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Arizona Supreme Court rules 'dark money' and medical debt measures can stay on the November ballot

Arizonans will be able to vote in November on two controversial ballot measures even though petition circulators did not comply with the law, the state Supreme Court ruled late Wednesday.

In separate orders, the justices said those who gather signatures for money are required to register with the Secretary of State’s Office for each petition campaign for which they work. And Chief Justice Robert Brutinel said that did not happen in either the initiative to require disclosure of “dark money” in politics or another to cap medical debt payments.

But Brutinel pointed out that the Secretary of State’s Office provided no procedure for those already registered to circulate other petitions to submit new registrations. He said that made it physically impossible for circulators to comply with the law.

More to the point, Brutinel said knocking the petition drives off the ballot for a problem that circulators and organizers did not create — and could not fix — “would unreasonably hinder or restrict” the constitutional right of the people to propose their own laws. So he and his colleagues agreed that the signatures gathered by those who did not register anew should count.

That conclusion is crucial. A contrary ruling would have left both measures short of the number of valid signatures needed to appear on the Nov. 8 ballot.

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Still undecided is the fate of a third initiative which would reverse some of the changes in election laws approved by the Republican-controlled legislature. Its fate hangs on whether the courts decide on the validity of thousands of petition signatures, unrelated to the registration requirement.

Wednesday’s rulings are setbacks for business interests who oppose both greater financial disclosure of who is putting money into political campaigns and those who believe it is a bad idea to provide individuals more protection from creditors.

In seeking to keep them off the ballot, attorneys Thomas Basile and Kory Langhofer, who represented the foes of both measures, pointed out state law requires anyone who is a paid circulator to first register before gathering signatures. The same requirement exists for out-of-state residents.

And that requirement, they argued, exists for each petition they want to circulate and for each election.

They said that did not occur for many circulators, saying that means none of the signatures they gathered were valid or could be counted.

Brutinel said the lawyers are legally correct. But the justices refused to void the signatures.

“Any circulators’ lack of compliance with (the law) does not invalidate the signatures gathered by these circulators on the record or circumstances before us,” he wrote.

And the key is that record — and those circumstances.

Brutinel pointed out the online portal set up by the secretary of state to register circulators does not allow any individual to submit more than one affidavit.

“By also refusing to accept manual submission of a hard copy affidavit, the secretary of state rendered it impossible for circulators to successfully submit a registration application as required ... if they had already registered to circulate other petitions,” he wrote. And that would make it unfair and improper to keep a measure off the ballot for failing to comply with a law that could not be complied with, he said.

Going forward, Brutinel said, he and his colleagues have “every expectation” the secretary of state to fix the problem.

Separately, the justices rejected other challenges aimed at keeping the measures off the ballot, including the failure of circulators to provide apartment numbers with their addresses.

What’s dubbed the Voters’ Right to Know Act is designed to eliminate exemptions in state campaign finance laws.

Those statutes require public disclosure of who is spending money to influence candidate elections and ballot measures. But state lawmakers crafted an exception for “social welfare” organizations who are free to run commercials seeking to influence the outcome but can hide the names of their donors.

The initiative seeks to deal with that by requiring the disclosure of true source of donations of more than $5,000 on political campaigns. And former Attorney General Terry Goddard, who is leading the effort, said those dollars would have to be traced back to the original source and cannot be “laundered” through a series of groups.

Foes include the business-oriented Free Enterprise Club. President Scot Mussi called it “an unconstitutional measure designed to silence and harass private citizens, and non-profit groups from exercising their First Amendment rights.”

This is actually the third try for the plan.

A similar 2018 effort failed after foes mounted a court challenge to some of the 285,000 signatures collected, many by paid circulators. The 2020 measure using only volunteers faltered during the COVID-19 pandemic which included, for a period of time, a stay-at-home order.

The measure on debt, if approved by voters, would increase the amount of equity someone could have in a home to keep it from being seized in bankruptcy to $400,000, up from $250,000. And it would mandate annual cost-of-living increases in that figure rather than having to wait for state lawmakers to marshal the votes for future changes.

Current law also allows individuals to keep up to $6,000 in household furniture, appliances and consumer electronics. That would increase to $15,000, also with inflation adjustments.

And the protected equity in a motor vehicle would go from $6,000 to $15,000 for most individuals, with the figure going from $12,000 to $25,000 for any debtor or family member with a physical disability.

Separately, the measure would cap the amount of someone’s wages that could be attached. And another provision specifically limits the amount of annual interest that could be charged on medical debt to no more than 3%.

Michael Guymon, president and CEO of the Tucson Metro Chamber of Commerce, argued that the measure would restrict the ability of Arizonans to access credit and loans.

“This is because lenders will have little or no ability to recoup money from people who don’t pay their debts,” he said in a statement against the plan.

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