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AGO Opinion 97038

Amendment to the Campaign Finance Limitation Act
Opinion 97038

DATE: August 4, 1997

SUBJECT: Amendment to the Campaign Finance Limitation Act

REQUESTED BY: Frank J. Daley, Jr., Acting Executive Director

Nebraska Accountability and Disclosure Commission

WRITTEN BY: Don Stenberg, Attorney General

Dale A. Comer, Assistant Attorney General




You have requested an Attorney General's Opinion concerning

§ 14 of LB 420, which was passed during the 1997 legislative

session and which amends the Campaign Finance Limitation Act (CFLA)

found at Neb. Rev. Stat. §§ 32-1601 through 32-1611. Your specific

concern is whether this recent amendment may abridge the freedom of

speech in violation of the First Amendment and be found

unconstitutional. In the event we conclude that § 14 is

unconstitutional, you also ask whether that section is severable

from the remainder of LB 420.




As set out in your request, the purpose of the CFLA is to

reduce spending in campaigns for certain offices by encouraging

candidates to abide by voluntary spending limits. As an

inducement, candidates who agree to abide by the spending limits

are potentially eligible to receive public funds for use in their

campaigns. In Op. Att'y Gen. No. 92120 we previously determined

that the Act was not unconstitutional in relation to the questions

which you raised at that time.




The recent amendment imposes new obligations on those persons

who make independent expenditures. Section 14 of LB 420 provides

that a person who intends to make independent expenditures of

$2,000 or more during an election period, for or against a

candidate seeking a covered elective office, must file a statement

of intent to expend with the Nebraska Accountability and Disclosure

Commission. That statement of intent must be filed no later than

45 days prior to the date of the election and must include certain

information including the name of the candidate for which the

independent expenditure is intended to be made and the maximum

amount of independent expenditures the person intends to spend in

support of or in opposition to that candidate. Section 14(2)

further provides as follows:




No person who has filed a statement of intent to expend

shall make independent expenditures exceeding twenty

percent more than the amount stated in subdivision (1)(e)

of this section or less than twenty percent less than

such amount. No person shall make independent

expenditures for a covered elective office without filing

a statement of intent to expend under this section.




Section 14 then allows a candidate to withdraw an affidavit of

intent to abide by the spending limitations if independent

expenditures are made in opposition to that candidate or on behalf

of another candidate for the same office and if the candidate has

not received public funds under the CFLA. You state in your

request that a candidate who has pledged to abide by the spending

limits was previously without the ability to respond to independent

expenditures because the pledge to abide by the voluntary spending

limits was irrevocable.




The definition of "independent expenditure" found at Neb. Rev.

Stat. § 49-1428 has also been amended at § 16 of LB 420 as follows:




Independent expenditure shall mean an expenditure as

defined in section 49-1419 by a person if the expenditure

is not made at the direction of, under the control of, or

with the cooperation of another person and if the

expenditure is not a contribution to a committee.




In Buckley v. Valeo, 96 S.Ct. 612 (1976), the United States

Supreme Court addressed the potential infringement on First

Amendment rights caused by requirements of the Federal Election

Campaign Act of 1971 concerning contributions and expenditures.

The Court concluded that the ceiling on independent expenditures,

and certain other restrictions on campaign expenditures in the Act,

imposed direct and substantial restraints on the quantity of

political speech and the ability of candidates, groups, and

citizens to engage in protected political expression, and were

therefore violative of the First Amendment. Id. at 634. The

expenditure ceilings at issue restricted certain individuals and

groups to an expenditure of $1,000 per year relative to a clearly

identified candidate and limited spending by candidates, their

campaigns, and political parties in connection with election

campaigns. The Court found that the governmental interest in

preventing corruption and the appearance of corruption was

inadequate to justify the ceilings on independent expenditures and

also found that the expenditure ceilings were not necessary to

prevent circumvention of the separate contribution limitations.

Id. at 647.




The Buckley court also examined the disclosure requirements of

the federal act and found that the provisions for disclosure by

those who make independent contributions and expenditures, if

narrowly construed, were within constitutional bounds. The Court

stated that compelled disclosure can seriously infringe on privacy

of association and belief guaranteed by the First Amendment, but

acknowledged that there were governmental interests sufficiently

important to outweigh the possibility of infringement. Id. at 656.

Those governmental interests fell into three categories. The Court

found that disclosure or reporting of contributions and

expenditures provides the electorate with information as to where

political campaign money comes from and how it is spent by the

candidate, deters actual corruption and avoids the appearance of

corruption and is a means of gathering the data necessary to detect

violations of the Act. Id. at 657-8. The disclosure and reporting

requirements survived strict scrutiny as the Court found they were

narrowly drawn to serve compelling governmental interests.




The United States Supreme Court has subsequently reaffirmed

these determinations. In FEC v. National Conservative Political

Action Committee, 470 U.S. 480, 105 S.Ct. 1459 (1985) the United

States Supreme Court examined a federal statutory dollar limitation

on independent expenditures by political committees. The Court

found that the expenditures at issue in this case produced speech

at the core of the First Amendment and that the governmental

interest in preventing corruption or the appearance of corruption

was not sufficiently strong to justify the expenditure limitations.




In Colorado Republican Campaign Committee v. FEC, 116 S.Ct.

2309 (1996) the Court held that the First Amendment prohibits the

application of a dollar limit provision to an expenditure that a

political party has made independently, without coordination with

any candidate. As stated by the Court at 116 S.Ct. 2315-6:




Beginning with Buckley, the Court's cases have found a

`fundamental constitutional difference between money

spent to advertise one's views independently of the

candidate's campaign and money contributed to the

candidate to be spent on his campaign.' (citations

omitted). This difference has been grounded in the

observation that restrictions on contributions impose

`only a marginal restriction upon the contributor's

ability to engage in free communication . . . .'




In contrast, the Court has said the restrictions on

independent expenditures significantly impair the ability

of individuals and groups to engage in direct political

advocacy and `represent substantial . . . restraints on

the quantity and diversity of political speech.' (quoting

Buckley 96 S.Ct. at 635.) And at the same time, the

Court has concluded that limitations on independent

expenditures are less directly related to preventing

corruption, since `[t]he absence of prearrangement and

coordination of an expenditure with the candidate . . .

not only undermines the value of the expenditure to the

candidate, but also alleviates the danger that

expenditures will be given as a quid pro quo for improper

commitments from the candidate.' (quoting Buckley at

648).


In McIntyre v. Ohio Elections Commission, 115 S.Ct. 1511

(1995), the United States Supreme Court found unconstitutional an

Ohio statute that prohibited anonymous campaign literature in that

it abridged the freedom of speech in violation of the First

Amendment. Although the State of Ohio contended that the Court had

previously supported the constitutionality of disclosure

requirements, the Court noted that, in Buckley, it had expressed

approval of a requirement that independent expenditures in excess

of a threshold level be reported to the Federal Election

Commission, but that requirement required only an identification of

the amount and use of money expended in support of a candidate and

was far different from compelled self-identification in campaign

literature. The Court noted that the Ohio statute's infringement

on freedom of speech was more intrusive than the Buckley disclosure

requirement and rested on different state interests.




The United States Supreme Court has thus distinguished

expenditures from contributions and dollar limitations and other

prohibitions from disclosure requirements. LB 420, § 14 is in one

sense a disclosure provision, requiring the filing of a statement

of intent to make an independent expenditure. However, the person

who fails to timely file the statement of intent is then absolutely

prohibited from making that independent expenditure. Section 14

also requires that the statement of intent set forth the maximum

amount of independent expenditures the person intends to spend with

regard to a covered elective office. The person who files the

statement of intent as required more than 45 days prior to the

election is then restricted in making independent expenditures to

an amount not exceeding 20 percent more than the listed amount.

Further, the person who timely files the statement of intent must

then make the independent expenditure as planned and may not spend

less than 20 percent less than the listed amount. While not an

absolute prohibition or dollar limitation on independent

expenditures as discussed in Buckley, § 14 appears more intrusive

relative to First Amendment rights than a mere disclosure

requirement with regard to expenditures previously made.




It is clear that independent expenditures are protected speech

and that restrictions on those expenditures may infringe the

freedom of speech and impinge on protected associational freedoms.

A court would employ a strict scrutiny test in determining whether

§ 14 may be upheld as against constitutional challenge. "When

considering whether a campaign finance law unconstitutionally

infringes freedom of speech, this Court's task is to decide whether

the provision in question actually `burdens the exercise of

political speech and, if it does, whether it is narrowly tailored

to serve a compelling state interest.'" Shrink Missouri Government

PAC v. Maupin, 71 F.3d 1422, 1424 (8th Cir. 1995) (citing Austin v.

Michigan Chamber of Commerce, 110 S.Ct. 1391 (1990).)




The state interests that provided the impetus for the

enactment of the recent amendments to the CFLA are described at LB

420, § 2 as follows:




The Legislature finds that there is a compelling state

interest in preserving the integrity of the electoral

process in state elections by insuring that these

elections are free from corruption and the appearance of

corruption and that this end can only be achieved if (a)

reasonable limits are placed on the amount of campaign

contributions from certain sources and (b) the sources of

funding and the use of that funding in campaigns are

fully disclosed.




As discussed previously, the United States Supreme Court has

generally found that the governmental interest in preventing

corruption or the appearance of corruption may be sufficient to

justify a disclosure requirement, but is not sufficient to justify

a ceiling on expenditures. These governmental interests have also

been discussed in the recent Eighth Circuit case of Day v. Holahan,

34 F.3d 1356 (8th Cir. 1994).




In Day, constitutional challenges were made to sections of the

Minnesota campaign reform laws. The Minnesota statutory scheme

included voluntary spending limits and eligibility for public

subsidies with regard to campaigns. Among the 1993 changes and

additions to the Minnesota campaign finance laws was a provision

directed to independent expenditures. That provision was described

by the Court of Appeals as follows:




The candidate whose defeat is advocated (or whose

opponent's election is encouraged) by the independent

expenditure has her own expenditure limits increased by

the amount of the independent expenditure (citation

omitted). The Minnesota Ethical Practices Board then

must pay her, if she is eligible to receive a public

subsidy and has raised two times the minimum amount

required for a match, an additional public subsidy equal

to one-half the amount of the independent expenditure.

Thus, by advocating a candidate's defeat (or her

opponent's victory) via an independent expenditure, the

individual, committee, or fund working for the

candidate's defeat instead has increased the maximum

amount she may spend and given her the wherewithal to

increase that spending - merely by exercising a First

Amendment Right to make expenditures opposing her or

supporting her opponent. . . . To the extent that a

candidate's campaign is enhanced by the operation of the

statute, the political speech of the individual or group

who made the independent expenditure `against' her (or in

favor of her opponent) is impaired. Day at 1359-1360.




The Court held that the State of Minnesota failed to show that the

statute at issue was narrowly drawn to serve a compelling state

interest. One of the State's interests in Day was encouraging

candidates to accept the voluntary campaign spending limits and the

accompanying public subsidies. The Court of Appeals stated that it

was "not certain" that this was a sufficiently compelling interest,

but did not decide that issue because it held that, "with candidate

participation and public campaign financing nearly 100 percent

before enactment of § 10A.25 subd. 13, the interest, no matter how

compelling in the abstract, is not legitimate." Day at 1361. The

court also pointed out at footnote 6 of its opinion that the

State's concern that candidate participation in publicly financed

campaigns might be eroded without the new limits on independent

expenditures was wholly speculative. The Court further found that

the statute was not narrowly tailored to encourage participation in

the public financing scheme by the non-participants. The Minnesota

statute was, therefore, found to be unconstitutional.




The recent Nebraska amendment, of course, differs in some

respects from the Minnesota statute found unconstitutional by the

Eighth Circuit Court of Appeals. Under LB 420, § 14, the candidate

whose defeat is advocated or whose opponent's election is

encouraged by an independent expenditure does not automatically

have her own expenditure limits increased by the amount of the

independent expenditure, but is allowed to withdraw a previously

filed affidavit of intent to abide by the voluntary spending

limitations if the candidate has not received public funds under

the act. Also, as distinguished from the Minnesota statute at

issue in Day, the Nebraska statute does not provide for an

additional public subsidy to the candidate negatively impacted by

the independent expenditure. In fact, the Nebraska candidate who

withdraws a previous affidavit to abide by the spending limits

would then receive no public funds under the Campaign Finance

Limitation Act. Nevertheless, it appears to us that a court could

find that, to the extent that the candidate's campaign was enhanced

by the operation of the statute in that the candidate was allowed

to withdraw the previous affidavit of intent to abide by the

spending limits, the political speech of the person who made the

independent expenditure "against" that candidate would be impaired.




In addition, the Nebraska statute prohibits independent

expenditures of more than $2000 unless the person who wishes to

make the independent expenditure files a timely statement of intent

and restricts that person from subsequently spending more than 20

percent more than the amount listed in his statement of intent or

less than 20 less than the listed amount. It appears that the

person filing the statement of intent would be compelled to spend

an amount within 20 percent of the dollar figure listed in his

statement of intent even if circumstances changed and a candidate

in question, for example, decided not to run for office or changed

his position on certain issues after a statement of intent to

expend was filed.




While we have found no case directly on point, we conclude for

all of the reasons stated above that § 14 is unconstitutional. In

this regard we note that, while in most constitutional challenges

it is presumed that all acts of the Legislature are constitutional

and all reasonable doubts are resolved in favor of

constitutionality (In Re Applications A-16027, et al., 242 Neb.

315, 495 N.W.2d 23, (1993), when a statute is contended to infringe

on the exercise of First Amendment rights, the presumption is to

the contrary and the burden of proof is shifted. The statute's

proponent then bears the burden of establishing the statute's

constitutionality. Acorn v. City of Frontenac, 714 F.2d 813, 817

(8th Cir. 1983).




To the extent that § 14 may be found unconstitutional, you

also ask for our opinion whether that section is severable from the

remaining provisions of LB 420. Assuming, arguendo, that the

requirement of a statement of intent to expend were held

unconstitutional as impermissibly burdening the freedom of speech,

we believe the remaining provisions of the bill would be upheld.

We first note that, whether reviewed by a state or federal court,

the court would address the severability of § 14 under Nebraska

law. See, Kinley Corp. v. Iowa Utilities Board, 999 F.2d 354, 359

(8th Cir. 1993) (holding that questions regarding severability of

state statutes are controlled by state law.)




Under Nebraska law, an unconstitutional portion of a statute

"may be severed if (1) absent the unconstitutional portion, a

workable statutory scheme remains; (2) the valid portions of the

statute can be enforced independently; (3) the invalid portion was

not an inducement to the passage of the statute; and (4) severing

the invalid portion will not do violence to the intent of the

Legislature." State ex rel. Stenberg v. Moore, 249 Neb. 589, 595,

544 N.W.2d 344, 349. See, State ex rel. Stenberg v. Murphy, 247

Neb. 358, 527 N.W.2d 185 (1995); State ex rel. Spire v.

Strawberries, Inc., 239 Neb. 1, 473 N.W.2d 428 (1991).




While a severability clause is not necessarily determinative

of the question, it is an indication of legislative intent and we

note that LB 420 contains a severability clause at § 24. Our

review of LB 420 reveals that §§ 1-14 amend the Campaign Finance

Limitation Act. Of those sections, §§ 1-13 primarily clarify the

existing Act and the requirements for the affidavit to abide by the

voluntary spending limits, the qualifications for public funds and

the disbursement of public funds under that Act. The remaining

sections of LB 420 amend accountability and disclosure commission

provisions of Chapter 49 and primarily address reporting

requirements, including a new reporting requirement for independent

expenditures, and the general enforcement of both the Campaign

Finance Limitation Act and the Nebraska Political Accountability

and Disclosure Act. Applying the principles set forth by the

Nebraska Supreme Court, we believe section 14 would be considered

severable. The value and enforcement of the remaining portions of

the bill are not dependent on the existence of the statement of

intent to expend found at § 14.






Sincerely,




DON STENBERG

Attorney General






Dale A. Comer

Assistant Attorney General