BILL ANALYSIS
AB 1430
Page 1
Date of Hearing: May 1, 2007
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Curren Price, Chair
AB 1430 (Garrick) - As Amended: April 9, 2007
SUBJECT : Political Reform Act of 1974: contribution
limitations.
SUMMARY : Prohibits local governments from adopting campaign
finance ordinances that restrict communications between an
organization and its members unless state law similarly
restricts such communications. Specifically, this bill
prohibits a local jurisdiction from doing any of the following:
1)Imposing source restrictions on payments for member
communications that are not expressly made applicable to
member communications by a state statute.
2)Adopting limits on payments to a political party committee for
member communications that are not expressly made applicable
to member communications by a state statute.
3)Adopting limits on the scope of payments considered directly
or indirectly related to the making of a member communication,
including costs associated with the formulation, design,
production and distribution of the communication such as
surveys, list acquisition, and consulting fees that are not
expressly made applicable to member communications by a state
statute.
EXISTING LAW :
1)Provides that payments made for communications to members,
employees, shareholders, or families of members, employees, or
shareholders of an organization for the purpose of supporting
or opposing a candidate or a ballot measure are not
contributions or expenditures, if those payments are not made
for general public advertising such as broadcasting,
billboards, and newspaper advertisements. Requires such
payments made by a political party for communications to its
members that would otherwise qualify as contributions or
expenditures to be reported in the same manner as
contributions or expenditures.
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2)Provides that nothing in the Political Reform Act (PRA) shall
nullify contribution limitations or prohibitions of any local
jurisdiction that apply to elections for local elective
office, except that those limitations and prohibitions cannot
conflict with the provision of state law that provides that
payments made by an organization for communications to its
members are not contributions or expenditures.
3)Prohibits a person from making a contribution to a political
party totaling more than $30,200 in a calendar year for the
purpose of making contributions for the support or defeat of
candidates for elective state office, or for the purpose of
making expenditures at the behest of a candidate for elective
state office for communications to party members related to
the candidate's candidacy for elective state office.
FISCAL EFFECT : This bill has been keyed non-fiscal by
Legislative Counsel.
COMMENTS :
1)Purpose of the Bill : According to the author:
AB 1430 . . . would clarify existing law regarding
protected 'member communications' for political parties,
labor unions, and other membership organizations.
Existing state law allows local jurisdictions to establish
regulations 'not in conflict' with state law or regulations
promulgated by the Fair Political Practices Commission
(FPPC). However, some local jurisdictions have begun the
process of attempting to promulgate local laws and
regulations that conflict with the clear meaning of the
Political Reform Act and FPPC regulations and which, as
such, are in clear conflict with both bodies.
In particular, local jurisdictions have begun the process
of attempting to restrict the First Amendment free speech
of political parties and labor unions to communicate with
their memberships without regulation by or from local
jurisdictions.
This bill clarifies the clear intent of the Political
Reform Act and FPPC regulations to allow membership
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organizations to communicate with their own members, and
the primacy of state government's authority to interpret
the clear meaning of the Political Reform Act.
Political parties, labor unions, and other membership
organizations have a clear First Amendment right, bolstered
by the actual language and clear intent of the Political
Reform Act and the FPPC, to communicate with their own
members. This bill clearly defines this right, so that
there will be no future confusion.
2)Member Communications : Proposition 34 was placed on the
November 2000 ballot by SB 1223 (Burton), Chapter 102,
Statutes of 2000. The proposition, which passed with 60% of
the vote, revised state laws on political campaigns for state
elective offices and ballot propositions. One of the
provisions of Proposition 34 provided that payments for
communications by an organization to members, employees,
shareholders, or families of members, employees, or
shareholders of that organization (commonly known as "member
communications") for the purpose of supporting or opposing a
candidate or a ballot measure are not contributions or
independent expenditures, provided those payments are not made
for general public advertising such as broadcasting,
billboards, and newspaper advertisements. Additionally,
Proposition 34 prohibited local jurisdictions from adopting
contribution limitations or prohibitions on member
communications that conflicted with the member communications
provisions of Proposition 34.
Because Proposition 34 provides that member communications are
not contributions or expenditures, contribution limits
generally do not apply to member communications. However, at
the state level, there is at least one circumstance under
which contribution limits apply to contributions that are
intended for use to finance member communications. While
Proposition 34 allows a political party committee to receive
unlimited contributions "provided that the contributions are
used for purposes other than making contributions to
candidates for elective state office," it also prohibits a
person from contributing more than $30,200 per calendar year
to a political party for the purpose of making contributions
for the support or defeat of candidates for elective state
office, or for the purpose of making expenditures at the
behest of a candidate for elective state office for
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communications to party members related to the candidate's
candidacy for elective state office.
Thus, if a political party committee coordinates with a
candidate on a communication to that party's members about the
candidate's candidacy for state office, the political party is
required to use money raised subject to the contribution
limits to pay for that communication. However, to the extent
that a political party committee makes a communication to
party members related to a candidate's candidacy for elective
state office, but the communication was not made at the behest
of that candidate, the political party committee can use money
that it raised that was not subject to contribution limits to
pay for that communication.
Member communications made by an organization other than a
political party committee are not subject to contribution
limits, except that if a payment is made by a person other
than the organization, its sponsored committee, or its
members, employees or shareholders, or if the communication is
paid for by funds received by the organization or its
sponsored committee from a person other than the
organization's members, employees, or shareholders, and those
funds are earmarked for the communication. In that case, the
payments for the communication are considered contributions or
expenditures, subject to all relevant reporting requirements
and restrictions.
3)Ongoing Regulatory Process : In implementing the provisions of
the PRA governing member communications, the FPPC has adopted
a regulation that sets parameters for what constitutes a
"payment[] for communications to members" by an organization.
Among other provisions, Title 2, California Code of
Regulations, section 18531.7 (Regulation 18531.7) defines
various terms used in the member communications statute
(including "organization," "member," "shareholder," and
"family"); specifies what constitutes a payment for
communications; provides a safe harbor for communications
inadvertently directed to nonmembers; addresses payments for
member communications made at the behest of a candidate or
committee; and specifies the reporting requirements for member
communications made by entities that are considered committees
under the PRA.
The FPPC is currently reviewing its regulations governing member
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communications, and is deciding whether to modify Regulation
18531.7, to adopt new regulations, or both. Among the issues
being considered by the FPPC in reviewing its member
communications regulation are whether to extend the regulation
(or adopt a new regulation) to govern member communications by
political parties (Regulation 18531.7 defines the term
"organization" to exclude political parties, so communications
by political parties are not currently covered by Regulation
18531.7), and what rules and restrictions (if any) should be
placed on member communications by political parties.
4)Fulhorst Opinion Request : Some of the issues that the FPPC
plans to address in reviewing its regulations governing member
communications, as detailed above, came to light due to an
opinion request sent to the FPPC from Stacey Fulhorst, the
Executive Director of the City of San Diego Ethics Commission.
Ms. Fulhorst posed 10 questions to the FPPC on how existing
law governing member communications was to be enforced,
including (1) whether a member communication made by a
political party at the behest of a candidate is considered a
contribution to that candidate, (2) whether contributions
earmarked for member communications at the request of a
candidate are considered contributions to the candidate, and
(3) whether a local jurisdiction can enact a law defining as a
"contribution" any payment for member communications that are
made at the behest of a candidate, and therefore subjecting
such payments to local contribution limits.
The FPPC ultimately declined to issue an opinion in response to
Ms. Fulhorst's request, and instead decided to incorporate the
questions raised in her request into its review of regulations
governing member communications. However, because the issues
raised in Ms. Fulhorst's request are directly related to some
of the issues addressed by this bill, any new or revised
regulations that result from the FPPC's review of its member
communication regulations could directly impact issues
addressed by this bill.
5)Restrictions "Not Expressly Made Applicable to Member
Communications by a State Statute" : This bill expressly
prohibits local jurisdictions from adopting three specific
types of limitations or prohibitions on member communications,
except where such restrictions or limitations "are expressly
made applicable to member communications by a state statute."
However, state statutes generally provide very few express
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restrictions or limitations on member communications.
Instead, many of the existing restrictions on member
communications are the result of regulations adopted by the
FPPC in an attempt to harmonize various provisions of the PRA.
For instance, an existing statute provides that payments made
by an organization for communications with its members are not
considered contributions or expenditures if those payments are
not made for general public advertising, but there is no
statute that specifies what constitutes a payment made by an
organization. As part of Regulation 18531.7, the FPPC has
specified that a payment is not a payment for communications
to members of an organization (and thus, is not exempt from
general provisions of state law governing contributions and
expenditures) if the payment is made by a person other than
the organization, its sponsored committee, or its members,
employees or shareholders. Similarly, Regulation 18531.7
specifies that a payment is not a payment for communications
to members of an organization (and thus, is not exempt from
general provisions of state law governing contributions and
expenditures) if the payment is paid for by funds received by
the organization or its sponsored committee that are earmarked
for the communication if the funds are from a person other
than the organization's members, employees or shareholders.
These restrictions, found in the regulations adopted by the
FPPC to implement the provisions of the member communications
provisions of the PRA, are not expressly found in state
statute. Nonetheless, these restrictions were adopted by the
FPPC in regulation form because the absence of these
regulations could have allowed individuals to circumvent other
provisions of state law that impose contribution limits or
that require disclosure of contributions and independent
expenditures.
As noted above, this restriction (and similar restrictions
adopted by the FPPC by regulation) is not an express
restriction made applicable to member communications by state
statute. As such, because this bill prohibits local
jurisdictions from adopting certain restrictions on member
communications that "are not expressly made applicable to
member communications by state statute," it could be argued
that this bill prohibits local jurisdictions from adopting and
enforcing restrictions on member communications similar to
those restrictions that are in effect for member
communications that involve candidates for elective state
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office. If this bill is interpreted in that fashion, it could
theoretically allow an individual to circumvent local
contribution limits by coordinating with a candidate on a
message that the candidate wants to deliver to voters, then
making earmarked payments to various member organizations to
deliver that message to their members by way of a "member
communication."
In order to ensure that this bill is not interpreted in a way
that could prohibit local jurisdictions from placing certain
restrictions on member communications that are consistent with
restrictions adopted by the FPPC by regulation, committee
staff recommends that this bill be amended to specify that
local jurisdictions may adopt limitations or prohibitions if
such restrictions or prohibitions are made applicable to
member communications by a state statute, or by a regulation
adopted by the FPPC pursuant to Section 83112 of the
Government Code.
6)Indirect Payments Related to Member Communications : One of
the provisions of this bill prohibits local jurisdictions from
imposing limitations on the scope of payments considered
directly or indirectly related to the making of a member
communication. Although the FPPC has not adopted regulations
that apply to member communications made by political parties,
Regulation 18531.7, which applies to all other member
communications, generally allows only costs that are directly
attributable to a communication from an organization to be
considered payments for member communications. To the extent
that this bill is approved in its current form, it could be
interpreted to prohibit local jurisdictions from enforcing
local contribution limits or prohibitions in situations where
an organization could demonstrate an indirect relationship
between payments made and a member communication, a standard
that is inconsistent with the standard adopted by the FPPC.
If it is the committee's desire to move this bill forward,
committee staff recommends that the words "or indirectly" be
deleted from the bill on page 2, lines 19-20 in order to
ensure that this bill is not interpreted in a way that could
undermine local contribution limits and prohibitions that are
consistent with limits and prohibitions that apply to member
communications under state statutes and regulations.
7)Political Reform Act of 1974 : California voters passed an
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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 2/3
vote of both houses of the Legislature.
REGISTERED SUPPORT / OPPOSITION :
Support
State Building and Construction Trades Council of California
Opposition
None on file.
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094