BILL ANALYSIS Ó SENATE COMMITTEE ON ELECTIONS AND CONSTITUTIONAL AMENDMENTS Senator Lou Correa, Chair BILL NO: SB 1001 HEARING DATE: 4/19/12 AUTHOR: YEE ANALYSIS BY: Darren Chesin AMENDED: 4/16/12 FISCAL: YES SUBJECT Political Reform Act: lobbyists and committees: fees DESCRIPTION Existing law , pursuant to the Political Reform Act of 1974 (PRA), requires the Secretary of State (SOS), in consultation with the Fair Political Practices Commission (FPPC), to provide online and electronic filing processes for use by specified political committees, lobbyists, lobbying firms, and lobbyist employers Those processes must enable a user to comply with all relevant disclosure requirements. The SOS must also make all the data filed available on the Internet for public viewing in an easily understood format. This online reporting and disclosure system is commonly referred to as the Cal-Access system. Existing law requires all state candidates and state political committees who are required to file campaign reports to file those reports online or electronically if the cumulative amount of contributions received, expenditures made, loans made, or loans received is $25,000 or more. Existing law requires that lobbying firms and lobbyist employers register with the SOS, and authorizes the SOS to charge each lobbying firm and lobbyist employer a fee of up to $25 per year for each lobbyist required to be listed on its registration statement. Currently, the SOS charges $25 every two years. Existing law provides that if any person, candidate or committee files an original statement of economic interest (SEI), campaign statement or report after any deadline imposed by the PRA, that filer, in addition to any other penalties or remedies established by the PRA, is subject to a penalty of $10 per day after the deadline until the statement or report is filed to the officer with whom the statement or report is required to be filed. This penalty need not be enforced by the filing officer if on an impartial basis he or she determines that the late filing was not willful and that enforcement of the penalty will not further the purposes of the PRA, except that no penalty may be waived if certain statements or reports are not filed within specified time periods. The filing officer must deposit any funds received under this section into the general fund of the jurisdiction of which he or she is an officer. This bill would increase the maximum amount of the lobbying firm and lobbyist employer fee to $50 per year and would also require each political committee that receives contributions totaling $1,000 or more in a calendar year (recipient candidate, general purpose, ballot measure committees, etc.) to pay a similar fee of not more than $50 per year to the SOS. This bill would require the FPPC to adjust these fee limits on December 1 of each even-numbered year to reflect any increase in the Consumer Price Index and to round the adjustment to the nearest $5. This bill would establish the Political Disclosure, Access, and Transparency Account in the State Treasury in which would be deposited all monies collected for lobbying, lobbyist employer, and political recipient committee registration fees as well as $10 per day late filing penalties. This bill would further declare that it is the intent of the Legislature that monies deposited into this account be expended for the maintenance, repair, and improvement of the SOS's Cal-Access online disclosure program. BACKGROUND Cal-Access Issues and Status According to the SOS : Created in 1999, Cal-Access is a database and filing system the SOS SB 1001 (YEE) Page 2 has used to make much of the lobbying and campaign finance information available online at no cost to users. Cal-Access is a suite of applications developed in 13 different programming languages which, until recently, ran the system on a server cluster and associated components that are more than 12 years old, using an uncommon version of the Unix operating system. While the SOS has the funding to maintain the existing hardware and software, finding parts and qualified people to do the maintenance on such outdated equipment has been increasingly difficult. The Cal-Access system went down November 30, 2011 was restored December 7, 2011 went down December 9, 2011 and was restored again on December 30, 2011. The causes of the outages were layered and complex and no quick fix was available. The recovery efforts pursued in December should stabilize Cal-Access and enable it to continue running, but the system can never be made stronger or patched with new features. Any attempt to upgrade or modernize Cal-Access could be as risky, time-consuming, and expensive as developing and deploying a new system. Even the December work to restore Internet availability of Cal-Access will not last forever. It is highly likely that Cal-Access will require more robust servers in the next three to four years simply to continue providing access to the ever-growing volume of information. The cost of an entirely new system and the speed with which it can be deployed will depend on many factors and ultimately can only be borne out through the state's IT procurement process, which history has shown to be lengthy and expensive. Before the Cal-Access outage began on November 30, the SOS was looking at existing commercial off-the-shelf (COTS) products, as well as systems used by other states to prepare a feasibility study report (FSR) - the project blueprint that is the required precursor for an IT project and subject to approval by state control agencies. Any consideration of an FSR, along with the subsequent legislative and gubernatorial review of any budget change proposal to conduct a procurement, would take into account the replacement of Cal-Access in the context SB 1001 (YEE) Page 3 of the two major IT procurements - VoteCal and California Business Connect - that the SOS is currently conducting. COMMENTS 1. According to the author , Cal-Access, the disclosure website that provides financial information supplied by state candidates, donors, and lobbyists, among others, has had a slew of technical issues recently that have resulted in a lack of access to this information by the public. This information is essential to ensuring transparency and accountability in affairs that directly impact the people of this state. This bill seeks to raise additional funds to be used on the maintenance of the Cal-Access website to ensure that this information is continuously available as it was intended to be by raising the fee for lobbying firms and lobbyist employers to $50 per year. This bill will also require the Fair Political Practices Commission to adjust this fee on December 1 of each even-numbered year to reflect any increase in the Consumer Price Index and to round the adjustment to the nearest $5. 2. How Much Money Would this Bill Raise ? The committee estimates that between lobbyist registrations, committee registrations, and late fines, this bill could provide approximately $600,000 per year for the proposed Cal-Access account. POSITIONS Sponsor: California Common Cause Support: California Newspaper Publishers Association Fair Political Practices Commission Oppose: Howard Jarvis Taxpayers Association SB 1001 (YEE) Page 4