BILL ANALYSIS                                                                                                                                                                                                    



                                                                            
                                                                            
                                                                            
                                                                            
                                                                            
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          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; 









                                                                            
                                                                            
                                                                            
                                                                            
                                                                            
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             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  








                                                                            
                                                                            
                                                                            
                                                                            
                                                                            
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               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;









                                                                            
                                                                            
                                                                            
                                                                            
                                                                            
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             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);








                                                                            
                                                                            
                                                                            
                                                                            
                                                                            
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             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  








                                                                            
                                                                            
                                                                            
                                                                            
                                                                            
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            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; 








                                                                            
                                                                            
                                                                            
                                                                            
                                                                            
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             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. 








                                                                            
                                                                            
                                                                            
                                                                            
                                                                            
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           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.









                                                                            
                                                                            
                                                                            
                                                                            
                                                                            
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           Analysis Prepared by  :  Romulo I. Lopez / E., R. & C. A. / (916)  
          319-2094 



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