BILL ANALYSIS Ó
SENATE COMMITTEE ON
ELECTIONS AND CONSTITUTIONAL AMENDMENTS
Senator Ben Allen, Chair
2015 - 2016 Regular
Bill No: AB 700 Hearing Date: 6/21/16
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|Author: |Gomez |
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|Version: |6/20/16 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Darren Chesin |
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Subject: Political Reform Act of 1974: advertisement
disclosures
DIGEST
This bill changes the content and format of disclosure
statements required on specified campaign advertisements in a
manner that generally requires such disclosures to be more
prominent.
ANALYSIS
Existing law:
1)Creates the Fair Political Practices Commission (FPPC), and
makes it responsible for the impartial, effective
administration and implementation of the Political Reform Act
(PRA).
2)Requires an advertisement for or against any ballot measure to
include a disclosure statement identifying any person whose
cumulative contributions are $50,000 or more. Provides that
if there are more than two donors of $50,000 or more, the
disclosure only needs to include the highest and second
highest donors in that order.
3)Requires a committee that supports or opposes one or more
ballot measures to name itself using a name or phrase that
identifies the economic or other special interest of its major
donors of $50,000 or more. Provides that if the major donors
of $50,000 or more share a common employer, the identity of
the employer must also be disclosed.
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4)Requires a broadcast or mass mailing advertisement supporting
or opposing a candidate or ballot measure that is paid for by
an Independent Expenditure (IE) to include a disclosure
statement identifying the name of the committee making the
expenditure and the names of the persons from whom the
committee making the IE received its two highest cumulative
contributions of $50,000 or more during the 12-month period
prior to the expenditure.
5)Provides that when a disclosure of the top two donors is
required on an advertisement pursuant to either of the above
provisions, only the largest donor needs to be disclosed on an
advertisement that is an electronic broadcast of 15 seconds or
less or a print advertisement of 20 square inches or less.
6)Provides that no candidate or committee shall send a mass
mailing unless the
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name, street address, and city of the candidate or committee
are shown on the outside of each piece of mail in the mass
mailing and on at least one of the inserts included within
each piece of mail of the mailing in no less than 6-point type
which shall be in a color or print which contrasts with the
background so as to be easily legible. If the sender of the
mass mailing is a single candidate or committee, the name,
street address, and city of the candidate or committee need
only be shown on the outside of each piece of mail. If the
sender of a mass mailing is a controlled committee, the name
of the person controlling the committee shall also be
included.
7)Provides that a candidate, committee, or slate mailer
organization may not expend campaign funds to pay for
telephone calls that are similar in nature and aggregate 500
or more in number, made by an individual, or individuals, or
by electronic means and that advocate support of, or
opposition to, a candidate, ballot measure, or both, unless
during the course of each call the name of the entity that
authorized or paid for the call is disclosed to the recipient
of the call, as specified. This requirement does not apply to
telephone calls made by the candidate, the campaign manager,
or individuals who are volunteers.
8)Provides that a person may not make any contribution to a
committee on the condition or with the agreement that it will
be contributed to any particular candidate unless the
contribution is fully disclosed pursuant to Section 84302.
This bill:
1)Defines the following terms, for the purposes of this bill:
a) "Advertisement" means any general or public
communication which is authorized and paid for by a
committee for the purpose of supporting or opposing a
candidate or candidates for elective office or a ballot
measure or measures. "Advertisement" does not include any
of the following:
i. A communication paid for by a political party
committee or a candidate controlled committee
established for elective office for the controlling
candidate;
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ii. A communication from an organization, other than
a political party, to its members;
iii. Various specified types of communications where
the inclusion of disclosures is impractical due to the
size or medium of the communication (such as a pen, or
sky writing); or,
iv. Any other advertisement as determined by
regulations of the FPPC.
a) "Cumulative contributions" means the cumulative amount
of contributions received by a committee beginning 12
months prior to the date of the expenditure and ending
seven days before the time the advertisement is sent to the
printer or broadcaster.
b) "Top contributors" means the persons from whom the
committee paying for an advertisement has received its
three highest cumulative contributions of $50,000 or more,
as specified.
1)Provides that if a contributor appears to qualify as a top
contributor but received earmarked funds to make the
contribution, the person or committee that earmarked the funds
shall be disclosed as the top contributor instead. Requires a
person or committee that is transferring earmarked funds to
disclose the true source of the funds at the time of the
transfer. Provides that funds are "earmarked," for these
purposes in the following circumstances:
a) The contributor solicited and received the funds for the
purpose of making a contribution to the committee paying
for the advertisements;
b) The funds were given subject to a condition, agreement,
or understanding that the funds would be used to make a
contribution to the committee paying for the advertisement,
as specified; or,
c) The contributor had existing funds from a donor and a
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subsequent agreement or understanding was reached that all
or a portion of the funds would be used to contribute to
the committee paying for the advertisement, as specified.
1)Requires an advertisement, as defined, to include a disclosure
statement in accordance with the following:
a) In the case of an advertisement paid for by a committee
that has not received contributions of $2,000 or more in a
calendar year:
"Paid for by [name of the committee as required to appear on
campaign statements]."
b) In the case of an advertisement that is paid for by a
committee that has received contributions of $2,000 or more
in a calendar year:
"Paid for by [name of the committee as required to appear on
campaign statements]. This committee has major funding
from [names of the top contributors to the committee that
is paying for the advertisement]."
Provides that if the content of the radio advertisement or
electronic message names each of the top contributors as
major funding sources, the disclosure statement in the
advertisement is not required to include the portion that
identifies the sources of the committee's major funding.
4)Imposes the following requirements on the disclosure
statements required by this bill:
a) In the case of an advertisement disseminated by radio or
telephone, the statement must be at the beginning or end of
the advertisement, read in a clearly spoken manner and in a
pitch and tone substantially similar to the rest of the
advertisement, and last no less than three seconds.
Provides that radio and prerecorded telephonic
advertisements are only required to disclose the single top
contributor of $50,000 or more.
b) In the case of a television or video advertisement, the
statement must comply with the following:
i. Appear at the beginning or end of the advertisement
for a minimum of five seconds in the case of an
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advertisement lasting 30 seconds or less, or for a
minimum of 10 seconds in the case of an advertisement
lasting longer than 30 seconds;
ii. Appear on a solid black background on the entire
bottom one-third of the screen; and,
iii. Include a link to the FPPC's Internet Web site
containing a list of the top donors to the committee
paying for the advertisement, in the case of
advertisements that are paid for by committees that are
required to file a list of their top 10 contributors with
the FPPC pursuant to existing law.
a) In the case of a print advertisement, the statement must
appear in a printed or drawn box with a solid white
background on the bottom of at least one page, and must
include a link to the FPPC's Internet Web site containing a
list of the top donors to the committee paying for the
advertisement, when applicable per existing law. Newspaper,
magazine, or other public print advertisements that are 20
square inches or less are only required to disclose the
single top contributor of $50,000 or more.
b) In the case of an electronic media advertisement, the
statement must comply with the following:
i. Be visible for a period of at least four seconds in
a type size and font that is clear and conspicuous and
contrasts with the background so as to be easily readable
by the average person, unless impractical or would
severely interfere with the committee's ability to convey
the intended message because of the nature of the
technology used to make the communication. The FPPC may
prescribe by regulation minimal disclaimer requirements
if inclusion of the full disclaimer is deemed
impractical.
ii. Include a hyperlink to an Internet Web site
containing the text of the disclosure statement. The
Internet Web site is required to remain online for at
least 30 days after the election where the candidate or
ballot measure was voted upon.
iii. If made by a form of electronic media that is
audio only, comply with the requirements for radio
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advertisements.
iv. If made by a form of electronic media that allows
users to engage in discourse and post content, or any
other social media, the statement is only required to be
included on the home page, landing page, or similar
location.
v. The statement is not required on advertisements made
via social media where the only expense or cost of the
communication is compensated staff time unless the social
media account where the content is posted was created
only for the purpose of advertisements governed by the
PRA.
5)Specifies requirements for the font type, size, color, and
placement of the text of disclosure statements required by
this bill.
6)Provides that the disclosure of a top contributor under this
bill does not need to include legal terms such as
"incorporated," "committee," "political action committee," or
"corporation" or their abbreviations, unless the term is part
of the contributor's name in common usage.
7)Requires disclosure statements to be updated to reflect any
changes in the order of top contributors as follows:
a) In the case of television, radio, telephone, or other
electronic media advertisements, within seven business
days, or within five business days if the change in top
contributors occurs within 30 days of an election; and,
b) In the case of a print advertisement, including
non-electronic billboards, prior to placing a new or
modified order for additional printing of the
advertisement.
8)Repeals existing, conflicting requirements governing
disclaimers and disclosure statements that must appear on
specified campaign advertisements, including all of the
following:
a) A requirement that an advertisement for or against a
ballot measure include a disclosure statement identifying
the two highest cumulative contributors of $50,000 or more
to the committee funding the advertisement;
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b) A requirement that a committee that supports or opposes
one or more ballot measures must name and identify itself
using a name or phrase that clearly identifies the economic
or other special interest of its major donors of $50,000 or
more in any reference to the committee required by law;
and,
c) A requirement that an advertisement that is paid for by
an IE must include a disclosure statement identifying the
name of the committee making the expenditure and the names
of the persons from whom the committee making the IE
received its two highest cumulative contributions of
$50,000 or more during the 12-month period prior to the
expenditure.
1)Provides that candidate and committee mass mailing sender
identification requirements also apply to candidate controlled
committees and political party committees. Provides for these
requirements that the "sender" is the candidate or committee
who pays for the largest portion of expenditures attributable
to the designing, printing, and posting of the mailing which
are reportable under existing law.
2) Provides that the existing campaign telephone call
disclosure requirements also apply to candidate controlled
committees and political party committees.
3)Provides that a person shall not make any contribution to any
committee or candidate that is earmarked for a contribution to
any other committee or candidate that is earmarked for a
contribution to any other committee or candidate unless the
contribution is fully disclosed pursuant to section 84302.
For purposes of this section a contribution is earmarked if
the contribution is made under the following circumstances:
a) The committee or candidate receiving the contribution
solicited the contribution for the purpose of making a
contribution to another committee or candidate, and
requested the contributor to consent to such use.
b) The contribution was made subject to a condition,
agreement, or understanding with the contributor that all
or a portion of the contribution would be used to make a
contribution to another committee or candidate, including
any circumstance in which the contributor identifies the
committee or candidate as a potential recipient of the
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contribution and the committee or candidate in fact
receives all or a portion of the contributor's
contribution.
c) After the contribution was made, the contributor and the
committee or candidate receiving the contribution reaching
a subsequent agreement or understanding that all or a
portion of the contribution would be used to make a
contribution to another committee or candidate, including
any circumstance where the contributor identifies the
committee or candidate as a potential recipient of the
contribution and the committee or candidate in fact
receives all or a portion of the contributor's
contribution.
12) Makes technical and conforming changes.
BACKGROUND
Existing Political Advertising Disclaimers . Under the PRA,
committees must put "paid for by" disclaimers on campaign
advertising, including campaign mailers, radio and television
ads, telephone robocalls, and electronic media ads. The
following, which is based on a publication produced by the FPPC,
discusses disclaimer requirements for committees that purchase
advertisements or circulate material supporting or opposing a
state or local candidate or ballot measure in California.
When is a disclaimer required on political ads or materials?
Political committees must include the following disclaimers:
a)Mass mailings, including blast campaign emails, must include
identification of the sender.
b)Paid telephone calls must identify the candidate or committee
who paid for or authorized the call.
c)Radio and television ads must include a "paid for by"
disclaimer under Federal Communications Commission (FCC) law.
d)Ballot measure ads and IE ads must include "paid for by
committee name" and such ads by primarily formed committees
must also list top two donors of $50,000 or more. This
applies to television, radio, and electronic media
advertisements, robocalls, mass mailings, and print ads such
as newspaper ads, billboards and yard signs.
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Are the PRA's disclaimer rules the same for all committees and
all ads?
No. Basic disclaimer rules apply to campaign materials
disseminated by a candidate for their own election campaign
because it is generally clear to the public that the candidate
is sending the communication. Stricter disclaimer rules apply
to ballot measure advertisements and IE advertisements on
candidates and ballot measures, because it is less clear to the
public who is responsible for these ads.
What does the disclaimer have to state?
The basic disclaimer must state "Paid for by committee name."
Ballot measure and IE ads paid for by primarily formed
committees must also list top two donors of $50,000 or more and
special committee name rules apply. All IE ads for or against a
candidate must state that the ad was "Not authorized by a
candidate or a committee controlled by a candidate."
How must the disclaimer appear?
Disclaimers on political ads and literature must be clear and
conspicuous so as to be understood by the intended public.
Written disclaimers must be printed clearly and legibly. Spoken
disclaimers must be clearly audible and intelligible.
Updating a disclaimer.
When a committee's name changes because of new top donors or
otherwise, advertisement disclaimers must be revised.
Television, radio, electronic media, or robocalls must be
amended within five calendar days. Print media, mass mailings,
or other tangible items must be amended every time an order to
reproduce is placed.
Advertisements in Languages Other than English.
Disclaimers on political advertisements should be written or
spoken in the same language used in the advertisement.
Does a disclaimer have to appear on ALL printed materials or
campaign items?
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No. A disclaimer is not required on regular-size campaign
buttons, pins, bumper stickers, or magnets. It is not required
on pens, pencils, rulers, mugs, potholders, key tags, golf balls
and similar small campaign promotional items where a disclaimer
cannot be conveniently printed. The disclaimer is also not
required on t-shirts, caps, hats, and other articles of
clothing; skywriting and airplane banners; or committee checks
and receipts.
COMMENTS
1)According to the author : AB 700 (Gomez and Levine), the
California Disclose Act, will dramatically improve disclosure
of the top funders on ads for ballot measures and independent
expenditures for and against candidates. Knowing the true
source of funds for ads will prevent voters from being
deceived about who is truly paying for them, help voters
better evaluate the credibility and content of ads, and
promote greater confidence in the electoral process.
Campaign spending has reached unprecedented levels in recent
years. In 2012-2014, more than $770 million was spent in
California on ballot measure ads and independent expenditure
ads for and against candidates. Furthermore, many
primarily-formed and general purpose committees that
contribute to them are purposely established to disguise who
exactly is funding the campaign messages that voters see and
hear, hiding behind vague names such as "Californians for
Progress." Money is often purposefully channeled through
multiple layers of committees or organizations to make it
harder to trace and disclose. As a result, the March 2013
PPIC Poll found that 84% of all likely voters, across
political ideology, want increased public disclosure of
funding sources for signature gathering and initiative
campaigns.
While it is essential for individuals and organizations in a
democracy to be able to communicate effectively and
efficiently with voters, it is equally important that voters
are not intentionally deceived and elections are not decided
upon misinformation.
AB 700 will increase transparency of campaign spending in
elections by requiring state and local ballot measure ads and
independent expenditure ads about candidates to clearly and
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prominently list their top three true contributors of $50,000
or more (one for radio ads and robocalls).
To limit potential for abuse of broad regulations we see in
current code and to maximize clarity and ensure consistency of
disclosures, AB 700 proscribes specific rules for the format
of disclosures. For example, for video and television ads, AB
700 replaces current fine print disclosures with a clear
listing of the top three contributors on the bottom 1/3 of the
screen on a solid black background for five seconds (ten
seconds for ads longer than 30 seconds), plus the name of the
committee paying. To ensure readability of funder names, they
must each be listed on a separate line, can't appear in all
capital letters, and must be in a contrasting Arial font that
is 4% of the height of the screen.
Perhaps most importantly, AB 700 uses new earmarking rules
originated in the previously-circulating Voters' Right to Know
Act initiative to ensure that contributions that are meant for
ballot measures or candidates must be disclosed if they're
among the top three even if they were passed through multiple
layers of committees or other organizations.
It is now often impossible for voters to determine the true
top funders of ballot measure ads and IE ads for and against
candidates. The disclosures required by current law are
usually extremely difficult to read, buried in fine print with
distracting backgrounds. Disclosures contain significant
additional verbiage that makes it harder for viewers to see
the major funders that is the most important part of the
disclosures.
Worst of all is that top contributors are able to avoid being
disclosed on ads simply by funneling their contributions
through committees with deceptive names, oftentimes
purposefully misleading viewers about who really paid for the
ads.
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2)Constitutional Issues . This measure could be interpreted as a
violation of the United States and California Constitutions'
guarantees to free speech. While the right to freedom of
speech is not absolute, when a law burdens core political
speech, the restrictions on speech generally must be "narrowly
tailored to serve an overriding state interest," McIntyre v.
Ohio Elections Commission (1995), 514 US 334.
In ACLU v. Heller (2004), 378 F.3d 979, the Ninth Circuit Court
of Appeals struck down a Nevada law that required any
published material concerning a campaign to identify the
person paying for the publication. In that case, the state of
Nevada argued that its law served three state interests,
including helping voters evaluate the usefulness of
information in a campaign communication, preventing fraud and
libel, and furthering enforcement of disclosure and
contribution election laws. The court concluded that Nevada
failed to demonstrate that its statute was "narrowly tailored
to serve an overriding state interest" in accordance with the
test established in McIntyre. The court did note in its
ruling, however, that "[a]n on-publication identification
requirement carefully tailored to further a state's campaign
finance laws, or to prevent the corruption of public
officials, could well pass constitutional muster."
Additionally, supporters of this bill have argued that,
notwithstanding the decision in the Heller case, the
provisions of this bill nonetheless are constitutional in
light of disclosure requirements that were upheld by the
United States Supreme Court in Citizens United v. Federal
Election Commission (2010), 130 S.Ct. 876. While the Citizens
United case is probably best known as the case in which the
United States Supreme Court struck down a 63 year old law that
prohibited corporations and unions from using their general
treasury funds to make IEs in federal elections, in the same
case, the Court also upheld certain disclaimer and disclosure
provisions of the federal Bipartisan Campaign Reform Act
(BCRA) of 2002, also sometimes called "McCain-Feingold" for
its Senate authors.
The Citizens United case involved a nonprofit corporation
(Citizens United) that sought to run television commercials
promoting a film it produced that was critical of then-Senator
and presidential candidate Hillary Clinton. Because federal
law prohibited corporations and unions from using their
general treasury funds to make expenditures for
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"electioneering communications" or for communications that
expressly advocated the election or defeat of a candidate,
Citizens United was concerned that the television commercials
promoting its film could subject the corporation to criminal
and civil penalties.
Under BCRA, the film produced by Citizens United and the
television commercials promoting that movie were subject to
certain disclaimer and disclosure requirements --
specifically, a requirement that televised electioneering
communications must include a disclaimer indicating the name
of the person or organization that was "responsible for the
content" of the advertising. Additionally, each communication
was required to include a statement that the communication was
"not authorized by any candidate or candidate's committee,"
and was required to display the name and address of the person
or group that funded the advertisement. Finally, under a
different provision of BCRA, any person who spent more than
$10,000 in a calendar year is required to file a disclosure
statement with the Federal Elections Commission
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(FEC) identifying the person making the expenditure, the
amount of the expenditure, the election to which the
communication was directed, and the names of contributors in
certain circumstances.
Citizens United (the corporation) challenged these disclaimer
and disclosure requirements as applied to the film and the
television advertisements promoting that film. Specifically,
Citizens United argued that the disclaimer and disclosure
requirements were unconstitutional on the grounds the
governmental interest in providing information to the
electorate did not justify requiring disclaimers for
commercial advertisements. The court disagreed, finding that
the disclaimers provided the electorate with important
information, helping to ensure that voters were informed, and
"avoid[ed] confusion by making clear that the ads are not
funded by a candidate or political party."
While some of the requirements of this bill are comparable to
provisions of federal law that were at issue in Citizens
United (for instance, certain disclaimer requirements included
in this bill are similar to those required under federal law
that were upheld by the court in Citizens United), other
requirements in this bill go beyond what is required by
federal law, and beyond what was considered by the court in
Citizens United. Specifically, the provisions of this bill
that require the identities of certain campaign contributors
-- entities that were not individually responsible for the
content or the production of the advertising -- to be included
in campaign advertising go beyond what is required by federal
law. In light of that fact, while the court in Citizens
United did uphold certain federal disclaimer requirements, it
is unclear whether the broader requirements in this bill would
similarly be upheld against a constitutional challenge on the
grounds that those requirements violate the First Amendment.
3)Anticipated Author's Amendments . The author's office
indicates that some additional amendments were inadvertently
omitted from the current version of the bill and he wishes to
offer those as author's amendments in committee. These new
amendments include some technical and clarifying changes as
well as some language that would ensure that disclosure
requirements intended for television and video display screens
do not exceed one-third of the screen as already provided in
the bill.
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4)Additional Suggested Amendment . Disclosure statements
required by this bill could result in taking up an excessive
amount of space on printed advertisements that are larger than
those designed to be individually distributed, such as yard
signs and billboards. Therefore, staff recommends that the
type size specified in new Section 84504.2(b) be decreased
from 10 percent of the height of the advertisement to 5
percent of the height of the advertisement, as in current FPPC
regulation 18450.4(b)(3)(D).
RELATED/PRIOR LEGISLATION
SB 52 (Leno of 2013-14) similarly proposed to change the content
and format of disclosure statements on specified campaign
advertisements to make those statements more prominent, among
other provisions. SB 52 died on the Assembly's Inactive file.
AB 1148 (Brownley) and AB 1648 (Brownley, from 2011-12) also
proposed increasing the prominence of disclosure statements on
campaign advertisements, among other provisions. AB 1148 failed
passage on the Assembly Floor, while AB 1648 was approved by the
Assembly, but was not heard in the Senate.
PRIOR ACTION
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|Assembly Floor: |60 - 15 |
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|Assembly Appropriations Committee: |12 - 0 |
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|Assembly Elections and Redistricting | 4 - 2 |
|Committee: | |
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POSITIONS
Sponsor: California Clean Money Campaign
Support: Insurance Commissioner Dave Jones
California Alliance of Retired Americans
California Church IMPACT
California Clean Money Campaign
California League of Conservation Voters
California Public Interest Research Group (CALPIRG)
Consumer Federation of California
CounterPAC
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Courage Campaign
Democracy for America
Endangered Habitats League
Friends Committee on Legislation of California
JERICHO: A Voice for Justice
Lutheran Office of Public Policy - California
Maplight
Money Out Voters In
New Progressive Alliance
People Demanding Action
Public Citizen
Represent.Us
In addition, the California Clean Money Campaign
submitted copies of petitions signed by a little more
than 20,000 individuals in support of AB 700.
Oppose:Fair Political Practices Commission
Howard Jarvis Taxpayers Association
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