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This article provides an overview of ballot measures, including the different types, the process involved, and the legal considerations. It also explores the structure and regulations surrounding ballot measure committees and government participation.
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Center for Transportation Excellence Public Involvement & the Early Education Campaign – Ballot Measures January 24, 2012 Christopher DeLacy Holland & Knight
Ballot Measures A Legal Overview
What is a Ballot Measure? • Hybrid of the legislative and electoral process • Involves both lobbying and political activity • A form of direct democracy • Creates, repeals, amends, modifies, or approves laws and constitutions
Types of Ballot Measures • Initiative • Veto Referendum • Legislative Referral • Note: Can be state or local - no ballot measures at the federal level
Key Terms: Initiative • Sometimes called popular, voter, or citizen initiatives • Proposes new laws or constitutional amendments • Can be direct or indirect • May include tax and bond issues • May be initiated by citizens • Example: 2012 California Change in Term Limits Initiative (amends constitution to impose term limits)
Key Term: Veto Referendum • Sometimes called a citizen referendum or legislative referendum • Repeals an existing law or constitutional provision • May include tax and bond issues • May be initiated by citizens • Example: 2012 North Dakota Property Tax Amendment, Measure 2 (repeals state property tax)
Key Term: Legislative Referral • Proposed legislation or constitutional amendments are put up for a popular vote • May include bond and tax issues • May only be initiated by state or local government • Example: 2012 Nevada Harrah's Sports Arena Initiative(establishes new sales tax and bonds)
Ballot Measures: Process • Drafting of text • Drafting title and summary • Signature collection • Certification for ballot • Voter approval/disapproval • Challenges
Ballot Measure Committees: Background • Committees created to support or oppose ballot measures • Similar in structure to political committees (e.g., candidates, political parties, PACs) • Must disclose contributions and expenditures • Unlike political committees, not generally subject to source and amount contribution limits
Ballot Measure Committees: Legal Background • First National Bank of Boston v. Belloti, 435 U.S. 765 (1978) (state statute prohibiting corporations from spending money on state referenda is unconstitutional) • Citizens Against Rent Control v. Berkeley, 454 U.S. 290 (1981) (city ordinance limiting contributions to a referendum committee to $250 is unconstitutional) • FEC Advisory Opinion 1980-95 (national banks may contribute to ballot measures) • FEC Advisory Opinion 1989-32 (foreign nationals may contribute to ballot measures) • Tip: Watch out for ballot measures associated with a candidate
Ballot Measure Committees: Structure • May be incorporated under state law as a non-profit • Must apply for a taxpayer ID (EIN) • Must open a separate bank account • Must comply with the Internal Revenue Code • Must comply with state and/or local laws, regulations, and rules • Must register with state or local government once certain thresholds are met
Ballot Measure Committees: Registration and Reporting Register with Secretary or State or City/County Clerk: • Statement of Organization • Periodic reports • Amendments • Termination report
Ballot Measure Committees: Tax Issues Are exempt from federal tax under IRC Section 501(c)(4) (not as 527 political organizations) May be exempt from state or local tax Contributions to ballot measure committees are considered lobbying expenditures by the IRS, not political campaign activity 501(c)(3) charitable organizations may contribute to a ballot measure committee (also 501(c)(4) community benefit organizations, (c)(5) labor unions, and (c)(6) trade associations may contribute)
Ballot Measures: Government Participation Many jurisdictions prohibit the use of taxpayer funds and resources to support or oppose a ballot measure (it is considered political activity) Taxpayer funds may typically be used to evaluate and provide objective information, but may not be used to urge voters to support or oppose Taxpayer funds generally may not be contributed to ballot measures or ballot measure committees A public employee may usually support a ballot measure in their personal capacity, after work hours, as a volunteer
Ballot Measures Questions?
2099 Pennsylvania Avenue, N.W, Suite 100 Washington, D.C. 20006 202.457.7162 chris.delacy@hklaw.com Christopher DeLacy