BILL ANALYSIS Ó SB 1107 Page 1 SENATE THIRD READING SB 1107 (Allen) As Amended August 15, 2016 2/3 vote SENATE VOTE: 26-12 ------------------------------------------------------------------ |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+--------------------| |Elections |5-2 |Weber, Gordon, Low, |Harper, Travis | | | |Mullin, Nazarian |Allen | | | | | | |----------------+-----+----------------------+--------------------| |Appropriations |14-6 |Gonzalez, Bloom, |Bigelow, Chang, | | | |Bonilla, Bonta, |Gallagher, Jones, | | | |Calderon, Daly, |Obernolte, Wagner | | | |Eggman, Eduardo | | | | |Garcia, Holden, | | | | |Quirk, Santiago, | | | | |Weber, Wood, McCarty | | | | | | | | | | | | ------------------------------------------------------------------ SUMMARY: Allows state and local governments to offer public SB 1107 Page 2 campaign financing programs. Limits the uses of campaign funds that are held by public officials who have been convicted of various public trust crimes. Specifically, this bill: 1)Permits state and local governmental entities to establish public campaign financing programs for candidates for elective office, if all of the following criteria are met: a) The governmental entity has established a dedicated fund, as specified, for the purpose of providing public campaign financing for candidates for elective office; b) Public moneys in the fund are available to all qualified, voluntarily participating candidates of the same office without regard to incumbency or political party; and, c) The state or local governmental entity has established criteria, as specified, for determining a candidate's qualification. 2)Provides that an officeholder who is convicted of a felony involving bribery, embezzlement of public money, extortion or theft of public money, perjury, or conspiracy to commit those crimes, as specified, may use funds held by the officeholder's candidate controlled committee only to pay outstanding campaign debts and expenses, and for returning contributions. Requires the officeholder, six months after conviction for one of the aforementioned felonies becomes final, to forfeit any remaining campaign funds and requires the funds to be deposited in the general fund. 3)Makes various findings and declarations, and contains a severability clause. SB 1107 Page 3 FISCAL EFFECT: According to the Assembly Appropriations Committee, any administrative costs to the Fair Political Practices Commission (FPPC), such as for providing advice or modifying regulations, should be absorbable. The burden of developing and adopting a public campaign financing program would fall on any entity that chooses do so, and would thus not be state reimbursable. There is a good probability that this bill could result in litigation challenging whether the bill meets the statutory requirement to further the purpose of the Political Reform Act (PRA), which does not provide for public financing. The state could therefore incur significant legal costs in the hundreds of thousands of dollars. COMMENTS: According to the author, "SB 1107 would remove the ban on voluntary public campaign financing programs. Programs would have to meet basic criteria for fairness and accountability. SB 1107 does not create, or require any government to create, any public campaign financing program - it simply restores the option for local governments and the state. "Additionally, SB 1107? would require elected officials, who under current law are banned from running for office due to conviction of a specified felony such as bribery, to forfeit their campaign funds within six months, after paying debts or returning contributions, other than legal defense funds." In 1988, voters approved Proposition 73, which prohibited public funding of campaigns and set contribution limits for state and local elections. Many of the provisions of Proposition 73 were ultimately ruled unconstitutional by the federal courts. The only provisions of Proposition 73 to survive legal challenge were contribution limits for special elections, restrictions on SB 1107 Page 4 certain mass mailings by officeholders, and the prohibition on the use of public money for campaign purposes. Because of the public funding ban contained in Proposition 73, the state and most local governments in California do not have the option to offer public financing programs for electoral campaigns. While the California Supreme Court ruled that the public financing ban does not apply to charter cities (Johnson v. Bradley (1992) 4 Cal. 4th 389), a state appellate court has held that the public financing ban does apply to charter counties (County of Sacramento v. Fair Political Practices Commission (1990) 222 Cal. App. 3d 687). As a result, while charter cities in California can enact public campaign financing programs, general law cities, all counties, all districts, and the state government are covered by the current ban. According to information provided by the author's office, six charter cities currently provide limited public funding to match small campaign contributions (Los Angeles, Long Beach, Oakland, Richmond, Sacramento, and San Francisco). 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 initiative and require a two-thirds vote of both houses of the Legislature. In a letter dated August 11, 2016, and addressed to Assemblymember Chad Mayes, the Office of the Legislative Counsel provided written confirmation of an oral opinion it reached in which it concluded that "the amendments proposed to Government Code Section 85300 by [this bill] would require voter approval in order to become effective." The letter does not include an SB 1107 Page 5 analysis of how the Office of the Legislative Counsel reached that conclusion. In response to this letter, the author's office notes that because the letter did not contain legal analysis on which the conclusion was based, it is impossible to address the legal reasoning behind that conclusion. However, the author's office also notes that "based in part on legal research conducted by attorneys with California Common Cause, the author disagrees with the Legislative Counsel's conclusion," and states that "at a December 11, 2015 oversight hearing held by the Senate Committee on Elections and Constitutional Amendments, Jodi Remke, Chair of the Fair Political Practices Commission, who is also an attorney, testified that it is her understanding that the Legislature could amend Section 85300 of the Government Code without placing the question on the ballot." Additionally, California Common Cause and other supporters of this bill argue that it furthers the purposes of the PRA, maintaining that "academic research over the past thirty years?confirms that [public campaign financing] programs reduce the financial advantages of incumbency," and noting that one of the purposes of the PRA is to abolish "laws and practices unfairly favoring incumbents." Please see the policy committee analysis for a full discussion of this bill. Analysis Prepared by: Ethan Jones / E. & R. / (916) 319-2094 FN: 0004916 SB 1107 Page 6