RBT H.B. 4 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 4 By: Gallego Elections 3/29/1999 Introduced BACKGROUND AND PURPOSE The amount of money invested in campaigns is a significant factor in many elections. Some candidates have taken full advantage of existing provisions regarding on fund raising, especially when receiving funds from national political organizations. H.B. 4 will provide more definite guidelines for candidates and officeholders to follow when raising and spending money during campaigns, with an emphasis on rules for disclosure of campaign funds. This bill regulates campaign committee formation, the reporting of contributions, loans, and gifts, the use of political consultants, and political advertising. It also creates the Fair Campaign Spending Fund, and authorizes the publication of a voter's guide. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Ethics Commission in SECTION 1 (Section 253.209, Election Code), and SECTION 12 (Section 254.128, Election Code), and SECTION 17 (Section 255.009, Election Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 253, Election Code, by adding Subchapter G, as follows: SUBCHAPTER G. RESTRICTIONS ON POLITICAL CONTRIBUTIONS AND EXPENDITURES IN CONNECTION WITH EXECUTIVE AND LEGISLATIVE OFFICES Sec. 253.201 APPLICABILITY OF SUBCHAPTER. Provides that this subchapter applies to a political contribution or a political expenditure in connection with a statewide office other than a judicial office, the office of state senator, the office of state representative, or the office of member, State Board of Education. Sec. 253.202. DEFINITION. Defines "principal political committee of a candidate or officeholder" to mean a specific-purpose committee established under Section 253.203 for supporting a candidate or assisting an officeholder. Sec. 253.203. PRINCIPAL POLITICAL COMMITTEE. Requires a candidate for or holder of an office designated in Section 253.201 to designate in writing a specific-purpose committee to serve as the person's principal political committee. Provides that the designation must be made within 15 days of becoming a candidate or officeholder and filed with the Texas Ethics Commission (commission). Provides that the name of the principal political committee must include the candidate's or officeholder's name. Provides that a candidate or officeholder may have only one principal political committee at a time, even when a person is both a candidate and an officeholder. Provides that a candidate who becomes an officeholder is not required to designate a new principal political committee. Provides that a prohibition or restriction imposed by this title on a candidate or officeholder also applies to the principal political committee. Prohibits a person from forming a specificpurpose committee except as provided by this section. Sec. 253.204. LIABILITY OF CANDIDATE OR OFFICEHOLDER FOR ACT OR OMISSION OF PRINCIPAL POLITICAL COMMITTEE. Provides that a candidate or officeholder is civilly liable for a violation of this title by the person's principal political committee if the person authorized, requested, commanded, performed, or recklessly or negligently tolerated the violation. Sec. 253.205. ACCEPTANCE OF POLITICAL CONTRIBUTION BY CANDIDATE OR OFFICEHOLDER. Prohibits a candidate or officeholder from accepting a political contribution for the person's own candidacy or office unless the contribution is accepted on behalf of the person's principal political committee and the principal political committee is authorized to accept it. Sec. 253.206. LIMIT ON CONTRIBUTION BY CHILD. Prohibits a child from making or authorizing political contributions over $50 for any principal political committee of a candidate or officeholder in each election in which the candidate or officeholder is involved. Prohibits a person from accepting and requires a person to refuse a political contribution that is received in violation of Subsection (a). Establishes that "child" means a person under age 18 who has not been married or who has not had the disabilities of minority removed for general purposes. Sec. 253.207. NOTICE REQUIRED FOR CERTAIN DIRECT CAMPAIGN EXPENDITURES. Prohibits direct campaign expenditures for the purpose of supporting or opposing candidates unless the person making the expenditure is the principal political committee of the state executive committee or a county executive committee of a political party or unless the person files with the commission and the principal political committee of each candidate whom the expenditure benefits a written declaration of the person's intent to make the expenditure and the amount of the expenditure not later than 72 hours before the expenditure is made. Requires the commission to file a written declaration with the records of the principal political committee of each candidate whom the expenditure benefits. Requires the commission to deliver a copy of the declaration, within 24 hours of receipt, by fax or overnight mail to the principal political committee of each opposing candidate. Provides that an expenditure that opposes a candidate benefits all other candidates for the same office. Exempts political expenditures made by a political committee or other association that consists only of costs incurred in contacting the committee's or association's dues-paying membership from the declaration requirement. Provides that this section does not apply to a candidate's principal political committee expenditures in connection with the candidate's election. Sec. 253.208. FAIR CAMPAIGN SPENDING FUND. (a) Specifies that the Fair Campaign Spending Fund is a special account in the general revenue fund. (b) Provides that the fund consists of damages recovered under Section 253.133 (Liability to State), civil penalties imposed under Section 571.173, Government Code (Civil Penalty for Delay or Violation), and any gifts or grants received by the commission under Subsection (f). (c) Provides that the fund may only be used for voter education projects that relate to campaigns for offices covered by this subchapter and payment of costs incurred in imposing civil penalties for violations of this subchapter. (d) Requires that, to the extent practicable, the fund be allowed to grow until the balance is sufficient to permit the publication of a voter's guide under Section 253.209. (e) Authorizes the commission to use money in the fair campaign spending fund to produce public service announcements to educate voters about this subchapter. (f) Authorizes the commission to accept gifts and grants for the purposes described by Subsections (c)(1), (d), and (e). Requires funds received under this subsection to be deposited in the fair campaign spending fund. (g) Exempts the fair campaign spending fund from Section 403.095, Government Code (Use of Dedicated Revenue). Sec. 253.209. VOTER'S GUIDE. Authorizes the commission to publish a voter's guide, if the necessary money is available under Section 253.208, listing candidates for offices covered by this subchapter, their backgrounds, and other similar information. Requires the commission to adopt rules by which candidates must provide information to the commission for inclusion in the voter's guide. Prohibits the rules from restricting a candidate's information except to set a maximum length. Requires the commission to make the voter's guide available for publication by newspapers in each part of the state, through the Internet, and through the comptroller's state government electronic billboard, at least seven days before early voting by mail begins. Defines "Internet" to mean the largest nonproprietary nonprofit cooperative public computer network, popularly known as the Internet. SECTION 2. Amends Section 84.001, Election Code, as follows: Sec. 84.001. APPLICATION REQUIRED. Prohibits an applicant from using an application form for an early voting ballot by mail that is part of or included with a campaign communication or political advertising, as defined by Section 251.001, unless the application form is provided by an individual, candidate, or officeholder not working in concert with another person or by the principal political committee of the state executive committee or a county executive committee of a political party. Provides that an application form that is provided under the terms of subsection (d) must be returned directly to the county clerk by the person that is applying for the early voting ballot. Redesignates existing Subsections (d)(e) to (f)-(g). SECTION 3. Amends Section 251.001, Election Code, to redefine "general-purpose committee," "political advertising," and to define "unidentified measure." Makes nonsubstantive changes. SECTION 4. Amends Section 253.003, Election Code, to exempt Subchapter G from the provisions of Section 253.003 (Unlawfully Making or Accepting Contribution). SECTION 5. Amends Section 253.004, Election Code, to exempt Subchapter G from Section 253.004 (Unlawfully Making Expenditure). SECTION 6. Amends Section 253.134, Election Code, by adding Subsection (b) which authorizes the commission, subject to approval of the attorney general, to contract with a nongovernmental entity to collect civil penalties imposed under Section 571.173, Government Code (Civil Penalty for Delay or Violation), that remain unpaid for 120 days. Creates Subsection (a) from existing text. SECTION 7. Amends Section 254.031, Election Code, to provide that if a person's contributions to a candidate or committee exceed $100 during a reporting period, the report must contain the person's principal occupation or job title, the full name of the person's employer, and, if the reporting individual is a candidate or officeholder, the aggregate total of political contributions for the office sought or held by the officeholder which was accepted from the person since the date of the last general election, other than a contribution designated in writing for that general election. Provides that a person is in compliance with Subsection (a)(2) if the person or the person's campaign treasurer shows that best efforts have been used to obtain, maintain, and report the required information. Redesignates existing Subdivisions (a)(2)-(7) to (a)(3)-(8). Redesignates existing Subsection (b) to (c). SECTION 8. Amends Section 254.061, Election Code, to include the amount of each political contribution or political expenditure to the list of items a candidate must include in a report if the candidate receives notice under Section 254.128, Election Code (Notice To Candidate and Officeholder of Contributions and Expenditures), and Section 254.161, Election Code (Notice to Candidate and Officeholder of Contributions and Expenditures). SECTION 9. Amends Subchapter C, Chapter 254, Election Code, by adding Section 254.0612, as follows: Sec. 254.0612. REPORTS BY PRINCIPAL POLITICAL COMMITTEE OF EXECUTIVE OR LEGISLATIVE CANDIDATE; ADDITIONAL CONTENTS. Requires the principal political committee of a candidate to comply with this chapter as if the committee were a candidate. Provides that reports by the principal political committee must include the information required by Section 254.031(a)(4) for political expenditures made from a candidate's personal funds or other assets. Provides in this section that "principal political committee of a candidate" means a specific-purpose committee established under Section 253.203. SECTION 10. Amends Section 254.091, Election Code, to include the amount of each political contribution or political expenditure to the list of items an officeholder must include in a report if the officeholder receives notice under Section 254.128, Election Code (Notice to Candidate and Officeholder of Contributions and Expenditures), and Section 254.161, Election Code (Notice to Candidate and Officeholder of Contributions and Expenditures). Makes a nonsubstantive change. SECTION 11. Amends Subchapter D, Chapter 254, Election Code, by adding Section 254.0912, as follows: Sec. 254.0912. REPORTS BY PRINCIPAL POLITICAL COMMITTEE OF EXECUTIVE OR LEGISLATIVE OFFICEHOLDER; ADDITIONAL CONTENTS. Requires the principal political committee of an officeholder to comply with this chapter as if the committee were an officeholder. Provides that reports by the principal political committee must include the contents prescribed by Section 254.0612 in addition to the contents required by Sections 254.031 and 254.091. Provides in this section that "principal political committee of an officeholder" means a specific-purpose committee established under Section 253.203. SECTION 12. Amends Section 254.128, Election Code, to include the amount of each political contribution accepted or political expenditure made in the required notice under this subsection. Requires a specific-purpose committee that makes a political expenditure that benefits more than one candidate or officeholder to allocate the expenditure proportionally in compliance with rules adopted by the commission. Specifies, for purposes of this subsection, that a political expenditure for supporting a candidate or assisting an officeholder benefits each candidate or officeholder supported or assisted and an expenditure for opposing a candidate benefits each opponent of the candidate. Creates new subdivisions out of existing text and redesignates existing Subsection (c) to (d). Makes nonsubstantive changes. SECTION 13. Amends Subchapter F, Chapter 254, Election Code, by adding Sections 254.1511 and 254.1512, as follows: Sec. 254.1511. REPORTS BY PRINCIPAL POLITICAL COMMITTEE OF POLITICAL PARTY; ADDITIONAL CONTENTS. Provides that each report by the principal political committee of the state executive committee of a political party must list on a separate schedule contributions and expenditures for each candidate or officeholder. Provides that the report must include the total amount of contributions and expenditures made during the calendar year to the principal political committee of the candidate or officeholder for each candidate or holder of an office covered by Subchapter G, Chapter 253, in addition to the information required by Sections 254.031 and 254.151. Provides in this section that "principal political committee of a candidate or officeholder" has the meaning established in Section 253.202. Sec. 254.1512. CONTENTS OF REPORTS OF FEDERALLY REGISTERED COMMITTEE. Provides that this section applies only to a general-purpose committee that is registered under Subchapter I, Chapter 14, Title 2, United States Code (Disclosure of Federal Campaign Funds). Provides that each report of a general-purpose committee must include the contents required by Section 254.031 and 254.151 (Additional contents of reports), unless there is an exception. Provides that instead of the information required by Sections 254.031 (a)(1)-(4) and (6), the committee's report must include for each contributor during a reporting period, if the person's contributions to that committee for the calendar year are over $200, the amount of the contribution, the full name, address and principal occupation of the person making the contribution, and date of the contribution; for each person who made a loan during a reporting period, if the person's loan to that committee for the calendar year exceeds $200, the amount of the loan, the full name and address of the person or financial institution making the loan, date of the loan, interest rate, maturity date, type of collateral, and full name, address, occupation, and name of the employer of each guarantor of the loan, and the amount guaranteed; for each political expenditure the committee made to a person during a reporting period, if the committee's expenditures to a person for the calendar year exceed $200, the amount of the expenditure, full name and address of the person to whom the expenditure is made, and date of the expenditure; the total amount or a specific listing of the contributions of $200 or less accepted and the total amount of expenditures of $200 or less made during a reporting period; and the aggregate principal amount of all outstanding loans as of the last day of the reporting period. Provides that the committee's report need not include the amount of a payment reported as a contribution under Subchapter I, Chapter 14, Title 2, United States Code. Provides that Section 254.156 (Contents of Monthly Reports) does not apply to a committee to which this section applies. Authorizes a committee to report the information required by Subsection (c) on a form adopted or accepted by the Federal Elections Commission. SECTION 14. Amends Section 254.203, Election Code, to prohibit a person from retaining contributions covered by this title, assets purchased with the contributions, or interest and other income earned on the contributions for more than six years after the date the person ceases to be an officeholder or the date of the most recent election in which the person was a candidate, whichever is later. SECTION 15. Amends Section 254.204, Election Code, to include payment to the commission for deposit in the fair campaign spending fund to the list of people to whom a candidate or former officeholder is required to remit any unexpended political contributions. Makes nonsubstantive changes. SECTION 16. Amends Section 255.001, Election Code, to include "copy" with other activities that must have appropriate disclosures in political advertising. Prohibits entering into a contract or other agreement to print, copy, publish, or broadcast political advertising that does not indicate that it is political advertising, and contain the full name and address of the person who caused the advertising to be produced, the campaign treasurer of the candidate, officeholder, or political committee on whose behalf the advertising is produced, or the candidate, officeholder, or political committee on whose behalf the advertising is produced. Deletes existing text. Makes nonsubstantive changes. SECTION 17. Amends Chapter 255, Election Code, by adding Section 255.009, as follows: Sec. 255.009. DISCLOSURE ON POLITICAL ADVERTISING CONCERNING CERTAIN UNPAID CIVIL PENALTIES. Provides that a person who fails to pay a civil penalty imposed by the commission for a violation of this title must include the following statement in political advertising "(Name of candidate or committee) has failed to pay a civil penalty imposed by the Texas Ethics Commission for a violation of Title 15, Election Code." Requires the commission to adopt rules providing for the minimum size of the disclosure required that appears on television or in writing and the minimum duration of the disclosure that appears on television or radio. Exempts a person who has appealed a civil penalty from this subsection. Provides that a violation of this section is a Class A misdemeanor. SECTION 18. Amends Title 15, Election Code, by adding Chapter 256, as follows: CHAPTER 256. POLITICAL CONSULTANTS Sec. 256.001 DEFINITIONS. Defines "political consultant" to mean a person required to register under Section 256.002. Provides that "political services" includes providing advice on political strategy, voter demographics, or the content or distribution of political advertising, seeking the endorsement of an individual or organization, and polling. Sec. 256.002. PERSONS REQUIRED TO REGISTER. Requires a person to register with the commission if the person receives or agrees to receive compensation of more than an amount determined by commission rule but not less than $200 in a calendar quarter from specified parties for providing political services in connection with a statewide or district office or a statewide measure. Provides that a person is not required to register if the person is compensated as an employee. Provides that failure to register is a Class A misdemeanor. Sec. 256.003. REGISTRATION. Requires each person who must register to file a written registration along with a registration fee. Provides that registrations expire on January 1 of each year, unless a written renewal of registration and renewal fee is filed with the commission. Authorizes the political consultant to file the registration renewal at any time in December. Provides that the registration and renewal fees are $300. Requires a person who has not registered or whose registration has expired to file the registration and fee within five days after providing political services. Prohibits a person from accepting compensation until the registration is filed. Provides that the registration must contain the person's full name, address, business telephone number, and business address. Requires a person to file an amended statement no later than the date the next report is due under Section 256.004. SECTION 19. (a) Effective date: September 1, 1999. (b) Requires each candidate for or holder of an office covered by Subchapter G, Chapter 253, Election Code, as added by this Act, to file a designation of the person's principal political committee by September 15, 1999. (c) Makes application of Subchapter G, Chapter 253, Election Code, as added by this Act, prospective with respect to a political contribution accepted or a political expenditure made. (d)-(e) Makes application of Sections 254.128 and 255.001, Election Code, as added by this Act, prospective. (f) Makes application of Sections 254.061, 254.091, and 254.128, Election Code, as amended by this Act, and Sections 254.0612, 254.0912, 254.1511, and 254.1512, Election Code, as added by this Act, prospective with respect to the reporting of a political contribution accepted or political expenditure made. (g) Requires a person who was last a candidate or officeholder before September 1, 1993, to dispose of unexpended political contributions, assets purchased with political contributions, and interest or other income earned on political contributions no later than January 1, 2000. Requires a person who was last a candidate or officeholder after September 1, 1993, to dispose of unexpended political contributions in compliance with Section 254.203. SECTION 20. Emergency clause.