A bill that would raise the maximum donation from $250 to $1,000 to officials who oversee permitting and licensing in the state, is one step closer to law after the Senate passed the measure May 20 on a vote of 30 to 2.
The bill will now be heard by committees in the Assembly, and if passed there, would receive a vote on the Assembly floor.
If ultimately passed by the Legislature, Senate Bill 1243 would amend a 1982 law on the donation cap and also shorten the window from one year to nine months that such can be made if a donor has business during that time frame before an agency of which the official is involved.
Under the bill’s original text, some industries—like housing construction—would have been exempt, which proved controversial for the Senate’s Elections and Constitutional Amendments Committee’s chair who voted against the proposal during a hearing April 30.
Ultimately, that carve-out was removed from the bill.
During that committee hearing, proponents argued the measure would remove complexities which are currently preventing some people and businesses seeking licenses or permits from donating due to a lack of understanding and concern that their actions could prove detrimental.
According to the bill’s author, Sen. Bill Dodd, SB 1243 would simplify campaign donations and improve the political process to allow for greater participation.
He suggested that by shortening the timeframe from one year to nine months that fewer projects or licensing applications would be impacted by regulations, thus allowing for more donations.
“The law is unnecessarily complicated and ... unworkable,” Mr. Dodd said during the hearing. “By making transparent direct contributions ... the law effectively freezes out a sector of the community from donating anything directly to candidates.”
Such creates what he described as an untenable situation where donations from “dark money” are less transparent.
“This unfortunately promotes a very undesirable consequence: independent expenditures pouring into campaigns,” Mr. Dodd said.
Regarding the bill’s intent to raise the maximum contribution limit, he argued that such small amounts are not likely to lead to corruption or improper behavior from candidates or elected officials and are far below the $5,500 cap for individuals to donate to state legislators.
“The idea that our local officials can be bought and sold for $250 is both laughable and, frankly, offensive, especially when compared to the standards of the state legislators,” Mr. Dodd said.
Proponents also said a change to the threshold is needed because of inflation—referencing the U.S. Bureau of Labor Statistics calculator which shows $250 in 1982 is worth about $800 today.
The construction industry strongly supports the bill, arguing the permitting process has become too cumbersome in recent years, and that it is unable to lobby effectively at the local level. While many construction codes are developed at the state level, local authorities issue permits.
Supporters also pointed to data showing a declining rate of residential construction permits issued in California from a peak of 322,000 in 1963 to approximately 120,000 issued last year, according to the Construction Industry Research Bureau.
During the same period, contributions to campaigns and candidates have increased, according to a building industry representative.
“This is the opposite of what you would expect to see if there were a pay-to-play type of scenario going on,” Nick Cammarota, senior vice president and general counsel of the California Building Industry Association, told lawmakers during the hearing.
Another supporter said current law is creating compliance problems for local officials because of the complexity of the process and the rules pertaining to aggregating donations.
The law is complex and multi-layered. It was first passed by voters as the Political Reform Act of 1974, was then amended in 1982 under the Levine Act and amended again—to lengthen the donation time frame from three months to one year—in 2022.
Such has caused “significant compliance issues for local elected officials,” Rebekah Krell, director of policy and legislative affairs for the San Francisco City Attorney’s Office. “It is difficult if not impossible to determine whether or when contributions ... must be aggregated.”
She said if the bill were to become law, it would clarify the donation process while reducing costs and time constraints for local officials to remain compliant.
Some opponents vociferously objected to the original language of the measure specifically the housing industry exemption.
“Exempting a single interest from an ethics law is simply bad policy,” Pedro Hernandez, representing California Common Cause, said during the hearing. “The bill ... does not further the Political Reform Act and would be extremely vulnerable in court.”
Another critic said the public would be negatively affected because some regulations would be loosened pertaining to conflict of interest.
“SB 1423 would dramatically weaken [conflict of interest] protections,” Trent Lange, executive director of the California Clean Money Campaign, said during the hearing.
He also argued the bill’s exemptions for certain industries and complex definitions of membership dues—where increased fees paid to labor groups and others involved in lobbying efforts are not included—not applying to donation limits would prove detrimental to elected officials.
“There are two parts of the proposed bill that we are evaluating today ... that carve out specific interests over others, and I think makes it very unworkable for a local elected official,” Mr. Lange said.
The chair of the Senate’s elections committee offered similar arguments and highlighted carve outs to labor groups—including those related to the cannabis industry—and the housing development industry as worrisome.
“Those are the two areas that are the most problematic in carving out specific special interests and exempting them,” Sen. Catherine Blakespear, the chair of the committee, said during the hearing. “This is essentially an anti-pay-to-play bill, and it’s exempting from ethics rules these two industries.”
She urged her colleagues to reject the measure and work with the author to amend the language before allowing it to pass.
“I am recommending no vote ... or a decline to vote ... on this because I do feel it is a disservice to be carving out these two industries,” Ms. Blakespear said. “This bill is not worth moving forward; it has too many problems in it.”
She also pointed to an Assembly Bill currently under consideration that would keep the existing law intact while raising the donation threshold to $1,500.
The committee ultimately approved the bill despite Ms. Blakespear’s no vote and recommendations, with four voting in favor—including three fellow Democrats—and two members abstaining.
While the bill’s author did not accept the committee’s amendments before the hearing, he promised to make some of the changes, including removing the exemption for the housing industry, before it reached the Senate floor.
Assembly committees are expected to take up the bill in the upcoming weeks.
