Peace helped draft the state's Proposition 14 of 2010, which opened primary elections for partisan statewide offices, the Legislature, the Board of Equalization and Congress to all voters regardless of party affiliation.
He hopes his latest proposal would extend the "top-two" primary to the presidential election.
Peace and Jeff Marston, both of the Independent Voter Project, submitted the proposal in June to "prohibit the expenditure of public funds for the private activities of political parties."
The proposed initiative, which is pending at the state attorney general's office, would discontinue the use of public funding to hold party elections, such as county central committee and presidential primary elections.
By cutting off the public funding, Peace hopes political parties would open their primaries to all voters, not just members of their own party. The secretary of state and elections officials currently use public funds to certify candidates, draw up ballots, run polling places and tally votes.
Peace said in a recent interview that parties would not be legally required to open their primaries to voters -- they would just have to fund a closed primary independently.
"If you, the Republican Party, want to say independents can't participate, fine, but you're going to have to pay for the costs to tally that vote," said Peace, who was appointed finance director by then-Gov. Gray Davis after being termed out of the Legislature.
PHOTO: Then-Finance Director Steve Peace, center, talks with then-Assemblyman Darrell Steinberg, left, and then-Assemblyman Lou Correa, about budget issues during the early morning hours on July 29, 2003. The Sacramento Bee/John Decker