BILL ANALYSIS Ó SENATE COMMITTEE ON ELECTIONS AND CONSTITUTIONAL AMENDMENTS Senator Norma J. Torres, Chair BILL NO: AB 857 HEARING DATE: 7/2/13 AUTHOR: FONG ANALYSIS BY: Frances Tibon Estoista AMENDED: 6/26/13 FISCAL: YES SUBJECT Initiatives: petition circulators DESCRIPTION Existing law allows electors to propose statutes and amendments to the Constitution and to adopt or reject them through the initiative process. Existing law requires that a state or local initiative petition contain a notice alerting voters that the petition may be circulated by a paid signature gatherer or a volunteer, and that voters have the right to ask if a petition circulator is a paid gatherer or volunteer. Existing law establishes penalties for fraudulent activity related to signature gathering. This bill makes numerous significant changes to provisions of state law governing initiatives and referenda. Specifically, this bill : 1) Requires at least 20 percent of the signatures needed to qualify a proposed state initiative measure for the ballot to be collected by individuals who did not receive money or other valuable consideration exclusively or primarily for the specific purpose of soliciting signatures of electors on the petition, as specified ("20 percent requirement"). a) Provides that signatures on a petition qualify toward meeting the 20 percent requirement if they are collected by a person who: 1) is an employee or member of a non-profit organization, other than an organization in the business of soliciting signatures on initiative petitions, 2) who receives money or other valuable consideration from the organization and as part of that employment or membership solicits signatures for the qualification of an initiative measure, unless a primary purpose of that employment or membership is to solicit signatures on an initiative petition. Defines "member" for the purposes of this provision. b) Provides that signatures solicited by registered voters or employees of a political party who receive money or other valuable consideration from the political party for soliciting signatures on an initiative petition do not qualify toward meeting the 20 percent requirement. AB 857 (FONG) Page 2 c) Provides that signatures solicited through direct mail do not count towards the 20 percent requirement unless the person soliciting the signatures through direct mail, and every other person who organizes, pays, or arranges for the direct mail, is eligible to solicit signatures that qualify toward meeting the 20 percent requirement, as described above. Provides that this provision shall not preclude an organization that has a primary purpose other than soliciting signatures on initiative petitions from soliciting signatures from its members through direct mail and relying on those signatures for the purposes of satisfying the 20 percent requirement. d) Provides that nothing in this bill shall be construed to preclude signatures that are solicited by a person who receives nominal, non-monetary benefits, including food, transportation, or lodging, from qualifying toward meeting the 20 percent requirement. 2) Notwithstanding existing law, requires each proposed initiative measure to also include on the first page of each section of the petition the circulating title prepared by the AG, placed in the one-inch space across the top of the page in 18-point roman boldface type. 3) Requires a petition for a proposed initiative measure that is circulated by a person who does not receive money or other valuable consideration for the purpose of soliciting signatures of electors to be printed on white paper in a contrasting color ink. 4) Requires a petition for a proposed initiative measure that is circulated by a person who receives money or other valuable consideration for the purpose of soliciting signatures of electors to be printed on paper of a color other than white in a contrasting color ink. 5) Requires a petition for a proposed initiative measure that is circulated by a person such that it will not qualify toward meeting the 20 percent requirement to include all of the following: a) Immediately prior to the portion of the petition for voters' signatures, the following language printed in AB 857 (FONG) Page 3 18-point boldface type: "NOTICE TO THE PUBLIC: THIS PETITION IS BEING CIRCULATED BY A PERSON PAID TO OBTAIN YOUR SIGNATURE. YOU ARE ENCOURAGED TO READ THE CONTENTS OF THIS PETITION BEFORE SIGNING." b) Immediately following the notice identified above, a disclosure statement, in 14-point boldface type, that includes the following language: "The political committee paying for this petition to be circulated is (insert full name of committee as registered with the Secretary of State (SOS)). The following donors have contributed $50,000 or more to the (insert full name of committee as registered with the SOS) within six months of the printing of this petition: (insert name of each of the top three donors who have contributed $50,000 or more and, if an individual, his or her occupation and the identity of his or her employer)." c) Requires, if the information for the disclosure statement changes, that the statement be updated within 14 days. d) Provides that failure to include the disclosure statement does not constitute grounds for an elections official to refuse to receive or file an initiative petition, nor render invalid any signature on an initiative petition. 6) Requires a person who solicits signatures on a petition that qualify toward meeting the 20 percent requirement to sign an affidavit that declares all of the following: a) That the person did not receive money or other valuable consideration for the specific purpose of soliciting signatures of electors pursuant to the requirements of this bill; b) That to the best of his or her knowledge, the signatures on the petition sections circulated by him or her should be counted towards the 20 percent requirement; c) If the person is not a resident of the state, a statement AB 857 (FONG) Page 4 that he or she consents to the jurisdiction of the state and service of process for any legal action for the purposes of an investigation or prosecution by any state or local agency regarding the validity of the signatures submitted by that person. 7) Makes corresponding changes to the process for elections officials to verify signatures submitted on a state initiative petition. 8) Requires each section of a petition for a proposed state initiative measure that is circulated by a person such that it does not qualify toward the 20 percent requirement to include the unique identifier of that circulator. 9) Repeals a requirement that a person must be a voter or qualified to register to vote in the state in order to circulate an initiative or referendum petition. 10) Defines the term "professional petition firm" (PPF) as a business that is created and maintained for the exclusive or primary purpose of paying individuals, directly or indirectly, to circulate initiative and referendum petitions for the purpose of gathering signatures to qualify an initiative or referendum measure for a state election ballot. Further requires the PPF to provide training to each person hired or retained directly or indirectly, to circulate an initiative or referendum petition, individually or in a group, and specifies what is included in the training. 11) Requires the PPF to register annually with the SOS. The registration form shall include the full name, address, and partners, owners, or officers of the firm, and shall be accompanied by a registration fee established by the SOS. 12) Requires the SOS to adopt regulations providing procedures for registration, including the denial and revocation of registration. Further requires the SOS to use the registration fees collected to maintain a directory of professional petition firms on his or her Internet Web site and to defray any costs associated with the requirements of this section. AB 857 (FONG) Page 5 13) Prohibits a PPF from hiring, retaining, or otherwise compensating a person directly or indirectly for soliciting signatures on an initiative or referendum petition if the person has been convicted, within the past 10 years, of a misdemeanor or felony offense in violation of the Elections Code, or a felony involving fraud, forgery, or identification theft. 14) Requires a PPF to obtain a statement, signed under penalty of perjury, from each paid circulator that it employs that includes all of the following: a) The person's name, residential address, signature, photograph, and a list of the petitions for which the person will solicit signatures; b) If the person has been convicted of a criminal offense involving fraud, forgery, identification theft, or a violation of the Elections Code, information relating to the circumstances of the conviction, as required by the SOS; c) A statement that the person has read and understands the applicable laws pertaining to the soliciting of signatures for an initiative or referendum measure, and proof that the person has completed the required training; and, d) If the person is not a California resident, a statement that he or she consents to the state's jurisdiction and service of process for the purposes of an investigation or prosecution. 15) Requires a PPF to assign a unique seven-digit identification number to each circulator, as specified, and to provide the name and identification number of each circulator to the SOS within 14 days of the date that the circulator executed the statement described above. Requires a PPF to retain copies of each circulator's statement for not less than two years after the petition is filed or two years after the deadline for submission of the petition to the elections official, whichever is later. Permits the SOS to inspect these records. 16) Requires each circulator hired by a PPF to wear a badge provided by the PPF in a conspicuous place while soliciting AB 857 (FONG) Page 6 signatures on petitions. Requires the badge to contain the person's photograph and identification number. 17) Requires the SOS to revoke the registration of a PPF that, in the course of circulating or hiring individuals to circulate an initiative or referendum petition, engages in fraud, misrepresentation, or other specified conduct prohibited by the Elections Code. 18) Provides that if a person who was required to be trained and certified pursuant to this bill was not trained and certified at the time he or she solicited signatures on a petition, the signatures presented on the petitions or sections of the petition circulated by that person shall not count toward qualifying that measure for the ballot. 19) Requires a PPF who pays a circulator for the specific purpose of soliciting signatures of electors on a petition to keep detailed accounts as specified. Provides that "accounts," for these purposes, means all of the following: a) Contracts entered into for the specific purpose of soliciting signatures on a petition; b) Employment manuals and training materials provided to petition circulators; c) Payroll records for each petition circulator showing hours worked, number of signatures collected, and amounts paid; d) Records identifying the amount and purpose of payments received from a proponent or from any other person who pays the PPF for signatures on a petition; and, e) Copies of petition sections circulated by registered circulators. 20) Permits the SOS to review the accounts of PPFs. 21) Provides that if PPF does not produce accounts upon demand of the SOS, there is a rebuttable presumption that the signatures were gathered in violation of the law and cannot be used to qualify the measure for the ballot. Prohibits the PPF from soliciting additional signatures on the AB 857 (FONG) Page 7 petition until the PPF makes the accounts available to the SOS for inspection. 22) Provides that a state initiative or referendum petition section is invalid if the signatures are solicited and submitted by a person who engages in fraud, misrepresentation, or other illegal conduct concerning the circulation of the petition, as specified. Provides that the SOS or any elector may enforce this provision by a civil action in which the plaintiff has the burden of showing a violation by clear and convincing evidence. 23) Makes various findings and declarations about the initiative process and the influence that special interests and paid circulators have on that process. 24) Makes corresponding changes. BACKGROUND The initiative is the power of the people of California to propose statutes and to propose amendments to the California Constitution. Generally, any matter that is a proper subject of legislation can become an initiative measure; however, no initiative measure addressing more than one subject area may be submitted to the voters or have any effect. An initiative measure is placed on the ballot after its proponents successfully satisfy the requirements prescribed by law. COMMENTS 1. According to the Author : In 1911, as part of the Progressive movement, California voters amended the state Constitution to reserve for themselves the power of the initiative, because powerful, out-of-state interests exercised a corrupting influence over state politics. Unfortunately, over the last 30 years, the original intent of the initiative process has been undermined, and the initiative has become one of the favorite tools of well-financed special interest groups. Voters recognize that the ability of an initiative's proponents to gather the necessary signatures to qualify a measure for the ballot is not necessarily a function of whether there is broad-based AB 857 (FONG) Page 8 community support for a proposed measure, as originally intended, but rather can depend on the amount of money that a proponent is willing to spend to place the proposal on the ballot When the initiative process was first created, it was envisioned that petitions would be circulated by volunteers and grassroots organizations that supported the proposed law. But in the late 1970s, the signature gathering process became a professional undertaking, and a number of professional signature gathering firms were created. Since the 1990s, most initiative measures have relied primarily on paid signature gatherers to qualify for the ballot, and no state initiative measure has qualified for the ballot using only volunteer signature gatherers since 1990. At the same time, proposed initiative measures with true grassroots support have continued to have success in collecting large numbers of signatures using volunteer signature gatherers. In 2008, proponents of Proposition 2 gathered half a million signatures using volunteer signature gatherers. AB 857 preserves the original intent of the initiative process by ensuring that proposed initiative measures have broad-based community support in order to qualify to appear on the ballot. To achieve that goal, AB 857 requires at least 20 percent of the signatures gathered to qualify a state initiative for the ballot to be collected by grassroots signature gatherers. Additionally, AB 857 helps ensure that measures do not qualify for the ballot due to fraudulent activity by signature gatherers by prohibiting fraudulently collected signatures from being used to qualify a measure for the ballot. Finally, AB 857 helps protect the integrity of the initiative process by requiring professional petition firms to train their employees and to register with the Secretary of State, and by prohibiting people convicted of fraud or other elections crimes from being paid to collect signatures on initiative petitions for a period of ten years. 2. 20 Percent Signature Requirement : Under the provisions of this bill, in order for a state initiative measure to qualify for the ballot, at least 20 percent of the signatures gathered on the petition for that measure would have to be AB 857 (FONG) Page 9 collected on petition sections that were circulated by a person who does not receive money or other valuable consideration exclusively or primarily for the specific purpose of soliciting signatures of electors on the petition, as specified. This "20 percent requirement" does not apply to state referendum or recall petitions, nor does it apply to local initiatives, referenda, or recalls. While signatures collected by volunteers will count toward meeting this 20 percent requirement, the language of the bill does not require the signatures to be gathered by volunteers in order to qualify to meet the 20 percent requirement. Instead, in certain circumstances, signatures collected by individuals who were paid for their time could count toward meeting the 20 percent requirement provided that the person wasn't paid exclusively or primarily for the specific purpose of soliciting signatures. This bill provides that signatures will count toward the 20 percent requirement if they are collected by employees and members of nonprofit organizations who receive compensation from that organization and solicit signatures as a part of their employment or membership, as long as the nonprofit organization is not primarily focused on soliciting signatures on petitions. In the case of signatures solicited by direct mail, those signatures would apply toward the 20 percent requirement if the person soliciting the signatures through direct mail and all persons that organize, pay for, and arrange the direct mail are persons who were eligible to solicit signatures that counted toward the 20 percent requirement. Additionally, signatures solicited by direct mail would count toward the 20 percent requirement if they are collected by an organization that is soliciting signatures through direct mail from its members, as long as the organization has a primary purpose other than collecting signatures. In 1988, the United States Supreme Court ruled that a Colorado prohibition against the use of paid circulators for initiative petitions violated the First Amendment's guarantee of free speech. Writing for a unanimous court, Justice Stevens noted that "[t]he State's interest in protecting the integrity of the initiative process does not justify the prohibition because the State has failed to demonstrate that it is necessary to burden appellees' ability to communicate their message in order to meet its concerns." Meyer v. Grant AB 857 (FONG) Page 10 (1988), 486 U.S. 414. It could be argued that the 20 percent requirement imposed by this bill could be susceptible to a court challenge in light of the United States Supreme Court's ruling in Meyer . However, the 20 percent requirement in this bill is distinguishable from the law struck down in Meyer in a number of different ways, and thus may be more likely to withstand constitutional scrutiny. Unlike the law considered by the court in Meyer , the 20 percent requirement in this bill does not apply to all signatures gathered to qualify a measure for the ballot, but only a portion of the signatures. Furthermore, as discussed above, the signatures that are gathered to meet that 20 percent requirement do not necessarily have to be collected by individuals who are unpaid if they are gathered by members and employees of a nonprofit organization in furtherance of that nonprofit's objectives. These provisions are designed to help ensure that initiative measures that qualify for the ballot have sufficient grassroots support, while still providing significant flexibility for proponents of initiative measures to gather the necessary number of signatures. Additionally, there is reason to believe that changes in the initiative process since the Meyer decision may undercut a key rationale used by the court in striking down Colorado's law. The Meyer court held that Colorado's interest in making sure that an initiative had sufficient grassroots support to be placed on the ballot did not justify the prohibition on the use of paid signature gatherers because it found that interest was "adequately protected by the requirement that no initiative proposal may be placed upon the ballot unless the required number of signatures has been obtained." But this bill questions whether the signature requirement, in and of itself, still serves as a sufficient barometer of grassroots support for a measure, finding that "[d]ue to the growth of paid signature gathering, the presence of an initiative measure on the ballot is no longer necessarily viewed as an expression of a minimum amount of public support but, rather, often is the result of a special interest willing to pay a sufficient number of petition circulators to qualify the initiative measure for the ballot." Research in 2008 by the now-closed Center for Governmental Studies (CGS) supports these findings, suggesting that over time, the signature AB 857 (FONG) Page 11 requirement has morphed from being a measure of the level of grassroots support for an initiative to instead being a measure of the amount of money that proponents are willing to spend to qualify a measure for the ballot. In its 2008 report, "Democracy by Initiative: Shaping California's Fourth Branch of Government, Second Edition," CGS wrote: For the last few decades, the most important factor determining whether an initiative will qualify for the ballot has been the amount of money spent on petition circulation. In the late 1970s, a gap began to grow between the amount of money spent on successful and unsuccessful attempts to qualify initiatives. Prior to the upsurge in ballot qualification costs that began with the 1978 general election, expenditures on petition circulation for both successful and unsuccessful efforts were reasonably close. While expenditures on unballoted initiatives have barely risen, the amount of money spent on successful qualification efforts has increased exponentially. In the early 1990s, ballot qualification could reasonably be assured at a cost of $500,000 and guaranteed at a price tag of $1 million or more. Some initiatives had managed to qualify spending less, and, throughout the entire history of California's initiative process, only two initiative proposals that spent as much as $500,000 on qualification efforts failed to make it to the ballot. Proponents of 10 of the 50 balloted initiatives from 1984 through 1990 spent under $500,000 for qualification, while 24 campaigns spent over $1 million. By contrast, the vast majority of the 39 campaigns for balloted initiatives between 2000 and 2006 spent more than $1 million on qualification, and 16 spent over $2 million. The fact that ballot access can be so reliably measured in terms of dollars rather than degree of public concern clearly runs counter to the original intent of the initiative process?. Money, rather than breadth or intensity of popular support, has become the primary threshold for determining ballot qualification. 3. Registration and Training of Paid Signature Gatherers & Badge Requirement : This bill requires PPFs to register with the SOS and to train their employees pursuant to regulations adopted by the SOS. The training program would focus primarily on instructing circulators about the requirements of state law when circulating petitions, while the AB 857 (FONG) Page 12 registration requirements appear to be designed primarily to assist in the enforcement of this bill and of other provisions of state law. This bill additionally requires employees of a PPF, when circulating a petition, to wear a badge that contains the person's photograph and unique identifying number. In 1999, the United States Supreme Court examined a Colorado law that provided a number of restrictions on the signature collection process for ballot initiatives. In that case the court ruled that there must be a compelling state interest to justify any restrictions on initiative petition circulation. Buckley v. American Constitutional Law Foundation (1999), 525 U.S. 182. In Buckley , the court invalidated Colorado's requirement that paid petition circulators wear badges identifying themselves and identifying that they are paid circulators. The court stated that the requirement to wear badges inhibits participation in the petitioning process. "Because the badge requirement compels personal name identification at the precise moment when the circulator's interest in anonymity is greatest, it does not qualify for inclusion among 'the more limited [election process] identification requirement[s]." The Buckley court did not rule on the validity of the requirement that a circulator wear a badge stating whether a petition circulator was paid or a volunteer. It could be argued that this bill's requirements for certain circulators to wear a badge could be susceptible to a court challenge in light of the ruling in Buckley . Unlike the badge required by the Colorado law at issue in Buckley , however, the badge required by this bill does not "compel personal name identification," or otherwise compromise the anonymity of the circulator because it does not require the circulator's name to appear on the badge. Instead, the badge would contain a photograph of the circulator and unique identifying number. Requiring circulators to wear this badge can help facilitate enforcement of this bill's provisions and of existing law by allowing voters who are asked to sign a petition to verify that the person circulating the petition has been trained in accordance with the law, and to report any misconduct by petition circulators by referencing the registration number of a circulator who violates the law. AB 857 (FONG) Page 13 Because the badge required by this bill helps facilitate enforcement of the state's laws governing the initiative process while maintaining the anonymity of the circulator, the badge requirement in this bill would appear to be on firmer ground than the badge requirement in question in Buckley . 4. Invalidation of Signatures : Existing law generally is silent on the issue of whether violations of state law prohibiting improper signature-gathering tactics will result in the signatures on those petitions being invalidated. In at least one case, however, a court invalidated signatures gathered to qualify an initiative for the ballot due to improper signature-gathering tactics by the proponents of the measure. In San Francisco Forty-Niners v. Nishioka (1999), 75 Cal.App.4th 637, the California Court of Appeals for the First District, Division One, prohibited an initiative measure from appearing on the ballot because the initiative petition included false statements intended to mislead voters, in violation of Section 18600 of the Elections Code. In this case, the false statements appeared on the text of the petition itself. As a result, every person who was asked to sign the petition was exposed to these false statements that were intended to mislead voters. In a case where petition circulators make false or misleading statements about a proposed ballot measure, or engage in other illegal signature-gathering tactics in an attempt to get voters to sign a petition, it is unclear whether that misconduct can result in signatures being invalidated. Committee staff is not aware of any court cases that have addressed this issue. 5. Non-Resident Circulators : In 2008, the United States Court of Appeals for the Ninth Circuit ruled in Nader v. Brewer (2008), 531 F.3d 1028, that it was unconstitutional for states to prevent non-residents from circulating petitions. In 2009, the United States Supreme Court declined to hear the case on appeal, so the Ninth Circuit opinion still stands. In the latter half of 2012, a number of California counties were sued because their county clerks were allegedly enforcing state laws that prevent non-Californians from circulating initiatives and/or nomination papers. AB 857 (FONG) Page 14 In light of the court's ruling in Nader , this bill repeals a requirement that a person must be qualified to register to vote in the state in order to circulate an initiative or referendum petition in the state. To help facilitate enforcement of the law in the case of circulators that are not residents of California, this bill requires non-residents to sign a declaration consenting to the jurisdiction of the state and to service of process for any legal action for the purposes of an investigation or prosecution by any state or local agency 6. Related Legislation : SB 477 (Steinberg), which is pending in the Senate Rules Committee, declares the intent of the Legislature to enact legislation to prohibit a political campaign committee from accepting large contributions for supporting the qualification of a statewide initiative ballot measure until the committee has first received a significant number of small individual contributions made for the same purpose, thereby demonstrating a sufficient degree of public support for the proposed initiative measure. AB 400 (Fong), which is pending on the Assembly Floor, requires an initiative, referendum, or recall petition that is circulated by a paid circulator to include a statement identifying the five largest contributors in support of the measure. 7. Previous Legislation : SB 334 (DeSaulnier) of 2011, would have required the state ballot pamphlet for an election to include a list of the five highest contributors of $50,000 or more to each primarily formed committee supporting and opposing the ballot measures that would appear on the ballot at that election. SB 334 was vetoed by Governor Brown, who expressed concern that the cutoff date for including contributors in the ballot pamphlet in order to comply with printing deadlines could "mislead voters about the true supporters and opponents of a ballot measure." AB 651 (Hueso) of 2011, would have required all professional petition firms, as defined, to register with the SOS, and to review the law relating to obtaining petition signatures with each paid petition circulator before the circulator could obtain signatures for the firm. AB 651 was vetoed by AB 857 (FONG) Page 15 Governor Brown, who stated that he was "not convinced that these new requirements are needed or would improve the initiative process." AB 2946 (Leno) of 2006, would have provided that any signatures collected in violation of any provision of state law relating to the circulation of a statewide initiative, referendum, or recall petition shall be invalid and shall not count towards qualification of the initiative, referendum, or recall, among other provisions. AB 2946 was vetoed by Governor Schwarzenegger, who argued that it would "allow legal technicalities to thwart the will of hundreds of thousands of Californians who choose to sign initiative petitions." PRIOR ACTION Assembly Elections and Redistricting Committee: 5-2 Assembly Appropriations Committee: 12-5 Assembly Floor: 53-24 POSITIONS Sponsor: California Labor Federation, Co-Sponsor California Professional Firefighters, Co-Sponsor Support: California Conference Board of the Amalgamated Transit Union California Conference of Machinists California Teamsters Public Affairs Council California School Employees Association (CSEA), AFL-CIO Communications Workers of America District 9 Engineers and Scientists of California International Longshore & Warehouse Union Laborers' International Union of North America Locals 777 and 792 Professional & Technical Engineers, Local 21 San Mateo County Central Labor Council United Food and Commercial Workers Union, Western States Council UNITE HERE! Utility Workers Union of America, Local 132 Oppose: Howard Jarvis Taxpayers Association AB 857 (FONG) Page 16 AB 857 (FONG) Page 17