BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair SB 1272 (Lieu) - Campaign Finance Amended: April 30, 2014 Policy Vote: E&CA 4-1 Urgency: Yes Mandate: No Hearing Date: May 5, 2014 Consultant: Maureen Ortiz This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 1272 will require the Secretary of State to submit an advisory question to the voters which will be placed on the November 4, 2014 ballot. Fiscal Impact: One time ballot printing/mailing costs of approximately $275,000 - $550,000 depending on the number of pages and based on an estimated cost per page of $55,000. (General) The actual costs could be higher or lower depending on the length of the title, summary, text, LAO analysis, proponents and opponents arguments, as well as the overall size of the ballot pamphlet. Larger ballots generally result in less printing and mailing costs per page. The average number of pages per measure since 2008 is ten and the minimum per measure has been five pages. Background: Existing law authorizes each city, county, school district, community college district, county board of education, or special district to hold an advisory election on any date on which that jurisdiction is permitted to hold a regular or special election for the purpose of allowing voters within the jurisdiction, or a portion thereof, to voice their opinions on substantive issues, or to indicate to the local legislative body approval or disapproval of the ballot proposal. While existing state law explicitly authorizes cities, counties, school districts, community college districts, county boards of education, and special districts to hold advisory elections, there is no explicit authorization, nor is there a statutory prohibition, for a statewide advisory election. While statewide advisory elections are uncommon, in at least two other instances SB 1272 (Lieu) Page 1 in California's history, one or more statewide advisory measures have appeared on the ballot. At a statewide special election in June 1933, voters rejected Propositions 9 and 10, which asked the voters whether the Legislature should divert gasoline tax revenues to the general fund to pay off highway bonds. These two measures were put on the ballot by the Legislature. Additionally, at the November 1982 Statewide General Election, voters approved Proposition 12, a measure that urged the United States government to propose to the Soviet Union that both countries agree to immediately halt the testing, production and further deployment of all nuclear weapons, missiles and delivery systems in a way that could be checked and verified by both sides. Unlike this bill, however, the advisory question decided by the voters in 1982 was placed on the ballot by initiative. Subsequent to the voters' approval of Proposition 12 in 1982, the California State Supreme Court ruled in American Federation of Labor v. Eu (1984) 36 Cal.3d 687, that placing advisory questions before the voters was not a proper use of the initiative power, because "an initiative which seeks to do something other than enact a statute-which seeks to render an administrative decision, adjudicate a dispute, or declare by resolution the views of the resolving body-is not within the initiative power reserved by the people." In that case, the Court ordered an initiative measure which sought to compel the Legislature to apply to Congress to hold a constitutional convention to adopt a federal balanced budget amendment to be removed from the ballot. The Court's decision in American Federation of Labor did not, however, rule on whether it was permissible for the Legislature to place an advisory question before the voters. Proposed Law: SB 1272 requires the following advisory question to be placed on the statewide ballot at a special election consolidated with the statewide general election on November 4, 2014: "Shall the Congress of the United States propose, and the California Legislature ratify, an amendment or amendments to the United States Constitution to overturn Citizens United v. Federal Election Commission (2010) 558 U.S. 310, and other applicable judicial precedents, to allow the full regulation or SB 1272 (Lieu) Page 2 limitation of campaign contributions and spending, to ensure that all citizens, regardless of wealth, may express their views to one another, and to make clear that the rights protected by the United States Constitution are the rights of natural persons only?" The Secretary of State, upon certification of the election, will be required to communicate to the Congress of the United States the results of the advisory question posed to California voters. This bill contains the following legislative findings and declarations: A. The United States Constitution and the Bill of Rights are intended to protect the rights of individual human beings. B. Corporations are not mentioned in the United States Constitution and the people have never granted constitutional rights to corporations, nor have we decreed that corporations have authority that exceeds the authority of "We the People." C. In Connecticut General Life Insurance Company v. Johnson (1938) 303 U.S. 77, United States Supreme Court Justice Hugo Black stated in his dissent, "I do not believe the word 'person' in the Fourteenth Amendment includes corporations." D. In Austin v. Michigan Chamber of Commerce (1990) 494 U.S. 652, the United States Supreme Court recognized the threat to a republican form of government posed by "the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public's support for the corporation's political ideas." E. In Citizens United v. Federal Election Commission (2010) 558 U.S. 310, the United States Supreme Court struck down limits on electioneering communications that were upheld in McConnell v. Federal Election Commission (2003) 540 U.S. 93 and Austin v. Michigan Chamber of Commerce . This decision presents a serious threat to self-government by rolling back previous bans on corporate spending in the electoral process and allows unlimited corporate spending to influence elections, candidate selection, policy decisions, and public SB 1272 (Lieu) Page 3 debate. F. In Citizens United v. Federal Election Commission , Justices John Paul Stevens, Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor noted in their dissent that corporations have special advantages not enjoyed by natural persons, such as limited liability, perpetual life, and favorable treatment of the accumulation and distribution of assets, that allow them to spend huge sums on campaign messages that have little or no correlation with the beliefs held by natural persons. G. Corporations have used the artificial rights bestowed upon them by the courts to overturn democratically enacted laws that municipal, state, and federal governments passed to curb corporate abuses, thereby impairing local governments' ability to protect their citizens against corporate harms to the environment, consumers, workers, independent businesses, and local and regional economies. H. In Buckley v. Valeo (1976) 424 U.S. 1, the United States Supreme Court held that the appearance of corruption justified some contribution limitations, but it wrongly rejected other fundamental interests that the citizens of California find compelling, such as creating a level playing field and ensuring that all citizens, regardless of wealth, have an opportunity to have their political views heard. I. In First National Bank of Boston v. Bellotti (1978) 435 U.S. 765 and Citizens Against Rent Control/Coalition for Fair Housing v. Berkeley (1981) 454 U.S. 290, the United States Supreme Court rejected limits on contributions to ballot measure campaigns because it concluded that these contributions posed no threat of candidate corruption. J. In Nixon v. Shrink Missouri Government PAC (2000) 528 U.S. 377, United States Supreme Court Justice John Paul Stevens observed in his concurrence that "money is property; it is not speech." AA. A February 2010 Washington Post-ABC News poll found that 80 percent of Americans oppose the ruling in Citizens United. SB 1272 (Lieu) Page 4 BB. Article V of the United States Constitution empowers and obligates the people of the United States of America to use the constitutional amendment process to correct those egregiously wrong decisions of the United States Supreme Court that go to the heart of our democracy and the republican form of self-government. CC. The people of California and of the United States have previously used ballot measures as a way of instructing their elected representatives about the express actions they want to see them take on their behalf, including provisions to amend the United States Constitution. Staff Comments: In the case of Citizens United v. FEC (2010) 558 U. S. 310 , corporations were granted the same rights as individuals as far as donating to political campaigns. In its decision, the Supreme Court struck down a 63 year old law that prohibited corporations and unions from using their general treasury funds to make independent expenditures in federal elections, finding that the law unconstitutionally abridged the freedom of speech. In McCutcheon v. FEC , the Supreme Court ruled on April 2, 2014 that it is permissible for individuals to make limitless contributions to federal campaign and federal candidate committee. If approved by the voters on November 4, 2014, Congress would be asked to amend the United States Constitution to overturn Citizens United v. Federal Election Commission (2010) , and other applicable judicial precedents such as McCutcheon v. Federal Election Commission . It should be noted that the Legislature approved AJR 22 (Wieckowski & Allen), Resolution Chapter 69, Statutes of 2012, which called upon the United States Congress to propose and send to the states for ratification a constitutional amendment that would overturn Citizens United v. FEC (2010) .