BILL ANALYSIS �
SB 1226
Page 1
Date of Hearing: June 25, 2014
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
SB 1226 (Correa) - As Amended: May 13, 2014
SENATE VOTE : 34-0
SUBJECT : Political Reform Act of 1974: local campaign finance
reform.
SUMMARY : Expands an authorization currently granted only to San
Bernardino County by allowing any city or county to enter into
an agreement with the Fair Political Practices Commission (FPPC)
for the FPPC to administer and enforce a local campaign finance
ordinance. Specifically, this bill :
1)Provides that, upon mutual agreement between the FPPC and the
city council or board of supervisors of a participating city
or county, the FPPC is authorized to assume primary
responsibility for the impartial, effective administration,
implementation, and enforcement of a local campaign finance
ordinance.
2)Provides that the FPPC shall be the civil prosecutor
responsible for the civil enforcement of every local campaign
finance ordinance that it enforces pursuant to this bill.
3)Provides that, as the civil prosecutor of the participating
city's or county's local campaign finance ordinance, the FPPC
is not required to seek authorization from the city attorney
or district attorney of a participating city or county to
bring a civil or administrative action to enforce the
ordinance.
4)Permits the FPPC, as the civil prosecutor of the participating
city's or county's local campaign finance ordinance, to
provide advice and guidance regarding the local campaign
finance ordinance and bring civil actions to enforce the civil
penalties and remedies of the local campaign finance
ordinance.
5)Repeals the January 1, 2018, sunset date on the provision of
law that allows the FPPC to enforce San Bernardino County's
campaign finance ordinance, extending these provisions to all
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cities and counties indefinitely.
6)Defines "participating city or county" to mean any city or
county that enters into a mutual agreement described in 1),
above.
7)Makes other conforming changes.
8)Finds and declares that this bill furthers the purposes of the
Political Reform Act (PRA) of 1974, as specified.
EXISTING LAW :
1)Creates the FPPC and makes it responsible for the impartial,
effective administration and implementation of the PRA.
2)Requires local government agencies that adopt or amend local
campaign finance ordinances to file a copy of the ordinance
with the FPPC.
3)Prohibits a local government agency from enacting a campaign
finance ordinance that imposes campaign reporting requirements
that are additional to or different from those set forth in
the PRA for elections held in its jurisdiction unless the
additional or different requirements apply only to the
candidates seeking election in that jurisdiction, their
controlled committees or committees formed or existing
primarily to support or oppose their candidacies, and to
committees formed or existing primarily to support or oppose a
candidate or to support or oppose the qualification or passage
of a local ballot measure being voted on only in that
jurisdiction, and to city or county general purpose committees
active only in that city or county.
4)Provides that nothing in the PRA shall nullify contribution
limitations or prohibitions of any local jurisdiction that
apply to elections for local elective office, except that
these limitations and prohibitions may not conflict with a
specified provision of the PRA dealing with "member
communications."
5)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, which are
referred to as "member communications," are not contributions
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or expenditures, if those payments are not made for general
public advertising such as broadcasting, billboards, and
newspaper advertisements.
6)Makes violations of the PRA subject to administrative, civil,
and criminal penalties.
7)Allows the FPPC, upon mutual agreement between the FPPC and
the San Bernardino County Board of Supervisors, to have
primary responsibility for the impartial, effective
administration, implementation, and enforcement of a local San
Bernardino County campaign finance reform ordinance. The San
Bernardino County Board of Supervisors must consult with the
FPPC prior to adopting or amending any local campaign finance
reform ordinance that is subsequently enforced by the FPPC.
8)Allows the FPPC, pursuant to 7), above, to investigate
possible violations of the San Bernardino County campaign
finance reform ordinance and bring administrative actions
against persons who violate the ordinance, as specified.
9)Allows the San Bernardino County Board of Supervisors and the
FPPC to enter into any agreements necessary and appropriate
for the operation of 7), above, including agreements for
reimbursement of state costs with county funds, as specified.
The San Bernardino County Board of Supervisors or the FPPC
may, at any time, by ordinance or resolution, terminate any
agreement for the FPPC to administer, implement, or enforce
the local campaign finance reform ordinance or any provision
thereof.
10)Requires, if the FPPC enters into such an agreement with the
San Bernardino County Board of Supervisors, the FPPC to report
to the Legislature by January 1, 2017, the following
information:
a) The status of the agreement;
b) The estimated annual cost savings, if any, for San
Bernardino County;
c) A summary of relevant annual performance metrics,
including measures of utilization, enforcement, and
customer satisfaction;
d) Any public comments submitted to the FPPC or San
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Bernardino County relative to the operation of the
agreement; and,
e) Any legislative recommendations.
11)Sunsets the provisions of 7) through 10), above, on January
1, 2018.
FISCAL EFFECT : According to the Senate Appropriations
Committee, all costs to the FPPC will be reimbursed by the city
or county that opts to enter into the mutual agreement.
COMMENTS :
1)Purpose of this bill . This bill expands a limited authority
that became effective just last year, which allows San
Bernardino County and the FPPC to enter into an agreement for
the FPPC to administer and enforce San Bernardino County's
local campaign finance ordinance, until January 1, 2018. This
bill extends this authority to all cities and counties, and
eliminates the sunset date on San Bernardino County's
authority to do so, making the authorization permanent. This
bill is sponsored by the Orange County Board of Supervisors
and the Urban Counties Caucus.
2)Author's statement . According to the author, "The Political
Reform Act of 1974 (PRA) allows local government agencies to
adopt campaign finance ordinances that apply to elections
within their jurisdictions. These ordinances may be more
stringent than the local restrictions that the PRA imposes.
While the Fair Political Practices Commission (FPPC) has broad
investigative and administrative authority across the state,
it does not assume primary responsibility for local campaign
finance ordinances. A county board of supervisors or a city
council must monitor these ordinances or create an Ethics
Commission with this authority.
"SB 1226 enables cities and counties to contract with the FPPC
for the administration and enforcement of local campaign
finance ordinance. This gives cities and counties the ability
to bring in an experienced, independent, and impartial entity
to investigate possible local campaign finance violations and
bring administrative action against these violators. This
bill allows participating entities to eliminate the potential
for bias, favoritism, or conflicting interests by authorizing
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the FPPC to assume primary responsibility for the
administration and enforcement of local campaign finance
ordinance(s)."
3)Background . Current law, pursuant to AB 2146 (Cook), Chapter
169, Statutes of 2012, allows San Bernardino County and the
FPPC to enter into a mutual agreement that permits the FPPC to
enforce the County's local campaign finance reform ordinance.
AB 2146 was prompted by several high-profile campaign finance
corruption cases in San Bernardino County, which subsequently
developed and enacted a campaign finance reform ordinance.
San Bernardino County asked for legislative authority to
contract with the FPPC to administer and enforce its campaign
finance ordinance instead of creating an ethics commission as
a means to avoid financial and conflict-of-interest
challenges. San Bernardino County also wished to retain the
services of the FPPC to provide for the enforcement and
interpretation of San Bernardino County's local campaign
finance ordinance because the FPPC has special skills,
knowledge, experience, and expertise in the area of
enforcement and interpretation of campaign laws necessary to
effectively advise, assist, litigate, and otherwise represent
the County on such matters. The FPPC and San Bernardino
County entered into a mutual agreement, from January 1, 2013
through December 31, 2014. Prior to AB 2146, the FPPC did not
enforce any local campaign finance ordinances.
4)Local campaign ordinances and the PRA . Current law allows
local government agencies to adopt campaign ordinances that
apply to elections within their jurisdictions, though the PRA
imposes certain limited restrictions on those local
ordinances. For example, SB 726 (McCorquodale), Chapter 1456,
Statutes of 1985, limited the ability of local jurisdictions
to impose campaign filing requirements that differed from
those in the PRA, permitting such requirements only when they
applied only to candidates and committees whose activity is
restricted primarily to the jurisdiction in question. This
provision sought to avoid the necessity of a candidate or
committee active over a wider area being required to adhere to
several different campaign filing schedules. Similarly, AB
1430 (Garrick), Chapter 708, Statutes of 2007, prohibited
local governments from adopting rules governing member
communications that are different than the rules that govern
member communications at the state level.
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Several cities and counties have adopted campaign finance
ordinances, some of which are very extensive. In some cases,
those ordinances include campaign contribution limits,
reporting and disclosure requirements that supplement the
requirements of the PRA, restrictions on when campaign funds
can be raised, and voluntary public financing of local
campaigns, among other provisions. In many cases, local
campaign finance ordinances are enforced by the district
attorney of the county or by the city attorney. However, some
local jurisdictions have established independent boards or
commissions to enforce local campaign finance laws.
The FPPC does not currently enforce any local campaign finance
ordinances other than San Bernardino County's. However, the
FPPC brings enforcement actions in response to violations of
the PRA that occur in campaigns for local office, even in
cases where the local jurisdiction brings separate enforcement
actions for violations of a local campaign finance ordinance.
5)Penalties under local campaign ordinances and the PRA .
Violations of the PRA are subject to administrative, civil,
and criminal penalties. Generally speaking, the Attorney
General (AG) and district attorneys have responsibility for
enforcing the criminal provisions of the PRA, though any
elected city attorney of a charter city also has the authority
to act as the criminal prosecutor for violations of the PRA
that occur within the city. The FPPC, the AG, district
attorneys, and elected city attorneys of charter cities all
have responsibility for enforcement of the civil penalties and
remedies provided under the PRA, depending on the nature and
location of the violation, while any member of the public also
has the ability to file a civil action to enforce the civil
provisions of the PRA, subject to certain restrictions. The
FPPC has the sole authority to bring administrative
proceedings for enforcement of the PRA. When the FPPC
determines on the basis of such a proceeding that a violation
of the PRA has occurred, it has the authority to impose
monetary penalties of up to $5,000 per violation, in addition
to ordering the violator to cease and desist violation of the
PRA and to file any reports, statements, or other documents or
information required by the PRA.
In the case of local campaign ordinances, there is no single
approach as to the types of penalties that are available for
the violations of those ordinances. Many local ordinances
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provide for misdemeanor or civil penalties for violations,
while some ordinances do not establish any penalties for
violations. In some local jurisdictions that have independent
boards or commissions to enforce the local campaign finance
ordinances, those boards or commissions have the authority to
bring administrative enforcement proceedings, similar to the
authority the FPPC has under the PRA.
6)Expanding authority to all cities and counties . According to
the author's office, this bill was precipitated by two reports
by the Orange County Grand Jury: one in 2008 that recommended
forming a Fair Campaign Practices Commission to oversee
compliance with the Orange County Campaign Reform Ordinance;
and, one in 2013 that recommended creating a Blue Ribbon
Commission to recommend an ethics reform program and oversight
authority for Orange County. However, the Orange County Board
of Supervisors preferred the approach of this bill as a means
to keep Orange County's costs down. According to Orange
County's legislative proposal, "Creating a new 'County Ethics
Commission' would have several drawbacks. Persons appointed
by the Board to such a commission may not have sufficient
training, experience, or independence to competently and
impartially interpret and enforce the County's campaign
finance ordinance. Staffing such a commission with attorneys,
campaign finance specialists, auditors, investigators, and
clerical staff would impose General Fund costs that far exceed
the costs of contracting with the FPPC. Removing enforcement
and prosecution decisions from the County (or, if an ethics
commission was established, Board-appointed commission
members) would also eliminate the appearance of bias,
favoritism, and/or conflicts-of-interest." The author's
office reports that this bill was expanded to include all
counties and cities in order to provide a uniform, consistent
statute for all local agencies.
7)Committee amendments . This bill eliminates the existing
sunset date on the original statutory authority that was
granted on a very limited basis to San Bernardino County only.
The bill maintains the reporting requirement, but only for an
agreement between San Bernardino County and the FPPC. Given
that the original report was not due until January 1, 2017,
and the Legislature has no data upon which to evaluate the
effectiveness of the program, the Committee may wish to
consider amending the bill to:
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a) Require FPPC reporting for all MOUs; and,
b) Extend the sunset date to January 1, 2020, rather than
eliminate it, so that the Legislature retains oversight
over the relatively new authority for San Bernardino County
enacted by AB 2146 and this bill's completely new authority
for all cities and counties.
8)Arguments in support . The Orange County Board of Supervisors,
co-sponsor of this bill, states, "The current Political Reform
Act of 1974 (PRA) allows local government agencies to adopt
campaign finance ordinances that apply to elections within
their jurisdictions; and the Board of Supervisors must monitor
ordinances or create a county ethics commission with separate
authority for enforcement of these local ordinances.
Investigations by these local commissions may appear biased
and impose substantial costs on local governments.
Furthermore, those selected by a Board to a county ethics
commission may not have sufficient expertise to competently
and impartially interpret and enforce a county's campaign
finance ordinance."
9)Arguments in opposition . None on file.
10)Two-thirds vote . California voters in 1974 passed
Proposition 9, commonly known as the PRA, which created the
FPPC and codified significant restrictions and prohibitions on
candidates, officeholders, and lobbyists. Amendments to the
PRA that are not submitted to the voters, such as those
contained in this bill, must further the purposes of the PRA
and require a two-thirds vote of each house of the
Legislature.
11)Double-referral . This bill was heard by the Elections and
Redistricting Committee on
June 10, 2014, where it passed with a 6-0 vote.
REGISTERED SUPPORT / OPPOSITION :
Support
Orange County Board of Supervisors [CO-SPONSOR]
Urban Counties Caucus [CO-SPONSOR]
Opposition
SB 1226
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None on file
Analysis Prepared by : Angela Mapp / L. GOV. / (916) 319-3958