BEFORE THE COMMISSIONER OF POLITICAL PRACTICES
OF THE STATE OF MONTANA
In the matter of the amendment of ARM 44.10.335 and 44.10.336, and the adoption of New Rules I through IX, all related to constituent services accounts
NOTICE OF AMENDMENT AND ADOPTION
TO: All Concerned Persons
1. On March 13, 2008, the office of the Commissioner of Political Practices (commissioner) published MAR Notice No. 44-2-143, regarding the notice of public hearing on proposed amendment and adoption of the above-stated rules at page 474 of the 2008 Montana Administrative Register, Issue No. 5; and on June 12, 2008, published MAR Notice No. 44-2-147 regarding the amended notice of public hearing on proposed amendment and adoption at page 1130 of the 2008 Montana Administrative Register, Issue No. 11.
2. After consideration of the comments received, the commissioner has amended ARM 44.10.335 and ARM 44.10.336 exactly as proposed.
3. The commissioner has adopted New Rule I (ARM 44.10.536), New Rule II (ARM 44.10.537), New Rule III (ARM 44.10.538), New Rule IV (ARM 44.10.539), New Rule VI (ARM 44.10.541), New Rule VIII (ARM 44.10.543), and New Rule IX (ARM 44.10.544), exactly as proposed.
4. The commissioner has adopted the following rules as proposed but with changes from the original proposal, matter to be stricken interlined, new matter underlined:
NEW RULE V (44.10.540) AUTHORIZED EXPENDITURES (1) through (1)(f) remain as proposed.
(g) expenses related to education, workshops, and conference participation that are incurred to represent and serve constituents;
(g) remains as proposed, but is renumbered (h).
(2) through (6) remain as proposed.
AUTH: 13-37-114, MCA
IMP: 13-37-401, 13-37-402, MCA
NEW RULE VII (44.10.542) RECORDS AND REPORTING (1) An eligible elected official who establishes a constituent services account under Title 13, chapter 37, part 4, MCA, 13-37-240, MCA, and the rules in this chapter, must file quarterly reports with the commissioner's office after an account is opened. Reports must be filed on or before
March 15, June 15, September 15, and December 15 April 10, July 10, October 10, and January 10 in each calendar year until the account is closed as provided in [NEW RULE IX] ARM 44.10.544. A report must be filed even if no expenditures have been made during the reporting period. The reports must include all expenditures made and interest accrued within ten days of the date through the end of the calendar quarter on which the quarterly report is due.
(2) through (4)(a) remain as proposed.
(b) A written log or other documents identifying the date on which constituent services were provided, the street address
, and city , and county at which the constituent services were provided, a statement describing the constituent services provided, and the full name and mailing address of at least one constituent on whose behalf the constituent services were provided.
(c) through (6) remain as proposed.
AUTH: 13-37-114, MCA
IMP: 13-37-401, 13-37-402, MCA
5. The commissioner has thoroughly considered the comments and testimony received. A summary of the comments received and the responses to the comments follow:
Comment 1: The statement of reasonable necessity is inadequate.
Response 1: The commissioner disagrees. The commissioner believes the reasonable necessity statement published on March 13, 2008, in support of the proposed amendments and adoptions adequately identifies the necessity and rationale for each of the proposed new rules or rule changes. Nevertheless, on June 12, 2008 the Commissioner of Political Practices published an amended notice providing a more detailed statement of reasonable necessity.
Comment 2: There is no basis for expanding or changing the existing definition of "immediate family" in ARM 44.10.335. The existing ban on returning surplus campaign funds to contributors would prohibit a successful candidate from returning a contribution to a first cousin or a spouse's grandparent.
Response 2: The existing definition of the term "immediate family" was based on a statutory definition of the term in the financial disclosure law applicable to elected officials. That definition has since been repealed. The amended definition in ARM 44.10.335 is based on Montana's nepotism statute, 2-2-303(1), MCA. The commissioner believes the amended definition is consistent with the expansive language in 13-37-240(2), MCA, which prohibits a candidate from using surplus campaign funds in a way that will provide a direct or indirect benefit of any kind to the candidate or any member of the candidate's immediate family.
Comment 3: New Rule II(3) appears to be an advisory or interpretive rule and is essentially meaningless.
Response 3: The commissioner disagrees. The commissioner believes it is important to direct the attention of those who create constituent services accounts to other provisions of Montana law that may also apply to the receipt or use of funds by a candidate or elected official. In addition, any candidates or elected officials who are not eligible to create constituent services accounts, but who may create or hold other accounts, should be aware of the restrictions in the Montana Code of Ethics and in the other cited statutes, which may apply to their activities or proposed activities.
Comment 4: In New Rule V, there is no basis for limiting reimbursement amounts to state rates.
Response 4: The commissioner believes it is appropriate to provide that reimbursement for travel, meals, and lodging expenses incurred to provide constituent services shall be at the rate and reimbursement levels applicable to elected officials as provided in Title 2, chapter 18, part 5, MCA, because the statutory definition of "constituent services" clearly indicates that those services are intended to relate to an eligible elected official's public duties.
Comment 5: The prohibition in New Rule V(6)(c) on the use of constituent services account funds to pay for the cost of polls or public opinion surveys is arbitrary and has no statutory basis.
Response 5: The commissioner disagrees. The commissioner believes that public opinion surveys and polls primarily benefit the elected official, not the official's constituents, and that permitting constituent services account funds to be used to pay for these activities is therefore inconsistent with the directive in 13-37-401 and 13-37-402, MCA, that such funds only be used for constituent services ("to represent and serve constituents").
Comment 6: A comment questions why there is a definition of the term "in-kind donation" in New Rule I, when the statute deals with constituent services accounts and surplus campaign funds.
Response 6: The definition is included because of the absolute prohibition against using any funds other than surplus campaign funds to pay for constituent services provided by an elected official. The definition of the term in New Rule I, and the prohibition against receiving in-kind donations of services in New Rule IV, are intended to make it absolutely clear that eligible elected officials may not seek assistance from, for example, lobbyists and principals, in providing services to constituents.
Comment 7: New Rule V, which lists authorized expenditures from constituent services accounts, does not specifically authorize the use of account funds for education, workshops, and conference participation. This is a common component of constituent services and the expenditure of funds for these purposes should be explicitly allowed.
Response 7: Although the commissioner believes that these types of expenditures would be permitted under subsection (1)(g) of the original rule proposal, the commissioner has added a subsection to specifically reference these authorized expenditures.
Comment 8: A comment suggests that the records and reporting provisions in New Rule VII require too much detailed information for some constituent services and don't "seem to work for most activities. . . "
Response 8: While the commissioner appreciates this concern, the commissioner believes that detailed recordkeeping and documentation are necessary to comply with the Legislature's clear directive that: (1) only surplus campaign funds may be deposited into an account; (2) the holder of an account must disclose the source of all money deposited into an account and all expenditures made from the account; (3) the quarterly reports must include the same information as required for a candidate reporting contributions under 13-37-229, MCA and expenditures under 13-37-230, MCA; and (4) any expenditure must be consistent with the directive in 13-37-401 and 13-37-402, MCA, that such funds only be used for constituent services ("to represent and serve constituents"). The commissioner also believes that detailed written documentation will assist in the resolution of any complaints of violations of the statute and notes that the written log required in New Rule VII(4)(b) is to be kept by the account holder and is not part of the quarterly reporting that is required to be filed regularly with the commissioner. For these reasons, no changes have been made to New Rule VII.
Comment 9: A comment questions why ARM 44.10.335(6)(b) defines "campaign" to include ballot issue campaigns, since 13-37-240, MCA, is clearly limited to candidates.
Response 9: While the commissioner agrees that 13-37-240, MCA, which restricts disposal of surplus campaign funds, applies to candidates, the statute does not distinguish between candidate campaigns and ballot issue campaigns in prohibiting the contribution of surplus funds "to another campaign." The commissioner therefore declines to change the proposal in response to this comment.
Comment 10: A comment suggests that New Rule IV should more specifically address how constituent services accounts relate to leadership committee accounts.
Response 10: The language and history of HB 462, which enacted 13-37-401 and 13-37-402, MCA, indicate that the law applies prospectively to new constituent services accounts created after the effective date of HB 462 (May 14, 2007). The effect of HB 462, as enacted, is that pre-existing accounts, including leadership political committee accounts created by an elected official who is eligible to create a constituent services account, may continue to exist and are not subject to regulation if they were in existence on the effective date of HB 462. An eligible elected official may not, however, establish a new leadership political committee account. See 13-37-402(3), MCA. Elected officials other than those who are listed in New Rule III are not prohibited from establishing a new leadership political committee account. See 13-37-402(3), MCA. The references to pre-existing accounts and leadership political committee accounts in New Rule IV are intended to clarify and provide guidance regarding the status of those accounts in the wake of the enactment of HB 462. In the judgment of the commissioner no further clarification or specificity is required.
/s/ Jim Scheier /s/ Dennis Unsworth
Jim Scheier Dennis Unsworth
Rule Reviewer Commissioner of
Certified to the Secretary of State September 2, 2008.