Prop. 105 Backers Now Turn to the Legislature : Initiatives: They want lawmakers to enact provisions of the truth-in-advertising ballot measure, which was struck down by a state Court of Appeal last week.

During last year’s elections, voters were treated to a new kind of truth in advertising: For the first time, initiative campaigns were required to identify on the air who financed their commercials.

For groups like Common Cause, the disclosure law contained in Proposition 105 was a step toward reducing the hidden influence of special interest groups in California politics.

But that requirement will be at the center of a new political battle this year as the result of a state Court of Appeal ruling last week striking down the wide-ranging 1988 ballot measure.

The court decision, issued on the grounds that the measure addressed too many subjects at once, also overturned Proposition 105’s disclosure requirements for such diverse things as toxic household products, nursing homes, insurance companies and corporations doing business in South Africa.

In most cases, the court’s ruling will have no noticeable effect--in part because major portions of the law were never implemented by the Administration of former Gov. George Deukmejian.

But the requirement that campaigns identify their major contributors in commercials had been widely enforced and supporters are gearing up to win its reinstatement in the Legislature.

“We are making it our top priority to restore the truth-in-initiative requirement through legislation,” said Ruth Holton, a lobbyist for Common Cause. “Voters have a right to know who are the true supporters and opponents of initiative measures.”

The main sponsor of Proposition 105, Oakland attorney Jim Rogers, maintained that the appeals court erred in its 3-0 decision and expressed hope that Atty. Gen. Dan Lungren will appeal the ruling to the state Supreme Court. Lungren’s office said no decision has yet been made on whether to appeal.

“The protection which the voters thought they were getting has now been stripped away,” said Rogers, who heads a group called Consumers United for Reform. “I don’t think this court followed the law.”

Under Proposition 105, ballot measure campaigns were required to identify in each television or radio commercial the industry or individual companies that were major contributors.

Last year, this meant that the alcohol, timber and chemical industries as well as individual companies were identified as major sponsors of measures in various commercials. For example, foes of Proposition 128, the “Big Green” environmental initiative, told voters in their advertisements that Monsanto, Chevron and Arco were major contributors to the opposition campaign.

The requirement was galling to some business leaders, who brought the successful suit challenging Proposition 105.

“It created a chilling effect on the exercise of free speech,” said James Parrinello, the attorney who handled the case on behalf of the California Chamber of Commerce and the Chemical Specialties Manufacturers Assn.

Parrinello said the rules were complex and required frequent recalculations to determine which contributors had to be identified in commercials. “It wasn’t just having to identify yourself,” he said. “It created confusion and uncertainty.”

But supporters of the disclosure requirement argued that it gave valuable information to voters about who was really behind the initiative campaigns. It reduced the possibility, they said, that a powerful industry could quietly influence voters through large campaign contributions.

“If special interests are going to use and abuse the initiative process, then they ought to stand up and say so publicly rather than hide behind phony committee names,” said Holton, the Common Cause lobbyist. “The voters will remain confused and frustrated with the initiative process if they cannot find out that it’s the alcohol industry or the timber industry that’s behind a measure.”

During the fall elections, several campaigns avoided identifying their contributors by taking advantage of a Proposition 105 loophole--that the major financial backers did not have to be named in commercials that dealt with more than one ballot measure.

For example, the campaign against Propositions 131 and 140, the term limit initiatives, did not identify in its ads the main source of its money: committees headed by Assembly Speaker Willie Brown and Senate President Pro Tem David A. Roberti. Because of the appeals court decision, a lawsuit filed over the controversy has been put on hold.

This year, Common Cause sponsored legislation to close the loophole in Proposition 105 so that all campaigns would have to identify their major backers. Now, with the court’s ruling, the citizens lobbying group plans to broaden the bill to restore the campaign disclosure requirements.

“We expect a lot of special interest opposition to this bill,” Holton said. “What we hope is to get a lot of grass-roots support for this.”

The court’s ruling has a less apparent effect on other disclosure requirements of Proposition 105.

The initiative required businesses to issue warnings that toxic household products, such as paints and solvents, should not be poured down drains or placed in the trash.

In addition, it required the state to publicize the safety records and health violations of nursing homes.

But the Department of Health Services, which was responsible for enforcing both provisions, never completed regulations to implement the law. As a result, more than two years after voters approved Proposition 105, no warnings were ever issued for hazardous household products and the records of nursing homes were not publicized.

Another provision of Proposition 105 required insurance companies to disclose to the extent possible any duplicate coverage in supplementary insurance policies for senior citizens.

According to the Department of Insurance, this provision was never enforced because it was superseded by a more comprehensive disclosure law enacted by the Legislature.

One widely enforced section of the measure was a requirement that any corporation selling stock or securities in California report whether it does business with South Africa. About 6,000 companies complied with the provision and filed statements with Secretary of State March Fong Eu saying whether they had business ties with South Africa.

The provision was designed to intensify pressure on the racially divided nation to abolish its policy of apartheid. But since Proposition 105 was passed, South Africa has moved toward dismantling its system of racial separation.

If the Supreme Court upholds the decision overturning Proposition 105, the big problem for the secretary of state’s office will be deciding what to do with the thousands of records.

“The files that we had presumably will end up in the archives eventually,” said Eu spokeswoman Melissa Warren.