L.L. 2001/021

Enactment date: 4/25/2001

Int. No. 879

By the Speaker (Council Member Vallone) and Council Members Pinkett, Carrion, Henry, Marshall, Miller, Moskowitz, Nelson, Perkins, Reed, Warden, White, DiBrienza, Freed, Malave-Dilan and The Public Advocate (Mr.Green); also Council Members Leffler, Robinson, Rodriguez, Lasher and Rivera

A Local Law to amend the administrative code of the city of New York in relation to campaign financing.

Be it enacted by the Council as follows:

Section 1. Declaration of Legislative Intent and Findings.

In October 1998, the Council enacted Local Law 48, which, among other provisions, provided that participating candidates in the City's campaign finance program who do not accept corporate contributions receive payment for qualified campaign expenditures of four dollars for every one dollar of matchable contributions. For candidates choosing to take corporate contributions, Local Law 48 provided that they would receive the previous matching rate of one-to-one. Subsequent to the Council passing Local Law 48, amendments to the Charter were approved by the voters through a referendum in the November 1998 election. These amendments included a ban on corporate contributions for all participating candidates, thereby making all participating candidates eligible for matching public funds at a rate of four-to-one pursuant to the unamended provisions of Local Law 48. See Charter § 1052(a)(12). Accordingly, during the 1999 election cycle, the Campaign Finance Board distributed matching public funds to participating candidates at a rate of four-to-one. Understandably, participating candidates and prospective participating candidates have anticipated four-to-one matching funds, relying on the unamended provisions of Local Law 48, pronouncements made by the Campaign Finance Board (See, e.g. Advisory Opinion No. 1998-2), and the Board's distribution of funds during the 1999 elections.

Recently, however, and notwithstanding Local Law 48 and the Campaign Finance Board's pronouncements and participating candidates' reliance thereon, the Director of Management and Budget and the Commissioner of Finance filed a complaint in Supreme Court, New York County, against the Campaign Finance Board (City of New York v. New York City Campaign Finance Board), claiming that the four-to-one provisions of Local Law 48 were invalidated by the Charter prohibition on corporate contributions adopted by the voters in the 1998 referendum. Failing to understand that the ban on corporate contributions continued to trigger the four-to-one provisions of Local Law 48 for all participating candidates, the complaint alleges that participating candidates are only entitled to a one-to-one match of public funds.

The Council, therefore, enacts this legislation to allay any confusion created by the above lawsuit, as well as by an opinion of the New York City Corporation Counsel's Office, dated December 29, 1998, which concluded that the 1998 Charter amendments required that the matching rate reverts back to the rate that existed prior to the enactment of Local Law 48. The Council finds plaintiffs' position in City of New York v. New York City Campaign Finance Board and Corporation Counsel's opinion to be contrary to the clear meaning of the Campaign Finance Act. By generating an atmosphere of confusion, prospective participating candidates in the upcoming election cycle may not have full confidence that they can predict the level of funds available for their campaigns or that they will have the requisite financing to even attempt campaigning for elected office. Any confusion and unpredictability created by the lawsuit and by Corporation Counsel's opinion undermines the integrity of the Campaign Finance Act. Furthermore, Corporation Counsel's opinion runs contrary to Advisory Opinion No. 1998-2 of the Campaign Finance Board, dated October 23, 1998, which held that "the Charter amendment would trigger the 4:1 matching rate for all participating candidates". Indeed it would be illogical to conclude that the Charter proposal to mandate the burden of a corporate ban would also effectively withdraw financial incentives and off-sets the Council has devised for promoting Program participation."

The Council enacts these technical amendments to Section 3-703 ("Eligibility and other requirements"), 3-705 ("Optional public financing") and 3-706 ("Expenditure limitations; additional financing and limits") in order to reaffirm the existing legal requirements of Local Law 48 providing matching funds at a rate of four-to-one, thereby maintaining the integrity of the campaign finance program. The four-to-one matching rate set forth in Local Law 48 provides a greater level of matching funds for small contributors, enhances the opportunity for candidates who do not have access to large contributors, and increases the role of New York City residents' contributions and public matching funds on the total financing of candidates. The four-to-one matching rate also assures that candidates who give up the opportunity to accept corporate contributions by joining the campaign finance program will receive financial support sufficient to generate and sustain a robust campaign. In addition, these technical amendments reaffirm that participating candidates campaigning against a candidate who is not a participant in the campaign finance program receive a five-to-one match. The four-to-one and five-to-one rates compensate for the lost funds that participating candidates may have raised from corporate contributions had they not joined the Campaign Finance Program. Such compensation furthers a salient goal of the Campaign Finance Act, which is to encourage participation in a fair and comprehensive program of campaign finance reform.

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[Consolidated provisions are not included in this Appendix A]

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§ 6. This local law shall be effective as of January 1, 1999