Loading...
HomeMy WebLinkAbout2007/09/25 Item 10 ~V~ ~ ~~~""'" ""-~~~ CnY OF CHUlA VISTA OFFICE OF THE CITY ATTORNEY REPORT TOTHE HONORABLE MAYOR AND CITY COUNCIL TO: Honorable Mayor and City Council VIA: City Attorney Ann Moore Q. (V\ . Joan F. Dawson, Deputy City Attorney9~ September 25, 2007 FROM: DATE: RE: Campaign Contribution Ordinance INTRODUCTION On August 14,2007, the City Council directed the City Attorney to return to Council with a Report outlining the ambiguities with the existing campaign contribution ordinance, found at Chula Vista Municipal Code Chapter 2.52, and proposing language to clarify these ambiguities without making any substantive changes or adding any new concepts. As requested by the City Council, the City Attorney's Office has prepared this Report, which discusses questions raised by the existing campaign contribution ordinance and analysis of those questions. Attached to this Report, as Exhibit A, are recommended changes in ordinance form, with explanatory notes included. As directed, the City Attorney's Office has worked to make language changes to the 2004 ordinance to clarify its existing intent, and not to add any new concepts. The recommended changes are highlighted in blue. The portions of the proposed ordinance that are underlined and in red highlight policy questions that require Council determination. Also, attached at Exhibit B is a summary of the existing campaign contribution ordinance, approved by the Council in 2004. Attached at Exhibit C is the actual 2004 ordinance, for reference. BACKGROUND In 2004, the City Council amended the Chula Vista Municipal Code to add a revised Chapter 2.52 regarding campaign contributions. This amendment was the result of a process started in November 2001, when the City Council asked then-City Attorney John Kaheny to return to the Council with a revised campaign contribution ordinance. In 200 I, the San Diego County Board of Supervisors appointed a nine-member San Diego Election Campaign Finance and Control Commission to create a model ordinance and use it as a tool in drafting local ordinances. City Attorney Kaheny recommended a complete 276 FOURTH AVENUE. CHULA VISTA. CAlI~lJIA 91910. (619) 691.5037. FAX (619) 409-5823 @ .....I-Con......., RKycIed P",* Honorable Mayor and City Council September 25, 2007 Page 2 review ofChula Vista's campaign contribution provisions, in part as a result of the work of the County Commission. The City's 2004 ordinance revisions were based on the model ordinance developed by the County Commission and modified to meet the needs ofChula Vista. The revised ordinance also included provisions adopted from other jurisdictions. Prior to its approval by the Council, the 2004 ordinance was prepared and reviewed by an Ad Hoc Committee, which included a member of the Charter Review Commission, the Ethics Commission, then-Councilmember Patty Davis, and former Council member John Moot. The 2004 ordinance is summarized in Exhibit B. to this Report. The ordinance itself is contained in Exhibit C. In 2007, it was brought to the Council's attention that the revised 2004 campaign ordinance had areas of ambiguity that needed review and possible revision. The revised ordinance had been in place for two elections, the general election in June 2006 and the special election in November 2006. On March 20, 2007, the City Council voted to form a new Ad Hoc Committee to review the 2004 campaign contribution ordinance. The Council determined that the Committee should be composed of one member each from the previous Ad Hoc Committee on campaign finance, the Charter Review Commission, and the Board of Ethics. The Council directed the Ad Hoc Committee to review implementation of the 2004 ordinance. Councilmember Ramirez stated he wanted to limit discussions on increasing campaign contribution limits, allowing others besides individuals to contribute to candidates, or on anything else that would expand the ordinance. The new Ad Hoc Committee was formed with former Councilmember John Moot, who served on the prior campaign finance committee, serving as the Chair. Also on the Committee were Michael German from the Board of Ethics and Humberto Peraza from the Charter Review Commission. City staff members assisting the Ad Hoc Committee were City Clerk Susan Bigelow, Assistant City Clerk Donna Norris, Deputy City Attorney Joan Dawson, and Legal Assistant Cheryl Ponds. The Committee thoroughly reviewed the existing ordinance, including information on implementation from City Clerk Susan Bigelow. In preparing this Report, the City Attorney's Office has done a thorough review of the language of the ordinance, gathered information from the City Clerk on questions raised during the 2006 election cycle, considered the discussion of the Ad Hoc Committee, and responded to the City Council's request of the City Attorney in August 2007. The City Attorney's Office has prepared a draft ordinance, attached as Exhibit A, 10-2 CITY OF CHULA VISTA Honorable Mayor and City Council September 25, 2007 Page 3 with recommended changes to clarify the existing provisions of the 2004 ordinance, and not to change existing intent or add new concepts. DISCUSSION A. Areas of Ambil!uitv The City Attorney's Office has reviewed the 2004 campaign contribution ordinance on its face, meaning the actual words used, and as it has been applied to issues raised during the general election in June 2006 and the special election in November 2006. As noted above, a summary of the 2004 ordinance is attached to this Report as Exhibit B. The existing ordinance is attached as Exhibit C. As reported by the City Clerk, portions of the 2004 ordinance have caused confusion for candidates and for the City Clerk's Office. The areas of concern are related to (I) the noticing provisions and (2) suspension of contribution and loan limits. The City Attorney's review ofthe ordinance also found inconsisteneies related to (3) the written notice to contributors, (4) the intent required for a violation of the ordinance, and (5) the terminology used in the ordinance that could be clarified in certain provisions. These five areas of coneern and/or inconsistency are discussed in detail, as follows. 1. Noticing Provisions Questions Presented: As reported by the City Clerk, the following questions have been raised by candidates regarding the noticing provisions for personal loans (meaning personal funds a candidate loans himself or herself) and personal funds spent by a candidate: · Does a personal loan (a loan by a candidate to himself or herself) require noticing? · Is notification for the use of personal funds in excess of $5,000 required more than once, if a candidate continues to contribute to him or herself amounts of more than $5,000? As an example, if a candidate contributes $6,000 to his or her campaign and provides notice, must the candidate provide new notice ifhe or she contributes another $1,000 or $5,000? . During what period of time does the $5,000 threshold for noticing apply, during a campaign for a single election contest, meaning the general/primary election or the special/run-off election, or during the entire campaign for a single elective office, including both the general/primary election and the special/run-off election? CITY Of-18~~LA VISTA Honorable Mayor and City Council September 25, 2007 Page 4 · What if a candidate spends or loans himself or herself personal funds that requires noticing, but the candidate fails to provide notice, can his or her opponents suspend contribution limits? Analysis: The answer to the first question, whether a candidate has to give notice to his or her opponents if the candidate plans to loan him or herself personal funds, is not clearly provided on the face of the ordinance. However, the ordinance clearly requires a candidate to give notice to opponents when the candidate intends to spend or contribute more than $5,000 in personal funds "in connection with an election campaign." CVMC 92.52. I OO(A). This ambiguity regarding noticing of personal loans is further caused by the fact that a candidate may suspend the $300 campaign contribution limit if his or her opponent lends himself or herself any amount of money. CVMC9 2.52.090(D). If a candidate can suspend the $300 contribution limit when an opponent loans himself or herself money, how is the candidate to know about the opponent's loan without a noticing requirement? As a general rule, statutory provisions should be read and construed as a whole in harmony with other provisions relating to the same general subject. Lubey v. City and County olSan Francisco, 98 Cal. App. 3d 340, 347-48 (1979). See also Moyer v. Workmen's Camp. Appeals Bd., 10 Cal. 3d 222,230 ("the various parts ofa statutory enactment must be harmonized by considering the particular clause or section in the context of the statutory framework as a whole"). Existing section 2.52.100 requires a candidate to provide notice to opponents and the City Clerk when the candidate intends to spend or contribute more than $5,000 in personal funds. The purpose of this notice is to allow opponents to suspend the $300 contribution limit, as allowed by section 2.52.1 OO(B), 'up to the amount of personal funds used. The Council's intent with this provision was to level the playing field, to allow a candidate who does not have the ability to contribute personal funds to seek more money from supporters. Section 2.52.090(D) provides a candidate with the same ability to level the playing field when an opponent has made a loan of personal funds to a campaign, allowing a candidate to suspend the $300 contribution limit up to the amount of the opponent's personal loan. When reading the 2004 ordinance as a whole, the noticing requirement for the use of personal funds should be read to apply to personal loans. A candidate should be required to provide notice when he or she loans himself or hersel f any amount of money because the suspension of the contribution limits is triggered by "a candidate who has made a loan to his or her campaign," pursuant to section 2.52.090(D). The recommended change to clarify the noticing provision is contained at proposed section 2.52.060, attached at Exhibit A. CITY OFI8HtLA VISTA Honorable Mayor and City Council September 25, 2007 Page 5 Regarding the second question on noticing, it is clear that a candidate must provide notice when he or she spends or contributes more than $5,000 of personal funds "in connection with an election campaign." CVMC S 2.52.100(A). However, it is not clear whether a candidate must provide new notice with each additional contribution above the $5,000 threshold. If the intent is to level the playing field, it follows that once a candidate has reached the $5,000 threshold, each contribution thereafter should require separate notice. This would allow the candidate's opponents to lift the contribution limits to keep up with the candidate's use of personal funds. This ambiguity should be addressed by adding clarifying language. Suggested language is found in section 2.52.060 of the proposed ordinance, at Exhibit A. The third question relates to whether the $5,000 threshold applies to a campaign for a single election contest or a campaign for a single elective office (meaning for both the general/primary and the special/run-off elections). The language of existing section 2.52. I OO(A) states, "No candidate or other person shall expend or contribute more than $5,000 in personal funds in connection with an election campaign unless and until the following conditions are met. . . ." Election campaign appears to imply the entire campaign for a single elective office, rather than each individual election (or "single election contest"). This interpretation would mean that a candidate could not spend more than $5,000 during the entire election cycle without providing notice. However, the majority ofthe rules regarding contributions contained in the ordinance relate to limits for a single election contest, not the entire campaign. As an example, a candidate may receive $300 from a contributor in the general/primary election and another $300 in the special/run-off election. The Council should clarify the meaning of "election campaign," contained within existing section 2.52.100(A), in order for the City Attorney's Office to make the appropriate changes in the ordinance. This policy question is highlighted in red and underlined in the proposed ordinance, at sections 2.52.040(1) and 2.52.060, in Exhibit A. Thefourth question regarding noticing iswhether a candidate may suspend the contribution limits ifhis or her opponent has not provided proper notice of the use of personal funds as required by the ordinance. The answer based on the plain language of existing section 2.52.100(8) appears to be "no." However, this interpretation does not capture the intent of the suspension provisions, which is to level the playing field. It is recommended that the Council add a provision allowing a candidate to suspend limits if there has been notice provided by an opponent or if the candidate discovers the use of personal funds and/or personal loans by an opponent through a campaign disclosure statement. The recommended language is added in the attached proposed ordinance, at sections 2.52.040(1) and 2.52.050(C) in Exhibit A. CITY OF t9,ia LA VISTA Honorable Mayor and City Council September 25, 2007 Page 6 2. Suspension of Limits Questions Presented: The 2004 ordinance allows candidates to suspend the campaign contribution and loan limits under certain circumstances. As reported by the City Clerk, the following questions have been raised by candidates regarding the suspension oflimits: . Can a candidate suspend contribution limits if he or she knows that his or her opponent has failed to provide the required notice? If so, when can the candidate suspend the limits? Does he or she have to wait until the next filing deadline to find out before suspending the limits? . When there is a suspension oflimits, what portion of a contribution counts toward leveling the playing field, the entire amount of the contribution, or the amount in excess of$300? . Should the suspension oflimits be limited to the single election contest (general or special election) in which an opponent contributes more than $5,000 in personal funds or any amount in personal loans, or for the entire election cycle (general and special elections)? In other words, should the ability to suspend the limits carry over from the general to the special election? . Does the personal loan limit of$20,000 apply to both a general/primary election and a special/run-off election together, or does the loan limit apply to each singlc election contest? Analysis: Regarding the first question of what a candidate can do if there is a failure by an opponent to properly notice a use of personal funds, this question was also raised and discussed in the subsection regarding noticing, above. The intent of the suspension provisions is to level the playing field. If a candidate were only permitted to suspend the limits with proper notice by an opponent, the candidate would be penalized for failure of an opponent to comply with the noticing requirements. It is recommended that the Council clarify this provision, by allowing a candidate to suspend limits when there has been actual notice, as required by the ordinance, or when there has been discovery through a campaign filing statement. The recommended language is added in the proposed ordinance, at sections 2.52.040(1) and 2.52.050(C), at Exhibit A. The second question that has been raised is what portion of a contribution counts toward leveling the playing field, under a suspension oflimits, the entire amount of the contribution or only the amount in excess of $300? One provision in existing sections 2.52.090(D) and 2.52.100(B) states that a' candidate can receive contributions "in excess" of the $300 limit up to the amount of the personal loan or personal funds deposited by an opponent. The next sentence in each of these sections states that the contributions that CITY OFI8HBLA VISTA Honorable Mayor and City Council September 25, 2007 Page 7 count toward leveling the playing field are those "within or in excess" of the limitation. This second sentence is conceptually flawed. There is no limit to the number of $300 contributions a candidate may receive. Therefore, conceptually, the use of the phrase"within or" does not make sense and should be deleted from existing sections 2.52.090(0) and 2.52.100(B). This deletion has been made in the proposed ordinance, at Exhibit A. Regarding the third question on the period of time permitted for a suspension of the loan and/or contribution limits, the existing ordinance states that the suspension shall continue from the date an opponent makes a loan of any amount or contributes personal funds of more than $5,000 until the candidate receives contributions equaling the amount of the personal loan or personal funds deposited into the opponent's campaign contribution account. Does this mean the suspension oflimits carries over from a general/primary election to a special/run-off election for the same elective office? This question requires analysis of the language in relation to other provisions of the existing ordinance. Certain provisions in the ordinance relate limits to a "single election contest." The ordinance defines "single election contest" as either a general or special election. CYMC 9 2.52.030(M). The campaign contribution limit of $300 applies to a single election contest, allowing a candidate to accept $300 from a contributor for the general/primary election and another $300 from the same contributor in a special/run-off election. CYMC 9 2.52.040(A). In existing section 2.52.090(C), the $20,000 personal loan limit applies to the "campaign" of a "candidate for elective city office," which implies it is an aggregate limit for the entire election cycle. Further, the notice requirement for personal contributions of more than $5,000 is "in connection with an election campaign," as contained in existing section 2.52.100(A). However, "campaign" and "election campaign," as used in existing sections 2.52.090(C)(loan limit) and 2.52.1 OO(A)(noticing provision), are not defined. A candidate running for city office may have to participate in both a general/primary election and a special/run-off election. Both elections are for a single elective office, and both will require a campaign: Therefore, it follows that when the 2004 ordinance refers to a "campaign" for city office or an "election campaign," the intended meaning is the entire election cycle. Further, the 2004 ordinance allows a candidate to carryover contributions from the general election to a special election (CYMC 2.52.040(0)). Taken together, these provisions imply the Council's intent was to allow a candidate to continue suspension oflimits for the entire campaign, including both the general election and the special election. If it is the Council's intent that a candidate be permitted to carryover a suspension of limits from a general to a special election, this 10-7 CITY OF"CHtJLA VISTA Honorable Mayor and City Council September 25, 2007 Page 8 provision should be clearly set forth. This policy clarification by the Council is needed, as highlighted in red and underlined, at sections 2.52.040(1) and 2.52.050(C) of the proposed ordinance, at Exhibit A. Regarding the fourth question on the loan limit of $20,000, the existing ordinance . . states, "A candidate for elective city office may not personally loan to his or her campaign an amount in excess of $20,000." Given the plain language of this provision and the analysis provided above, it appears the Council's intent was to place the $20,000 loan limit on the entire campaign, meaning both the general and special elections. It is requested that the Council address this policy question by reviewing the proposed language at section 2.52.050(A) of the proposed ordinance, at Exhibit A. 3. Written Notice to Contributors' Existing section 2.52.080 requires candidates to provide written notice to contributors regarding the contribution limits. Pursuant to the 2004 ordinance, the required notice must provide that Chula Vista's ordinance limits contributions to both candidates and candidate-controlled committees, and independent expenditure committees, to $300 per contributor. However, the ordinance does not regulate independent expenditure committees, such as the Republican or Democratic Parties. According to the City Clerk, some independent expenditure committees are local committees, some are state committees, and most are multi-purpose committees. A candidate has no control over these committees. It is recommended that the notice be changed by deleting reference to independent expenditure committees to reflect the intent of the existing 2004 ordinance. 4. Intent The City Attorney's review of the 2004 ordinance found that the existing ordinance is inconsistent as to the intent required to prove a violation. At current section 2.52.060(C), it states a candidate must "knowingly" accept a payment or contribution to be in violation. "Knowingly" as used there is a specific intent, meaning to violate the chapter a candidate must not only accept imd expend a contribution in violation of the chapter, but must know that accepting and expending the contribution is in violation. Elsewhere, at section 2.52. 1 80(A), the criminal violation requires a "willful" act, which means purposeful, without the specific intent of "knowingly." To prove a civil violation, a candidate must "intentionally or negligently" violate the provisions of the chapter. It is recommended that the City Council consider changing the intent language so that it is consistent throughout the ordinance. . .;)- CITY OFl~LA VISTA Honorable Mayor and City Council September 25, 2007 Page 9 5. Terminology Throughout the 2004 ordinance, there are inconsistencies with use of terminology. There are extra words that could be deleted. Further, there are ways to make the ordinance more reader-friendly. Analysis of the inconsistencies identified by the City Attorney's Office, as well as proposed changes, is set forth more fully below. Also, please refer to the notes attached to the proposed ordinance, at Exhibit A, for specific details on words that have been deleted or sections that have been moved and/or renumbered. B. Recommended Cbanl!cs Upon review of the 2004 ordinance, the City Attorney's Office has restructured the existing ordinance to clarify existing provisions and address the areas of concern discussed above as well as the other issues described below. Most of the recommended restructuring involves moving provisions that relate tei the same subject matter under consolidated section headings. The goal is to have all of the rules regarding contributions, loans, and noticing requirements grouped together. A proposed amendment to the 2004 ordinance is attached as Exbibit A with notes indicating the proposed changes. New language, which is either re-written or added to clarify provisions, is highlighted in blue in the proposed ordinance. Language highlighted in red and underlined in the proposed ordinance requires a policy decision by the Council. Please refer to the notes attached to Exhibit A for specific and detailed information on renumbered provisions and on terminology that has been deleted because it is redundant or inconsistent. Analysis of the recommended changes is as follows: 1. Section 2.52.020Ilntcrpretation of chapter Subsection C is new language, adding a "grandfather provision" to address how any new provisions will relate to existing councilmembers with campaign accounts, funds, or debts and existing candidates with campaign accounts, funds, or debts. 2. Throughout the ordinance, reference to "candidate for city elective office" should be replaced with "candidate." The extra words are not necessary because "candidate" is presently defined at section 2.52.030(C), as "any individual seeking any city elective office, the candidate's campaign committee, committee( s) controlled by the candidate, agents of the candidate." CITY o~&BLA VISTA Honorable Mayor and City Council September 25, 2007 Page 10 3. Section 2.52.030mefinitions Add definition for "campaign contribution account." This term is used in the 2004 ordinance at section 2.52.140. The term should be added to the definition section because that is good legislative drafting practice. The proposed definition is consistent with existing section 2.52.140, and Government Code section 8520 I. 4. Section 2.52.030mefinitions Delete definition for "intermediary" because it is not used elsewhere in the ordinance. 5. Section 2.52,040/Campaign contributions Recommend title change to be more reader friendly. Also, all of the provisions regarding the same subject matter of contributions to candidates have been moved from elsewhere in the chapter and brought under this section. The purpose is to have all of the rules regarding campaign contributions in one section for ease of reading and understanding. 6. Section 2.52.040(J)(proposed subsection)/Campaign contributions Recommend adding this subsection regarding suspension ofthe campaign contribution limits here. The rules regarding suspension are taken from sections 2.52.090(D) and 2.52.1 OO(B) of the 2004 ordinance. 7. Section 2.52.090 (proposed number change)/Return of prohibited contributions Existing sections 2.52.070(A) and (B) are inconsistent in that subsection A calls for return of prohibited contributions within three business days and subsection B calls for return of prohibited contributions within 24 hours of discovery. The recommended change incorporates the "three business days" timcline. Also, it is recommended that subsections A and B of the existing 2004 ordinance be combined into one subsection for ease of reading because both subsections deal with the timeframe for return of contributions. Existing section C then would become the new subsection B. The entire existing section is moved to section 2.52.090. 1ll~10 CITY OF L'HL ,A VISTA Honorable Mayor and City Council September 25, 2007 Page II 8. Section 2.52.100 (proposed number change)/Written solicitation by candidates The 2004 ordinance requires candidates making written solicitations to include a notice on all solicitations. The requisite notice states that the City's campaign contribution ordinance limits contributions to both candidate-controlled committees and "to regulated independent expenditure committees." However, candidates cannot control independent expenditure committees. Further, tlie existing campaign contribution ordinance does not intend to place limits on independent committees. It is recommended that the language of the requisite notice he revised to accurately reflect the legal provisions and intent of the existing ordinance. 9. Section 2.52.090 (existing)/Loans and Section 2.52.100 (existing)/ Notice regarding use of personal funds Under the 2004 ordinances, certain provisions within these two sections are inconsistent; therefore, these sections will be addressed together in this Report. It is recommended that all provisions regarding loans be moved into a new section 2.52.050, and the noticing provisions for both personal funds and loans be moved into a new section 2.52.060. The existing rules regarding loans are as follows: . A loan or extension of credit from the maker of the loan, other than a commercial lending institution, is considered a contribution subject to the $300 limit. (CYMC S 2.52.090). · A candidate may not personally loan to his or her campaign more than $20,000. (CYMC S2.52.090(C)). Presently, it is not clear whether a candidate who loans himself or herself money is required to notify opponents. Noticing is required when a candidate expends or contributes more than $5,000 in personal funds. . If a candidate loans himself or herself funds, each opponent can solicit and receive, and contributors to the opponent may make, contributions in excess of the $300 limit contained in CYMC 2.52.040 up the amount of the candidate's loan. The limits shall be suspended from the date the candidate made a loan. (CYMC S 2.52.090(D)). . Ifa candidate gives notice of use of personal funds in an amount of more than $5,000, as required by CYMC 2.52.100, then each opponent is not bound by the loan limitation of $20,000, to the extent the amount of personal funds contributed exceeds $20,000. (CYMC S 2.52.090(E)). 10-11 CITY OF CHULA VISTA Honorable Mayor and City Council September 25, 2007 Page 12 Simply put, all loans equal contributions, except when from a commercial lending institution; a candidate may not make a personal loan of more than $20,000 to his or her campaign; if a candidate makes a personal loan of any amount, the other candidates may suspend the $300 contribution limit up to the amount of the loan; and a candidate may suspend the loan limit of $20,000 if an opponent is using personal funds in an amount of more than $20,000 and provides notice. The existing rules regarding personal funds are as follows: . There is no limitation on personal funds a candidate may contribute; however, if a candidate contributes more than $5,000 in personal funds in connection with an election campaign, there is a notice requirement. (CVMC S 2.52.100(A)). Written notice must be provided to all opponents and the City Clerk within a specified time, and the funds must first be deposited into the candidate's campaign contribution account. . If a candidate provides notice of the use of personal funds of more than $5,000, each opponent may solicit and receive, and contributors may make, contributions in excess of $300.00 up to the amount of personal funds. The City may not restrict a candidate's use of personal funds because to do so would be an infringement of the candidate's First Amendment right to free speech (see Buckley v. Valeo, 424 U.S. I, 57 (1976); however, reporting and disclosure requirements placed upon a candidate may be imposed. The 2004 ordinance places a disclosure requirement on a candidate who intends to spend more than $5,000 in personal funds in connection with an election campaign. As eXplained in sections A (I) and (2) of this Report, an issue was raised in the 2006 election as to whether the 2004 ordinance places a disclosure requirement on a candidate who intends to loan himself or herself personal funds with the intent to repay the loan to himself or herself. The ambiguity is one of the reasons for the City Council's referral to the Ad Hoc Committee earlier this year for review ofthe 2004 ordinance. For the reasons set forth in Sections A (1) and (2) of this Report; it is recommended that this ambiguity be clarified by clearly stating that the notice requirement now applies to both situations involving the use of personal funds (outright contributions and personal loans). The recommended changes are found in the proposed section 2.52.090(C). Also, within existing sections 2.52.090/Loans and 2.52.1 OO/Notice regarding use of personal funds, there are provisions related to lifting of the $300 campaign contribution limit. This was the provision addedin 2004 to give candidates the opportunity to level the playing field when an opponent uses personal funds or a personal loan. If the Council intends to maintain the ability of candidates to suspend the $300 CITY o~ 't-~dLA VISTA Honorable Mayor and City Council September 25, 2007 Page 13 contribution limit under certain circumstances, it is recommended that the rules regarding suspension be incorporated into the section regarding campaign contribution limits so it is easier for the reader to follow and understand. The recommended revision is found at proposed section 2.52.040(1). The City Attorney is also recommending that the Council review the language regarding what amount of contributions count toward leveling the playing field when there has been a suspension of the limits. The current ordinance provides that all contributions received within or in excess of the $300 contribution limit count. As noted in section A of this Report, the use of the phrase "within" does not make sense because a candidate may collect as many $300 contributions as the candidate is able. It is recommended that the words "within or" be deleted. Finally, in proposed section 2.52.040(1), it is recommended that the Council clarify whether the suspension of the $300 contribution limit carries over from a general to a special election. In proposed sections 2.52.050(A) and 2.52.050(C), it is recommended that the Council clarify whether the loan limit of $20,000 and the ability to suspend this limit apply to a campaign for a single election contest (one election) or single elective office (the general/primary and the special/run-off elections together). 10. Section 2.52.100(A)(existing) This section begins with the provision: "No candidate or other person shall expend or contribute more than $5,000 in personal funds in connection with an election campaign unless and until the following conditions are met. . . ." (italics added). It is recommended that the Council delete the words'''or other person." These words are inconsistent with other provisions of the 2004 ordinance. Pursuant to the 2004 ordinance, no person can expend or contribute more than $300 to a candidate for a single election contest, unless there has been a suspension of the contribution limit. Contributions from other people to a candidate are reported in campaign statements. CVMC S 2.52.100. If the Council's inclusion of "or other person" was intended to require a candidate to notice opponents of any contributions accepted pursuant to suspended limits, it seems that this notice requirement can be accomplished through the campaign reporting provisions. If the Council desires that candidates provide opponents with more immediate notice of contributions accepted in excess of limits, the language "or other person" should be clarified because the noticing is done by a candidate, not a contributor. 11. Section 2.52.130 (proposed number ehange)/Duties of City Clerk Recommend changing word "apparent" to "alleged" in reference in subsection (D) and adding reference to existing section 2.52.170, that it is the duty of the City Clerk CITY o~<t-~dLA VISTA Honorable Mayor and City Council September 25, 2007 Page 14 to report "alleged violations of this chapter filed pursuant to CVMC 2.52.140(E) and applicable state law to the enforcement authority." "Alleged" is used elsewhere in the ordinance and more properly refers to allegations brought pursuant to the complaint process that have not been proven to be true at that point in the process. Using "apparent" violations requires the City Clerk to exercise judgment in making referrals to the enforcement authority. Under the 2004 ordinance only, it is the sole authority of the "enforcement authority" to make determinations of probable cause and take enforcement action. 12. Section 2.52.140 (proposed number change)/Enforcement Recommend replacing words "special counsel" with "enforcement authority," a defined term in the 2004 ordinance, where reference is intended to refer to the "enforcement authority." 13. Section 2.52.150 (proposed number change )/PenaIties Recommend that the City Council consider changing the criminal intent to be consistent. At current section 2.52.060(C), it states a candidate must "knowingly" accept a payment. "Knowingly" as used there is a specific intent, meaning to violate the chapter a candidate must not only accept a contribution in violation of the chapter, but must also know accepting the contribution is in violation. Elsewhere, at section 2.52. I 80(A), the criminal violation requires a "willful" act, which means purposeful, without the specific intent of "knowingly." Further, a civil violation may be brought against any person "who intentionally or negligently" violates any provision. "Intentional" is similar to the criminal intent of "knowingly." "Negligently" is a lower standard. It is recommended that the City Council consider amending the intent language to be consistent throughout the ordinance. CONCLUSION As directed by the City Council, the City Attorney's Office will prepare an ordinance for first reading that incorporates any or all of the proposals set forth in this Report. Exhibit A: Exhibit B: Exhibit C: Proposed Revisions to 2004 Ordinance Summary of2004 Ordinance Actual 2004 Ordinance (Chula Vista Municipal Code Chapter 2.52) CITY o~12:-~6LA VISTA EXHIBIT A 10-15 City Attorney's Office Proposed Revisions to Existing Ordinance 2.52.010 Purpose and intent[Jbl]. -~ In enacting this chapter, the City Council finds and declares that moderate monetary contributions to political campaigns are a legitimate form of participation in the American political process. It is the policy of this City to protect the integrity of the electoral process, and the best interests of the citizens of this City are served by regulating campaign finance. Inherent in the high cost of election campaigning is the problem of improper influence, real or potential, exercised by campaign contributors over elected officials. It is the purpose and intent of the City Council in enacting this chapter: A. To preserve an orderly political forum in which individuals may express themselves effectively; B. To place realistic and enforceable limits on the amounts of money that may be contributed to political campaigns in City elections; C. To prohibit contributions by organizations and permit contributions by individuals only; D. To provide full and fair enforcement of all the provisions ofthis chapter; and E. To encourage candidate adherence to election regulations by making them easier to understand. 2.52.020 Interpretation of this chapter. A. The terms and phrases in this chapter shall be defined as those terms and phrases are defined in the Political Reform Act of 1974, as amended (Government Code, 1:lAaomey\JDAWSON\campaignfinanceordinance,revised.9.10.doc 10-16 Ordinance No. Section 81000 et seq.) and in regulations adopted by the Fair Political Practices Commission[JD2], unless otherwise specified in this chapter. B. The [JD3]terms of this chapter are applicable to any contributions made to a candidate or candidate-controlled committee, whether used by the candidate to finance a current campaign or to pay debts incurred in prior campaigns. C. Revisions [JD4]to this chapter take effect on and are applicable to all contributions received by candidates seeking City elective office in the general election of June 2008 and any election thereafter. Any candidate for City elective office participating in the general election of June 2008 shall have a grace period of 60 days from the effective date, as stated in this paragraph, to repay any campaign contributions made or received prior to the effective date of the revisions in conflict with or in violation of any provisions of this chapter. A candidate repaying any campaign contributions or loans during this 60-day grace period shall provide written notice to the City Clerk of the repayment within three business days of the repayment. 2.52.030 A. Definitions. "Agent" means a person who acts on behalf or at the behest of any other person or accepts a contribution on behalf of a candidate. If an individual acting as an agent is also acting as an employee or member of a law, architectural, engineering or consulting firm, or a similar entity or corporation, both the entity or corporation and the individual are "agents." 10-17 Ordinance No. B. "At the behest" means made under the control or at the direction of, in cooperation, consultation, coordination, or concert with, at the request or suggestion of, or with the express prior consent of. C. -[JDs]';Campaign contribution account" is that account in which all contributions or loans made to the candidate shall be deposited, as required by Government Code section 85201. D. "Candidate" means any individual seeking any City elective office, the candidate's campaign committee, committee(s) controlled by the candidate, agents of the candidate. E. "City campaign statement" means the statement which, to the extent practicable, shall be similar to or consolidated with that required by state law. F. "City elective office" means the offices held by the Mayor or members of the City Council. G. "Contribution" is defined in a manner identical with the definition found in Government Code Section 82015 and any related provisions in the California Code of Regulations. H. . "Enforcement authority," under this chapter, means that special counsel appointed by the City Attorney pursuant um>Jto' CVMC 2.52.140. I. "General election" is that election identified by Charter Section 900 that is combined with the California State primary election. J. "Independent expenditure committee" is as defined in Government Code Sections 82013 and 82031 which supports or opposes in whole or in part a candidate for 10-18 Ordinance No. city elective office if contributions are made to said committee with the intent that they, or a comparable amount of funds otherwise owned by, or under the control of, the committee be used to support or oppose a particular candidate for a city elective office. This type of committee is not controlled by the candidate[JD7]. K. "Organization" means a proprietorship, labor union, firm, partnership, joint venture, syndicate, business, trust, company, corporation, association, or committee, including a political action committee. L. "Person" means a natural individual. M. "Single election contest" means either a general or special election. N. "Special election" defined in Charter Section 901, means a municipal election other than a general election that may be held by authority of the Charter or of any law. 2.52.040 A. Campaign contribution limits/rules and suspension[JD8]. No person, other than a candidate, shall make a contribution in excess of $300.00 to a candidate for a single election contest. No candidate shall solicit or accept a contribution in excess of $300.00 from a contributor for a single election contest. A candidate may receive up to $300.00 from a contributor in each of the general and special elections. This $300.00 limit on contributions by individuals may be suspended only on the conditions set forth in CVMC 2.52.040(1). B!!d9]. No organization shall make a contribution to any candidate or candidate- controlled campaign committee. This chapter shall not apply to contributions made to a committee, which is organized solely for the purpose of supporting or opposing the 10-19 Ordinance No. qualification for the ballot or adoption of one or more city measures. All contributions made by a person whose contribution activity is financed, maintained or controlled by an organization or any other person shall be deemed to be made by that organization or other person. If the contribution is deemed made by an organization, it is prohibited. C. No [JDIO]individual, or combination of individuals acting jointly, shall make directly or indirectly a contribution in the name of another individual or combination of individuals. D. Contributions [JDIl]by a husband and wife shall be treated as separate contributions and shall not be aggregated where the checks are drawn separately and signed by the spouse making the contribution. Contributions by a husband and wife shall be treated as separate even if combined into one check but presented with two signatures. E. No [JD12ul'erson shall make a contribution to any candidate, and no such candidate shall accept from any person such a contribution earlier than eleven months preceding a single election contest. F. A [JDijjcontribution for an election may be accepted by a candidate after - the date of the election only to the extent that the contribution does not exceed net debts outstanding from the election, and the contribution does not otherwise exceed the applicable contribution limit for that election. G. A '[JDI4jcandidate may not solicit or accept contributions for a special election prior to the holding of the general election for that office. 10-20 Ordinance No. H. A [JD15]candidate may carryover contributions raised in connection with one election for City elective office to pay campaign expenditures incurred in connection with a subsequent election for the same City elective office. I. A [JDI6]candidate who has received notice of an opponent's use of personal funds of more than $5,000 aggregate and any amount thereafter, or a personal loan of any amount, either pursuant to CYMC 2.52.060 or as discovered in any campaign filing statement, [for a single election contest, or campaign for single elective office 1 shall [JlM]be permitted to solicit and receive, and contributors to each such opponent may make, contributions in excess of the $300.00 per person limit set forth in CYMC 2.52.040(A).[JD18] The $300.00 limit for individual contributions contained in CYMC 2.52.040(A) shall be suspended from the date the candidate's opponent deposits the personal funds, including a personal loan, into his or her campaign contribution account. The suspension of the $300.00 limit shall continue until the candidate receives contributions, in excess of thc $300.00 limit, up to the amount of personal funds, including a personal loan, deposited by the candidate's opponent in his or her campaign contribution account. Those contributions received in [JD!2]excess ofthe $300.00 per person limit shall count toward equaling the amount of personal funds, including a personal loan, deposited by the candidate's opponent in his or her campaign contribution account. 10-21 Ordinance No. 2.52.050 Loans/rules and suspension. A. A [!r2olcandidate shall not loan tohis or her campaign personal funds in an amount in excess of $20,000 [Note: $20.000 per campaign for single election contest or single elective office??l, except as set forth in CVMC 2.52.050(C). B. A [1021 ]Ioan or extension of credit shall be considered a contribution from the maker of the loan or extender of credit and shall be subject to the contribution limit of $300.00 per person, pursuant to CVMC 2.52.040. The [1022]$300.00 contribution limit does not apply to loans made to a candidate for the purpose of a campaign by himself or herself or by a commercial lending institution in the lender's regular course of business on terms available to members of the general public for which the candidate is personally liable. C. A [1023]candidate shall not be bound by the loan limit of $20,000 where the candidate has received notice by an opponent, pursuant to CVMC 2.52.060, or has discovered in any campaign filing statement that the opponent intends to spend or contribute personal funds of more than $20,000 rin a campaign for a single election contest or for a single elective office??l. If a candidate's opponent spends or contributes personal funds of more than $20,000 in a campaign rfor a single election contest or for a single elective office?l, the candidate may loan himself or herself personal funds in an amount of more than $20,000 up to the amount of personal funds spent or contributed by the opponent in excess of $20,000. 10-22 Ordinance No. 2.52.060 Notice regarding personal funds and loan'friD24]. - If a candidate spends [JD25]()r contributes personal funds of more than $5,000, or - . loans himself or herself personal funds of any amount, in connection with a campaign for [single election contest or single elective office?l, a candidate shall do all of the following: A. Provide written notice of the candidate's intent to spend or contribute more than $5,000 of personal funds, or to loan himself or herself any amount of personal funds, to the City Clerk and all opponent candidates. The notice shall be delivered personally or sent by registered mail to the last known address of the opponent candidates as shown in the records of the City Clerk and shall specify the amount of personal funds intended to be expended, contributed, or loaned. The notice shall also provide the date the personal funds shall be deposited into the candidate's campaign contribution account, as required by CVMC 2.52.070(B). Separate notice is required for anv separate deposit of personal funds of anv amount that is a loan from a candidate to his or her campaign. Separate notice is also required for anv separate deposit of personal funds that is a contribution from a candidate to his or her campaign. once the candidate has spent or contributed more than $5.000 in personal funds in connection with the campaign for fa single election contest or for single elective office.] B. The required notice shall be given no later than 21 days prior the election, unless the expenditure or contribution occurs during the 21 days preceding the election, in which case the required notice shall be provided 24 hours prior to deposit into the candidate's campaign contribution account. 10-23 Ordinance No. 2.52.070 .. . Campaign contribution account[Jp2~].- A. The campaign contribution account required by Government Code section 85201(a) shall be established at a financial institution located in San Diego County. B. All [JD27]personal funds to be expended, contributed, or loaned by a - candidate shall first be deposited in the candidate's campaign contribution account. 2.52.080 Surplus campaign funds[JD28]. A. Upon leaving any elected office, or at the end of the post-election reporting period following the defeat of a candidate for elective office, whichever occurs last, campaign funds under the control of a candidate shall be considered surplus campaign funds. B. Surplus campaign funds shall be used only for the following purposes: 1. To repay contributions. 2. To make a donation to any bona fide charitable, educational, civic, religious, or nonprofit organization, where no substantial part of the proceeds will have a material financial effect on the candidate, any member of his or her immediate family, or his or her campaign treasurer. 3. To pay for professional services reasonably required by the candidate or candidate-controlled committee to assist in the performance of its administrative functions, including payment for attorney's fees for litigation that arises directly out of a candidate's activities or his or her status as a candidate, including, but not limited to, an action to enjoin defamation, defense of an action brought of a violation 10-24 Ordinance No. of state or local campaign, disclosure, or election laws, and an action from an election contest or recount. 2.52.090 Return of prohibited contributionspD29]. - A. If a contribution is tendere'd and would be in violation of this chapter, it shall be returned by a candidate to the contributor within three business days of discovery of receipt ofthe contribution by the candidate, or his or her representative. The candidate shall also report in writing to the City Clerk within three business days of discovery the facts surrounding the contribution. B. A contribution shall not be considered to be received ifit has not been negotiated, deposited, or utilized, and is returned by the candidate to the contributor within three business days of discovery of receipt. 2.52.100 Written solicitations by candidates[JD3o]. Any candidatc making a written solicitation for a contribution for his or her campaign for City elective office shall include the following written notice in no less than six point type on each such solicitation: NOTICE The City ofChula Vista Municipal Code limits contributions to campaigns for City elective office to three hundred dollars per person. 2.52.110 Campaign statements.[JD31] Each candidate shall file campaign statements with the City Clerk in the time and manner as required by the Political Reform Act of 1974 as amended (Government Code 10-25 Ordinance No. Section 84100 et seq.). Compliance with the requirements of that Act shall be deemed to be compliance with this chapter. 2.52.120 Contributions for legal defense[jD32J. - Notwithstanding anything contained herein to the contrary, a payment to or for the benefit of a Councilmember and Mayor, or candidate made and used for the express purpose of offsetting costs already incurred by that Councilmember, Mayor, or candidate in the defense of a criminal or administrative prosecutorial action against said Councilmember, Mayor, or candidate and not made or used for the purpose of aiding in the election of said Councilmember, Mayor, or candidate, and not made within (before or after) 100 days of an election in which the Councilmember, Mayor, or candidate is competing for a seat or office, shall not be deemed to be a contribution for the purposes of this chapter. 2.52.130 Duties of City Clerk[JD33]. In addition to other duties required of the City Clerk under the terms of this chapter and City Charter, the Clerk shall: A. Supply appropriate forms and manuals prescribed by the California Fair Political Practices Commission. These forms and manuals shall be furnished to all candidates and committees, and to all other persons required to report. B. Determine whether required documents have becn filed and, if so, whether they conform on their face with the requirements of state law. C. NotifY promptly all persons and known committees who have failed to file a document in the form and at the time required by state law. 10-26 Ordinance No. D. Report alleged [JD34] violations ofthis chapter filed pursuant to CVMC 2.52. I 40(E) and applicable state law to the enforcement authority. E. Compile and maintain a current list of all statements or parts of statements filed with the City Clerk's office pertaining to each candidate and each measure. F. Cooperate with the enforcement authority in the performance ofthe duties of the enforcement authority as prescribed in this chapter and applicable state laws. 2.52.140 Enforcement[JD35]. I A. The City Attorney shall not investigate or prosecute alleged violations of this chapter, but shall defend the constitutionality and legality of this chapter in any civil proceeding in which the City or the City Council is a party. B. The enforcement authority, as defined by this chapter, shall investigate or prosecute alleged violations of this chapter. C. The City Attorney shall solicit proposals from attorneys in accordance with Section 503 of the City Charter and Chapter 2.56 CVMC to act as the enforcement authority eleven months [1036] prior to a general election. As part of the annual budget . process, the City Council shall appropriate no less than $100,000 to fund the retention of special counsel to serve as the enforcement authority. These funds shall be separate from the City Attorney's budget and used solely for the investigation and prosecution of alleged violations of this chapter. D. The City Attorney shall appoint a panel of no less than three attorneys to act as the enforcement authority. These attorneys shall be compensated by the City. Should the appointment of additional special counsel become necessary or appropriate, 10-27 Ordinance No. the City Attorney shall appoint additional special counsel as may be required. A single member of the special counsel panel shall be assigned to each case. Assignments shall be made on a rotating basis. E. Complaints'[J[)3710fviolations of this chapter shall be submitted in writing, - under penalty of perjury, by a resident of the City to the City Clerk. The complaint shall state a full recitation of all facts that are alleged to constitute a violation of this chapter. The complaint must be filed within 90 days of discovery of the alleged violation, but no later than 180 days from thc datc of the election. F. Thc City Clerk shall forward the complaint to the enforcement authority within five working days of receipt for a probable cause determination. Ifno probable cause is determined to exist, the complaint shall be dismissed summarily and interested parties shall be notified of the dismissal in writing. G. If probable cause is determined to exist, the enforcement authority shall take further investigatory and procedural steps necessary to resolve the matter. H. Violations ofthis chapter may be pursued either through a civil or criminal action at the discretion of the enforcement authority. The enforcement authority may also commence and prosecute any necessary administrative procecdings or civil litigation to compel compliance with this chapter. No enforcement'or prosecution or action by the enforcement authority shall be subjcct to the review or control of the City Attorney or City Council. I. The special counsel, serving as the enforcement authority, may investigate and may institute legal action to prevent further violations. The special counsel may 10-28 " Ordinance No. decline to investigate ifthe allegation is also a violation of state law, and is the subject of a complaint filed with the Fair Political Practices Commission. J. Special counsel, serving as the enforcement authority, shall be immunc to liability for enforcement of chapter. 2.52.150 PenaIties[JD38]. . A. No [JD39]candidate shall knowinglv accept a payment or contribution made in violation of this chapter. B. No officer[JIl40], employee, agent or attorney or other representative of a person covered by this chapter shall aid, abet, advise or participate in a violation of this chapter. C. Any person who willfully [JD41]violates any provision of this chapter is guilty of a misdemeanor. Any person who willfully causes or solicits any other person to violate any provisions of this chapter, or who aids and abets any other person in the violation of this chapter shall be guilty of a misdemeanor. D. Any person who intentionally or negligentlv violates any provision of this chapter shall be liable in a civil action brought by special counsel for an amount not more than three times the amount the person failed to report properly or unlawfully contributed, expended, gave or received, or $5,000 per violation, whichever is greater. In determining the amount ofliability, the court may take into account the seriousness ofthe violation and the degree of culpability of the defendant. If a judgment is entered, the funds recovered shall be deposited into the City's general fund. 10-29 Ordinance No. 2.52.160 Severability[jo42] . If any provision of this chapter, or the application of any such provision to any person or circumstances, shall be held invalid, the remainder of this chapter to the extent it can be given effect, or the application of those provisions to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby, and to this end the provisions of this chapter are severable. 10-30 Page: I [JDI]No change to this section. Page: 2 [JD2]Added reference to the Fair Political Practices Commission to be consistent with state law. Page: 2 [JD3]This subsection is moved from existing section 2.52.040(8) and renumbered here. Page: 2 [JD4]This subsection is a necessary "grandfather" provision. Page: 3 [JD5]Added this definition, which is consistent with state law and other references in this chapter. Page: 3 [JD6] The reference here to City Council in the existing ordinance is inconsistent with existing section 2.52. I 70(D), which states that the City Attorney shall appoint the attorneys to act as the enforcement authority. The City Council authorizes an appropriation of no less than $100,000 for payment of the attorneys. Page: 4 [JD7]Deleted definition of "intermediary" because it is not used elsewhere in the chapter. Page: 4 [JD8]Renamed chapter to make it easier for the reader to understand. Page: 4 [JD9]This is existing sections 2.52.060(A) and (8) moved and renumbered here. Page: 5 [JDIO]This is existing section 2.52.120 moved and renumbered here. The language has been edited to make it easier to read. The existing language states, "It is unlawful for any individual, or combination of individuals acting jointly, to make directly or indirectly a contribution in the name of another individual or combination of individuals." Page: 5 [JDII]This is existing section 2.52.110 moved and renumbered here. Page: 5 [JDI2]This is existing section 2.52.040(C) moved and renumbered here, with the word "earlier" replacing "sooner." Page: 5 [JD13]This is existing section 2.52.040(D) moved and renumbered here. Page: 5 [JDI4]This is existing section 2.52.040(E) moved and renumbered here. The second sentence of the existing section has been broken up into the next subsection for ease in reading. Page: 6 [JD 15]This is the second sentence of existing section 2.52.040(E) moved and renumbered here. Page: 6 [JDI 6]This is existing sections 2.52.090(D) and 2.52.100(8) consolidated, moved and renumbered here. The existing sections have been re-written to simplify them, but the intent has not changed. ]0-31 Page: 6 [JDI7] Existing section 2.52.100 provides that no candidate shall expend or contribute more than $5,000 in personal funds in connection with an election campaign unless notice is provided. "Election campaign" appears to mean a single election contest, the language used throughout the ordinance. It is recommended that "election campaign" be clarified. Also, it appears that notice is required even whcre the use of personal funds totals $5,000, but is contributed by a candidate in lesser increments. Page: 6 [JDI8]There is no "cut-off time" for the suspension of the $300.00 limits contained in the existing ordinance, but it is recommended that one be established to be consistent with existing section 2.52.040(E), which states that a candidate may not solicit or accept contributions for a special election prior to the holding of the general election. Also, the $300.00 loan limit applies to a single election contest, so to limit the suspension period to the end of the current election is consistent with other provisions of the chapter. Page: 6 [JD 19]Existing section 2.52.1 OO(B) has an inconsistency written into the section. It states the opponent may receive contributions "in excess" oflimits up the amount of personal funds deposited by the candidate. It then states contributions received "within or in excess" of the limits count toward equaling the amount of personal funds. This ambiguity and inconsistency has created substantial confusion by candidates and the City Clerk's Office, and should be clarified. Page: 7 [JD20lThis is existing section 2.52.090(C) moved and renumbered here. Page: 7 [JD21]This is existing section 2.52.090(A) moved and renumbered here. Page: 7 [JD22]This is existing section 2.52.090(B) moved and renumbered here. Page: 7 [JD23]This is existing section 2.52.090(E) moved and renumbered here, with additional language added to clarify the existing provision., Page: 8 [JD24]This is existing section 2.52.100 moved and renumbered here, with new language that adds a notice requirement for the use of loans of any amount. Page: 8 [JD25] The existing ordinance states, "No candidate or other person shall expend or contribute more than $5,000 in personal funds in connection with an election campaign. . . ." Use of the word "other person" is inconsistent with the other existing provisions, in that it is in conflict with the campaign contribution limit of $300 per contributor that forms the basis of the existing ordinance. The reference to "other person" has been deleted in the recommended changes here. Page: 9 [JD26]Existing section 2.52.140 moved and renumbered here, with subsections Band C added to be consistent with state law. Page: 9 [JD27]Existing provision from section 2.52.1 00(A)(2) moved and renumbered here. Page: 9 [JD28]Existing section 2.52.050 moved and renumbered here. 10-32 ..- Page: 10 [JD29]Existing section 2.52.070 moved and renumbered here. Also, existing sections 2.52.070(A) and (8) are inconsistent in that section A calls for return of prohibitcd contributions within three business days and section 8 calls for return of prohibited contributions within 24 hours of discovery. This inconsistency is corrected here by making it "within three business days." Existing sections A and 8 have been combined into one section. Page: 10 [JD30]Existing section 2.52.080 moved and renumbered here. Also, reference to a limit to contributions for independent expenditure committees is removed because this ordinance did not intend to regulate those contributions. Page: 10 [JD31] Existing section 2.52.150 moved and renumbered here. Page: II [JD32]Existing section 2.52.150 moved and renumbered here. Page: II [JD33]Existing section 2.52.160 moved and renumbered here. Page: 12 [JD34]Changed word in existing section 2.52.160(D) from "apparent" to "alleged" to be consistent with existing section 2.52. I 70(E). Page: 12 [JD35]Existing section 2.52.170 moved and renumbered here. Recommend changing use of phrase "special counsel" to "enforcement authority" where intent is to refer to the three attorneys acting as the "enforcement authority" to be consistent with definitions at the beginning of the chapter. Page: 12 [JD36]Recommend changing from 180 days in existing section 2.52.170(C) to eleven months to coincide with the period in which candidates may collect contributions (see existing section 2.52.040(C)). Page: 13 [JD37]This subsection is rewritten from existing section 2.52.170(E). Page: 14 [JD38]Existing section 2.52.180 moved and renumbered here. Page: 14 [JD39]Existing sections 2.52.060(8) and (C) moved and renumbered here. Page: 14 [JD40] Portion of existing section 2.52.060(8) regarding criminal violations moved and renumbered here. Page: 14 [JD41]Intent is inconsistent in existing chapter. Knowledge requirement from section 2.52.060(C) is added here. Page: 15 [JD42]Existing section 2.52.190 moved and renumbered here. 10-33' . EXHIBIT B 10-34 Summary of the Campaign Contribution Ordinance Approved by the City Council in 2004 . $300 campaign contribution limit per single election (single election is defined as general/primary or special/run-off) (CYMC ~2.52.040(A)) . Contributions of a husband and wife are treated separately (CYMC ~2.52.11 0) . Contributions may not be made earlier than II months before an election (CYMC ~2.52.040(C)) . Candidates may collect contributions after an election only to repay debts (CYMC ~2.52.040(D)) . Candidates may carry over contributions from one election to pay campaign expenses in subsequent election for same office (CYMC ~2.52.040(E)) . Surplus funds can be used to repay contributions/debt, make donations to a charitable organization, or pay for professional services related to a campaign (CYMC ~2.52.050) . Contributions to a legal defense fund are not considered contributions under the ordinance, as long as certain factors are met (CYMC ~2.52.130) . Candidates must open a campaign contribution account in San Diego and deposit contributions into the account before expending them (CYMC ~~2.52.1 00, 2.52.140) . Organizations may not contribute to candidates (CYMC ~2.52.060) . Contributions collected in violation of the ordinance must be returned (CYMC ~2.52.070) . Candidates must provide written notice of$300 contribution limit on written solicitations (CYMC ~2.52.080) . Loans are considered contributions subject to the $300 limit, except for loans from a commercial lending institution (CYMC ~~2.52.090(A), (B)) . Candidates may not loan themselves more than $20,000 (CYMC ~2.52.090(C)); however, this loan limit does not apply to the extent a candidate's opponent contributes more than $20,000 to himself or herself, in which a candidate may increase the loan limit up to the amount of personal funds contributed by an opponent (CYMC ~2.52.090(E)) . A candidate must give written notice to his or her opponents if the candidate intends to contribute or expend more than $5,000 in personal funds (CYMC ~ 2.52.100); if a candidate gives this notice, an opponent may suspend the $300 contribution limit and receive contributions in excess of the $300 limit up to the amount of personal funds contributed by the candidate (CYMC ~2.52.l00(B)); a candidate may also suspend the $300 limit if his or her opponent loans himself or herself money, up to the amount of the loan (CYMC ~2.52.090(D)). . Candidates must file campaign statements as required by state law (CYMC ~2.52.160) . Alleged violations of the ordinance are to be reported to the City Clerk, to be investigated and/or prosecuted by special counsel designated as the "enforcement authority" (CYMC ~~2.52.160, 2.52.170) 10-35 . Yiolations may be prosecuted criminally as misdemeanors and/or through a civil action, with specified fines; monetary judgments from a civil action are to be deposited into the general fund (CYMC 92.52.180) 10-36 I EXHIBIT C 10-37 Chula Vista Municipal Code 2.52.030 Sections: 2.52.010 2.52.020 2.52.030 2.52.040 2.52.050 2.52.060 2.52.070 2.52.080 2.52.090 2.52.100 2.52.110 2.52.120 2.52.130 2.52.140 2.52.150 2.52.160 2.52.170 2.52.180 2.52.190 Chapter 2.52 CAMPAIGN CONTRlBUTlONS* Purpose and intent. Interpretation of this chapter. Definitions. Campaign contributions. Surplus campaign funds. Organizational contributions. Contribution in violation of this chapter. Written solicitations by candidates. Loans. Notice regarding personal funds. Family contributions. Prohibition of contribution in the name of another individual. Contributions for legal defense. Campaign contribution checking account. Campaign statements. Duties of city clerk. Enforcement. Penalties. Severability. . Prior legislation: Ords. 2298. 2334. 2391, 2434,2581, 2654,2661,2769 and 2849. 2.52.010 Purpnse and intent. In enacting this chapter, the city council finds and declares that moderate monetary contributions to political campaigns are a legitimate form of par- ticipation in the American political process. It is the policy of this city to protect the integrity of the electoral process, and the best interests of the citi- zens of this city are served by regulating campaign finance. Inherent in the high cost of election campaign- ing is the problem of improper influence, real or potential, exercised by campaign contributors over elected officials. It is the purpose and intent of the city council in enacting this chapter: A. To preserve an orderly political forum in which individuals may express themselves effec- tively; B. To place realistic and enforceable limits on the amounts of money that may be contributed to political campaigns in city elections; C. To prohibit contributions by organizations and permit individual contributions only; D. To provide full and fair enforcement of all the provisions of this chapter; and E. To encourage candidate adherence to elec- tion regulations by making them easier to under- stand. (Ord. 2955 Ii 1,2004). 2.52.020 Interpretation of this chapter. The terms and phrases in this chapter shall be defined as those terms and phrases are defined in the Political Reform Act of 1974, as amended (Government Code, Section 81000 et seg.), unless otherwise specified in this chapter. (Ord. 2955 Ii I, 2004). 2.52.030 Definitions. A. "Agent" means a person who acts on behalf or at behest of any other person or accepts a contri- bution on behalf of a candidate. If an individual acting as an agent is also acting as an employee or member of a law, architectural, engineering or con- sulting firm, or a similar entity or corporation, both the entity or corporation and the individual are "agents." B. "At the behest" means made under the con- trol or at the direction of, in cooperation, consulta- tion, coordination, or concert with, at the request or suggestion of, or with the express prior consent of. C. "Candidate" means any individual seeking any city elective office, the candidate's campaign committee, committee(s) controlled by the candi- date, agents of the candidate. D. "City campaign statement" means the state- ment which, to the extent practicable, shall be sim- ilar to or consolidated with that required by state law. E. "City elective office" means the offices held by members of the city council and mayor. F. "Contributions" are defined in a manner identical with the definition found in Government Code Section 820 IS and any related provisions in the California Code of Regulations. G. "Enforcement authority" means that special counsel appointed by the city council pursuant to CVMC 2.52.170. H. "General election" is that election identified by Charter Section 900 which is combined with the state primary election. l. "Independent expenditure committee" is as defined in Government Code Sections 82013 and 82031 which SUppOlts or opposes in whole or in part a candidate for city elective office if contribu- tions are made to said committee with the intent that they, or a comparable amount of funds other- wise owned by, or under the control of, the com- Ji0)..J8-77 (Revised 7/05) 2.5~.040 mittL be used to support or oppose a particular candidate for a city elective office. This type of committee is not controlled by the candidate. J I "Intermediary" means a person who delivers to a candidate or committee or committee treasurer a contribution from another person unless such coniribution is from the person's employer, imme- diate family or an association to which the person beldngs. Neither candidate or treasurer is consid- ered an intermediary. K. "Organization" means a proprietorship, labdr union, finn, partnership, joint venture, syndi- cat~, business, trust, company. corporation. associ- atioh. or committee. including a political action cozrtmittee. rJ. "Person" means a natural individual. M. "Single election contest" means either a general or special election. N. "Special election" defined in Charter Sec- tio~ 901, as all other municipal elections that may be held by authority of the Charter or of any law. (Oril. 2955 ~ 1,2004). I 2,52.040 Campaign contributions. A. No person, other than a candidate, shall make a contribution in excess of $300.00 to a can- didate for a single election contest. No candidate shail solicit or accept a contribution in excess of $300.00 from a contributor for a single election contcst. A candidate may receive up to $300.00 from a contributor in each of the general and spe- cial elections. B. The terms of this chapter are applicable to any' contributions made to a candidate or commit- tee Ihereunder, whether used by such candidate or committee to finance a current campaign or to pay debts incurred in prior campaigns. t. No person shall make a contribution to any candidate for city elective offices and no such can- didate shall accept from any person such a contri- bution sooner than 11 months preceding a single eleCtion contest. D. A contribution for an election may be acCepted by a candidate for elective city office aft~r the date of the election only to the extent that thel contribution does not exceed net debts out- standing from the election, and the contribution does not otherwise exceed the applicable contribu- tion limit for that election. E. A candidate for city elective office may not solicit or accept contributions for a special election pripr to the holding of the general election for that office. A candidate for city elective office may cr over contributions raised in connection with (RrSed 7/05) one election for elective city office to pay cam- paign expenditures incurred in connection with a subsequent election for the same elective city office. (Ord. 2955 ~ 1,2004). 2.52.050 Surplus campaign funds. A. Upon leaving any elected office, or at the end of the post-election reporting period following the defeat of a candidate for elective office, which- ever occurs last, campaign funds under the control of a candidate shall be considered surplus cam- paign funds. 2-7!lm3.9 Chula Vista Municipal Code 2.52.090 B. Surplus campaign funds shall be used only for the following purposes: 1. To repay contributions. 2. To make a donation to any bona fide char- itable, educational, civic, religious, or nonprofit organization, where no substantial part of the pro- ceeds will have a material financial effect on the candidate, any member of his or her immediate family, or his or her campaign treasurer. 3. To pay for professional services reason- ably required by the candidate or committee to assist in the performance of its administrative func- tions, including payment for attorney's fees for lit- igation that arises directly out of a candidate's activities or his or her status as a candidate, includ- ing, but not limited to, an action to enjoin defama- tion, defense of an action brought of a violation of state or local campaign, disclosure, or election laws, and an action from an election contest or recount. (Ord. 2955 ~ 1,2004). 2.52.060 Organizational contributions. A. No organization shall make a contribution to any candidate or candidate campaign committee. This chapter shall not apply to contributions made to a committee which is organized solely for the purpose of supporting or opposing the qualification for the ballot or adoption of one or more city mea- sures. B. No officer, employee, agent or attorney or other representative of a person covered by this chapter shall aid, abet, advise or participate in a violation of this chapter. All contributions made by a person whose contribution activity is financed, maintained or controlled by an organization or any other person shall be deemed to be made by that organization or other person. If the contribution is deemed made by an organization, it is prohibited. C. No candidate shall knowingly accept a pay- ment or contribution made in violation of this chapter. (Ord. 2955 ~ 1,2004). 2.52.070 Contribution in violation of this chapter. A. If a contribution is tendered and would be in violation of this chapter, it shall be returned within three business days of discovery. B. Ifa contribution which is in violation of this chapter is received by a candidate, the candidate shall report in writing within three business days of discovery of the receipt of the contribution to the city clerk the facts surrounding such contribution and shall return such contribution to the contributor within 24 hours of discovery. C. A contribution shall not be considered to be received if it has not been negotiated, deposited, or utilized, and is returned to the donor within three business days of discovery of receipt. (Ord. 2955 ~ 1,2004). 2.52.080 Written solicitations by candidates. Any candidate making a written solicitation for a contribution for his or her campaign for city elec- tive office shall include the following written notice in no less than six point type on each such solicitation: NOTICE Ordinance No. 2955 of the City of Chula Vista limits contributions to campaigns for City elective office, either to candidate controiled committees or to regulated inde- pendent expenditure committees, to three hundred doilars per contributor. (Ord. 2955 ~ 1,2004). 2.52.090 Loans. A. A loan or extension of credit shall be consid- ered a contribution from the maker of the loan or extender of credit and shall be subject to the contri- bution limitations of this chapter. B. The provisions of this chapter apply to per- sonalloans or extensions of credit, but do not apply to loans made to a candidate by a commercial lend- iog institution in the lender's regular course of business on terms available to members of the gen- eral public for which the candidate is personally liable. C. A candidate for elective city office may not personally loan to his or her campaign an amount in excess of $20,000. D. Each opponent of a candidate who has made a loan to his or her campaign pursuant to this sec- tion shall be permitted to solicit and receive, and contributors to such opponent may make, contribu- tions in excess of the limits contained in CVMC 2.52.040. The limitation contained in CVMC 2.52.040 shall be suspended from the date candi- date made said loan so that the opponent may receive contributions in excess of the limitation up to the amount loaned by the candidate. Those con- tributions received within or in excess of the limi- tation shall count toward equaling the amount loaned. E. Each opponent of a candidate or other person who has given notice pursuant to CVMC 2.52.100 shall not be bound by the loan limitation within this . 1 O"4U- 79 (Revised 6/04) . 2.52pOO I sectjon to the extent the amount of personal funds expended or contributed exceeds $20,000. (Ord. 2955 ~ 1,2004). I 2.52.100 Notice regarding personal funds. A. No candidate or other person shall expend or contribute more than $5,000 in personal funds in conrtection with an election campaign unless and untii the following conditions are met: II. Written notice of the candidate's or other person's intent to so expend or contribute in excess of$5,000 shall be provided to the city clerk and all opponent candidates. The notice shall be delivered per~onally or sent by registered mail to the last kno~n address of the opponent candidates as sho~n in the records of the city elerk and shall spe~ify the amount intended to be expended or contributed; and I 2. All personal funds to be expended or con- tributed by the candidate shall first be deposited in the I candidate's campaign contribution checking account. The required notice shall be given no later than 21 days prior to the election. If the expcndi- tun: or contribution occurs during the 21 days pre- ceding the election, the required notice shall be provided within 24 hours. B. Each opponent of any candidate who ha. con\.plicd with the above conditions shall be per- mitted to solicit and receive, and contributors to each such opponent may make, contributions in cxcbss of the limits established in CVMC 2.52.040(A). The limitation contained in CVMC 2.52.040 shall be suspended from the date candi- date deposited said funds so that the opponent may receive contributions in excess of the limitation up to the amount of personal funds deposited by the candidate in his or her campaign contribution checking account. Those contributions received within or in excess of the limitation shall count to\Jard equaling the amnunt of personal funds deposited by the candidate in his or her campaign contributinn checking account. (Ord. 2955 ~ I, 20(4). I 2.52.110 Family contributions. Contributions by a busband and wife shall be tre~ted as separate contributions and shall not be I aggregated where the checks are drawn separately and signed by the spouse making the contribution. CoPtributions by a husband and wife shall be treated as separate even if combined into one check bul presented with two signatures. (Ord. 2955 ~ I, 2004). 2.52.120 Prohibition of contribution in the name of another individual. It is unlawful for any individual, or combination of individuals acting jointly, to make directly or indirectly a contribution in the name of another individual or combination of individuals. (Ord. 2955 ~ 1,2004). 2.52,130 Contributions for legal defense. Notwithstanding anything contained herein to the contrary, a payment to or for the benefit of a councilmember and mayor or candidate made and used for the express purpose of offsetting costs already incurred by that councilmember and mayor or candidate in the defense of a criminal or admin- istrative prosccutorial action against said coun- cilmembcr and mayor, and not made or used for the purpose of aiding in the election of said coun- cilmember and mayor or candidate, and not made within (before or after) 100 days of an election in which the councilmember and mayor or candidate is competing for a seat or office, shall not be deemed to be a contribution for the purposes ofthis chapter. (Ord. 2955 ~ I, 2004). 2.52.140 Campaign contribution checking account. The campaign account required by Government Code Section 85201 (a) shall be established at a financial institution located in San Diego County. (Ord. 2955 ~ 1,2004). 2.52.150 Campaign statements. Each candidate and committee shall file cam- paign statements in the time and manner required by the Political Reform Act of 1974 as amended (Government Code Section 84100 et seq.). Com- pliance with the requirements of that Act shall be deemed to be compliance with this chapter. (Ord. 2955 ~ 1,2004). 2.52.160 Duties of city clerk. In addition to other duties required of the city elerk under the terms of this chapter and city Char- ter, the elerk shall: A. Supply appropriate forms and manuals pre- scribed by the California Fair Political Practices Commission. These forms and manuals shall be furnished to all candidates and committees, and to all other persons required to report. B. Determine whether required documents have been filed and, if so, whether they conform on their face with the requirements of state law. (RrSed 8/04) 2-R't0;41 4 Chula Vista Municipal Code 2.52.190 C. Notify promptly all person and known com- mittees who have failed to file a document in the form and at the time required by state law. D. Report apparent violations of this chapter and applicable state law to the enforcement author- ity. E. Compile and maintain a current list of all statements or parts of statements filed with. the clerk's office pertaining to each candidate and each measure. F. Cooperate with the enforcement authority in the performance of the duties of the enforcement authority as prescribed in this chapter and applica- ble state laws. (Ord. 2955 ~ 1,2004). 2.52.170 Enforcement. . A. The city attorney shall not investigate or prosecute alleged violations of this chapter, but shall defend the constitutionality and legality of this chapter in any civil proceeding in which the city or the city council is a party. B. Special counsel shall investigate or prose- cute alleged violations of this chapter. C. The city attorney shall solicit proposals from attorneys in accordance with Section 503 of the city Charter and Chapter 2.56 CVMC to act as spe- cial counsel 180 days prior to a city election. As part ofthe annual budget process, city council shall appropriate no less than $100,000 to fund the reten- tion of special counsel. Said funds shall be separate from the city attorney's budget and used solely for the investigation and prosecution of alleged viola- tions of this chapter. D. The city attorney shall appoint a panel of no less than three attorneys to act as special counsel. Said attorneys shall be compensated by the city and shall serve as the enforcement authority for this chapter. Should the appointment of additional spe- cial counsel become necessary or appropriate, the city attorney shall appoint such additional special counsel as may be required. A single member of the special counsel panel will be assigned to each case. Assignments will be made on a rotating basis. E. Complaints of violation of this chapter shall be submitted in writing, under penalty of perjury, by a resident of the city to the city clerk. Said com- plaint shall state the full allegation of facts that would constitute a violation of the code. The com- plaint must be filed within 90 days of discovery of the alleged violation, but no later than 180 days from the date of the election. F. The city clerk shall forward the complaint to the randomly assigned special counsel from the panel of attorneys appointed by the city attorney within five working days of receipt for a probable cause determination. lfno probable cause is deter- mined to exist the complaint shall be dismissed summarily and interested parties shall be notified in writing. G. If probable cause is determined to exist, spe- cial counsel shall take further investigatory and procedural steps necessary to resolve the matter. H. Violations of this chapter may be pursued either through a civil or criminal action at the dis- cretion of the special counsel. Special counsel may also commence and prosecute any necessary administrative proceedings or civil litigation to compel compliance with this chapter. No enforce- ment or prosecution or action of special counsel shall be subject to the review or control of the city attorney or city council. I. Special counsel may investigate and may institute legal action to prevent further violations. The special counsel may decline to investigate if the allegation is also a violation of state law and is the subject of a complaint filed with the fair politi- cal practices commission. J. Special counsel shall be immune to liability for enforcement of chapter. (Ord. 2955 ~ I, 2004). 2.52.180 Penalties. A. Any person who willfully violates any pro- vision of this chapter is guilty of a misdemeanor. Any person who willfully causes or solicits any other person to violate any provisions of this chap- ter, or who aids and abets any other person in the violation of this chapter shall be guilty ofa misde- meanor. B. Any person who intentionally or negligently violates any provision of this chapter shall be liable in a civil action brought by special counsel for an amount not more than three times the amount the person failed to report properly or unlawfully con- tributed, expended, gave or rcccived, or $5,000 per violation, whichever is greater. In determining the amount of liability, the court may take into account the seriousness of the viola- tion and the degree of culpability of the defendant. If a judgment is entered, the funds recovered shall be deposited into the city's general fund. (Ord. 2955 ~ 1,2004). 2.52.190 Severability. If any provision of this chapter, or the applica- tion of any such provision to any person or circum- stances, shall be held invalid, the remainder ofthis chapter to the extent it can be given effect, or the application of those provisions to persons or cir- .!<r-,f281 (Revised 8/04) 4 2.52.190 ]stanees other than those as to which it is held indlid, shall not be affected thereby, and to this endl the provisions of this chapter are severable. COrd. 2955 ~ 1, 2004). I. (ReVised 8/04) I 2-810_43