Enacts the "2010 Campaign Finance Reform Act"

Summary and description of provisions

The bill amends Article 14 of the election law to designate the existing law Title I and adds an identifi- cation requirement for independent political communications, a filing requirement for independent expenditures and a requirement that certain candidates disclose their intent to spend personal funds in a campaign.

It also adds a new Title II to Article 14 to provide for public financ- ing of primary and general election campaigns for statewide office, primary, general and special election campaigns for state legislative office and primary and general election campaigns for constitutional convention delegates.

TITLE I PROVISIONS

Identification of Independent Political Communications: The bill requires all independent political communications that expressly advo- cate for the election or defeat of a clearly identified, candidate or the success or defeat of a ballot proposal and cost more than $1000 to identify the source of the funding for such communication.

Independent Expenditures: The bill requires reporting of independent expenditures that cost more than $1000 and expressly advocates for the election or defeat of a clearly identified candidate or the success or defeat of a ballot proposal. Independent expenditures that occur after the last filing before an election must be reported within 24 hours.

Disclosure of the Intent to Use Personal Funds: Within 3 days of the last day to file designating petitions, all candidates for statewide office, state legislative office or constitutional convention delegate must file a statement with the state board of elections disclosing whether the candidate has or will contribute personal funds to his or her committee and estimating the amount of such funds.

TITLE II PROVISIONS

Criteria for Participation:

To be eligible for public financing, a candidate for nomination or election to a statewide office, state legislative office or as a consti-

tutional convention delegate must satisfy the legal requirements for having his or her name on the ballot, elect to participate in the public financing system, meet the threshold for eligibility and agree to file required statements, authorize a single participating committee; and identify the source of all campaign material.

Eligibility Threshold: Governor: Must collect not less than $900,000 from at least 9,000 match- able contributions made up of sums of up to $250 per individual contrib- utor who resides in New York state.

Lt. Governor (primary only), Attorney Gen. & Comptroller: Must collect not less than $300,000 from at least 3,000 matchable contributions made up of sums of up to $250 per individual contributor who resides in New York Sate.

Senate: Must collect not less than $25,000 from at least 250 matchable contributions made up of sums of up to $250 per individual contributor who resides in New York state including at least $12,500 from at least 125 individual contributors who reside in the senate district in which the seat is to be filled.

Assembly: Must collect not less than $10,300 from at least 100 matchable contributions made up of sums of up to $250 per individual contributor who resides in New York state including at least $5,000 from at least 50 individual contributors who reside in the assembly district in which the seat is to be filled.

At-large Delegate to a Constitutional Convention: Must collect not less than $25,000 from at least 250 matchable contributions made up of sums of up to $250 per individual contributor who resides in New York State.

District Delegate to a Constitutional Convention: Must collect not less than $5,000 from at least 50 matchable contributions made up of sums of up to $250 per individual contributor who resides in the district in which the seat is to be filled.

Matchable Contributions: May be collected after January first of the year of the primary or general election. For a special election, may be collected up to six months before the election. Consist of the net amount of contributions after deduction of the value of any food, drink or entertainment provided in exchange for the contribution. Only contributions from persons who reside in New York State are matchable.

The Match: Eligible contributions up to $250 are matched at the rate of $4 for every $1.

Triggers: If, however, a candidate who dots not elect to receive public funds raises, spends or contributes his or her own personal funds in an amount

greater than the expenditure limit established for such office for candidates participating in the public financing system, an additional grant of public funds is given to the participating candidate.

Grants: A participating candidate may receive up to four grants equaling 25% of the amount of public funds previously received by the candidate as a match for matchable contributions obtained and reported to the state board of elections. Each of the grants is added to the original expendi- ture limit, effectively creating a new TRIGGER for the next grant when the nonparticipating candidate raises, spends or contributes his or her own personal funds in an amount greater than the new expenditure limit.

Misc. Rules: To receive public funds for a primary election, a participating candi- date must agree to receive public funding for the general election.

Participating candidates who are unopposed in a primary election may not receive public funds. Participating candidates whose opponents don't raise or spend 10% of the expenditure limit are deemed unopposed. Participating candidates that are unopposed may raise private funds of up to 50% of the expenditure limit if there is a contest in the primary for at least one other party for such office. Such funds may only be raised with contributions of up to $2000 per contributor.

Candidates who are challenged in a primary and who do not seek public funds are not eligible for public funds for the general election.

Candidates who are unopposed in a general or special election may not receive public funds.

Permissible and Prohibited Uses of Public Funds: Public funds may be used only for qualified campaign expenditures during the year of the primary or general election. For a special election, such funds may only be used in the 3 months prior to the election. They may not be used for expenditures in violation of law, for payments to a candidate or to a relative of the candidate. (or to any business entity of which such a person is an officer or employee or has a ten percent or greater ownership interest), for payments in excess of fair market value, for any expenditure after the candidate or the candidate's only remaining opponent has been disqualified (until and unless reversed), to challenge an opponent's petitions or certificates, for non-campaign related food, drink or entertainment, or for gifts (except brochures, buttons, signs and other campaign material).

Contribution Limit: All candidates who choose to participate in the public financing system have a contribution limit of $2,000 per contributor.

Expenditure Limits: The following expenditure limits apply to all candidates who participate in the public financing system:

General Election Primary

Governor $12,000,000 1.1 per enrolled voter or $600,000, whichever is more, but not to exceed $6,000,000

Lt. Governor -- $1.1 per enrolled voter o $300,000, whichever is more, but not to exceed $3,000,000

Attorney General & $6,000,000 Same as Lt, Governor Comptroller

State Senator $350,000 $2.50 per enrolled voter or $35,000, whichever is more, but not to exceed $350,000

Member of Assembly $150,000 $2.50 per enrolled voter or $15,000, whichever is more, but not to exceed $150,000

At-Large Delegate $350,000 $.15 per enrolled voter or $75,000, whichever is more, but not to exceed $175,000

District Delegate $75,000 $1.10 per enrolled voter in the district or $5,000, whichever is more, but not to exceed $50,000

Party Expenditures in Support of Participating Candidates: Notwithstanding the expenditure limits for participating candidates, state party committees may make the following expenditures for services to participating candidates:

Gov. and Lt. Gov. $2,500,000 Att. Gen or Comp. $1,000,000 Senate $100,000 State Assembly $50,000 At-large Delegate $50,000 District Delegate $10,000

* Transfers to a participating candidate tray constitute up to 25% of such party expenditures.

Tax Check-off: The bill provides an income tax check-off of $5. Such monies would be paid into a separate fund, known as the New York State Campaign Finance Fund. If the state campaign finance fund lacks the money to pay all properly certified claims, the deficiency will be paid from the general fund.

Penalties:

Title

I

The knowing and willful failure to identify the source of campaign communications will subject the candidate to a civil fine equal to $1000 or the cost of the communication, whichever is greater.

A failure to file the statements required for an independent expenditure shall subject the person or entity to a cavil fine of $500.

A knowing and willful failure to file the statement required regarding the use of personal funds in a campaign shall subject the candidate to a civil fine of up to $5000.

TITLE II

The failure to make proper campaign finance filings, as required by Title II and rules and regulations promulgated thereunder, shall subject the offender to a civil penalty of up to $5000.

If a participating candidate's aggregate Expenditures exceed the expend- iture limitations, the candidate is liable for a civil penalty in an amount equal to three times- the amount of the excess.

Legislative history

A11507-a of 2008.

Justification

This public financing bill provides a comprehensive yet balanced approach to the public financing of political campaigns. It contains significant but realistic limitations on expenditures and contribution receipts, a means for recovering public funds when they are unspent, excessive or used for prohibited purposes, and penalties for violations of the filing requirements or the expenditure limitations for participants.

The hybrid "matching plus grant" structure of the program has several advantages. It will reduce the amount of time a candidate must spend raising money, leaving more time to address the issues that are impor- tant to the public. The matching component allows for participation by private citizens throughout the campaign while also conserving resources by ensuring that only candidates who can show substantial voter support and face opposition will be eligible to receive public funds. The grant components containing 4 separate triggers, allows candidates that are outspent to remain competitive without giving a participating candidate an unnecessary windfall.

The identification requirement for independent political communications, the filing requirement for independent expenditures and the requirement that candidates disclose their intent to spend personal funds in a campaign provide both participants and non-participants with information necessary to formulate their campaign strategy. The opportunity for party committees to make limited expenditures in support of participat- ing candidates provides flexibility to both the candidates and the parties.

Overall, the bill strikes a balance that allows challengers and incum- bents to compete fairly while capping the amount of public funds that will be expended.

Fiscal implications

There will be no cost in 2009. In 2010, there could be costs associated with participating candidates seeking election to the office of State comptroller. There would be no cost in 2011, 2012 and 2013. In 2014, there could be costs associated with participating candidates seeking election to a statewide office and constitutional delegate. There will be no cost in 2015. In 2016, there could be costs associated with participating candidates seeking election to state legislative office. There would be no cost in 2017. In 2018, there could be costs associated with participating candidates seeking election to a statewide office, state legislative office and constitutional dele- gate. Other states that have public financing systems in place have had very low participation rates at first with increasing participation in later elections. The long term cost of the system in New York is unknown.

Effective date

This act takes effect immediately; provided, however, that candidates for state comptroller will be eligible to participate in the public financing system beginning with the 2010 election, all state- wide candidates and constitutional delegates will be eligible to partic- ipate in 2014 and state legislative candidates will be eligible to participate in 2016.