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Copyright © 2011 Holland & Knight LLP. All Rights Reserved
Center for Transportation Excellence
Public Involvement & the Early Education Campaign – Ballot Measures
January 24, 2012
Christopher DeLacyHolland & Knight
BALLOT MEASURES
A Legal Overview
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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
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TYPES OF BALLOT MEASURES
• Initiative
• Veto Referendum
• Legislative Referral
• Note: Can be state or local - no ballot measures at the federal level
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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)
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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)
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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)
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BALLOT MEASURES: PROCESS
• Drafting of text
• Drafting title and summary
• Signature collection
• Certification for ballot
• Voter approval/disapproval
• Challenges
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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
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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
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BALLOT MEASURE COMMITTEES: REGISTRATION AND REPORTING
Register with Secretary or State or City/County Clerk:
• Statement of Organization
• Periodic reports
• Amendments
• Termination report
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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)
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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
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BALLOT MEASURES
Questions?
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2099 Pennsylvania Avenue, N.W, Suite 100
Washington, D.C. 20006
202.457.7162
chris.delacy@hklaw.com
Christopher DeLacy