BILL ANALYSIS �
SB 3
Page 1
Date of Hearing: August 13, 2013
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
SB 3 (Yee & Lieu) - As Amended: August 6, 2013
SENATE VOTE : 30-6
SUBJECT : Political Reform Act of 1974.
SUMMARY : Makes numerous significant changes to the Political
Reform Act of 1974 (PRA). Specifically, this bill :
1)Changes the terms "late contribution" and "late independent
expenditure" to "election-cycle contribution" and
"election-cycle independent expenditure," respectively.
2)Requires a person who serves as a treasurer for one or more
committees to complete an online training course, designed and
administered by the Fair Political Practices Commission
(FPPC), before being designated as a treasurer for a committee
or not later than 20 business days after that designation.
a) Requires the training course to address the statutes and
regulations governing the financing of campaigns, and the
duties and responsibilities of a treasurer under the PRA.
b) Provides that each applicant shall be required to
certify, under penalty of perjury, his or her identity by
means of an identifier determined by the FPPC, as part of
the training course.
c) Permits the FPPC to charge a fee of up to $50 for each
applicant for training.
d) Requires a treasurer to participate in training every
two years.
e) Requires the FPPC to maintain a list of treasurers who
have completed training on its Web site.
f) Requires the FPPC, prior to developing the online
training course, to coordinate with one or more other state
agencies or departments, including, but not limited to the
Department of Technology, to identify any existing online
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training and certification courses that may be converted
and utilized for the purposes of this bill.
g) Requires the FPPC to complete the development of the
online training course no later than December 31, 2014.
h) Provides that treasurers shall be subject to the online
training requirements created by this bill 30 days after
the FPPC has certified a training course, but no sooner
than January 1, 2015.
i) Provides that a treasurer who is required to complete
the online training course shall be fined no more than
$1,000 if he or she fails to complete that course.
3)Declares the intent of the Legislature that the Secretary of
State (SOS) develop a statewide electronic filing system that
provides for the following:
a) Electronic filing of committee organization statements;
b) Electronic filing of lobbyist, lobbying firm, and
lobbyist employer registrations;
c) Electronic filing of campaign statements by all state
committees, without regard to the amounts of contributions
and expenditures;
d) Electronic filing of periodic reports filed by
lobbyists, lobbying firms, and lobbyist employers.
e) Electronic filing of reports by all major donors at the
state level when specified thresholds are met;
f) A statewide, Internet-accessible system that provides
for search capabilities that are data driven and
user-friendly for all members of the public; and,
g) A system that provides for lobbying and committee data
to be made regularly available to the public in raw,
machine-readable data format.
4)Requires the SOS, not later than December 31, 2014, to develop
a feasibility study report (FSR) that will outline the
technology requirements and the costs of the statewide
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electronic filing system described above. Requires the SOS to
consult and coordinate with other state agencies that he or
she deems appropriate including the FPPC with respect to data
transitioning. Requires the FSR to include an examination of
the feasibility of establishing a statewide electronic filing
system that permits state-required committee disclosure forms
and reports to be imported into the statewide database,
according to data standards established by the SOS, from each
local jurisdiction that has its own electronic filing system.
5)Increases the penalty imposed on a person or committee who
files a statement or report required by the PRA after the
deadline for that report from $10 for each day after the
deadline that the statement or report is filed to $30 per day.
Increases the maximum amount of such penalties from the
cumulative amount stated on the late statement or report or
$100, whichever is greater, to 150 percent of the cumulative
amount stated in the late statement or report or $1,000,
whichever is greater. Provides that if the SOS is the filing
officer, he or she shall deposit two-thirds of any funds
received pursuant to this provision into the Political
Disclosure, Accountability, Transparency, and Access Fund
(PDATA Fund), and the remainder into the General Fund.
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EXISTING LAW :
1)Creates the FPPC, and makes it responsible for the impartial,
effective administration and implementation of the PRA.
2)Requires a committee, as specified, to file a "late
independent expenditure report" within 24 hours of making any
independent expenditure of $1,000 or more in the last 90 days
prior to an election.
3)Requires a committee, as specified, to file a "late
contribution report" within 24 hours of receiving any
contribution of $1,000 or more in the last 90 days prior to an
election.
4)Requires every committee to have a treasurer. Prohibits an
expenditure from being made by or on behalf of a committee
without the authorization of the treasurer or that of his or
her designated agents. Requires the statement of organization
for a campaign committee to include the full name, street
address, and telephone number (if any), of the campaign's
treasurer.
5)Requires the SOS, in consultation with the 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.
Requires the SOS to make all the data filed using the system
available on the Internet for public viewing in an easily
understood format and to 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.
6)Provides that if a 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, as specified. Provides that this late filing penalty
shall not exceed the cumulative amount stated in the late
statement or report, or $100, whichever is greater.
FISCAL EFFECT : Unknown. State-mandated local program;
contains a crimes and infractions disclaimer.
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COMMENTS :
1)Purpose of the Bill : According to the author:
In winter of 2011, the Secretary of State's online
campaign finance and lobbying disclosure website (also
known as Cal-ACCESS) crashed for nearly a month.
During that time regulated parties sought other means
of filing legally required disclosure forms; the media
and government watchdogs were forced to wait until the
system was restored in order to conveniently access
the system to do important accountability work.
Luckily, this crash occurred during a quiet time in
state politics and during a non-election year.
However, this incident only supported the ongoing
commentary among independent watchdogs, candidates,
consultants, lobbyists and media publications that the
decade-old design of Cal-ACCESS is outdated and does
not meet the 21st century data standards or demands of
today.
In 2012, Common Cause sponsored legislation authored
by Senator Yee that created a dedicated funding source
for a new online disclosure system through
registration fees gathered from lobbyists and
political committees. Senate Bill 1001 created the
Political Disclosure, Accountability, Transparency,
and Access Fund for the purpose of paying for
maintenance and an eventual upgrade to the Cal-ACCESS
system.
Senate Bill 3 is the second half of the Sunshine in
Campaigns Act (including SB 2). SB 3 is also a
continuation of the work done in Senate Bill 1001 with
its major provisions that require the Secretary of
State to conduct a feasibility study on the design and
development of a new online disclosure system that
meets today's information technology standards,
including online and electronic filing capabilities.
SB 3 also makes important changes to what the state
designates as "late" contributions or independent
expenditures. This change will amend the term "late"
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with the term "election-cycle" which is less confusing
to voters and regulated individuals and closer to what
the FPPC designates these transactions in regulations.
Finally, SB 3 will require campaign committee
treasurers to complete an online certification course,
designed and administered by the Fair Political
Practices Commission.
2)Author's Amendment : According to the author's staff, the most
recent set of amendments contained a drafting error. Those
amendments required one-third of the total amount of money
collected by the SOS under this bill for late filing penalties
to be deposited into the PDATA Fund, but it was the author's
intent that two-thirds of the late filing penalties-the entire
increase from $10 a day to $30 per day that is proposed by
this bill-to be deposited in the PDATA fund. This analysis
reflects this proposed author's amendment.
3)Cal-Access Status : 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 November 2011, the Cal-Access system
went down, and the system was unavailable for most of the
month of December. In response to a letter from the chair of
this committee, 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?.
The Cal-Access system went down November 30, was
restored December 7, went down December 9, and was
restored again on December 30. The causes of the
outages were layered and complex, and no quick fix was
available?.
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The recovery efforts that [SOS] staff and contractors
pursued in December should stabilize Cal-Access and
enable it to continue running, but the system can
never be made stronger or patched with new features.
Any attempt to upgrade or modernize Cal-Access could
be as risky, time-consuming, and expensive as
developing and deploying a new system. Even the
December work to restore Internet availability of
Cal-Access will not last forever. It is highly likely
that Cal-Access will require more robust servers in
the next three to four years simply to continue
providing access to the ever-growing volume of
information.
The cost of an entirely new system and the speed with
which it can be deployed will depend on many factors
and ultimately can only be borne out through the
state's IT procurement process, which history has
shown to be lengthy and expensive. Before the
Cal-Access outage began on November 30, my office was
looking at existing commercial off-the-shelf (COTS)
products, as well as systems used by other states to
prepare a feasibility study report (FSR) - the project
blueprint that is the required precursor for an IT
project and subject to approval by state control
agencies. Any consideration of an FSR, along with the
subsequent legislative and gubernatorial review of any
budget change proposal to conduct a procurement, would
take into account the replacement of Cal-Access in the
context of the two major IT procurements - VoteCal and
California Business Connect - that my office is
currently conducting.
4)Treasurer Training and Possible Amendment : In August 2010,
then-chairman of the FPPC, Dan Schnur, established a 25-member
Advisory Task Force charged with proposing regulatory and
statutory changes to the PRA. One of the changes recommended
by the task force was to require online training of campaign
treasurers, to better ensure that they are aware of basic
reporting rules and legal prohibitions. This bill would
require all persons who are serving as campaign treasurers to
undergo training at least every two years, and permits the
FPPC to charge up to $50 to each person who takes the
training. This training requirement would apply to everyone
who serves as a treasurer for a committee that is organized
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under the PRA, regardless of whether the committee is a state
or local committee, and regardless of the amount of campaign
activity by the committee. A treasurer who failed to complete
the training within the required time period would be subject
to a fine of up to $1,000.
While the requirement to undergo training-and to pay the fee
associated with that training-is likely to be a small burden
to committees with high levels of campaign activity, and to
individuals who regularly serve as professional campaign
treasurers, the training requirement and fee could be a much
more significant burden for committees with relatively low
levels of campaign activity that rely on volunteers to serve
as campaign treasurers, and it may make it more difficult for
those committees to find people who are willing to serve as
campaign treasurers. On the other hand, volunteer campaign
treasurers without much experience serving as treasurers may
have less familiarity with the PRA generally, and thus may be
more likely to benefit from the training.
The committee may wish to consider whether the training
requirement in this bill, when combined with the potentially
significant penalties for failure to complete the training in
the required time period, is overly burdensome, or whether
those burdens are justified to ensure greater awareness of the
state's campaign reporting rules and legal prohibitions. To
reduce the potential that the training requirement and high
fines could make it harder for smaller committees to find
treasurers, the committee may wish to consider lowering the
penalty for failing to complete the training in the required
time period from $1,000 to $500.
5)PDATA Fund and Previous Legislation : SB 1001 (Yee), Chapter
506, Statutes of 2012, imposed a $50 annual fee on specified
committees that are required to file disclosure reports
pursuant to the PRA and increased the fee on lobbying firms
and lobbyist employers from $25 to $50 per year per lobbyist.
The revenue generated by the bill is deposited into the
newly-created PDATA Fund, and is available to be used for the
online and electronic disclosure of reports filed pursuant to
the PRA. It is estimated that these fees will result in
approximately $490,000 of new revenue yearly for the PDATA
Fund.
This bill seeks to provide an additional source of funding to
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the PDATA fund by requiring the increase in late filing
penalties collected by the SOS pursuant to this bill to be
deposited in that fund.
6)Related Legislation : SB 2 (Lieu & Yee), which is also being
heard in this committee today, increases the maximum fines
that can be levied for certain violations of the PRA, among
other provisions.
7)Political Reform Act of 1974 : 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 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.
REGISTERED SUPPORT / OPPOSITION :
Support
California Common Cause (co-sponsor)
League of Women Voters of California (co-sponsor)
American Federation of State, County and Municipal Employees,
AFL-CIO
California Clean Money Campaign
California Forward Action Fund
Communications Workers of America AFL-CIO, CLC Local 9003
Friends Committee on Legislation of California
Secretary of State Debra Bowen
Opposition
None on file.
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094