BILL ANALYSIS �
SB 27
Page 1
SENATE THIRD READING
SB 27 (Correa)
As Amended August 21, 2013
2/3 vote
SENATE VOTE :28-8
ELECTIONS 5-1 APPROPRIATIONS 12-5
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|Ayes:|Fong, Bocanegra, Bonta, |Ayes:|Gatto, Bocanegra, |
| |Hall, Perea | |Bradford, |
| | | |Ian Calderon, Campos, |
| | | |Eggman, Gomez, Hall, |
| | | |Holden, Pan, Quirk, Weber |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Donnelly |Nays:|Harkey, Bigelow, |
| | | |Donnelly, Linder, Wagner |
| | | | |
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SUMMARY : Establishes conditions under which a multipurpose
organization (MPO) that makes campaign contributions or expenditures
is required to disclose names of its donors. Requires the Fair
Political Practices Commission's (FPPC) Web site to include a list
of the largest contributors to committees that support or oppose
state ballot measures or candidates, as specified. Specifically,
this bill :
1)Requires MPOs that make contributions or expenditures in
California campaigns to file campaign disclosure reports pursuant
to the following:
a) Defines an MPO as an organization described in Sections
501(c)(3) through (10) of the Internal Revenue Code that is
exempt from taxation under Section 501(a) of the Internal
Revenue Code; a federal or out-of-state political organization,
as specified; a trade or professional association; a civic or
religious organization; a fraternal society; an educational
institution; or any other association or group of persons
acting in concert; that is operating for purposes other than
making contributions or expenditures.
b) Provides that an MPO is a recipient committee, for the
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purposes of the Political Reform Act (PRA), only under one or
more of the following circumstances:
i) The MPO is a political committee registered with another
state or with the Federal Elections Commission (FEC), except
as specified, and it makes contributions or expenditures in
this state of at least $1,000;
ii) The MPO solicits and receives payments from donors
totaling $1,000 or more for the purpose of making
contributions or expenditures, or subject to an understanding
that the payments may be used for making contributions or
expenditures;
iii) The MPO has funds from a donor and a subsequent
understanding is reached that the funds may be used for
making contributions or expenditures of $1,000 or more; or,
iv) The MPO makes contributions or expenditures totaling
more than $50,000 in 12 months, or more than $100,000 in four
consecutive years. Provides that such an MPO is not a
recipient committee if it uses only nondonor funds, as
specified, to make contributions and expenditures, and it
identifies the source of the nondonor funds.
c) Provides that an MPO that is a recipient committee and a
federal or out-of-state political committee is not required to
itemize federal or out-of-state contributions and expenditures.
Provides that a committee registered with the FEC is not
required to provide detailed information about contributors of
$100 or more.
d) Provides that an MPO that is a recipient committee must
disclose donors as follows:
i) The committee must provide detailed information about
donors of $100 or more where those donations were solicited
for the purposes of making contributions or expenditures in
California, or where there was an understanding or agreement
that the donations may be used for making contributions or
expenditures in California;
ii) The total amount of contributions received that are
disclosed by the MPO on its campaign disclosure reports must
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equal the total amount of contributions and expenditures made
by the MPO in California; and,
iii) If the total contributions disclosed pursuant to i) is
not sufficient to account for all the contributions and
expenditures made by the MPO during the reporting period, the
MPO must disclose the identities of other donors of $1,000 or
more, using a last-in, first-out accounting method, until the
MPO has disclosed a total amount of contributions received to
equal the total amount of contributions and expenditures made
by the MPO in California. Provides that a donor is not
subject to disclosure if the donor prohibits the MPO from
using the donation for contributions or expenditures, or if
the donation is a grant from a private foundation, as
specified.
e) Provides that an MPO that is a recipient committee by virtue
of making contributions or expenditures totaling more than
$50,000 in 12 months or more than $100,000 in a four year
period is not required to disclose the donors for contributions
and expenditures made in a prior calendar year in which the MPO
did not qualify as a committee.
f) Permits an MPO that is a membership organization, is a
sponsor of a committee, and makes all of its contributions and
expenditures from funds derived from dues, assessments, fees,
and similar payments that do not exceed $10,000 per calendar
year from a single source, to report contributions or
expenditures made from the sponsor's treasury funds on the
campaign statements of the sponsored committee, as specified.
2)Requires a committee that is primarily formed to support or oppose
a state ballot measure or candidate, and that raises $1 million or
more for an election, to maintain an accurate list of the
committee's top 10 contributors of $10,000 or more, as specified
by the FPPC. Requires a current list of the top 10 contributors
to be disclosed on the FPPC's Web site, as specified. Requires the
committee to update the top 10 contributor list whenever it
changes. Requires the FPPC to post or update the top contributor
list within five business days, or within 48 hours during the last
16 days before the election.
3)Requires a committee to use reasonable efforts to identify the
individuals or corporations that are the true source of
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contributions made to the committee when listing the top
contributors.
4)Requires the FPPC to compile, maintain, and display on its Web
site a current list of the top contributors supporting and
opposing each state ballot measure.
5)Requires the state ballot pamphlet to contain a written
explanation of the top contributor lists described above,
including a description of the Web sites where the lists are
available.
FISCAL EFFECT : According to the Assembly Appropriations Committee:
1)Any costs to the FPPC will be minor and absorbable. No additional
penalty revenues, as the penalty provisions are consistent with
existing commission regulations.
2)Annual general fund printing costs of $55,000 to the Secretary of
State for one additional page in the state ballot pamphlet to
include a written explanation of the top 10 contributor lists, as
specified.
COMMENTS : According to the author, "Everyone is aware of the
now-infamous $11 million contribution from an Arizona non-profit
organization to a committee that was opposing Proposition 30 and
supporting Proposition 32 last November. After a court battle with
the FPPC, this nonprofit group revealed that it was not the true
source of the $11 million contribution but merely an intermediary.
They disclosed that the actual source of the $11 million was another
nonprofit organization who had received it from yet another
nonprofit organization. The true, original source of this campaign
money is still unknown to the public?
"In light of this, I introduced SB 27 which is a simple measure that
will accomplish two important goals. First, it will enact a series
of tests and presumptions in the law so that campaign funds can no
longer be laundered through nonprofit corporations without them
disclosing the true source of the money. Second, it will require
ballot measure committees that raise one million dollars or more to
give the FPPC a current list of the committee's top ten contributors
of ten thousand dollars or more. The FPPC and the committee will be
required to post the list on their Internet web sites."
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This bill is intended to address some of the challenges with
ensuring thorough campaign disclosure by specifying circumstances in
which an MPO is required to disclose its donors when it makes
contributions or expenditures. Some of these provisions are similar
to regulations adopted by the FPPC. This bill also establishes a
new situation in which an MPO is required to disclose the identities
of donors when it makes contributions or expenditures of more than
$50,000 in a 12 month period, or more than $100,000 in a four year
period.
California voters passed an initiative, Proposition 9, in 1974 that
created the FPPC and codified significant restrictions and
prohibitions on candidates, officeholders and lobbyists. That
initiative is commonly known as the Political Reform Act (PRA).
Amendments to the PRA that are not submitted to the voters, such as
those contained in this bill, must further the purposes of the
initiative and require a two-thirds vote of both houses of the
Legislature.
Please see the policy committee analysis for a full discussion of
this bill.
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094 FN:
0002085