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HomeMy WebLinkAbout1997 12-02 CC ADJ AGENDA PKTAGENDA OF AN ADJOURNED REGULAR MEETING CITY COUNCIL OF THE CITY OF NATIONAL CITY LARGE CONFERENCE ROOM CIVIC CENTER 1243 NATIONAL CITY BOULEVARD NATIONAL CITY, CA TUESDAY, DECEMBER 2, 1997 - 2:00 P.M. WORKSHOP MEETING ROLL CALL 1. Voluntary Campaign Expenditure Limits Under Proposition 208 PUBLICE ORAL COMMUNICATIONS ADJOURNMENT Next Regular City Council Meeting — Tuesday, December 2, 1997, 3:00 p.m. Council Chambers, Civic Center City of National City, California COUNCIL AGENDA STATEMENT MEETING DATE December 2, 1997 AGENDA ITEM NO 1 ITEM TITLE PREPARED BY EXPLANATION. VOLUNTARY CAMPAIGN EXPENDITURE LIMITS UNDER PROPOSITION 208 George H. Eiser, III See attached memorandum DEPARTMENT City Attorney X Environmental Review N/A Financial Statement N/A Account No. STAFF RECOMMENDATION Direct staff concerning possible preparation of ordinance. BOARD/COMMISSION RECOMMENDATION N/A ATTACHMENTS (Listed Below) Resolution No Memorandum A -.cc -'.. °11c1 City of National City Office of the City Attorney 1243 National City Boulevard, National City, CA 91950 George H. Eiser, III • City Attorney (619) 336-4220 FAX (619) 336-4327 TDD (619) 336-1615 TO: Mayor and City Council DATE: October 16, 1997 FROM: City Attorney SUBJECT: Voluntary Campaign Expenditure Limits Under Proposition 208 Proposition 208 was approved by the voters at the November 5, 1996 election, eff ctive January 1, 1997. Last December, prior to Proposition 208 taking effect, memorandum summarizing its provisions. e` Idistributed. the Proposition 208 applies to every campaign for state and local office in California.--: �With very few exceptions (mostly related to slate mailers and disclosure of the .sponsor of adver sements), Proposition 208 does not apply to ballot measure campai-s_ For cities, this means that Proposition 208 will likely not apply to recall elections, because they have been held to be ballot measure elections. However, Proposition 208 will apply to car* npaiy s for candidates to replace officials subject to a recall. Also, most of Proposition 208will not to local tax elections, which may become more prevalent after i ��-ale:�_ art2. the passae or Preposition 213. issue which was discussed on page three of my memorandum, but which has not yet been determined by the City Council, is that of the voluntary expendinre limits authorized by Proposition 208. Proposition 208 does not require that expenditure limits be established, but permits cities to establish voluntary expenditure ceilings or up to SI or less per resident ror each election in the city. A hiczher expenditure limitation may also be estabiis ed. but only by voter approval. If the City Council adopts a voluntary expenditure ceiling, candidates must file with the FPPC a statement of acceptance or rejection of the ceiling before accepting ,any contributions. (With certain exceptions, candidates may not accept contributions more than six (6) mcnt.'is prior :o an election). If a candidate Pr—pcs the expenditure ceiling, he/she is subjec: to a cont,i.budon limitation of 32.5 per Contributor (i.e., Individual, business, union, PAC)election, than. SW() per contributor c establishedper e.th en, rather perelec ion as by Proposition 208. In the case small contributor committee," theof a contribution limitation is increased from 5200 to S.500 per contributor per election.' Under ?rcposidon 2C3, eonaibudons co a commie- that conc-ibures to a candidate are limited to S.:C) per calendar year. although irre mz1�s indcpenn: nt expenditures of SI.CCA or more opposing or PPa..na a 3 tide commimay not accept any conaibution in excess of $=S Addiricnally, contributions to political party committees are C xy election. r.he coaaibuaon limitations would not be affected bylimited to dintre per caleadar year. These imposition of an expenditure ceiling. Pmcor October 16, 1997 Page Two If the City Council adopts voluntary expenditure limits, Proposition 208 requires that local election officials designate on the ballot, in the ballot pamphlet, and in the sample ballot, which candidates have accepted the voluntary expenditure limits. Once a candidate who does not accept the expenditure ceiling raises or spends 75% of the recommended expenditure ceiling for that office, the voluntary expenditure ceiling for other candidates in the same race will automatically triple. If an independent expenditure committee or committees in the aggregate spend 50% or more of the applicable expenditure ceiling in support of or in opposition to any candidate, the other candidates' voluntary expenditure ceiling automatically triples. If an independent expenditure committee or committees in the aggregate spend 25% or more of the applicable expenditure ceiling in support of or in opposition to any candidate, the other candidates' voluntary expenditure ceiling. automatically doubles. _ The total aggregate amount a candidate may receive from entities, other individuals, small contributor committers, and political party committees is limited to 25% of the voluntary expenditure limit. Likewise, no more than 25% of the voluntary expenditure limit shall be accepted in cumulative contributions for any election from all political party committees. It is unclear what the consequences are when a candidate accepts voluntary expenditure limitations but then breaks the agreement. It would appear that this would constitute a violation of the Political Reform Act; however, applying the Act's penalties would convert a "voluntary' ceiling to a `mandatory' ceiling. In the 1976 landmark case of Buckley v. Valeo, the United States Supreme Court held that mandatory expenditure limits unconstitutionally impair the free speech rights of candidates and contributors. However, the court also held that voluntary expenditure limits, when accompanied by a government benefit such as public matching funds, are constitutional. Because Pr2oposition 208 does not require matching funds, it is not clear whether the fact that any expenditure limits are voluntary would alone render its provisions defensible against a constitutional challenge. Proposition 208 attempts to overcome this potential problem with constitutionality with other less costly incentives, discussed above. In the case of candidates for state office who comply with the voluntary ceilings, Proposition 208 requires election officials to print candidates' statements in the sample ballot for free. That requirement does not apply to local jurisdictions, apparently to avoid imposing an unfunded State mandate. The absence of that incentive in local campaians, however, makes local voluntary expenditure limits somewhat more vulnerable to constitutional challenge. Therefore, if the City Council intends to impose a voluntary expenditure ceiling, the Council may wish to consider providing the additional incentive of printing candidates' statements at no cost for candidates who agree to accept the voluntary expenditure Iimit. 2 It is not certain that these expenditure limits apply to local (e.g. city) offices. October 16, 1997 Page Three Lastly, in considering whether to impose voluntary expenditure limits, the following contribution limits, already imposed by Proposition 208, should be kept in mind. These limits are in effect whether or not voluntary expenditure limits are enacted. a. Ban on Transfers Between Candidates: Candidates and their controlled committees may not make any contribution of campaign funds to any other candidate running for office or to the other candidate's controlled committee. A candidate may contribute personal funds to his or her own campaign in unlimited amounts, or to another candidate subject to applicable contribution limits. b. Limits on Members of Appointed Boards and Commissions: Appointees to boards and commissions may not contribute to, or solicit or accept any contribution for, the person who made the appointment to that office. This means, for example, that Planning Commissioners are prohibited from contributing to or raising funds on behalf of the counciimembers who made the appointment. c. Ban on Lobbyists' Contributions: Candidates and officeholders may not accept contributions from any registered state or lodal lobbyists if that lobbyist finances, is engaged in, or is authorized to lobby the governmental agency of the office being sought. d. Time Limits on Campaign Fund Raising: Candidates in jurisdictions with fewer than 1,000,000 residents may solicit and accept contributions only during the period between six (6) months prior to the election and 90 days after the election. Post -election contributions may be raised only if the campaivi has outstanding debt. e. Limits on Loans to Campaigns: Every loan and extension of credit to a candidate or committee will be considered a contribution from the maker of the loan and is subject to all contribution limits. A candidate may loan his or her personal funds to the candidate's campaign committee up to a limit of 320,000 in outstanding loans at any one time. f. Limits on Surplus Funds: Funds remaining in a campaign account at the end of an election may not be carried -over for a subsequent election. Within 90 days after the election, candidates must dispose of their remaining funds by either returning the funds to contributors pro-rata, donating the funds to a political party, or turning the funds over to the General Fund. Successful candidates may transfer up to 310,000 to an officeholder fund for payment of the expenses of communicating with constituents or carrying -out the official's duties. October 16, 1997 Page Four If the City Council decides to impose voluntary expenditure limits, an implementation ordinance will be prepared and submitted for Council approval at a future meeting. GHE/gmo Attachment e\pr v2Cs.da got: al GEORGE H. EISER, III City Attorney City of National City Office of the City Attorney 1243 National City Boulevard, National City, CA 91950 George H. Eiser, Ill • City Attorney (619) 336-4220 FAX (619) 336-4327 TDD (619) 336-1615 TO: Mayor and City Council DATE: December 17, 1996 FROM: City Attorney SUBJECT: Proposition 208; California Political Reform Act of 1996 BACKGROL'D As you know, Proposition 208 was approved by the voters at the November 5, 1996 election. Proposition 208, which takes effect January 1, 1997, amends the Political Reform Act (Government Code Section 81000 et sec") to add new contribution and spending limits for local office holders, to revise disclosure requirements for contributions and expenditures, and to expand the penalty provisions of the Act. Following is a summary of the major provisions of these amendments. All statutory references are to the Government Code. LIMITATIONS ON CONTRIBUTIONS Section 85301 Emits condibutions to a candidate for local office in a jurisdiction with fewer than 100,00 residents to S100 per concibutor per election, and imposes a contribution Emit of 3250 for candidates in jurisdictions of 100,000 or more residents. Generally, contributions to a committee that contributes to a candidate are limited to S500 per calendar year. These limitations do not apply to a candidate's contribution of his or her personal funds to his or her own campaign committee; they do apply to contributions from a spouse. Section 85302 provides that the contribution limit for "small contributor committees" is two times the limit set forth in Section 85301. Pursuant to Section 85203, a "sriiall contributor committee" means any committee which meets the following criteria: (a) It has a membership of at least 100 individuals. (b) All the contributions it receives from any person in a calendar year total fifty dollars (350) or less. (c) It has been in existence at least six months. (d) It is not a candidate -controlled committee. }dcd aap- December 17, 1996 Page 2 Section 35306 prohibits a candidate from making a contribution to any other candidate. However, a candidate may make a contribution of his or her personal funds to his or her own candidacy or to the candidacy of any other candidate for office. Section 85307 provides that a candidate may not personally make a Lean of more than S20,000 to his or her campaign or campaign committee, but may make unlimited contributions to his or her own campaign. Section 85311 provides that a contribution made by a business entry, labor organization, association, political party or other group of persons shall be considered to be made by a single person. Section 85313 permits an elected officer to establish an "officeholder expo 'is., fund" for expenses relating. to assisting, serving or communicating with constirueats, or with carrying out the official duties of the elected officer, provided aggregate contributions to such a fund do not exceed 310,000 within any calendar year and that the expenditures are not made in connection with any campaign for elective office or ba ct measure. Section 85313 prohibits a person from malting contributions totaling mcre than 5250 during a calendar year. Contributions to an officeholder account are not considered campaign cent butions. Contributions from a lobbyist are prohibited if the Lobbyist is authorized to engage in lobbying the governmental agency of the oilicehc:der. Section 85313 requires that all expenditures from and contributions to the officeholder account are subject to Campaign disclosure and reporting requirements of the Act. Lastly, all funds remaining in an ofnnce:icIder account when the officer leaves office are to be turned over to the state General Fund. 1'LvflNG OF CONTRIBUTIONS Section 85305 provides that in jurisdictions of fewer than 1,000,000 residents, candidates may not accept contributions more than six months prior to an election_ The time limit for accepting contributions is 12 months in jurisdictions of 1,000,CC0 or more residents. Further, Section 85305 provides that no candidate shall accept contributions more than 90 days after the election. Contributions accepted up to 90 days after t:e election shall be used only to pay outstanding bills or debts owed by the candida:e or the candidate's controlled committee. Exceptions are provided for retiring debts incur ed with respect to an election held prior to January 1, 1997 if certain criteria are met, and for payment of attorney's fees arising out of alleged election law violations, for payment of fines or assessments for violations of the Act, for payment of expenses for recounts or election contests, for costs of external audits and for tax liabilities. Under Sec ion 89519, any campaign funds remaining in excess of expenses incurred for the campaign are considered surplus funds, and may be deposited in the amount of up to 310,000 in the officeholder December 17, 1996 Page 3 account, with any remaining surplus distributed to any political party, returned to contributors, or turned over to the state General Fund. VOLUNTARY EXPENDITURE CEILLNGS Section 85400 provides that a municipality may establish voluntary expenditure ceilings for candidates at S1.00 or less per resident. Section 85401 provides that each candidate shall file a statement of acceptance or rejection of the voluntary expenditure ceiling before accepting any contributions. If the candidate accepts the expenditure ceiling, the candidate is subject to a contribution limitation of S250 in a jurisdiction with fewer than 100,000 residents, and S500 in a jurisdiction of 100,000 or more residents. If a candidate declines to accept the expenditure ceiling-, his or her contributions are subject to the limitation of Section 85301. Section 85404 provides that if a candidate declines to accept volunmr expenditure ceilings and receives contributions, has cash on hand, or makes qualified expenditures equal to 75 percent or more of the recommended expenditure ceiling for that office, the voluntary expenditure ceiling shall then be three times the amount of the established expenditure ceiling. Similar provisions apply to expenditures by political party committees and by independent expenditure committees. INDEPENDENT EXPENDITURES Section 85500 provides that any committee that makes independent expenditures of more than S1,000 in support of or in opposition to any candidate shall notify the filing officer and all candidates running for the same seat by facsimile transmission or overnight delivery each time this threshold is met. Any committee that makes independent expenditures of 31,000 or more supporting or approving a candidate shad not accept any contribution in excess of S250 per election. Any contributor that makes a contribution of $100 or more per election to a candidate for elective office shall be considered to be acting in concert with that candidate and shall not make independent expenditures and contributions which in combination exceed the amounts set forth in Section 85301 in support of that candidate or in opposition to that candidate's opponent or opponents. ADDITIONAL CONTRIBUTION REOLTREIEtiTS Section 85700 prohibits a contribution of 5100 or more into a campaign chec'.dng account unless the name, address, occupation and employer of the contributor is an file in the records of the recipient of the contribution. December 17, 1996 Page 4 Section 85701 provides that any person who accepts a contribution which is not from the person listed on the check or subsequent campaign disclosure statement shall be liable to pay the state the entire amount of the laundered contribution. Section 85702 provides that with certain exceptions, contributions made directly or indirectly to or on behalf of a particular candidate through an intermediary or conduit shall be treated as contributions from the contributor and the intermediary or conduit to the candidate for purposes of the limitation of Section 85700. Section 85703 provides that no person shall make and no person, other than a candidate or the candidate's controlled committee, shall accept any contribution on the condition or with the agreement that it will be contributed to any particular candidate. The expenditure of funds received by a person shall be made at the sole discretion of the recipient person. Section 85704 provides that no elected officeholder, candidate, or the candidate's controlled committee may solicit or accept a campaign contribution or contribution to an of .ceholder account from, through, or arranged by a registered stare or local lobbyist if that lobbyist finances, engages, or is authorized to engageinlobbying the governmental ental agency for which the candidate is seeking electionagency �e or t`i., governmental a� _icy of t:,, officeholder. Section 8570E provides that the governing body of a local jurisdiction may impose lower contribution limitations, and more stringent disclosures or prohibitions, than those set forth in the Act. A local jurisdiction may establish higher contribution or expenditure limitations, but only by a vote of the people. DISCLOSURE Section 84201 establishes a threshold of S 100 for contributions and expenditures required to be reported in campaign statements. Under Section 35305.5, a slate mailer organization or committee formed to support a ballot measure must include the name, street address, and ciry of the slate mailer organization or committee on the outside of each piece of slate mail and on every insert within each piece of slate mail. ADVERTISEN EN"TS Section 84501 defines "advertisement" as any general or public advertisement which is authorized and paid for by a person or committee for the purpose of supporting, or December 17, 1996 Page 5 opposing a candidate for elective office or a ballot measure(s). "Advertisement" does not include a communication from an organization other than a political party to its members, a campaign button smaller than 10 inches in diameter, a bumper sticker smaller than 60 square inches, or other advertisement as determined by regulations of the FPPC. Section 84503 requires any advertisement for or against any ballot measure to include a disclosure statement identifying any person whose cumulative contributions are 350,000 or more. ENFORCEMENT Section 83116 increases the maximum penalty for violation of the Political Reform Act from 32500 to 35000. Under Section 83116.5, criminal as well as civil penalties maybe pursued against those who purposely or negligendy cause violations by another. CONCLUSION Undoubtedly, many of the provisions of Proposition 208 will be interpreted and clarified by the courts and through the adoption of administrative regulations by the FPPC. In the short term, should any questions arise as to the application of these provisions to specific situations, I am avRi fable for discussion. GEORGE h. EISER. II_ City Attorney GHE!sbc cc: City Manager