A BILL TO BE ENTITLED
AN ACT to establish spending limits on council of state and general assembly campaigns.
The General Assembly of North Carolina enacts:
SECTION 1.(a)  The General Assembly finds that:
(1)	The continuing unrestrained growth in expenditures on election campaigns for statewide and state legislative offices in the North Carolina is harmful to the democratic process and the integrity of elections and government in North Carolina. 
(2)	Unlimited campaign spending fosters the public perception that candidates and elected officials respond and give access to contributors and special interests who can assist them in raising the necessary campaign funds, in preference to those who make small or no contributions. This perception undermines public confidence in government that is necessary to the proper functioning of a democratic system. The importance of fundraising under a system of unlimited campaign spending also undermines the public's belief in the value of the vote.
(3)	The need for unlimited fundraising deters many potential candidates from seeking office, and leaves many elections effectively uncontested, undermining the necessary conditions for a robust public debate of the issues.
(4)	Because there are no upper limits on candidates' campaign expenditures, candidates and officeholders face pressure to spend inordinate time and attention on fundraising, for fear of being outspent by an opponent in the campaign funding arms race. The excessive time that must be devoted to fundraising in the absence of spending limits interferes with the ability of officeholders to carry out the duties for which they were elected and the ability of candidates to meet and interact with average voters.
(5)	Limits on campaign expenditures will limit the time spent soliciting contributions, and will reduce the need of elected officials to respond to, and provide special access to, contributors. As a result, candidates will be freed to devote more time and energy to debate of the issues and elected officials will be able to spend more time responding to constituents and to performing their official duties. 
(6)	Limits on campaign expenditures will encourage direct and small group contact between candidates and the electorate and will encourage the personal involvement of a larger number of citizens in campaigns, both of which are crucial to public confidence and robust debate of the issues. 
(7)	Limits on campaign expenditures will promote open and robust debate of the issues by allowing more candidates a meaningful opportunity to compete for office. 
(8)	The expenditure limits established in this act will allow sufficient spending for candidates to communicate effectively with the electorate and inform the electorate of their positions on the issues.
SECTION 1.(b)  The General Assembly adopts this act to provide restrictions on campaign expenditures and to provide other regulations of contributions to and expenditures for election to office in the State. 
SECTION 2.  Article 22A of Chapter 163 of the General Statutes is amended by adding a new section to read:
"§ 163‑278.13C. Mandatory expenditure limits for Council of State and General Assembly.
(a)	Limits. – Any candidate for Governor, Lieutenant Governor, Secretary of State, Attorney General, State Treasurer, State Auditor, Commissioner of Agriculture, Commissioner of Insurance, Commissioner of Labor, Superintendent of Public Instruction, State senator, or State representative shall limit campaign expenditures in an election to no more than seventy‑five percent (75%) of the median amount spent by candidates in the last two comparable elections for the same office. 
(b)	Calculating the Limits. – In the case of a primary, the last two comparable elections are the two most recent primaries for the office, however long ago held, with a second primary counting separately as a primary. In the case of the general election, the last two comparable elections are the last two general elections for the office. In the case of elections for State Senate, the median shall be calculated for any seat using all State Senate contests in the State in a comparable election. In the case of contests for State representative, the median shall be calculated for any seat using all State representative contests in the State in a comparable election. In State Senate and State representative calculations, only the primaries occurring in the two most recent election cycles shall be used. If the same individual is a candidate in more than one of the two comparable elections used in calculating the median, that candidate is counted as a separate candidate for each election.
(c)	Sources and Definitions. – The expenditure limits in this section apply regardless of whether the candidate is financing the campaign from private contributions, from the candidate's own resources, or from the resources of that candidate's immediate family. For purposes of this section, the term "candidate" includes a political committee controlled by the candidate. 
(d)	State Board Duties. – The State Board of Elections shall adopt rules to administer this provision. The State Board shall publicly announce, as soon as possible to the beginning of every election cycle for an office, the expenditure limit for that office."
SECTION 3.  G.S. 163‑278.27(a) reads as rewritten:
"(a)	Any individual, candidate, political committee, referendum committee, treasurer, person or media who intentionally violates the applicable provisions of G.S. 163‑278.7, 163‑278.8, 163‑278.9, 163‑278.10, 163‑278.11, 163‑278.12, 163‑278.13, 163‑278.13B, 163‑278.13C, 163‑278.14, 163‑278.16, 163‑278.17, 163‑278.18, 163‑278.19, 163‑278.20, 163‑278.39, 163‑278.40A, 163‑278.40B, 163‑278.40C, 163‑278.40D or 163‑278.40E is guilty of a Class 2 misdemeanor. The statute of limitations shall run from the day the last report is due to be filed with the appropriate board of elections for the election cycle for which the violation occurred."
SECTION 4.  G.S. 163‑278.34(b) reads as rewritten:
"(b)	Civil Penalties for Illegal Contributions and Expenditures. – If an individual, person, political committee, referendum committee, candidate, or other entity intentionally makes or accepts a contribution in violation of this Article or intentionally exceeds the expenditure limits provided in G.S. 163‑278.13C, then that entity shall pay to the State Board of Elections, in an amount to be determined by that Board, a civil penalty and the costs of investigation, assessment, and collection. The civil penalty shall not exceed three times the amount of the unlawful contribution or expenditure involved in the violation. The State Board of Elections may, in addition to the civil penalty, order that the amount unlawfully received be paid to the State Board by check, and any money so received by the State Board shall be deposited in the Civil Penalty and Forfeiture Fund of North Carolina."
SECTION 5.  This act becomes effective January 1, 2006, and applies to all expenditures made on or after that date, except that the State Board of Elections shall as soon as possible after this act becomes law calculate and publicly announce the expenditure limits for all upcoming elections that will be subject to this act.