BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair SB 1101 (Padilla) - Campaign Contributions Amended: April 30, 2014 Policy Vote: E&CA 4-1 Urgency: No Mandate: No Hearing Date: May 23, 2014 Consultant: Maureen Ortiz SUSPENSE FILE. AS AMENDED. Bill Summary: SB 1101 amends the Political Reform Act (PRA) to prohibit campaign contributions to a Member of the Legislature during specified periods of time, and makes certain exceptions for local elective offices and special elections. Fiscal Impact: Annual costs of approximately $85,000 to Fair Political Practices Commission (General Fund) The FPPC indicates the need for PY Attorney IV position for litigation purposes. Background: Existing law, pursuant to the Political Reform Act, limits campaign contributions to candidates for elective state office as follows: To a candidate for elective state office other than a candidate for statewide elective office, no person may contribute more than $4,100 per election and no small contributor committee may contribute more than $8,200 per election; To a candidate for elective statewide office other than a candidate for Governor, no person may contribute more than $6,800 per election and no small contributor committee may contribute more than $13,600 per election; To a candidate for Governor, no person or small contributor committee may contribute more than $27,200 per election. The Fair Political Practices Commission is authorized to adjust SB 1101 (Padilla) Page 1 these contribution limits biannually to reflect any increase or decrease in the Consumer Price Index. A state lobbyist may not contribute to a state officeholder's or candidate's committee if the lobbyist is registered to lobby the agency of the elected officer or the agency to which the candidate is seeking election. The lobbyist also may not contribute to a local committee controlled by any such state candidate. Existing law requires an individual to file a statement of intention to be a candidate for an elective office prior to soliciting or receiving a campaign contribution or loan but does not otherwise place restrictions on when candidates may solicit or receive contributions. Proposed Law: SB 1101 prohibits any person from making a contribution to a Member of the Legislature, and prohibits a Member of the Legislature from soliciting or accepting a contribution during the following periods: 1) In an odd-numbered year, on the date the Legislature adjourns the regular session for a joint recess to reconvene in the second calendar year of the biennium of the regular session, during the 100 day period preceding that date, and during the seven-day period following that date. 2) In an even-number year, the period from May 23 to September 7, inclusive. However, the above blackout periods will not apply to a Member of the Legislature for purposes of that member's candidacy for a local elective office, or for that member's candidacy for an elective state office that is to be voted upon at a special election. Staff Comments: This bill imposes "blackout" periods where no campaign contributions can be made to Members of the Legislature. This has been challenged as a violation of the First Amendment right to freedom of speech in several states. While several other states also have enacted blackout periods prohibiting campaign contributions, the Oregon Attorney General issued an opinion that its statute is unconstitutional and would not be enforced. SB 1101 (Padilla) Page 2 In at least four states, state or federal courts have struck down laws that prohibited legislators from receiving campaign contributions while the Legislature was in session. In 1990, the Florida State Supreme Court ruled in State v. Dodd (1990) 561 So.2d 263, that a state law that prohibited a candidate running for legislative office or a statewide office from accepting or soliciting a campaign contribution during a regular or special session of the Legislature was "unconstitutional for its overbroad intrusion upon the rights of free speech and association." The court found a number of defects to the Florida law, including that it placed restrictions on candidates "who could not possibly be subject to a corrupting quid pro quo arrangement," and that "by focusing entirely on the legislative session, the Campaign Financing Act fails to recognize that corrupt campaign practices just as easily can occur some other time of the year." Additionally, the court found that the contribution blackout period would cut off "the flow of resources needed for effective advocacy during a crucial portion of the election year," in violation of the test established in Buckley . The United States District Court for the Eastern District of Missouri, Eastern Division considered a similar contribution blackout period in Shrink Missouri Government PAC v. Maupin (1996) 922 F. Supp. 1413. Unlike the Florida law, Missouri's Campaign Finance Disclosure Law only applied during a regular session of the legislature and it did not prohibit the solicitation of campaign contributions during a legislative session, but otherwise was substantially similar to the Florida law. The Maupin court ruled that Missouri's blackout period "severely impacts on a candidate's ability to expend funds which in turn impinges upon the rights of individual citizens and candidates to engage in political debate and discussion." Two other federal courts reached similar conclusions in 1998. The United States District Court for the Eastern District of North Carolina, Western Division in North Carolina Right to Life v. Bartlett (1998) 3 F.Supp.2d 675, struck down a North Carolina law prohibiting lobbyists from making contributions to legislators and candidates for state legislature during a legislative session. The court ruled that the North Carolina law "prevent[ed] candidates from amassing the resources SB 1101 (Padilla) Page 3 necessary for effective advocacy," in violation of the test established in Buckley . The United States District Court for the Western District of Arkansas, Fayetteville Division in Arkansas Right to Life v. Butler (1998) 29 F.Supp.2d 540, struck down an Arkansas law that prohibited statewide elected officials and legislators from accepting any contribution 30 days before, during, and 30 days after any regular session of the Legislature. The court concluded that the Arkansas law was unconstitutional because "it does not take into account the fact that corruption can occur at any time, and that only large contributions pose a threat of corruption." Unlike the Florida, Missouri, and North Carolina laws, the Arkansas law did not apply to non-state officeholder candidates for state office, but only to elected state officials. While the provisions of this bill are distinguishable from the laws in Florida, Missouri, North Carolina, and Arkansas in that it does not apply during the entire legislative session, but only during that portion of the legislative session, this bill nevertheless could be vulnerable to a constitutional challenge based on other issues raised by one or more of these court decisions. Committee Amendments: Revise the blackout periods, and add an urgency clause.