BILL ANALYSIS Ó
AB 2523
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Date of Hearing: April 13, 2016
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Shirley Weber, Chair
AB 2523
(Mullin) - As Amended April 6, 2016
SUBJECT: Local elective offices: contribution limitations.
SUMMARY: Establishes campaign contribution limits for local
office at the same level as the limit on contributions from
individuals to candidates for Senate and Assembly, except where
a local jurisdiction establishes its own limits. Specifically,
this bill:
1)Prohibits a person from making to a candidate for local
elective office, and prohibits a candidate for local elective
office from accepting from a person, a contribution totaling
more than the limit on contributions to candidates for state
Senate and Assembly from persons other than small contributor
committees and political party committees, as adjusted by the
Fair Political Practices Commission (FPPC), as specified. The
current limit under this provision is $4,200 per contributor
per election.
a) Provides that a contribution is not deemed to be
received for the purposes of this limit if it is returned
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to the contributor within 14 days of receipt.
b) Provides that this limit does not apply to a candidate's
contributions of his or her personal funds to his or her
own campaign.
2)Permits a local government, by ordinance or resolution, to
impose a limitation on contributions to candidates for local
elective office which shall take precedence over the limits
otherwise imposed by this bill, and allows the local
government to adopt enforcement standards for a violation of
that limit. Permits the limitation to be imposed by a local
initiative measure. Provides that nothing in this bill
prevents a local government from adopting its own penalties
and its own enforcement mechanism for a violation of a local
contribution limit that is established pursuant to this
provision.
3)Provides that a violation of the contribution limits
established by this bill is punishable by a civil fine of up
to $5,000 or three times the amount that was contributed or
accepted in excess of the contribution limit, whichever is
greater. Provides that a knowing and willful violation of the
contribution limits is a misdemeanor. Makes the district
attorney of the county in which the violation occurs
responsible for enforcing these civil and criminal penalties.
4)Provides that whether a violation of the contribution limits
imposed by this bill is inadvertent, negligent, or deliberate,
and the presence or absence of good faith, shall be considered
in applying the penalties detailed above.
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5)Requires a civil action or criminal prosecution for a
violation of the contribution limits established by this bill
to be commenced within four years after the date on which the
violation occurred.
6)Defines various terms for the purposes of this bill such that
those terms generally have the same or similar meanings as
those terms are defined in the Political Reform Act (PRA).
7)Requires this bill to be liberally construed to accomplish its
purposes.
8)Contains a severability clause.
9)Makes various findings and declarations.
10)Makes corresponding changes.
EXISTING LAW:
1)Permits a county, city, special district, or school district
to limit campaign contributions in local elections.
2)Creates the FPPC, and makes it responsible for the impartial,
effective administration and implementation of the PRA.
3)Requires any local government agency that has enacted, enacts,
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amends, or repeals an ordinance or other provision of law
affecting campaign contributions and expenditures to file a
copy of the action with the FPPC.
4)Prohibits a local government agency from enacting a campaign
finance ordinance that imposes campaign reporting requirements
that are additional to or different from those set forth in
the PRA for elections held in its jurisdiction unless the
additional or different requirements apply only to the
candidates seeking election in that jurisdiction, their
controlled committees or committees formed or existing
primarily to support or oppose their candidacies, and to
committees formed or existing primarily to support or oppose a
candidate or to support or oppose the qualification or passage
of a local ballot measure which is being voted on only in that
jurisdiction, and to city or county general purpose committees
active only in that city or county, respectively.
5)Provides that nothing in the PRA shall nullify contribution
limitations or prohibitions of any local jurisdiction that
apply to elections for local elective office, except that
these limitations and prohibitions may not conflict with a
specified provision of the PRA dealing with "member
communications."
6)Prohibits a person, other than a small contributor committee
or political party committee, from making any contribution
totaling more than $4,200 to any candidate for elective state
office other than statewide elective office, and prohibits
candidates from accepting a contribution that exceeds that
amount. Requires the FPPC to adjust this limit in January of
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every odd-numbered year to reflect any increase or decrease in
the Consumer Price Index, and requires those adjustments to be
rounded to the nearest $100.
FISCAL EFFECT: Unknown. State-mandated local program; contains
a crimes and infractions disclaimer.
COMMENTS:
1)Purpose of the Bill: According to the author:
Currently, there is no state standard of limits on
campaign contributions for candidates running for
local office. This means that those local
jurisdictions that have not adopted limits
independently currently have no limit on the amount of
money local candidates can accept. This opens the
potential for the corrupting influence of money.
Ensuring the integrity of our elections process should
be a priority, and more money should not equal more
representation, even at the lowest level of elected
office. Local elected officials often have the most
direct influence on the governance, and California
needs a standard in place to ensure that local
candidates are not overly reliant upon a select few
wealthy donors.
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AB 2523 establishes a standard $4,200 limit on
campaign contributions to candidates running for local
elected office in jurisdictions that have not adopted
their own contribution limits. By establishing a
reasonable cap to prevent excessive contributions in
jurisdictions that have no limits and simultaneously
maintaining and encouraging local jurisdictions'
ability to enact their own contribution limits
tailored to the needs of their communities, this
measure safeguards our democracy down to the local
level. Thirty-four other states have enacted a
statewide limit for local campaign contributions.
California should be among them.
2)History of Contribution Limits: In 1988, voters approved
Proposition 73, a campaign finance initiative that prohibited
public funding of campaigns and established contribution
limits for state and local elections, among other provisions.
Under Proposition 73, contributions from a person to a
candidate for state or local office were limited to $1,000 per
fiscal year, while political parties and certain political
committees could give higher amounts.
Many of the provisions of Proposition 73, including the
campaign contribution limits, were ultimately ruled
unconstitutional by the federal courts. Because Proposition
73 limited the amount that a contributor could give in each
fiscal year, rather than limiting the amount that a
contributor could give in each election, the courts found that
the contribution limits discriminated in favor of incumbents,
since incumbents were much more likely than challengers to
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fundraise in non-election years.
The federal case ended in 1993 when the United States Supreme
Court denied certiorari in Service Employees International
Union v. FPPC. The only provisions of Proposition 73 to
survive legal challenge were contribution limits for special
elections (those limits were on a per-election basis, rather
than a per-year basis), limits on gifts and honoraria to state
and local elected officials, restrictions on certain mass
mailings by officeholders, and a prohibition on the use of
public money for campaign purposes. State and local elections
were conducted under the Proposition 73 contribution limits
for most of the 1990 election cycle, though the limits were
struck down for the last six weeks before the 1990 general
election.
In 1996, California voters approved Proposition 208, which
proposed significant changes to the PRA, including
establishing new contribution limits for state and local
elections. Proposition 208 prohibited any person other than a
political party or a small contributor committee from making
contributions of more than $100 per election to candidates in
small local districts (less than 100,000 residents); $250 per
election for Senate, Assembly, Board of Equalization and large
local districts; and $500 per election for statewide office.
These limits were increased to $250, $500, and $1,000,
respectively, for candidates who agreed to abide by specified
voluntary expenditure limits.
On January 6, 1998, the United States District Court for the
Eastern District of California entered a preliminary
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injunction barring the enforcement of Proposition 208. The
Legislature subsequently placed Proposition 34 on the November
2000 ballot through passage of SB 1223 (Burton), Chapter 102,
Statutes of 2000. The proposition, which passed with 60.1% of
the vote, revised state laws on political campaigns for state
elective offices and ballot propositions, and repealed almost
all of Proposition 208, which was still enjoined from
enforcement.
While Proposition 34 established new campaign contribution
limits for elections to state office, it did not contain
contribution limits for elections to local office. The limits
on contributions by individuals contained in Proposition 34
ranged from $3,000 (for candidates for Assembly and Senate) to
$20,000 per election (for candidates for Governor), and are
required to be adjusted for inflation every two years. For
2015 and 2016, these limits range from $4,200 per election for
candidates for Assembly and Senate to $28,200 for candidates
for Governor. While local governments have the authority to
adopt contribution limits for elections to local offices in
their jurisdictions, state law does not impose limits on
contributions to candidates for local office.
3)Local Campaign Ordinances: 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, while AB 1430 (Garrick),
Chapter 708, Statutes of 2007, prohibits 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
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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 posts those ordinances on its website. The FPPC's
website currently includes campaign finance ordinances from 19
counties, 141 cities, and one special district.
The campaign ordinances adopted by local governments in
California vary significantly in terms of their scope. Some
local ordinances are very limited in scope, while others are
much more extensive. In some cases, the 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.
According to a recent report prepared by California Common
Cause, approximately 23 percent of cities and 28 percent of
counties in the state have adopted local campaign contribution
limits. Of the 124 local jurisdictions identified in the
report as having adopted local campaign contribution limits,
only one (Alameda County) has a contribution limit that is
higher than the $4,200 per election limit that would be
imposed by this bill. More than 90 percent of the cities that
have adopted contribution limits have limits of $1,000 or
less. By contrast, about half of the counties that adopted
contribution limits have limits of $1,000 or less.
4)FPPC and Campaign Regulation: With a few limited exceptions,
provisions of state law regulating campaign finance generally
are found within the PRA, and the FPPC has the primary
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responsibility for administering and enforcing those
provisions. Given the FPPC's role as the primary entity
responsible for administering, interpreting, and enforcing the
state's campaign finance laws, it could be argued that this
bill indirectly amends the PRA, and therefore should be
subject to restrictions that apply to bills that seek to amend
the PRA. The fact that local contribution limits previously
have been imposed at the state level through amendments to the
PRA (as described above) could provide some support to the
argument that the imposition of local contribution limits in
state law is a policy that falls within the scope of the PRA.
On the other hand, as originally enacted, the PRA did not impose
campaign contribution limits, and none of the enumerated
purposes of the PRA relate to imposing restrictions on
campaign contributions. Instead, the PRA's enumerated
purposes generally focus on disclosure of campaign receipts
and expenditures. Provisions of state law that explicitly
allow local jurisdictions to enact their own contribution
limits are currently located in the Elections Code and the
Education Code, not in the PRA, and were first enacted by the
Legislature in the same year that the PRA was approved by the
voters (although those provisions were signed into law after
the adoption of the PRA). Finally, the PRA expressly provides
that its provisions do not "prevent[] the Legislature or any
other state or local agency from imposing additional
requirements on any person if the requirements do not prevent
the person from complying with" the PRA. All these factors
support the argument that this bill is not an indirect
amendment of the PRA.
Regardless of whether this bill is an indirect amendment to the
PRA, however, the committee may wish to consider whether it
makes sense, as a policy matter, to make its provisions part
of the PRA, and to have it enforced and interpreted by the
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FPPC. On the one hand, making the FPPC responsible for
enforcing campaign contribution limits for hundreds of local
government agencies likely would significantly increase the
workload at the FPPC, which could have a significant expense
and could negatively impact the administration and enforcement
of this bill and of the current provisions of the PRA. On the
other hand, because the PRA regulates campaign disclosure, it
already governs local campaign contributions and spending. In
fact, as noted above, this bill generally adopts the PRA's
definitions of various terms. Bringing this bill's
restrictions within the PRA, and having it be administered by
the same entity that generally administers the state's other
campaign laws, could promote greater consistency in the
interpretation and enforcement of the state's campaign finance
laws. Additionally, candidates and campaign committees would
have a single point of contact for inquiries, advice, and
opinions about compliance with campaign finance laws.
Furthermore, having the FPPC enforce the provisions of this bill
may lead to more timely and robust enforcement. The FPPC has
the authority to impose fines of up to $5,000 for violations
of the PRA through an administrative enforcement process. A
substantial majority of enforcement actions for violations of
the PRA are handled through that administrative process,
thereby eliminating the need for more time-consuming and
resource-intensive civil or criminal actions in the courts.
As currently drafted, this bill does not offer an
administrative enforcement process-any violation of the
contribution limits imposed by this bill would have to be
pursued civilly or criminally (except in situations where
local jurisdictions have established their own administrative
enforcement process). Moreover, it is unclear whether it
would be workable or realistic to establish a new
administrative enforcement process solely for the purposes of
enforcing this bill. By moving the provisions of this bill
into the PRA, however, the FPPC would have the ability to use
its existing administrative process to bring enforcement
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actions against violators.
Finally, even if the FPPC does not enforce the default
contribution limits, this bill nonetheless likely will
increase the FPPC's workload. The existence of contribution
limits tends to be associated with an increase in independent
expenditures, so this bill may increase advice requests and
enforcement actions related to independent expenditures,
including rules that limit coordination between candidates and
independent expenditure committees. Additionally, attempts to
circumvent contribution limits could result in an increase in
laundering of campaign contributions. Because laws governing
independent expenditures and the laundering of campaign
contributions are contained in the PRA, the FPPC would have
jurisdiction and enforcement authority over these matters even
if it does not enforce the contribution limits imposed by this
bill.
5)Arguments in Support: In support of this bill, California
Common Cause writes:
Under current law, local governments may enact local
contribution limits, but the vast majority have not
done so. Only 23 percent of cities and 28 percent of
counties have enacted local limits; the percentage of
districts with limits is even lower. In jurisdictions
without limits, contributors can give any amount to
candidates for local office - even contributions
exceeding the average Californian's annual salary.
Common Cause's research of local contributions found
many examples of contributors giving $50,000 to
$90,000+ contributions. In some cases, more than 50
percent of a candidate's campaign war chest came from
just one or two contributors.
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Unfettered campaign contributions undermine democracy.
Whenever a candidate is financially dependent on just
a handful of contributors there is a risk that they
will value their contributors' interests over those of
the people they serve. Moreover, requiring candidates
to seek support in smaller amounts but from a broader
number of contributors has a democratizing effect, and
can help the competitiveness of community-supported
candidates who do not have access to wealthy patrons.
6)Concerns Expressed: While not taking an official position,
Urban Counties of California (UCC) submitted a letter to the
committee expressing concerns with this bill. Many of those
concerns appear to be addressed by recent amendments to the
bill. Two of the concerns expressed by UCC, however, do not
appear to be addressed by recent amendments. Specifically,
UCC writes that it is "unclear if there are sufficient
resources for [district attorneys] to handle the potential
volume of cases" that would result from the bill, and UCC
expresses concern that "there could be a conflict of interest
for [the district attorney's] office to handle all of the
enforcement."
7)Technical Amendments: This bill repeals provisions of law
that allow counties, cities, and districts to limit campaign
contributions in local elections, and instead provides that
local governments may enact contribution limits that prevail
over the default limits established by this bill. This bill
does not, however, repeal Section 35177 of the Education Code,
which is a similar provision of law that allows school
districts to limit campaign contributions and expenditures.
To ensure consistency and avoid ambiguity, committee staff
recommends that this bill be amended to repeal Section 35177
of the Education Code.
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This bill expressly permits a local government to impose its own
contribution limits that differ from those that are otherwise
imposed by this bill. The bill's language is ambiguous,
however, on the question of whether existing local ordinances
that impose campaign contribution limits would prevail over
the limits set by this bill, or if a local jurisdiction would
have to re-adopt local contribution limits. Committee staff
recommends that this bill be amended to clarify that any
existing local ordinances that impose campaign contribution
limits will continue to be valid if this bill becomes law, and
the limits set by those ordinances will prevail over the
default limits set by this bill.
REGISTERED SUPPORT / OPPOSITION:
Support
California Clean Money Campaign
California Common Cause
League of Women Voters of California
MOVI, Money Out Voters In
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Opposition
None on file.
Analysis Prepared by:Ethan Jones / E. & R. / (916) 319-2094