74(R) HB 262 House Committee Report

BILL ANALYSIS

C.S.H.B. 262
By: Madden
05-01-95
Committee Report (Substituted)

BACKGROUND

There is much discussion today about how to bring
uncompromising integrity and non-biased representation to the
judiciary. The current mechanism of electing judges has been
questioned. Without creating a whole new process of appointment,
merit selection and retention elections, etc., there is a way to
take our partisan election system and structure it so judicial
candidates meet a high standard of election campaign funding. By
implementing sweeping campaign finance reform measures, the
corrupting influence of high-dollar campaigns and back room dealing
can be diminished.

PURPOSE

The Madden/Denny bill works to preserve the independence and
electability of the judiciary by requiring judicial candidates to
agree to voluntary contribution and spending ceilings. Expenditure
limits range from $2.5 million for statewide elections down to
$100,000 for district judges and statutory county/probate judges in
districts with populations less than 250,000. The U.S. Supreme
Court ruled in Buckley vs. Valeo that mandatory expenditure limits
for federal races are unconstitutional, but voluntary limits should
be exempt from court challenge. The voluntary aspect also provides
the complying candidate a political weapon with which to strike a
non-complying candidate, so opting to ignore the voluntary
expenditure limits is only done at one's political peril.
Contributions limits likewise are set for individuals, law
firms, law firm PACs and special purpose committees. An individual
would be eligible to contribute $5,000 to statewide candidates,
$2,500 for judges running for the court of appeals, and $1,000 for
district judges and statutory county/probate judges. Law firms and
PACs are limited to contributions not exceeding $25,000, $10,000
and $5,000 respectively for the positions mentioned above.
Contributions from members of the same law firm are also limited.
In addition, contributions to specific-purpose committees that form
to elect a judicial candidate are considered contributions to that
candidate and are reported to the Texas Ethics Commission as such.
Limits are also set on the amount of money incumbents can keep
in their campaign/office-holder accounts, on the amount in personal
loans that can be repaid, and on the length of the fund raising
period with an allowance for an annual fund-raiser outside those
parameters if certain conditions are met.
No monies accumulated in the course of a campaign for non-judicial office are to be rolled over into a judicial race. The
incorrect characterization of an opponent's compliance with or
violation of the contribution/expenditure/personal loan repayment
limits subjects the candidate making false charges to civil
penalties. Any complying candidate attempting to evade the limits
by having a phony opponent declare as a non-complying candidate
should expect severe political repercussions from various sources
if their tactics are exposed. Political advertising disclosure
guidelines and provisions for disclosure of any special
relationships between a sitting judge and attorney in matters
pending before the bench are stipulated.
It is believed that both the perception of impropriety as well
as legitimate concerns that justice has the potential of being
subverted through the campaign fund raising and spending cycle is
largely remedied through these realistic constraints coupled with
the attendant reporting and disclosure filings.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill expressly grants
rulemaking authority to the Ethics Commission in SECTION 8 of the
bill (Section 255.008 (d) of the Election Code).

SECTION BY SECTION ANALYSIS

SECTION 1: Amends Chapter 253, Election Code, by adding Subchapter
F, as follows:

SUBCHAPTER F. JUDICIAL CAMPAIGN FAIRNESS ACT

Section 253.151. APPLICABILITY OF SUBCHAPTER.

(a) Sets forth the judicial candidates and holders of judicial
office to which this subchapter applies.

(b) Establishes supremacy of this or other legislative acts to
any other judicial campaign finance directives, guidelines, etc.
issued by a state agency or officer.

Section 253.152. DEFINITIONS. Defines "complying candidate,"
"complying officeholder," "election cycle," "in connection with
an election cycle," "judicial district," "law firm," "member,"
"non-complying candidate," and "statewide judicial office."

Section 253.153. VOLUNTARY COMPLIANCE. (a) Sets forth two
declarations required to be filed when a person becomes a
candidate for a judicial office.

(b) Prohibits a judicial candidate from knowingly accepting a
campaign contribution, or making or authorizing a campaign
expenditure before a declaration under Subsection (a) is filed.

Section 253.154. EFFECT OF NONCOMPLYING CANDIDATE. (a)
Establishes criteria under which a complying candidate or
specific-purpose committee supporting the candidate is not
required to comply with the prescribed limits on contributions, expenditures or repayment of personal loans.

(b) Requires the executive director of the commission or
county clerk, as appropriate, to issue an order suspending the
financial limits for a specific office no later than 10 days after the director or county clerk determines a violation of
this act or refusal by a competing candidate to comply from
the outset has been established.

(c) Clarifies the eligible entity and/or official authorized
to release a candidate from their declaration to comply with this
act's provisions.

Section 253.155. BENEFIT TO COMPLYING CANDIDATE. (a)
Entitles a complying candidate to state on political
advertising that the candidate complies with the Judicial Campaign Fairness Act, regardless of whether limits on
contributions, expenditures and the repayment of personal loans
are later suspended, and state that the candidate's opponent, if
the opponent is a noncomplying candidate, does not comply with the
Judicial Campaign Fairness Act.

(b) A noncomplying candidate is not entitled to these
benefits.

Section 253.156. CONTRIBUTION PROHIBITED EXCEPT DURING
ELECTION PERIOD. (a) Except as provided by Subsection (c) or by
Section 253.168, prohibits a person from knowingly making or
authorizing a political contribution to a complying judicial
candidate or officeholder or a specific-purpose committee for
supporting or opposing a complying candidate, or assisting a
complying officeholder, except within designated periods of time
corresponding to both characteristic and uncharacteristic election circumstances with unique allowances for the varying
situations, also making a distinction between statewide and
subordinate offices and allowing time to retire campaign debt.

(b) Prohibits a person from knowingly accepting a political
contribution made or authorized in violation of Subsection (a).

(c) Fund-raising activity allowed under the extended time
limits for retiring debt or building an officeholder account is
explained with greater specificity.

(d) No violation is involved if fund-raising beyond normal
limits is engaged in to cover costs associated with an
election contest.

(e) A complying officeholder may make an officeholder
contribution to himself or a specific-purpose committee for
supporting himself at any time, except as provided by Section
253.168, but may not exceed the limit prescribed by Section
253.167.

(f) "Deficiency debt" defined.

Section 253.157. WRITE-IN CANDIDACY. (a) Prohibits a person
from knowingly making or authorizing a political contribution
to a write-in candidate for judicial office or a specific-purpose
committee for supporting or opposing the candidate before the declaration of candidacy.

Section 253.158. CONTRIBUTION LIMITS. (a) Except as provided
by Subsection (e), prohibits a person from making or authorizing
political contributions to a complying candidate that in the
aggregate exceed the limits prescribed in Subsection (b) or (c) in connection with each election in which the judicial candidate
is involved.

(b) Sets forth contribution limits for individuals.

(d) Prohibits a complying candidate from accepting a political
contribution made or authorized in violation of Subsection (a).

(e) Provides that any contribution made by a general-purpose
committee tied to a law firm qualifies as a contribution by the
law firm and that a contribution by members that network with
other law firms will have their contribution attributed only to
their primary law firm.

(f) Provides that this section does not apply to a political
contribution made by the principal political committee of the
state executive committee or a county executive committee of a
political party.

Section 253.159. CONTRIBUTION TO CERTAIN COMMITTEES
CONSIDERED CONTRIBUTION TO CANDIDATE. Provides that a
contribution to a specific-purpose committee for supporting a
judicial candidate, opposing the candidate's opponent, or assisting the candidate as an officeholder is considered a
contribution to the candidate.

Section 253.160. LIMIT ON CONTRIBUTION BY MEMBER OF LAW FIRM.
(a) Prohibits a complying judicial candidate from accepting a
political contribution in excess of $125 from a member of a law
firm if the contribution, combined with all the contributions
from other members of the individual's law firm, would exceed
$50,000 in a judicial campaign for any office at the state
appeals court level or above, or $25,000 for any other
judicial office covered by this act.

(b) Requires a complying candidate who receives a political
contribution that violates Subsection (a) to return the
contribution.

Section 253.161. EXCEPTION TO CONTRIBUTION LIMITS. Exemption
from Sections 253.158 and 253.160 provided for relatives of
complying candidates.

Section 253.162. USE OF CONTRIBUTION FROM NONJUDICIAL OFFICE.
No funds contributed to a campaign, officeholder account or
political committee and designated for use by a non-judicial
candidate, officeholder or political committee are able to be redirected by the candidate, officeholder or political
committee to a race for judicial office unless the candidate
announced for judicial office while serving in the office they
intend to abdicate.

Section 253.163. CERTIFICATION OF POPULATION; NOTICE OF
EXPENDITURE LIMITS. (a) Requires the secretary of state to
deliver to the commission and the county clerk of affected
counties a written certification of the population of each judicial
district electing a judge or justice to office.

(b) Requires the commission or county clerk, as appropriate,
based on the certification of population, to deliver to each
candidate, within a specific time period, written notice of limits on expenditures and repayment of personal loans
applicable to the office sought.

Section 253.164. EXPENDITURE LIMITS. Sets limits for
political expenditures corresponding to a specified office or
judicial district categorized by population.

Section 253.165. EXPENDITURE BY CERTAIN COMMITTEES CONSIDERED
EXPENDITURE BY CANDIDATE. (a) Provides that an expenditure by
a specific- purpose committee supporting, opposing, or assisting
a candidate as an officeholder is considered an expenditure by the
candidate unless the candidate files an affidavit disclaiming
political affiliation with the committee, or does not receive
notice of the expenditure as provided by Section 254.128.

(b) Section 253.163 is applicable to any prior approval by a
candidate or officeholder of an expenditure by a general-purpose
committee supporting, opposing, or assisting a candidate as an
officeholder.

Section 253.166. LIMIT ON REPAYMENT OF PERSONAL LOANS. (a)
Limits use of political contributions by a complying candidate
or officeholder to repay a personal loan or loans accrued
during an election cycle by establishing various payback thresholds
based on the office aspired to or held or population of the
judicial district served.

(b) Prohibits the candidate and officeholder from qualifying
for a double entitlement on the personal loan repayment
provision.

Section 253.167. MAXIMUM AMOUNT RETAINED IN OFFICEHOLDER
ACCOUNT. (a) Except as provided by Section 253.168, and per the
provisions of Section 253.156, a complying officeholder is able
retain varying sums of unexpended political contributions dependent on the office that they hold, and any surplus is to
either be returned to contributors or donated to an IRS-qualified charity.

(b) The amount of political contributions remitted under
Subsection (a)(2)(A) may not exceed the aggregate amount accepted
from that person during the two years preceding the remittance.

Section 253.168. ANNUAL FUND-RAISING EVENT. A complying
officeholder can exercise the option of hosting one fund-raising
event in a calendar year outside the time constraints imposed by
Section 253.156(a) and officeholder account limits stipulated in Section 253.167 only if the special conditions itemized herein
are met.

Section 253.169. AGREEMENT TO EVADE LIMITS PROHIBITED. Any
complying candidate attempting to evade the provisions of this act
by having a phony opponent declare as a non-complying candidate
should anticipate severe political repercussions from various
sources if their tactics are exposed.

Section 253.170. MISREPRESENTATION OF OPPONENT'S COMPLIANCE
WITH OR VIOLATION OF SUBCHAPTER PROHIBITED. The incorrect
characterization by a judicial candidate of their opponent's compliance with or violation of the contribution/ expenditure/personal loan repayment limits outlined in this
act subjects the candidate making false charges to civil
penalties.

Section 253.171. CIVIL PENALTY. (a) Entity and vehicle for
determining if Sections 253.164, 253.169 or 253.170 were violated
by a judicial candidate identified.

(b) Criteria for evaluation of seriousness of infraction
established.

(d) Options for handling surplus funds after recovering costs
associated with imposing the civil penalty outlined.

SECTION 2: Amends Section 252.0032, Election Code, to establish
that awareness exists on the part of a candidate of the
nepotism provisions of Chapter 573, Government Code, and--if applicable--Subchapter F, Chapter 253, Election Code.

SECTION 3: Amends Sections 253.003, 253.004, and 253.005 to make
conforming changes in lieu of voluntary nature of compliance
with this act.

SECTION 4: Amends Subchapter E, Chapter 253, Election Code, by
adding Section 253.135 as follows: NONAPPLICABILITY TO
CERTAIN CONTRIBUTIONS AND EXPENDITURES IN CONNECTION WITH
JUDICIAL OFFICES. Establishes that compliance with this
act is voluntary.

SECTION 5: Amends Subchapter C, Chapter 254, Election Code, by
adding Section 254.0611 as follows: ADDITIONAL CONTENTS OF
REPORTS BY CERTAIN JUDICIAL CANDIDATES. (a) Specifies
components to be included in reports covered by Subchapter
F, Chapter 253, beyond requirements of Sections 254.031 and 254.061.

(b) Prior section referenced which provides definitions.

SECTION 6: Amends Subchapter D, Chapter 254, Election Code, by
adding Section 254.0911 as follows: ADDITIONAL CONTENTS OF
REPORTS BY CERTAIN JUDICIAL OFFICEHOLDERS. The holder of a
judicial office covered by Subchapter F, Chapter 253 has
the duty to fulfill the reporting requirements of Section
254.0611(a)(1), (3), and (4) in addition to Sections 254.031 and
254.091.

SECTION 7: Amends Subchapter E, Chapter 254, Election Code, by
adding Section 254.1211 to read as follows: ADDITIONAL
CONTENTS OF REPORTS OF CERTAIN COMMITTEES. (a) Establishes
that in addition to the requirements contained in Sections
254.031 and 254.121, a specific-purpose committee report addressing
their support or opposition of a judicial candidate
covered by Subchapter F, Chapter 253, must also satisfy
Section 254.0611 criteria with regard to report contents.

(b) Establishes that in addition to the requirements
contained in Sections 253.031 and 254.121, a specific-purpose committee report addressing their assistance of a
judicial officeholder covered by Subchapter F, Chapter 253,
must also satisfy Section 254.0611(a)(1), (3), and (4) criteria with regard to report contents.

SECTION 8: Amends Chapter 255, Election Code, by adding Section
255.008 as follows: REQUIRED DISCLOSURE ON POLITICAL
ADVERTISING BY CERTAIN JUDICIAL CANDIDATES. The judicial
candidate or the specific-purpose committee established to
support a candidate to which Subchapter F, Chapter 253,
applies who/which issued a declaration refusing to abide by its
provisions must convey that message with prescribed
language/size characters/duration of disclosure on/in all
their political advertising.

SECTION 9: Amends Chapter 21, Government Code, by adding Section
21.010 as follows: DISCLOSURE OF SPECIAL RELATIONSHIP
BETWEEN JUDGE AND ATTORNEY. (a) Defines "special
relationship."

(b) Sets deadline of first contested hearing for
disclosure by judge of any special relationship with an
attorney representing any party in the case.

(d) If judge recused, options successor can exercise.

(e) If grounds for recusal or disqualification arise due
to issues or circumstances covered under Section 21.005;
Section 11, Article V, Texas Constitution; or Rule 18b, Texas
Rules of Civil Procedure, this section does not apply.

SECTION 10: Amends Chapter 159, Local Government Code by adding
Subchapter C as follows: SUBCHAPTER C. FINANCIAL
DISCLOSURE BY COUNTY JUDICIAL OFFICERS.

Section 159.01. DEFINITION. Defines "county judicial
officer."

Section 159.052. FILING REQUIREMENT. Instructs a
county judicial candidate or officeholder to comply with
reporting requirements of Sections 572.022 and 572.023,
Government Code, by filing with the county clerk or county
elections administrator in a county having that position.

Section 159.053. FILING DATES; TIMELINESS OF FILING.
(a) Provides that financial statements required of a county
judicial candidate or officeholder by this subchapter are to
comply with Section 572.027 and 572.027 of the Government
Code respectively.

(b) References Section 572.029 of Government Code per
timeliness.

Section 159.054. PREPARATION AND MAILING OF FORMS. (a)
Provides options for form design.

(b) County clerk or county elections administrator to
comply with Section 572.030(c) of Government Code on
mailing deadline.

Section 159.055. DETERMINATION OF COMPLIANCE WITH SUBCHAPTER. (a) Stipulates enforcement mechanism to be
exercised by county clerk or county elections administrator
not later than the second day after the applicable filing
date under Section 159.053.

(b) Response to violation of filing requirements of this
subchapter.

Section 159.056. PUBLIC ACCESS TO STATEMENTS. (a) Sets
guidelines on maintaining and granting access to the
filings required under this subchapter.

(b) Requires logging of inspection requests and
mandatory record keeping.

Section 159.057. FAILURE TO FILE; CRIMINAL PENALTY.
A county judicial officer or candidate for a county judicial
office that knowingly fails to file a financial statement
as required by this subchapter commits a Class B misdemeanor.

Section 159.057. FAILURE TO MAINTAIN FILED FINANCIAL STATEMENTS; CRIMINAL PENALTY. (a) Instances of neglect
of duty for which a county clerk or county elections
administrator is liable.

(b) Exemption from prosecution if destroy records in
compliance with Section 159.056(c).

SECTION 11. Amends Section 159.032(3), Local Government Code, to
clarify definition of "county judicial officer."

SECTION 12. (a) Effective date for Sections 1-8: January 1,
1996.

(b) Makes application of Subchapter F, Chapter 253,
Election Code, as added by this Act, prospective.

SECTION 13. (a) Requires the secretary of state to deliver to
the commission and the county clerk of the affected
county written certification of the population of each judicial district not later than September 15, 1995.

(b) Requires the commission or the county clerk, as
appropriate, to deliver to each judicial candidate for an
office covered by Subchapter F, Chapter 253, Election Code,
written notice of expenditure limits within a specified
period of time.

(d) Effective date of this section.

SECTION 14. (a) Effective date for Section 21.010, Government
Code, as added by this act: September 1, 1995

(b) Declares all legal actions open for disclosure of
special relationships when the first contested hearing
before a judge is on or after September 1, 1995.

SECTION 15. Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The most significant alterations to H.B. 262 can be discerned
by noting the differences in the captions when comparing the
introduced version to the committee substitute. The repetitive
terminology is the contribution, expenditure and financial
disclosure filings language, now joined by such topics as political
advertising, disclosure of special relationships between judges and
attorneys and civil penalties.
Despite additional definitions, some fluctuations in
figures/dates, and a conscientious effort to specify or clarify
just what expectations are being placed on various individuals or
entities, the core elements of H.B. 262 remain intact. Among the
notable additions are: offering opportunities to retire campaign
debt and/or accumulate funds in an officeholder account by granting
some leeway amidst otherwise rigid fund-raising constraints;
characterizing the diverse affiliations among lawyers and the
association between a law firm and its PAC more precisely; making
sure special relationships between a judge and an attorney
representing any party to an action are disclosed; attaching civil
penalties or bringing negative attention to overt and covert
attempts to spurn or sabotage the spirit as well as the letter of
this initiative; stating that contributions received for non-judicial offices are not able to be expended in a judicial race and
subordinating all other non-legislated judicial campaign finance
reform measures to the provisions of this act.

SUMMARY OF COMMITTEE ACTION

HB 262 was considered by the Committee on Elections in a
public hearing on March 1, 1995. For the purposes of testimony the
Committee considered the following related bills together: HB 262,
HB 483, HB 926, HB 1110. The following persons testified in favor
of one or more of the bills: Justice John Cornyn of the Texas
Supreme Court for HB 262; Justice Craig Enoch of the Texas Supreme
Court for HB 262, HB 483, and HB 926; Chief Justice Tom Phillips
of the Texas Supreme Court for HB 262, HB 483, and HB 926. The
following persons testified against one or more of the following
bills: Camille Purvis representing Public Citizen against HB 262;
John Willingham representing the Texas Association of Elections
Administrators against HB 262; Dana DeBeauvoir representing the
County and District Clerks Association against HB 262; Tom Smith
representing Public Citizen against HB 262 and HB 926; Judge
Morris L. Overstreet of the Texas Court of Criminal Appeals against
HB 262. The following persons testified neutrally on one or more
of the bills: Ed Martin representing the Texas Democratic Party on
HB 262, HB 483, HB 1110, and HB 926; Suzy Woodford representing
Common Cause on HB 262; and Leonard Spearman representing Harris
County Commissioners Court on HB 262. HB 262 was referred to the
Subcommittee on Judicial Finance Reform; a subcommittee consisting
of Representatives Madden (Chair), Denny, Danburg, Munoz, Crabb,
Jones, and Ehrhardt.
HB 262 was considered by the Committee on Elections,
Subcommittee on Judicial Finance Reform in a public hearing on
March 29, 1995. The following person testified in favor of HB 262:
George Strong representing himself. The following person testified
neutrally on HB 262: Tom Smith representing the Public Citizen.
The Chair left HB 262 pending. The Chair laid out HB 262 as
pending business. The following person testified neutrally on HB
262: Ed Shack representing himself. The Chair left HB 262 pending.
HB 262 was considered by the Committee on Elections,
Subcommittee on Judicial Finance Reform in a public hearing on
April 3, 1995. The following person testified neutrally on HB 262:
Robert Lemons representing the Texas Association of Counties. The
Chair left HB 262 pending.
HB 262 was considered by the Committee on Elections,
Subcommittee on Judicial Finance Reform in a public hearing on
April 20, 1995. The Subcommittee considered a complete substitute
to HB 262. The following person testified in favor of HB 262:
Justice Craig Enoch of the Texas Supreme Court. The following
persons testified against HB 262: Judge Noe Gonzalez of the 370th
District Court; Judge Fernando G. Mancias, Hidalgo County; Judge
Tony Lindsay of the 280th District Court; and Dan Downey
representing himself. The Subcommittee did not adopt the
substitute to HB 262. The Chair left HB 262 pending.
HB 262 was considered by the Committee on Elections,
Subcommittee on Judicial Finance Reform in a public hearing on
April 24, 1995. The following persons testified against HB 262:
Judge Richard P. Bianchi, of Harris County, representing himself;
and Allen E. Blakemore, political consultant, representing himself.
The Chair left HB 262 pending.
After being recalled from subcommittee, HB 262 was considered
by the Committee in a public hearing on April 26, 1995. The
following persons testified in favor of HB 262: Richard J.
Trabulsi, Jr., representing Texans for Lawsuit Reform; and George
Strong representing himself. The following person testified
neutrally on HB 262: Sue Daniel representing the County Clerk's
Legislative Committee of the County and District Clerk's
Association of Texas. The Committee considered a complete
substitute for HB 262. The substitute was adopted without
objection. HB 262 was reported favorably as substituted with the
recommendation that it do pass and be printed, by a record vote of
5 AYES, 4 NAYS, 0 PNV, 0 ABSENT.