BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 2 (Lieu) - Campaign Statements
Amended: May 6, 2013 Policy Vote: E&CA 4-1
Urgency: No Mandate: No
Hearing Date: May 13, 2013 Consultant: Maureen Ortiz
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 2 establishes new campaign report filing
requirements, authorizes the Fair Political Practices Commission
(FPPC) to perform additional audits, and increases various fines
and penalties relating to campaign reporting laws.
Fiscal Impact:
Potential increase in penalty revenue of $200,000 -
$300,000 annually (General)
Potential increase in revenue of approximately $15,000
(PDATA Fund)
FPPC indicates annual costs of $389,048 plus one-time costs
of $8,000 (General)
FPPC costs result from the need for 1PY Senior Commission
Counsel, 1 PY FPPC Counsel, and 2 PYs Political Reform
Consultant. One-time costs result from workstations and
furniture.
Background: 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.
These campaign statements must 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.
Candidates and committees that are required to file specified
SB 2 (Lieu)
Page 1
campaign statements by online or electronic means with the
Secretary of State (SOS) must 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.
Existing law permits the Fair Political Practices Commission to
make investigations and audits with respect to any reports or
statements required under the PRA. However, those audits are
prohibited 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.
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 measure created
the Political Disclosure, Accountability, Transparency, and
Access Fund (PDATA Fund) and require the new fee revenue to be
used for the maintenance, repair, and improvement of the online
or electronic disclosure program implemented by the Secretary of
State.
Proposed Law: SB 2 repeals existing campaign reporting
requirements and instead establishes 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 will be required to 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
SB 2 (Lieu)
Page 2
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 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.
SB 2 (Lieu)
Page 3
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 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.
Additionally, SB 2 increases the penalties for the late filing
of campaign reports from $10 per day to $30 per day. The
penalties for filing late campaign reports in FY 2012-13 was
$163,456, in FY 2011-12 was $181,195, and in FY 2010-11 the
penalty revenue totaled $197,384. Since the bill essentially
triples the fine, revenue could also triple however it is more
likely that the increase in penalties will result in better
compliance.
SB 2 (Lieu)
Page 4
SB 2 also adds a 15% surcharge for improperly reporting
laundered or earmarked contributions and requires that revenue
to be deposited into the PDATA Fund to be used for maintenance
on the Cal-ACCESS database.
SB 2 also authorizes the FPPC to 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 authorizes the FPPC to seek
an injunction to compel compliance with the audit.
Certain disclosure information is currently required on all
slate mailers. SB 2 will additionally require that each
candidate and ballot measure whose appearance has been paid for
by a third party be designated by an @.
Staff Comments: 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.
This bill seeks to eliminate many of the special activity-based
reports in favor of requiring more frequent regular reports.
SB 2 will adopt slate mailer recommendations from the FPPC's
Chairman's Task Force that include 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 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
SB 2 (Lieu)
Page 5
allow them to react and investigate violations prior to Election
Day. Most of the FPPC's discretionary audit powers can now only
be utilized after the election, which prevents the FPPC from
reacting to violations in progress that may affect the result of
a contest.
SB 2 amends the Political Reform Act and will require 2/3rd vote
on the Senate Floor.