Campaign Contribution and Spending Limits. Federal law limits the amount of money individuals and groups can contribute to a candidate and to the candidate's campaign committee for federal elective office. State law generally does not impose similar limits on state and local campaigns. However, some local governments in California have established such limits for local elective offices.
In addition, current state law contains no limits on the amounts of personal loans or personal funds candidates can use for their own elections. Also, there are no aggregate limits on what individuals and groups can contribute to all candidates for state and local elective offices. Furthermore, there are no prohibitions on lobbyists making, transmitting, or arranging campaign contributions. Finally, there are no limits on the amounts of money candidates or their campaign committees, or other groups in support of the candidate, can spend in any election.
Reporting Requirements. Both state and federal law require candidates for elective office to report contributions they receive and spend for their campaigns. In addition, state law requires that lobbyists register with the Secretary of State's office.
Lobbying Expenses. Under current state law, organizations and businesses may deduct from their income taxes expenses for lobbying public agencies.
Restrictions on Gifts, Honoraria, and Travel. Current state law contains restrictions on the amounts of gifts, honoraria (payments for speeches, articles, or attendance at meetings or gatherings), and travel payments that may be accepted by public officials.
Court Review. The specific provisions of this measure have not been reviewed by either state or federal courts. In California and other states, a number of provisions similar to those contained in this measure have been challenged in court and have been invalidated.
This measure makes a number of changes to current state law regarding campaign contributions and spending. Specifically, the measure:
Limits on Campaign Contributions
Limits on Contributions to a Single Candidate. The measure establishes limits on the amount of political campaign contributions that an individual, committee, and political party may make to a candidate for statewide office (such as the Governor), the state Legislature, and local elective office. Businesses, labor organizations, and nonprofit corporations would be prohibited from making contributions. This measure prohibits the transfer of campaign funds from one candidate to another. This measure does not set limits for any candidates for federal office. Figure 1 summarizes these limits.
Out-of-District Contribution Limits. The measure provides that at least 75 percent of a candidate's campaign contributions must come from individuals of voting age residing within the jurisdiction of the office sought by the candidate.
Limits on Contributions to All Candidates. The measure restricts the total amount an individual can contribute to all candidates. An individual is limited to making contributions totaling no more than $2,000 per year to all candidates, committees, and political parties. Of this amount, no more than $1,000 may be contributed to committees other than to political parties. Entities other than individuals are limited to contributions totaling no more than $10,000 per year to all state and local candidates, committees, and political parties. These limitations on contributions do not apply to Citizen Contribution Committees.
Other Limits. The measure limits the total amount of loans a candidate may make to his or her campaign. These limits are $25,000 for candidates for Governor and $10,000 for all other candidates. Officeholders and candidates are prohibited from soliciting or receiving contributions from, or arranged by, lobbyists.
Businesses, labor organizations, and nonprofit corporations are prohibited from making contributions, but they may:
Mandatory and Voluntary Spending Limits
The measure establishes mandatory campaign spending limits. In the past, the U.S. Supreme Court has ruled that mandatory spending limits in election campaigns violate the U.S. Constitution. The measure provides that if the mandatory limits are invalidated by the courts, the spending limits will become voluntary. The measure establishes spending limits in local government elections of 40 cents per resident for each office. The spending limits for individual candidates for state offices are shown in Figure 2.
Access to Ballot Pamphlets. If the voluntary limits go into effect, the measure requires that candidates who accept the spending limits be so identified in ballot pamphlets and on the ballot. These candidates also would be entitled to place a statement free-of-charge in the applicable state or local ballot pamphlet. Candidates who do not accept the spending limits would be so identified on the ballot. In addition, these candidates may also place a statement in the ballot pamphlet, but would have to pay the costs of printing, handling, and mailing the statement.
Restrictions on When Contributions May Be Accepted
This measure places restrictions on when campaign contributions may be accepted. For any elective office, no candidate may accept contributions more than nine months before any primary election. Fund-raising for all candidates must end on the date of the election and no contributions may be accepted more than 30 days after the election.
Elimination of Restrictions on Candidate Honoraria, Gifts, and Travel. This measure repeals current law that prohibits elected officials from receiving honoraria and limits their receipt of gifts. Currently, elected officials cannot accept gifts valued at more than $280 from any single source. The measure also eliminates the restrictions on when elected officials can accept reimbursement for travel.
Elimination of Tax Deductions for Lobbying and Increases in Lobbyist Registration Fees. The measure eliminates all state income tax deductions for lobbying. The measure also increases the fee charged to register as a lobbyist with the Secretary of State. Any additional state revenues resulting from the elimination of this tax deduction and the increase in registration fees would be used to offset the costs of implementing and enforcing the measure.
Penalties and Enforcement. This measure increases penalties for violations of campaign law. In addition, any person who has violated campaign laws three times would be subject to removal from office and subject to a permanent ban from (1) holding any state or local office in the future or (2) registering as a lobbyist. Enforcement of the measure's provisions can either be through governmental agencies, such as the Fair Political Practices Commission (FPPC), or registered voters, who would be allowed to sue those candidates who violate any provisions of the measure.
Disclosure of Major Donors. Any campaign advertisement for a candidate or ballot measure must disclose the names of the donors making contributions above specified levels.
Relationship to Other Measures
This measure provides that if both this measure and another measure or measures relating to campaign finance reform on this ballot are approved by the voters, the measures will be considered to be in conflict. If this measure is approved with the most votes, then this measure will take effect in its entirety and none of the provisions of the other measure or measures will take effect. If the other measure or measures are approved with the most votes, the provisions of this measure that are not in conflict will take effect.
This measure would result in additional costs and revenues to the state and local governments.
Costs. The measure would result in additional costs to the state and local governments for implementation and enforcement of its provisions. Based on information provided by the FPPC and the Secretary of State, we estimate that the costs would be up to $4 million annually. To offset the FPPC's enforcement costs, the measure includes an annual General Fund appropriation, based on a formula, which in 1996-97 would be approximately $570,000. The measure provides that the annual appropriation be adjusted in future years for inflation.
In addition, the measure would result in additional state and local election costs to provide additional information on candidates in voter pamphlets. These costs are unknown, but are probably not significant.
Revenues. Elimination of tax deductions for lobbying expenses would result in additional tax revenues to the state of about $6 million annually.