The Political Reform Act of 1974 prohibits a person, other than a small contributor committee or political party committee, from making to a candidate for elective state, county, or city office, and prohibits those candidates from accepting from a person, a contribution totaling more than $3,000 per election, as that amount is adjusted by the Fair Political Practices Commission in January of every odd-numbered year to reflect changes in the Consumer Price Index.

This bill would apply those contribution limits to candidates for school district, community college district, and other special district elections. The bill would make certain other provisions of the act relating to contribution limits applicable to candidates for district office. However, the bill would authorize school districts, community college districts, and other special districts to impose contribution limits on candidates for district office that differ from the limits imposed by the act, as provided. This bill would retain the existing provisions of law until January 1, 2025, and on that date would repeal the existing law and make operative the provisions of the bill described in this paragraph.

The act makes a knowing or willful violation of its provisions punishable as a misdemeanor and subject to specified penalties. By adding new contribution limits to the act, the bill would expand the scope of an existing crime and thereby create a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the acts purposes upon a ²/₃ vote of each house of the Legislature and compliance with specified procedural requirements.

This bill would declare that it furthers the purposes of the act.

The Political Reform Act of 1974 prohibits a person, other than a small contributor committee or political party committee, from making to a candidate for elective state, county, or city office, and prohibits those candidates from accepting from a person, a contribution totaling more than $3,000 per election, as that amount is adjusted by the Fair Political Practices Commission in January of every odd-numbered year to reflect changes in the Consumer Price Index.

This bill would apply those contribution limits to candidates for school district, community college district, and other special district elections. The bill would make certain other provisions of the act relating to contribution limits applicable to candidates for district office. However, the bill would authorize school districts, community college districts, and other special districts to impose contribution limits on candidates for district office that differ from the limits imposed by the act, as provided. This bill would retain the existing provisions of law until January 1, 2025, and on that date would repeal the existing law and make operative the provisions of the bill described in this paragraph.

The act makes a knowing or willful violation of its provisions punishable as a misdemeanor and subject to specified penalties. By adding new contribution limits to the act, the bill would expand the scope of an existing crime and thereby create a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the acts purposes upon a ²/₃ vote of each house of the Legislature and compliance with specified procedural requirements.

This bill would declare that it furthers the purposes of the act.

The Political Reform Act of 1974 prohibits a person, other than a small contributor committee or political party committee, from making to a candidate for elective state, county, or city office, and prohibits those candidates from accepting from a person, a contribution totaling more than $3,000 per election, as that amount is adjusted by the Fair Political Practices Commission in January of every odd-numbered year to reflect changes in the Consumer Price Index.

This bill would apply those contribution limits to candidates for school district, community college district, and other special district elections. The bill would make certain other provisions of the act relating to contribution limits applicable to candidates for district office. However, the bill would authorize school districts, community college districts, and other special districts to impose contribution limits on candidates for district office that differ from the limits imposed by the act, as provided.

The act makes a knowing or willful violation of its provisions punishable as a misdemeanor and subject to specified penalties. By adding new contribution limits to the act, the bill would expand the scope of an existing crime and thereby create a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the acts purposes upon a ²/₃ vote of each house of the Legislature and compliance with specified procedural requirements.

This bill would declare that it furthers the purposes of the act.

The Political Reform Act of 1974 prohibits a person, other than a small contributor committee or political party committee, from making to a candidate for elective state, county, or city office, and prohibits those candidates from accepting from a person, a contribution totaling more than $3,000 per election, as that amount is adjusted by the Fair Political Practices Commission in January of every odd-numbered year to reflect changes in the Consumer Price Index.

This bill would apply those contribution limits to candidates for school district, community college district, and other special district elections. The bill would make certain other provisions of the act relating to contribution limits applicable to candidates for district office. However, the bill would authorize school districts, community college districts, and other special districts to impose contribution limits on candidates for district office that differ from the limits imposed by the act, as provided.

The act makes a knowing or willful violation of its provisions punishable as a misdemeanor and subject to specified penalties. By adding new contribution limits to the act, the bill would expand the scope of an existing crime and thereby create a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the acts purposes upon a ²/₃ vote of each house of the Legislature and compliance with specified procedural requirements.

This bill would declare that it furthers the purposes of the act.

The Political Reform Act of 1974 prohibits a person, other than a small contributor committee or political party committee, from making to a candidate for elective state, county, or city office, and prohibits those candidates from accepting from a person, a contribution totaling more than $3,000 per election, as that amount is adjusted by the Fair Political Practices Commission in January of every odd-numbered year to reflect changes in the Consumer Price Index.

This bill would apply those contribution limits to candidates for school district, community college district, and other special district elections. The bill would make certain other provisions of the act relating to contribution limits applicable to candidates for district office. However, the bill would authorize school districts, community college districts, and other special districts to impose contribution limits on candidates for district office that differ from the limits imposed by the act, as provided.

The act makes a knowing or willful violation of its provisions punishable as a misdemeanor and subject to specified penalties. By adding new contribution limits to the act, the bill would expand the scope of an existing crime and thereby create a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the acts purposes upon a ²/₃ vote of each house of the Legislature and compliance with specified procedural requirements.

This bill would declare that it furthers the purposes of the act.

Date of Hearing: August 23, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

SBPCA Bill Id:SB 328

Author:(Dodd) – As Amended Ver:June 28, 2023

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill applies, beginning January 1, 2025, contribution limits in effect for a candidate for elective state, county, or city office to a candidate for school district, community college district, and other special district elections.

However, school districts, community college districts, and other special districts may impose, by an ordinance, resolution, or initiative measure, different contribution limits on candidates.

FISCAL EFFECT:

Costs of approximately $1.4 million in the first year and $1.3 million annually thereafter to the Fair Political Practices Commission (FPPC) for nine new positions to enforce additional local district contribution limits. The FPPC counts potentially more than 4,000 impacted local government agencies (approximately 1,000 school districts, 58 county offices of education, 73 community college districts, and 3,300 special districts), but notes the actual number may be lower since agencies could adopt their own limits outside of FPPC’s enforcement jurisdiction.

COMMENTS:

1. Purpose. According to the author:

Too often, we’re seeing eye-popping amounts donated to candidates for smaller community offices. These well-financed campaigns favor the wealthy at the exclusion of grassroots candidates. Placing reasonable limits on the money in these races will help ensure fairness in local elections while encouraging a more diverse field that is more reflective of our communities. No candidate for local office needs contributions larger than those for a Senate or Assembly district.

1. Support and Opposition. This bill is supported by the FPPC and voter empowerment groups such as the California Clean Money Campaign, which argues “default contribution limits the same as legislative candidates if [districts] have not set their own contribution limits will give voters more confidence in their elections by curbing potential corruption of the appearance of corruption from unlimited contributions.”

This bill is opposed by the California Federation of Teachers, which argues this bill “will cause contributors who week to support candidates beyond contribution limits to shift spending from direct contributions to independent committees supporting or opposing candidates” and “unintentionally have negative consequences on our democracy, including increasing money spent in competitive elections, increasing negative advertising, and lowering civic participation.”

1. Background.

State and Local Campaign Contribution Limits. Proposition 34 (2000) established campaign contribution limits for elections to state office that are adjusted for inflation every two years. For 2023 and 2024, these limits are $5,500 per election for Assembly and Senate candidates and $36,400 for gubernatorial candidates. Proposition 34 set no such limits for elections to local office, although local governments generally have the authority to adopt their own contribution limits within their jurisdictions, until AB 571 (Mullin), Chapter 556, Statutes of 2019, established, beginning January 1, 2021, default campaign contribution limits for city and county offices at the same level as the limit for Assembly and Senate candidates. This bill further extends those limits to elections for school districts, community college districts, and other special districts.

Independent Expenditures and Self-funded Candidates. This bill does not restrict two other common sources of major campaign spending – independent expenditures and candidates contributing to their own campaigns – as courts have ruled such limits violate the rights of free speech and association. However, as noted the noted in the Assembly Elections Committee’s analysis of this bill:

[T]he campaign activities of major contributors in local elections in 2022 suggest that they may spend more money on independent expenditures if direct campaign contributions are limited. For example, a political committee contributed more than $215,000 in 2022 to two board of education candidates in a county without contribution limits also spent over $480,000 on independent expenditures supporting two candidates for county boards of education in other counties where the candidates were [emphasis in original] subject to contribution limits.

Implementing campaign contribution limits could also give a further advantage to candidates who have the financial means to fund their own campaigns.

1. Prior Legislation. AB 1089 (Mullin), of the 2017-18 Legislative Session, was similar to AB 571, but also applied to the districts specified in this bill. AB 1089 was held on this committee’s suspense file.

AB 2523 (Mullin), of the 2015-16 Legislative Session, was substantially similar to AB 1089. AB 2523 failed passage on the Senate Floor.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

Date of Hearing: July 5, 2023

ASSEMBLY COMMITTEE ON ELECTIONS

Gail Pellerin, Chair

SBPCA Bill Id:SB 328

Author:(Dodd) – As Amended Ver:June 28, 2023

SENATE VOTE: 33-5

SUBJECT: Political Reform Act of 1974: contribution limits.

SUMMARY: Establishes default campaign contribution limits for county boards of education, school districts, community college districts, and special districts, at the same level as the limit on contributions from individuals to candidates for Senate and Assembly, effective January 1, 2025. Permits a local jurisdiction to establish its own contribution limits which prevail over the default limits contained in this bill. Specifically, this bill:

1. Expands an existing law that imposes default contribution limits for elective county and city office such that it applies to all local elective offices, as follows:
   1. Makes all local elective offices subject to an existing law that prohibits a person from making to a candidate for elective county or city office, and that prohibits a candidate for elective county or city office from accepting from a person, a contribution totaling more than the limit on contributions to candidates for state Senate and Assembly from persons other than small contributor committees and political party committees, as adjusted by the Fair Political Practices Commission (FPPC), as specified. The current limit under this provision is $5,500 per contributor per election.
   2. Permits any local government agency, by ordinance or resolution, to impose a limit on contributions to a candidate for local elective office that prevails over the limit otherwise imposed by this bill, and allows the local government to adopt enforcement standards for violations, which may include administrative, civil, or criminal penalties. Permits the limitation to be imposed by a local initiative measure if the local government agency is authorized to enact ordinances by initiative. Provides that the FPPC is not responsible for the administration or enforcement of such a local government ordinance or resolution. Provides that local contribution limits that are in effect on January 1, 2025, shall prevail over the default contribution limits imposed by this bill.
   3. Prohibits a candidate for any elective state or local office, or a committee controlled by such a candidate, from making a contribution to any other candidate for elective office in an amount greater than the limit on contributions to candidates for state Senate and Assembly from persons other than small contributor committees and political party committees, as adjusted by the FPPC, as specified. Provides that this restriction does not apply in a jurisdiction in which the local government imposes its own limits on campaign contributions.
   4. Makes conforming changes to various state laws related to contribution limits, including rules governing the transfer of campaign funds from one controlled committee to another controlled committee for the same candidate; the acceptance of campaign contributions for an election after that election has occurred; the carryover of contributions raised in connection with one election for an elective office to pay campaign expenditures incurred in connection with a subsequent election to the same office; the acceptance of campaign contributions for a general election prior to the primary election; and personal loans made by a candidate to the candidate’s campaign committee.
   5. Provides that the contribution limits in this bill do not apply to contributions made to oppose a recall against a local elected official, as specified.
2. Makes corresponding and technical changes.
3. Provides for this bill to become effective on January 1, 2025.

EXISTING LAW:

1. Permits a special district, school district, or community college district to limit campaign contributions in elections to district offices. (Education Code §§35177, 72029; Elections Code §10544)
2. Creates the FPPC, and makes it responsible for the impartial, effective administration and implementation of the Political Reform Act (PRA). (Government Code §§83100, 83111)
3. Requires any local government agency that has enacted, enacts, amends, or repeals an ordinance or other provision of law affecting campaign contributions and expenditures to file a copy of that action with the FPPC. (Government Code §81009.5(a))
4. 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 which is being voted on only in that jurisdiction, and to city or county general purpose committees active only in that city or county, respectively. (Government Code §81009.5(b))
5. 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." (Government Code §§85312, 85703)
6. Prohibits a person, other than a small contributor committee or political party committee, from making any contribution totaling more than $5,500 to any candidate for elective state office other than statewide elective office, and prohibits candidates from accepting a contribution that exceeds that amount. Requires the FPPC to adjust this limit in January of every odd-numbered year to reflect any increase or decrease in the Consumer Price Index, and requires those adjustments to be rounded to the nearest $100. (Government Code §§83124, 85301(a); Code of California Regulations, Title 2, §18545(a)(1))
7. Prohibits a person from making to a candidate for elective county or city office, and prohibits a candidate for such an office from accepting from a person, a contribution totaling more than the limit on contributions to candidates for state Senate and Assembly from persons other than small contributor committees and political party committees, as adjusted by the FPPC. Permits a county or city, by ordinance or resolution, to impose a limit on contributions to a candidate for elective county or city office which prevails over this limit, and allows the county or city to adopt enforcement standards for violations, which may include administrative, civil, or criminal penalties. Permits this limit to be imposed by a local initiative measure. Provides that the FPPC is not responsible for the administration or enforcement of such a county or city ordinance or resolution. (Government Code §§85301(d), 85702.5)

FISCAL EFFECT: According to the Senate Appropriations Committee, the FPPC indicates that it would incur first-year costs of about $1.5 million, and $1.4 million annually thereafter, to implement the provisions of the bill (General Fund).

COMMENTS:

1. Purpose of the Bill: According to the author:

Too often, we’re seeing eye-popping amounts donated to candidates for smaller community offices. These well-financed campaigns favor the wealthy at the exclusion of grassroots candidates. Placing reasonable limits on the money in these races will help ensure fairness in local elections while encouraging a more diverse field that is more reflective of our communities. No candidate for local office needs contributions larger than those for a Senate or Assembly district.

1. History of Local Contribution Limits & Previous Legislation: In 1988, voters approved Proposition 73, a campaign finance initiative that prohibited public funding of campaigns and established contribution limits for state and local elections, among other provisions. Under Proposition 73, contributions from a person to a candidate for state or local office were limited to $1,000 per fiscal year, while political parties and certain political committees could give higher amounts.
   
   Many of the provisions of Proposition 73, including the campaign contribution limits, were ultimately ruled unconstitutional by federal courts. Because Proposition 73 limited the amount that a contributor could give in each fiscal year, rather than limiting the amount that a contributor could give in each election, the courts found that the contribution limits discriminated in favor of incumbents, since incumbents were much more likely than challengers to fundraise in non-election years. State and local elections were conducted under the Proposition 73 contribution limits for most of the 1990 election cycle, though the limits were struck down for the last six weeks before the 1990 general election.
   
   In 1996, California voters approved Proposition 208, which proposed significant changes to the PRA, including establishing new contribution limits for state and local elections. Proposition 208 prohibited any person other than a political party or a small contributor committee from making contributions of more than $100 per election to candidates in small local districts (less than 100,000 residents); $250 per election for Senate, Assembly, Board of Equalization and large local districts; and $500 per election for statewide office. These limits were increased to $250, $500, and $1,000, respectively, for candidates who agreed to abide by specified voluntary expenditure limits.
   
   On January 6, 1998, the United States District Court for the Eastern District of California entered a preliminary injunction barring the enforcement of Proposition 208. The Legislature subsequently placed Proposition 34 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, and repealed almost all of Proposition 208, which was still enjoined from enforcement.
   
   While Proposition 34 established new campaign contribution limits for elections to state office, it did not contain contribution limits for elections to local office. The limits on contributions by individuals contained in Proposition 34 ranged from $3,000 (for candidates for Assembly and Senate) to $20,000 per election (for candidates for Governor), and are required to be adjusted for inflation every two years. For 2023 and 2024, these limits range from $5,500 per election for candidates for Assembly and Senate to $36,400 for candidates for Governor.
   
   While local governments generally have the authority to adopt contribution limits for elections to local offices in their jurisdictions, until recently, state law did not impose limits on contributions to candidates for local office. In 2019, however, the Legislature approved and the Governor signed AB 571 (Mullin), Chapter 556, Statutes of 2019, which established default campaign contribution limits for county and city office at the same level as the limit on contributions from individuals to candidates for Senate and Assembly, beginning January 1, 2021. Those default limits are enforced by the FPPC. A county or city is free to establish its own contribution limits which prevail over the default limits in AB 571. If a county or city does so, however, those limits are not enforced by the FPPC, and the local jurisdiction is responsible for enforcement and administration of the limits.
   
   While AB 571 applied only to counties and cities, earlier legislation by the same author sought to impose a similar policy for all local governments, including school districts, community college districts, and special districts. That legislation—AB 2523 (Mullin) of 2016 and AB 1089 (Mullin) of 2017—was approved by the Assembly Elections & Redistricting Committee (the predecessor to this committee), but both bills failed at other points in the legislative process.
2. Local Campaign Ordinances: Under existing law, local government agencies have the ability to adopt campaign ordinances that apply to elections within their jurisdictions, though the PRA imposes certain limited restrictions on those local ordinances. For instance, 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, while AB 1430 (Garrick), Chapter 708, Statutes of 2007, prohibits local governments from adopting rules governing member communications that are different than the rules that govern member communications at the state level.
   
   Aside from these restrictions, however, local government agencies generally have a significant amount of latitude when developing local campaign finance ordinances that apply to elections in those agencies' jurisdictions. Any jurisdiction that adopts or amends a local campaign finance ordinance is required to file a copy of that ordinance with the FPPC, and the FPPC posts those ordinances on its website. The FPPC's website currently includes campaign finance ordinances from 26 counties, 183 cities, one school district, one community college district, and one special district.
   
   The campaign ordinances adopted by local governments in California vary significantly in terms of their scope. Some local ordinances are very limited, while others are more extensive. In some cases, the ordinances include campaign contribution limits, reporting and disclosure requirements that supplement the requirements of the PRA, temporal restrictions on when campaign funds may 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. In at least a few cases, however, local jurisdictions have set up independent boards or commissions to enforce the local campaign finance laws.
   
   Although it is possible that some school, community college, and special districts have adopted local ordinances or other laws affecting campaign contributions and expenditures and have failed to file copies of those policies with the FPPC as required by existing law, the fact that only three districts have filed such policies with the FPPC suggests that a substantial majority of those districts have not imposed campaign contribution limits for elections for district governing board members. (In some cases, however, contribution limits adopted by a city apply to candidates for seats on the governing board of a school or community college district that is wholly or partially located within that city.)
   
   It is unclear how often candidates for school, community college, or special district governing boards in California receive campaign contributions that are larger than the $5,500 limit that would be imposed by this bill. Nonetheless, some candidates for those boards in 2022 received campaign contributions that were considerably larger than the limit that is proposed by this bill. According to a September 3, 2022, article in the San Bernardino Sun, two candidates for the Chino Valley Unified School District school board received individual $50,000 campaign contributions from the owners of a Southern California company. In Sacramento County, two candidates for the board of education at the June 2022 election received cumulative contributions of $135,000 and more than $82,000, respectively, from a political committee sponsored by charter school advocates, while three school board candidates at the November 2022 election received cumulative amounts ranging from $48,000 to nearly $78,000 in campaign contributions from a political committee sponsored by a labor union.
3. Independent Expenditures and Self-Funded Candidates: This bill would set default limits on campaign contributions for candidates running for all local elective offices. However, it does not restrict two other common sources of major campaign spending: independent expenditures and candidates contributing to their own campaigns. Courts have ruled that limiting spending on independent expenditures or on the amount that a candidate contributes to their own campaign would violate the rights of free speech and association.
   
   When campaign contribution limits are put in place, it often leads to an increase in independent expenditures. For example, in the 2000 election cycle, state legislative elections in California were conducted without contribution limits, and the total spent on independent expenditures for all legislative races was less than $500,000. By contrast, after contribution limits were put into place for legislative elections with the passage of Proposition 34, the next two election cycles saw more than $8 million (in 2002) and more than $15 million (in 2004) spent on independent expenditures in legislative races. In the 2022 election cycle, independent expenditures in state legislative elections surpassed $78 million.
   
   In fact, the campaign activities of major contributors in local elections in 2022 suggest that they may spend more money on independent expenditures if direct campaign contributions are limited. For example, a political committee contributed more than $215,000 in 2022 to two board of education candidates in a county without contribution limits also spent over $480,000 on independent expenditures supporting two candidates for county boards of education in other counties where the candidates were subject to contribution limits.
   
   Implementing campaign contribution limits could also give a further advantage to candidates who have the financial means to fund their own campaigns. A candidate who does not have significant personal wealth—and who must rely on campaign contributions received from other individuals to fund their campaign and to communicate with voters—may find it more difficult to raise the funds necessary to compete against a self-funded candidate if the amount of money that can be contributed by any single source is limited.
4. Arguments in Support: In support of a prior version of this bill, California Common Cause wrote:

Allowing unlimited campaign contributions has a corrupting influence on local democracy, and contributes to voter cynicism about government. Whenever a candidate is financially dependent on just a handful of contributors there is a risk that they will value their contributors’ interests over those of the people they serve. Moreover, requiring candidates to seek support in smaller amounts from a broader number of contributors has a democratizing effect, and can help the competitiveness of community-supported candidates who do not have access to wealthy patrons.

For these reasons, California Common Cause sponsored and strongly supported prior legislation that established default campaign contribution limits for city and county races… SB 328, beginning January 1, 2025, extends that approach to local jurisdictions currently without limits — school districts, community college districts, and other special district elections — thus putting reasonable anti-corruption limitations in place while respecting local governments’ autonomy to set contribution limits more precisely tailored to the needs of their communities, whether lower or higher than the default cap.

1. Arguments in Opposition: In opposition to a prior version of this bill, the California Federation of Teachers wrote:

Current law provides school board races may have contribution limits. In competitive elections where there are no contribution limits and a robust reporting system, the disclosure of contributions is more transparent and likely can be located in one location. In elections where there are contribution limits, the disclosure of contributions must be sought through multiple committees with often obscure names.

This legislation would create limits for local school district, community college, and other special district elections. As such, CFT believes that this would inadvertently reduce disclosure and not reduce special interest money in elections…

Senate Bill 328 would push every local race into the darkness of election cycles dominated by well-funded independent campaigns rather than allowing the public coordination between candidates and their support groups. Under SB 328, the well-funded voice of [independent expenditure (IE)] committees overpower the ability of candidates and supporters to work together. Local races are meant to encourage local action, with local people, and with transparency and accountability. When local races become dominated by IEs, these races become yet another casualty to obscure independent committees funded by the super-wealthy and no longer represent the true participation of traditional local campaigns.

1. 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 Common Cause (prior version)

Fair Political Practices Commission (prior version)

League of Women Voters of California

Opposition

California Federation of Teachers, AFL-CIO (prior version)

Analysis Prepared by: Ethan Jones / ELECTIONS / (916) 319-2094

 THIRD READING  

Bill No: SB 328

Author: Dodd (D), et al.

Amended: 5/18/23

Vote: 27

SENATE ELECTIONS & C.A. COMMITTEE: 6-0, 3/21/23

AYES: Glazer, Allen, McGuire, Menjivar, Newman, Umberg

NO VOTE RECORDED: Nguyen

SENATE EDUCATION COMMITTEE: 6-1, 4/12/23

AYES: Newman, Ochoa Bogh, Cortese, Glazer, McGuire, Smallwood-Cuevas

NOES: Wilk

SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/18/23

AYES: Portantino, Ashby, Bradford, Wahab, Wiener

NOES: Jones, Seyarto

SUBJECT: Political Reform Act of 1974: contribution limits

SOURCE: Author

DIGEST:

This bill applies the same contribution limitations for candidates seeking city and county elective offices to candidates for school district, community college district, and other special districts beginning January 1, 2025, as specified.

ANALYSIS:

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 of 1974 (PRA).
2. Permits a special district, school district, or community college district to limit campaign contributions in elections to district offices.
3. Prohibits a person from making to a candidate for elective county or city office, and prohibits a candidate for elective county or city office from accepting from a person, a contribution totaling more than the limit on contributions to candidates for state Senate and Assembly from persons other than small contributor committees and political party committees, as adjusted by the FPPC, as specified. These limits became effective January 1, 2021.
4. Permits a county or city, by ordinance or resolution, to impose a limit on contributions to a candidate for elective county or city office which prevails over the limit otherwise imposed by this bill, and allows the county or city to adopt enforcement standards for violations, which may include administrative, civil, or criminal penalties. Permits the limitation to be imposed by a local initiative measure. Provides that the FPPC is not responsible for the administration or enforcement of such a county or city ordinance or resolution. Provides that local contribution limits that are in effect on January 1, 2021, shall prevail over the default contribution limits imposed by this bill.
5. Prohibits a candidate for any elective state, county, or city office, or a committee controlled by such a candidate from making a contribution to any other candidate for elective state, county, or city office in an amount greater than the limit on contributions to candidates for state Senate and Assembly from persons other than small contributor committees and political party committees, as adjusted by the FPPC, as specified, beginning January 1, 2021. A similar prohibition currently applies to contributions made by candidates for elective state office (or their controlled committees) to other candidates for elective state office. Provides that this restriction does not apply in a jurisdiction in which the county or city imposes its own limits on campaign contributions.
6. Provides that the contribution limits for a county or city do not apply to contributions made to oppose a recall against a county or city elected official if the jurisdiction imposed their own contribution limit, as specified.
7. Requires any local government agency that has enacted, enacts, amends, or repeals an ordinance or other provision of law affecting campaign contributions and expenditures to file a copy of the action with the FPPC.
8. Allows the governing body of any local government agency with a population of three million to contract with the FPPC for the administration, implementation, and enforcement of a local campaign finance or government ethics law, as specified.
9. Prohibits a person, other than a small contributor committee or political party committee, from making any contribution totaling more than $5,500 to any candidate for elective state office other than statewide elective office, and prohibits candidates from accepting a contribution that exceeds that amount. Requires the FPPC to adjust this limit in January of every odd-numbered year to reflect any increase or decrease in the Consumer Price Index, and requires those adjustments to be rounded to the nearest $100.

This bill:

1. Applies the same contribution limitations for candidates seeking city and county elective offices to candidates for school district, community college district, and other special districts, as specified.
2. Provides that a local government agency may, by ordinance or resolution, impose a limit on contributions to a candidate for elective local office which prevails over the default limit, as specified.
3. Provides that the contribution limits do not apply to all local government agencies’ contributions made to oppose a recall against an official if the jurisdiction imposed their own contribution limit, as specified.
4. Provides that a candidate for elective state or local office or a committee controlled by that candidate shall not make a contribution to any other candidate for elective state or local office in excess of the default limits and does not apply in a jurisdiction in which the local government agency imposes a limit on contributions, as specified.
5. Delays implementation of the bill’s provision to January 1, 2025. Retains existing provisions of law until January 1, 2025.
6. Makes various corresponding and technical changes.

Background

History of Local Contribution Limits. In 1988, voters approved Proposition 73, a campaign finance initiative that prohibited public funding of campaigns and established contribution limits for state and local elections, among other provisions. Under Proposition 73, contributions from a person to a candidate for state or local office were limited to $1,000 per fiscal year, while political parties and certain political committees could give higher amounts.

Many of the provisions of Proposition 73, including the campaign contribution limits, were ultimately ruled unconstitutional by federal courts. Since Proposition 73 limited the amount that a contributor could give in each fiscal year, rather than limiting the amount that a contributor could give in each election, the courts found that the contribution limits discriminated in favor of incumbents since they were much more likely than challengers to fundraise in non-election years.

The federal case ended in 1993 when the United States Supreme Court denied certiorari in Service Employees International Union v. FPPC. The only provisions of Proposition 73 to survive legal challenge were contribution limits for special elections (those limits were on a per-election basis, rather than a per-year basis), limits on gifts and honoraria to state and local elected officials, restrictions on certain mass mailings by officeholders, and a prohibition on the use of public money for campaign purposes. State and local elections were conducted under the Proposition 73 contribution limits for most of the 1990 election cycle, though the limits were struck down for the last six weeks before the 1990 general election.

In 1996, California voters approved Proposition 208, which proposed significant changes to the PRA, including establishing new contribution limits for state and local elections. Proposition 208 prohibited any person other than a political party or a small contributor committee from making contributions of more than $100 per election to candidates in small local districts (less than 100,000 residents); $250 per election for Senate, Assembly, Board of Equalization, and large local districts; and $500 per election for statewide office. These limits were increased to $250, $500, and $1,000, respectively, for candidates who agreed to abide by specified voluntary expenditure limits.

On January 6, 1998, the United States District Court for the Eastern District of California entered a preliminary injunction barring the enforcement of Proposition 208. The Legislature subsequently placed Proposition 34 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, and repealed almost all of Proposition 208, which was still enjoined from enforcement.

While Proposition 34 established new campaign contribution limits for elections to state office, it did not contain contribution limits for elections to local office. The limits on contributions by individuals contained in Proposition 34 ranged from $3,000 (for candidates for Assembly and Senate) to $20,000 per election (for candidates for Governor), and are required to be adjusted for inflation every two years.

For 2023 and 2024, these limits range from $5,500 per election for candidates for Assembly and Senate to $36,400 for candidates for Governor.

Local Campaign Ordinances. Under existing law, local government agencies have the ability to adopt campaign ordinances that apply to elections within their jurisdictions, though the PRA imposes certain limited restrictions on those local ordinances. For instance, 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, while AB 1430 (Garrick, Chapter 708, Statutes of 2007) prohibits local governments from adopting rules governing member communications that are different than the rules that govern member communications at the state level.

However, aside from these restrictions, local government agencies generally have had a significant amount of latitude when developing local campaign finance ordinances that apply to elections in those agencies' jurisdictions. Any jurisdiction that adopts or amends a local campaign finance ordinance is required to file a copy of that ordinance with the FPPC, and the FPPC posts those ordinances on its website. The FPPC's website currently includes campaign finance ordinances from 23 counties, 160 cities, and three special districts.

The campaign ordinances adopted by local governments in California vary significantly in terms of their scope. Some local ordinances are very limited, while others are much more extensive. In some cases, the ordinances include campaign contribution limits, reporting and disclosure requirements that supplement the requirements of the PRA, 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, in at least a few cases, local jurisdictions have set up independent boards or commissions to enforce the local campaign finance laws.

According to a 2016 report prepared by California Common Cause, approximately 23 percent of cities and 28 percent of counties in the state have adopted local campaign contribution limits. Of the 124 local jurisdictions identified in the report as having adopted local campaign contribution limits, only one (Alameda County) has a limit on campaign contributions from individuals that is higher than the $4,700 per election limit that would be imposed by this bill. More than 90 percent of the cities that have adopted contribution limits have limits of $1,000 or less. About half of the counties that adopted contribution limits have limits of $1,000 or less.

Recent legislation. In 2019, the Legislature passed and Governor Newsom signed AB 571 (Mullin, Chapter 556, Statutes of 2019). AB 571 established default campaign contribution limits for county and city office at the same level as the limit on contributions from individuals to candidates for Senate and Assembly, effective January 1, 2021. AB 571 also permitted a county or city to establish its own contribution limits, which would prevail over these default limits. This bill expands these provisions to local offices, such as school boards and special districts.

Comments

According to the author, too often, we’re seeing eye-popping amounts donated to candidates for smaller community offices. These well-financed campaigns favor the wealthy at the exclusion of grassroots candidates and people of color.  Placing reasonable limits on the money in these races will help ensure fairness in local elections while encouraging a more diverse field that is more reflective of our communities. No candidate for local office needs contributions larger than those for a Senate or Assembly district.

The author’s office also noted that local elections for school boards and special districts have historically received very little support or attention from political parties or political action committees, the only major exception being employee groups. This has dramatically changed in the last few years. From national organizations to local efforts, this local government has become the new battleground in the culture wars that often play out in our political system. These elections have also historically received very little, if any, media attention. This dynamic continues and had produced a potentially dangerous combination: massive outside spending with very little public awareness.

Related/Prior Legislation

AB 571 (Mullin, Chapter 556, Statutes of 2019) established default campaign contribution limits for county and city office at the same level as the limit on contributions from individuals to candidates for Senate and Assembly, effective January 1, 2021. AB 571 also permitted a county or city to establish its own contribution limits, which would prevail over these default limits, as specified.

AB 2880 (Harper, Chapter 394, Statutes of 2018) authorized the FPPC to administer and enforce a local campaign finance ordinance or government ethics law upon mutual agreement between the FPPC and a local agency with a population of less than three million people, as specified. As a result of AB 2880, any local jurisdiction that wants to establish campaign contribution limits but that does not want to create its own mechanism for enforcement of those limits has the option of contracting with the FPPC (subject to the agreement of the FPPC) for that purpose.

AB 1089 (Mullin, 2017) would have imposed default contribution limits for all levels of local government (including school districts and special districts). AB 1089 was held on the Assembly Appropriations Committee’s suspense file. Additionally, the final version of AB 2523 (Mullin, 2016) was substantially similar to AB 1089. AB 2523 failed passage on the Senate Floor on a 25-14 vote (27 votes were required for passage).

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee, the FPPC indicates that it would incur first-year costs of about $1.5 million, and $1.4 million annually thereafter, to implement the provisions of the bill (General Fund).

SUPPORT: (Verified 5/18/23)

California Common Cause

Fair Political Practices Commission

League of Woman Voters of California

OPPOSITION: (Verified 5/18/23)

California Federation of Teachers, AFT, AFL-CIO

Argument IN SUPPORT: In a letter supporting SB 328, the League of Women Voters of California stated, in part, the following:

Reasonable limits on campaign contributions should be established to reduce undue influence by special interests on the political process. Very large contributions can damage the public’s trust in the democratic process by deepening the perception or the possibility that candidates will be more responsive to their financial backers than to their constituents. SB 328 would establish a realistic default limit on contributions, would not affect jurisdictions that have adopted their own local contribution limits, and would not prevent a local government from adopting a higher or lower limit.

ARGUMENT IN OPPOSITION: In a letter opposing SB 328, California Federation of Teachers, AFT, AFL-CIO stated, in part, the following:

Senate Bill 328 would push every local race into the darkness of election cycles dominated by well-funded independent campaigns rather than allowing the public coordination between candidates and their support groups. Under SB 328, the well-funded voice of (independent expenditure) IE committees overpower the ability of candidates and supporters to work together. Local races are meant to encourage local action, with local people, and with transparency and accountability. When local races become dominated by IEs, these races become yet another casualty to obscure independent committees funded by the super-wealthy and no longer represents the true participation of traditional local campaigns.

Prepared by: Scott Matsumoto / E. & C.A. / (916) 651-4106

5/23/23 13:28:09

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

SB 328 (Dodd) - Political Reform Act of 1974: contribution limits

Bill Summary:

SB 328 would apply the same contribution limitations for candidates seeking city and county elective offices to candidates seeking all other local elective offices.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on May 18, 2023

Fiscal Impact:

The Fair Political Practices Commission (FPPC) indicates that it would incur first-year costs of about $1.5 million, and $1.4 million annually thereafter, to implement the provisions of the bill (General Fund).

Author Amendments:

Retain existing law until January 1, 2025.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

SB 328 (Dodd) - Political Reform Act of 1974: contribution limits

Bill Summary:

SB 328 would apply the same contribution limitations for candidates seeking city and county elective offices to candidates seeking all other local elective offices.

Fiscal Impact:

The Fair Political Practices Commission (FPPC) indicates that it would incur first-year costs of about $1.5 million, and $1.4 million annually thereafter, to implement the provisions of the bill (General Fund).

Background:

Current law permits a county or city to limit campaign contributions in its local elections. Additionally, it authorizes a special district, school district, or community college district to limit campaign contributions in elections to district offices. However, many cities, counties, and special districts have not established campaign contribution limits. Existing law establishes certain campaign contribution limits for statewide offices. FPPC is responsible for ensuring compliance with statewide campaign contribution limits and investigates potential violations of those limits.

Specifically, the existing contribution limits that apply to candidates for elective state office were enacted via Proposition 34 (November, 2000). While that proposition established new campaign contribution limits for elections to state office, it did not contain contribution limits for elections to local office. Subsequent legislation (Mullin, 2019) established a contribution limit for elective county or city office at the level for a candidate for elective state office, but did not impose a limit for candidates for school districts, community college districts, or other special districts.

The limits on contributions by individuals contained in Proposition 34 ranged from $3,000 (for candidates for Assembly and Senate) to $20,000 per election (for candidates for Governor), and are required to be adjusted for inflation every two years. For 2023 and 2024, these limits range from $5,500 per election for candidates for Assembly and Senate to $36,400 for candidates for Governor.

Under existing law, local government agencies have the ability to adopt campaign ordinances that apply to elections within their jurisdictions. Aside from some restrictions in the PRA, local government agencies generally have had a significant amount of latitude when developing local campaign finance ordinances that apply to elections in those agencies' jurisdictions.

FPPC's website currently includes campaign finance ordinances from 23 counties, 160 cities, and three special districts, and vary significantly in terms of their scope. In some cases, the ordinances include campaign contribution limits, reporting and disclosure requirements that supplement the requirements of the PRA, and voluntary public financing of local campaigns, among other provisions.

Proposed Law:

This bill would, among other things, do the following:

• Apply the same contribution limitations for candidates seeking city and county elective offices to candidates seeking all other local elective offices.
• Provide that a local government may impose a limit on contributions to a candidate for elective local office which prevails over the limit, as specified. Require that this contribution limit must be in effect on January 1, 2021.
• Provide that a prohibition for a candidate for any elective state, county, or city office, or a committee controlled by such a candidate, from making a contribution to any other candidate for elective state, county, or city office in an amount greater than the limit on contributions to candidates does not apply in a jurisdiction in which the county or city imposes its own limits on campaign contributions, as specified.

Related Legislation:

• AB 571 (Mullin, Chapter 556, Statutes of 2019) established default campaign contribution limits for county and city office at the same level as the limit on contributions from individuals to candidates for Senate and Assembly, effective January 1, 2021. AB 571 also permitted a county or city to establish its own contribution limits, which would prevail over these default limits, as specified.
• AB 1089 (Mullin, 2017) would have imposed default contribution limits for all levels of local government (including school districts and special districts). The bill was held under submission of the Suspense File of the Assembly Appropriations Committee. Additionally, the final version of AB 2523 (Mullin, 2016) of 2016 was substantially similar to AB 1089, and failed passage on the Senate Floor.
• AB 2880 (Harper, Chapter 394, Statutes of 2018) authorized FPPC to administer and enforce a local campaign finance ordinance or government ethics law upon mutual agreement between FPPC and a local agency with a population of less than three million people, as specified. As a result of AB 2880, any local jurisdiction that wants to establish campaign contribution limits but that does not want to create its own mechanism for enforcement of those limits has the option of contracting with FPPC (subject to the agreement of FPPC) for that purpose.

Staff Comments:

FPPC anticipates requiring nine positions to accommodate the bill’s resulting enforcement workload activity.

Any local government costs resulting from the mandate in this measure are not state-reimbursable because the mandate only involves the definition of a crime or the penalty for conviction of a crime.

-- END --

SENATE COMMITTEE ON EDUCATION

Senator Josh Newman, Chair

2023 - 2024 Regular

Bill No: SB 328 Hearing Date: April 12, 2023

Subject: Political Reform Act of 1974: contribution limits.

SUMMARY

This bill applies the existing contribution limitations for state elective offices to candidates for school district, community college district, or other special district elections.

BACKGROUND

Existing law:

1. Establishes the Fair Political Practices Commission (FPPC) and makes it responsible for the impartial, effective administration and implementation of the Political Reform Act of 1974 (PRA). (Government Code § 83100 et seq.)
   
2. Authorizes a special district, school district, or community college district to limit campaign contributions in elections to district offices. (Election Code § 10544; Education Code § 35177 and § 72029)
   
3. Establishes, beginning January 2021, the following contribution limits for state elective office (other than from a small contributor committee or political party committee), and requires the FPPC to adjust the contribution limitations every other year:
   
4. $3,000 per election for elective state office (not statewide elective office).
   
5. $5,000 per election for statewide elective office (except a candidate for Governor).
   
6. $20,000 per election for a candidate for Governor.
   
7. $3,000 per election for local elective office (except when a local government imposes its own limit on contributions). (Government Code § 85301 and § 85316)
   
8. Authorizes a county or city, by ordinance or resolution, to impose a limit on contributions to a candidate for elective county or city office that is different than limits for state offices. Existing law also authorizes the limitation to be imposed by means of a county or city initiative measure. (Government Code § 85702.5)
   

ANALYSIS

This bill applies the existing contribution limitations for state elective offices to candidates for school district, community college district, or other special district elections. Specifically, this bill:

1. Applies the existing contribution limitations on candidates seeking state elective offices (such as the State Senate or State Assembly) to candidates seeking local elective offices to a school district, community college district, or other special district.
2. Modifies the existing authority for a county or city to impose (by ordinance, resolution or initiative measure) a limit on contributions for elective county or city office that is different than limits for state offices, to clarify that a local government agency may impose a different limit and that a local initiative measure may be pursued by a local government agency that is authorized to enact ordinances by initiative. This bill also clarifies that a county or city’s limit on contributions that is in effect on January 1, 2021, is deemed to be the contribution limit.
   
3. For a local government other than a county or city (such as a school district), deems a local government’s limit on contributions for elective local office that is in effect on January 1, 2025, to be the contribution limit. This allows time for the development of their own contribution limits before the provisions of this bill would apply.
   
4. Specifies that this bill applies to contributions to candidates for school district, community college district, or other special district elections made on or after the effective date of this bill.
   
5. Makes various corresponding and technical changes, such as removing from the Education Code the authority for school boards, community college boards, and a special district board to limit campaign contributions, while leaving similar provisions intact in the Government Code; and, changing terminology from “county or city” to “local” or “local government agency.”

STAFF COMMENTS

1. Need for the bill. According to the author, “Too often, we’re seeing eye-popping amounts donated to candidates for smaller community offices. These well-financed campaigns favor the wealthy at the exclusion of grassroots candidates. Placing reasonable limits on the money in these races will help ensure fairness in local elections while encouraging a more diverse field that is more reflective of our communities. No candidate for local office needs contributions larger than those for a Senate or Assembly district.”
   
2. State contribution limits don’t apply to local governments with their own limits or to school board elections. The existing contribution limits that apply to candidates for elective state office were enacted via Proposition 34 on the November, 2000 ballot through passage of SB 1223 (Burton) Chapter 102, Statutes of 2000. While Proposition 34 established new campaign contribution limits for elections to state office, it did not contain contribution limits for elections to local office. Subsequent legislation in 2020 established a contribution limit for elective county or city office at the level for a candidate for elective state office, but did not impose a limit for candidates for school districts, community college districts, or other special districts.
   
   This bill applies the existing contribution limitations for state elective offices to candidates seeking local elective offices that do not have their own limits as of January 1, 2021, and to elections for school districts, community college districts, and other special districts that don’t have their own limits in place before January 1, 2025.
   
   The limits on contributions by individuals contained in Proposition 34 ranged from $3,000 (for candidates for Assembly and Senate) to $20,000 per election (for candidates for Governor), and are required to be adjusted for inflation every two years. For 2023 and 2024, these limits range from $5,500 per election for candidates for Assembly and Senate to $36,400 for candidates for Governor.
   
3. Local Campaign Ordinances. Under existing law, local government agencies have the ability to adopt campaign ordinances that apply to elections within their jurisdictions. Aside from some restrictions in the PRA, local government agencies generally have had a significant amount of latitude when developing local campaign finance ordinances that apply to elections in those agencies' jurisdictions.
   
   The FPPC's website currently includes campaign finance ordinances from 23 counties, 160 cities, and three special districts. The campaign ordinances adopted by local governments in California vary significantly in terms of their scope. In some cases, the ordinances include campaign contribution limits, reporting and disclosure requirements that supplement the requirements of the PRA, and voluntary public financing of local campaigns, among other provisions.
   
   According to a 2016 report prepared by California Common Cause, approximately 23 percent of cities and 28 percent of counties in the state have adopted local campaign contribution limits. Of the 124 local jurisdictions identified in the report as having adopted local campaign contribution limits, only one (Alameda County) has a limit on campaign contributions from individuals that is higher than the $4,700 per election limit for state offices; more than 90 percent of the cities that have adopted contribution limits have limits of $1,000 or less.
   
4. What about candidates to county boards of education? This bill specifically applies to contributions to candidates for school district, community college district, or other special district elections. While it appears that this bill would also apply to elections for county boards of education, the author may wish to clarify such moving forward.
   
5. Heard by the Senate Elections Committee. This bill was heard and passed by the Senate Elections and Constitutional Amendments Committee on March 21, 2023, where is passed on a 6-0 vote.
   
6. Prior legislation.
   
   AB 1089 (Mullin, 2017) would have imposed default contribution limits for all levels of local government (including school districts and special districts). AB 1089 was held on the Assembly Appropriations Committee’s suspense file.
   
   AB 2523 (Mullin, 2016) was substantially similar to AB 1089. AB 2523 failed passage on the Senate Floor.

SUPPORT

League of Women Voters of California

OPPOSITION

None received

-- END --

SENATE COMMITTEE ON

ELECTIONS AND CONSTITUTIONAL AMENDMENTS

Senator Steven Glazer, Chair

2023 - 2024 Regular

Bill No: 328 Hearing Date: 3/21/23

Subject:

DIGEST

This bill applies the same contribution limitations for candidates seeking city and county elective offices to candidates seeking all other local elective offices.

ANALYSIS

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 of 1974 (PRA).
2. Permits a special district, school district, or community college district to limit campaign contributions in elections to district offices.
   
3. Prohibits a person from making to a candidate for elective county or city office, and prohibits a candidate for elective county or city office from accepting from a person, a contribution totaling more than the limit on contributions to candidates for state Senate and Assembly from persons other than small contributor committees and political party committees, as adjusted by the FPPC, as specified. These limits became effective January 1, 2021.
   
4. Permits a county or city, by ordinance or resolution, to impose a limit on contributions to a candidate for elective county or city office which prevails over the limit otherwise imposed by this bill, and allows the county or city to adopt enforcement standards for violations, which may include administrative, civil, or criminal penalties. Permits the limitation to be imposed by a local initiative measure. Provides that the FPPC is not responsible for the administration or enforcement of such a county or city ordinance or resolution. Provides that local contribution limits that are in effect on January 1, 2021, shall prevail over the default contribution limits imposed by this bill.
   
5. Prohibits a candidate for any elective state, county, or city office, or a committee controlled by such a candidate, from making a contribution to any other candidate for elective state, county, or city office in an amount greater than the limit on contributions to candidates for state Senate and Assembly from persons other than small contributor committees and political party committees, as adjusted by the FPPC, as specified, beginning January 1, 2021. A similar prohibition currently applies to contributions made by candidates for elective state office (or their controlled committees) to other candidates for elective state office. Provides that this restriction does not apply in a jurisdiction in which the county or city imposes its own limits on campaign contributions.
   
6. Provides that the contribution limits for a county or city do not apply to contributions made to oppose a recall against a county or city elected official if the jurisdiction imposed their own contribution limit, as specified.
   
7. Requires any local government agency that has enacted, enacts, amends, or repeals an ordinance or other provision of law affecting campaign contributions and expenditures to file a copy of the action with the FPPC.
8. Allows the governing body of any local government agency with a population of three million to contract with the FPPC for the administration, implementation, and enforcement of a local campaign finance or government ethics law, as specified.
   
9. Prohibits a person, other than a small contributor committee or political party committee, from making any contribution totaling more than $5,500 to any candidate for elective state office other than statewide elective office, and prohibits candidates from accepting a contribution that exceeds that amount. Requires the FPPC to adjust this limit in January of every odd-numbered year to reflect any increase or decrease in the Consumer Price Index, and requires those adjustments to be rounded to the nearest $100.

This bill:

1. Applies the same contribution limitations for candidates seeking city and county elective offices to candidates seeking all other local elective offices.
2. Provides that a local government may, by ordinance or resolution, impose a limit on contributions to a candidate for elective local office which prevails over the limit. Requires that this contribution limit must be in effect on January 1, 2021.
3. Provides that the contribution limits for do not apply to all local government contributions made to oppose a recall against a county or city elected official if the jurisdiction imposed their own contribution limit, as specified. Provides that this restriction does not apply in a jurisdiction in which the county or city imposes its own limits on campaign contributions.
4. Provides that a prohibition for a candidate for any elective state, county, or city office, or a committee controlled by such a candidate, from making a contribution to any other candidate for elective state, county, or city office in an amount greater than the limit on contributions to candidates does not apply in a jurisdiction in which the county or city imposes its own limits on campaign contributions, as specified.
5. Makes various corresponding and technical changes.

BACKGROUND

History of Local Contribution Limits. In 1988, voters approved Proposition 73, a campaign finance initiative that prohibited public funding of campaigns and established contribution limits for state and local elections, among other provisions. Under Proposition 73, contributions from a person to a candidate for state or local office were limited to $1,000 per fiscal year, while political parties and certain political committees could give higher amounts.

Many of the provisions of Proposition 73, including the campaign contribution limits, were ultimately ruled unconstitutional by federal courts. Since Proposition 73 limited the amount that a contributor could give in each fiscal year, rather than limiting the amount that a contributor could give in each election, the courts found that the contribution limits discriminated in favor of incumbents since they were much more likely than challengers to fundraise in non-election years.

The federal case ended in 1993 when the United States Supreme Court denied certiorari in Service Employees International Union v. FPPC. The only provisions of Proposition 73 to survive legal challenge were contribution limits for special elections (those limits were on a per-election basis, rather than a per-year basis), limits on gifts and honoraria to state and local elected officials, restrictions on certain mass mailings by officeholders, and a prohibition on the use of public money for campaign purposes. State and local elections were conducted under the Proposition 73 contribution limits for most of the 1990 election cycle, though the limits were struck down for the last six weeks before the 1990 general election.

In 1996, California voters approved Proposition 208, which proposed significant changes to the PRA, including establishing new contribution limits for state and local elections. Proposition 208 prohibited any person other than a political party or a small contributor committee from making contributions of more than $100 per election to candidates in small local districts (less than 100,000 residents); $250 per election for Senate, Assembly, Board of Equalization and large local districts; and $500 per election for statewide office. These limits were increased to $250, $500, and $1,000, respectively, for candidates who agreed to abide by specified voluntary expenditure limits.

On January 6, 1998, the United States District Court for the Eastern District of California entered a preliminary injunction barring the enforcement of Proposition 208. The Legislature subsequently placed Proposition 34 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, and repealed almost all of Proposition 208, which was still enjoined from enforcement.

While Proposition 34 established new campaign contribution limits for elections to state office, it did not contain contribution limits for elections to local office. The limits on contributions by individuals contained in Proposition 34 ranged from $3,000 (for candidates for Assembly and Senate) to $20,000 per election (for candidates for Governor), and are required to be adjusted for inflation every two years.

For 2023 and 2024, these limits range from $5,500 per election for candidates for Assembly and Senate to $36,400 for candidates for Governor.

Local Campaign Ordinances. Under existing law, local government agencies have the ability to adopt campaign ordinances that apply to elections within their jurisdictions, though the PRA imposes certain limited restrictions on those local ordinances. For instance, 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, while AB 1430 (Garrick), Chapter 708, Statutes of 2007, prohibits local governments from adopting rules governing member communications that are different than the rules that govern member communications at the state level.

However, aside from these restrictions, local government agencies generally have had a significant amount of latitude when developing local campaign finance ordinances that apply to elections in those agencies' jurisdictions. Any jurisdiction that adopts or amends a local campaign finance ordinance is required to file a copy of that ordinance with the FPPC, and the FPPC posts those ordinances on its website. The FPPC's website currently includes campaign finance ordinances from 23 counties, 160 cities, and three special districts.

The campaign ordinances adopted by local governments in California vary significantly in terms of their scope. Some local ordinances are very limited, while others are much more extensive. In some cases, the ordinances include campaign contribution limits, reporting and disclosure requirements that supplement the requirements of the PRA, 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, in at least a few cases, local jurisdictions have set up independent boards or commissions to enforce the local campaign finance laws.

According to a 2016 report prepared by California Common Cause, approximately 23 percent of cities and 28 percent of counties in the state have adopted local campaign contribution limits. Of the 124 local jurisdictions identified in the report as having adopted local campaign contribution limits, only one (Alameda County) has a limit on campaign contributions from individuals that is higher than the $4,700 per election limit that would be imposed by this bill. More than 90 percent of the cities that have adopted contribution limits have limits of $1,000 or less. About half of the counties that adopted contribution limits have limits of $1,000 or less.

Recent Legislation. In 2019, the Legislature passed and Governor Newsom signed AB 571 (Mullin), Chapter 556, Statutes of 2019. AB 571 established default campaign contribution limits for county and city office at the same level as the limit on contributions from individuals to candidates for Senate and Assembly, effective January 1, 2021. AB 571 also permitted a county or city to establish its own contribution limits, which would prevail over these default limits. This bill would expand these provisions to local offices, such as school boards and special districts.

COMMENTS

1. According to the author: Too often, we’re seeing eye-popping amounts donated to candidates for smaller community offices. These well-financed campaigns favor the wealthy at the exclusion of grassroots candidates and people of color.  Placing reasonable limits on the money in these races will help ensure fairness in local elections while encouraging a more diverse field that is more reflective of our communities. No candidate for local office needs contributions larger than those for a Senate or Assembly district.

The author’s office also noted that local elections for school boards and special districts have historically received very little support or attention from political parties or political action committees, the only major exception being employee groups. This has dramatically changed in the last few years. From national organizations to local efforts, this local government has become the new battleground in the culture wars that often play out in our political system. These elections have also historically received very little, if any, media attention. This dynamic continues and had produced a potentially dangerous combination: massive outside spending with very little public awareness.

1. Suggested Amendments. There are three suggested amendments for the committee to consider.
   1. Local Government Agency. The PRA defines a “local government agency” as a county, city, or district of any kind including school district, or any other local or regional subdivision, or any department, division, bureau, office, board, commission, or other agency of the foregoing. This bill’s language refers to a “local government” instead of a “local government agency.” To avoid any potential confusion, committee staff recommends the bill be amended to replace “local government” with “local government agency.”
   2. Flexibility for Newly Affected Local Agencies. Pursuant to AB 571, a local government was provided the ability to impose a contribution limit that differed from the state contribution limit. That section of the bill, Government Code 85702.5, became operative on January 1, 2021. This was one year after AB 571 would have taken effect.

This bill provides that a local government’s limit on contributions to a candidate for elective local office is the contribution limit in effect on January 1, 2021. If no action occurred, then the contribution limit defaults to the state contribution limit. In other words, all elective local governments would have needed to establish and put into effect a contribution limit by January 1, 2021, to differ from the established state contribution limits. As a result, this would not provide any flexibility of the newly affected elective local agencies to consider their own contribution limits unless they had done so prior to 2021.

Committee staff recommends that the bill be amended to provide time to allow local governments affected by the provisions of this bill to have the ability to establish their own contribution limits in a similar manner that was provided for counties and cities. Committee staff recommends that the deadline for non-county or municipal governments be January 1, 2025.

• 1. Effective Date. When AB 571 was being implemented, questions were raised relating to whether contributions received before the bill’s effective date would count towards the contribution limits imposed by the bill. This topic was considered by the FPPC. The FPPC was asked whether contributions made prior to AB 571’s effective date, January 1, 2021, for an election held after January 1, 2021, are aggregated with any contribution from the same contributor to the same recipient made after the effective date. The FPPC concluded that contributions made prior to AB 571’s effective date for an election held after that date are not aggregated with any contribution from the same contributor to the same recipient made after the legislation’s effective date.

To avoid a similar scenario should the bill be chaptered, committee staff recommends the bill specify that the provisions of the bill apply to contributions made to candidates for school districts, community college districts, or other special districts on or after the bill’s operative date.

1. Argument in Support. In a letter supporting SB 328, the League of Woman Voters for California, stated, in part, the following:

We have observed high levels of contributions in school board and other district elections. The rationale behind limiting contributions to city and county election candidates is equally applicable to district contests.

Reasonable limits on campaign contributions should be established to reduce undue influence by special interests on the political process. Very large contributions can damage the public’s trust in the democratic process by deepening the perception or the possibility that candidates will be more responsive to their financial backers than to their constituents. SB 328 would establish a realistic default limit on contributions, would not affect jurisdictions that have adopted their own local contribution limits, and would not prevent a local government from adopting a higher or lower limit.

1. Double-Referral. If approved by this committee, this bill will be re-referred to the Senate Committee on Education for further consideration.

RELATED/PRIOR LEGISLATION

AB 571 (Mullin), Chapter 556, Statutes of 2019, established default campaign contribution limits for county and city office at the same level as the limit on contributions from individuals to candidates for Senate and Assembly, effective January 1, 2021. AB 571 also permitted a county or city to establish its own contribution limits, which would prevail over these default limits, as specified.

AB 1089 (Mullin) of 2017 would have imposed default contribution limits for all levels of local government (including school districts and special districts). AB 1089 was held on the Assembly Appropriations Committee’s suspense file. Additionally, the final version of AB 2523 (Mullin) of 2016 was substantially similar to AB 1089. AB 2523 failed passage on the Senate Floor on a 25-14 vote (27 votes were required for passage).

AB 2880 (Harper), Chapter 394, Statutes of 2018, authorized the FPPC to administer and enforce a local campaign finance ordinance or government ethics law upon mutual agreement between the FPPC and a local agency with a population of less than three million people, as specified. As a result of AB 2880, any local jurisdiction that wants to establish campaign contribution limits but that does not want to create its own mechanism for enforcement of those limits has the option of contracting with the FPPC (subject to the agreement of the FPPC) for that purpose.

POSITIONS

Sponsor: Author

Support: League of Woman Voters of California

Oppose: None Received

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