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 23, 2013 Consultant: Maureen Ortiz
SUSPENSE FILE.
Bill Summary: SB 2 authorizes the Fair Political Practices
Commission (FPPC) to perform additional audits, and increases
various fines and penalties relating to campaign reporting laws.
Fiscal Impact:
FPPC indicates minor, absorbable costs (General)
Potential increase in penalty revenue of $200,000 -
$300,000 annually (General)*
Potential increase in revenue of approximately $15,000
(PDATA Fund)
Approximately $18,000 one-time to update the automated fine
assessment system to accommodate the increase in late filing
penalties (General)
*This same penalty revenue is contained in SB 3 (Yee).
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
campaign statements by online or electronic means with the
Secretary of State (SOS) must additionally file the original and
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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 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 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.
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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.
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
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.
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