BILL ANALYSIS
AB 709
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Date of Hearing: April 5, 2005
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Tom Umberg, Chair
AB 709 (Wolk) - As Introduced: February 17, 2005
SUBJECT : Candidate controlled ballot measure committees.
SUMMARY : Imposes campaign contribution limits on ballot
measure committees that are controlled by candidates for
elective state office. Specifically, this bill :
1)Prohibits a person from making to any ballot measure committee
controlled by a candidate for elective state office any
contribution totaling more than $5,600 during the entire
period of time the candidate controls the committee, and
prohibits any ballot measure committee controlled by a
candidate for elective state office from accepting such a
contribution.
2)Provides that a ballot measure committee primarily formed to
support or oppose a ballot measure or measures and controlled
by a candidate for elective state office is subject to a
provision of state law limiting the amount of post-election
fundraising to the net debts outstanding to the committee.
This provision does not apply to a general purpose ballot
measure committee.
3)Requires the Fair Political Practices Commission (FPPC) to
adjust the contribution limits to ballot measure committees
that are controlled by a candidate for elective state office
in January of every odd-numbered year to reflect any increase
or decrease in the Consumer Price Index. Those adjustments
are to be rounded to the nearest $100.
EXISTING LAW :
1)Limits campaign contributions to candidates for elective state
office as follows:
a) To a candidate for elective state office other than a
candidate for statewide elective office, no person may
contribute more than $3,300 per election and no small
contributor committee may contribute more than $6,700 per
election;
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b) To a candidate for elective statewide office other than
a candidate for Governor, no person may contribute more
than $5,600 per election and no small contributor committee
may contribute more than $11,100 per election;
c) To a candidate for Governor, no person or small
contributor committee may contribute more than $22,300 per
election.
2)Requires the FPPC to adjust these contribution limits
biannually to reflect any increase or decrease in the Consumer
Price Index.
FISCAL EFFECT : Unknown. State-mandated local program;
contains a crimes and infractions disclaimer.
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COMMENTS :
1)Purpose of the Bill : According to the author, "This bill is
necessary to prevent the circumvention of Proposition 34
contribution limits on candidates by directing contributions
to candidate controlled ballot measure committees."
2)Proposition 34 : At the November 2000 general election, voters
approved Proposition 34 with 60.1% of the vote. Proposition 34
revised state laws on political campaigns for state elective
offices and ballot propositions, most notably by establishing
new contribution and voluntary campaign spending limits for
state elective offices. Proposition 34 placed no contribution
limits on ballot measure committees.
3)Distinction Between Limits on Candidates and Ballot Measures :
The United States Supreme Court has made a distinction between
limits on campaign contributions made to candidates and limits
on campaign contributions made to ballot measure committees.
In Buckley v. Valeo (1976) 424 U.S. 1, the Supreme Court
upheld contribution limits placed upon candidates,
acknowledging the state interest of preventing corruption or
its appearance. However, in Citizens Against Rent Control v.
City of Berkeley (1981) 454 U.S. 290, the Court found that no
such risk of corruption exists when contributions are given to
ballot measure committees. Accordingly, the Court struck down
a City of Berkeley ordinance that placed a $250 contribution
limit on ballot measures committees.
The ballot measure committee at issue in Citizens Against Rent
Control was not candidate controlled, however. This bill
seeks only to regulate contributions made to candidate
controlled ballot measure committees, and does not address
contributions made to non-candidate controlled committees
similar to the one in Citizens Against Rent Control .
4)The Rise of Candidate Controlled Ballot Measure Committees :
Since the enactment of the campaign contribution limits
imposed by Proposition 34, candidates have found other ways to
raise large sums of campaign funds. The author notes that
recent complaints have been filed in the courts and with the
FPPC regarding alleged abuse of candidate controlled ballot
measure committees in order to circumvent contribution limits.
Two recent cases involve candidates for Governor who also
control other committees not subject to contribution limits.
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In the first case, Lieutenant Governor Cruz Bustamante
controlled a ballot measure committee called The Cruz
Bustamante Committee Against Prop. 54. The purpose of the
committee was to advocate the defeat of a proposition
appearing on the October 7, 2003, recall election ballot.
Bustamante himself was on that same ballot as a replacement
candidate in the recall. The ballot measure committee raised
$5,596,135.00 in 2003, with 19 contributions over the $21,200
contribution limit for gubernatorial campaigns that was in
effect at the time. The largest contribution, from the
Lieutenant Governor Bustamante 2002 Committee, was $3.8
million.
In the second instance, Governor Arnold Schwarzenegger
established the Governor Schwarzenegger's California Recovery
Team committee, which he controls. Last year, that committee
received $18,695,196.74 in contributions, of which more than
$12 million was contributed to various ballot measure
committees. More than 200 contributions to the California
Recovery Team exceeded the $21,200 contribution limit for
gubernatorial campaigns that was in effect at the time, with
51 contributions of $100,000 or more. More than 430
contributions exceeded the $5,600 contribution limit that
would be imposed by this bill.
In both instances, the candidates appeared in television
advertisements related to the respective ballot measures that
they supported or opposed.
5)FPPC Regulations : At its June 25, 2004 meeting, FPPC adopted
new regulations governing contributions to ballot measure
committees controlled by elected state officers and candidates
for elective state office. Under those regulations,
contributions to a ballot measure committee that is controlled
by a candidate for elective state office are limited to the
Proposition 34 contribution limits that applied to the
individual's candidate committee at the time the candidate
took control of the ballot measure committee. If the
candidate has more than one state candidate committee, the
limit for the committee with the higher contribution limit
applies.
On February 9, 2005, Citizens to Save California and
Assemblymember Keith Richman filed suit against the FPPC
challenging these regulations. The plaintiffs claimed that
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the regulation adopted by the FPPC was illegal for several
reasons, including that the FPPC lacked the authority to adopt
the regulation and that the regulation violates the First
Amendment to the United States Constitution. On March 23,
2005, Sacramento Superior Court Judge Shelleyanne Chang,
issued a tentative ruling in Citizens to Save California v.
FPPC in favor of the plaintiffs, finding that the FPPC's
regulations were "inconsistent with the [Political Reform Act
(PRA)]" and therefore "exceed[] the FPPC's rulemaking
authority." Judge Chang also ruled that the regulation
"unreasonably impairs and chills the associational rights of
candidates and those directing a committee who would otherwise
desire to consult with them." Judge Chang upheld that
tentative ruling on March 25, 2005, thus invalidating the
FPPC's regulations limiting campaign contributions to ballot
measure committees that are controlled by candidates for
elective state office. As a result of that decision, there
are no contribution limits on ballot measure committees -
whether controlled by a candidate for elective state office or
not. The FPPC has not announced whether it will appeal the
Superior Court ruling.
This bill essentially would codify the FPPC regulations that
were struck down by the court in Citizens to Save California ,
with one key difference - this bill would change the amount of
money that a candidate controlled ballot measure committee
could receive from any single contributor. Under the FPPC
regulations, a candidate controlled ballot measure committee
could receive contributions of up to $3,300 if the candidate
controlling the committee was a candidate for the Legislature
or the Board of Equalization, up to $5,600 if the candidate
was a candidate for elective statewide office other than a
candidate for Governor, and up to $22,300 if the candidate was
a candidate for Governor. Under this bill, the same $5,600
limit would apply to all candidate controlled ballot measure
committees, regardless of the office sought by the candidate
for state elective office.
It is unclear whether a court would uphold the provisions of
this bill when a similar regulation was struck down in court.
In the decision in Citizens to Save California , Judge Chang
indicated that her ruling was based in part on her
determination that the FPPC did not have the statutory
authority to adopt a regulation limiting contributions to
ballot measure committees that are controlled by candidates
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for elective state office. But Judge Chang also expressed
concerns about the constitutionality of the regulation as well
- concerns that presumably would be equally applicable to a
statutory limit on contributions to ballot measure committees
that are controlled by candidates for elective state office.
6)Arguments in Support : According to the FPPC:
Since voter approval of Proposition 34 in November of 2000,
the growing use of ballot measure campaigns by elective
state office candidates represents a disturbing trend
toward circumvention of the candidate contribution limits
of that initiative. In some of these instances, unlimited
contributions are use to fund ballot measure ads featuring
the elective state office candidate, offering the ancillary
benefit of improving voter awareness of the featured
candidate. Even where the ballot funds are not used to pay
for ads featuring the controlling candidate, these
contributions-often in amounts many times the limit
applicable to the candidate under Proposition 34-represent
a clear opportunity for "corruption or the appearance of
corruption," to use the language of Buckley v. Valeo.
Moreover, the Supreme Court signaled in McConnell v. FEC
that limitations on non-express advocacy are constitutional
when part of a valid contribution limit scheme.
7)Previous Legislation : The August 13, 2004 Proposed Conference
Committee Report of AB 1980 (Wolk) of 2004 was substantially
similar to this bill. That Conference Committee Report was
adopted in the Senate by a vote of 33-1, but failed in the
Assembly by a vote of 50-29 (54 votes were required for
passage).
8)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. Amendments to the PRA
that are not submitted to the voters, such as those contained
in this bill, require a 2/3 vote of both houses of the
Legislature.
REGISTERED SUPPORT / OPPOSITION :
Support
AB 709
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California Common Cause
Fair Political Practices Commission
Opposition
None on file.
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094