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HomeMy WebLinkAbout8.3 MuniCode Campaign Cont/~~~ ~~ ~ ~~ C~ /,/, /~. CITY CLERK File # Q~^~^-^2. AGENDA STATEMENT CITY COUNCIL MEETING DATE: October 6, 2009 SUBJECT: Report on Impact of State Law on Potential Scope of Amendments to Dublin Municipal Code Chapter 2.28 Relating to Campaign Contributions Report Prepared by: John D. Bakker, City Attorney ATTACHMENTS: 1. Dublin Municipal Code Chapter 2.28 (Campaign Contributions) RECOMMENDATION: 1) Receive Staff Presentation; and 2) Provide direction on desired amendment(s) to Dublin ~~ Municipal Code Chapter 2.28 Relating to Campaign Contributions FINANCIAL STATEMENT: None. DESCRIPTION: At its April 21, 2009 meeting, in conjunction with its review of the status of the comprehensive update of the Dublin Municipal Code (DMC or Code), the City Council specifically directed the City Attorney's Office to ensure that DMC Chapter 2.28 (Campaign Contributions) is updated before the end of this calendar year. In response to this directive, the City Attorney has prepared this staff report analyzing whether and to what extent that Chapter should be revised to ensure consistency with state law, and describing the scope of permissible amendments to the Chapter. Provisions of Current Ordinance Chapter 2.28 (Attachment 1) was last amended in 1997 by Ordinance 11-97. The first section of the Chapter states that the City Council "finds that it is in the public interest to place realistic and enforceable limits on the amounts which maybe contributed to political campaigns in municipal elections." The core provision of the chapter provides that no person may make, and no candidate or committee may accept a contribution or multiple contributions totaling more than $300 from any one person with respect to a single election. This limit does not apply to contributions made by a candidate to his or her own campaign. COPY TO: Page 1 of 4 ITEM NO. A "single election" is defined to mean either: the election designated by the contributor in writing or, where the contributor makes no such written designation, the subsequent election for the office in question after the contribution is made. A "designated" contribution may be made after the election and prior to June 30th following the election, so long as the contribution does not exceed the net outstanding debts owed by the campaign for that election. To ensure compliance with the Chapter, candidates must execute a declaration stating that he or she did not receive more than $300 in contributions from any one person with respect to that election. This declaration must be filed with the City Clerk with all election statements required to be filed pursuant to state law. Violators of the Chapter are guilty of a misdemeanor. Law Relating to Restriction of Campaign Contributions Cities are not required, under current state law, to have campaign contribution limit ordinances, and there is currently no state law limiting contributions in local elections. For a period of time, state law, through the provisions of Proposition 208, did limit contributions in local elections. However, in a federal district court challenge of Proposition 208, the court concluded that the contribution limits it imposed were not narrowly drawn to achieve a legitimate governmental purpose and were thus unconstitutional.. The court then enjoined enforcement of the entire initiative. [California Prolife Council Political Action Committee v. Scully (1998) 989 F.Supp. 1282.] The voters subsequently adopted Proposition 34, which is in effect at this time and, unlike Proposition 208, does not establish contribution limits for local elections but rather addresses limits for state elections only. Case law interpreting the First Amendment to the United States Constitution imposes stricter limits on governments' ability to regulate expenditures than it does on campaign contributions. In a case involving federal legislation regulating campaign expenditures, the Supreme Court concluded that a limitation upon the amount that any one person or group may contribute to a candidate or political committee entails only a marginal restriction on the contributor's ability to engage in free association, while expenditure limitations represent substantial restraints on the quantity and diversity of political speech. [Buckley v. Valeo (1976) 424 U.S. 1.] In the Court's view, a contribution serves as a general expression of support for the candidate and his or her views. However, a contribution does not communicate the underlying basis for that support. Thus, the Court concluded that a limitation on the amount of money a person may give to a candidate or campaign organization implicates a very low level of restraint on his or her political communication because it allows a symbolic expression of support, as evidenced by a contribution, but does not infringe on the contributor's freedom to discuss candidates and issues. By contrast, the Court concluded that restrictions on candidate expenditures represent substantial restraints on the quantity and diversity of political speech due to the costs of communicating ideas in public media. The Court stated that the purpose of the Federal Election Campaign Act, to limit the actuality and appearance of corruption resulting from large individual financial contributions, was a sufficient justification for the intrusion on freedom of political association, but that the same purpose was insufficient to justify the expenditure limitations contained in the Act. Id., at pp. 28-29, 45. Thus, while campaign contribution limits are frequently justifiable as a means of limiting the appearance of corruption arising from contributions, courts will scrutinize limitations on campaign expenditures much more closely. Nevertheless, limits on contributions must be drafted with some care. One of the key bases the Scully court relied on in concluding that the Proposition 208 contribution limits were too low was that the limits changed depending on whether a candidate agreed to abide by voluntary expenditure limits. The court ~a~e a o f ~{ concluded that this meant that the lower limits were not narrowly drawn. Additionally, it seems clear from the Supreme Court's opinion in Buckley v. Yaleo that there is a point at which a campaign contribution limit becomes so low that its impact on contributors' right to free association is too harsh to be justified under the objective of limiting the actuality or appearance of corruption. Suggested Amendment As far as ensuring compliance with statutory and constitutional law, Staff believes that there is only one amendment that should be made to Chapter 2.28. Section 2.28.030 states simply that no "person" may make a contribution that exceeds $300. In the past some candidates have transferred funds from one campaign committee fund controlled by a candidate to another campaign fund controlled by the same candidate. (For example, a transfer from a campaign for a council seat in one election year to a campaign fund for council seat or mayoral seat in a different election year.) Campaign fund transfers have been characterized as being more like "expenditures" than "contributions." [Services Employees International, AFL-CIO v. Fair Political Practices Commission (1992) 955 F.2d 1312, 1322.] Although it is arguable that the ordinance, as written, may preclude such transfers, you have previously been advised by the City Attorney's Office-to ensure the ordinance's constitutionality-that such transfers are permissible because they are more akin to "expenditures" than "contributions." State law allows such transfers with respect to campaign funds for state offices. Thus, Staff recommends that the City Council modify Section 2.28.030 to make it clear that inter- campaign fund transfers are permitted, but Staff requires additional policy direction on how the modification should be accomplished. In reviewing this issue, Staff has identified two (2) options for City Council consideration. Option One would be simply to revise the Section so that these transfers are permitted. This approach would mean that any contributions previously made to the candidate, which were deposited into the initial campaign fund, would not be treated as contributions to the subsequent campaign. Thus, a contributor could contribute $300 to the first campaign, and if those moneys are "left over" at the termination of the first campaign, the candidate could transfer the funds to a campaign fund for a second campaign. Although the transferred funds are hypothetically attributable to that contributor, he or she could then contribute an additional $300 to the second campaign. Option Two would be to use the approach taken in the Government Code provisions relating to campaigns for state office. Government Code Section 85306 permits such transfers, but it imposes certain accounting rules on them. It provides that: [a] candidate may transfer campaign funds from one controlled committee to a controlled committee for elective state office of the same candidate. Contributions transferred shall be attributed to specific contributors using a "last in, first out" or "first in, first out" accounting method, and these attributed contributions when aggregated with all other contributions from the same contributor may not exceed the [statutory limits on contributions to campaigns for statewide office]. Both accounting approaches would require candidates to utilize the records required to be kept pursuant to state campaign disclosure laws (Govt. Code §§ 84100 et seq.) to track the timing and amounts of contributions from individual contributors. Assume for the following examples that a candidate has $450 dollars left over in his or her campaign account at the end of a campaign, and he or she wishes to transfer that amount to another campaign fund for a subsequent election. Under the "last in, first out" approach, that $450 is attributed to the first donors. That is, if Contributors A and B were the first and second contributors to the campaign respectively, and each one contributed $300, then Contributor A could not contribute to the subsequent campaign, and Contributor B could contribute only $150. Under the "first in, first out," that $450 is attributed to the last donors. If Contributors A and B were the second-to-last, and ~~~=~ ~ ~ last contributors respectively, then Contributor A could contribute $150 to the subsequent campaign, and Contributor B could not contribute anything. The second option does not impact the ability of committees to transfer money (i.e. their expenditures), but it retains a limit on campaign contributions, consistent with state and federal constitutional protections of free speech and free association. These two options are not necessarily the only alternatives available to the City Council, rather, they are examples of two possible approaches to handling inter-campaign fund transfers. The City Council could, if it wished, choose to address this issue in some other way, provided that the end result is that the Chapter allows inter-campaign fund transfers. Possible Amendments -- Options In addition to the suggested amendment, the City Council could also consider: 1) Elimination of the restriction on campaign contributions. 2) Amending Chapter 2.28 to reduce or raise the $300 limit. Whatever the limit on campaign contributions it should be consistent across the board, and not create situations where, as was the case with Proposition 208, the limit varied depending on the actions of the candidate. If directed, Staff could research campaign contribution limits for other Bay Area communities and provide that information to assist in the City Council's consideration of this matter. Additionally, if the City Council wishes to lower the contribution limit, there may be a point at which a contribution limit is so low that it would constitute an unjustified infringement on contributors' freedom of political association. Conclusion Staff has concluded that there is only one substantive amendment required to be made to Chapter 2.28 to ensure compliance with law. However, there are changes that the City Council could make if it wished to do so. Staff requests that the City Council provide direction as to what changes, if any, should be made to Chapter 2.28. RECOMMENDATION: Staff recommends that the City Council: 1) receive Staff presentation; and 2) provide direction on amendment(s) to Chapter 2.28 relating to Campaign Contributions. 1236216.11 ~~ ~~ ~ ~~ ~ Chapter 2.28 CAMPAIGN CONTRIBUTIONS Page 1 of 2 Chapter 2.28 CAMPAIGN CONTRIBUTIONS Sections: 2.28.010 Findings and purpose. 2.28.020 Definitions. 2.28.030 Limitations on contributions. 2.28.040 Declaration re: compliance. 2.28.060 Violation-Penalty. 2.28.010 Findings and purpose. Pursuant to the authority granted to the City Council in Government Code Section 81013 permitting the imposition of additional local requirements to the Political Reform Act of 1974, the City Council finds that it is in the public interest to place realistic and enforceable limits on the amounts which may be contributed to political campaigns in municipal elections. (Ord. 3- 98 § 1: Ord. 11-97 § 1 (part)) 2.28.020 Definitions. For the purpose of this chapter, definitions codified in the Political Reform Act, beginning at Government Code Section 82000, et seq., shall apply with the addition of the following: "Election" means any municipal election, whether general or special, at which the offices of Councilmember and/or Mayor are to be filled. "With respect to a single election" means: 1. In the case of a contribution designated in writing by the contributor for a particular election, the election so designated, provided that a contribution designated in writing for a particular election may be made after the election and prior to June 30th following the election only to the extent such contribution does not exceed net debts outstanding from the election. 2. In the case of a contribution not designated in writing by the contributor for a particular election, the next election for the office after the contribution is made. (Ord. 3-98 § 2: Ord. 11- 97 § 1 (part)) 2.28.030 Limitations on contributions. A. No person shall make any contribution or contributions to a candidate or committee which exceeds the cumulative amount of three hundred dollars ($300), nor shall any such contribution or contributions which exceed the cumulative amount of three hundred dollars ($300) be accepted by any candidate or committee from any person with respect to a single election. B. The prohibitions stated in subsection A of this section shall not apply to contributions made or received in support of, or in opposition to, a ballot measure, nor shall said prohibitions apply to contributions made by a candidate to his or her campaign. (Ord. 3-98 § 3; Ord. 11-97 § 1 (part)) 2.28.040 Declaration re: compliance. A. To ensure full compliance with this chapter, each candidate shall execute a declaration under penalty of perjury on a form provided by the City Clerk stating that such candidate did not receive any contribution or contributions totaling more than three hundred dollars ($300) from any person with respect to an election. B. The declaration required by subsection A of this section shall be filed with the City Clerk with each pre-election statement filed pursuant to state law and with the semi-annual statements required to be filed pursuant to state law. (Ord. 3-98 § 4; Ord. 11-97 § 1 (part)) 2.28.060 Violation-Penalty. A. Violation of any provision of this chapter is a misdemeanor punishable by a fine not to ATTACHMENT 1 http://www.codepublishing.com/CA/Dublin/Dublin02/Dublin0228.htm1 ~ftfl ~ , ~j ~Q ~ ~ ~ ~``~( Chapter 2.28 CAMPAIGN CONTRIBUTIONS Page 2 of 2 ~' c:~ exceed five hundred dollars ($500) or imprisonment for a term not exceeding six (6) months, or by both such fine and imprisonment. B. Whether or not a violation is inadvertent, negligent, or deliberate in the presence or absence of good faith, shall be considered in applying the penalties of this chapter. (Ord. 11- 97 § 1 (part)) This page of the Dublin Municipal Code is current through Ordinance 12- Code Publishing Company 09, passed 7uly 21, 2009. Disclaimer: The City Clerk's Office has the official version of the Dublin Municipal Code. Users should contact the City Clerk's Office for ordinances passed subsequent to the ordinance cited above. City Website: http://www.ci.dublin.ca.us/ Telephone number: (925) 833-8741 http://www.codepublishing.com/CA/Dublin/Dublin02/Dublin0228.html 9/28/2009