BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1226| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 1226 Author: Correa (D), et al. Amended: 5/13/14 Vote: 27 SENATE ELECTIONS & CONST. AMEND. COMM .: 5-0, 4/22/14 AYES: Torres, Anderson, Hancock, Jackson, Padilla SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/5/14 AYES: De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg SUBJECT : Political Reform Act of 1974: local campaign finance reform SOURCE : County of Orange DIGEST : This bill authorizes the Fair Political Practices Commission (FPPC) to administer and enforce a local campaign finance ordinance upon mutual agreement between the FPPC and the city or county. Senate Floor Amendments of 5/13/14 clarify that the FPPC can contract with a city or county to enforce a local campaign finance ordinance regardless of how the ordinance was enacted. ANALYSIS : Existing law: 1.Authorizes, until January 1, 2018, the FPPC, upon mutual CONTINUED SB 1226 Page 2 agreement between them and the San Bernardino County Board of Supervisors, to have primary responsibility for the impartial, effective administration, implementation, and enforcement of a local San Bernardino County campaign finance reform ordinance. The San Bernardino County Board of Supervisors must consult with the FPPC prior to adopting and/or amending any local campaign finance reform ordinance that is subsequently enforced by the FPPC. 2.Authorizes, pursuant to the aforementioned agreement, the FPPC to investigate possible violations of the San Bernardino County campaign finance reform ordinance and bring administrative actions against persons who violate the ordinance, as specified. 3.Specifies that the San Bernardino County Board of Supervisors and the FPPC may enter into any agreements necessary and appropriate for the operation of these provisions, including agreements for reimbursement of state costs with county funds, as specified. The San Bernardino County Board of Supervisors or the FPPC may, at any time, by ordinance or resolution, terminate any agreement for the FPPC to administer, implement, or enforce the local campaign finance reform ordinance or any provision thereof. 4.Requires the FPPC to report to the Legislature with specified information on or before January 1, 2017, if the FPPC enters into such an agreement with the San Bernardino County Board of Supervisors. This bill: 1.Specifies that the FPPC can contract with a city or county to enforce a local campaign finance ordinance regardless of how the ordinance was enacted. 2.Extends existing provisions to any participating city or county. It modifies these existing provisions by requiring the FPPC to be the civil prosecutor responsible for the civil enforcement of the local campaign finance ordinances and authorizes them to provide advice and guidance regarding the ordinances and to bring civil actions to enforce the civil penalties and remedies of the ordinances. CONTINUED SB 1226 Page 3 3.Provides that as the civil prosecutor of a participating city's or county's local campaign finance ordinance, the FPPC is not required to seek authorization from the city attorney or district attorney of a participating city or county to bring a civil or administrative action to enforce the ordinance. 4.Extends these provisions indefinitely by repealing the January 1, 2018 sunset date but maintains the requirement that the FPPC file the aforementioned report to the Legislature on or before January 1, 2017. Background Local Campaign Ordinances and the Policy Reform Act (PRA) . Pursuant to AB 2146 (Cook, Chapter 169, Statutes of 2012), San Bernardino County and the FPPC entered into an agreement that provides for the FPPC to enforce the county's local campaign finance ordinance. Under existing law, local government agencies have the ability to adopt campaign ordinances that apply to elections within their jurisdictions, though the PRA imposes certain limited restrictions on those local ordinances. For instance, SB 726 (McCorquodale, Chapter 1456, Statutes of 1985) limited the ability of local jurisdictions to impose campaign filing requirements that differed from those in the PRA, permitting such requirements only when they applied solely to candidates and committees whose activity is restricted primarily to the jurisdiction in question. This provision sought to avoid the necessity of a candidate or committee active over a wider area, being required to adhere to several different campaign filing schedules. Similarly, AB 1430 (Garrick, Chapter 708, Statutes of 2007) prohibited local governments from adopting rules governing member communications that are different than the rules that govern member communications at the state level. Aside from these restrictions, however, local government agencies generally have a significant amount of latitude when developing local campaign finance ordinances that apply to elections in those agencies' jurisdictions. Any jurisdiction that adopts or amends a local campaign finance ordinance is required to file a copy of that ordinance with the FPPC, and the FPPC has begun posting those ordinances on its Internet Web CONTINUED SB 1226 Page 4 site. San Bernardino County as well as several other cities and counties have adopted campaign finance ordinances, some of which that are very extensive. In some cases, those ordinances include campaign contribution limits, reporting and disclosure requirements that supplement the requirements of the PRA, temporal restrictions on when campaign funds may be raised, and voluntary public financing of local campaigns, among other provisions. In many cases, local campaign finance ordinances are enforced by the district attorney of the county or by the city attorney. In at least a few cases, however, local jurisdictions have set up independent boards or commissions to enforce the local campaign finance laws. The FPPC does not currently enforce any local campaign finance ordinances other than San Bernardino County's. The FPPC can and does, however, bring enforcement actions in response to violations of the PRA that occur in campaigns for local office, even in cases where the local jurisdiction brings separate enforcement actions for violations of a local campaign finance ordinance. Criminal, Civil, and Administrative Enforcement of the PRA and Local Campaign Ordinances . Violations of the PRA are subject to administrative, civil, and criminal penalties. Generally, the Attorney General (AG) and district attorneys have responsibility for enforcing the criminal provisions of the PRA, though any elected city attorney of a charter city also has the authority to act as the criminal prosecutor for violations of the PRA that occur within the city. The FPPC, the AG, district attorneys, and elected city attorneys of charter cities all have responsibility for enforcement of the civil penalties and remedies provided under the PRA, depending on the nature and location of the violation, while any member of the public also has the ability to file a civil action to enforce the civil provisions of the PRA, subject to certain restrictions. The FPPC has the sole authority to bring administrative proceedings for enforcement of the PRA. When the FPPC determines on the basis of such a proceeding that a violation of the PRA has occurred, it can impose monetary penalties of up to $5,000 per violation, in addition to ordering the violator to cease and desist violation of the PRA and to file any reports, statements, or other documents or information required by the PRA. CONTINUED SB 1226 Page 5 In the case of local campaign ordinances, there is no single approach as to the types of penalties that are available for the violations of those ordinances. Many local ordinances provide for misdemeanor or civil penalties for violations, while some ordinances do not establish any penalties for violations. In some local jurisdictions that have independent boards or commissions to enforce the local campaign finance ordinances, those boards or commissions have the authority to bring administrative enforcement proceedings, similar to the authority the FPPC has under the PRA. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee, all costs to the FPPC will be reimbursed by the city or county that opts to enter into the mutual agreement. (Local Fund) SUPPORT : (Verified 5/13/14) County of Orange (source) Urban Counties Caucus ARGUMENTS IN SUPPORT : According to the author: The PRA allows local government agencies to adopt campaign finance ordinances that apply to elections within their jurisdictions. These ordinances may be more stringent than the local restrictions that the PRA imposes. While the FPPC has broad investigative and administrative authority across the state, it does not assume primary responsibility for local campaign finance ordinances. The Boards of Supervisors must monitor ordinances or create a County Ethics Commission with this authority. In order to address concerns of local campaign finance violations, a report by the Orange County Grand Jury recommended that the Board of Supervisors establish a County Ethics Commission to oversee its local campaign finance ordinance. However, establishing a County Ethics Commission and policing behavior could cost local governments millions of dollars. For comparison, the CONTINUED SB 1226 Page 6 current contract established by the FPPC and San Bernardino County after the enactment of AB 2146 (Cook) costs the County approximately $250,000 a year. This bill enables cities and counties to contract with the FPPC for the administration and enforcement of local campaign finance ordinances. This gives cities and counties the ability to bring in an experienced, independent, and impartial entity to investigate possible local campaign finance violations and bring administrative action against these violators. This bill allows participating entities to eliminate the potential for bias, favoritism, or conflicting interests by authorizing the FPPC to assume primary responsibility for the administration and enforcement of local campaign finance ordinances. RM:e 5/14/14 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED