BILL ANALYSIS Ó
SENATE COMMITTEE ON ELECTIONS
AND CONSTITUTIONAL AMENDMENTS
Senator Lou Correa, Chair
BILL NO: SB 2 HEARING DATE: 04/30/13
AUTHOR: LIEU ANALYSIS BY: Darren Chesin
AMENDED: 04/23/13
FISCAL: YES
SUBJECT
Political Reform Act: campaign reporting: advertisement
disclosure: slate mail
DESCRIPTION
Campaign Filing Schedules
Existing law , pursuant to the Political Reform Act (PRA),
requires candidates, political committees, and slate mail
organizations to file specified periodic and activity-based
campaign finance reports, including semiannual statements,
pre-election statements, supplemental pre-election
statements, and late contribution/expenditure reports that
include specified campaign finance information.
Existing law requires these campaign statements to
disclose, among other things, specified information about
contributors who have made aggregate contributions, as
defined, of $100 or more as well as similar information
about expenditures of $100 or more.
Existing law requires candidates and committees that are
required to file specified campaign statements by online or
electronic means with the Secretary of State (SOS) to
additionally file the original and one copy of those
campaign statements in a paper format with the SOS. The
paper originals will continue to be considered the official
filing for audit and other legal purposes until the SOS
determines that the online or electronic campaign
disclosure system is operating securely and effectively.
This bill would repeal these reporting requirements and
would instead establish new quarterly statements, monthly
statements, pre-election statements, postelection
statements, and year-end statements for filing, as
specified, including, but not limited to, all of the
following:
a.Elected officers, candidates, committees, and slate
mailer organizations would file quarterly statements each
year.
b.Candidates who receive contributions of less than $1,000,
and who make expenditures of less than $1,000, in a
calendar year will not be required to file quarterly
statements, as specified.
c.Elected officers whose salaries are less than $200 a
month, judges, judicial candidates, and their controlled
committees will not be required to file quarterly
statements for any three-month period in which they have
not made or received any contributions or made any
expenditures.
d.A judge who is not listed on the ballot for reelection
to, or recall from, any elective office during a calendar
year will not be required to file quarterly statements
for any three-month period in that year if the judge has
not received any contributions and the only expenditures
made by the judge during the calendar year are
contributions from the judge's personal funds to other
candidates or committees totaling less than $1,000.
e.A candidate, committee, or slate mailer organization that
is required to file monthly statements during an
even-numbered year will not be required to file quarterly
statements during an even-numbered year.
f.During each even-numbered year , the following entities
shall file monthly statements:
Ballot measure committees.
Slate mailer organizations.
Committees not controlled by a candidate, if the
candidate for whom the committee is primarily formed
to support or oppose will appear on the ballot for the
primary or general election held in that even-numbered
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year.
Candidates for statewide elective office and their
controlled committees, if they will appear on the
ballot for the primary or general election held in
that even-numbered year.
a.During each odd-numbered year in which an election
occurs, the following entities shall file a monthly
statements for the period covering each month in which
the entity has spent $1,000 or more to support or oppose
a candidate or ballot measure in that election:
A ballot measure committee primarily formed to
support or oppose a ballot measure appearing on the
ballot.
A slate mailer organization that produces a slate
mailer supporting or opposing candidates or ballot
measures appearing on the ballot.
A committee not controlled by a candidate, if the
candidate for whom the committee is primarily formed
to support or oppose will appear on the ballot.
A candidate for statewide elective office and the
candidate's controlled committees, if the candidate
for statewide elective office will appear on the
ballot.
a.An elected official, candidate, committee, or slate
mailer organization may elect to file monthly statements
in lieu of filing quarterly.
b.During an even-numbered year , all candidates for elective
office to be voted upon in the statewide primary election
or statewide general election, their controlled
committees, committees formed primarily to support or
oppose an elected state officer or candidate for state
elective office being voted upon at the election, all
committees formed primarily to support or oppose a ballot
measure to be voted upon at the statewide primary
election or statewide general election, and slate mailer
organizations shall file a year-end campaign statement.
The year-end statement shall be filed by January 31 of
the year following the year of the election and shall
cover the time period starting on the 21st day following
the election and ending December 31 of the year in which
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the election occurred.
c.A candidate whose name appeared on a statewide primary
election ballot and that candidate's controlled
committees shall not be required to file a year-end
statement if that candidate does not advance to the
general election, unless the candidate or the candidate's
controlled committees expend funds to support or oppose
another candidate or a ballot measure that will be voted
on at the general election.
FPPC Audits
Existing law permits the Fair Political Practices
Commission (FPPC) to make investigations and audits with
respect to any reports or statements required by specified
provisions of the PRA. However, existing law prohibits an
audit or investigation of any candidate, controlled
committee, or committee primarily supporting or opposing a
candidate or measure in connection with a report or
statement required by specified provisions of law from
commencing until after the last date for filing the first
report or statement following the general, runoff, or
special election for the office for which the candidate
ran, or following the election at which the measure was
adopted or defeated, except as specified.
This bill would specify that the FPPC may perform audits
prior to the date of the election and prior to the date
that a statement or report is required to be filed and
provide that the FPPC is authorized to seek an injunction
to compel compliance with the audit.
Increased Fines and the PDATA Fund
Existing law provides for the Political Disclosure,
Accountability, Transparency, and Access Fund (PDATA Fund)
in the State Treasury and requires that specified fees
collected from recipient committees, lobbying firms, and
lobbyist employers be deposited into the PDATA Fund.
Moneys deposited in the PDATA Fund are subject to
appropriation by the Legislature for the maintenance,
repair, and improvement of the online or electronic
disclosure program implemented by the SOS.
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This bill would increase the fines for improperly reporting
laundered or earmarked contributions to include a fine to
be deposited into the PDATA Fund, as specified.
Existing law provides that in addition to other remedies
provided for in the PRA, any person who fails to comply
with specified political advertisement disclosures is
liable in a civil or administrative action brought by the
FPPC or any person for a fine up to three times the cost of
the advertisement, including placement costs. If a
judgment is entered against the defendant in such an
action, the plaintiff shall receive 50 percent of the
amount recovered and the remaining 50 percent shall be
deposited in the General Fund of the state. In an action
brought by a local civil prosecutor, 50 percent shall be
deposited in the account of the agency bringing the action
and 50 percent shall be paid to the General Fund of the
state.
This bill would increase the maximum penalty for a
violation of these provisions to six times the amount of
the costs of the advertisement.
Existing law provides that if any person files a copy of a
statement or report after any deadline imposed by the PRA,
he or she shall, in addition to any other relevant
penalties or remedies, be liable in the amount of $10 per
day until the statement is filed not to exceed the
cumulative amount stated in the late statement or report,
or $100, whichever is greater.
This bill would increase the fines and penalties imposed on
campaign statements and reports that are filed late from
$10 per day to $30 per day not to exceed 150% of the
cumulative amount stated in the late statement or report,
or $1,000, whichever is greater.
Advertisement Disclosures
Existing law requires an advertisement for or against any
ballot measure to include a disclosure statement
identifying any person whose cumulative contributions are
$50,000 or more. If there are more than two donors of
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$50,000 or more, the disclosure only needs to include the
highest and second highest donors in that order. When a
disclosure of the top two donors is required on an
advertisement only the largest donor needs to be disclosed
on an advertisement that is an electronic broadcast of 15
seconds or less or a print advertisement of 20 square
inches or less.
This bill would increase to four the number of donors of
$50,000 or more who must be disclosed in an advertisement
for or against a ballot measure and requires the name of a
committee that supports or opposes a ballot measure to
include the names of up to four such major donors.
Existing law provides that when a committee files an
amended campaign statement the committee shall change its
advertisements to reflect the changed disclosure
information.
This bill would further provide that if an amended campaign
statement must be filed to reflect a change in the name of
the committee to identify a new major donor of $50,000 or
more, then the disclosure on advertisements shall be
amended as follows:
A television, radio, or other electronic media
advertisement shall be amended to reflect the new
committee name within three calendar days.
A print media advertisement, including billboards, shall
be updated to reflect the new committee name prior to
placing a new or modified order for additional printing
of the advertisement.
This bill would also require that television, video, or
audio broadcast advertisements supporting or opposing a
candidate or soliciting contributions in support of that
purpose that are authorized by a candidate include a
specified disclosure statement in which the candidate
identifies himself or herself and states that the candidate
has approved the message.
Slate Mail Disclosures
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Existing law requires slate mailer organizations and
committees primarily formed to support or oppose ballot
measures to include all of the following on slate mailers
they send:
The name and street address of the slate mailer
organization or committee shown on the outside of each
piece of slate mail and on at least one of the included
inserts in no less than 8-point roman type in a color or
print which contrasts with the background so as to be
easily legible.
At the top or bottom of the front side or surface of at
least one insert or at the top or bottom of one side or
surface of a postcard or other self-mailer, a notice to
voters consisting of the following statement in a
printed or drawn box in no less than 8-point roman type
in a color or print which contrasts with the background
so as to be easily legible:
NOTICE TO VOTERS
THIS DOCUMENT WAS PREPARED BY (name of slate
mailer organization or committee primarily
formed to support or oppose one or more ballot
measures), NOT AN OFFICIAL POLITICAL PARTY
ORGANIZATION. Appearance in this mailer does
not necessarily imply endorsement of others
appearing in this mailer, nor does it imply
endorsement of, or opposition to, any issues
set forth in this mailer. Appearance is paid
for and authorized by each candidate and
ballot measure which is designated by an *.
Each candidate and each ballot measure that has paid to
appear in the slate mailer must be designated by an
asterisk (*) which must immediately follow the name of
the candidate, or the name or number and position
advocated on the ballot measure. Any candidate or
ballot measure that has not paid to appear in the slate
mailer may not be designated by an asterisk.
The name of any candidate appearing in the slate mailer
who is a member of a political party differing from the
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political party which the mailer appears by
representation or indicia to represent, must be
accompanied, immediately below the name, by the party
designation of the candidate, in no less than
9-point roman type which shall be in a color or print
that contrasts with the background so as to be easily
legible. This designation is not required for
candidates for nonpartisan office.
This bill would additionally require that each candidate
and ballot measure whose appearance has been paid for by a
third party be designated by an @.
Existing law , pursuant to FPPC regulations, provides that
the notice to voters in a slate mailer shall appear in
English. In addition, if all or a significant portion of
the slate mailer appears in a language other than English,
the notice to voters must also appear in that language.
This bill would also provide that if a slate mailer is
produced entirely in a language other than English, the
notice to voters shall be produced in that language. If a
substantial portion of a slate mailer, as determined by the
FPPC by regulation, is in a language other than English,
the notice to voters shall be produced in both English and
the other language.
BACKGROUND
New Filing Schedule . Under existing law, candidates and
committees generally are required to file regular campaign
disclosure reports semi-annually. Candidates generally are
required to file two pre-election campaign statements for
any election where they will appear on the ballot, and
certain non-candidate committees similarly must file
pre-election reports. When candidates and committees are
required to file these pre-election reports, they generally
must also file late contribution reports, and late IE
reports, disclosing within 24-hours any contributions made
or received and IEs made of $1,000 or more in the last 16
days before the election. Candidates and committees can
also be required to file additional special campaign
reports at other times of year, based on the particular
campaign finance activity of the candidate or committee.
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This bill seeks to eliminate many of the special
activity-based reports in favor of requiring more frequent
regular reports. These changes may help simplify campaign
reporting, but may also significantly increase the number
of reports that a candidate or committee has to file. The
impacts on any particular candidate or committee will vary
significantly depending on the level and timing of activity
by that committee.
The PDATA Fund . SB 1001 (Yee), Chapter 506 of 2012,
imposed a new $50 fee on specified committees that are
required to file disclosure reports pursuant to the PRA and
increased fees by $25 per year on lobbying firms and
lobbyist employers. The bill created the Political
Disclosure, Accountability, Transparency, and Access Fund
(PDATA Fund) in the State Treasury and required the new fee
revenue to be used for the online and electronic disclosure
of reports filed pursuant to the PRA. Moneys deposited in
the PDATA Fund are subject to appropriation by the
Legislature for the maintenance, repair, and improvement of
the online or electronic disclosure program implemented by
the SOS pursuant to existing law. It is estimated that
these fees will result in approximately $490,000 of new
revenue yearly for the PDATA Fund.
Slate Mail Definitions . "Slate mailer" is defined in the
PRA as a mass mailing which supports or opposes a total of
four or more candidates or ballot measures.
A "slate mailer organization" means any person or
organization who, directly or indirectly, does all of the
following:
Is involved in the production of one or more slate
mailers and exercises control over the selection of the
candidates and measures to be supported or opposed in
the slate mailers.
Receives or is promised payments totaling $500 or more
in a calendar year for the production of one or more
slate mailers.
However, a slate mailer organization does not include any
of the following:
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A candidate or officeholder or his or her controlled
committee.
An official committee of any political party.
A legislative caucus committee.
A committee primarily formed to support or oppose a
candidate, officeholder, or ballot measure.
COMMENTS
1.According to the author , California's semiannual filing
schedule is no longer considered best practice and will
be reformed under SB 2 by adopting a filing model that is
akin to the federal schedule. This change will affect all
regulated campaign entities within the PRA.
Candidates in California are not currently required to
"stand by their ads" like federal candidates. Candidate
disclaimers in broadcast advertisements have also become
the norm to voters who expect to see or hear their
candidates "approve" an ad if it is paid for by the
candidate. By adding this requirement, voters will also
know how to differentiate between candidate and
independent expenditure advertisements.
SB 2 will increase several fines within the PRA that have
remained unchanged over decades, becoming weaker by
inflation, and widely recognized as not a real deterrent
to violators.
This bill will also improve advertisement disclosure of
ballot measures and IEs by requiring the top four donors
to a campaign be disclosed at the end of an ad, an
increase from current law's requirement of top two
donors.
SB 2 will adopt slate mailer recommendations from the
FPPC's Chairman's Task Force that include for the first
time in California history, language access to slate
mailer disclosures when the slate mailer is in a language
other than English. Slate mailer reforms also include a
new symbol to alert voters when certain advertisements
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are purchased by third parties or IEs. Current law does
not provide for such a designation.
Lastly, SB 2 gives the FPPC discretionary audit tools
that will allow them to react and investigate violations
prior to Election Day. Most of the FPPC's discretionary
audit powers can only be utilized after the election,
which prevents the FPPC from reacting to violations in
progress that may affect the result of a contest.
2.Broadcaster's Opposition . The California Broadcasters
Association (CBA), which opposes this bill, states that
current disclosures can now require up to 50% of a
30-second radio spot and if the number of required donors
to be disclosed is increased from two to four it will
discourage political campaigns from using the medium -
costing local stations jobs. The CBA contends that this
bill would unfairly discriminate against radio by putting
stations at a competitive disadvantage with every other
advertising medium. They additionally state that the
number of calendar days allowed before the ad must be
updated because of a donor change is also unreasonable.
Specifically, a "three calendar day" rule puts a
tremendous burden on the staff of local stations,
considering the ad must first be edited by the campaign
before it is delivered to the station. CBA instead
suggests a seven-day-calendar rule for most of the
campaign with a shorter window nearer to the election.
3.Related Legislation . This bill conflicts with SB 268
(Gaines) as both bills seek to change existing PRA
campaign reporting schedules. However, SB 268 was
recently made a "two-year" bill by the author.
This bill also conflicts with SB 52 (Leno) which is also
before this committee as both bills seek to amend the law
regarding disclosure of major donors who must be
identified on specified advertisements.
SB 26 (Correa), which is now pending in the Assembly, also
makes changes in the way the notice to voters on slate
mail appears but it does not conflict with this bill on a
policy basis.
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This bill is similar to portions of AB 447 (Huffman) of
2011 which died in the Assembly Appropriations Committee.
POSITIONS
Sponsor: California Common Cause
League of Women Voters of California
Support: American Association of University Women
California Clean Money Campaign
Oppose: California Broadcasters Association
Southern California Broadcasters Association
San Diego Radio Broadcasters Association
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