BILL ANALYSIS �
SB 1101
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Date of Hearing: June 24, 2014
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
SB 1101 (Padilla) - As Amended: May 27, 2014
AS PROPOSED TO BE AMENDED
SENATE VOTE : 32-1
SUBJECT : Political Reform Act of 1974.
SUMMARY : Prohibits a member of or candidate for the
Legislature from soliciting or accepting a campaign contribution
during the last month of each year's legislative session, or
during the time period between May 14 and June 15.
Specifically, this bill :
1)Prohibits a person from making a contribution to member of or
a candidate for the Legislature, and prohibits a member of or
candidate for the Legislature from soliciting or accepting a
contribution, during the following periods:
a) In each year, the time period between May 14 and June 15
of the same year;
b) In each odd-numbered year, the period from the date 30
days preceding the date the Legislature is scheduled to
adjourn for a joint recess to reconvene in the second year
of the biennium of the legislative session to the date that
adjournment occurs; and,
c) In each even-numbered year, the time period between
August 1 and August 31.
2)Permits each house of the Legislature to take any disciplinary
action it deems appropriate against a Member of that house who
violates the provisions of this bill, including, but not
limited to, reprimand, censure, suspension, or expulsion.
3)Provides that this bill does not prohibit a contribution made
to, or solicited or accepted by, a member of or candidate for
the Legislature for purposes of that person's candidacy for an
elective state office that is to be voted upon at a special
election.
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4)Contains a severability clause.
5)Contains an urgency clause, allowing this bill to take effect
immediately upon enactment.
EXISTING LAW :
1)Creates the Fair Political Practices Commission (FPPC), and
makes it responsible for the impartial, effective
administration and implementation of the Political Reform Act
(PRA).
2)Requires the Director of the Department of Finance to provide
the May revision to the Governor's budget to the Legislature
on or before May 14 of each year, which is to include all of
the following:
a) An estimate of General Fund revenues for the current
fiscal year and for the ensuing fiscal year;
b) Any proposals to reduce expenditures to reflect updated
revenue estimates; and,
c) All proposed adjustments to the Governor's budget.
3)Prohibits an elected state officer or candidate for elected
state office from accepting a contribution from a lobbyist,
and prohibits a lobbyist from making a contribution to an
elected state officer or candidate for elected state office,
if that person is registered to lobby the governmental agency
for which the candidate is seeking election or the
governmental agency of the elected state officer.
4)Limits campaign contributions to candidates for elective state
office as follows:
a) To a candidate for elective state office other than a
candidate for statewide elective office, no person may
contribute more than $4,100 per election and no small
contributor committee may contribute more than $8,200 per
election;
b) To a candidate for elective statewide office other than
a candidate for Governor, no person may contribute more
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than $6,800 per election and no small contributor committee
may contribute more than $13,600 per election;
c) To a candidate for Governor, no person or small
contributor committee may contribute more than $27,200 per
election.
5)Requires the FPPC to adjust these contribution limits
biennially to reflect any increase or decrease in the Consumer
Price Index.
6)Provides for administrative, civil, and criminal penalties for
violations of the PRA.
FISCAL EFFECT : Unknown. State-mandated local program; contains
a crimes and infractions disclaimer.
COMMENTS :
1)Author's Amendments : In response to questions and concerns
raised when this bill was debated on the Senate Floor, the
author of this bill committed to amend it to do the following:
a) To make the fundraising blackout periods proposed by
this bill applicable to non-incumbent candidates for the
Legislature; and,
b) To specify a date certain for the start (May 14) and the
end (June 15) of the fundraising blackout period around the
time that the Legislature is considering the state budget
for the succeeding fiscal year, instead of having that
fundraising blackout period start on the date of the
release of the May revision to the Governor's budget, and
end on the date that the Legislature passes a budget.
In addition to these amendments, the author is also proposing
an amendment to add a severability clause to this bill.
Due to upcoming committee deadlines, these author's amendments
were unable to be amended into the bill prior to the
committee's hearing. This analysis reflects these proposed
author's amendments.
2)Purpose of the Bill : According to the author:
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The California legislature is the most powerful state
legislative body in the United States. With a "GDP"
approaching two trillion dollars, California is by far
the largest economy among our 50 states and the 8th
largest economy in the world. Because California is
such an important market force?decisions made in
California's State Capitol are often felt well beyond
our borders. Recognizing this, a multitude of
interests actively seek to influence the fate of
thousands of pieces of legislation that work their way
through California's Capitol each year.
Meanwhile, members of the legislature regularly raise
campaign funds to support their re-election efforts.
It is the perceived confluence of campaign
contributions and legislative votes that erodes the
public's faith in the legislature's ability to keep
the two separate. This is of particular concern toward
the end of the legislative session as the fate of
hundreds of bills is decided while fundraisers abound.
SB 1101 would create a fundraising blackout period in
California. It would prohibit solicitation or
acceptance of campaign contributions by a member of
the legislature from the time of the budget revise
through the budget vote and the last 30 days of the
legislative session.
The blackout period would be in place during critical
budget votes and at the end of legislative session
when large volumes of bills including last minute "gut
and amend" measures are up for votes.
3)Blackout Periods in Other States : According to information
from the National Conference of State Legislatures, 29 states
place restrictions on giving or receiving campaign
contributions during the legislative session. Of those 29
states, 14 prohibit or restrict only lobbyist contributions
made during the legislative session, including California,
which prohibits individuals who are registered to lobby before
the legislature from making contributions to any legislator or
any candidate for state legislature at any time, not just
during the legislative session.
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Fifteen states (Alabama, Alaska, Florida, Georgia, Illinois,
Indiana, Louisiana, Maryland, Nevada, New Mexico, Tennessee,
Texas, Utah, Virginia, and Washington) have contribution
blackout periods that apply to contributions made by
individuals or organizations other than lobbyists. The length
of the blackout period generally runs the length of the
legislative session, though in some cases the blackout period
extends for a certain time period before or after the
legislative session, and in some cases there are exceptions to
the blackout periods as an election approaches.
4)Contribution Limits : Proposition 34 was placed on the
November 2000 ballot through passage of SB 1223 (Burton),
Chapter 102, Statutes of 2000. The proposition, which passed
with 60.1% of the vote, revised state laws on political
campaigns for state elective offices and ballot propositions.
Proposition 34 enacted new campaign disclosure requirements
and established new campaign contribution limits, limiting the
amount that individuals could contribute to state campaigns.
The findings of Proposition 34 noted that the measure would,
"minimize the potentially corrupting influence and appearance
of corruption caused by large contributions by providing
reasonable contribution and voluntary expenditure limits." It
was the stated intent of the people in Proposition 34 to enact
reasonable contribution limits so that campaign contributions
would not be so large as to permit the campaign contributions
to have a "corrupting influence." If Proposition 34 is
achieving its stated goal, this measure should be unnecessary.
5)Contribution Blackout Period and First Amendment Concerns :
This measure could be interpreted as a violation of the United
States and California Constitutions' guarantees to free
speech. While the right to freedom of speech is not absolute,
when a law burdens core political speech, the restrictions on
speech generally must be "narrowly tailored to serve an
overriding state interest," McIntyre v. Ohio Elections
Commission (1995), 514 US 334.
State and federal courts have repeatedly held that the giving
and spending of campaign money involves the exercise of free
speech. The United States Supreme Court found in Buckley v.
Valeo (1976), 424 US 1 that any "restriction on the amount of
money a person or group can spend on political communication
during a campaign necessarily reduces the quantity of
expression by restricting the number of issues discussed, the
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depth of their exploration, and the size of the audience
reached." The Supreme Court in Buckley ruled that expenditure
limits during a campaign were unconstitutional for this
reason. In the same case, however, the court upheld campaign
contribution limits, noting that "[b]y contrast with a
limitation on expenditures for political expression, a
limitation upon the amount that any one person or group may
contribute to a candidate or political committee entails only
a marginal restriction upon the contributor's ability to
engage in free communication." The Buckley court was cautious
to note that not all campaign contribution limits would be
constitutionally permissible, however, writing "[g]iven the
important role of contributions in financing political
campaigns, contribution restrictions could have a severe
impact on political dialogue if the limitations prevented
candidates and political committees from amassing the
resources necessary for effective advocacy." The Supreme Court
has repeatedly upheld its ruling in Buckley .
One issue presented by this bill is whether its provisions would
prevent candidates from amassing the resources necessary for
effective advocacy and whether the state's interest in
prohibiting campaign contributions to Legislators is
sufficient to justify this limit on contributors' and
candidates' free speech rights.
In at least four states, state or federal courts have struck
down laws that prohibited legislators from receiving campaign
contributions while the legislature was in session. In 1990,
the Florida State Supreme Court ruled in State v. Dodd (1990)
561 So.2d 263, that a state law that prohibited a candidate
running for legislative office or a statewide office from
accepting or soliciting a campaign contribution during a
regular or special session of the Legislature was
"unconstitutional for its overbroad intrusion upon the rights
of free speech and association." The court found a number of
defects to the Florida law, including that it placed
restrictions on candidates "who could not possibly be subject
to a corrupting quid pro quo arrangement," and that "by
focusing entirely on the legislative session, the Campaign
Financing Act fails to recognize that corrupt campaign
practices just as easily can occur some other time of the
year." Additionally, the court found that the contribution
blackout period would cut off "the flow of resources needed
for effective advocacy during a crucial portion of the
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election year," in violation of the test established in
Buckley .
The United States District Court for the Eastern District of
Missouri, Eastern Division considered a similar contribution
blackout period in Shrink Missouri Government PAC v. Maupin
(1996) 922 F. Supp. 1413. Unlike the Florida law, Missouri's
Campaign Finance Disclosure Law only applied during a regular
session of the legislature and it did not prohibit the
solicitation of campaign contributions during a legislative
session, but otherwise was substantially similar to the
Florida law. The Maupin court ruled that Missouri's blackout
period "severely impacts on a candidate's ability to expend
funds which in turn impinges upon the rights of individual
citizens and candidates to engage in political debate and
discussion."
Two other federal courts reached similar conclusions in 1998.
The United States District Court for the Eastern District of
North Carolina, Western Division in North Carolina Right to
Life v. Bartlett (1998) 3 F.Supp.2d 675, struck down a North
Carolina law prohibiting lobbyists from making contributions
to legislators and candidates for state legislature during a
legislative session. The court ruled that the North Carolina
law "prevent[ed] candidates from amassing the resources
necessary for effective advocacy," in violation of the test
established in Buckley . The United States District Court for
the Western District of Arkansas, Fayetteville Division in
Arkansas Right to Life v. Butler (1998) 29 F.Supp.2d 540,
struck down an Arkansas law that prohibited statewide elected
officials and legislators from accepting any contribution 30
days before, during, and 30 days after any regular session of
the Legislature. The court concluded that the Arkansas law
was unconstitutional because "it does not take into account
the fact that corruption can occur at any time, and that only
large contributions pose a threat of corruption." Unlike the
Florida, Missouri, and North Carolina laws, the Arkansas law
did not apply to non-state officeholder candidates for state
office, but only to elected state officials.
The provisions of this bill are distinguishable from the laws in
Florida, Missouri, North Carolina, and Arkansas in that it
does not apply during the entire legislative session, but only
during certain portions of the legislative session.
Nevertheless, this bill could be susceptible to a
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constitutional challenge based on issues raised in these
decisions.
6)Uneven Playing Field : One of the amendments being taken by
the author in this committee today would make the contribution
blackout periods imposed by this bill applicable to
non-incumbent candidates for state Legislature. This
amendment was intended to avoid creating an uneven playing
field, where sitting members of the Legislature were prevented
from raising campaign funds during certain times of the year,
while their opponents were not subject to the same
limitations. While this amendment does help reduce the
potential for such an uneven playing field, it does not
eliminate that potential entirely. Sitting members of the
Legislature who are running for an office other than state
Legislature (e.g., for local or statewide office), and who are
running against other candidates who are not members of the
Legislature could be put at a disadvantage compared to their
opponents, since the contribution blackout period would apply
to the member of the Legislature, but not to other non-member
candidates for offices other than state Legislature.
7)Other Elected State Officers : The author contends that a
fundraising blackout period is needed in order to put distance
between the giving of political money and the taking of
governmental actions during certain times in the legislative
process. Legislators are not, however, the only elected state
officials that are involved in governmental actions that are
taken during that period of the legislative process. In
particular, the Governor develops the budget that is
considered by the Legislature, is directly involved in
negotiations with legislative leaders over the state budget,
and has the authority to sign or veto the budget, including
line-item veto authority with which the Governor may reduce
appropriations in the budget. It is not uncommon for members
of the Legislature to negotiate with the Governor over the
contents of legislation toward the end of session, and after
the Legislative session adjourns, the Governor has 30 days to
decide whether to sign or veto hundreds of bills that have
been passed by the Legislature (this period of time is
commonly referred to as the "bill signing period"). While
other state officials are not as directly involved in the
legislative process, it is nonetheless commonplace for
statewide elected officials and members of the Board of
Equalization (BOE) to advocate before the Legislature both
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publicly and privately, including sponsoring, supporting,
opposing, and seeking amendments on bills and budget items.
If there is a need to put distance between the giving of
political money and the taking of governmental actions during
certain times in the legislative process, as the author
contends, then it may be appropriate to limit the fundraising
activities of other elected state officials during these time
periods as well.
The committee may wish to consider whether this bill should be
amended to apply to statewide elected officers (including the
Governor), members of the BOE, and candidates for those
offices. Additionally, the committee may wish to consider
whether this bill should be made applicable to the Governor
during the bill signing period.
8)Statewide Primary Election & Special Elections : One of the
fundraising blackout periods proposed by this bill-the period
between the time the May revision is released until the time a
state budget is passed by the Legislature-almost certainly
will include the date of the statewide primary election and
the two to three weeks prior to the primary election in
even-numbered years. Limiting fundraising during this crucial
campaign period could put Legislators at a significant
fundraising disadvantage in relation to other candidates who
are not subject to the blackout period.
Additionally, while this bill contains an exception to the
blackout periods in a situation where a candidate is running
for elective state office at a special election, this bill
does not include similar accommodations for candidates who are
running for an office other than state office at an election
that is held during a blackout period, or shortly after the
conclusion of a blackout period. Such a policy could prevent
candidates for local office, for instance, from being able
raise campaign funds during a crucial campaign period.
To address these concerns, committee staff recommends that this
bill be amended to provide that the fundraising blackout
periods will not apply to a candidate in the last 30 days
prior to an election at which that candidate will appear on
the ballot.
9)Senate Rule : On June 9, 2014, the Senate adopted SR 44 (De
Le�n & Steinberg), which amended the Standing Rules of the
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Senate for the 2013-14 Regular Session by imposing campaign
fundraising blackout periods similar to those contained in
this bill. Unlike the provisions of this bill, however, the
blackout periods in SR 44 apply only to the solicitation and
acceptance of campaign contributions from lobbyist employers.
SR 44 does not prohibit Senators from soliciting or receiving
campaign contributions during the blackout period from
individuals or entities who are not lobbyist employers. The
rule enacted by SR 44 becomes effective on August 1, so it was
not in effect for this year's budget process, but it will be
in effect for the last month of session.
Because SR 44 adopted a Senate rule, rather than enacting a
statute, it cannot and does not apply to members of the
Assembly or to non-member candidates. Additionally, a
violation of the contribution blackout period enacted by SR 44
is punishable only by disciplinary action taken by the Senate,
and is not subject to the criminal, civil, or administrative
penalties that generally apply for violations of the PRA.
10)Urgency Clause and Suggested Amendment : As noted above, this
bill contains an urgency clause, and would go into effect
immediately upon enactment. In light of the Legislative
calendar, it is unlikely that this bill could be signed into
law prior to the adjournment of session this year, and thus,
it is unlikely that the contribution blackout periods proposed
by this bill could be in effect this year. On the other hand,
making such a significant change to campaign finance law in an
election year and having that change go into effect
immediately could create confusion, and could hamper the
implementation and enforcement of the law. To address these
concerns, committee staff recommends that this bill be amended
to remove the urgency clause.
11)Previous Legislation : AB 2622 (Smyth) of 2010, which failed
passage in this committee, would have prohibited members of
the Legislature from accepting campaign contributions from
June 16 until the budget bill was passed by the Legislature.
AB 1411 (Torrico) of 2009, would have prohibited a member of the
Legislature from participating in any campaign fundraising
activity from July 1 until August 15 or the date the budget
bill was passed by the Legislature and sent to the Governor,
whichever occurred first. AB 1411 died on the inactive file
on the Assembly Floor. AB 1411 was not heard in this
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committee.
AB 16 (Huff) of 2005, would have prohibited contributions to
members of the Legislature and the Governor between the time
that the Governor presented the May revision to his or her
budget proposal and the time that a budget was enacted. AB 16
failed passage in this committee.
12)Political Reform Act of 1974 : 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.
REGISTERED SUPPORT / OPPOSITION :
Support
California League of Conservation Voters (prior version)
League of Women Voters of California (prior version)
MapLight (prior version)
Pane & Pane Associates, Inc. (prior version)
Opposition
None on file.
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094