BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 3 (Yee) - Campaign Reporting
Amended: April 22, 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 3 requires the Secretary of State (SOS) to
develop a single, statewide electronic filing system that
consolidates the filing of all state and local campaign
statements and reports into one searchable database. The SOS
will be required to conduct a feasibility study by December 31,
2014, and to develop a funding plan and complete the new filing
system by December 31, 2018.
Additionally, SB 3 makes numerous changes to existing reporting
requirements, and requires the FPPC to develop an online
certification course for campaign committee treasurers and
authorizes the FPPC to charge a fee of up to $50 for the course.
Fiscal Impact:
The SOS anticipates costs of $100,000 to conduct the
feasibility study (Special)
The costs of implementing a new filing system for state and
local reports is unknown, but would likely be between $15
million and $25 million (General)
Approximately $18,000 one-time to updating the automated
fine assessment system to accommodate the increase in late
filing penalties (General)
FPPC indicates annual costs of $269,467 for 3 PYs and
one-time costs of $6,000 for workstations and furniture
(General). These costs could possibly be offset by fee
revenue depending on the number of treasurers who are
required to complete the course.
Estimated penalty revenue of $200,000 to $300,000 annually
(General)
It is possible that the PDATA fund could be used to conduct the
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feasibility study. The cost of replacing the existing
Cal-Access database is unknown at this time - the range shown
above is purely estimation, however, after completion of the
study, a more definitive cost will be known. A study completed
in 2008 estimated costs at about $7.5 million, however, that
estimate is outdated and did not include the additional local
filings that are required in this bill. There are 20 different
local filings systems that will have to be accommodated plus
different local filing thresholds adding significant complexity
and costs.
Background: Existing law requires the Secretary of State
(SOS), in consultation with the Fair Political Practices
Commission (FPPC), to provide an online and electronic filing
system for use by specified state candidates, committees,
lobbyists, lobbying firms, and lobbyist employers. This online
reporting and disclosure system is commonly referred to as the
Cal-Access system. The SOS must make all the data filed using
the system available on the Internet for public viewing in an
easily understood format and also provide a means whereby
entities that are required to file statements or reports online
or electronically with the SOS pursuant to the PRA, can submit
those required filings free of charge.
Created in 1999, Cal-Access is a database and filing system the
SOS has used to make much of the lobbying and campaign finance
information available online at no cost to users. In late
November 2011, the Cal-Access system went down, and the system
was unavailable for most of the month of December. Shortly
following that incident, the SOS provided the following
information about the status of the Cal-Access system and the
challenges to replacing that system with a new (and more robust)
campaign and lobbying disclosure database:
Cal-Access is a suite of applications developed in 13 different
programming languages which, until [recently], ran the system on
a server cluster and associated components?that are more than 12
years old, using an uncommon version of the Unix operating
system.?While the [SOS] has the funding to maintain the existing
hardware and software, finding parts and qualified people to do
the maintenance on such outdated equipment has been increasingly
difficult.
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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 (Cal-Access). It is estimated that these fees will
result in approximately $490,000 of new revenue yearly for the
PDATA Fund.
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.
Existing law requires each committee to have a designated
treasurer who is identified in the statement of organization. A
committee may not make an expenditure without the authorization
of the treasurer.
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 candidates and committees to file a report
within 24-hours of making or receiving a contribution, or making
an independent expenditure, of $1,000 or more during the last 90
days before an election (late contribution and late independent
expenditure reports). Candidates and committees that are
required to file specified campaign statements by online or
electronic means with the SOS must additionally file the
original and one copy of those campaign statements in a paper
format with the SOS. The paper originals, which are signed, are
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considered the official filing for audit and other legal
purposes.
Existing law requires each committee to file a statement of
organization within 10 days of becoming a committee.
Proposed Law: SB 3 would require the SOS to develop the
electronic filing system as follows:
Not later than December 31, 2014, the SOS must develop a
feasibility study report (FSR) that will outline the
technology requirements and the costs of the electronic filing
system. The SOS must consult and coordinate with other state
agencies that he or she deems appropriate, including, but not
limited to, the FPPC, with respect to data transitioning.
The SOS must develop a funding plan that includes a
comprehensive and detailed project budget that will be
accurate through the duration of the project and will include
appropriate and reasonable contingencies.
Not later than December 31, 2018, the SOS must complete work
on the development, construction, and launch of the new
electronic filing system.
SB 3 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.
SB 3 will require a treasurer for a committee or committees that
have made cumulative contributions or expenditures in excess of
$250,000 to complete an online certification course, designed
and administered by the FPPC. The course would address the
statutes and regulations governing the financing of campaigns
and the duties and responsibilities of a treasurer and it must
be completed within 20 business days after being designated as
the treasurer, or within 20 business days of exceeding the
$250,000 threshold.
SB 3 also makes the following changes to campaign reporting
requirements:
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a) Change the terms "late contribution" and "late independent
expenditure," as defined in the PRA, to "election-cycle
contribution" and "election-cycle independent expenditure,"
respectively, and would make other conforming changes.
b) Repeals the requirement that candidates and committees that
are required to file late contribution and late independent
expenditure reports file paper reports.
c) Reduces the time in which the statement of organization must
be filed from 10 days to 5 days.
Staff Comments: The Secretary of State is currently involved
the procurement of two major IT procurements - VoteCal and
California Business Connect.