BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 583|
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THIRD READING
Bill No: AB 583
Author: Hancock (D), et al
Amended: 8/12/08 in Senate
Vote: 21
SENATE ELEC., REAP. & CONST. AMEND. COMM. : 3-2, 6/18/08
AYES: Migden, Oropeza, Calderon
NOES: Battin, Cogdill
SENATE APPROPRIATIONS COMMITTEE : 9-6, 8/7/08
AYES: Torlakson, Cedillo, Corbett, Florez, Kuehl, Oropeza,
Ridley-Thomas, Simitian, Yee
NOES: Cox, Aanestad, Ashburn, Dutton, Runner, Wyland
ASSEMBLY FLOOR : 45-34, 6/6/07 - See last page for vote
SUBJECT : Political Reform: California Clean Money and
Fair Elections
Act
SOURCE : California Clean Money Campaign
DIGEST : This bill enacts the California Clean Money and
Fair Elections Act of 2008 to authorize candidates for the
office of Secretary of State to obtain public funds for
campaign purposes, and provides for its submission to the
voters for approval at the June 8, 2010 statewide primary
election. Sunsets on January 1, 2019. Provides for a tax
checkoff where taxpayers may designate to the Voters Clean
and Fair Elections Fund which is created by the bill.
CONTINUED
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ANALYSIS : Existing law limits the amount of campaign
contributions that a person or group can make to a
candidate for state elective office, as specified.
Existing law provides that no public officer shall spend
and no candidate shall accept any public moneys for the
purpose of seeking elective office.
Existing law provides that the Political Reform Act (PRA)
may be amended to further its purposes by statute, passed
in each house of the Legislature by a two-thirds vote or
amended or repealed by a statute that becomes effective
only if approved by the voters.
This bill enacts the California Clean and Fair Elections
Act of 2008 which provides for the following:
1. Allows eligible candidates for Secretary of State to
obtain public funds.
2. Establishes a special, dedicated, nonlapsing Clean Money
Fund for the receipt and deposit of a new fee imposed on
lobbying firms, and continuously appropriates the money
in this fund to the Fair Political Practices Commission
(FPPC) for the purpose of allocating the funds to
qualified candidates.
3. Requires the FPPC to administer all provisions of the
Act.
4. Requires lobbyists, lobbying firms, and lobbyist
employers who are required to register to pay a
nonrefundable fee of $700, every two years, with
specified exceptions.
5. Provides for a tax check-off on the state personal
income tax return where taxpayers may designate a
specified amount in excess of their tax liability to be
transferred to the Voters Clean and Fair Elections Fund.
6. Provides funding for administrative and enforcement
costs of the FPPC will be subject to appropriation by
the Legislature.
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Specifically, this bill provides that any lobbyist,
lobbying firm, or lobbyist employer will be charged a
nonrefundable fee of $700, every two years, which will be
deposited in the Clean Money Fund which is created by the
bill. Twenty-five dollars of each fee shall be deposited
in the General Fund and used when appropriated for purposes
of the current registration fee. Organizations that meet
the criteria as a tax-exempt organization under Section
501(c)(3) will not be charged the $700 fee, but will be
required to pay the $50 registration fee biennially if
already required to do so. Requires the Secretary of State
to adjust the amount of fees collected to reflect any
increase or decrease in the Consumer Price Index. The
Senate Appropriations Committee staff notes that the
Secretary of State's office currently does not have any
system to differentiate the 501(c)(3) organizations, from
those filed under the 501(c)(4) code. Other sources of
revenue to the Clean Money Fund will include the following:
1. The qualifying contributions required of candidates
seeking to become certified as participating candidates,
and any excess contributions collected thereof.
2. The excess seed money contributions of candidates.
3. Unspent funds distributed to any participating candidate
who does not remain a candidate.
4. Voluntary donations made directly to the Clean Money
Fund.
5. Other funds appropriated by the Legislature.
6. Any interest generated by the Clean Money Fund.
7. Any other sources of revenue from the General Fund or
from other sources as determined by the Legislature.
This bill additionally authorizes a voluntary tax check-off
to be placed on the personal income tax return, after
another voluntary contribution is removed. These donations
will be placed into the Voters Clean and Fair Elections
Fund, created by the bill. The Franchise Tax Board will
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notify the State Controller of the amount of money to be
transferred to the Voters Clean and Fair Elections Fund.
Those funds will be allocated, upon appropriation by the
Legislature, to the Franchise Tax Board and the State
Controller for reimbursement of all costs incurred in
connection with this provision. The remaining balance will
be transferred to the Clean Money Fund. This voluntary tax
check-off will remain on the personal income tax return
until January 1 of the fifth taxable year following its
first appearance.
This bill provides that an office-qualified candidate
qualifies as a participating candidate for the primary
election if (1) the candidate files a declaration agreeing
to comply with all requirements of the Clean Money Act, (2)
collects at least 7,500 qualifying contributions of at
least $5 each and gives a receipt for each contribution to
the contributor and to the county registrar of voters, as
specified, and (3) the candidate shall send all receipts to
the country registrar of voters along with a check from the
candidates campaign account for the total amount of the
qualifying contributions received. The county registrar
will forward the checks to the FPPC.
This bill provides that a candidate qualifies for the
general election campaign if (1) the candidate files a
declaration with the FPPC that all requirements of the Act
are or will be fulfilled with, and (2) the candidate has
the highest number of votes in the respective party and has
won the party's nomination. An independent candidate who
does not run in a primary may qualify by collecting twice
as many qualifying contributions, as specified.
The revenue generated to the Clean Money Fund will provide
a base amount of public campaign financing of $900,000 for
a primary election and $1.3 million for a general election,
special election, or special runoff election. Candidates
may receive additional public campaign funds to match any
expenditure by a nonparticipating candidate that exceeds
the amount of public funds received by the participating
candidate, as specified.
Any candidate who has voluntarily agreed to participate in,
and has become eligible for, Clean Money benefits, will be
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prohibited from accepting any private contributions from
any source other than the candidate's political party. Any
participating candidate must pay all campaign expenditures
except petty cash expenditures by use of a "Clean Money
Debit Card" issued by the FPPC. All financial activities
must be conducted through a single campaign account.
Participating candidates will be prohibited from using
Clean Money Funds for any costs of a legal defense or fines
imposed for violations of campaign contribution laws, or
indirect campaign purposes including the following: (1)
the candidate's personal support or compensation to the
candidate or the candidate's family, (2) the candidate's
personal appearance, (3) a contribution or loan to the
campaign committee of another candidate, a party committee,
or other political committee, (4) an independent
electioneering expenditure, (5) a gift in excess of $25 per
person, or (6) any payment or transfer for which
compensating value is not received.
This bill makes funding for the administrative and
enforcement costs of the act available from the Clean Money
Fund. The bill requires that the available funds, for each
four-year election cycle, will be no more than 10 percent
of the total amount deposited in the Clean Money Fund
during the four-year election cycle.
Willful violation of the bill will be a misdemeanor. The
bill also contains a severability clause. Lastly, it
provides for a sunset date of January 1, 2019.
This bill is similar to Proposition 89, an initiative
measure that appeared on the November 2006 general election
ballot. Proposition 89 would have allowed candidates for
state office who collected a specified number of $5
contributions and who agreed to limit their campaign
spending, to receive funding from the state to run their
campaigns. Proposition 89 was defeated by the voters,
receiving just 25.7 percent of the vote statewide.
Other states that have some forms of public financing for
campaigns include Maine, Massachusetts, and Arizona.
Prior legislation . AB 583 (Hancock), 2005-06 Session, was
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substantially similar to this bill although it applied to
all state elective offices. The bill died in the Senate
Elections, Reapportionment and Constitutional Amendments
Committee. AB 2949 (Hancock), 2003-04 Session, proposed
providing public funds to candidates who collect a
specified number of $5 contributions as the only funds
those candidates may use on their campaigns for state
office, similar to this bill. AB 2949 was held on the
Assembly Appropriations Committee's suspense file. AB 1623
(Longville), 2003-04 Session, would have allowed
individuals to make political contributions through Freedom
Drafts to political candidates of their choice to be funded
through the state treasury. AB 1623 failed passage in
Assembly policy committee, and was amended to deal with a
different subject. AB 190 (Longville), 2001-02 Session,
and AB 2134 (Longville), 2001-02 Session, proposed
different methods to provide matching funds and public
financing grants to legislative candidates who agreed to
abide by voluntary expenditure ceilings. AB 190 failed
passage in Assembly policy committee, while AB 2134 was
held on the Assembly Appropriations Committee's suspense
file. SB 1169 (Bowen), 1999-2000 Session, proposed
providing matching funds to legislative candidates who
agreed to abide by voluntary expenditure ceilings imposed
by the bill. SB 1169 died on the Senate Floor without
having been brought up for a vote.
NOTE: See the Senate Elections, Reapportionment and
Constitutional analysis for a detailed background
history on campaign finance reform.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/13/08)
California Clean Money Campaign (source)
California Church IMPACT
California National Organization for Women
California Nurses Association
CALPIRG
Common Cause
Consumer Federation of California
Consumer for Auto Reliability and Safety
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Equal Justice Society
Friends Committee on Legislation
Gray Panthers California
League of Women Voters of California
Mexican America Legal Defense and Educational Fund
Planning and Conservation League
Sierra Club California
William C. Velasquez Institute
Wild Dog Productions
Numerous individuals
OPPOSITION : (Verified 8/13/08)
AdvoCal
Cal-Tax
California Chamber of Commerce
California Family Council
California State Council of Laborers
Department of Finance
Howard Jarvis Taxpayers Association
Institute for Governmental Advocates
Wilke, Fleury, Hoffelt, Gould, Birney LLP
ARGUMENTS IN SUPPORT : According to the author's office,
the current campaign finance system requires candidates to
devote a substantial amount of time to fund-raising while
diminishing the time in which candidates have to
communicate with voters. The ever-increasing amount of
money that is necessary for a successful political campaign
is an almost insurmountable hurdle that limits the pool of
candidates who can run for office. The consequence of this
is that public office is not a position reserved for common
citizens, but rather a place for those who are
independently wealthy or who can fund-raise large amounts
of money from moneyed interests that often have a stake in
government decisions. The pressure on a candidate in the
current campaign financing system on fund-raising
diminishes a candidate's time on developing public policy
positions and fostering one-on-one contact with voters. As
the time legislators spend on fundraising has increased,
both the confidence in elected officials and voter
participation has decreased. This bill provides a small
but powerful step toward improving this system in shifting
the emphasis away from a competition in fund-raising toward
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a system of competition in the market place of ideas. This
bill enacts what has become to be known around the country
as the "Clean Money" system of public financing of
elections. Simply put, Clean Money is a voluntary system
in which candidates who raise a substantial number of $5
dollar contributions from people who live in the districts
they seek to represent - and agree not to take a dime from
any other private source - will receive full public
financing of their campaign. This system will allow
candidates to spend their time talking to people about
their needs, priorities and ideas. This bill provides
public financing for campaigns as a voluntary alternative
of financing a campaign. However, it allows a candidate to
choose the traditional system of fundraising. Experiences
in other states show that the Clean Money system curbs
spiraling campaign costs while increasing voter
participation. Evaluations of these Clean Money systems
show that they are preferred by candidates. In Arizona, 28
out of the 32 candidates for statewide office ran "Clean"
in 2002. In Maine, 70 percent of the State Senate and 50
percent of the House ran "Clean" elections also in 2002.
ARGUMENTS IN OPPOSITION : Opponents object to allocating
tax dollars away from investing in programs from highways
to schools to health care and refer to the voter rejection
of public financing of elections with the defeat of
Proposition 89 in 2006.
ASSEMBLY FLOOR :
AYES: Arambula, Bass, Beall, Berg, Brownley, Caballero,
Charles Calderon, Carter, Coto, Davis, De La Torre, De
Leon, DeSaulnier, Dymally, Eng, Evans, Feuer, Fuentes,
Hancock, Hayashi, Hernandez, Huffman, Jones, Karnette,
Krekorian, Laird, Leno, Levine, Lieber, Lieu, Ma,
Mendoza, Mullin, Nava, Portantino, Price, Richardson,
Ruskin, Salas, Saldana, Solorio, Swanson, Torrico, Wolk,
Nunez
NOES: Adams, Aghazarian, Anderson, Benoit, Berryhill,
Blakeslee, Cook, DeVore, Duvall, Emmerson, Fuller,
Gaines, Galgiani, Garcia, Garrick, Horton, Houston, Huff,
Jeffries, Keene, La Malfa, Maze, Nakanishi, Niello,
Parra, Plescia, Sharon Runner, Silva, Smyth, Spitzer,
Strickland, Tran, Villines, Walters
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NO VOTE RECORDED: Soto
DLW:mw 8/13/08 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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