Agenda Item No. 8
CITY OF YUCAIPA
AGENDA REPORT
TO: Honorable Mayor and City Council
FROM: Ana V. Sauseda, Director of General Services/City Clerk ,c X1 FOR: City Council Meeting of January 22, 2024
SUBJECT: Introduction and First Reading of Ordinance No. 440, Related to Campaign Contributions
RECOMMENDATION:
That the City Council approve the Introduction and First Reading of Ordinance No. 440, an Ordinance of the City Council of the City of Yucaipa, California, Amending the Yucaipa Municipal Code to add Section 1.08.070 Related to Campaign Contribution Limits.
DISCUSSION:
In California, the Political Reform Act (Act) governs the reporting of campaign contributions and expenditures at the state and local level. Historically, the Act has only set campaign contribution limits for state level offices such as Senator, Assemblymember, Governor, Lieutenant Governor, etc. There was no state requirement for cities or counties to have limits in place. Thus, most cities and counties throughout the state had no limits. Some cities and counties at their discretion opted to impose limits on themselves. Yucaipa, along with the vast majority of other cities in California, did not have limits.
In 2019, the State legislature adopted AB 571. Pursuant to AB 571, commencing January 1, 2021, if a city or county had not already enacted a contribution limit on such candidates, the limits would automatically default to the state's campaign contribution limits. The bill further authorized a city to impose limitations that are different from those of the state.
Prior to the law going into effect, many cities throughout the state proactively passed ordinances establishing their own limits and thus avoiding defaulting to the state limits. By not adopting an ordinance, the City of Yucaipa has been subject to the contribution limits of AB 571 for the last few years. In addition to the contribution limits, the City has also been affected by several other provisions of AB 571 which now also apply to cities and counties.
As the City of Yucaipa has historically not had campaign contribution limits, and after several months of correspondence seeking guidance and clarification from the Fair Political Practices Commision (FPPC), staff is recommending that the City Council adopt an ordinance setting the limit to "no limit." It's rare that cities have the option to essentially opt out of a state imposed law or regulation, but this happens to be one of those opportunities.
FISCAL IMPACT:
There would be no direct fiscal impact to the City in making a decision with regard to establishment of limits on local campaign contributions in City elections. The cost of enforcing the limits would depend on the rigorousness of the enforcement program.
Attachments:
1. Ordinance No. 440
2. AB 571 Fact Sheet
Approved By:���� —
ATTACHMENT 1
ORDINANCE NO.440
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF YUCAIPA,
CALIFORNIA, AMENDING THE YUCAIPA MUNICIPAL CODE TO ADD
SECTION 1.08.070 RELATED TO CAMPAIGN CONTRIBUTION LIMITS WHEREAS, the Political Reform Act of 1974 (the "Act"), codified at Government Code Section 81000, et seq., was amended by the voters in 1988 to impose contribution limitations for statewide offices, and authorized local jurisdictions to enact contribution limits or other prohibitions; and WHEREAS, in 2019, the State Legislature amended the Act to impose contribution limits on local elective offices in jurisdictions that have not enacted their own contribution limits with the passage of Assembly Bill ("AB") 571; and
WHEREAS, AB 571 imposes default campaign contribution limits upon cities beginning in January 1, 2021; and
WHEREAS, the City of Yucaipa currently does not have campaign contribution limits; and WHEREAS, Government Code Section 85702.5(a) authorizes a City to set any local campaign contribution limit by ordinance; and
WHEREAS, it is the intent of the City Council that this Ordinance impose no limit on campaign contributions.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YUCAIPA, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS:
Section 1. The above recitals are true and correct and incorporated herein.
Section 2. That Chapter 1.08 Elections shall be amended to add Section 1.08.070 as follows:
Section 1.08.070 CAMPAIGN CONTRIBUTION LIMITS
(a) The terms used in this Ordinance shall have the same definitions as specified in the Political Reform Act of 1974 (the "Act"), as amended from time to time, and Regulations of the Fair Political Practices Commission (the "FPPC Regulations"), as amended from time to time. (b) Campaign Contribution Limits. The City Council of the City of Yucaipa hereby imposes no limit on the campaign contributions that a City Council candidate can receive per election.
(c) Campaign Fund Transfers. Candidates may transfer non -surplus campaign funds from one controlled committee to another committee controlled by the same candidate for the same or a different local elective office in the City of Yucaipa and may carry over non -surplus campaign funds raised in connection with one municipal election to pay for campaign expenditures incurred
in connection with a subsequent municipal election without attributing, or being subject to the campaign contribution limit, or using the "last in, first out" or "first in, first out" accounting method. Candidates for local elective office in the City of Yucaipa do not need to establish a separate campaign bank account for redesignated committees for the same or a different City of Yucaipa local elective office. In all other aspects, the Act and FPPC Regulations related to campaign fund transfers shall apply.
Section 3. Severability. If any sections, subsections, subdivisions, paragraph, sentence, clause or phrase of this Ordinance or any part hereof or exhibit hereto is for any reason held to be invalid, such invalidity shall not affect the validity of the remaining portions of this Ordinance or any part thereof or exhibit thereto. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase hereof, irrespective of the fact that anyone or more sections, subsections, subdivisions, paragraph, sentences, clauses or phrases be declared invalid.
Section 4. Publication. The City Clerk shall cause this Ordinance to be published or posted in accordance with California law.
Section 5. Effective Date. This Ordinance shall take effect thirty days after its adoption.
PASSED, APPROVED and ADOPTED this day of , 2024.
ATTEST:
Ana V. Sauseda, CMC
Director of General Services/City Clerk
Justin Beaver, Mayor
APPROVED AS TO FORM
Steven Graham, City Attorney
ATTACHMENT 2
Fair Political Practices Commission
Contribution Limits: City and County Candidates,
Introduction
Pursuant to Assembly Bill 571 (Stats. 2019, Ch. 556, AB 571 Mullin), beginning January 1, 2021 a state campaign contribution limit will by default apply to city and county candidates when the city or county has not already enacted a contribution limit on such candidates. Along with the new campaign contribution limit, there are also other related provisions that formerly applied only to state level candidates that will now apply to city and county candidates. Please note that none of the provisions of AB 571 discussed in this fact sheet apply to candidates in cities or counties for which the city or county has enacted campaign contribution limits.
Current State Contribution Limit
The contribution limit that will now apply to city and county candidates pursuant to AB 571 is updated biennially for inflation. Contribution limits can be found in Regulation 18545(a)2 and on the FPPC website's FPPC Regulations page. The default limit for contributions to city and county candidates subject to AB 571 for 2023-2024 is set at $5,500 per election.
Other Provisions Affecting City and County Candidates
Several other provisions will now apply to city and county candidates in jurisdictions that have not enacted campaign contribution limits, including the following:
A candidate may not make a contribution over the AB 571 limit to another candidate in jurisdictions subject to the AB 571 limit with limited exceptions related to recall elections, legal defense funds and candidate - controlled ballot measure committees. (See Regulation 18535 for more information.)
A candidate that has qualified as a committee must establish a separate controlled committee and campaign bank account for each specific office. Candidates may not redesignate a committee for one election for another election.
Candidates may transfer non -surplus campaign funds from one candidate - controlled committee to another committee controlled by the same candidate for a different office if the committee receiving the transfer is for an elective state, county or city office. However, contributions transferred must be attributed and transferred using the "last in, first out" or "first in, first out" accounting method and www.fppc.ca.gov
FPPC advice: advice(�fppc.ca.gov 1.866.275.3772
FPPC Ed. Pro. 086-11-2023 Page 1 of 7
shall not exceed the applicable contribution limit per contributor. If a candidate is seeking to transfer campaign funds from one controlled committee to another for the same office a candidate may carry over non -surplus campaign funds raised in connection with one election to pay for campaign expenditures incurred in connection with a subsequent election for the same office without attributing or using the "last in, first out" or "first in, first out" accounting method. (See Regulation 18536 for more information on the transfer and attribution of contributions and See Regulation 18537.1 for more information on carryover of contributions.)'
• Candidates may not personally loan to a candidate's campaign an amount for which the outstanding balance exceeds $100,000. "Campaign" includes both the primary and general, or special and special runoff, elections. However, a candidate may loan each committee for a different office or term of office up to $100,000. A candidate may not charge interest on any such loan the candidate made to the candidate's campaign. (See Regulation 18530.8 for more information.)
• Candidates may establish a committee to oppose the qualification of a recall measure and the recall election when the candidate receives a notice of intent to recall. Campaign funds raised to oppose the qualification of a recall measure and/or the recall election would not be subject to any campaign contribution limit under the Act. (See Regulation 18531.5 for more information.) • A candidate for local office may open a candidate -controlled general purpose ballot measure committee to oppose or support a measure being voted on. The committee must identify on its campaign statements and reports each measure for which an expenditure of $100 or more is made. (See Regulations 18421.8 and 18521.5 for more information.)
• Contributions after the date of the election may be accepted to the extent contributions do not exceed net debts outstanding from the election, and contributions do not otherwise exceed applicable contribution limits for that election. (See Regulation 18531.64 for more information.) This fact sheet is informational only and contains only highlights of selected provisions of the law. It does not carry the weight of the law. For further information, consult the Political Reform Act and its corresponding regulations, advice letters, and opinions. 2 The Political Reform Act is contained in Government Code Sections 81000 through 91014. All statutory references are to the Government Code, unless otherwise indicated. The regulations of the Fair Political Practices Commission are contained in Sections 18110 through 18997 of Title 2 of the California Code of Regulations. All regulatory references are to Title 2, Division 6 of the California Code of Regulations, unless otherwise indicated.'
www.fppc.ca.gov
FPPC advice: advice(c)-fppc.ca.gov 1.866.275.3772
FPPC Ed. Pro. 086-11-2023 Page 2 of 7
Candidates are permitted to raise contributions for a general election before the primary election and may establish separate campaign contribution accounts for the primary and general so long as candidates set aside contributions and use them for the general or special general election as raised. If the candidate is defeated in the primary election or otherwise withdraws from the general election, the general election funds must be refunded to contributors on a pro rata basis less any expenses associated with the raising and administration of the general election contributions. (See Regulation 18531.2 for more information.) Candidates that are currently in office that are running for reelection to the same seat in an election after January 1, 2021 may carry over campaign funds without attribution as mentioned above. Candidates running for a different office also do not need to do LIFO FIFO or attribution for the election immediately subsequent to the election prior to 2021 for which the money was raised. • Candidates must disclose cumulative totals of contributions received or made for each election on campaign statements. (See Regulation 18421.4 for more information.)
FAQs
A. If a city or county does not currently have contribution limits set within their ordinance would the state contribution limit be the default? Yes. The state contribution limit stated above would be the default contribution limit if the city or county ordinance is silent on whether there are contribution limits within that jurisdiction or if there is no city or county ordinance in place.
B. Is there a way for a city or county to adopt "no" contribution limits for city or county elective city and county offices?
Yes. A city or county may elect to have "no" contribution limits. To do so, it must explicitly state in the city or county ordinance that there are no limits on contributions. If it is explicit that the city or county has implemented "no" contribution limits, the state contribution limit will not apply as a default for that jurisdiction.
C. Can a city or county ordinance be less restrictive than the AB 571 limit (e.g., the city or county limit is set higher than the state limit)? Yes. A city or county can set contribution limits higher than the default state limit. www.fppc.ca.gov
FPPC advice: advice(c)-fppc.ca.gov 1.866.275.3772
FPPC Ed. Pro. 086-11-2023 Page 3 of 7
D. If a city or county imposes contribution limits, is the Commission responsible for enforcing those limits?
No. The Commission will not regulate the administration or enforcement of the penalties. Cities or counties with existing limits or that adopt their own limits are not subject to the state limit and may impose their own penalties for violations.
E. If a city or county has voluntary contribution limits, but no mandatory contribution limits will the state limit be applicable? Yes. A city or county must enact mandatory contribution limits to avoid the state limit applying to elective city and county offices.
F. Does the default contribution limit also include judicial candidates? No. Elective city and county offices do not include judicial offices.
G. If a city or county has imposed contribution limits for particular city or county offices (e.g., Board of Supervisors), do those limits also apply to other positions such as the District Attorney or would the default state limit apply if a particular position is not specifically addressed by the city or county? The default state limit would apply to other positions for which the city or county has not set contribution limits. A city or county ordinance must explicitly state the city or county contribution limits and for which elective offices those limits will apply. A city or county may adopt a general provision implementing a contribution limit for all elective city and county offices in that jurisdiction. As noted above, a city or county may also adopt an ordinance that states the city or county is adopting no contribution limits for any offices to avoid the default state limit applying.
H. Does AB 571 apply to special district or school district elections? No. AB 571 applies only to city and county elections for offices that a city or county has not implemented its own contribution limit.
I. Does AB 571 apply to the office of County Superintendent of Schools or the office of County Board of Education?
AB 571 does apply to the office of County Superintendent of Schools because it is considered a "county" office. However, the office of County Board of Education is not subject to AB 571 because it's not considered a "county" position.
J. Can candidates that are subject to the AB 571 contribution limit open an officeholder committee?
No. Officeholder committees are not permitted for candidates subject to the AB www.fppc.ca.gov
FPPC advice: advice(�fppc.ca.gov 1.866.275.3772
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571 contribution limit. However, a candidate may use a committee for the officeholder's future election for officeholder expenses. A candidate may also use existing funds in the election committee for current office for officeholder expenses.
K. Does the AB 571 contribution limit apply to debt retirement for the 2020 election?
No. For purposes of retiring debt, the contribution limit is the one that was applicable to that election. The Act did not impose a contribution limit on city and county candidates in 2020.
L. If a contribution was received for an election occurring after January 1, 2021, PRIOR to January 1, 2021, does this contribution count towards the new AB 571 contribution limit after January 1, 2021?
No. The Commission adopted a formal opinion on April 15, 2021 that states contributions made prior to the effective date of AB 571 are not aggregated with contributions made on or after the effective date of AB 571 for purposes of the new contribution limit. Therefore, if someone contributed up to or above the current limit to an AB 571 committee prior to January 1, 2021 the same person can give additional contributions to the same committee up to the AB 571 contribution limit on or after January 1, 2021.
M. If a contributor gave $10,000 in 2020 (prior to the AB 571 limit going into effect) to a committee for a 2022 primary election, what happens? The AB 571 contribution limit does not apply to contributions made prior to January 1, 2021 so a contribution of this amount is permissible.
N. Does the AB 571 contribution limit apply to political party committees and small contributor committees making contributions to candidates subject to the AB 571 limit?
Yes. Political parties and small contributor committees are only permitted to give contributions to candidates subject to the AB 571 in amounts up to the applicable AB 571 contribution limit for that candidate.
O. Does the AB 571 limit apply to county central committee candidates? No. AB 571 imposes a contribution limit on city and county elective offices when a local jurisdiction has not already done so. Local jurisdictions are prohibited from placing contribution limits on county central committee candidates; therefore, AB 571 is not applicable to those offices.
www.fppc.ca.gov
FPPC advice: advice(cDfppc.ca.gov 1.866.275.3772
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P. If an election was held in November 2023, but resulted in the need for a run-off election to be held in February 2024, how would the contributions be treated under AB 571?
The run-off election is considered a new election. If a contributor gave any amount to an AB 571 candidate for the November 2023 election, the same contributor would still be permitted to contribute up to $5,500 (the AB 571 limit) to the same candidate for the February 2024 run-off election.
Q. An AB 571 candidate for city council would like to send out a request for contributions to their constituents. Do they need to include anything specific in the request?
Yes. A candidate that is subject to AB 571 must have the following information in the solicitation: the name of the controlled committee soliciting contributions, and the specific office for which those contributions will be used.
R. If an AB 571 candidate is the subject of a recall, is their committee to oppose the recall subject to contribution limits?
No. There are no contribution limits for a committee controlled by a candidate that is the subject of a recall that is formed to oppose the recall.
S. An AB 571 candidate has debts for an election held after January 1, 2021, may the candidate terminate their committee?
No. If a candidate -controlled committee has outstanding debts for an election held after January 1, 2021, they may not terminate without resolving or paying off the debt. When the committee has no net debts outstanding, the committee must be terminated within 24 months after the earliest of the date the candidate is defeated, leaves office, or the term of office for which the committee was formed ends, or, for withdrawn candidates no later than 24 months after the election from which the candidate withdrew. Please see Regulation 18404.1 for more on termination requirements for committees subject to AB 571.
T. If a local jurisdiction, which is subject to AB 571, passes a local campaign contribution ordinance, are the candidates still subject to AB 571? No. They would no longer be subject to AB 571.
www.fppc.ca.gov
FPPC advice: advice(a)-fppc.ca.gov 1.866.275.3772
FPPC Ed. Pro. 086-11-2023 Page 6 of 7
Index of Regulations and Government Codes:
FPPC Regulations:
18404.1
18421.4
18421.8
18521
18521.5
18523.1
18530.2
18530.8
18531.2
18531.5
18531.61
18531.63
18531.64
18535
18536
18537.1
18545
1 RCIM
Government Code(s):
85301
85303
85304.5
85305
85306
85307
85315
85316
85317
85318
85702.5
www.fppc.ca.gov
FPPC advice: advice(�fppc.ca.gov 1.866.275.3772
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