BILL ANALYSIS
AB 583
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 583 (Hancock)
As Amended August 22, 2008
Majority vote
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|ASSEMBLY: |45-34|(June 6, 2007) |SENATE: |21-18|(August 29, 2008) |
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|COMMITTEE VOTE: |4-3 |(August 30, 2008) |RECOMMENDATION: |concur |
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Original Committee Reference: E. & R.
SUMMARY : Creates a pilot project whereby candidates for Secretary
of State (SOS) will be eligible to receive public campaign funds
for the 2014 and 2018 elections if they agree not to accept most
private contributions and if they collect a specified number of $5
contributions. Specifically, this bill :
1)Repeals a provision of state law that prohibits public officers
and candidates from expending public funds for the purpose of
seeking elective office.
2)Enacts the California Fair Elections Act of 2008 (Act), which
authorizes eligible candidates for SOS to obtain public funds for
their campaigns, subject to the following provisions:
a) Defines a "participating candidate" as a candidate who
qualifies for public campaign funding;
b) Allows a candidate who desires to receive public campaign
funding to solicit seed money contributions from registered
voters in the district in which the candidate is running to
pay for the costs of qualifying to receive public campaign
funding. Provides that a seed money contribution shall not
exceed $100 per donor, and the aggregate amount of seed money
contributions received by a candidate shall not exceed
$75,000;
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c) Defines an "office-qualified candidate" as a candidate
seeking the nomination for state office from a party whose
gubernatorial or SOS nominee has received 10% or more of the
votes at the last election;
d) Requires an "office-qualified candidate" to collect $5
contributions in the period beginning 270 days before the
primary election and ending 90 days before the primary
election from 7,500 registered voters in order to receive
public financing for the candidate's campaign in the primary
election;
e) Provides $1 million in public campaign financing at a
primary election for an office-qualified candidate for SOS who
qualifies for public campaign financing;
f) Provides $1.3 million in public campaign financing at a
general election for an office-qualified candidate for SOS who
qualifies for public campaign financing;
g) Allows a participating candidate to receive additional
public campaign funds to match expenditures by
nonparticipating candidates, independent electioneering
expenditures made in support of opponents' candidacies, and
independent electioneering expenditures made in opposition of
his/her candidacy under specified circumstances. Caps the
amount of additional money that a candidate may receive to
match these expenditures at four times the original amount of
public funding received;
h) Requires a candidate who is not an office-qualified
candidate to collect double the amount of $5 contributions as
required for an office-qualified candidate in order to receive
the same amount of public funding that an office-qualified
candidate is eligible to receive. Allows a candidate who is
not an office-qualified candidate to receive up to 20% of the
funding received by an office-qualified candidate in the
primary election, and up to 25% of the funding received by an
office-qualified candidate in the general election, by
collecting at least one-half the number of $5 contributions as
required for an office-qualified candidate;
i) Prohibits candidates from using public campaign funding for
any of the following purposes:
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i) Costs of legal defense or fines resulting from any
campaign law enforcement proceeding;
ii) The candidate's personal support or compensation to the
candidate or the candidate's family;
iii) The candidate's personal appearance;
iv) A contribution or loan to the campaign committee of
another candidate or to a party committee or other political
committee;
v) An independent electioneering expenditure;
vi) A gift in excess of $25 per person; or,
vii) Any payment or transfer for which compensating value is
not received.
j) Prohibits a participating candidate from receiving private
contributions from any source other than qualifying
contributions, seed money contributions, or contributions from
a political party that do not exceed 5% of the original public
campaign financing allotment to the candidate; and,
aa) Requires all candidates in contested races who receive
public funds to participate in at least one debate during a
contested primary election and two debates during a contested
general election.
3)Creates the Fair Elections Fund (FEF) in the State Treasury for
the purpose of providing public financing to candidates under the
provisions of this bill. Repeals a provision of existing law
that allows the SOS to charge a lobbying firm or lobbyist
employer a fee up to $25 per year for each lobbyist required to
be listed on the firm's or employer's registration statement, and
instead imposes a $700 fee for every two-year period on every
lobbyist, lobbying firm, and lobbyist employer. Requires $25
from each fee to be deposited in the General Fund (GF) for the
purposes of enforcement activities associated with the regulation
of lobbyists, lobbying firms, and lobbyist employers. Requires
the remaining $675 from each fee to be deposited in the FEF for
the purpose of providing public campaign financing under the
provisions of this bill.
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4)Requires the SOS to adjust the amount of the fees on lobbyists,
lobbying firms, and lobbyist employers every two years to reflect
any increase or decrease in the Consumer Price Index (CPI).
5)Provides that the following sources of revenue shall be deposited
into the FEF:
a) All qualifying contributions collected by candidates
seeking to qualify for public financing;
b) Any seed money contributions collected by candidates
seeking to qualify for public financing that are not spent by
the candidate;
c) All funds previously distributed to a participating
candidate that remain unspent by the candidate following the
election for which the funds were distributed;
d) Voluntary donations made to the FEF;
e) Other funds appropriated by the Legislature;
f) Any interest generated by the FEF; and,
g) Any other sources of revenue from the GF or from other
sources as determined by the Legislature.
6)Allows an individual to designate on his/her tax return that a
contribution in excess of the tax liability be made to the Voters
Fair Elections Fund (VFEF). Creates the VFEF in the State
Treasury for these purposes. Provides that a voluntary
contribution designation for the VFEF shall not be added to the
tax return until another voluntary contribution is removed.
7)Requires that funds transferred to the VFEF be allocated to the
Franchise Tax Board and the State Controller to cover all costs
incurred in connection with administering the program allowing
voluntary contributions to be made to the VFEF on tax returns.
Requires all other funds transferred to the VFEF to be allocated
to the FEF.
8)Requires any broadcast or print advertisement placed by a
candidate or his or her committee to include a clear written or
spoken statement indicating that the candidate has approved of
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the contents of the advertisement.
9)Requires the SOS to designate in the state ballot pamphlet and on
any Internet Web site listing of candidates maintained by any
government agency those candidates who have voluntarily agreed to
be participating candidates. Permits a participating candidate
for SOS to place a statement in the state ballot pamphlet,
without cost, that does not exceed 250 words, and allows the
candidate to include a list of up to 10 endorsers with the
statement. Permits a non-participating candidate for SOS to pay
to place a statement in the state ballot pamphlet that does not
exceed 250 words, and allows the candidate to include a list of
up to 10 endorsers with the statement.
10)Requires the seed money limits and public campaign financing
amounts to be adjusted in the January following the election of
the SOS to reflect any increase or decrease in the CPI and the
increase or decrease in the number of registered voters in the
state.
The Senate amendments :
1)Make candidates for the office of SOS, instead of candidates for
Governor, an unspecified Senate district, and an unspecified
Assembly district, eligible to participate in the public
financing pilot project.
2)Adjust the cap on the amount of seed money that a candidate may
collect, the number of contributions that are required to qualify
for public financing, and the amount of public financing provided
to participating candidates, to reflect the change in the offices
that are the subject of the pilot project created by this bill.
3)Delete a continuous appropriation from the GF that would have
funded the public campaign financing pilot project provided for
in this bill.
4)Impose a $700 fee for every two-year period on every lobbyist,
lobbying firm, and lobbyist employer to fund the public campaign
financing provided for in this bill.
5)Allow taxpayers to make voluntary contributions on their tax
returns to fund the public campaign financing provided for in
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this bill.
6)Limit the amount of money that may be appropriated to the Fair
Political Practices Commission (FPPC) from the FEF to pay for
administrative and enforcement costs associated with the public
financing pilot project to not more than 10 percent of the total
amount deposited in the FEF during each four-year election cycle.
7)Extend the sunset date in the bill from January 1, 2011, to
January 1, 2019.
8)Require the provisions of this bill to be submitted for voter
approval at the June 8, 2010 statewide primary election ballot,
instead of the June 3, 2008 ballot. Require the following
language to be used as the ballot label for this measure on the
June 2010 ballot:
CALIFORNIA FAIR ELECTIONS ACT. This act creates a
voluntary system for candidates for Secretary of State to
qualify for a public campaign grant if they agree to
strict spending limits and take no private contributions.
Candidates would have to qualify before receiving the
grant. Candidates who demonstrate sufficient public
support would receive the same amount. Participating
candidates would be prohibited from raising or spending
money beyond the grant. There would be strict enforcement
and accountability with published reports open to the
public. Funded by voluntary contributions and by a $350
annual registration fee on lobbyists, lobbying firms, and
lobbyist employers.
9)Allow the Legislature to extend the date of the pilot project
proposed by this bill on a majority vote and without a further
vote of the public.
10)Make corresponding changes.
AS PASSED BY THE ASSEMBLY , this bill created a pilot project
whereby candidates for Governor, for an unspecified Senate
District, and for an unspecified Assembly District would be
eligible to receive public campaign funds for the 2010 election if
they agreed not to accept most private contributions and if they
collected a specified number of $5 contributions.
FISCAL EFFECT : According to the Senate Appropriations Committee:
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1)Anticipated special fund revenue between $6 million and $7
million during each four-year election cycle, with all public
campaign financing and administrative expenses paid for by that
special fund revenue.
2)GF costs of approximately $480,000 in 2009-10 to include the
provisions of this measure on the June 2010 primary election
ballot.
COMMENTS : According to the author, "The current campaign finance
system is widely decried across the political spectrum. It
requires elected officials and candidates to devote substantial
amount of time to incessant fund-raising diminishing the time which
candidates have to communicate with voters. The ever-increasing
amounts spent in campaigning are a substantial hurdle that diminish
the free speech rights and create a pressure that focuses campaigns
on fund-raising rather than emphasis of competition in the
marketplace of ideas. The increasing influence of money and
special interests in campaigns is one of the biggest challenges
facing our democratic system. As legislators' time spent on
fundraising has increased, both the confidence in elected officials
and voter participation has decreased. Providing public funds for
campaigns is a voluntary alternative form of financing which
provides candidates with the means to run a competitive,
issues-based campaign on a level playing filed. Experience in
other states shows that Clean Money holds down spiraling campaign
costs while increasing voter participation in the process."
California voters passed an initiative, Proposition 9, in 1974 that
created the FPPC and codified significant restrictions and
prohibitions on candidates, officeholders and lobbyists. That
initiative is commonly known as the Political Reform Act (PRA).
Amendments to the PRA by the Legislature must further the purposes
of the proposition and require a two-thirds vote of each house of
the Legislature, or the Legislature may propose amendments to the
proposition that do not further the purposes of the act by a
majority vote, but such amendments must be approved by the voters
to take effect. This bill would only take effect if approved by
the voters.
The pilot project that would be created by this bill is similar to
Proposition 89, an initiative measure that appeared on the November
2006 general election ballot, which would have allowed candidates
for state office who collect a specified number of $5 contributions
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and who agree 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% of the vote statewide.
As noted above, the primary source of funding for the public
financing pilot project proposed by this bill is an increase in
lobbying fees. This funding source may be susceptible to a
challenge on the grounds that it represents an impermissible burden
on the freedom of speech, association, and the right to petition
the government for redress of grievances, in violation of the
United States and California Constitutions.
In at least two other states, Arizona and Vermont, state courts
have invalidated lobbyist fees that were used to fund public
financing programs similar to the one proposed by this bill. In
Arizona's public financing system, one of the major funding sources
was an annual fee of $100 imposed on certain classes of registered
lobbyists. In Vermont, the public financing system was funded, in
part, by a 5% tax on all expenditures exceeding $2,500 in a
calendar year by a lobbyists or lobbyist employer. In both states,
state courts struck down those fees on the grounds that the fees
impermissibly burdened interests protected by the First Amendment.
Additionally, lobbying fees in at least one other state have been
struck down in court on the grounds that such fees impermissibly
burdened the right to freedom of speech. In 1998, the Oregon
Supreme Court struck down a state law that imposed a $50 biennial
lobbyist registration fee on the grounds that the fee was an
impermissible burden on the right to speak, write, or print freely
as guaranteed by the Oregon State Constitution. One of the reasons
that the Oregon Supreme Court reached this conclusion was that the
revenue from the fee was used for purposes other than administering
the lobbying registration system.
Given the fact that courts have struck down lobbyist registration
fees in at least three states where such fees were used for
purposes other than to pay the costs associated with registering
lobbyists, the primary funding source for the pilot project
proposed by this bill could be susceptible to a challenge on First
Amendment grounds.
Since 1996, voters in Maine, Massachusetts, and Arizona have
approved laws that provide substantial public financing to state
candidates who demonstrate support by collecting a number of small
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contributions. Candidates who participate in "Clean Elections"
receive a public financing grant that funds all campaign
activities. In exchange for receiving the public funds, candidates
agree not to raise any funds privately, with the exception of those
small contributions collected to demonstrate support. These laws
went into effect in Maine and Arizona for the 2000 elections.
Initial studies of the Maine and Arizona programs show that public
financing has resulted in a substantial increase in the number of
contested races and in small donor participation. The provisions
of this bill are similar, but not identical, to the "Clean
Elections" laws in Maine and Arizona.
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094
FN: 0007725