BILL ANALYSIS SB 1223 Page 1 PROPOSED CONFERENCE REPORT NO. 1 - June 29, 2000 SB 1223 (Burton) As Amended July 13, 1999 Majority vote ---------------------------------------------------------------- |SENATE: | |(August 31, |ASSEMBLY: | |(August 26, | | | |1999) | | |1999) | ---------------------------------------------------------------- (vote not relevant) (vote not relevant) SENATE CONFERENCE VOTE : 3-0 ASSEMBLY CONFERENCE VOTE :2-1 ---------------------------------------------------------------- |Ayes:|Burton, Murray, Johnson |Ayes:|Hertzberg, Shelley | | | | | | |-----+-------------------------+-----+--------------------------| | | |Nays:|Ackerman | | | | | | ---------------------------------------------------------------- Original Committee Reference: E.R. & C.A. SUMMARY : Enacts campaign finance reform by amending the Political Reform Act of 1974 (PRA). Limits campaign contributions to candidates for state office, provides for voluntary spending limits, requires additional campaign disclosure, modifies enforcement provisions, changes disposition of surplus funds, repeals conflicting provisions of prior propositions, and calls a special election to be consolidated with the 2000 statewide general election. Specifically, the conference committee amendments : 1)Define, for purposes of campaign contribution limitations: a) "Small contributor committee" as a committee that has been in existence at least six months, receives contributions from 100 or more persons to a maximum of $200 per person per calendar year, and contributes to five or more candidates; SB 1223 Page 2 b) "Political party committee" as the state central committee or county central committee of a political party recognized under the Elections Code, and remove a political party committee from the definition of a controlled committee; c) "Statewide elective office" as including the office of Member of the State Board of Equalization, as well as the office of Governor, Lieutenant Governor, Attorney General, Insurance Commissioner, Controller, Secretary of State, Treasurer, and Superintendent of Public Instruction; and, d) Apply the existing definition of a "person" under the PRA, which includes an individual, firm, partnership, company, corporation, and other organization or group acting in concert. 2)Impose campaign contribution limits, per election, including special elections, except as specified: a) To a candidate, other than Governor, by a person: statewide, $5,000; legislative, $3,000; b) To a candidate, other than Governor, by a small contributor committee: statewide, $10,000; legislative, $6,000; c) To a candidate for Governor, by a person or small contributor committee: $20,000; d) To a committee by a person, for the purpose of making contributions to candidates for state office: $5,000 per calendar year; e) To a political party committee, for the purpose of making contributions for the support or defeat of candidates for state office: $25,000 per calendar year; f) To a political party committee by a person for purposes other than making contributions to candidates for state SB 1223 Page 3 office: no limits on contributions; g) Personal loans by a candidate for state office to his or her campaign: up to $100,000. The candidate may not charge interest on any personal loan to his or her campaign; h) Personal funds contributed by a candidate to his or her own campaign: no limits on contributions; i) To a committee established by a state officer to oppose a recall measure and recall election: no limits on contributions; j) To a candidate's or officeholder's legal compliance account for the purpose of defraying legal costs in an administrative, civil, or criminal proceeding arising from an election campaign, the electoral process, or the performance of governmental duties: no limits on contributions; aa) To a state officer or candidate for state office from a lobbyist registered to lobby the governmental agency: no contribution allowed; bb) A candidate may accept a contribution for a state election after the date of the election only to the extent it does not exceed net debts outstanding from the election and does not otherwise exceed the applicable contribution limit for that election; and, cc) Applicable contribution limits shall be adjusted in January of every odd-numbered year to reflect changes in the consumer price index. 3)Specify the following regulations on transfers of funds: a) To a legislative candidate from another legislative candidate: up to $3,000; SB 1223 Page 4 b) To a candidate's own controlled committee from another controlled committee of the same candidate, using a "last in, first out" or "first in, first out" accounting method: aggregate and attribute to a specific contributor up to the applicable contribution limits; c) To a political party committee by a state candidate for purposes other than making contributions to candidates for state office, such as voter registration, get-out-the-vote activities, and slate mailers: no limits on transfers of excess funds; d) To a state officer or candidate for state office from an entity whose contributions are directed and controlled by any individual: all contributions made by that individual and any other entity whose contributions are controlled by that individual are aggregated; e) Communications to members, employees, shareholders, or their families to support or oppose a candidate or ballot measure: payments are not treated as contributions or independent expenditures if the payments are not for general public advertisements; and, f) Independent expenditures by a candidate's controlled committee or transfers to another committee for the purpose of making independent expenditures: none allowed. 4)Provide voluntary expenditure limits at a primary or special primary election (P), or at a general or special runoff election (G). A state candidate must file a statement of acceptance or rejection at the time he or she files a statement of intention to run for office: a) Assembly: $400,000 (P); $700,000 (G); b) Senate: $600,000 (P); $900,000 (G); c) Board of Equalization: $1 million (P); $1.5 million (G); SB 1223 Page 5 d) Statewide: $4 million (P); $6 millioin (G); and, e) Governor: $6 million (P); $10 million (G). 5)Provide incentives for acceptance of voluntary expenditure ceilings and penalties for violations, as follows: a) A candidate who accepts voluntary expenditure limits will be so designated in the state ballot pamphlet, and may pay for a 250-word statement to be included therein; b) A candidate may file an acceptance for the general election even though he or she declined the voluntary spending limits for the primary election if his or her primary election expenditures did not exceed the voluntary limits; c) A candidate is not bound by the voluntary spending limits if an opponent contributes personal funds to his or her own campaign in excess of the voluntary spending limits; d) Political party campaign expenditures on behalf of a candidate do not count toward the candidate's voluntary spending limits; e) Restriction on the future elective office for which campaign funds held on the effective date of this measure may be used: no restriction; f) Applicable voluntary spending limits shall be adjusted in January of every odd-numbered year to reflect changes in the consumer price index; and, g) A candidate who exceeds the voluntary spending limits after accepting them is subject to administrative fines and other penalties under the PRA. 6)Make the following changes, among others, to enforcement SB 1223 Page 6 provisions of the PRA: a) Provides that the Fair Political Practices Commission may impose administrative fines up to $5,000 per violation of the PRA; b) Requires a candidate or committee that receives a "laundered" contribution to pay it over to the state General Fund; c) Reauthorizes administrative penalties on persons who aid and abet a violation of the PRA if they have filing obligations or are compensated for planning, organizing, or directing any activity regulated under the PRA; and, d) Clarifies the authority of the public prosecutor to prosecute misdemeanor violations of the PRA. 7)Require additional campaign disclosures, as follows: a) A candidate or ballot measure committee shall file within 24 hours an online or electronic report disclosing receipt of a contribution of $1,000 or more within 90 days of an election; b) A person shall file within 48 hours an online or electronic report disclosing payment or promise of payment totaling $50,000 or more for an ad that clearly identifies a candidate for state office, but does not expressly advocate election or defeat of the candidate, disseminated, broadcast, or otherwise published within 45 days of an election; c) A committee shall file within 24 hours a report online or electronically disclosing an independent expenditure of $1,000 or more within 90 days of an election in connection with a candidate for state office. Also, a committee's independent expenditure report must disclose the reportable contributions received and expenditures made by that committee since it filed its last statement; SB 1223 Page 7 d) An advertisement must disclose a payment of $5,000 or more to a spokesperson who appears in the ad supporting or opposing qualification, passage, or defeat of a ballot measure; and, e) A slate mailer that recommends a support or oppose position that is different than the official position of the political party the slate mailer appears to represent must contain a specified disclaimer statement. 8)Require a candidate, upon leaving office or at the end of the reporting period following the defeat of the candidate, to manage surplus funds as follows: a) Report surplus funds on campaign finance reports; and, b) Use the surplus funds only to pay outstanding campaign debts; repay contributions; make donations to bona fide tax-exempt nonprofit organizations; contribute to a political party committee for purposes other than support or opposition of candiates, such as voter registration, get-out-the-vote activities, and slate mailers; contribute to federal candidates or any ballot measure; and pay for professional services required by the committee to assist in the performance of its administrative functions. 9)Repeal provisions of prior ballot measures (including provisions of Proposition 73 of 1988 and Proposition 208 of 1996 invalidated by the courts) that conflict with this measure's provisions, and makes other conforming changes to the PRA. 10)Require that this measure be submitted to the voters at a special statewide election held on the same date as, and consolidated with, the November 7, 2000, statewide general election. 11)Provide this bill takes effect immediately as an act calling an election pursuant to the California Constitution. SB 1223 Page 8 AS PASSED BY THE SENATE , this bill made nonsubstantive grammatical changes to a provision of the PRA that prohibits the use of public moneys for campaign purposes. The Assembly amendments deleted the Senate version of this bill and instead declared legislative intent to require a specified notice to be printed on any slate mailer that recommends a support or oppose position that is different from that of the political party the slate mailer appears to represent. FISCAL EFFECT : Unknown COMMENTS : Proposition 208, the campaign finance reform initiative adopted at the November 1996 statewide general election, is currently enjoined from operation by order of the Sacramento federal district court issued January 6, 1998. The federal district court ruled that Proposition 208's contribution limits were too restrictive to permit effective communication with the voters, and thereby violated a candidate's First Amendment political speech rights. Individual contributions to legislative candidates were limited to $250 per election, or $500 per election if a candidate accepted the voluntary expenditure limits in Proposition 208. The federal district court issued an injunction to permit appeal of the ruling. However, the Ninth Circuit Court of Appeals remanded the case to the federal district court with directions to make final determinations on the validity of the myriad provisions of Proposition 208. The trial is scheduled to reconvene in Sacramento on July 11, 2000. This bill, if approved by the voters at the November 6, 2000, statewide general election, will impose contribution limits and voluntary expenditure ceilings. Individual contributions to legislative candidates will be capped at $3,000 per election. It will apply to legislative candidates on January 1, 2001, and will apply to candidates for statewide office, including Governor, on and after November 6, 2002. SB 1223 Page 9 Analysis Prepared by : Romulo I. Lopez / E., R. & C. A. / (916) 319-2094 FN: 0005568