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Expect the unexpected: Changes to Arizona’s campaign contribution limits

The secretary of state’s suggestions for compliance with Arizona’s campaign finance laws now that the increased campaign contribution limits of Chapter 98 (HB2593) are in effect have caused quite a stir.

Specifically, the secretary of state advises candidates that they need to form separate primary and general election committees and that the primary election committee may transfer no more than $2,000 to that same candidate’s general election committee. The secretary of state seems to have gotten this right. The real mystery is how the folks at the Legislature could have thought they were doing something else.

One of the basic rules of statutory construction is that the plain words chosen by the Legislature are the best indicator of legislative intent. If the words are clear, other rules used to sort out ambiguities in the law are not employed.

Here, the Legislature made some very straightforward changes designed to increase contribution limits. And — instead of continuing to have one limit for the primary and general elections combined — the Legislature changed the definition of “election” so that the primary and general are now separate elections with separate contribution limits.

The goal was to double the increased contribution limits. But given the complexity of campaign finance laws, this simple change in definition has other consequences that should have been anticipated.

Section 16-903 requires that each candidate “shall designate … a political committee for each election to serve as the candidate’s campaign committee.”  The amendment to the definition of “election” warned that 16-903 would be caught up in this change: “For THE purposes of sections 16-903 and 16-905, the general election DOES NOT INCLUDE the primary election.”  The Legislature could have deleted this reference to 16-903 or clarified that there must be one committee designated for the primary and general election campaigns combined. But it said nothing. The Legislature’s target was section 16-905 (contribution limits), but the amendment’s plain language requires application to section 16-903 as well.

Some may argue that section 16-903 does not expressly prohibit designating the same committee for the primary and general elections, as long as a designation is made for each election. Unfortunately, the Legislature’s failure to address a key “funds transfer” provision seems to undercut this construction. While amending the contribution limits in HB2593, the Legislature ignored 16-905(F), which addresses transfers between a candidate’s own designated committees:

• If both of the candidate’s committees have been designated for an election in the same year, the transfer or contribution of monies from one campaign committee to another campaign committee designated by the same candidate must be within the contribution limits (i.e., within the $2,000 limit on what one political committee can give another committee).

• If the transfer or contribution is from a candidate’s committee to another committee for that candidate designated for an election in a subsequent year, the contribution limits do not apply.

HB2593 clearly creates two elections — primary and general — within the same year and retains this provision limiting transfers between a candidate’s committees designated for elections within the same year. So, it becomes difficult to argue that the Legislature somehow intended that a candidate can designate the same committee for both the primary and general. If a candidate could do that, it would circumvent the transfer limitation.

It is unlikely that a court would adopt a construction of the committee designation requirement that would nullify this limit on transfers between a candidate’s own same-year committees.

The “surplus funds” provisions in section 16-915.01 do not provide an escape route for a candidate wanting to transfer unlimited funds between his primary and general election committees designated for the same election year. By definition, “surplus funds” exist when all of a political committee’s expenditures have been made and its debts have been extinguished. A political committee will need to get rid of any surplus funds before it can terminate.

Section 16-915.01 allows a candidate committee to transfer its surplus funds to the committee designated for that candidate’s “subsequent election,” a term which is not defined. Even if the 2014 general election constitutes an election subsequent to the 2014 primary, it is doubtful that section 16-915.01 will be read to allow a candidate to transfer all of his primary election surplus to his general election campaign. That would be in conflict with the funds transfer limit of section 16-905 more specifically applicable to committees designated by one candidate for elections in the same year.

The temptation exists to conclude that the Legislature surely did not intend to require a candidate to form separate primary and general election committees within one election year or to limit transfers between those committees. Any number of legislators may be willing to say that they had no such intent. But because there could be as many views on legislative intent as there are legislators, the courts look to a set of rules when construing statutes.

The plain words chosen by the Legislature will be honored and all of the statutes on this subject will be given effect. After all, had the Legislature intended to allow the free flow of campaign funds between a candidate’s primary and general election campaigns, it would have said so.

If the Legislature believes that it did not clearly express its intent, then it should make the necessary amendments. Until then, the secretary of state’s guidance is not the problem. Candidates should exercise great care in designating their primary and general election committees and in moving funds between them.

Candidates who have already raised significant 2014 funds that are in one account have some options to consider before determining how to proceed, including asking contributors to re-designate their contributions to apply to specific elections. But they must consider all applicable statutes — something the Legislature should be sure to do in the future.

Lisa Hauser, partner, Gammage & Burnham in Phoenix; practiced election law for almost 30 years.

2 comments

  1. To Stop the Craziness in Washington, Fund the Census – NYTimes.com

    http://takingnote.blogs.nytimes.com/2013/10/04/to-stop-the-craziness-in-washington-fund-the-census/?_r=0

    John McDonaldVancouver, Washington

    “As this editorial notes, the Census provides facts, figures and information on more than just population. Census surveys provide half of the info which the Bureau of Labor Statistics uses to tabulate the monthly unemployment numbers. Other surveys provide a wealth of info on crime, income, spending, transportation, housing, schools, medical care, hospitals…the list goes on. We all know that there are certain politicians who prefer their own “facts” to actual facts. Can it be that this accounts for some of the opposition to fully funding Census operations?”

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