Oregon Advisory Opinions June 18, 1979: OAG 7 9-78 (June 18, 1979)

OAG 7 9-78.

ORS 316.102 now authorizes a credit against personal income taxes for certain political contributions. Senate Bill 698 would make the credit against taxes available only for contributions to a candidate who files with the Secretary of State a declaration that the candidate's campaign election expenditures, including expenditures by the candidate's campaign committees, will not exceed a specified amount.

The tax credit would also be available for contributions to a political organization, only if its treasurer files with the Secretary of State a declaration that its expenditures will be limited to contributions to candidates who have filed a declaration of expenditure limitation, or in supporting or opposing ballot measures.

If the candidate or organization fails to comply with the declaration, a civil penalty may be imposed of up to $2,500 or twice the amount of tax credits received by contributors, whichever is greater. The object of the proposed legislation is to prevent excessive campaign spending

which may distort the election process.

The leading federal case on this subject is Buckley v. Valeo, 424 US 1 (1976). It involved a law which among other things provided for partial public financing of candidates of a political party in a presidential election if they agreed to specified limits on their campaign expenses. 26 USC 9003. This feature of the law was apparently not directly challenged, but the court said in a footnote that

The Buckley case may be cited by some as authorizing a plan of expenditure limitations such as proposed by Senate Bill 698. But the Oregon Supreme Court has made it clear that the Oregon Constitution will control in cases where it is more restrictive of government. In Deras v. Myers, 272 Or 47, 535 P2d 541 (1975) the court considered a law which unconditionally limited election campaign spending. The court said:

"We are faced, then, with the initial question of whether the legislature may exercise its authority to regulate the conduct of elections by limiting the rights of individual citizens to spend money in an effort to persuade their fellow citizens of the merits or demerits of electoral candidates without violating the prohibitions contained in Article I, sections 8 and 26 of the Oregon Constitution.

"Article I, sec 8, provides:

"Article I, sec 26, provides:

The court concluded that perhaps no "balancing" test, which would take into consideration other worthy social objectives, could ever be applied to justify a limit on freedom of expression (which was held to include campaign expenditures) to make it valid:

"In disposing of defendant's contentions predicated upon balancing legislative objective against the constitutional guarantee of Art. I, our detailed examination of the effect of the uncontrolled expenditure of funds in political campaigns has, perhaps, obscured the emphasis we intend to make in disposing of this case.

"Our apparent preoccupation with the comparison of the good and bad effects of the statutes in question is not to be taken as the recognition of a principle that proof of desirable and needful legislation is enough to override constitutional mandates. As we said at the outset, it is possible that sound analysis in the interpretation of constitutions does not permit any balancing whatsoever between a constitutional provision and a statute which directly impinges upon it." 272 Or at 65.

There is no case directly in point answering the question presented. The United States Supreme Court in Buckley indicated that restrictions on campaign spending are allowable if made a condition of government assistance. That would appear to be the issue here.

Yet there may be other considerations. The federal law proposed a new plan of assistance to candidates and stipulated that if they accepted such assistance they must accept the limitations. Here we have an existing tax credit plan which the proposed legislation would terminate except as to those who would abide by spending limitations.

And we have been specifically warned by the Oregon Supreme Court that it will not allow restrictions on campaign spending even if they do not violate the federal constitution. The Oregon Constitution will prevail. Deras v. Myers, 272 Or at 53, 64.

The decision in Deras related to an unconditional limit on campaign spending. That is not what Senate Bill 698 proposes. A candidate or political organization may spend as much money as desired unless the tax credit for contributors is sought. Granted, that is a big "unless."

A law will be held constitutional when reasonably possible.(fn1) Weinberger v. Rall, 265 Or 597, 510 P2d 549 (1973). It is possible that the proposed legislation may be held invalid because it does indirectly that which cannot be done directly. But we find no basis in binding case law which would justify us in saying that the Oregon Legislature cannot condition the availability of a tax credit for a political contribution upon the recipient's accepting a spending limitation.

We therefore conclude that the limitations on campaign expenditures as proposed in Senate Bill 698 would probably be valid if enacted.

"The Legislative Assembly shall enact laws to support the privilege of free suffrage, prescribing the manner of regulating, and conducting elections, and prohibiting under adequate penalties, all undue influence therein, from power, bribery, tumult, and other improper conduct."