hb4532 intr

H. B. 4532

(By Delegates Hubbard, Compton, Marshall,

Manuel, Dempsey, C. White and Perdue)

[Introduced February 19, 2002; 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 twelve, relating to elections generally; establishing the West Virginia clean elections act; providing that the provisions of the act are applicable to candidates for the office of governor and candidates for seats in the Legislature; setting forth certain legislative findings and declarations; defining certain terms; setting forth eligibility criteria for qualifying party independent candidates; requiring qualifying candidates to comply with all provisions of the act; prohibiting participating candidates from accepting private contributions other than specifically set forth in the act; requiring candidates to keep records and report to the state election commission; prohibiting the use of personal funds for certain purposes; providing for seed money contributions; requiring the state election commission to certify eligible candidates; providing that qualified candidates shall receive funding for election campaigns from the clean elections fund; specifying amounts of such funds for each office; requiring certain disclosures; setting forth certain duties of the state election commission; establishing a clean elections fund; providing for the deposit of certain revenue into the fund; requiring repayment of excessive expenditures by candidates; providing both civil and criminal penalties for violations of the act and setting forth an effective date.

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 twelve, to read as follows:
ARTICLE 12. WEST VIRGINIA CLEAN ELECTIONS ACT.
§3-12-1. Short title and applicability.

This article shall be known as the "West Virginia Clean Elections Act" and is applicable to candidates for the office of governor and candidates for election to the Senate and House of Delegates.
§3-12-2. Legislative findings and declarations.
The Legislature hereby finds and declares that current election finance laws:

(a) Force elected officials to spend too much of their time raising funds rather than representing the public;

(b) Cost an average taxpayer millions of dollars in the form of subsidies and special privileges granted to large campaign contributors;

(c) Allow elected officials to accept large campaign contributions from private interests when they may have statutory or regulatory power over those interests;

(d) Give incumbents an unfair advantage over challengers;

(e) Hinder reasonable communication with potential voters by qualified candidates not supported by large private campaign contributions;

(f) Effectively suppress the voices and influence of the majority of West Virginia citizens in favor of a small number of wealthy special interests;

(g) Undermine public confidence in the integrity of public officials; and

(h) Drive up the cost of campaigning for office and discouraging otherwise qualified candidates who lack personal wealth or access to special interest funding.

Therefore, the creation of a clean elections system is essential to improve the integrity of elections in this state by diminishing the influence of special interest contributions, encouraging more citizens to participate in the political process; remove funding as a source of campaign attention and candidate attack; promote freedom of speech and direct the focus of political campaigns to issues of substance.

§3-12-3. Definitions.

Unless the context clearly requires a different meaning, as herein used:

(a) "Allowable contribution" is a qualifying contribution or a seed money contribution.

(b) "Clean elections qualifying period" is the period during which candidates are permitted to collect qualifying contributions in order to qualify for clean elections funding and, for legislative candidates, begins one hundred eighty days before the primary election and ends sixty days before the primary election and, for gubernatorial candidates begins two hundred forty days before the primary election and ends sixty days before the primary election.

(c) "Election commission" means the state election commission created pursuant to the provisions of article one-a of this chapter.

(d) "Excess expenditure amount" means the amount of money spent or obligated to be spent by a nonparticipating candidate in excess of the clean elections funding amount provided for in this article and available to a participating candidate running for the same office.

(e) "General election campaign period" means the period beginning the day after the primary election and ending on the day of the general election.

(f) "Independent candidate" means a candidate who does not represent a political party and is on the ballot.

(g) "Nonparticipating candidate" means a candidate who is on the ballot but has chosen not to apply for clean elections campaign funding, or a candidate who is on the ballot and has applied but has not satisfied the requirements for receiving clean elections funding.

(h) "Participating candidate" means a candidate who qualifies for clean elections campaign funding and is eligible to receive clean campaign funding during a primary or general campaign periods.

(i) "Party candidate" means a candidate who represents a political party that has been granted ballot status.

(j) "Primary election campaign period" means the period beginning on the first day of the filing period and ending on the day of the primary election.

(k) "Private contribution" includes contributions from every nonpublic source except:

(1) Payments by membership organizations for the cost of communicating to its members;

(2) Payments by a membership organization for the purpose of
facilitating the making of qualifying contributions;

(3) Volunteer activity, including the payment of incidental expenses by volunteers; and

(4) Nonpartisan and noncandidate specific voter registration and get out the vote activities conducted by individuals and organizations.

(l) "Qualifying contribution" means a contribution of five dollars received by a candidate during the designated clean election qualifying period: Provided, That the contribution is acknowledged by a written receipt identifying the contributor; the contributor is a registered voter residing in same election district as the candidate for legislative office and a resident of this state for a candidate for governor; the contributor is provided a receipt for the contribution which identifies the contributor, includes a statement indicating that the contributor understands the purpose of the contribution, the contribution is made without coercion or is to be reimbursed; the five dollars is gathered by the candidate or an unpaid volunteer on behalf of the candidate and is remitted to the state election commission for deposit in the clean elections fund established by the provisions of this article.

(m) "Seed money contribution" is a contribution of no more than one hundred dollars from an individual adult during the seed money period.

(n) "Seed money period" is the period beginning the day following the most recent general election for that office and ending on the last day of the clean elections qualifying period thereafter and is the exploratory period during which candidates who wish to become eligible for clean elections funding for the next election are permitted to raise and spend a limited amount of private seed money in contributions of not more than one hundred dollars from any one qualified contributor to explore his or her chances of election and of fulfilling the clean elections eligibility requirements.

§3-12-4. Eligibility for clean election campaign funding for party candidates.

(a) A candidate representing a political party qualifies as a participating candidate for the primary election campaign period if the candidate:

(1) Files a declaration with the state election commission that the candidate has complied and will continue to comply with all of the requirements contained in this article, including the requirement that during the seed money period and the clean elections qualifying period, the candidate may not accept or spend private contributions from any source other than seed money contributions and clean elections qualifying contributions;

(2) Before the close of the clean elections qualifying period, collects at least the following number of qualifying contributions:

(A) Two thousand five hundred qualifying contributions for a candidate running for the office of governor;

(B) Two hundred qualifying contributions for a candidate running for the office of state senator, except for the eighth and seventeenth senatorial districts which require three hundred fifty qualifying contributions.

(C) Seventy-five qualifying contributions for a candidate running for member of the office of House of Delegates in a single member district, one hundred in a two member district, one hundred twenty-five in a three member district, one hundred fifty in a four member district, one hundred seventy-five in a five member district, two hundred in a six member district and two hundred twenty-five in a seven member district.

(b) Each qualifying contribution shall be acknowledged on a written receipt containing the signature of the candidate, the contributor's signature, printed name, home address, and telephone number, the printed name of the candidate on whose behalf the contribution is made, a statement near the signature of the contributor that the contributor understands the purpose of the contribution is to assist the candidate to qualify for clean elections funding and copied in triplicate with one copy given to the contributor, one copy retained by the candidate and one copy sent to the state election commission.

A contribution submitted as a qualifying contribution without the above described receipt is not a qualifying contribution.

A party candidate qualifies as a participating candidate for the general election campaign period if the candidate meets all other statutory requirements; files a declaration with the election commission that he or she has fulfilled or will fulfill all of the requirements of this act; and won the party's nomination for the contested office or was otherwise nominated under applicable election law.
§3-12-5. Eligibility for clean elections campaign funding for independent candidates.

An independent candidate qualifies as a participating candidate for the general election campaign period if, prior to the primary election, he or she has met all of the applicable requirements of this code, qualifies for placement of his or her name on the general election ballot; meets all of the requirements of this act; files a declaration with the state election commission of compliance with the requirements of a participating candidate.
§3-12-6. Transition rule for current election cycle.
During the election cycle in effect on the date of the enactment of this article, a candidate may be certified as a participating candidate, notwithstanding the acceptance of contributions or the expenditure of funds from private donations before the effective date of this article: Provided, That funds accepted but not expended before the effective date shall be either returned to the contributor or submitted to the election commission for deposit in the clean elections fund.
§3-12-7. Obligations of participating candidates.

A participating candidate accepting any benefits under the provisions of this article shall continue to comply with all of its provisions throughout the primary and general election.
§3-12-8. Contributions.
(a) During the primary and general election campaign periods, a participating candidate may not accept private contributions.

(b) A contribution from one person may not be made in the name of another person.

(c) A participating candidate receiving qualifying contributions or seed money contributions from a person not listed on the receipt required by section four and section ten of this article is liable to the state election commission for the entire amount of that contribution and any applicable penalties.

(d) A participating candidate receiving qualifying contributions or seed money contributions shall provide the state election commission with complete campaign records, including all records of seed money contributions, qualifying contributions received and campaign expenditures as required by the commission and shall fully cooperate with any audit of campaign finances requested or authorized by the state election commission.
§3-12-9. Use of personal funds.
(a) A contribution of personal funds by a candidate or by adult members of the candidate's immediate family as seed money to help the candidate become eligible as a participating candidate may not exceed one hundred dollars.

(b) Except for one five-dollar contribution from the candidate and one five-dollar contribution from the candidate's spouse who are registered voters residing in the district in which the candidate is running, personal funds may not be used to meet the requirements for a qualifying contribution.
§3-12-10. Seed money.
(a) A candidate seeking to qualify for clean elections funding may accept qualifying contributions and seed money contributions from adults only during the applicable seed money period or the applicable qualifying period and may not accept any other private contributions.

(b) A single contribution of seed money may not exceed one hundred dollars and the aggregate amount of seed money contributions accepted by a candidate seeking to become eligible for clean elections funding may not exceed:

(1) Fifty thousand dollars for a candidate running for the office of governor;

(2) Two thousand five hundred dollars for a candidate running for the office of state senator; and

(3) One thousand dollars for a candidate running for the office of House of Delegates.

(c) Receipts for seed money contributions under twenty-five dollars may include only the contributor's signature, printed name, and address and receipts or seed money contributions of twenty-five dollars or more shall include the contributor's signature, printed name, street address and zip code, telephone number, occupation, and name of employer, otherwise, contributions shall not be accepted if the required disclosure information is not provided.

(d) Seed money may be expended only during the period beginning prior to and continuing through the clean elections qualifying period.

(e) Within forty-eight hours after the close of the clean elections qualifying period, candidates seeking to become eligible for clean election funding shall:

(1) Disclose all contributions and expenditures on forms developed by and following procedures established by the state election commission; and

(2) Remit to the state election commission for deposit in the clean elections fund any seed money in excess of the aggregate limit for seed money.
§3-12-11. Certification.
A candidate shall request certification for eligibility for clean elections funding and shall request funding from the state election commission on forms provided by the state election commission and signed by the candidate and his or her campaign treasurer under penalty of perjury. No more than five days after a candidate applies for clean elections benefits, the election commission shall certify that the candidate meets the eligibility criteria set forth in this article.

A candidate's eligibility may be revoked if the candidate violates any of the requirements of this article. A candidate having received funds under this article and having been found to have violated its provisions shall repay the state election commission all clean election funds received by that candidate for deposit in the clean election fund.

The determination of any issue before the state election commission is the final administrative determination. Any person adversely affected by a decision of the state election commission under the provisions of this article may appeal that decision to the circuit court of Kanawha County.
§3-12-12. Clean election benefits and limitations.
(a) A qualifying candidate is eligible for clean elections funding for the primary and general elections and shall:
(1) Receive funding, which may be used to finance any and all campaign expenses during the particular campaign period for which it was allocated, from the clean elections fund for each election as set out in section fourteen of this article.
(2) Receive additional funding to match any excess expenditure amount spent by a nonparticipating candidate, as specified in section sixteen of this article.
(b) A qualifying candidate may receive no more than two hundred percent of the full amount of the clean elections funding allocated to any participating candidate for the same office during either a primary or general election campaign in order to match the excess expenditures of a nonparticipating candidate for the same office.
§3-12-13. Schedule of clean elections funding payments.
(a) An eligible party candidate shall receive clean elections funding for the primary election campaign period on the date on which the candidate is certified as a participating candidate. The state election commission shall certify a candidate not later than five days after the candidate has submitted all necessary applications and has otherwise qualified for participation as a qualified candidate, but in no case may a candidate be certified earlier than the beginning of the primary election campaign period.

(b) An eligible party candidate shall receive clean election funding for the general election campaign period within forty-eight hours after certification of the primary or general election results.

(c) An eligible independent candidate shall receive clean elections funding for a general election campaign period within forty-eight hours after certification of the primary election results.

§3-12-14. Determination of clean elections funding amounts.

(a) An eligible candidate running in a contested primary election may receive an amount of clean elections funding as follows:

(1) One million dollars for a candidate running for governor;

(2) Twenty thousand dollars for a candidate running for the office of state senator, except that for the eighth and seventeenth senatorial districts, the amount shall be thirty-five thousand dollars;

(3) Seven thousand five hundred dollars for a candidate running for office as a member of the House of Delegates in a single member district, ten thousand dollars for a candidate running for office as a member of the House of Delegates in a two member district, twelve thousand five hundred dollars for a candidate running for office as a member of the House of Delegates in a three member district, fifteen thousand dollars for a candidate running for office as a member of the House of Delegates in a four member district, seventeen thousand five hundred dollars for a candidate running for office as a member of the House of Delegates in a five member district, twenty thousand dollars for a candidate running for office as a member of the House of Delegates in a six member district and twenty-two thousand five hundred dollars for a candidate running for office as a member of the House of Delegates in a seven member district.

(b) An eligible candidate in an uncontested campaign may receive no more than twenty-five percent of the amount allowed for a contested primary election.

(c) An eligible candidate running in a contested general election may receive an amount of clean elections funding as follows:

(1) One million dollars for a candidate running for governor;

(2) Twenty thousand dollars for a candidate running for the office of state senator, except that for the eighth and seventeenth senatorial districts, the amount shall be thirty-five thousand dollars;

(d) An eligible party candidate running in an uncontested general election may receive ten percent of the amount provided in a contested general election for the same office.

(e) An eligible independent candidate running in the general election may receive an amount of clean elections funding as equal to the amount an eligible party candidate for the same office may receive in the general election.

(f) After the first cycle of clean elections, the election commission shall modify all clean elections funding amounts based on the national monetary rate of inflation and the cost-of-living (COLA) index as calculated by the federal government.
§3-12-15. Expenditures made with clean elections funds.
(a) The clean elections received by a participating candidate may only be used for the purpose of defraying a candidate's campaign-related expenses during either a primary or general election in the campaign period set forth in this article for the election for which clean election funds were dispersed to eligible candidates.

(b) Payments may not be used:

(1) In violation of the law;

(2) To repay any personal, family or business loans, expenditures, or debts; or

(3) To help any other candidate.
§3-12-16. Disclosure of excess spending by nonparticipating candidates.

(a) A nonparticipating candidate shall (within forty-eight hours of the expenditure of funds by his or her campaign in aggregates of one thousand dollars in excess of the amount of funding allocated by the state election commission to a qualified participating candidate for the same office 's total expenditures) declare and report the excess sums to the state election commission.

(b) During the last twenty days next preceding the end of the campaign period, a nonparticipating candidate shall within twenty-four hours thereof report to the state election commission and declare every excess expenditure in amounts over five hundred dollars which the nonparticipating candidate makes or obligates as campaign expenses.

(c) Upon receipt of excess expenditure report and declaration, the state election commission immediately release additional clean elections funding to the eligible opposing participating candidate equal to the excess expenditure amount the nonparticipating candidate spends or intends to spend or obligate not to exceed the amounts set forth in section twelve of this article.
§3-12-17. Duties of the state election commission.
In addition to its other duties the state election commission shall:

(a) Encourage voter education regarding gubernatorial and legislative candidates;

(b) Prescribe forms for reports, statements, notices and other documents required by this article;

(c) Prepare and publish information about this act and provide the information to potential candidates and the citizens of this state;

(d) Prepare and publish instructions setting forth methods of bookkeeping and preservation of records to facilitate compliance with this article and explaining the duties of candidates and others participating in elections under the provisions of this article;

(e) Make an annual report to the Legislature describing the commission's activities, listing any recommendations for changes of law, administration, or funding amounts and accounting for moneys in the fund;

(f) Propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code as may be necessary for the proper administration the provisions of this article;

(g) Enforce the provisions of this article to ensure that moneys from the fund are placed in candidate campaign accounts or otherwise spent as specified in this article and not otherwise;

(h) Monitor reports filed pursuant to this article and the financial records of candidates to ensure that qualified candidates receive equalization moneys promptly and to ensure that moneys required by this article to be paid to the fund are deposited in the fund.

To fulfill its responsibilities under this article, the commission may subpoena witnesses, compel their attendance and testimony, administer oaths and affirmations, take evidence and require by subpoena the production of any books, papers, records, or other items material to the performance of the commission's duties or the exercise of its powers.

The commission may propose and adopt procedural rules to carry out the purposes and provisions of this article and to govern procedures of the commission.

Ninety days after a general election, the clean elections fund shall be audited by independent certified public accountants. The commission shall cooperate with the audit and provide all necessary documentation and financial records to the auditor. The state election commission shall maintain a record of all information supplied by the audit.
§3-12-18. Clean elections fund, nature and purposes of the fund.
All moneys collected under the provisions of this article shall be deposited in special account to be known as the "Clean Elections Fund." Expenditures from the fund shall be for the purposes set forth in this article and are not authorized from collection, but are to be made only in accordance with appropriation by the Legislature and in accordance with the provisions of article three, chapter twelve of this code and upon the fulfillment of the provisions of article two, chapter five-a of this code: Provided, That for the fiscal year ending the thirtieth day of June, two thousand three, expenditures are authorized from collections rather than pursuant to appropriation by the Legislature.
§3-12-19. Sources of revenue for the fund.
Revenue from the following sources shall be deposited in the clean elections fund as follows:

(a) Legislative appropriations;

(b) Qualifying contributions required of candidates seeking to become certified as participating candidates;

(d) Excess seed money contributions;

(e) Refunds from participating candidates who fail to comply with the provisions of this article;

(f) Refunds of unspent moneys allotted to qualified candidates and remaining unspent on the date of the primary or general election for which the money was distributed;

(g) Administrative fines levied by the state election commission against candidates for violations of this article;

(h) Voluntary donations; and

(i) Interest income.
§3-12-20. Additional revenue.
Any taxpayer may make a voluntary donation to the clean election fund by making a payment directly to the fund. Any taxpayer making a donation pursuant to this subsection shall receive a dollar for dollar tax credit not to exceed twenty percent of the tax amount on the return or five hundred dollars per taxpayer, whichever is higher. Donations made pursuant to this section are otherwise not tax deductible and cannot be designated as for the benefit of any particular candidate, political party or election contest. The department of revenue shall transfer to the fund all donations made pursuant to this subsection. The department of revenue shall provide a space, identified as the clean elections fund tax credit, on the first page of income tax return forms, for donations pursuant to this subsection.

In addition, any tax payer may designate that up to three dollars of taxes may be deposited into the clean elections fund pursuant to a check off program developed by the tax commissioner. If a husband and wife file a joint return, each spouse may designate up to three dollars for deposit into the clean elections fund. All amounts so designated shall be appropriated from the general fund and credited to the clean elections fund.
§3-12-21. Repayments of excess expenditures.
(a) If a participating candidate unintentionally spends or obligates to spend more than the amount of clean elections funding the candidate receives from the fund, the excess shall be immediately refunded to the state election commission for deposit into the fund.

(b) If a participating candidate intentionally spends or obligates more than the amount of clean elections funding the candidate receives from the fund, the candidate shall be fined an amount equal to ten times the amount of the excess spent or obligated. Upon notice of being penalized, the candidate shall pay the amount penalized within seven days of receipt of the notice. All moneys collected under the provisions of this section shall be deposited into the clean elections fund.
§3-12-22. Criminal penalties.
(a) It is a violation of the law for candidates to knowingly accept more benefits than those to which they are entitled, spend more than the amount of clean elections funding they have received, or misuse such benefits or clean elections funding. Any person violating the provisions of this subsection is guilty of a misdemeanor and, upon conviction thereof, shall be fined not less than fifty dollars nor more than five hundred dollars, or confined in the county or regional jail for more than thirty days or both fined and imprisoned.

(b) It is unlawful to provide false information to the state election commission or to conceal or withhold information from the commission. Any person violating the provisions of this subsection is guilty of a misdemeanor and, upon conviction thereof, shall be fined not less than one thousand dollars nor more than ten thousand dollars, or confined in the county or regional jail for more than one year or both fined and imprisoned.
§3-12-23. Civil penalties.
In addition to any other penalties imposed by law, the civil penalty for a violation by or on behalf of any candidate of any reporting requirement imposed by this article is one hundred dollars per day for candidates for the Legislature and three hundred dollars per day for the office of governor and the penalty shall be doubled if the amount not reported for a specific election exceeds ten percent of the primary or general election spending limit.

The candidate and the candidate's campaign account are jointly and severally responsible for the payment of any penalty imposed pursuant to this section.

All civil penalties collected pursuant to this article shall be deposited into the clean elections fund.
§3-12-24. Effective date.
The provisions of this article are effective the first day of January, two thousand three.

NOTE: The purpose of this bill is to provide a process for public funding of elections for members of the Legislature and the Governor. The bill establishes the "Clean Elections Act" which creates a voluntary system of public funding to qualified political candidates who agree to accept spending limits and do no other private fund raising. Participating candidates collect a set number of five-dollar qualifying contributions from voters in their districts in order to qualify. A qualified candidate receives a set amount of campaign funding on the date of certification as a qualified candidate. The state election commission is responsible for administering the program. A special clean elections fund is established to receive moneys from various sources including excess seed money funds, refunds of unspent allotments, tax check off funds and certain civil penalties. Both civil and criminal penalties are provided for violations of the act and the act is to become effective on January 1, 2003.

This article is new; therefore, strike-throughs and underscoring have been omitted.