1. Copyright © 2011 Holland & Knight LLP. All Rights Reserved Center for Transportation Excellence Public Involvement & the Early Education Campaign – Ballot Measures January 24, 2012 Christopher DeLacy Holland & Knight

2. B ALLOT M EASURES A Legal Overview 2

3. W HAT IS A B ALLOT M EASURE ? Hybrid of the legislative and electoral process Involves both lobbying and political activity A form of direct democracy Creates, repeals, amends, modifies, or approves laws and constitutions 3

4. T YPES OF B ALLOT M EASURES Initiative Veto Referendum Legislative Referral Note: Can be state or local - no ballot measures at the federal level 4

5. K EY T ERMS : I NITIATIVE Sometimes called popular, voter, or citizen initiatives Proposes new laws or constitutional amendments Can be direct or indirect May include tax and bond issues May be initiated by citizens Example: 2012 California Change in Term Limits Initiative (amends constitution to impose term limits) 5

6. K EY T ERM : V ETO R EFERENDUM Sometimes called a citizen referendum or legislative referendum Repeals an existing law or constitutional provision May include tax and bond issues May be initiated by citizens Example: 2012 North Dakota Property Tax Amendment, Measure 2 (repeals state property tax) 6

7. K EY T ERM : L EGISLATIVE R EFERRAL Proposed legislation or constitutional amendments are put up for a popular vote May include bond and tax issues May only be initiated by state or local government Example: 2012 Nevada Harrah's Sports Arena Initiative (establishes new sales tax and bonds) 7

8. B ALLOT M EASURES : P ROCESS Drafting of text Drafting title and summary Signature collection Certification for ballot Voter approval/disapproval Challenges 8

9. B ALLOT M EASURE C OMMITTEES : B ACKGROUND Committees created to support or oppose ballot measures Similar in structure to political committees (e.g., candidates, political parties, PACs) Must disclose contributions and expenditures Unlike political committees, not generally subject to source and amount contribution limits 9

10. 10 B ALLOT M EASURE C OMMITTEES : L EGAL B ACKGROUND First National Bank of Boston v. Belloti, 435 U.S. 765 (1978) (state statute prohibiting corporations from spending money on state referenda is unconstitutional) Citizens Against Rent Control v. Berkeley, 454 U.S. 290 (1981) (city ordinance limiting contributions to a referendum committee to $250 is unconstitutional) FEC Advisory Opinion 1980-95 (national banks may contribute to ballot measures) FEC Advisory Opinion 1989-32 (foreign nationals may contribute to ballot measures) Tip: Watch out for ballot measures associated with a candidate

11. B ALLOT M EASURE C OMMITTEES : S TRUCTURE May be incorporated under state law as a non-profit Must apply for a taxpayer ID (EIN) Must open a separate bank account Must comply with the Internal Revenue Code Must comply with state and/or local laws, regulations, and rules Must register with state or local government once certain thresholds are met 11

12. B ALLOT M EASURE C OMMITTEES : R EGISTRATION AND R EPORTING Register with Secretary or State or City/County Clerk: Statement of Organization Periodic reports Amendments Termination report 12

13. B ALLOT M EASURE C OMMITTEES : T AX I SSUES Are exempt from federal tax under IRC Section 501(c)(4) (not as 527 political organizations) May be exempt from state or local tax Contributions to ballot measure committees are considered lobbying expenditures by the IRS, not political campaign activity 501(c)(3) charitable organizations may contribute to a ballot measure committee (also 501(c)(4) community benefit organizations, (c)(5) labor unions, and (c)(6) trade associations may contribute) 13

14. B ALLOT M EASURES : G OVERNMENT P ARTICIPATION Many jurisdictions prohibit the use of taxpayer funds and resources to support or oppose a ballot measure (it is considered political activity) Taxpayer funds may typically be used to evaluate and provide objective information, but may not be used to urge voters to support or oppose Taxpayer funds generally may not be contributed to ballot measures or ballot measure committees A public employee may usually support a ballot measure in their personal capacity, after work hours, as a volunteer 14

15. B ALLOT M EASURES Questions? 15

16. Please always enter your data in the right-hand box first. If there is only one presenter, please use this box. When entering your details, please use the following format: Line 1: Address Line 2: City, State, Zip Line 3: Phone (xxx.xxx.xxxx) Line 4: Email (this comment will not be appear on print- outs nor in slideshow mode) 2099 Pennsylvania Avenue, N.W, Suite 100 Washington, D.C. 20006 202.457.7162 chris.delacy@hklaw.com Christopher DeLacy