Amended in Assembly June 30, 2016

Amended in Assembly June 21, 2016

Amended in Senate March 28, 2016

Senate Bill No. 1107

Introduced by Senator Allen

(Principal coauthor: Senator Hancock)

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(Principal coauthor: Assembly Member Chiu)

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February 17, 2016

An act to amend begin delete Sections 85300 and 85320 end delete begin insert Section 85300 end insert of, and to add begin delete Sections 89519.5 and 91004.5 end delete begin insert Section 89519.5 end insert to, the Government Code, relating to the Political Reform Act of 1974.

LEGISLATIVE COUNSEL’S DIGEST

SB 1107, as amended, Allen. Political Reform Act of 1974.

Existing law prohibits a person who has been convicted of a felony involving bribery, embezzlement of public money, extortion or theft of public money, perjury, or conspiracy to commit any of those crimes, from being considered a candidate for, or elected to, a state or local elective office. Existing law, the Political Reform Act of 1974, provides that campaign funds under the control of a former candidate or elected officer are considered surplus campaign funds at a prescribed time, and it prohibits the use of surplus campaign funds except for specified purposes.

This bill would prohibit an officeholder who is convicted of one of those enumerated felonies from using funds held by that officeholder’s candidate controlled committee for purposes other than certain purposes permitted for the use of surplus campaign funds. The bill would also require the officeholder to forfeit any remaining funds held 6 months after the conviction became final, and it would direct those funds to be deposited in the General Fund.

The Political Reform Act of 1974 prohibits a public officer from expending, and a candidate from accepting, public moneys for the purpose of seeking elective office.

This bill would permit a public officer or candidate to expend or accept public moneys for the purpose of seeking elective office if the state or a local governmental entity established a dedicated fund for this purpose, as specified.

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The act prohibits a foreign government or principal, as defined, from making a contribution or expenditure in connection with a state or local ballot measure, and it also sets forth civil and criminal penalties for violations of the act’s provisions.

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This bill would expand the scope of the prohibitions relating to foreign governments and principals by also prohibiting a foreign government or principal from making a contribution in support of, or opposition to, a state or local candidate. It would also permit a greater criminal penalty to be imposed for a violation of that prohibition, and it would establish the amount of a civil penalty for a violation of the prohibition.

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A violation of the act’s provisions is punishable as a misdemeanor. By expanding the scope of an existing crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

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The Political Reform Act of 1974, an initiative measure, provides that the act may be amended by a statute that becomes effective upon approval of the voters.

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This bill would require the Secretary of State to submit the bill to the voters for approval at the November 6, 2018, statewide general election.

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The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the act’s purposes upon a 2⁄3 vote of each house and compliance with specified procedural requirements.

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This bill would declare that it furthers the purposes of the act.

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Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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begin insert The Legislature finds and declares all of the
following: end insert

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(a) All citizens should be able to make their voices heard in the
political process and hold their elected officials accountable.

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(b) Elections for local or state elective office should be fair,
open, and competitive.

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(c) The increasing costs of political campaigns can force
candidates to rely on large contributions from wealthy donors and
special interests, which can give those wealthy donors and special
interests disproportionate influence over governmental decisions.

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(d) Such disproportionate influence can undermine the public’s
trust that public officials are performing their duties in an impartial
manner and that government is serving the needs and responding
to the wishes of all citizens equally, without regard to their wealth.

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(e) Special interests contribute more to incumbents than
challengers because they seek access to elected officials, and such
contributions account for a large portion of the financial
incumbency advantage, as confirmed by recent studies such as
those published in the Journal of Politics in 2014 and Political
Research Quarterly in 2016.

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(f) Citizen-funded election programs, in which qualified
candidates can receive public funds for the purpose of
communicating with voters rather than relying exclusively on
private donors, have been enacted in six charter cities in
California, as well as numerous other local and state jurisdictions.

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(g) Citizen-funded election programs encourage competition
by reducing the financial advantages of incumbency and making
it possible for citizens from all walks of life, not only those with
connections to wealthy donors or special interests, to run for office,
as confirmed by recent studies such as those published in State
Politics and Policy Quarterly in 2008, and by the Campaign
Finance Institute in 2015 and the National Institute of Money in
State Politics in 2016.

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(h) By reducing reliance on wealthy donors and special interests,
citizen-funded election programs inhibit improper practices,
protect against corruption or the appearance of corruption, and
protect the political integrity of our governmental institutions.

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(i) In Johnson v. Bradley (1992) 4 Cal.4th 389, the California
Supreme Court commented that “it seems obvious that public
money reduces rather than increases the fund raising pressures
on public office seekers and thereby reduces the undue influence
of special interest groups.”

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(j) In Buckley v. Valeo (1976) 424 U.S. 1, the United States
Supreme Court recognized that “public financing as a means of
eliminating improper influence of large private contributions
furthers a significant governmental interest.”

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(k) In Arizona Free Enterprise v. Bennett (2011) 564 U.S. 721,
the United States Supreme Court acknowledged that public
financing of elections “can further ‘significant governmental
interest[s]’ such as the state interest in preventing corruption,”
quoting Buckley v. Valeo.

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(l) In Buckley v. Valeo, the United States Supreme Court further
noted that citizen-funded elections programs “facilitate and
enlarge public discussion and participation in the electoral
process, goals vital to a self-governing people.”

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(m) The absolute prohibition on public campaign financing
allows special interests to gain disproportionate influence and
unfairly favors incumbents. An exception should be created to
permit citizen-funded election programs so that elections may be
conducted more fairly.

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begin delete SECTION 1. end delete

begin insert SEC. 2. end insert   

Section 85300 of the Government Code is amended
to read:

85300.  

(a) Except as provided in subdivision (b), a public
officer shall not expend, and a candidate shall not accept, any
public moneys for the purpose of seeking elective office.

(b) A public officer or candidate may expend or accept public
moneys for the purpose of seeking elective office if the state or a
local governmental entity establishes a dedicated fund for this
purpose by statute, ordinance, resolution, or charter, and both of
the following are true:

(1) Public moneys held in the fund are available to all qualified,
voluntarily participating candidates for the same office without
regard to incumbency or political party preference.

(2) The state or local governmental entity has established criteria
for determining a candidate’s qualification by statute, ordinance,
resolution, or charter.

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SEC. 2.  

Section 85320 of the Government Code is amended
to read:

85320.  

(a) A foreign government or foreign principal shall
not make, directly or through any other person, any contribution,
expenditure, or independent expenditure in connection with the
qualification or support of, or opposition to, a state or local
candidate or ballot measure.

(b) A person or a committee shall not solicit or accept a
contribution from a foreign government or foreign principal in
connection with the qualification or support of, or opposition to,
a state or local candidate or ballot measure.

(c) For the purposes of this section, a “foreign principal”
includes the following:

(1) A foreign political party.

(2) A person outside the United States, unless either of the
following is established:

(A) The person is an individual and a citizen of the United
States.

(B) The person is not an individual and is organized under or
created by the laws of the United States or of any state or other
place subject to the jurisdiction of the United States and has its
principal place of business within the United States.

(3) A partnership, association, corporation, organization, or
other combination of persons organized under the laws of or having
its principal place of business in a foreign country.

(4) A domestic subsidiary of a foreign corporation if the decision
to contribute or expend funds is made by an officer, director, or
management employee of the foreign corporation who is neither
a citizen of the United States nor a lawfully admitted permanent
resident of the United States.

(d) This section does not prohibit a contribution, expenditure,
or independent expenditure made by a lawfully admitted permanent
resident.

(e) A person who violates this section is guilty of a misdemeanor
and shall be fined the greater of ten thousand dollars ($10,000) or
an amount equal to the amount contributed or expended.

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SEC. 3.  

Section 89519.5 is added to the Government Code, to
read:

89519.5.  

(a) An officeholder who is convicted of a felony
enumerated in Section 20 of the Elections Code, and whose
conviction has become final, shall use funds held by the
officeholder’s candidate controlled committee only for the
following purposes:

(1) The payment of outstanding campaign debts or elected
officer’s expenses.

(2) The repayment of contributions.

(b) Six months after the conviction becomes final, the
officeholder shall forfeit any remaining funds subject to subdivision
(a), and these funds shall be deposited in the General Fund.

(c) This section does not apply to funds held by a ballot measure
committee or in a legal defense fund formed pursuant to Section
85304.

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SEC. 4.  

Section 91004.5 is added to the Government Code, to
read:

91004.5.  

(a) A person who intentionally violates Section 85320
is liable in a civil action brought by the civil prosecutor, for each
violation, for the greater of ten thousand dollars ($10,000) or an
amount equal to the amount contributed or expended.

(b) The civil prosecutor may not bring an action pursuant to this
section against a person being criminally prosecuted for a violation
of Section 85320 pursuant to Section 91000.

(c) This section is applicable only to violations occurring after
the effective date of this section.

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begin delete SEC. 5. end delete

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The provisions of this bill are severable. If any
provision of this bill or its application is held invalid, that invalidity
shall not affect other provisions or applications that can be given
effect without the invalid provision or application.

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SEC. 6.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII  B of the California Constitution because
the duties imposed on a local agency or school district by this act
were expressly included in a ballot measure approved by the voters
in a statewide election, within the meaning of Section 17556 of
the Government Code.

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SEC. 7.  

Notwithstanding Section 9040 of the Elections Code,
the Secretary of State shall, pursuant to subdivision (b) of Section
81012 of the Government Code, submit this act to the voters for
approval at the November 6, 2018, statewide general election.

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begin insert SEC. 5. end insert   

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No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

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begin insert SEC. 6. end insert   

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The Legislature finds and declares that this bill furthers
the purposes of the Political Reform Act of 1974 within the meaning
of subdivision (a) of Section 81012 of the Government Code.

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