BILL NUMBER: SB 27 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 6, 2013
AMENDED IN SENATE APRIL 9, 2013
INTRODUCED BY Senator Correa
DECEMBER 3, 2012
An act to amend Section 9084 of the Elections Code, and to amend
Sections 82015 and 88001 of, and to add Sections 84222 and 84223 to,
the Government Code, relating to the Political Reform Act of 1974.
LEGISLATIVE COUNSEL'S DIGEST
SB 27, as amended, Correa. Political Reform Act of 1974.
Existing law, the Political Reform Act of 1974, provides for the
comprehensive regulation of campaign financing, including requiring
the reporting of campaign contributions and expenditures, as defined,
and imposing other reporting and recordkeeping requirements on
campaign committees, as defined. The Fair Political Practices
Commission administers and enforces the act. A violation of the act's
provisions is punishable as a misdemeanor.
This bill would revise the definition of a "contribution" to
include payments made by a donor who, at the time of making the
payment, knows or has reason to know that the payment, or funds with
which the payment will be commingled, may be used to make
contributions or expenditures. The bill would establish a presumption
that a donor to a nonprofit or other multipurpose organization, as
defined, has reason to know that a payment may be used to make
contributions or expenditures if specified criteria are satisfied,
including, among other things, that the organization has made
contributions or expenditures of $1,000 or more in the aggregate
during the calendar year in which the payment occurs or during any of
the immediately preceding 4 calendar years.
This bill would impose reporting requirements on specified
nonprofit or other multipurpose organizations, including the
requirement that the organizations disclose the portion of their
activities devoted to California elections and specified information
regarding the sources of an organization's funds used to make those
contributions and expenditures, such as donors and dues-paying
members.
This bill would require ballot measure committees and candidate
committees that raise $1,000,000 or more for an election to maintain
an accurate list of the committee's top 10 contributors. This bill
would require a committee to provide accurate lists of these
contributors to the Commission, and would require the Commission to
post the top 10 contributor lists on its Internet Web site and to
post updates to those lists when prescribed events occur. The bill
would require the Commission to provide copies of the top 10
contributor lists to the Secretary of State, at the Secretary of
State's request, for purposes of posting those lists on the Secretary
of State's Internet Web site.
Existing law requires the Secretary of State to prepare a ballot
pamphlet that includes specified information with respect to an
election.
This bill would require the Secretary of State to include in the
ballot pamphlet a written explanation of the top 10 contributor lists
required by the bill, including a description of the Internet Web
sites where those lists would be available to the public.
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.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) Nonprofit and other multipurpose organizations within and
outside the state are increasing their political activities and some
are seeking to make contributions and expenditures in California
elections without revealing their financial backers. Wealthy
individuals and other deep-pocketed interests should not be able to
spend anonymously in California elections by contributing to these
groups. Nonprofit organizations and other advocacy groups should not
be used as intermediaries to conceal the identities of donors who are
required to be disclosed to the public pursuant to the Political
Reform Act of 1974.
(b) The Political Reform Act of 1974 should be strengthened to
require nonprofit and other multipurpose organizations that make
contributions or expenditures to support or oppose California
candidates or ballot measures to disclose the sources of funds used
for their political contributions and expenditures, just as
committees that raise funds specifically for California elections
must. This disclosure should be limited to the extent of the group's
political activity in California. The Ninth Circuit Court of Appeals,
in California Pro-Life Council, Inc. v. Randolph (9th Cir. 2007) 507
F.3d 1172, upheld the disclosure of a nonprofit or other
multipurpose organization's political activities, as required by
regulations of the Fair Political Practices Commission.
(c) The disclosure of donors to nonprofit or other multipurpose
organizations that make contributions or expenditures to support or
oppose California candidates and ballot measures serves the following
important purposes:
(1) It provides the electorate with information as to where
campaign money comes from, increasing its ability to identify the
supporters of a candidate or ballot measure.
(2) It deters actual corruption and avoids the appearance of
corruption by exposing large contributions and expenditures to the
light of publicity.
(3) It is an important means of gathering the information
necessary to detect violations of the Political Reform Act of 1974.
(4) It prevents people and organizations from being able to mask
their identities by pretending to make contributions for, or to be
formed for, a nonpolitical purpose.
(d) The people of California have a compelling interest in
receiving clear and easy to use information about who is financing
ballot measures and candidate independent expenditure committees.
Committees themselves are in the best position to provide the public
with information about their top 10 financial backers in an accurate,
timely, and transparent manner.
(e) It is therefore the intent of the Legislature to strengthen
the laws requiring the disclosure of contributions and expenditures
in California elections by nonprofit and other multipurpose
organizations and to require committees that raise or spend one
million dollars ($1,000,000) or more to support or oppose ballot
measures or make independent expenditures on behalf of a candidate to
disclose a list of their top 10 contributors on the Internet Web
site of the Fair Political Practices Commission.
SEC. 2. Section 9084 of the Elections Code is amended to read:
9084. The ballot pamphlet shall contain all of the following:
(a) A complete copy of each state measure.
(b) A copy of the specific constitutional or statutory provision,
if any, that each state measure would repeal or revise.
(c) A copy of the arguments and rebuttals for and against each
state measure.
(d) A copy of the analysis of each state measure.
(e) Tables of contents, indexes, art work, graphics, and other
materials that the Secretary of State determines will make the ballot
pamphlet easier to understand or more useful for the average voter.
(f) A notice, conspicuously printed on the cover of the ballot
pamphlet, indicating that additional copies of the ballot pamphlet
will be mailed by the county elections official upon request.
(g) A written explanation of the judicial retention procedure as
required by Section 9083.
(h) The Voter Bill of Rights pursuant to Section 2300.
(i) If the ballot contains an election for the office of United
States Senator, information on candidates for United States Senator.
A candidate for United States Senator may purchase the space to place
a statement in the state ballot pamphlet that does not exceed 250
words. The statement may not make any reference to any opponent of
the candidate. The statement shall be submitted in accordance with
timeframes and procedures set forth by the Secretary of State for the
preparation of the state ballot pamphlet.
(j) If the ballot contains a question on the confirmation or
retention of a justice of the Supreme Court, information on justices
of the Supreme Court who are subject to confirmation or retention.
(k) If the ballot contains an election for the offices of
President and Vice President of the United States, a notice that
refers voters to the Secretary of State's Internet Web site for
information about candidates for the offices of President and Vice
President of the United States.
(l) A written explanation of the appropriate election procedures
for party-nominated, voter-nominated, and nonpartisan offices as
required by Section 9083.5.
(m) A written explanation of the top 10 contributor lists required
by Section 84223 of the Government Code, including a description of
the Internet Web sites where those lists are available to the public.
SEC. 3. Section 82015 of the Government Code is amended to read:
82015. (a) "Contribution" means a payment, a forgiveness of a
loan, a payment of a loan by a third party, or an enforceable promise
to make a payment except to the extent that full and adequate
consideration is received, unless it is clear from the surrounding
circumstances that it is not made for political purposes.
(b) (1) A payment made at the behest of a committee as defined in
subdivision (a) of Section 82013 is a contribution to the committee
unless full and adequate consideration is received from the committee
for making the payment.
(2) A payment made at the behest of a candidate is a contribution
to the candidate unless the criteria in either subparagraph (A) or
(B) are satisfied:
(A) Full and adequate consideration is received from the
candidate.
(B) It is clear from the surrounding circumstances that the
payment was made for purposes unrelated to his or her candidacy for
elective office. The following types of payments are presumed to be
for purposes unrelated to a candidate's candidacy for elective
office:
(i) A payment made principally for personal purposes, in which
case it may be considered a gift under the provisions of Section
82028. Payments that are otherwise subject to the limits of Section
86203 are presumed to be principally for personal purposes.
(ii) A payment made by a state, local, or federal governmental
agency or by a nonprofit organization that is exempt from taxation
under Section 501(c)(3) of the Internal Revenue Code.
(iii) A payment not covered by clause (i), made principally for
legislative, governmental, or charitable purposes, in which case it
is neither a gift nor a contribution. However, payments of this type
that are made at the behest of a candidate who is an elected officer
shall be reported within 30 days following the date on which the
payment or payments equal or exceed five thousand dollars ($5,000) in
the aggregate from the same source in the same calendar year in
which they are made. The report shall be filed by the elected officer
with the elected officer's agency and shall be a public record
subject to inspection and copying pursuant to subdivision (a) of
Section 81008. The report shall contain the following information:
name of payor, address of payor, amount of the payment, date or dates
the payment or payments were made, the name and address of the
payee, a brief description of the goods or services provided or
purchased, if any, and a description of the specific purpose or event
for which the payment or payments were made. Once the
five-thousand-dollar ($5,000) aggregate threshold from a single
source has been reached for a calendar year, all payments for the
calendar year made by that source must be disclosed within 30 days
after the date the threshold was reached or the payment was made,
whichever occurs later. Within 30 days after receipt of the report,
state agencies shall forward a copy of these reports to the Fair
Political Practices Commission, and local agencies shall forward a
copy of these reports to the officer with whom elected officers of
that agency file their campaign statements.
(C) For purposes of subparagraph (B), a payment is made for
purposes related to a candidate's candidacy for elective office if
all or a portion of the payment is used for election-related
activities. For purposes of this subparagraph, "election-related
activities" shall include, but are not limited to, the following:
(i) Communications that contain express advocacy of the nomination
or election of the candidate or the defeat of his or her opponent.
(ii) Communications that contain reference to the candidate's
candidacy for elective office, the candidate's election campaign, or
the candidate's or his or her opponent's qualifications for elective
office.
(iii) Solicitation of contributions to the candidate or to third
persons for use in support of the candidate or in opposition to his
or her opponent.
(iv) Arranging, coordinating, developing, writing, distributing,
preparing, or planning of any communication or activity described in
clause (i), (ii), or (iii).
(v) Recruiting or coordinating campaign activities of campaign
volunteers on behalf of the candidate.
(vi) Preparing campaign budgets.
(vii) Preparing campaign finance disclosure statements.
(viii) Communications directed to voters or potential voters as
part of activities encouraging or assisting persons to vote if the
communication contains express advocacy of the nomination or election
of the candidate or the defeat of his or her opponent.
(D) A contribution made at the behest of a candidate for a
different candidate or to a committee not controlled by the behesting
candidate is not a contribution to the behesting candidate.
(3) A payment made at the behest of a member of the Public
Utilities Commission, made principally for legislative, governmental,
or charitable purposes, is not a contribution. However, payments of
this type shall be reported within 30 days following the date on
which the payment or payments equal or exceed five thousand dollars
($5,000) in the aggregate from the same source in the same calendar
year in which they are made. The report shall be filed by the member
with the Public Utilities Commission and shall be a public record
subject to inspection and copying pursuant to subdivision (a) of
Section 81008. The report shall contain the following information:
name of payor, address of payor, amount of the payment, date or dates
the payment or payments were made, the name and address of the
payee, a brief description of the goods or services provided or
purchased, if any, and a description of the specific purpose or event
for which the payment or payments were made. Once the
five-thousand-dollar ($5,000) aggregate threshold from a single
source has been reached for a calendar year, all payments for the
calendar year made by that source must be disclosed within 30 days
after the date the threshold was reached or the payment was made,
whichever occurs later. Within 30 days after receipt of the report,
the Public Utilities Commission shall forward a copy of these reports
to the Fair Political Practices Commission.
(c) "Contribution" includes the purchase of tickets for events
such as dinners, luncheons, rallies, and similar fundraising events;
the candidate's own money or property used on behalf of his or her
candidacy other than personal funds of the candidate used to pay
either a filing fee for a declaration of candidacy or a candidate
statement prepared pursuant to Section 13307 of the Elections Code;
the granting of discounts or rebates not extended to the public
generally or the granting of discounts or rebates by television and
radio stations and newspapers not extended on an equal basis to all
candidates for the same office; the payment of compensation by any
person for the personal services or expenses of any other person if
the services are rendered or expenses incurred on behalf of a
candidate or committee without payment of full and adequate
consideration.
(d) "Contribution" further includes any transfer of anything of
value received by a committee from another committee, unless full and
adequate consideration is received.
(e) "Contribution" does not include amounts received pursuant to
an enforceable promise to the extent those amounts have been
previously reported as a contribution. However, the fact that those
amounts have been received shall be indicated in the appropriate
campaign statement.
(f) "Contribution" does not include a payment made by an occupant
of a home or office for costs related to any meeting or fundraising
event held in the occupant's home or office if the costs for the
meeting or fundraising event are five hundred dollars ($500) or less.
(g) Notwithstanding the foregoing definition of "contribution,"
the term does not include volunteer personal services or payments
made by any individual for his or her own travel expenses if the
payments are made voluntarily without any understanding or agreement
that they shall be, directly or indirectly, repaid to him or her.
(h) "Contribution" further includes the payment of public moneys
by a state or local governmental agency for a communication to the
public that satisfies both of the following:
(1) The communication expressly advocates the election or defeat
of a clearly identified candidate or the qualification, passage, or
defeat of a clearly identified measure, or, taken as a whole and in
context, unambiguously urges a particular result in an election.
(2) The communication is made at the behest of the affected
candidate or committee.
(i) (1) "Contribution" further includes a payment made to a
person, including, but not limited to, a nonprofit or other
multipurpose organization as defined in Section 84222, if, at the
time of making the payment, the donor knows or has reason to know
that the payment, or funds with which the payment will be commingled,
may be used to make a contribution or expenditure to support or
oppose a California state or local candidate or ballot measure.
Contributions that satisfy the criteria of this subdivision shall be
reported in the manner prescribed by Section 84222.
(2) For purposes of paragraph (1), there shall be a presumption
that a donor to a nonprofit or other multipurpose organization has
reason to know that all or part of the payment may be used to make a
contribution or expenditure if any of the following criteria are
satisfied:
(A) The nonprofit or other multipurpose organization has
madecontributions or expenditures of one thousand dollars ($1,000) or
more in the aggregate during the calendar year in which the payment
occurs or during any of the immediately preceding four calendar
years.
(B) The nonprofit or other multipurpose organization has
made makes payments totaling five hundred
thousand dollars ($500,000) or more for contributions or expenditures
in this state during the current calendar year
in which the payment occurs .
(C) The nonprofit or other multipurpose organization has disclosed
contributions or expenditures to support or oppose candidates or
ballot measures, or for issue advocacy activities, in this state on
any publicly available annual or periodic report of its activities,
including Internal Revenue Service Form 990, filed with a federal,
state, or local government agency during the calendar year in which
the payment occurs or during any of the immediately preceding four
calendar years.
(D) The nonprofit or other multipurpose organization has a
sponsored committee registered with the Secretary of State.
SEC. 4. Section 84222 is added to the Government Code, to read:
84222. (a) For purposes of this section and Section 82015,
"nonprofit or other multipurpose organization" means a nonprofit
organization formed and operated under Section 501(c)(3), 501(c)(4),
501(c)(5), or 501(c)(6) of the Internal Revenue Code, a federal or
out-of-state political organization, or an unincorporated
association.
(b) A nonprofit or other multipurpose organization that qualifies
as a committee under Section 82013 shall file the campaign statements
required by this title and shall disclose the portion of its
activities devoted to California state and local elections. The
organization's campaign statements shall report its contributions and
expenditures to support or oppose state and local candidates and
ballot measures in California and shall itemize the sources of funds
used to make those contributions and expenditures, including, but not
limited to, donors and dues-paying members.
(c) A donor who makes a contribution described in subdivision (i)
of Section 82015 to a nonprofit or other multipurpose organization
that qualifies as a committee shall be identified and reported by the
organization that receives the contribution in accordance with
regulations adopted by the Commission. The Commission's regulations
shall provide that the nonprofit or other multipurpose organization
identify each donor who requests or knows that the donor's payment
will be used by the organization to make a contribution or an
expenditure to support or oppose a candidate or ballot measure in
California. The Commission's regulations shall further provide that
the nonprofit or other multipurpose organization identify other
donors to the organization based on a "last in, first out" accounting
method, and shall specify the formula for that determination.
However, a donor need not be reported as a contributor pursuant to
this section if the organization has evidence that clearly
establishes specific circumstances demonstrating that the donor did
not know or have reason to know that its payment would be used to
fund a contribution or expenditure.
(d) A nonprofit or other multipurpose organization that qualifies
as a committee and discloses its activities devoted to California
elections pursuant to this section shall, on the organization's
statement of organization filed pursuant to Section 84102, indicate
that organization's tax-exempt or other organizational status,
describe the organization's mission or most significant activities,
and describe the organization's political activities.
(e) A nonprofit or other multipurpose organization that qualifies
as a committee and files campaign statements required by this title
to disclose its activities devoted to California elections shall
state the total dollar amount of, and the percentage of its total
expenditures devoted to, contributions and expenditures supporting or
opposing California candidates or ballot measures on its semi-annual
statement due on January 31 for the period commencing July 1 and
ending December 31, and on its Internet Web site, if any.
(f) A person shall not use a nonprofit or other multipurpose
organization as an intermediary or agent for the purpose of making a
contribution on behalf of that person without providing to the
organization all of the information required to be disclosed by
Section 84302. A nonprofit or other multipurpose organization shall
disclose the identity of a person for whom the organization is acting
as an intermediary or agent to the recipient of the contribution, as
well as all other information required by Section 84302. The
nonprofit or other multipurpose organization shall not knowingly
conceal the name of a donor for whom the organization makes a
contribution as an intermediary or agent for the purpose of
withholding information required to be made public under this title.
SEC. 5. Section 84223 is added to the Government Code, to read:
84223. (a) A committee primarily formed to support or oppose a
ballot measure or candidate that raises one million dollars
($1,000,000) or more for an election shall maintain an accurate list
of the committee's top 10 contributors, as specified by Commission
regulations. A current list of the top 10 contributors shall be
provided to the Commission for disclosure on the Commission's
Internet Web site, as provided in subdivision (c).
(b) (1) Except as provided in paragraph (4), the list of top 10
contributors shall identify the names of the 10 persons who have made
the largest cumulative contributions to the committee, the total
amount of each person's contributions, the city and state of the
person, the person's committee identification number, if any, and any
other information deemed necessary by the Commission.
(2) (A) A committee primarily formed to support or oppose a ballot
measure shall count the cumulative amount of contributions received
by the committee from a person for the period beginning 12 months
prior to the date the committee made its first expenditure to
qualify, support, or oppose the measure and ending with the current
date.
(B) A committee primarily formed to support or oppose a candidate
shall count the cumulative amount of contributions received by the
committee from a person for the primary and general elections
combined.
(3) The aggregation rules of Section 85311 and any implementing
regulations adopted by the Commission shall apply in identifying the
persons who have made the top 10 cumulative contributions to a
committee.
(4) A person who makes contributions to a committee in a
cumulative amount of less than ten thousand dollars ($10,000) shall
not be identified or disclosed as a top 10 contributor to a committee
pursuant to this section.
(c) (1) The Commission shall adopt regulations to govern the
manner in which the Commission shall display top 10 contributor lists
provided by a committee that is subject to this section, and the
Commission shall post the top 10 contributor lists on its Internet
Web site in the manner prescribed by those regulations. The
Commission shall provide the top 10 contributor lists to the
Secretary of State, upon the request of the Secretary of State, for
the purpose of additionally posting the contributor lists on the
Secretary of State's Internet Web site.
(2) A committee shall provide an updated top 10 contributor list
to the Commission when any of the following occurs:
(A) A new person qualifies as a top 10 contributor to the
committee.
(B) A person who is an existing top 10 contributor makes
additional contributions to the committee.
(C) A change occurs that alters the relative ranking order of the
top 10 contributors.
(3) The 10 persons who have made the largest cumulative
contributions to a committee shall be listed in order from largest
contribution amount to smallest amount. If two or more contributors
of identical amounts meet the threshold for inclusion in the list of
top 10 contributors, the order of disclosure shall be made beginning
with the most recent contributor of that amount.
(4) The Commission shall post or update a top 10 contributor list
within five business days or, during the 16 days before the election,
within 48 hours of a contributor qualifying for the list or of any
change to the list.
(d) In listing the top 10 contributors, a committee shall use
reasonable efforts to identify and state the actual individuals or
corporations that are the true sources of the contributions made to
the committee from other persons or committees.
(e) In addition to any other lists that the Commission is required
to post on its Internet Web site, the Commission shall compile,
maintain, and display on its Internet Web site a current list of the
top 10 contributors supporting and opposing each state ballot
measure, as prescribed by Commission regulations.
SEC. 6. Section 88001 of the Government Code is amended to read:
88001. The ballot pamphlet shall contain all of the following:
(a) A complete copy of each state measure.
(b) A copy of the specific constitutional or statutory provision,
if any, that would be repealed or revised by each state measure.
(c) A copy of the arguments and rebuttals for and against each
state measure.
(d) A copy of the analysis of each state measure.
(e) Tables of contents, indexes, art work, graphics ,
and other materials that the Secretary of State determines will make
the ballot pamphlet easier to understand or more useful for the
average voter.
(f) A notice, conspicuously printed on the cover of the ballot
pamphlet, indicating that additional copies of the ballot pamphlet
will be mailed by the county elections official upon request.
(g) A written explanation of the judicial retention procedure as
required by Section 9083 of the Elections Code.
(h) The Voter Bill of Rights pursuant to Section 2300 of the
Elections Code.
(i) If the ballot contains an election for the office of United
States Senator, information on candidates for United States Senator.
A candidate for United States Senator may purchase the space to place
a statement in the state ballot pamphlet that does not exceed 250
words. The statement may not make any reference to any opponent of
the candidate. The statement shall be submitted in accordance with
timeframes and procedures set forth by the Secretary of State for the
preparation of the state ballot pamphlet.
(j) If the ballot contains a question as to the confirmation or
retention of a justice of the Supreme Court, information on justices
of the Supreme Court who are subject to confirmation or retention.
(k) If the ballot contains an election for the offices of
President and Vice President of the United States, a notice that
refers voters to the Secretary of State's Internet Web site for
information about candidates for the offices of President and Vice
President of the United States.
(l) A written explanation of the appropriate election procedures
for party-nominated, voter-nominated, and nonpartisan offices as
required by Section 9083.5 of the Elections Code.
(m) A written explanation of the top 10 contributor lists required
by Section 84223, including a description of the Internet Web sites
where those lists are available to the public.
SEC. 7. 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. 8. 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.