BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2558


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          Date of Hearing:  March 30, 2016


                  ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING


                                Shirley Weber, Chair


          AB 2558  
          (Steinorth) - As Introduced February 19, 2016


          SUBJECT:  Political Reform Act of 1974:  San Bernardino County.


          SUMMARY:  Removes the January 1, 2018, sunset date from a  
          provision of law that authorizes the Fair Political Practices  
          Commission (FPPC) to enforce San Bernardino County's local  
          campaign finance reform ordinance, as specified.  Specifically,  
          this bill:  


          1)Deletes January 1, 2018, sunset date from a provision of law  
            that authorizes the FPPC, upon a mutual agreement between the  
            FPPC and the San Bernardino County Board of Supervisors, to  
            have primary responsibility for the impartial, effective  
            administration, implementation, and enforcement of San  
            Bernardino County's local campaign finance reform ordinance.  


          2)Makes legislative findings and declarations as to the  
            necessity of a special statute for San Bernardino County due  
            to the need to avoid an appearance of corruption in the County  
            of San Bernardino's electoral process.  


          EXISTING LAW:  









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          1)Creates the FPPC, and makes it responsible for the impartial,  
            effective administration and implementation of the Political  
            Reform Act (PRA).

          2)Requires a local government agency that adopts or amends a  
            local campaign finance ordinance to file a copy of the  
            ordinance with the FPPC.

          3)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.

          4)Authorizes the FPPC, until January 1, 2018 and upon mutual  
            agreement between the FPPC 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.  Requires the San Bernardino County Board of  
            Supervisors to consult with the FPPC prior to adopting and  
            amending any local campaign finance reform ordinance that is  
            subsequently enforced by the FPPC.

          5)Authorizes the FPPC, pursuant to the aforementioned agreement,  
            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.  









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          6)Permits the San Bernardino County Board of Supervisors and the  
            FPPC to 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.  Permits the San Bernardino County Board of  
            Supervisors or the FPPC, at any time, by ordinance or  
            resolution, to terminate any agreement for the FPPC to  
            administer, implement, or enforce the local campaign finance  
            reform ordinance or any provision thereof.

          7)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, as specified.

          FISCAL EFFECT:  Unknown


          COMMENTS:  


          1)Purpose of the Bill:  According to the author:


               By removing the 2018 sunset date from statute, AB 2558  
               will continue the existing, effective partnership  
               between San Bernardino County and the FPPC for  
               enforcement of local campaign finance ordinances. In  
               2012, the County established a campaign finance  
               ordinance with contribution limits mirroring those  
               applied to State Senate and Assembly candidates.  
               However, appointing an ethics commission to enforce  
               the ordinance could have created financial and  
               conflict-of-interest challenges to the County, which  
               had suffered various levels of corruption in its local  
               governments over recent years. 











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               Instead, AB 2146 (Cook, 2012) allowed the County to  
               contract with the FPPC for enforcement of their local  
               ordinance. The FPPC willingly took on responsibility  
               for this enforcement in 2012. This partnership has  
               been successful, cost-effective, and mutually  
               beneficial to the two entities. AB 2558 seeks to  
               continue this arrangement by removing the 2018 sunset  
               date from statute.


          2)San Bernardino County:  In 2012, the Legislature passed and  
            the Governor signed AB 2146 (Cook), Chapter 169, Statutes of  
            2012, which permitted San Bernardino County and the FPPC to  
            enter into an agreement that provides for the FPPC to enforce  
            the County's local campaign finance reform ordinance.  Prior  
            to this, the FPPC did not enforce any local campaign finance  
            ordinances.  According to previous analyses, the County of San  
            Bernardino, which had been the subject of several high-profile  
            corruption cases, was in the process of developing a campaign  
            finance ordinance.  Rather than appoint an ethics commission,  
            which could present financial as well as conflict of interest  
            challenges, the County proposed to contract with the FPPC to  
            enforce their local campaign finance ordinance.  Moreover, the  
            County determined that it was in the best interest of the  
            County to retain the services of the FPPC to provide for the  
            enforcement and interpretation of San Bernardino County's  
            local campaign finance ordinance as the FPPC has special  
            skills, knowledge, experience, and expertise in the area of  
            enforcement and interpretation of campaign laws necessary to  
            effectively advise, assist, litigate, and otherwise represent  
            the County on such matters.  As a result, the FPPC and San  
            Bernardino County entered into a mutual agreement, from  
            January 1, 2013 through December 31, 2014, for the FPPC to  
            provide the County campaign enforcement and interpretation  
            services for the impartial, effective administration,  
            implementation, and enforcement of the San Bernardino's  
            campaign finance reform ordinance.  According to the FPPC, San  
            Bernardino County and the FPPC have entered into a new  
            two-year mutual agreement from January 1, 2015 through  








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            December 31, 2016.


          3)FPPC's San Bernardino County Report:  As mentioned above, in  
            2012, AB 2146 (Cook) became law to permit San Bernardino  
            County and the FPPC to enter into an agreement for the FPPC to  
            enforce the County's local campaign finance reform ordinance.   
            Among other provisions, AB 2146 also required the FPPC, if it  
            entered into an agreement with the San Bernardino County Board  
            of Supervisors, to report to the Legislature with specified  
            information on or before January 1, 2017.  Current law  
            requires the report to include, but not be limited to, the  
            status of the agreement, the estimated annual cost savings, if  
            any, for the County of San Bernardino, a summary of relevant  
            annual performance metrics, as specified, any public comments  
            submitted relative to the operation of the agreement, and any  
            legislative recommendations.  



          The FPPC submitted the report to the committee on March 24,  
            2016.   According to the report, the FPPC served to  
            administer, interpret and enforce the County's ordinance,  
            focusing on four key areas - advising, informing, auditing and  
            enforcing.  Key points detailing the FPPC's responsibilities  
            include, but is not limited to, the following:

                     Advising candidates for elected county offices and  
                 potential contributors in county elections regarding the  
                 county's local campaign finance reform ordinance;

                     Proposing revisions to the original ordinance to  
                 help the ordinance more closely align with the PRA;



                     Providing training and developing educational  
                 materials to assist candidates and campaign treasurers in  
                 the county; 








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                     Conducting audits of 22 candidates and campaign  
                 committees; 



                     Resolving 23 cases involving committees, candidates,  
                 and donors involved in San Bernardino County elections  
                 (of those 23 cases, the FPPC prosecuted 9 cases resulting  
                 in fines, issued warning letters in 4 cases, and closed  
                 10 cases with no violation found).



            Additionally, County staff stated that the agreement between  
            the FPPC and the San Bernardino County resulted in substantial  
            savings when compared to the cost of other public ethics  
            commissions and aided in enforcement proceedings by removing  
            any semblance of conflict of interest.  The report concluded  
            by stating that the partnership between the FPPC and the San  
            Bernardino County has been successful and both the FPPC and  
            San Bernardino County support removing  the sunset date from  
            the statute.  


          1)Local Campaign Ordinances and the PRA:  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  








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            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 posts those ordinances on its website.  



            Several cities and counties have adopted campaign finance  
            ordinances, some of which 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.
          2)Criminal, Civil, and Administrative Enforcement of the PRA and  
            Local Campaign Ordinances:  Violations of the PRA are subject  








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            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.

          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.
          3)Arguments in Support:  In support, the Fair Political  
            Practices Commission writes:


               Commission staff has been working in partnership with  
               the County to develop a report to submit to the  
               Legislature this month, which will explain the status  
               of the agreement, cost savings to the County, and  








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               other information required by the original statute.   
               The Commission believes the partnership has been  
               constructive and that the sunset date should be  
               repealed so it can continue.  



               Since this bill will help protect the integrity of  
               campaigns in San Bernardino County, and the  
               relationship has been beneficial for both parties, the  
               Commission supports AB 2558.  
          4)Political Reform Act of 1974:  California voters passed an  
            initiative, Proposition 9, in 1974 
          that created the FPPC and codified significant restrictions and  
            prohibitions on candidates, officeholders, and lobbyists. That  
            initiative is commonly known as the PRA.  Amendments to the  
            PRA that are not submitted to the voters, such as those  
            contained in this bill, must further the purposes of the  
            proposition and require a two-thirds vote of each house of the  
            Legislature. 

          5)Related Legislation:  AB 2070 (Harper), which is also being  
            heard in this committee today, authorizes the FPPC, upon  
            mutual agreement between the FPPC and the Board of Supervisors  
            of the County of Orange, to administer and enforce a local  
            campaign finance ordinance passed by the Orange County Board  
            of Supervisors, as specified.  



          6)Previous Legislation:  AB 2146 (Cook), Chapter 169, Statutes  
            of 2012, permitted San Bernardino County and the FPPC to enter  
            into an agreement that provides for the FPPC to enforce the  
            County's local campaign finance ordinance.













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            SB 1226 (Correa) of 2014, would have authorized any city or  
            county to enter into an agreement with the FPPC to administer  
            and enforce a local campaign finance ordinance.  The bill was  
            gutted and amended in the Assembly Appropriations Committee.



            AB 910 (Harper) of 2015, would have authorized the FPPC to  
            administer and enforce a local campaign finance ordinance for  
            any city or county, upon mutual agreement between the FPPC and  
            the local agency, as specified.  AB 910 was never heard in  
            this committee.  

            AB 1083 (Eggman), Chapter 186, Statutes of 2015, permits the  
            City Council of the City of Stockton and the FPPC to enter  
            into an agreement that provides for the FPPC to enforce a  
            local campaign finance ordinance passed by the City Council of  
            the City of Stockton.  

          7)Double Referral:  This bill is double-referred to the Assembly  
            Local Government Committee.
          




          REGISTERED SUPPORT / OPPOSITION:


          Support


          San Bernardino County (sponsor) 


          California State Association of Counties


          Fair Political Practices Commission








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          Urban Counties of California




          Opposition


          None on file.




          Analysis Prepared by:Nichole Becker / E. & R. / (916) 319-2094