BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1107|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: SB 1107
Author: Allen (D), et al.
Amended: 3/28/16
Vote: 21
SENATE ELECTIONS & C.A. COMMITTEE: 4-1, 4/19/16
AYES: Allen, Hancock, Hertzberg, Liu
NOES: Anderson
SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/27/16
AYES: Lara, Beall, Hill, McGuire, Mendoza
NOES: Bates, Nielsen
SUBJECT: Political Reform Act of 1974: public moneys:
definition
SOURCE: California Clean Money Campaign
California Common Cause
DIGEST: This bill provides, within the Political Reform Act
(PRA), an exception to the existing ban on use of public moneys
for the purpose of seeking public office, a prohibition on
foreign contributions to candidates, and a requirement that an
officeholder who is convicted of specified crimes to forfeit any
remaining campaign funds to the general fund.
ANALYSIS:
Existing law:
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1) Provides, pursuant to the PRA as amended by Proposition 73
of 1988, that no public officer shall expend and no candidate
shall accept any public moneys for the purpose of seeking
elective office.
2) Provides, pursuant to the California Constitution, that
every person shall be disqualified from holding any office of
profit in this state who has been convicted of having given
or offered a bribe to procure personal election or
appointment and that laws shall be made to exclude persons
convicted of bribery, perjury, forgery, malfeasance in
office, or other high crimes from office or serving on
juries.
3) Provides that a person shall not be considered a candidate
for, and is not eligible to be elected to, any state or local
elective office if the person has been convicted of a felony
involving accepting or giving, or offering to give, any
bribe, the embezzlement of public money, extortion or theft
of public money, perjury, or conspiracy to commit any of
those crimes.
4) Provides that campaign funds under the control of a former
candidate or elected officer are considered "surplus campaign
funds" on the 90th day after the person leaves office, or on
the 90th day following the end of the postelection reporting
period following the defeat of the candidate, whichever
occurs last.
5) Permits surplus campaign funds to be used only for the
following purposes:
a) The payment of outstanding campaign debts or elected
officer's expenses.
b) The repayment of contributions.
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c) Donations to a bona fide charitable, educational,
civic, religious, or similar tax-exempt, nonprofit
organization, where no substantial part of the proceeds
will have a material financial effect on the former
candidate or elected officer, any member of his or her
immediate family, or his or her campaign treasurer.
d) Contributions to a political party committee, provided
that the campaign funds are not used to support or oppose
a candidate for elective office. However, contributions
made pursuant to this provision may be used by a political
party committee to conduct partisan voter registration,
partisan get-out-the-vote activities, and slate-mailers.
e) Contributions to support or oppose a candidate for
federal office, a candidate for elective office in a state
other than California, or a ballot measure.
f) The payment for professional services reasonably
required by the committee to assist in the performance of
its administrative functions, including payment for
attorney's fees and other costs for litigation that arises
directly out of a candidate's or elected officer's
activities, duties, or status as a candidate or elected
officer.
6) Prohibits a foreign government or foreign principal from
making, directly or through any other person, a contribution,
expenditure, or independent expenditure in connection with
the qualification or support of, or opposition to, a state or
local ballot measure. Prohibits a person or a committee from
soliciting or accepting a contribution from a foreign
government or a foreign principal in connection with the
qualification or support of, or opposition to, any state or
local ballot measure. These restrictions do not prohibit a
contribution, expenditure, or independent expenditure made by
a lawfully admitted permanent resident. A person who
violates these provisions is guilty of a misdemeanor and
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shall be fined an amount equal to the amount contributed or
expended. A "foreign principal," for the purposes of these
restrictions, includes the following:
a) A foreign political party.
b) A person outside the U.S., unless the person is an
individual and a citizen of the U.S. or the person is not
an individual, and is organized under or created by the
laws of the U.S. or of any state or other place subject to
the jurisdiction of the U.S. and has its principal place
of business within the U.S.
c) 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.
d) 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 U.S. nor a
lawfully admitted permanent resident of the U.S.
7) Prohibits, pursuant to federal law, a foreign national,
directly or indirectly, from making a campaign contribution,
expenditure, independent expenditure, or disbursement for an
electioneering communication in connection with a federal,
state, or local election and prohibits a person from
soliciting, accepting, or receiving a contribution or
donation made by a foreign national in connection with a
federal, state, or local election. These federal
prohibitions only apply to elections for candidates and do
not therefore, apply to elections for ballot measures.
8) Establishes, pursuant to federal law, the Federal Election
Commission (FEC), and makes it responsible for the
administration and enforcement of the Federal Election
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Campaign Act (FECA), including the restrictions on
contributions and expenditures by foreign nationals described
above.
9) Permits the Fair Political Practices Commission (FPPC) to
impose administrative penalties of up to $5,000 per violation
of the PRA and provides for specified civil penalties.
10)Provides that any person who violates any provision of the
PRA for which no specific civil penalty is provided, shall be
liable in a civil action brought by the FPPC or the district
attorney or the elected city attorney for an amount up to
$5,000 per violation.
11)Provides that any person who violates the PRA's prohibition
on foreign contributions for ballot measure campaigns shall
be guilty of a misdemeanor and shall be fined an amount equal
to the amount contributed or expended.
12)Provides that the PRA may only be amended or repealed in the
following manner:
a) Amended to further its purposes by a statute passed in
each house of the Legislature by a two-thirds vote and
signed by the Governor.
b) Amended or repealed by a statute that becomes
effective only when approved by the electors. The
Legislature may place a PRA amendment on the ballot by
majority vote in each house and signed by the Governor.
This bill:
1) Permits 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 establishes a
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dedicated fund for this purpose, and both of the following
are true:
a) 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.
b) The state or local governmental entity has established
criteria for determining a candidate's qualification by
statute, ordinance, resolution, or charter.
2) Provides that a state or local officeholder who is convicted
of a felony involving accepting or giving, or offering to
give, any bribe, the embezzlement of public money, extortion
or theft of public money, perjury, or conspiracy to commit
any of those crimes, and whose conviction has become final,
may only use funds held by the officeholder's candidate
controlled committee only for the payment of outstanding
campaign debts or expenses and the repayment of
contributions.
3) Requires that six months after conviction for one of the
aforementioned felonies becomes final, the officeholder shall
forfeit any remaining funds and these funds shall be
deposited in the general fund. This provision does not apply
to funds held by a ballot measure committee or in a legal
defense fund.
4) Expands the scope of the PRA's prohibitions relating to
contributions by foreign governments and principals in
relation to ballot measures by also prohibiting a foreign
government or principal from making a contribution in support
of, or opposition to, a state or local candidate.
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5) Provides that a person who violates the PRA's foreign
contribution ban is guilty of a misdemeanor and shall be
fined the greater of $10,000 or an amount equal to the amount
contributed or expended. Alternatively provides that a
person who violates this prohibition can be held liable in a
civil action brought by the civil prosecutor, for each
violation, for the greater of $10,000 or an amount equal to
the amount contributed or expended. The civil prosecutor may
not bring a civil action against a person who is being
criminally prosecuted for violation of same prohibition.
6) Requires the Secretary of State (SOS) to submit this bill to
the voters for approval at a statewide election occurring at
least 131 days after the adoption of the proposal by the
Legislature.
Background
Where does the public funding ban apply? The state itself and
most California local governments do not have the option to
offer any public funding to electoral campaigns, under the
existing statewide ban. While charter cities are exempt under
autonomy granted by the State Constitution, general law cities,
counties, districts, and the state government are covered by the
current state ban. In fact, after voters in Sacramento County
enacted public financing several years ago, the courts struck it
down under Prop. 73. Currently, six charter cities provide
limited public funding to match small campaign contributions
(Los Angeles, Long Beach, Oakland, Richmond, Sacramento, and San
Francisco). Proponents of these programs describe them as
intended to provide candidates with an alternative to relying on
large campaign contributions and amplify the voices of
Californians who make small donations. Other local governments
are prohibited from offering public campaign funding, due to a
provision of Proposition 73 of 1988.
Foreign campaign spending, federal law, and previous
legislation. As detailed above, federal law prohibits foreign
nationals from making contributions in connection with federal,
state, and local candidate elections. According to information
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from the FEC, the ban on political contributions and
expenditures by foreign nationals was first enacted in 1966 as
part of the amendments to the Foreign Agents Registration Act
(FARA), an 'internal security' statute. The goal of the FARA
was to minimize foreign intervention in U.S. elections by
establishing a series of limitations on foreign nationals.
These included registration requirements for the agents of
foreign principals and a general prohibition on political
contributions by foreign nationals. In 1974, the prohibition
was incorporated into FECA, giving the FEC jurisdiction over its
enforcement and interpretation.
Until 2002, the restriction on contributions by foreign
nationals specifically applied to contributions made "in
connection with an election to any political office." Because
that language was limited to elections for office, it was the
position of the FEC that contributions from foreign nationals
relating exclusively to ballot measures were not restricted by
federal law. In 2002, the restriction on foreign contributions
was amended to make it applicable to any contribution made "in
connection with a Federal, State, or local election," though it
is unclear whether that change was intended to cover ballot
measure elections.
In 1997, the Legislature approved and Governor Wilson signed SB
109 (Kopp, Chapter 67, Statutes of 1997), to prohibit foreign
governments or foreign principals from making contributions,
expenditures, or independent expenditures in connection with
state or local ballot measures. The legislative history
suggests that SB 109 did not seek to regulate foreign
contributions made in connection with elections for office
because such contributions were already restricted by federal
law. Instead, SB 109 was limited to foreign spending in
connection with ballot measure elections, thereby restricting
foreign spending that was not covered by federal law.
Aside from the fact that state law is limited to foreign
spending made in connection with ballot measures, state and
federal law differ in one other important respect. While
federal law restricts contributions and expenditures by foreign
nationals, state law does not restrict contributions or
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expenditures by a foreign national who is an individual and who
is legally present in the U.S. The initial version of SB 109
(and an unsuccessful bill from the prior legislative session)
would have restricted contributions by foreign nationals who
were legally present in the U.S., but that restriction was
amended out of the bill to address opposition.
Comments
1)According to the author, SB 1107 would restore control to
local governments and the state to enact new options for
election campaign funding. Voters are increasingly concerned
about political mega-donors in our elections. Most Americans
think that money has too much influence in our political
campaigns today and they believe that campaign finance should
be reformed so that the influence of special interest money is
reduced.
Los Angeles, San Francisco, Sacramento, Long Beach, Oakland,
and Richmond offer limited public funds to match small
campaign donations. Unfortunately, such programs are
currently prohibited in other California jurisdictions.
Unlike charter cities, state law bans counties, districts,
general law cities, and the state itself from offering public
campaign funds, under a provision enacted by Proposition 73, a
1988 initiative that had virtually all of its other provisions
invalidated in federal court.
SB 1107 would remove the ban on voluntary public campaign
financing programs. Because the ban was originally instituted
by ballot initiative, this bill refers the issue to the ballot
for voters' approval. SB 1107 would not create a public
financing program or require any government to offer public
financing. It would not spend any public funds or raise any
taxes or fees. It would simply amend the ban to permit local
governments or the state, if they so choose, to enact laws
that create public financing programs. Local governments
would have the flexibility to tailor policies to local
concerns and conditions, while requiring basic protections for
fairness and accountability.
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SB 1107 also includes two other common sense reforms to
increase the accountability of our elections. Currently,
foreign corporations and governments may not donate to ballot
measure campaigns, but current law does not ban contributions
to candidates. SB 1107 extends the ban to prohibit foreign
corporations and governments from donating to state or local
candidates, enforceable by the state FPPC. Given the FEC's
recent history of deadlocking on enforcement matters, the FPPC
is in a better position to enforce this prohibition in
California.
Lastly, when an elected official is convicted of a felony that
includes the abuse of their office, such as bribery or
embezzlement, they are disqualified from running for office
again. In these rare but serious cases, SB 1107 requires the
convicted official to return any unused campaign funds to
donors or pay past debts, and forfeit any surplus funds after
six months to the state's general fund. (Legal defense funds
would not be affected.)
Related Legislation
AB 2250 (Ridley-Thomas, 2016), which is pending in the Assembly
Floor, is similar to the section of this bill that prohibits,
under state law, contributions, expenditures, and independent
expenditures from foreign governments and foreign principals in
connection with candidate elections.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee:
The FPPC indicates that it would incur first-year costs of
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$167,000 and ongoing annual costs of $160,000 to implement the
provisions of this bill (General Fund).
One-time costs in the range of $414,000 to $552,000 to the SOS
for printing and mailing costs to place the measure on the
ballot in the next statewide election. (General Fund)
SUPPORT: (Verified5/27/16)
California Clean Money Campaign (co-source)
California Common Cause (co-source)
Alliance of Californians for Community Empowerment
American Association of Retired Persons
American Civil Liberties Union of California
American Sustainable Business Council
Asian Americans Advancing Justice - California
Bay Area Rapid Transit
Brennan Center for Justice at New York University School of Law
California Alliance for Retired Americans
California Church IMPACT
California Forward Action Fund
California League of Conservation Voters
California Public Interest Research Group
California School Employees Association
California Voices for Progress
Campaign Legal Center
Courage Campaign
Franciscan Action Network
League of Women Voters of California
Los Angeles County Federation of Labor
MapLight
Money Out Voters In
National Council of Jewish Women-California
Represent California
Represent.Us
Sierra Club California
Southwest Voter Registration Education Project
UFCW Western Stats Council
OPPOSITION: (Verified5/27/16)
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None received
Prepared by:Darren Chesin / E. & C.A. / (916) 651-4106
5/28/16 16:57:30
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