BILL NUMBER: AB 914 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 21, 2013
INTRODUCED BY Assembly Member Gordon
FEBRUARY 22, 2013
An act to amend Section 12586 of, and to add Article 3.5
(commencing with Section 84350) to Chapter 4 of Title 9 of, the
Government Code, relating to the Political Reform Act of 1974.
LEGISLATIVE COUNSEL'S DIGEST
AB 914, as amended, Gordon. Political Reform Act of 1974 :
campaign disclosures .
The
(1) The Political Reform Act of
1974 imposes various reporting requirements with regard to
contributions and independent expenditures, as defined, made for
political purposes. The act establishes the Fair Political
Practices Commission as the agency responsible for administering and
enforcing the act.
This bill would require the Commission to develop a Nonprofit and
Multipurpose Organization Disclosure Statement form. The bill would
require that the form provide for the disclosure of specified
information relating to contributions, expenditures, and independent
expenditures made by, and donations made to, a nonprofit corporation.
The bill would require a nonprofit corporation to file a Nonprofit
and Multipurpose Organization Disclosure Statement, at a time
prescribed by the Commission, in any year in which the nonprofit
corporation makes combined contributions, expenditures, and
independent expenditures in this state aggregating $50,000 or more
during the nonprofit corporation's fiscal year.
The bill would require the Commission to make Nonprofit and
Multipurpose Organization Disclosure Statements available to the
public. The bill would authorize a nonprofit corporation or a donor
to the nonprofit corporation to petition the Commission to maintain
the confidentiality of information relating to donors and donations.
The bill would require the Commission to grant a petition to maintain
the confidentiality of donor and donation information if the
petitioner establishes by clear and convincing evidence that the
public disclosure of donor information will cause undue harm,
threats, harassment, or reprisals to the donor, or that the donor did
not know or have reason to know that his or her donation would be
used to make a contribution, expenditure, or independent expenditure,
as specified.
(2) The Supervision of Trustees and Fundraisers for Charitable
Purposes Act provides the Attorney General with enforcement and
supervisory powers relating to certain entities, including charitable
corporations, unincorporated associations, and trustees. Existing
law requires these entities to file with the Attorney General
periodic written reports, under oath, that set forth information as
to the nature of the assets held for charitable purposes and the
administration of these assets by the corporation or the trustee in
accordance with rules and regulations of the Attorney General. These
requirements do not apply to an entity that is a committee for
purposes of the Political Reform Act of 1974 that is required to file
specified campaign statements pursuant to that act.
This bill would additionally require a charitable corporation,
unincorporated association, or trustee that is required to file
periodic written reports with the Attorney General to file a
Nonprofit and Multipurpose Organization Disclosure Statement as an
attachment to its periodic written reports if the entity made
combined contributions, expenditures, or independent expenditures in
this State aggregating $50,000 or more during the entity's fiscal
year, as specified.
This bill would authorize an entity or its donors to petition the
Attorney General to maintain the confidentiality of certain donor
information in the same manner described above with respect to
similar statements filed with the Commission, as specified.
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.
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.
This bill would declare the intent of the Legislature to enact
legislation that would strengthen the act by requiring greater
accountability and disclosure by multipurpose groups and nonprofit
organizations that make campaign contributions and independent
expenditures.
Vote: majority 2/3 . Appropriation:
no. Fiscal committee: no yes .
State-mandated local program: no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 12586 of the
Government Code is amended to read:
12586. (a) Except as otherwise provided and except corporate
trustees which that are subject to the
jurisdiction of the Commissioner of Financial Institutions of the
State of California under Division 1 (commencing with Section 99) of
the Financial Code or to the Comptroller of the Currency of the
United States, every charitable corporation, unincorporated
association, and trustee subject to this article shall, in addition
to filing copies of the instruments previously required, file with
the Attorney General periodic written reports, under oath, setting
forth information as to the nature of the assets held for charitable
purposes and the administration thereof by the corporation,
unincorporated association, or trustee, in accordance with rules and
regulations of the Attorney General.
(b) The Attorney General shall make rules and regulations as to
the time for filing reports, the contents thereof, and the manner of
executing and filing them. The Attorney General may classify trusts
and other relationships concerning property held for a charitable
purpose as to purpose, nature of assets, duration of the trust or
other relationship, amount of assets, amounts to be devoted to
charitable purposes, nature of trustee, or otherwise, and may
establish different rules for the different classes as to time and
nature of the reports required to the ends (1) that he or she shall
receive reasonably current, periodic reports as to all charitable
trusts or other relationships of a similar nature, which will enable
him or her to ascertain whether they are being properly administered,
and (2) that periodic reports shall not unreasonably add to the
expense of the administration of charitable trusts and similar
relationships. The Attorney General may suspend the filing of reports
as to a particular charitable trust or relationship for a
reasonable, specifically designated time upon written application of
the trustee filed with the Attorney General and after the Attorney
General has filed in the register of charitable trusts a written
statement that the interests of the beneficiaries will not be
prejudiced thereby and that periodic reports are not required for
proper supervision by his or her office.
(c) A copy of an account filed by the trustee in any court having
jurisdiction of the trust or other relationship, if the account
substantially complies with the rules and regulations of the Attorney
General, may be filed as a report required by this section.
(d) The first periodic written report, unless the filing thereof
is suspended as herein provided, shall be filed not later than four
months and 15 days following the close of the first calendar or
fiscal year in which property is initially received. If any part of
the income or principal of a trust previously established is
authorized or required to be applied to a charitable purpose at the
time this article takes effect, the first report shall be filed at
the close of the calendar or fiscal year in which it was registered
with the Attorney General or not later than four months and 15 days
following the close of the calendar or fiscal period.
(e) Every charitable corporation, unincorporated association, and
trustee required to file reports with the Attorney General pursuant
to this section that receives or accrues in any fiscal year gross
revenue of two million dollars ($2,000,000) or more, exclusive of
grants from, and contracts for services with, governmental entities
for which the governmental entity requires an accounting of the funds
received, shall do all of the following:
(1) Prepare annual financial statements using generally accepted
accounting principles that are audited by an independent certified
public accountant in conformity with generally accepted auditing
standards. For any nonaudit services performed by the firm conducting
the audit, the firm and its individual auditors shall adhere to the
standards for auditor independence set forth in the latest revision
of the Government Auditing Standards, issued by the Comptroller
General of the United States (the Yellow Book). The Attorney General
may, by regulation, prescribe standards for auditor independence in
the performance of nonaudit services, including standards different
from those set forth in the Yellow Book. If a charitable corporation
or unincorporated association that is required to prepare an annual
financial statement pursuant to this subdivision is under the control
of another organization, the controlling organization may prepare a
consolidated financial statement. The audited financial statements
shall be available for inspection by the Attorney General and by
members of the public no later than nine months after the close of
the fiscal year to which the statements relate. A charity shall make
its annual audited financial statements available to the public in
the same manner that is prescribed for IRS Form 990 by the latest
revision of Section 6104(d) of the Internal Revenue Code and
associated regulations.
(2) If it is a corporation, have an audit committee appointed by
the board of directors. The audit committee may include persons who
are not members of the board of directors, but the member or members
of the audit committee shall not include any members of the staff,
including the president or chief executive officer and the treasurer
or chief financial officer. If the corporation has a finance
committee, it must be separate from the audit committee. Members of
the finance committee may serve on the audit committee; however, the
chairperson of the audit committee may not be a member of the finance
committee and members of the finance committee shall constitute less
than one-half of the membership of the audit committee. Members of
the audit committee shall not receive any compensation from the
corporation in excess of the compensation, if any, received by
members of the board of directors for service on the board and shall
not have a material financial interest in any entity doing business
with the corporation. Subject to the supervision of the board of
directors, the audit committee shall be responsible for recommending
to the board of directors the retention and termination of the
independent auditor and may negotiate the independent auditor's
compensation , on behalf of the board of
directors. The audit committee shall confer with the auditor to
satisfy its members that the financial affairs of the corporation are
in order, shall review and determine whether to accept the audit,
shall assure that any nonaudit services performed by the auditing
firm conform with standards for auditor independence referred to in
paragraph (1), and shall approve performance of nonaudit services by
the auditing firm. If the charitable corporation that is required to
have an audit committee pursuant to this subdivision is under the
control of another corporation, the audit committee may be part of
the board of directors of the controlling corporation.
(f) If, independent of the audit requirement set forth in
paragraph (1) of subdivision (e), a charitable corporation,
unincorporated association, or trustee required to file reports with
the Attorney General pursuant to this section prepares financial
statements that are audited by a certified public accountant, the
audited financial statements shall be available for inspection by the
Attorney General and shall be made available to members of the
public in conformity with paragraph (1) of subdivision (e).
(g) The board of directors of a charitable corporation or
unincorporated association, or an authorized committee of the board,
and the trustee or trustees of a charitable trust shall review and
approve the compensation, including benefits, of the president or
chief executive officer and the treasurer or chief financial officer
to assure that it is just and reasonable. This review and approval
shall occur initially upon the hiring of the officer, whenever the
term of employment, if any, of the officer is renewed or extended,
and whenever the officer's compensation is modified. Separate review
and approval shall not be required if a modification of compensation
extends to substantially all employees. If a charitable corporation
is affiliated with other charitable corporations, the requirements of
this section shall be satisfied if review and approval is obtained
from the board, or an authorized committee of the board, of the
charitable corporation that makes retention and compensation
decisions regarding a particular individual.
(h) (1) This subdivision applies only to a charitable corporation,
unincorporated association, or trustee that is required to file
reports with the Attorney General pursuant to this section and that
makes combined contributions, expenditures, and independent
expenditures in this state aggregating fifty thousand dollars
($50,000) or more during the entity's fiscal year.
(2) The Fair Political Practices Commission shall develop a
Nonprofit and Multipurpose Organization Disclosure Statement form
that an entity described in paragraph (1) shall file with the
Attorney General, as required by this subdivision. The form, which
may be identical to the form created for nonprofit corporations
pursuant to Section 84350, shall provide for the disclosure of all of
the following information:
(A) The aggregate combined dollar amount of contributions,
expenditures, and independent expenditures that are made during the
reporting period.
(B) The amount of expenses attributable to contributions,
expenditures, and independent expenditures as a percentage of the
entity's total expenses that are made during the reporting period.
(C) For purposes of an entity for which the combined amounts of
contributions, expenditures, and independent expenditures made during
the reporting period exceed 10 percent of the entity's total
expenses, each of the following with respect to contributions,
expenditures, and independent expenditures made during that period:
(i) The amount of any funds, or the fair market value of any
services or assets, that are provided in relation to a contribution,
expenditure, or independent expenditure.
(ii) The amount or fair market value of any liabilities incurred
in relation to a contribution, expenditure, or independent
expenditure.
(iii) The date that the funds, services, or assets were provided
or the liabilities were incurred.
(iv) The name and address of the recipient of the contribution,
expenditure, or independent expenditure.
(v) A description of the contribution, expenditure, or independent
expenditure and its purpose, including whether the contribution,
expenditure, or independent expenditure was made in support of or
opposition to a candidate, political party, ballot measure, or other
question put before the voters in an election.
(vi) Information related to each donation received by the entity
during the reporting period, including the name and address of each
donor who made donations in an aggregate amount of ten thousand
dollars ($10,000) or more during the reporting period, the name of
the employer of each individual donor, if available, and the date and
amount of each donation.
(3) (A) Except as otherwise provided in this paragraph, an entity
described in paragraph (1) shall file a Nonprofit and Multipurpose
Organization Disclosure Statement as an attachment to its periodic
written reports required by this section with the Attorney General
for any year in which the entity meets the fifty thousand dollar
($50,000) threshold for combined aggregate contributions,
expenditures, and independent expenditures made during a fiscal year.
Except as provided in paragraph (4), the Attorney General shall make
the filed Nonprofit and Multipurpose Organization Disclosure
Statement available to the public through the Register of Charitable
Corporations and Trustees established pursuant to Section 12584.
(B) An entity is not required to disclose the information
described in subparagraph (C) of paragraph (2) if that information
has been previously disclosed by the entity in any other campaign
statement or report required by the Political Reform Act of 1974
(Title 9 (commencing with Section 81000)).
(C) If an entity required to file a Nonprofit and Multipurpose
Organization Disclosure Statement pursuant to this subdivision
maintains one or more segregated bank accounts for the purpose of
making election-related contributions, expenditures, or independent
expenditures, and those accounts represent the exclusive source of
the entity's election-related contributions, expenditures, and
independent expenditures in this state, the entity is only required
to report information described in clause (vi) of subparagraph (C) of
paragraph (2) with respect to donations deposited into the
segregated election-related accounts.
(4) A charitable corporation, unincorporated association, or
trustee that is subject to the reporting requirements of this
subdivision, or a donor to any of these entities, may petition the
Attorney General, no later than 45 days prior to the date on which
the Nonprofit and Multipurpose Organization Disclosure Statement must
be filed, to maintain the confidentiality of donor information that
is disclosed on the statement. If a petitioner demonstrates by clear
and convincing evidence that the public disclosure of donor
information reported on the Nonprofit and Multipurpose Organization
Disclosure Statement will cause undue harm, threats, harassment, or
reprisals to the donor or that the donor did not know or have reason
to know that his or her donation would be used to make a
contribution, expenditure, or independent expenditure in this state,
the Attorney General shall treat the donor and donation information
as confidential and shall redact the donor and donation information
from any documents that are made available to the public. The
Attorney General shall inform the petitioner, in writing, whether the
petition to maintain the confidentiality of donor and donation
information has been granted or denied. The Attorney General's grant
or denial determination shall include a statement of findings and
conclusions, and the reasons or basis for the determination.
(5) The Attorney General shall immediately provide a copy of each
filed Nonprofit and Multipurpose Organization Disclosure Statement to
the Fair Political Practices Commission. If the Attorney General has
approved a petition to maintain the confidentiality of donor and
donation information disclosed on the Nonprofit and Multipurpose
Organization Disclosure Statement pursuant to paragraph (4), the Fair
Political Practices Commission shall also treat that information as
confidential and shall not make that information publicly available.
(6) For purposes of this subdivision, the following terms have the
following meanings:
(A) "Contribution" has the same meaning as set forth in Section
82015.
(B) "Expenditure" has the same meaning as set forth in Section
82025.
(C) "Independent expenditure" has the same meaning as set forth in
Section 82031.
SEC. 2 . Article 3.5 (commencing with
Section 84350) is added to Chapter 4 of Title 9 of the
Government Code , to read:
Article 3.5. Nonprofit and Multipurpose Organizations
84350. (a) This section shall apply only to a nonprofit
corporation, as defined in Section 501(c) of the Internal Revenue
Code, that is not required to file periodic written reports with the
Attorney General under the Supervision of Trustees and Fundraisers
for Charitable Purposes Act (Article 7 (commencing with Section
12580) of Chapter 6 of Part 2 of Division 3 of Title 2) and that
makes combined contributions, expenditures, and independent
expenditures in this state aggregating fifty thousand dollars
($50,000) or more during the nonprofit corporation's fiscal year.
(b) The Commission shall develop a Nonprofit and Multipurpose
Organization Disclosure Statement form that provides for the
disclosure of all of the following information:
(1) The aggregate combined dollar amount of contributions,
expenditures, and independent expenditures that are made during the
reporting period.
(2) The amount of expenses attributable to contributions,
expenditures, and independent expenditures as a percentage of the
nonprofit organization's total expenses that are made during the
reporting period.
(3) For purposes of a nonprofit organization for which the
combined amounts of contributions, expenditures, and independent
expenditures made during the reporting period exceed 10 percent of
the nonprofit organization's total expenses, each of the following
with respect to contributions, expenditures, and independent
expenditures made during that period:
(A) The amount of any funds, or the fair market value of any
services or assets, that are provided in relation to a contribution,
expenditure, or independent expenditure.
(B) The amount or fair market value of any liabilities incurred in
relation to a contribution, expenditure, or independent expenditure.
(C) The date that the funds, services, or assets were provided or
the liabilities were incurred.
(D) The name and address of the recipient of the contribution,
expenditure, or independent expenditure.
(E) A description of the contribution, expenditure, or independent
expenditures and its purpose, including whether the contribution,
expenditure, or independent expenditure was made in support of or
opposition to a candidate, political party, ballot measure, or other
question put before the voters in an election.
(F) Information related to each donation received by the nonprofit
corporation during the reporting period, including each of the
following:
(i) The name and address of each donor who made donations in an
aggregate amount of ten thousand dollars ($10,000) or more during the
reporting period.
(ii) The name of the employer of each individual donor, if
available.
(iii) The date and amount of each donation.
(c) (1) Except as otherwise provided in this subdivision, a
nonprofit corporation described in subdivision (a) shall file, at a
time to be determined by the Commission, a Nonprofit and Multipurpose
Organization Disclosure Statement with the Commission for any year
in which the nonprofit corporation meets the fifty thousand dollar
($50,000) threshold for combined aggregate contributions,
expenditures, and independent expenditures made during a fiscal year.
Except as provided in subdivision (d), the Commission shall make the
filed Nonprofit and Multipurpose Organization Disclosure Statement
available to the public, as required by Section 81008.
(2) A nonprofit corporation is not required to disclose the
information described in paragraph (3) of subdivision (b) if that
information has been previously disclosed by the nonprofit
corporation in any other campaign statement or report required by
this title.
(3) If a nonprofit corporation required to file a Nonprofit and
Multipurpose Organization Disclosure Statement pursuant to this
section maintains one or more segregated bank accounts for the
purpose of making election-related contributions, expenditures, or
independent expenditures, and those accounts represent the exclusive
source of the nonprofit corporation's election-related contributions,
expenditures, and independent expenditures in this state, the
nonprofit corporation is only required to report information
described in subparagraph (F) of paragraph (3) of subdivision (b)
with respect to donations deposited into the segregated
election-related accounts.
(d) A nonprofit corporation or a donor to a nonprofit corporation
that is subject to the reporting requirements of this section may
petition the Commission, no later than 45 days prior to the date on
which the Nonprofit and Multipurpose Organization Disclosure
Statement must be filed, to maintain the confidentiality of donor
information that is disclosed on the statement. If a petitioner
demonstrates by clear and convincing evidence that the public
disclosure of donor information reported on the Nonprofit and
Multipurpose Organization Disclosure Statement will cause undue harm,
threats, harassment, or reprisals to the donor or that the donor did
not know or have reason to know that his or her donation would be
used to make a contribution, expenditure, or independent expenditure
in this state, the Commission shall, notwithstanding Section 81008,
treat the donor and donation information as confidential and shall
redact the donor and donation information from any documents that are
made available to the public. The Commission shall inform the
petitioner, in writing, whether the petition to maintain the
confidentiality of donor and donation information has been granted or
denied. The Commission's grant or denial determination shall include
a statement of findings and conclusions, and the reasons or basis
for the determination.
SEC. 3. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.
SEC. 4. The Legislature finds and declares that
this bill furthers the purposes of the Political Reform Act of 1974
within the meaning of subdivision (a) of Section 81012 of the
Government Code.
SECTION 1. It is the intent of the Legislature
to enact legislation that would strengthen the Political Reform Act
of 1974 by requiring greater accountability and disclosure by
multipurpose groups and nonprofit organizations that make campaign
contributions and independent expenditures.