BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 27 (Correa) - Campaign Contributions
Amended: May 6, 2013 Policy Vote: E&CA 4-1
Urgency: No Mandate: No
Hearing Date: May 23, 2013 Consultant: Maureen Ortiz
SUSPENSE FILE.
Bill Summary: SB 27 revises the definition of campaign
"contribution" to include payments made by a donor who has
reason to know that the payment may be used to make a
contribution to support or oppose a California state or local
candidate or ballot measure. Additionally, SB 27 requires
ballot measure committees and candidate committees that raise $1
million or more for an election to maintain an accurate list of
the committee's top ten contributors which would be posted on
the FPPC's Internet website and the committee's website.
Fiscal Impact:
The FPPC indicates costs of approximately $10,000 annually
(General)
The Secretary of State indicates costs of about $55,000
(General)
The FPPC indicates only minor costs to modify regulations.
Costs to the SOS result from providing the Top 10 Contributor
List in the Voter Information Guide.
Background: The Political Reform Act (PRA) 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.
Existing law generally defines "contribution" as a payment for
political purposes for which full and adequate consideration is
not received. FPPC regulations further define "contribution" to
include certain payments to nonprofit organizations and federal
or out-of-state political organizations active in California
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elections as follows:
Any payment made to a person or organization other than a
candidate or committee, when, 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,
will be used to make contributions or expenditures.
If the donor knows or has reason to know that only part of the
payment will be used to make contributions or expenditures,
the payment shall be apportioned on a reasonable basis in
order to determine the amount of the contribution.
There shall be a presumption that the donor does not have
reason to know that all or part of the payment will be used to
make expenditures or contributions, unless the person or
organization has made expenditures or contributions of at
least $1,000 in the aggregate during the calendar year in
which the payment occurs, or any of the immediately preceding
four calendar years.
A donor to such a person or organization shall be identified
and reported as specified.
Proposed Law: SB 27 revises the definition of campaign
"contribution" to include payments made by a donor who has
reason to know that the payment may be used to make a
contribution to support or oppose a California state or local
candidate or ballot measure.
SB 27 establishes 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:
- The nonprofit or other multipurpose 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 four calendar years.
- The nonprofit or other multipurpose organization has made
payments totaling $500,000 or more for contributions or
expenditures in this state during the calendar year in which the
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payment occurs.
- 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 period report
of its activities, including IRS 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.
- The nonprofit or other multipurpose organization has a
sponsored committee registered with the Secretary of State.
Any nonprofit or other multipurpose organization that qualifies
as a committee shall file appropriate campaign statements and
shall disclose the portion of its activities devoted to
California state and local elections. The statements must
identify donors that made contributions if the donor requests or
knows that the 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.
Additionally, SB 27 prohibits any person from using 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 all the required identification for
disclosure purposes.
Any committee that is formed to support or oppose a ballot
measure or candidate that raises $1 million or more for an
election shall maintain an accurate list of the committee's top
10 contributors, as specified by FPPC regulations. The FPPC
will be required to post this list on its Internet Web site, and
to provide that list to the Secretary of State. The FPPC will
be required to adopt regulations to govern the manner in which
it will display top 10 contributor lists.
The Secretary of State will be required to provide a written
explanation of the top 10 contributor lists and a description in
the ballot pamphlet of the Internet Web sites where those lists
are available to the public.
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Staff Comments: SB 27 will result in more timely and accurate
disclosure of the identity of the actual source of funds being
spent on California elections, rather than just the name of the
multipurpose organization - which often provides little, and
sometimes misleading, information about the interest behind the
expenditure. It will increase accountability for those who
attempt to avoid disclosure of their identities by channeling
funds used to influence California elections through other
committees or nonprofits.
SB 27 amends the Political Reform Act and will require a 2/3rd
vote on the Senate Floor.