BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    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  
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            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.


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          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  

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          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.

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          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  

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               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

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