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BACKGROUND At its February 20, 2007 meeting, the City Council adopted its 2007-2008 Work Plan, which included "Campaign Finance Issues and Options for Change". This report provides information in response to that Council priority. State law requires that candidates for local office and candidates' committees, as well as committees for local ballot measures, disclose persons and organizations which make contributions to such campaigns, as well as disclose expenditures. (See the Political Reform Act of 1974 at Govemment Code §§ 81000 et. seq.) State law does allow local jurisdictions to adopt more stringent requirements -which Pleasanton did in 1994 regarding the reporting of contributions. The City's current campaign regulations, set forth in Chapter 1.20 of the Municipal Code, require that any candidate for City office, and that candidate's committee, file four campaign statements listing pen;ons who contribute $25 or more to that candidate's campaign. Similar reporting provisions apply to contributions to committees formed in support of, or opposition to, City ballot measures. These City regulations are stricter than State law, which sets $100 as the contribution reporting threshold, and requires only three disclosure statements during the election period. The City's current regulations do not impose any contribution or expenditure limits on candidates or ballot measures. Contribution limits for local office are expressly allowed by State law. However, expenditure limits are not pemnitted, as such limits have been found by both Federal and State courts to violate the guarantees of freedom of speech and association. DISCUSSION Limits on Contributions. While placing a limit on a pennon, organization, business or committee's ability to contribute to a candidate or candidate's committee does raise oancems about freedom of speech and association, Federal and State courts have upheld contribution limits for the purposes of eliminating the appearance of impropriety and actual corruption associated with large contributions. In fact, State law specffically allows the City to enact contribution limits for elections for local office. (See Govemment Code §85703.) Because ooncems about corruption generally do not arise in campaigns regarding ballot measures, as they do not involve a particular candidate, contribution limits for ballot initiatives or referendum are legally disfavored. Similarly, corruption issues do not exist when a candidate makes a contribution to his or her own campaign, so such contributions are regularly exempted from the contribution limits. Page 2 of 6