BILL NUMBER: SB 1449	CHAPTERED  09/27/04

	CHAPTER  815
	FILED WITH SECRETARY OF STATE  SEPTEMBER 27, 2004
	APPROVED BY GOVERNOR  SEPTEMBER 27, 2004
	PASSED THE SENATE  AUGUST 26, 2004
	PASSED THE ASSEMBLY  AUGUST 25, 2004
	AMENDED IN ASSEMBLY  AUGUST 12, 2004
	AMENDED IN SENATE  APRIL 16, 2004

INTRODUCED BY   Senator Johnson
   (Principal coauthor:  Assembly Member Leno)

                        FEBRUARY 19, 2004

   An act to amend Section 85307 of the Government Code, relating to
the Political Reform Act of 1974, and declaring the urgency thereof,
to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1449, Johnson.  Political Reform Act of 1974:  loans.
   Under the Political Reform Act of 1974, a candidate for elective
state office may not personally loan to his or her campaign an
amount, the outstanding balance of which exceeds $100,000.  This
limitation does not apply to a loan made to a candidate by a
commercial lending institution in the lender's regular course of
business on terms available to members of the general public for
which the candidate is personally liable.
   This bill would delete this exemption.
   Existing law makes a violation of the Political Reform Act of 1974
subject to administrative, civil, and criminal penalties.
   By removing an exemption to the loan prohibition, this bill would
impose a state-mandated local program by expanding the scope of a
crime.
  The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   The Political Reform Act of 1974, an initiative measure, provides
that the Legislature may amend the act to further the act's purposes
with a 2/3 vote of each house and compliance with specified
procedural requirements.
   This bill, which would declare that it furthers the purposes of
the act, would therefore require a2/3 vote.
   The bill would declare that it is to take effect immediately as an
urgency statute.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 85307 of the Government Code is amended to
read:
   85307.  (a) The provisions of this article regarding loans apply
to extensions of credit, but do not apply to loans made to a
candidate by a commercial lending institution in the lender's regular
course of business on terms available to members of the general
public for which the candidate is personally liable.
   (b) Notwithstanding subdivision (a), a candidate for elective
state office may not personally loan to his or her campaign,
including the proceeds of a loan obtained by the candidate from a
commercial lending institution, an amount, the outstanding balance of
which exceeds one hundred thousand dollars ($100,000).  A candidate
may not charge interest on any loan he or she made to his or her
campaign.
  SEC. 2.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
  SEC. 3.  The Legislature finds and declares that this bill furthers
the purposes of the Political Reform Act of 1974 within the meaning
of subdivision (a) of Section 81012 of the Government Code.
  SEC. 4.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect.  The facts constituting the necessity are:
   In order to ensure that the November 2, 2004, statewide general
election is conducted in a fair and impartial manner, and to clarify
the law regarding candidate loans to the candidate's committee in
light of the ruling in Camp v.  Schwarzenegger (Superior Court
Sacramento County, 2004, No. 03AS05478), it is necessary that this
bill go into immediate effect.