BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



           ------------------------------------------------------------ 
          |SENATE RULES COMMITTEE            |                   SB 202|
          |Office of Senate Floor Analyses   |                         |
          |1020 N Street, Suite 524          |                         |
          |(916) 651-1520         Fax: (916) |                         |
          |327-4478                          |                         |
           ------------------------------------------------------------ 
           
                                         
                                 THIRD READING


          Bill No:  SB 202
          Author:   Hancock (D)
          Amended:  As introduced
          Vote:     21

           
           SENATE ELECTIONS & CONSTIT. AMEND. COMMITTEE :  3-2, 5/3/11
          AYES:  Correa, De León, Lieu
          NOES:  La Malfa, Gaines

           SENATE APPROPRIATIONS COMMITTEE  :  6-1, 5/16/11
          AYES:  Kehoe, Alquist, Emmerson, Lieu, Price, Steinberg
          NOES:  Runner
          NO VOTE RECORDED:  Walters, Pavley


           SUBJECT  :    Ballot initiatives:  filing fees

           SOURCE  :     Author


           DIGEST :    This bill increases the fee to submit a proposed 
          ballot initiative or referendum to the Attorney General for 
          preparation of the circulating title and summary from $200 
          to $2,000.

           ANALYSIS  :   Existing law establishes a process for the 
          Attorney General (AG) to prepare a summary of the chief 
          purposes and points of a proposed statewide initiative 
          measure.  Requires the AG to provide a copy of the title 
          and summary to the Secretary of State within 15 days after 
          receipt of the final version of a proposed initiative 
          measure, or if a fiscal estimate or opinion is to be 
                                                           CONTINUED





                                                                SB 202
                                                                Page 
          2

          included, within 15 days after receipt of the fiscal 
          estimate or opinion prepared by the Department of Finance 
          and the Joint Legislative Budget Committee.

          Existing law requires proponents of any initiative measure, 
          at the time of submitting the draft of the measure to the 
          AG, to pay a fee of $200, which shall be placed in a trust 
          fund in the office of the Treasurer and refunded to the 
          proponents if the measure qualifies for the ballot within 
          two years from the date the summary is furnished to the 
          proponents.  If the measure does not qualify within that 
          period, the fee shall be immediately paid into the General 
          Fund of the state.

          The existing $200 fee imposed for filing a proposed ballot 
          initiative with the AG was originally set in 1943 and has 
          never been increased.  It is currently inadequate to cover 
          the administrative costs incurred to prepare the title and 
          summary. For example, the costs in 2007-08 for the AG's 
          Office to prepare titles and summaries were $418,459, while 
          only $22,800 in filing fees was received.  If this fee had 
          been increased annually according to the Consumer Price 
          Index, it would currently be $2,480.

          This bill increases the current $200 filing fee to $2,000.

          Comments
           
           Increasing Number of Initiatives and Ballot Summaries  .  
          According to the AG's office, there has been a steady 
          increase in the number of statewide initiative proposals 
          submitted in the last few decades.  The following 
          illustrates the increased number of filed initiative 
          proposals:

                 47 from 1960 to 1969
                 180 from 1970 to 1979
                 282 from 1980 to 1989
                 391 from 1990 to 1998
                 647 from 2000 to 2009

          Although reports show that there has been a recent decline 
          in the number of voter approved initiatives, the AG is 
          still required to develop a title and summary for each 

                                                           CONTINUED





                                                                SB 202
                                                                Page 
          3

          initiative, regardless of whether the initiative qualifies 
          for the ballot.

          In California, proponents of an initiative measure must 
          submit the text of a measure to the AG's office for 
          preparation of a title and summary and pay a $200 filing 
          fee before they can circulate petitions for signatures.  
          Originally set in 1943, the filing fee was intended to 
          cover the administrative costs of the initiative process to 
          the state and to discourage frivolous proposals.

          Over the course of the 66 years since the initiative filing 
          fee was designated, the nature of the initiative process 
          has changed dramatically.  Data provided by the AG's office 
          shows the median cost in 2007-2008 to title and summarize 
          each of the 126 initiatives for that cycle was $3,157.  In 
          total, the state received $22,800 in filing fees but it 
          spent $418,459 of taxpayer money (General Fund) and 2933.75 
          hours of paid state attorney time to title and summarizes 
          all 126 measures.  One measure from the November 2008 
          General Election cost nearly $20,000 to title and 
          summarize; since the fee was refunded, the entire cost was 
          paid through the General Fund.

           Previous legislation
           
          AB 1832 (Saldana) of 2010 was similar to this bill, but 
          raised the filing fees incrementally.  The Governor vetoed 
          AB 1832 stating in relevant part:   "While the argument may 
          be made that the current fee is no longer a sufficient 
          deterrent, I cannot support increasing the fee ten-fold.  
          While well-funded special interest groups would have no 
          problem paying the sharply increased fee, it will make it 
          more difficult for citizen groups to qualify an 
          initiative."

          Another similar bill was AB 436 (Saldana) of 2009-10 
          Session, was also vetoed.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  No

          According to the Senate Appropriations Committee analysis:


                                                           CONTINUED





                                                                SB 202
                                                                Page 
          4

                          Fiscal Impact (in thousands)

           Major Provisions                2011-12     2012-13    
           2013-14   Fund
           
          Revenue increase                                  unknown, 
          potentially $100 annually                         General

           SUPPORT  :   (Verified  5/16/11)

          League of California Women

           OPPOSITION  :    (Verified  5/16/11)

          Howard Jarvis Taxpayer Association

           ARGUMENTS IN SUPPORT  :    According to the author's office, 
          this bill does not target good-faith individuals 
          representing broad concerns, as $2,000 is not a prohibitive 
          dollar amount and if the initiative qualifies, then the fee 
          is completely refunded.  Rather, this bill targets those 
          bad actors who abuse the initiative process at the expense 
          of the state.  This bill restores the filing fee to a level 
          close to - but still less than - the level originally 
          sought in 1943, and more accurately reflect the actual cost 
          to the general fund.

           ARGUMENTS IN OPPOSITION  :    The Howard Jarvis Taxpayers 
          Association opposes this bill and states, "that a $2,000 
          hurdle is not hard for a well-heeled special interest to 
          confront, but it could make things much more difficult for 
          individuals or those representing broad based concerns."  
           

          DLW:do  5/17/11   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

                                ****  END  ****
          





                                                           CONTINUED