AB 800, as amended, Gordon. Political Reform Act of 1974
(1) The Political Reform Act of 1974 defines various terms for purposes of the reporting and disclosure requirements under the act. The act defines a “controlled committee” as a committee that is controlled directly or indirectly by a candidate or state measure proponent or that acts jointly with a candidate, controlled committee, or state measure proponent in connection with the making of expenditures. The act provides that a candidate or state measure proponent controls a committee if he or she, his or her agent, or any other committee he or she controls has a significant influence on the actions or decisions of the committee.
This bill would establish a presumption that a committee is significantly influenced by a candidate for purposes of these provisions if any of several specified factors is satisfied.
(2) The act prohibits an agent or independent contractor from making an expenditure of $500 or more, other than overhead or normal operating expenses, on behalf of or for the benefit of any candidate or committee unless it is reported by the candidate or committee as if the expenditure were made directly by the candidate or committee. The act requires an agent or independent contractor to make known to the candidate or committee all information subject to this reporting requirement.
This bill, in addition, would require a subagent or subcontractor who provides goods or services to or for the benefit of a candidate or committee to make known to the agent or independent contractor all of the information subject to the reporting requirement described above, and would require that disclosure of this information by a subagent or subcontractor to the agent or independent contractor or by the agent or independent contractor to the candidate or committee occur no later than three working days prior to the time the campaign statement reporting the expenditure is required to be filed, except that an expenditure that is required to be reported as a late contribution or late independent expenditure must be reported to the candidate or committee within 24 hours of the time that it is made.
(3) The act defines as “surplus campaign funds” campaign funds that are under the control of a former candidate or former elected officer as of the date of leaving elective office or the end of the postelection reporting period following the defeat of the candidate for elective office, whichever occurs last. The act restricts the purposes for which surplus campaign funds may be expended.
This bill would increase the time at which campaign funds become surplus campaign funds by 90 days following either the officer leaving elective office or the end of the postelection reporting period following the defeat of a candidate, whichever occurs last.
(4) The act requires the Franchise Tax Board to conduct audits and field investigations of various financial statements required to be submitted by lobbying firms, lobbyist employers, candidates, and specified committees.
The act prohibits the commencement of an audit or investigation of a candidate, controlled committee, or committee primarily supporting or opposing a candidate or a measure in connection with a report or statement required by specified provisions of the act until after the last date for filing the first report or statement following the general, runoff, or special election for the office for which the candidate ran, or following the election at which the measure was adopted or defeated, except as provided. The act prescribes the scope of campaign statements and reports to be included in audits and investigations of candidates, controlled committees, or committees primarily supporting or opposing a candidate or a measure.
This bill would delete these provisions that delay the commencement of an audit or investigation and prescribe the scope of audits and investigations.
In addition to the general auditing requirements imposed on the Franchise Tax Board as described above, the act authorizes the Franchise Tax Board and the Fair Political Practices Commission to make investigations and audits with respect to any reports or statements required by specified provisions of the act regarding campaign disclosure, limitations on contributions, and lobbyists.
This bill would expand this authority to allow the Franchise Tax Board and the Fair Political Practices Commission to make investigations and audits with respect to any reports or statements required under the act.
The act requires the Franchise Tax Board periodically to prepare reports regarding its audit and investigations under the act and send them to the Commission, the Secretary of State, and the Attorney General. The act requires the board to complete its report of any audit conducted on a random basis pursuant to a specified statute within one year after the person or entity subject to the audit is selected by the Commission to be audited.
This bill wouldbegin delete delete thisend deletebegin insert extend theend insert deadline forbegin delete completing reports regarding auditsend deletebegin insert
the Franchise Tax Board to complete its report of an auditend insert conducted on a random basisbegin insert from one to two years after the person or entity to be audited is selected by the Fair Political Practices Commissionend insert.
The act prohibits a member, employee, or agent of the Franchise Tax Board from divulging or making known in any manner any particulars of any record, documents, or information which he or she receives by virtue of conducting audits and investigations, except as provided.
This bill, in addition, would make this prohibition applicable to a member, employee, or agent of the Fair Political Practices Commission.
This bill would authorize the Fair Political Practices Commission, and the Franchise Tax Board at the direction of the Commission, to audit any record required to be maintained under the act in order to ensure compliance with the act prior to an election, even if the record is a report or statement that has not yet been filed. The bill would authorize the Commission to seek injunctive relief in a superior court to compel disclosure consistent with the act, and would require a court to grant expedited review of an action filed pursuant to this provision, as specified.
(5) Existing law makes a knowing or willful violation of the Political Reform Act of 1974 a misdemeanor and subjects offenders to criminal penalties.
This bill would impose a state-mandated local program by creating additional crimes.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
(6) The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the act’s purposes upon a 2⁄3 vote of each house and compliance with specified procedural requirements.
This bill would declare that it furthers the purposes of the act.
Vote: 2⁄3. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
The Legislature finds and declares all of the
2following:
3(a) The people of this state have a compelling interest in
4ensuring that the political contributions and expenditures of
5nonprofit entities, multipurpose organizations, and other
6committees are subject to prompt public disclosure prior to
7elections in order to provide as much information to the public as
8possible in a timely manner.
9(b) If the Fair Political Practices Commission determines that
10an audit or investigation is in the best interests of the public in
11order to detect violations of the Political Reform Act of 1974,
12
judicial review of an action in this regard should receive expedited
13review.
14(c) It is therefore the intent of the Legislature to ensure that the
15Fair Political Practices Commission be given the authority to carry
16out the provisions of the Political Reform Act of 1974 in a manner
17that ensures information regarding political contributions and
P5 1expenditures is provided to the public in an expedited manner prior
2to elections.
Section 82016 of the Government Code is amended
4to read:
(a) “Controlled committee” means a committee that
6is controlled directly or indirectly by a candidate or state measure
7proponent or that acts jointly with a candidate, controlled
8committee, or state measure proponent in connection with the
9making of expenditures. A candidate or state measure proponent
10controls a committee if he or she, his or her agent, or any other
11committee he or she controls has a significant influence on the
12actions or decisions of the committee.
13(b) Notwithstanding subdivision (a), a political party committee,
14as defined in Section 85205, is not a controlled committee.
15(c) For purposes of subdivision (a), a committee is presumed
16to be significantly influenced by a candidate, his or her agent, or
17another committee he or she controls if any of the following is
18satisfied:
19(1) The candidate, or his or her agent, is a voting member of
20the committee’s governing body.
21(2) The candidate, or his or her agent, is involved in the
22decisionmaking of the committee, or the development or
23implementation of the committee’s campaign strategy.
24(3) The candidate, or his or her agent, is involved in directing,
25planning, or implementing the committee’s fundraising activities
26in a greater capacity than making endorsements or appearing at
27fundraisers.
28(4)
end delete
29begin insert(3)end insert The candidate, or his or her agent, is substantially involved
30in directing the day-to-day operations of the committee.
Section 84303 of the Government Code is amended
32to read:
(a) An expenditure of five hundred dollars ($500) or
34more shall not be made, other than for overhead or normal
35operating expenses, by an agent or independent contractor,
36including, but not limited to, an advertising agency, on behalf of
37or for the benefit of a candidate or committee unless it is reported
38by the candidate or committee as if the expenditure were made
39directly by the candidate or committee.
P6 1(b) A subagent or subcontractor who provides goods or services
2to or for the benefit of a candidate or committee shall make known
3to the agent or independent contractor all of the information
4required to be reported by this section, and the agent or
independent
5contractor shall then make known to the candidate or committee
6all of the information required to be reported by this section no
7later than three working days prior to the time the campaign
8statement reporting the expenditure is required to be filed, except
9that an expenditure that is required to be reported by Section 84203
10or 84204 shall be reported to the candidate or committee within
1124 hours of the time that it is made.
Section 89519 of the Government Code is amended
13to read:
(a) Upon the 90th day after leaving an elective office,
15or the 90th day following the end of the postelection reporting
16period following the defeat of a candidate for elective office,
17whichever occurs last, campaign funds under the control of the
18former candidate or elected officer shall be considered surplus
19campaign funds and shall be disclosed pursuant to Chapter 4
20(commencing with Section 84100).
21(b) Surplus campaign funds shall be used only for the following
22purposes:
23(1) The payment of outstanding campaign debts or elected
24officer’s expenses.
25(2) The repayment of contributions.
26(3) Donations to a bona fide charitable, educational, civic,
27religious, or similar tax-exempt, nonprofit organization, where no
28substantial part of the proceeds will have a material financial effect
29on the former candidate or elected officer, any member of his or
30her immediate family, or his or her campaign treasurer.
31(4) Contributions to a political party committee, provided the
32campaign funds are not used to support or oppose candidates for
33elective office. However, the campaign funds may be used by a
34political party committee to conduct partisan voter registration,
35partisan get-out-the-vote activities, and slate mailers as that term
36is defined in Section 82048.3.
37(5) Contributions to support or oppose a candidate for federal
38office, a candidate for elective office in a state other than
39California, or a ballot measure.
P7 1(6) The payment for professional services reasonably required
2by the committee to assist in the performance of its administrative
3functions, including payment for attorney’s fees for litigation that
4arises directly out of a candidate’s or elected officer’s activities,
5duties, or status as a candidate or elected officer, including, but
6not limited to, an action to enjoin defamation, defense of an action
7brought for a violation of state or local campaign, disclosure, or
8election laws, and an action from an election contest or recount.
9(c) For purposes of this section, the payment for, or the
10reimbursement to the state
of, the costs of installing and monitoring
11an electronic security system in the home or office, or both, of a
12candidate or elected officer who has received threats to his or her
13physical safety shall be deemed an outstanding campaign debt or
14elected officer’s expense, provided that the threats arise from his
15or her activities, duties, or status as a candidate or elected officer
16and that the threats have been reported to and verified by an
17appropriate law enforcement agency. Verification shall be
18determined solely by the law enforcement agency to which the
19threat was reported. The candidate or elected officer shall report
20
an expenditure of campaign funds made pursuant to this section
21to the Commission. The report to the Commission shall include
22the date that the candidate or elected officer informed the law
23enforcement agency of the threat, the name and the telephone
24number of the law enforcement agency, and a brief description of
25the threat. No more than five thousand dollars ($5,000) in surplus
26campaign funds may be used, cumulatively, by a candidate or
27elected officer pursuant to this subdivision. Payments made
28pursuant to this subdivision shall be made during the two years
29immediately following the date upon which the campaign funds
30become surplus campaign funds. The candidate or elected officer
31shall reimburse the surplus fund account for the fair market value
32of the security system no later than two years immediately
33following the date upon which the campaign funds became surplus
34campaign
funds. The campaign funds become surplus campaign
35funds upon sale of the property on which the system is installed,
36or prior to the closing of the surplus campaign fund account,
37whichever comes first. The electronic security system shall be the
38property of the campaign committee of the candidate or elected
39officer.
Section 90002 of the Government Code is amended
2to read:
(a) Audits and investigations of lobbying firms and
4lobbyist employers shall be performed on a biennial basis and shall
5cover reports filed during a period of two years.
6(b) If a lobbying firm or lobbyist employer keeps a separate
7account for all receipts and payments for which reporting is
8required by this chapter, the requirement of an audit under
9subdivision (a) of Section 90001 shall be satisfied by an audit of
10that account and the supporting documentation required to be
11 maintained by Section 86110.
Section 90003 of the Government Code is amended
13to read:
In addition to the audits and investigations required by
15Section 90001, the Franchise Tax Board and the Commission may
16make investigations and audits with respect to any reports or
17statements required by this title.
Section 90004 of the Government Code is amended
19to read:
(a) The Franchise Tax Board shall periodically prepare
21reports, which, except as otherwise provided in this section, shall
22be sent to the Commission, the Secretary of State, and the Attorney
23General. If the reports relate to candidates for or committees
24supporting or opposing candidates for the office of Attorney
25General, the reports shall be sent to the Commission, the Secretary
26of State, and the District Attorneys of the Counties of Los Angeles,
27Sacramento, and San Francisco. If the reports relate to local
28candidates and their controlled committees, the reports shall be
29sent to the Commission, the local filing officer with whom the
30candidate or committee is required to file the originals of campaign
31reports
pursuant to Section 84215, and the district attorney for the
32candidate’s county of domicile.
33(b) The Franchise Tax Board shall complete its report of any
34audit conducted on a random basis pursuant to Section 90001
35within two years after the person or entity subject to the audit is
36selected by the Commission to be audited.
37(b)
end delete
38begin insert(c)end insert The reports of the Franchise Tax Board shall be public
39documents and shall contain in detail the Franchise Tax Board’s
40findings with respect
to the accuracy and completeness of each
P9 1report and statement reviewed and its findings with respect to any
2report or statement that should have been but was not filed. The
3Secretary of State and the local filing officer shall place the audit
4reports in the appropriate campaign statement or lobbying files.
Section 90005 of the Government Code is amended
6to read:
A member, employee, or agent of the Franchise Tax
8Board or the Commission shall not divulge or make known in any
9manner the particulars of any record, documents, or information
10that he or she receives by virtue of this chapter, except in
11furtherance of the work of the Franchise Tax Board or the
12Commission or in connection with a court proceeding or the lawful
13investigation of any agency.
Section 90008 is added to the Government Code, to
15read:
(a) It is the intent of the Legislature that the people of
17California have timely access to information concerning the
18campaign contributions and expenditures of all committees,
19corporations, and individuals, and that this information be provided
20before the election, when it is relevant, in accordance with the
21requirements of this title. It is the further intent of the Legislature
22that the Commission ensure that these disclosures are being made,
23and that this title be liberally construed and any judicial process
24be expedited to achieve this purpose.
25(b) The Commission, and the Franchise Tax Board at the
26direction of the Commission, may audit any record required to be
27maintained
under this title to ensure compliance with this title prior
28to an election, even if the record is a report or statement that has
29not yet been filed.
Section 90009 is added to the Government Code, to
31read:
(a) To further the purposesbegin delete identified in Section 90008end delete
33begin insert of this titleend insert, the Commission may seek injunctive relief in a superior
34court to compel disclosure consistent with this title.
35(b) A court shall grant expedited review to an action filed
36pursuant to subdivision (a) as follows:
37(1) The court shall conduct an expedited hearing with an
38opportunity for the defendant to respond.
39(2) Briefs of the parties shall be required pursuant to an
40expedited schedule.
P10 1(c) A superior or appellate court may, at its discretion, grant a
2stay of an order granting relief pursuant to subdivision (a).
No reimbursement is required by this act pursuant to
4Section 6 of Article XIII B of the California Constitution because
5the only costs that may be incurred by a local agency or school
6district will be incurred because this act creates a new crime or
7infraction, eliminates a crime or infraction, or changes the penalty
8for a crime or infraction, within the meaning of Section 17556 of
9the Government Code, or changes the definition of a crime within
10the meaning of Section 6 of Article XIII B of the California
11Constitution.
The Legislature finds and declares that this bill
13furthers the purposes of the Political Reform Act of 1974 within
14the meaning of subdivision (a) of Section 81012 of the Government
15Code.
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