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NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9281 SPONSOR: Heastie (MS)
TITLE OF BILL: An act to amend the election law, in relation to enacting the "2016 Fair Elections Act"; to amend the election law, the state finance law and the tax law, in relation to providing for optional partial public financing of certain election campaigns in this state; and to amend the general business law, in relation to additional surcharges   SUBJECT AND PURPOSE: To provide optional public financing of campaigns for statewide and state legislative offices and constitutional convention delegates.   SUMMARY AND DESCRIPTION OF PROVISIONS: This bill would create an optional public financing system for certain elections within the state of New York. Specifically, the bill adds a new Title II to Article 14 to provide for public financing 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. Section 1 of the bill is the title. Section 2 of the bill contains the legislative findings. Section 3 of the bill amends section 3-104 of the election law to provide that cases involving possible violations of campaign finance laws by a candidate for attorney general will be referred to the appro- priate district attorney. Section 4 of the bill amends the heading for article 14 of the election law. Section 5 of the bill adds a new Title II to article 14 of the election law to create an optional public financing system for certain elections within the state, as follows:   OPTIONAL PUBLIC FINANCING OF ELECTIONS: The bill creates new definitions relating to the optional public finance system.   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 and authorize a single participating committee.   ELIGIBILITY THRESHOLD: Governor: Must collect not less than $650,000 from at least 6,500 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 $200,000 from at least 2,000 matchable contributions made up of sums of up to $250 per individual contributor who resides in New York State. Senate: Must collect not less than $20,000 from at least 200 matchable contributions made up of sums of up to $250 per individual contributor who resides in New York State including at least $10,000 from at least 100 individual contributors who reside in the senate district, or in any part of any county in the Senate district, in which the seat is to be filled. Assembly: Must collect not less than $10,000 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, or in any part of any county in the Assembly district, in which the seat is to be filled. At-large Delegate to a Constitutional Convention: Must collect not less than $20,000 from at least 200 matchable contributions made an 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, or any part of any county in the district, in which the seat is to be filled.   MATCHABLE CONTRIBUTIONS: Matchable contributions may be collected during the election cycle in which the primary or general election is held for the public office sought. 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 $6 for every $1.   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 are deemed unopposed unless there is at least one other candidate, as defined by § 14-100(7) of the election law, in the race for the same office. 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 to further the candidate's nomination or election for the office sought. 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) in excess of the fair market value for services rendered, 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. Public funds may not be given as a campaign contribution or a transfer.   CONTRIBUTION LIMIT: All candidates who choose to participate in the public financing system have a contribution limit of $2,000 per contributor.   PUBLIC FUNDS RECEIPT LIMITS: The following limits on public funds apply to all candidates who partic- ipate in the public financing system: General Election Primary Governor $12,000,000 $9,000,000 Lt. Governor --------- $6,000,000 Attorney General $8,000,000 $6,000,000 Comptroller $8,000,000 $6,000,000 State Senator $ 400,000 $350,000 Member of Assembly $ 200,000 $150,000 At-Large Delegate $ 350,000 $175,000 District Delegate $ 75,000 $ 50,000 NOTE: A participating candidate may raise unlimited amounts of private money subject to the $2,000 per contributor limitation.   PARTY EXPENDITURES IN SUPPORT OF PARTICIPATING CANDIDATES: Notwithstanding the expenditure limits for participating candidates, a state party committee may make the following expenditures for services to participating candidates the party has nominated: Gov. and Lt. Gov. $2,500,000; Atty Gen. or Comptroller $1,000,000; Senate $100,000; State Assembly, $50,000; At-large Delegate $50,000; District Delegate $10,000 *Transfers to a participating candidate may constitute up to 25% of such party expenditures.   ADMINISTRATION AND ENFORCEMENT: Administration of the new Title II will be handled by the state board of elections. The board may conduct examinations and audits of all contrib- utions and qualified expenses.   PENALTIES: CIVIL: *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. *Any person or authorized committee who knowingly and willfully violates any other provision of Title III or any regulations promulgated there- under shall subject the offender to a civil penalty of up to $10,000.   CRIMINAL: *All prosecutions under Title II for criminal acts shall he prosecuted by the Attorney General, unless there is reasonable cause to believe that a candidate for attorney general has violated any provision where- upon the matter shall be referred to the appropriate district attorney. *The failure to make proper campaign finance filings, as required by Title II within 10 days or anyone that willfully violates any other provision of this title shall he guilty of a misdemeanor, and in addi- tion to such other penalties as may be provided by law, shall be subject to a fine not to exceed the amount of $10,000. *Any person who knowingly and willfully contributes, accepts or aids or participates in the acceptance of a contribution in an amount exceeding an applicable maximum specified in this article shall be guilty of a misdemeanor and shall be subject to a fine not to exceed the amount of $10,000. *Any person who knowingly and willfully makes a false statement or know- ingly omits a material fact to the board or an auditor designated by the board during any audit conducted pursuant to new section 14-218 of the election law shall be guilty of a class E felony. * In addition to any other sentence lawfully imposed upon a finding of guilt in a criminal prosecution commenced under the provisions of this bill, a court may order a defendant to repay to the board any public matching funds obtained as a result of any criminal conduct.   DEBATES: Participating candidates are required to participate in at least one debate before the primary election and in at least one debate before the general election for which the candidate receives public funds, unless the participating candidate is running unopposed. A non-participating candidate may be a party to such debates.   PROCEEDINGS Section 6 of the bill add a new section 16-103 to the election law to create new proceedings as to public financing in which determinations of eligibility, qualified campaign expenditures, or payments relating to examinations and audits may be heard in supreme court, Albany county.   NOTICE TO STATE BOARD Section 7 of the bill adds a new section 4-115 to the election law providing that the board of elections receiving petitions for a member of the state legislature shall send notice of such petition to the state board within seven days the last day to file such petitions; each county board of elections shall also send notice to the state board within one day of a petition or certificate of nomination or certificate of accept- ance, declination or substitution; the state board shall also be noti- fied forthwith of any disqualification or finding of invalidity or reversing of same by the board of elections or a court of competent jurisdiction.   SOURCES OF FUNDING: Sections 8, 9 and 10 create the New York state fair elections fund for the public finance regime, to be funded by four sources, as follows: 1) The bill imposes an additional 10% surcharge on recoveries for frau- dulent practices relating to stocks, bonds, other securities as well as all other recoveries having to do with fraud by the Attorney General. 2) The bill provides for the transfer of available monies in the state abandoned property fund to the state fair elections fund. 3) The bill provides an income tax check-off of $5 to be donated to the state fair elections fund. The taxpayers' tax liability would not be affected by making this designation. 4) If the state fair elections fund lacks the money to pay all properly certified claims, the deficiency will be paid from the general fund.   LEGISLATIVE HISTORY: This is a new bill, based upon A4980-E of 2014 (Silver).   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 partic- ipants. The "matching 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 important to the public. The matching component allows for participation by private citi- zens 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. 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: Starting in 2017, there could be costs associated with participating candidates seeking election as constitutional convention delegates in 2018. Starting in 2018, there could be costs associated with participat- ing candidates seeking election to the state legislature or a statewide office in 2022. The long term cost of the system in New York is unknown.   EFFECTIVE DATE: This act takes effect immediately; provided, however, that candidates for constitutional convention delegates will be eligible to participate in the public financing system beginning with the 2018 election; state legislative Candidates and all statewide candidates will be eligible to participate in 2022.