Amended in Senate June 13, 2013

Amended in Assembly April 30, 2013

Amended in Assembly April 15, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 800


Introduced by Assembly Member Gordon

(Coauthor: Assembly Member Dickinson)

February 21, 2013


An act to amend Sectionsbegin delete 82016,end delete 84303, 89519, 90002, 90003, 90004, and 90005 of, and to add Sections 90008 and 90009 to, the Government Code, relating to the Political Reform Act of 1974.

LEGISLATIVE COUNSEL’S DIGEST

AB 800, as amended, Gordon. Political Reform Act of 1974

begin delete

(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.

end delete
begin delete

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.

end delete
begin delete

(2)

end delete

begin insert(1)end insert Thebegin delete actend deletebegin insert Political Reform Act of 1974end insert 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.

begin delete

(3)

end delete

begin insert(2)end insert 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.

begin delete

(4)

end delete

begin insert(3)end insert 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 would extend the deadline for the Franchise Tax Board to complete its report of an audit conducted on a random basis from one to two years after the person or entity to be audited is selected by the Fair Political Practices Commission.

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.

begin delete

(5)

end delete

begin insert(4)end insert 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.

begin delete

(6)

end delete

begin insert(5)end insert 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 23 vote of each house and compliance with specified procedural requirements.

This bill would declare that it furthers the purposes of the act.

Vote: 23. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P4    1

SECTION 1.  

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,
P5    1 judicial review of an action in this regard should receive expedited
2review.

3(c) It is therefore the intent of the Legislature to ensure that the
4Fair Political Practices Commission be given the authority to carry
5out the provisions of the Political Reform Act of 1974 in a manner
6that ensures information regarding political contributions and
7expenditures is provided to the public in an expedited manner prior
8to elections.

begin delete9

SEC. 2.  

Section 82016 of the Government Code is amended
10to read:

11

82016.  

(a) “Controlled committee” means a committee that
12is controlled directly or indirectly by a candidate or state measure
13proponent or that acts jointly with a candidate, controlled
14committee, or state measure proponent in connection with the
15making of expenditures. A candidate or state measure proponent
16controls a committee if he or she, his or her agent, or any other
17committee he or she controls has a significant influence on the
18actions or decisions of the committee.

19(b) Notwithstanding subdivision (a), a political party committee,
20as defined in Section 85205, is not a controlled committee.

21(c) For purposes of subdivision (a), a committee is presumed
22to be significantly influenced by a candidate, his or her agent, or
23another committee he or she controls if any of the following is
24satisfied:

25(1) The candidate, or his or her agent, is a voting member of
26the committee’s governing body.

27(2) The candidate, or his or her agent, is involved in the
28decisionmaking of the committee, or the development or
29implementation of the committee’s campaign strategy.

30(3) The candidate, or his or her agent, is substantially involved
31in directing the day-to-day operations of the committee.

end delete
32

begin deleteSEC. 3.end delete
33begin insertSEC. 2.end insert  

Section 84303 of the Government Code is amended
34to read:

35

84303.  

(a) An expenditure of five hundred dollars ($500) or
36more shall not be made, other than for overhead or normal
37operating expenses, by an agent or independent contractor,
38including, but not limited to, an advertising agency, on behalf of
39or for the benefit of a candidate or committee unless it is reported
P6    1by the candidate or committee as if the expenditure were made
2directly by the candidate or committee.

3(b) A subagent or subcontractor who provides goods or services
4to or for the benefit of a candidate or committee shall make known
5to the agent or independent contractor all of the information
6required to be reported by this section, and the agent or independent
7contractor shall then make known to the candidate or committee
8all of the information required to be reported by this section no
9later than three working days prior to the time the campaign
10statement reporting the expenditure is required to be filed, except
11that an expenditure that is required to be reported by Section 84203
12or 84204 shall be reported to the candidate or committee within
1324 hours of the time that it is made.

14

begin deleteSEC. 4.end delete
15begin insertSEC. 3.end insert  

Section 89519 of the Government Code is amended
16to read:

17

89519.  

(a) Upon the 90th day after leaving an elective office,
18or the 90th day following the end of the postelection reporting
19period following the defeat of a candidate for elective office,
20whichever occurs last, campaign funds under the control of the
21former candidate or elected officer shall be considered surplus
22campaign funds and shall be disclosed pursuant to Chapter 4
23(commencing with Section 84100).

24(b) Surplus campaign funds shall be used only for the following
25purposes:

26(1) The payment of outstanding campaign debts or elected
27officer’s expenses.

28(2) The repayment of contributions.

29(3) Donations to a bona fide charitable, educational, civic,
30religious, or similar tax-exempt, nonprofit organization, where no
31substantial part of the proceeds will have a material financial effect
32on the former candidate or elected officer, any member of his or
33her immediate family, or his or her campaign treasurer.

34(4) Contributions to a political party committee, provided the
35campaign funds are not used to support or oppose candidates for
36elective office. However, the campaign funds may be used by a
37political party committee to conduct partisan voter registration,
38partisan get-out-the-vote activities, and slate mailers as that term
39is defined in Section 82048.3.

P7    1(5) Contributions to support or oppose a candidate for federal
2office, a candidate for elective office in a state other than
3California, or a ballot measure.

4(6) The payment for professional services reasonably required
5by the committee to assist in the performance of its administrative
6functions, including payment for attorney’s fees for litigation that
7arises directly out of a candidate’s or elected officer’s activities,
8duties, or status as a candidate or elected officer, including, but
9not limited to, an action to enjoin defamation, defense of an action
10brought for a violation of state or local campaign, disclosure, or
11election laws, and an action from an election contest or recount.

12(c) For purposes of this section, the payment for, or the
13reimbursement to the state of, the costs of installing and monitoring
14an electronic security system in the home or office, or both, of a
15candidate or elected officer who has received threats to his or her
16physical safety shall be deemed an outstanding campaign debt or
17elected officer’s expense, provided that the threats arise from his
18or her activities, duties, or status as a candidate or elected officer
19and that the threats have been reported to and verified by an
20appropriate law enforcement agency. Verification shall be
21determined solely by the law enforcement agency to which the
22threat was reported. The candidate or elected officer shall report
23 an expenditure of campaign funds made pursuant to this section
24to the Commission. The report to the Commission shall include
25the date that the candidate or elected officer informed the law
26enforcement agency of the threat, the name and the telephone
27number of the law enforcement agency, and a brief description of
28the threat. No more than five thousand dollars ($5,000) in surplus
29campaign funds may be used, cumulatively, by a candidate or
30elected officer pursuant to this subdivision. Payments made
31pursuant to this subdivision shall be made during the two years
32immediately following the date upon which the campaign funds
33become surplus campaign funds. The candidate or elected officer
34shall reimburse the surplus fund account for the fair market value
35of the security system no later than two years immediately
36following the date upon which the campaign funds became surplus
37campaign funds. The campaign funds become surplus campaign
38funds upon sale of the property on which the system is installed,
39or prior to the closing of the surplus campaign fund account,
40whichever comes first. The electronic security system shall be the
P8    1property of the campaign committee of the candidate or elected
2officer.

3

begin deleteSEC. 5.end delete
4begin insertSEC. 4.end insert  

Section 90002 of the Government Code is amended
5to read:

6

90002.  

(a) Audits and investigations of lobbying firms and
7lobbyist employers shall be performed on a biennial basis and shall
8cover reports filed during a period of two years.

9(b) If a lobbying firm or lobbyist employer keeps a separate
10account for all receipts and payments for which reporting is
11required by this chapter, the requirement of an audit under
12subdivision (a) of Section 90001 shall be satisfied by an audit of
13that account and the supporting documentation required to be
14maintained by Section 86110.

15

begin deleteSEC. 6.end delete
16begin insertSEC. 5.end insert  

Section 90003 of the Government Code is amended
17to read:

18

90003.  

In addition to the audits and investigations required by
19Section 90001, the Franchise Tax Board and the Commission may
20make investigations and audits with respect to any reports or
21statements required by this title.

22

begin deleteSEC. 7.end delete
23begin insertSEC. 6.end insert  

Section 90004 of the Government Code is amended
24to read:

25

90004.  

(a) The Franchise Tax Board shall periodically prepare
26reports, which, except as otherwise provided in this section, shall
27be sent to the Commission, the Secretary of State, and the Attorney
28General. If the reports relate to candidates for or committees
29supporting or opposing candidates for the office of Attorney
30General, the reports shall be sent to the Commission, the Secretary
31of State, and the District Attorneys of the Counties of Los Angeles,
32Sacramento, and San Francisco. If the reports relate to local
33candidates and their controlled committees, the reports shall be
34sent to the Commission, the local filing officer with whom the
35candidate or committee is required to file the originals of campaign
36reports pursuant to Section 84215, and the district attorney for the
37candidate’s county of domicile.

38(b) The Franchise Tax Board shall complete its report of any
39audit conducted on a random basis pursuant to Section 90001
P9    1within two years after the person or entity subject to the audit is
2selected by the Commission to be audited.

3(c) The reports of the Franchise Tax Board shall be public
4documents and shall contain in detail the Franchise Tax Board’s
5findings with respect to the accuracy and completeness of each
6report and statement reviewed and its findings with respect to any
7report or statement that should have been but was not filed. The
8Secretary of State and the local filing officer shall place the audit
9reports in the appropriate campaign statement or lobbying files.

10

begin deleteSEC. 8.end delete
11begin insertSEC. 7.end insert  

Section 90005 of the Government Code is amended
12to read:

13

90005.  

A member, employee, or agent of the Franchise Tax
14Board or the Commission shall not divulge or make known in any
15manner the particulars of any record, documents, or information
16that he or she receives by virtue of this chapter, except in
17furtherance of the work of the Franchise Tax Board or the
18Commission or in connection with a court proceeding or the lawful
19investigation of any agency.

20

begin deleteSEC. 9.end delete
21begin insertSEC. 8.end insert  

Section 90008 is added to the Government Code, to
22read:

23

90008.  

(a) It is the intent of the Legislature that the people of
24California have timely access to information concerning the
25campaign contributions and expenditures of all committees,
26corporations, and individuals, and that this information be provided
27before the election, when it is relevant, in accordance with the
28requirements of this title. It is the further intent of the Legislature
29that the Commission ensure that these disclosures are being made,
30and that this title be liberally construed and any judicial process
31be expedited to achieve this purpose.

32(b) The Commission, and the Franchise Tax Board at the
33direction of the Commission, may audit any record required to be
34maintained under this title to ensure compliance with this title prior
35to an election, even if the record is a report or statement that has
36not yet been filed.

37

begin deleteSEC. 10.end delete
38begin insertSEC. 9.end insert  

Section 90009 is added to the Government Code, to
39read:

P10   1

90009.  

(a) To further the purposes of this title, the Commission
2may seek injunctive relief in a superior court to compel disclosure
3consistent with this title.

4(b) A court shall grant expedited review to an action filed
5pursuant to subdivision (a) as follows:

6(1) The court shall conduct an expedited hearing with an
7opportunity for the defendant to respond.

8(2) Briefs of the parties shall be required pursuant to an
9expedited schedule.

10(c) A superior or appellate court may, at its discretion, grant a
11stay of an order granting relief pursuant to subdivision (a).

12

begin deleteSEC. 11.end delete
13begin insertSEC. 10.end insert  

No reimbursement is required by this act pursuant to
14Section 6 of Article XIII B of the California Constitution because
15the only costs that may be incurred by a local agency or school
16district will be incurred because this act creates a new crime or
17infraction, eliminates a crime or infraction, or changes the penalty
18for a crime or infraction, within the meaning of Section 17556 of
19the Government Code, or changes the definition of a crime within
20the meaning of Section 6 of Article XIII B of the California
21Constitution.

22

begin deleteSEC. 12.end delete
23begin insertSEC. 11.end insert  

The Legislature finds and declares that this bill
24furthers the purposes of the Political Reform Act of 1974 within
25the meaning of subdivision (a) of Section 81012 of the Government
26Code.



O

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