections fund for the primary election campaign 4 period, if opposed, and the general election campaign period, 5 if opposed, when the candidate or the candidate’s committee has 6 received, during either period, cash contributions of at least 7 five dollars from two hundred twenty-five or more identified 8 electors who are not related to the candidate within the third 9 degree of consanguinity or affinity and who reside in the 10 district in which the candidate stands for election. 11 Sec. 3. NEW SECTION . 68A.803 Restrictions on campaign fund 12 use. 13 A candidate for the general assembly receiving matching 14 funds from the fair elections fund is subject to the following 15 restrictions: 16 1. All campaign funds shall be expended directly by 17 the candidate or the candidate’s committee and may not be 18 forwarded to a political committee or candidate’s committee of 19 a different candidate. 20 2. A candidate shall not use any campaign funds or 21 in-kind contributions on a communication that refers directly 22 or indirectly to the candidate’s opponent, unless that 23 communication is in response to a communication made by the 24 candidate’s opponent or made by an independent expenditure that 25 refers directly or indirectly to the candidate receiving public 26 support. 27 3. a. Candidates receiving matching funds are limited to 28 spending limits of thirty thousand dollars for each of the 29 primary and general election campaign periods for an election 30 to the house of representatives and forty-five thousand dollars 31 for each of the primary and general election campaign periods 32 for an election to the senate. The spending limit includes the 33 monetary value of in-kind contributions. 34 b. A candidate who is opposed by a person or political 35 -2- LSB 1358HH (9) 84 jr/sc 2/ 6

H.F. 359 committee making an independent expenditure may spend amounts 1 exceeding the limit equal to two times the independent 2 expenditures as reported to the board. Funds used to respond 3 to independent expenditures may be received from any source 4 authorized by law. 5 Sec. 4. NEW SECTION . 68A.804 Iowa fair elections fund —— 6 nature and purposes. 7 1. An Iowa fair elections fund is established as a separate 8 fund within the office of the state treasurer, under the 9 control of the board, for the following purposes: 10 a. Providing financing for the election campaigns of 11 eligible candidates to the general assembly during primary 12 election and general election campaign periods. 13 b. Paying for the administrative and enforcement costs of 14 the board in relation to this subchapter. 15 2. a. The fund shall consist of moneys received pursuant 16 to section 68A.805 and moneys appropriated by the general 17 assembly. Notwithstanding section 8.33, unencumbered or 18 unobligated moneys credited to the fund and, notwithstanding 19 section 12C.7, any interest earned on moneys in the fund, as of 20 June 30 of any fiscal year shall not revert to the general fund 21 of the state but shall remain in the fund and be available for 22 expenditure in subsequent years. 23 b. Moneys in the fund are appropriated to the board for the 24 purposes of subsection 1. 25 Sec. 5. NEW SECTION . 68A.805 Funding —— Iowa fair elections 26 fund. 27 In addition to any moneys appropriated by the general 28 assembly to the Iowa clean elections fund established in 29 section 68A.804, the following moneys shall be deposited in the 30 fund: 31 1. Civil penalties levied by the board against candidates 32 for violations of this subchapter. 33 2. Voluntary donations made directly to the fund. 34 3. Any other sources of revenue designated by the general 35 -3- LSB 1358HH (9) 84 jr/sc 3/ 6

H.F. 359 assembly. 1 Sec. 6. NEW SECTION . 68A.806 Powers and procedures. 2 The board shall have the following powers and procedures in 3 addition to those granted in this chapter and chapter 68B when 4 administering this subchapter: 5 1. After every primary and general election, the board 6 may conduct random audits and investigations to ensure 7 compliance with this subchapter. The subjects of audits and 8 investigations shall be selected on the basis of impartial 9 criteria established by rule. 10 2. The board may investigate anonymous complaints. The 11 identity of a complainant may be kept confidential if the 12 complainant states in the complaint that revealing the identity 13 of the complainant could reasonably result in disciplinary 14 action or loss of employment. 15 3. The board may levy civil penalties for violations of 16 this subchapter. Civil penalties levied and collected shall be 17 deposited in the Iowa fair elections fund. 18 4. The board shall adopt rules pursuant to chapter 17A as 19 necessary to administer this subchapter. 20 Sec. 7. Section 422.7, Code 2011, is amended by adding the 21 following new subsection: 22 NEW SUBSECTION . 54. Subtract, to the extent not otherwise 23 excluded, up to fifty percent of the amount contributed to the 24 fair elections fund pursuant to section 68A.804. The exemption 25 is limited to one hundred dollars per individual return and two 26 hundred dollars per joint return. The contribution to the fair 27 elections fund, for which the exemption is claimed, may be made 28 at the same time the tax return is filed. 29 Sec. 8. Section 422.35, Code 2011, is amended by adding the 30 following new subsection: 31 NEW SUBSECTION . 25. Subtract, to the extent not otherwise 32 excluded, up to fifty percent of the amount contributed to the 33 fair elections fund pursuant to section 68A.804. The exemption 34 is limited to five hundred dollars on corporate returns. 35 -4- LSB 1358HH (9) 84 jr/sc 4/ 6

H.F. 359 The contribution to the fair elections fund, for which the 1 exemption is claimed, may be made at the same time the tax 2 return is filed. 3 Sec. 9. APPROPRIATION. 4 1. There is appropriated from the general fund of the state 5 to the Iowa ethics and campaign disclosure board for deposit in 6 the Iowa fair elections fund for the fiscal year beginning July 7 1, 2012, and ending June 30, 2013, the following amount, to be 8 used for the purposes set out in section 68A.804: 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,000,000 10 2. It is the intent of the general assembly that, in 11 subsequent fiscal years, there be appropriated funds sufficient 12 to restore the fund to $4,000,000 on January 1 in fiscal years 13 in which a primary election is held and to restore the fund to 14 $2,000,000 on July 1 in years in which a general election is 15 held. 16 Sec. 10. EFFECTIVE DATE. This Act takes effect July 1, 17 2012. 18 EXPLANATION 19 This bill provides for public funding for legislative 20 election campaigns. The bill provides a dollar-for-dollar 21 state match of individual contributions made by electors 22 residing in the candidate’s district. Funding is available 23 for both the primary and general election. The maximum amount 24 that can be matched for each election period is $10,000 for a 25 candidate for the house of representatives and $15,000 for the 26 senate. 27 To be eligible for funding, a candidate for the house of 28 representatives must receive, during the campaign period, cash 29 contributions of at least $5 from 150 or more identified, 30 unrelated electors who live in the district. A candidate for 31 the senate must receive $5 from 300 unrelated electors. 32 The bill places restrictions on expenditure of campaign 33 funds. All campaign funds must be expended directly by 34 the candidate or the candidate’s committee and may not be 35 -5- LSB 1358HH (9) 84 jr/sc 5/ 6

H.F. 359 forwarded to a political committee or candidate’s committee of 1 a different candidate. A candidate cannot use any campaign 2 funds or in-kind contributions on a communication that refers 3 directly or indirectly to the candidate’s opponent, unless 4 that communication is in response to a communication made by 5 the candidate’s opponent or made pursuant to an independent 6 expenditure. 7 Candidates receiving matching funds are limited to 8 spending limits of $30,000 for each of the primary and general 9 election campaign periods for an election to the house of 10 representatives and $45,000 for each of the primary and general 11 election campaign periods for an election to the senate. 12 As provided in Code section 68A.701, a willful violation 13 of any provision of the campaign finance chapter is a serious 14 misdemeanor punishable by confinement for not more than one 15 year and a fine of at least $315 but not more than $1,875. A 16 variety of civil remedies are also available in Code section 17 68B.32D for a violation of Code chapter 68A or rules of the 18 ethics and campaign disclosure board, ranging from a reprimand 19 to a civil penalty of not more than $2,000. 20 The bill creates an Iowa fair elections fund, controlled 21 by the Iowa ethics and campaign disclosure board. The bill 22 establishes a separate, nonreverting fund in the state treasury 23 for the Iowa fair elections fund, and provides sources of 24 revenue. 25 The bill creates an individual and corporate tax exemption 26 for contributions to the fund. 27 The bill appropriates $2 million in FY 2012-2013 to the 28 Iowa fair elections fund. For subsequent fiscal years, the 29 bill provides that it is the intent of the general assembly to 30 appropriate sufficient funds to restore the fund to $4 million 31 on January 1 in years in which a primary election is held and 32 to restore the fund to $2 million on July 1 in years in which a 33 general election is held. 34 The bill has an effective date of July 1, 2012. 35 -6- LSB 1358HH (9) 84 jr/sc 6/ 6