H. B. 2458


(By Delegates Brown, Manuel, Douglas,
Doyle and Petersen)
[Introduced March 3, 1993; referred to the
Committee on the Judiciary then Finance.]




A BILL to amend chapter three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article eight-a, relating to public financing of election campaigns for governor; defining certain terms; providing for a voluntary tax check- off system; setting out application procedures; qualifications; limiting campaign contributions and expenditures; providing that the secretary of state certify eligible candidates and distribute funds to eligible candidates; limiting the use of campaign grant funds; allowing for the return of campaign grant funds; providing for the lawful use of campaign grant funds; requiring a report on the use of campaign grant funds; and allowing the use of certain statements regarding campaign grant funds for loan purposes.

Be it enacted by the Legislature of West Virginia:
That chapter three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article eight-a, to read as follows:
ARTICLE 8A. PUBLIC FINANCING OF ELECTION CAMPAIGNS FOR GOVERNOR.

§3-8A-1. Statement of intent and purpose.

The Legislature finds and declares the following:
(a) The enactment of a system of public financing of election campaigns for governor is an essential means to protect the integrity of the electoral process and ensure the maintenance of free government.
(b) It is desirable to encourage the broadest possible participation in financing campaigns by all citizens of the state, and to enable candidates to have an equal opportunity to present their programs to the voters.
(c) Our democratic system of government can be maintained only if the electorate is informed.
(d) A publicly funded system of financing election campaigns for governor in this state will encourage full discussion of issues, provide a fair and equal opportunity for all candidates for governor to participate in the election process, and reduce the influence of special interests in election campaigns and the daily affairs of government.
(e) Public financing provides a neutral source of revenue to assist candidates in raising sufficient money to communicate their views and positions adequately to the voters. Publicfinancing provides a level playing field to facilitate competitive campaigns and promote public discussion of the issues. By providing public financing of election campaigns, the potential corrupting influence of special interests and large contributions is diminished, and candidates can reduce their reliance on these sources of funding. Public financing reduces the fund raising advantages of incumbents while allowing all candidates to devote less time to fund raising and more time to discussion of the issues.
(f) Public funding of election campaigns permits the state to regulate the escalating amount of expenditures on political campaigns, while providing an equal opportunity for candidates to present their views and to provide for a better informed electorate.
§3-8A-2. Definitions.

(a) "Fund" means the election campaign fund.
(b) "Grant" means a contribution from the fund.
(c)(1) "Qualifying contribution" means:
(i) A contribution of five hundred dollars or less;
(ii) Made to a candidate;
(iii) By and from a qualified elector residing in this state;
(iv) Received on or after the first day of January of an election year in which the recipient is a candidate for office, or, if a special election, after the date the special election is called.
(2) A qualifying contribution does not include a loan, pledge or nonmonetary contribution.
§3-8A-3. Election campaign fund.

(a) Each individual filing an income tax return for any taxable year who has a tax liability or is entitled to a tax refund or other payment from the department of tax and revenue may designate an amount of not more than twenty dollars to be deposited into the election campaign fund. If individuals filing a joint return have a tax liability or are entitled to a tax refund or other payment from the department of tax and revenue, each individual may make a designation under this section.
(b) A designation does not increase a taxpayer's liability or decrease a refund or other payment to the individual from the department of tax and revenue.
(c) The department of tax and revenue shall place on the top one third of the first page of all tax returns to be filed the following language:
ELECTION OF
THE GOVERNORI designate $.... (not more than $20.00) to go to the Governor's Election
CAMPAIGNCampaign Fund.
FUND
FUND NOTE: A designation will not increase the taxes you pay or reduce your refund or other payment from the department of tax and revenue.

(d)(1) During a fiscal year which contains an election forgovernor, the Legislature shall, in its final budget, appropriate from the governor's election campaign fund an amount sufficient to fully fund all candidates for governor eligible to receive a grant from the election campaign fund.
(2) The secretary of state shall provide a written estimate of the amount necessary to fully fund all eligible candidates for governor no later than the first day of January preceding an election year.
(3) General revenue moneys may be appropriated to meet any shortfall in the governor's election campaign fund if the estimate of the secretary of state clearly indicates a need for additional funds.
§3-8A-4. Application and withdrawal procedures.

(a) Each candidate for governor shall file a statement of intent to accept or to reject a grant from the election campaign fund. The statement shall be filed no later than the deadline for filing nomination papers.
(b) A candidate for governor who intends to accept a grant shall swear or affirm that the candidate and the candidate's authorized agents have complied with and will continue to comply with all applicable contribution and expenditure limits at all times.
(c) A candidate for governor shall designate in the statement of acceptance whether the candidate will accept or reject a grant in either the primary or the general election. A candidate may designate both.
(d) A candidate for governor may rescind the statement of acceptance:
(1) For a primary election grant no later than ten calendar days after the last date for filing nomination papers; or
(2) For a general election grant no later than ten calendar days after the primary election.
§3-8A-5. Qualification procedures.

The secretary of state shall approve the payment of a primary or a general election grant or both a primary election grant and a general election grant if an eligible candidate for governor meets all of the following requirements:
(1) The candidate has filed a timely statement of acceptance.
(2) The candidate is certified to appear on the ballot for the election for which the grant is sought.
(3) The candidate is opposed by a candidate for the same office:
(i) Who has qualified to receive a grant; or
(ii) Whose campaign finance reports indicate that the opposing candidate has received, expended, or has cash on hand of at least two hundred fifty thousand dollars.
(4) The financial reports filed by or on behalf of the candidate as of the date of qualification indicate that the candidate has received qualifying contributions equal to fifty thousand dollars.
§3-8A-6. Contribution limits.

(a) A candidate for governor, filing a statement of acceptance, may not receive a contribution or contributions from the candidate's own funds or from those of the candidate's immediate family that exceed five thousand dollars.
(b) A candidate for governor, filing a statement of acceptance, may not receive a contribution or contributions from a political committee other than a political party committee.
(c) An eligible candidate for governor, filing a statement of acceptance, may receive a primary election grant, a general election grant, or both a primary election grant and a general election grant equal to five hundred thousand dollars for each election.
(d) An eligible candidate for governor, filing a statement of acceptance, may voluntarily limit the amount of the grant received by designating a reduced grant amount in writing:
(1) For a primary election grant, no later than ten calendar days after the deadline for filing nomination papers; or
(2) For a general election grant, no later than ten calendar days after the primary election.
§3-8A-7. Expenditure limits.

(a) A candidate for governor who files a statement of acceptance of a grant from the election campaign fund may not make a qualified campaign expenditure or qualified campaign expenditures in excess of one million dollars in the primary election and one million dollars in the general election.
(b)(1) For the purpose of the expenditure limits, aqualified campaign expenditure made before the last day of the month in which the primary election is held, shall be considered a primary election expenditure.
(2) A qualified expenditure made from the first day of the month following the month in which the primary election is held through the thirty-first day of December of the general election year shall be considered a general election expenditure.
(3) Notwithstanding the provisions of subdivisions (1) and (2) above, in the event that payments are made, but the goods or services are not used during the period purchased, the payments shall be considered qualified campaign expenditures for the time period when they are used or during which benefit is derived from them. Payment for goods and services used in both time periods shall be prorated.
(c) A candidate filing a rejection of a grant from the election campaign fund may file an affidavit agreeing to voluntarily comply with the applicable contribution and expenditure limits no later than the deadline for filing nomination papers. An affidavit filed under this section shall be binding unless rescinded:
(1) No later than ten calendar days after the nomination paper filing deadline in the case of primary expenditure limits; or
(2) No later than ten calendar days after the primary election in the case of general election expenditure limits.
(d)(1) If a candidate filing a statement of acceptance:
(i) Is opposed by a candidate who has declined to accept a grant; and
(ii) The opposing candidate does not voluntarily agree to limit the receipt of contributions and expenditures under section four of this article; or
(iii) If an independent expenditure is made in an amount greater than two hundred fifty thousand dollars in support of or in opposition to a candidate for governor, the expenditure limits are no longer applicable to all candidates.
(2) If an independent expenditure is made in an amount greater than two hundred fifty thousand dollars in support of or in opposition to a candidate for governor, each candidate who has filed a statement of acceptance of a grant or an affidavit voluntarily agreeing to abide by spending and contribution limits, shall be permitted to receive an additional one hundred thousand dollars for either the primary election or general election, as appropriate, notwithstanding the contribution limits otherwise applicable to the election.
(e) In computing applicable expenditure limits, a candidate or campaign treasurer may exclude the following items:
(1) A contribution or contributions returned to the contributor;
(2) A loan repayment;
(3) An expense incurred as a direct result of a recount; and
(4) A refund of a deposit paid.
§3-8A-8. Disbursement of funds.

(a) The secretary of state shall immediately review the:
(1) Statements of acceptance;
(2) Nomination papers; and
(3) Financial reports of candidates for governor filing a statement of intent to accept a grant to determine the eligibility of a candidate filing a statement of acceptance.
(b) The secretary of state shall certify whether a candidate is eligible to receive a primary election grant no later than seven calendar days before the deadline for certifying the candidate for the primary election ballot.
(c) The secretary of state shall certify whether a candidate is eligible to receive a general election grant no later than seven calendar days after the certification of the primary election results.
(d) A separate determination shall be made for a primary and a general election grant.
(e) The certification by the secretary of state must indicate:
(1) Whether a candidate is eligible to receive a grant; and
(2) The amount of grant the candidate is eligible to receive.
(f) If a candidate who has filed a statement of intent to accept a grant is not eligible to receive a grant, the certification must:
(1) State the reasons why the candidate is not eligible to receive a grant; and
(2) What action, if any, the candidate may take to qualify for a grant.
(g) The secretary of state shall certify a candidate who becomes eligible after the deadline in subsections (b) and (c) of this section, if the candidate qualifies after the deadline, but before the primary election or general election for which the funds are sought.
(h) The grant check shall be included with the certification.
(i) A candidate may file a written request to review the determination of the secretary of state no later than seven calendar days after the date of certification.
(j) The amount of the grant may not exceed fifty percent of the applicable expenditure limit.
§3-8A-9. Use of grant funds.

(a) All grants must be deposited in the candidate committee's campaign depository account.
(b) Grant funds may be expended only for one or more of the following:
(1) Purchase of services from a communications medium, including production costs;
(2) Printing, photography, graphic arts or advertising;
(3) Office supplies;
(4) Postage and other commercial delivery services; or
(5) Repayment of loans secured by a statement of intent to accept a grant pursuant to section thirteen of this article.
(c) Grant funds may not be expended, directly or indirectly, for the following items or services:
(1) Purchase of capital equipment;
(2) Purchase of computer software;
(3) Payment of fees for placement of political advertisements; or
(4) Items or services otherwise prohibited under this article or the laws of this state.
§3-8A-10. Return of grant funds.

(a)(1) Grant funds disbursed under this section remain the property of the state until disbursed or encumbered for lawful campaign purposes.
(2) Grant funds that are not spent or unencumbered by a candidate on the date after the election in which the candidate participates revert to the state. A deposit or refund derived from grant funds that are received by a candidate after the day of the election in which the candidate participates shall revert to the state. All reversions shall be returned to the secretary of state who shall deposit the money in the fund.
(b) Return of grant funds after the withdrawal date set forth in section four of this article does not remove applicable contribution and expenditure limits.
§3-8A-11. Lawful use of grant funds.

(a) For a purpose other than to advance the candidacy by lawful means of the specific candidate or candidates who qualify for the grant, a person may not:
(1) Expend;
(2) Authorize the expenditure of; or
(3) Incur an obligation to expend a grant.
(b) After the date of an election where the grant is returnable to the state under section ten of this article, a person may not:
(1) Expend;
(2) Authorize the expenditure of; or
(3) Incur an obligation to expend a grant.
(c) If the candidate violates the pledge required under section four of this article, a candidate may not:
(1) Expend;
(2) Authorize the expenditure of; or
(3) Incur an obligation to expend a grant.
(d) A person may not prepare or transmit to the secretary of state evidence that purports to demonstrate the amount or purpose for which a grant has been used if such evidence specifies an amount or purpose for which a payment is received other than the true amount or purpose.
§3-8A-12. Proof of payment.

(a) The candidate or the candidate's campaign treasurer shall deliver or transmit to the secretary of state sufficient proof of payment of all disbursements made from grant funds no later than the due date for the next campaign finance report occurring at least thirty days after the election in which the candidate received the grant.
(b) The secretary of state shall determine what constitutes sufficient proof of payment and shall promulgate:
(1) Procedures;
(2) Reporting forms; and
(3) Administrative rules; necessary to implement this responsibility.
(c) The secretary of state shall conduct a random audit of the accounts and records of a candidate filing a statement of intent to accept a grant.
§3-8A-13. Miscellaneous provisions.

(a) A candidate or a candidate's treasurer may use the candidate's statement of intent to accept a grant as security for a loan made for campaign purposes from an institution that ordinarily makes loans in the course of its business.
(b) To the extent that proceeds of a loan obtained under the provisions of subsection (a) of this section are used for a purpose set forth in section nine of this article, repayment of the loan may be made from grant funds.



NOTE: The purpose of this bill is to establish a system to provide public financing of election campaigns for governor. The bill allows taxpayers to designate up to twenty dollars on tax returns to be used to establish a public campaign fund to be used by eligible candidates in campaigns for governor. To qualify as an eligible candidate, the bill requires that a candidate receive not less than fifty thousand dollars in qualifying contributions from other sources in addition to meeting other campaign standards. The bill requires an eligible candidate for governor to swear and affirm to abide by contribution and expenditure limits. Expenditure limits are set at one million dollars in the primary election and one million dollars in the general election. An eligible candidate may receive five hundred thousand dollars from the fund for each election. The bill also provides that the secretary of state certify eligible candidates and issue grant moneys from the fund.

Article eight-a is new; therefore, strike-throughs and underscoring have been omitted.