BILL ANALYSIS �
AB 860
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Date of Hearing: May 3, 2011
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
AB 860 (Jones and Mansoor) - As Amended: March 31, 2011
SUBJECT : Political Reform Act of 1974: political
contributions.
SUMMARY : Prohibits payroll deductions from being made if the
money deducted will be used for political purposes. Prohibits
corporations, labor unions, and government contractors from
making campaign contributions in certain circumstances.
Specifically, this bill :
1)Makes various findings and declarations.
2)Prohibits a corporation, labor union, or public employee labor
union from making a contribution to any candidate, candidate
controlled committee, or to any other committee, individual,
organization, agency, or association, including a political
party committee, if those funds will be used to make
contributions to any candidate or candidate controlled
committee.
3)Prohibits a government contractor, or a committee sponsored by
a government contractor, from making a contribution to any
elected officer, committee controlled by an elected officer,
or to any other committee, individual, organization, agency,
or association, including a political party committee, if
those funds will be used to make contributions to any elected
officer or committee controlled by any elected officer, if
that elected officer makes, participates in making, or in any
way attempts to use his or her official position to influence
the decision to grant, let, or award a public contract to the
government contractor.
4)Prohibits a corporation, labor union, public employee labor
union, government contractor, or government employer from
deducting from an employee's wages, earnings, or compensation
any amount of money to be used for political purposes.
Provides that this prohibition does not apply to deductions
for retirement benefits, health, life, death, or disability
insurance, or other similar benefit, nor to a voluntary
deduction for the benefit of a charitable organization
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organized under Section 501(c)(3) of Title 26 of the United
States Code.
5)Provides that an employee is not prohibited from making
voluntary contributions in any manner other than a payroll
deduction to a sponsored committee of his or her employer,
labor union, or public employee labor union, if the
contributions are made with the employee's written consent,
which shall be effective for no more than one year after it is
submitted.
6)Defines the following terms, for the purposes of this bill:
a) "Corporation" to mean a corporation organized under the
laws of California, any other state, the District of
Columbia, or under an act of Congress;
b) "Government contractor" to mean a person who contracts
with a government employer to provide goods, real property,
or services, including the services of employees
represented by a public employee labor union during the
term of the contract;
c) "Government employer" to mean the State of California
and any of its political subdivisions;
d) "Labor union" to mean any organization of any kind, or
any agency or employee representation committee or plan, in
which employees participate and which exists for the
purpose, in whole or in part, of negotiating with employers
concerning grievances, labor disputes, wages, rates of pay,
hours of employment, or conditions of work;
e) "Political purposes" to mean to influence or attempt to
influence the action of voters for or against the
nomination or election of a candidate or candidates, or the
qualification or passage of any measure; or received by or
made at the behest of a candidate, a controlled committee,
a committee of a political party, including a state central
committee, and county central committee, or an organization
formed or existing primarily for political purposes,
including a political action committee established by any
membership organization, labor union, public employee labor
union, or corporation; and,
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f) "Public employee labor union" to mean a labor union in
which the employees participating in the labor union are
employees of a government employer.
7)Provides that if any part of this bill is found to be invalid
or unconstitutional, the remaining parts shall remain in
effect.
8)States that this bill is not intended to interfere with any
existing contract or collective bargaining agreement, and
provides that no new or amended contract or collective
bargaining agreement shall be valid if it violates the
provisions of this bill.
9)Requires this bill to be liberally construed to further its
purposes, and provides that in any legal action brought by an
employee or union member to enforce the provisions of this
bill, the burden shall be on the employer or labor union to
prove compliance with this bill's provisions.
EXISTING LAW :
1)Prohibits an employer from withholding or deducting any amount
from an employee's wages except when authorized to do so by
federal or state law or when expressly authorized by the
employee or a collective bargaining agreement or wage
agreement.
2)Gives public and private employees the right to organize into
unions and take collective action to bargain over wages,
hours, benefits and other working conditions. Gives
individuals the right to refuse to join or participate in the
activities of a union, but generally provides that employees
who are not members of a union but are part of a group of
employees who are represented by a union may be required to
pay a "fair share fee" to cover the non-members' share of the
costs of bargaining and representation services.
3)Prohibits a union from spending funds from dues-paying
non-union employees on activities unrelated to collective
bargaining and representation services, including for
political purposes, when those employees object to such
expenditures.
FISCAL EFFECT : Unknown. State-mandated local program; contains
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a crimes and infractions disclaimer.
COMMENTS :
1)Purpose of the Bill : According to the author, "This is a
unique opportunity to defend working Californians against all
special interests. If a political candidate or organization
needs financial contributions, then they should be direct and
ask for them; they should not be acquiring them through an
employer, whether government or corporate. When money is
withheld from an employee's paycheck and subsequently
earmarked for political purposes, an environment is created
that is ripe for corruption."
2)Employees Can Opt Out of Paying Union Dues for Political
Purposes : State and federal law offers broad protections to
employees so that they can organize into unions and take
collective action to improve their wages, hours, benefits and
other working conditions. The federal National Labor
Relations Act (NLRA) is the primary source of such protection
for most private sector employees. There are also a limited
number of provisions of the California Labor Code related to
private sector labor relations. California law also sets
forth similar rights for agricultural workers and most public
sector employees, which are excluded from the NLRA.
Under current California law, employers make a variety of
payroll deductions from their employees' wages, including
deductions for Social Security, income taxes, medical plans
and charitable contributions. The Labor Code also requires
employers to notify employees at the time of payment of wages
regarding the amount of compensation and any deductions
therefrom.
Many employees in California are represented by labor
organizations and pay union dues or similar fees for
representation to the union. Under many collective bargaining
agreements, such dues or fees are automatically deducted by
the employer from employee wages and forwarded directly to the
labor organization.
This bill would prohibit corporations and government employers,
among others, from deducting money to be used for political
purposes from an employee's wages, a provision that appears
aimed directly at the use of union dues for political
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purposes.
Section 8(a)(3) of the NLRA allows employers and unions to enter
into union-security agreements requiring all employees in a
particular bargaining unit to become "members" after a 30-day
period following hire. However, in a 1963 decision, the
Supreme Court held that the term "member" requires only the
payment of periodic dues and fees as opposed to full
membership in the union. NLRB v. General Motors Corporation ,
373 U.S. 734 (1963). Since the court noted that "the
membership that is required has been whittled down to its
financial core," individuals choosing that approach are often
referred to as "financial core members."
Therefore, under current law, no employee is required to become
a member of a union in order to maintain a job, but all
employees subject to a union security clause can be required
to pay union dues and fees to defray the costs of
representation.
In Communication Workers of America v. Beck , 487 U.S. 735
(1988), the United States Supreme Court held that the section
of the NLRA that allows employers and unions to enter into
union security agreements does not "permit a union, over the
objections of dues-paying nonmember employees, to expend funds
so collected �pursuant to a union security clause] on
activities unrelated to collective bargaining, contract
administration or grievance adjustment." Thus, federal labor
law does not permit a union to spend funds from dues-paying
non-union employees on certain activities unrelated to
collective bargaining when those employees object to such
expenditures. At issue in Beck was the specific use of dues
for political purposes.
In Lehnert v. Ferris Faculty Association , 500 U.S. 507 (1991),
the Supreme Court articulated a test for determining whether a
particular expenditure of union funds may be charged to
nonmember employees. Chargeable uses must (1) be germane to
collective bargaining activities, (2) be justified by
governmental interest in the maintenance of labor peace and
the prevention of "free riders" who benefit from the union's
collective bargaining activities without contributing to the
costs of such activities, and (3) not add significantly to the
burdening of free speech rights.
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Under Beck and subsequent cases, a union has several general
obligations to ensure that employee's Beck rights are
protected. First, the union must provide notice to nonmember
employees of their Beck rights. Second, the union must
refrain from charging objectors for nonrepresentational
expenses. Finally, the union must provide objectors with a
financial disclosure and establish procedures for objectors to
challenge the accuracy of the union's disclosure.
Therefore, applicable federal labor law establishes a mechanism
whereby employees covered under union security agreements can
become "financial core" nonmembers and therefore avoid having
to pay that portion of their dues or fees for purposes
unrelated to collective bargaining.
3)Citizens United v. FEC and Independent Expenditures : In
January 2010, the United States Supreme Court issued its
ruling in Citizens United v. Federal Election Commission
(2010) 130 S.Ct. 876, a case involving a nonprofit corporation
(Citizens United) that sought to run television commercials
promoting a film it produced that was critical of then-Senator
and presidential candidate Hillary Clinton. Because federal
law prohibited corporations and unions from using their
general treasury funds to make expenditures for
"electioneering communications" or for communications that
expressly advocated the election or defeat of a candidate,
Citizens United was concerned that the television commercials
promoting its film could subject the corporation to criminal
and civil penalties. In its decision, the Supreme Court
struck down the 63-year old law that prohibited corporations
and unions from using their general treasury funds to make
independent expenditures in federal elections, finding that
the law unconstitutionally abridged the freedom of speech.
While this bill prohibits corporations and labor unions from
making contributions to candidates in the state, it does not
limit the ability of corporations or labor unions to make
independent expenditures. In fact, in light of the Citizens
United ruling described above, it seems unlikely that such a
restriction on independent expenditures would be deemed to be
constitutional. Because this bill doesn't restrict
independent expenditures, it seems unlikely that it will have
much of an impact on political spending by corporations.
Because labor unions often rely on payroll deductions to
collect union dues, however, and because this bill prohibits
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any amount deducted from an employee's wages for being used
for political purposes, this bill could noticeably reduce the
amount of money that labor unions have available to make
expenditures for political purposes.
One of the effects of this bill, if approved, may be to further
shift campaign spending away from spending by candidates and
toward independent expenditures done by outside entities. A
study done by this committee in 2006 and a subsequent report
from the Fair Political Practices Commission (FPPC) found that
since campaign contribution limits went into effect in
California with the passage of Proposition 34 at the November
2000 statewide general election, the amount of campaign
spending done through independent expenditures increased by
more than 6,000 percent in Legislative elections, and more
than 5,500 percent in statewide elections. In hotly contested
campaigns for Legislature, it is not uncommon for spending
through independent expenditures to exceed the total amount of
spending by all candidates in the race. A large majority of
spending on independent expenditures was made by corporations,
unions, or coalitions comprised primarily of corporations
and/or unions.
4)Similar Initiative : This bill is substantially similar to an
initiative that is awaiting a circulating title and summary
from the Attorney General.
5)Arguments in Support : Associated Builders and Contractors of
California (ABC California), takes a "support if amended"
position on this bill, expressing concern about the portion of
the bill that prohibits corporate contributions to candidates.
In support of the other portions of the bill, ABC California
writes:
ABC California believes that every public and private
sector union member should have the right to say yes or no
to whether or not they wish to provide their union with
money that is specifically intended to be used for
political purpose, as proposed by AB 860. Importantly,
nothing in the bill prohibits union members from
voluntarily agreeing to submit extra dollars for political
action to the union or from making political contributions
on their own.
6)Arguments in Opposition : The Service Employees International
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Union (SEIU) Local 1000 writes, in opposition to this bill:
AB 860 is a covert way of silencing California's dedicated
public employees by not allowing those who represent them
in bargaining and other matters from participating in the
elections of those who support them. Although this bill
includes a prohibition for corporations from making
contributions also, this section is disingenuous as the
United States Supreme Court has ruled that corporations can
spend as much as they want in an election. This bill would
create an imbalance with corporations and public employee
unions in the funding of candidates.
7)Propositions 75 & 226 : Proposition 75, which was on the
ballot at the November 2005 statewide special election, would
have prohibited the use by public employee labor organizations
of public employee dues or fees for political contributions
except with the prior consent of individual public employees
each year on a specified written form. Proposition 75 was
defeated by the voters by a 46.5% to 53.5% margin.
Proposition 226, which was on the ballot at the June 1998
statewide primary election, would have required all employers
and labor organizations to obtain employee's or member's
permission annually on a prescribed form before withholding
wages or using union dues or fees for political contributions.
Proposition 226 was defeated by the voters by a 46.8% to
53.2% margin.
8)Related Legislation : AB 1179 (Mansoor), which is pending in
the Assembly Labor & Employment Committee, would prohibit a
labor organization from making expenditures for political
activities unless the organization establishes a separate fund
from which to make those expenditures, and complies with
various restrictions, including a prohibition against the use
of union dues for political activities.
9)Political Reform Act of 1974 : California voters passed an
initiative, Proposition 9, in 1974, which created the FPPC and
codified significant restrictions and prohibitions on
candidates, officeholders and lobbyists. That initiative is
commonly known as the Political Reform Act (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
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Legislature.
REGISTERED SUPPORT / OPPOSITION :
Support
Associated Builders and Contractors of California (if amended)
Opposition
California Correctional Peace Officers Association
California Faculty Association
California Statewide Law Enforcement Association
Service Employees International Union (SEIU) Local 1000
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094