BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1692|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: AB 1692
Author: Garcia (D)
Amended: 8/13/14 in Senate
Vote: 27
SENATE ELECTIONS & CONST. AMEND. COMM. : 4-1, 6/24/14
AYES: Padilla, Hancock, Jackson, Pavley
NOES: Anderson
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 77-0, 5/15/14 - See last page for vote
SUBJECT : Political Reform Act of 1974
SOURCE : Author
DIGEST : This bill limits the use of campaign funds and legal
defense funds to pay fines and penalties that are imposed for an
improper personal use of campaign funds.
Senate Floor Amendments of 8/13/14 add double-jointing language
with AB 1666 (Garcia) and SB 831 (Hill).
ANALYSIS :
Existing law:
1. Prohibits campaign funds from being used to pay or reimburse
fines, penalties, judgments, or settlements, except those
CONTINUED
AB 1692
Page
2
resulting from either of the following:
A. Parking citations issued in the performance of an
activity that was directly related to a political,
legislative, or governmental purpose; or
B. Any other action for which payment of attorney's fees
from contributions is permitted pursuant to the Political
Reform Act (PRA).
1. Requires campaign expenditures to be reasonably related to a
political, legislative, or governmental purpose. Campaign
expenditures that confer a substantial personal benefit on an
individual with the authority to approve the expenditure of
campaign funds must be directly related to a political,
legislative, or governmental purpose. "Substantial personal
benefit" for these purposes means an expenditure that results
in a direct personal benefit of more than $200.
2. Permits candidates and elected officials to establish a
legal defense fund to defray attorney's fees and other
related legal costs incurred in the defense of the candidate
or elective officer who is subject to one or more civil,
criminal, or administrative proceedings arising directly out
of the conduct of an election campaign, the electoral
process, or the performance of the officer's governmental
activities and duties. Funds deposited into a legal defense
fund may be used only to defray those attorney's fees and
other related legal costs.
3. Provides that campaign funds that are raised on or after
January 1, 1989, by a candidate and that remain in the
campaign account at the time the candidate leaves elective
office, or at the end of the postelection reporting period
following the defeat of the candidate, are considered surplus
campaign funds. Such funds may be used for payment of
attorney's fees for litigation which arises directly out of a
candidate's or elected official's activities, duties, or
status as a candidate or elected officer.
4. Provides that expenditures of campaign funds for attorney's
fees and other costs in connection with administrative,
civil, or criminal litigation are not directly related to a
political, legislative, or governmental purpose except where
CONTINUED
AB 1692
Page
3
the litigation is directly related to activities of a
committee that are consistent with its primary objectives or
arises directly out of a committee's activities or out of a
candidate's or elected officer's activities, duties, or
status as a candidate or elected officer.
This bill:
1. Prohibits an expenditure of campaign funds to pay a fine,
penalty, judgment, or settlement relating to an expenditure
of campaign funds that was found to be improper because the
expenditure resulted in either of the following:
A. A personal benefit to the candidate or officer, and the
expenditure was not reasonably related to a political,
legislative, or governmental purpose; or
B. A substantial personal benefit to the candidate or
officer, and the expenditure was not directly related to a
political, legislative, or governmental purpose.
1. Codifies a regulatory definition of the term "attorney's
fees and other related legal costs" for the purposes of
provisions of existing law that specify the permissible uses
of funds raised into a legal defense fund, and makes that
definition applicable to provisions of state law that
restrict the use of surplus campaign funds and that limit the
circumstances under which campaign funds may be used to pay
fines, penalties, judgments, or settlements.
2. Contains double-jointing language with AB 1666 (Garcia) and
SB 831 (Hill) to avoid chaptering-out issues.
Background
Personal use of campaign funds . Existing law generally
prohibits campaign funds from being used for personal expenses,
and instead requires campaign expenditures to be reasonably
related to a political, legislative, or governmental purpose.
When a campaign expenditure results in a personal benefit of
more than $200 to an individual who had the authority to approve
the expenditure, the expenditure must be directly related to a
political, legislative, or governmental purpose. These
provisions are intended to ensure that campaign funds are not
CONTINUED
AB 1692
Page
4
used as a method of personally enriching candidates and officers
of political committees.
Use of campaign funds to pay fines & penalties . As noted above,
the PRA generally allows campaign funds to be used to pay or
reimburse fines and penalties only if the action is one for
which the use of campaign funds to pay attorney's fees will be
permissible. The use of campaign funds to pay attorney's fees
is permissible only when those attorney's fees arise directly
out of an election campaign, the electoral process, or the
performance of an official's governmental activities. These
provisions are a natural extension of the "personal use"
provisions of the PRA -- if litigation against a candidate or
elected official is unrelated to that person's duties or
activities as a candidate or official, then the expenditure of
campaign funds for attorney's fees (or to pay any fines or
penalties that result from the litigation) would not be
reasonably or directly related to a political, governmental, or
legislative purpose, but instead would serve to defray the
personal legal expenses of the candidate or official.
Regulatory definition of "attorney's fees" . As noted above,
existing law permits candidates and elected officials to
establish a legal defense fund to defray attorney's fees and
other related legal costs under certain situations. The Fair
Political Practices Commission (FPPC) has adopted a regulation
to define the term "attorney's fees and other related legal
costs" for the purpose of expenditures from legal defense funds.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
ASSEMBLY FLOOR : 77-0, 5/15/14
AYES: Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hernández,
Holden, Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Medina, Melendez, Mullin, Muratsuchi, Nazarian,
Nestande, Olsen, Pan, Patterson, Perea, John A. Pérez, V.
CONTINUED
AB 1692
Page
5
Manuel Pérez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas,
Rodriguez, Salas, Skinner, Stone, Ting, Wagner, Weber,
Wieckowski, Wilk, Williams, Yamada, Atkins
NO VOTE RECORDED: Mansoor, Waldron, Vacancy
RM:d:n 8/14/14 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
**** END ****
CONTINUED