Amended in Senate April 1, 2013

Senate Bill No. 52

Introduced by Senators Leno and Hill

December 20, 2012

An act begin insert to amend Sections 84505 and 85310 of, to add Sections 84506.1, 84506.2, 84506.3, and 84506.4 to, to add Article 6 (commencing with Section 84550) to Chapter 4 of Title 9 of, to repeal Sections 84502, 84503, 84504, and 84506.5 of, and to repeal and add Sections 84501, 84506, 84507, 84508, and 84509 of, the Government Code, end insert relating to the Political Reform Act of 1974.

LEGISLATIVE COUNSEL’S DIGEST

SB 52, as amended, Leno. Political Reform Act of 1974: campaign disclosures.

Existing law, the Political Reform Act of 1974, provides for the comprehensive regulation of campaign financing, including requiring the reporting of campaign contributions and expenditures and imposing other reporting and recordkeeping requirements on campaign committees. begin insert Existing law additionally imposes disclosure statement requirements with respect to advertisements supporting or opposing a candidate or ballot measure paid for by donors making contributions of specified amounts or by independent expenditures and defines several terms and phrases for these purposes. end insert Existing law makes a knowing or willful violation of the Political Reform Act of 1974 a misdemeanor and subjects offenders to criminal penalties.

begin delete

This bill would declare the intent of the Legislature to enact legislation that would strengthen the Political Reform Act of 1974 and the campaign disclosure requirements within that act to require that advertisements disclose specified funding, expenditure, and issue advocacy information in a manner that clearly and unambiguously identifies the three largest major donors.

end delete begin insert

This bill would repeal and recast several definitions. The bill would repeal a committee identification requirement and the disclosure statement requirements relating to advertisements for or against any ballot measure paid for by any person whose cumulative contributions are $50,000 and advertisements paid for by an independent expenditure. The bill would impose new disclosure statement requirements for radio advertisements, prerecorded telephonic messages, television or video advertisements, and mass mailing or print advertisements that would require the identification of identifiable contributors, ballot measures, and other funding details, as specified. The bill would also require a committee, in prescribed circumstances, to establish and maintain a campaign disclosure Internet Web site for each of its campaigns for the purpose of making a contribution disclosure statement. The bill would require covered organizations, as defined, that make campaign-related disbursements or expenditures exceeding a certain amount to comply with disclosure and accounting requirements. Covered organizations would be required to keep an accounting of all original contributors of political purpose funds and to make this accounting available for audit by the Fair Political Practices Commission. The bill would provide that, in addition to other remedies, a person who makes a covered transfer of political purpose funds in violation of specified requirements is liable in a civil or administrative action brought by the Fair Political Practices Commission or any person for a fine up to 3 times the amount of the covered transfer. By introducing new disclosure requirements, the violation of which would be a misdemeanor, the bill would create a new crime, thereby imposing a state-mandated local program.

end insert begin insert

Existing law requires a person who makes a payment or promise of payment totaling $50,000 or more for a communication that identifies, but does not advocate the election or defeat of, a candidate for elective state office, and that is disseminated within 45 days of an election, to file a disclosure report with the Secretary of State.

end insert begin insert

This bill would reduce the payment threshold to $10,000 and change the communication dissemination period to the period beginning 120 days before the primary or special election and ending on the date of the general or runoff election.

end insert begin insert

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert begin insert

The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the act’s purposes upon a 2⁄3 vote of each house and compliance with specified procedural requirements.

end insert begin insert

This bill would declare that it furthers the purposes of the act.

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Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

SECTION 1.  

This act shall be known as the California Disclose
Act.

begin delete

SEC. 2.  

It is the intent of the Legislature to enact legislation
that would strengthen the Political Reform Act of 1974 and the
campaign disclosure requirements within that act to require that
advertisements disclose the largest funders of all political
television, radio, print, and other forms of advertising for ballot
measures, independent expenditures, and issue advocacy in a
manner that clearly and unambiguously identifies the three largest
major donors.

end delete

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 84501 of the end insert begin insert Government Code end insert begin insert is repealed. end insert

begin delete

84501.  

(a) “Advertisement” means any general or public
advertisement which is authorized and paid for by a person or
committee for the purpose of supporting or opposing a candidate
for elective office or a ballot measure or ballot measures.

(b) “Advertisement” does not include a communication from
an organization other than a political party to its members, a
campaign button smaller than 10 inches in diameter, a bumper
sticker smaller than 60 square inches, or other advertisement as
determined by regulations of the commission.

end delete

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 84501 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

begin insert

begin insert 84501. end insert   

For purposes of this article, the following terms have
the following meanings:

(a) (1) “Advertisement” means a general or public
advertisement that is authorized and paid for by a person or
committee for the purpose of supporting or opposing a candidate
for elective office or a ballot measure or ballot measures, for an
electioneering communication, or for an issue advocacy
advertisement, as defined in Section 84550.

(2) “Advertisement” does not include a communication from
an organization other than a political party to its members, a
campaign button smaller than 10 inches in diameter, a bumper
sticker smaller than 60 square inches, or other advertisement as
determined by regulations of the Commission.

(b) “Campaign” means the expenditures and other activities
of a covered organization in support of, or opposition to, or in
reference to a specific ballot measure, candidate, legislative action,
or administrative action, or any combination thereof.

(c) “Campaign disclosure threshold” means ten thousand
dollars ($10,000) in the case of a campaign in support of or
opposition to a statewide ballot measure, a state candidate, or
issue advocacy, or two thousand dollars ($2,000) in the case of a
campaign in support of or opposition to a local ballot measure or
local candidate.

(d) “Campaign disclosure Internet Web site” means a
committee’s Internet Web site for a specific campaign that discloses
the top identifiable contributors to that committee for that
campaign, as described in Section 84506.3.

(e) “Covered organization” has the same meaning as set forth
in subdivision (c) of Section 84550.

(f) “Earmarked original contributions” means the cumulative
amount of original contributions from an identifiable contributor
that a covered organization used for a specific campaign or that
have been directed to be used for the campaign but have not yet
been expended.

(g) “Identifiable contributor” means a person whose earmarked
original contributions to a campaign’s covered organization meet
or exceed the campaign disclosure threshold. If an original
contributor’s earmarked original contributions do not meet or
exceed the campaign disclosure threshold, the accumulation of
those contributions shall be treated as a single earmarked original
contribution to the original recipient.

(h) “Original contribution” has the same meaning as set forth
in subdivision (h) of Section 84550.

(i) “Original contributor” has the same meaning as set forth
in subdivision (i) of Section 84550.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 84502 of the end insert begin insert Government Code end insert begin insert is repealed. end insert

begin delete

84502.  

“Cumulative contributions” means the cumulative
amount of contributions received by a committee beginning 12
months prior to the date the committee made its first expenditure
to qualify, support, or oppose the measure and ending within seven
days of the time the advertisement is sent to the printer or broadcast
station.

end delete

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 84503 of the end insert begin insert Government Code end insert begin insert is repealed. end insert

begin delete

84503.  

(a) Any advertisement for or against any ballot measure
shall include a disclosure statement identifying any person whose
cumulative contributions are fifty thousand dollars ($50,000) or
more.

(b) If there are more than two donors of fifty thousand dollars
($50,000) or more, the committee is only required to disclose the
highest and second highest in that order. In the event that more
than two donors meet this disclosure threshold at identical
contribution levels, the highest and second highest shall be selected
according to chronological sequence.

end delete

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 84504 of the end insert begin insert Government Code end insert begin insert is repealed. end insert

begin delete

84504.  

(a) Any committee that supports or opposes one or
more ballot measures shall name and identify itself using a name
or phrase that clearly identifies the economic or other special
interest of its major donors of fifty thousand dollars ($50,000) or
more in any reference to the committee required by law, including,
but not limited, to its statement of organization filed pursuant to
Section 84101.

(b) If the major donors of fifty thousand dollars ($50,000) or
more share a common employer, the identity of the employer shall
also be disclosed.

(c) Any committee which supports or opposes a ballot measure,
shall print or broadcast its name as provided in this section as part
of any advertisement or other paid public statement.

(d) If candidates or their controlled committees, as a group or
individually, meet the contribution thresholds for a person, they
shall be identified by the controlling candidate’s name.

end delete

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 84505 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

84505.  

In addition to the requirements of Sections begin delete 84503, end delete
84504, 84506, begin delete and 84506.5 end delete begin insert 84506.1, 84506.2, 84506.3, and
84506.4 end insert , the committee placing the advertisement or persons acting
in concert with that committee shall be prohibited from creating
or using a noncandidate-controlled committee or a nonsponsored
committee to avoid, or that results in the avoidance of, the
disclosure of any individual, industry, business entity, controlled
committee, or sponsored committee as a major funding source.

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 84506 of the end insert begin insert Government Code end insert begin insert is repealed. end insert

begin delete

84506.  

(a) An advertisement supporting or opposing a
candidate or ballot measure, that is paid for by an independent
expenditure, shall include a disclosure statement that identifies
both of the following:

(1) The name of the committee making the independent
expenditure.

(2) The names of the persons from whom the committee making
the independent expenditure has received its two highest
cumulative contributions of fifty thousand dollars ($50,000) or
more during the 12-month period prior to the expenditure. If the
committee can show, on the basis that contributions are spent in
the order they are received, that contributions received from the
two highest contributors have been used for expenditures unrelated
to the candidate or ballot measure featured in the communication,
the committee shall disclose the contributors making the next
largest cumulative contributions of fifty thousand dollars ($50,000)
or more.

(b) If an acronym is used to identify any committee names
required by this section, the names of any sponsoring organization
of the committee shall be printed on print advertisements or spoken
in broadcast advertisements.

end delete

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 84506 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

begin insert

begin insert 84506. end insert   

(a) A radio advertisement paid for by a
candidate-controlled committee that clearly identifies the candidate
or one or more of the opponents of the candidate shall include an
audio statement in which the candidate identifies himself or herself
and states that the candidate has approved the message.

(b) (1) A radio advertisement or prerecorded telephonic
message regarding a campaign shall include a disclosure at the
end of the advertisement read in a clearly spoken manner and in
a pitch and tone substantially similar to the rest of the
advertisement that reads as follows: “Top funders of this ad are
[state names in descending order of identifiable contributors who
have made the three largest earmarked original contributions for
the campaign]. Paid for by [name of the committee that paid for
the advertisement].”

(2) If there are fewer than three identifiable contributors, the
disclosure required by paragraph (1) shall be adjusted accordingly
to disclose the qualifying identifiable contributors, if any.

(3) If there are no identifiable contributors or the committee
that paid for the advertisement is the only identifiable contributor,
it may replace the disclosure required by paragraph (1) with the
following: “Paid for by [name of the committee that paid for the
advertisement].”

(4) If the advertisement is a prerecorded telephonic message
and names each of the three largest identifiable contributors of
the campaign and identifies the speaker as speaking on behalf of
them, it may replace the disclosure required by paragraph (1) with
the following: “Paid for by [name of the committee that paid for
the advertisement].”

(5) The disclosures specified in this subdivision shall not be
required if the advertisement is paid for by a candidate-controlled
committee and clearly identifies the candidate or one or more of
the opponents of the candidate or if the committee has not expended
an amount on the campaign that meets or exceeds the campaign
disclosure threshold.

end insert

begin insert

begin insert SEC. 10. end insert   

end insert

begin insert Section 84506.1 is added to the end insert begin insert Government Code end insert begin insert ,
to read: end insert

begin insert

begin insert 84506.1. end insert   

(a) A television or video advertisement paid for by
a candidate-controlled committee that clearly identifies the
candidate or one or more of the opponents of the candidate shall
include a statement in which the candidate identifies himself or
herself and states that the candidate has approved the message.
The candidate statement shall be made using an unobscured,
full-screen video of the candidate, alone, making the statement,
or by using an unobscured, full-screen, and clearly identifiable
photographic image of the candidate, alone, that is displayed
during an audio voiceover of the candidate reading the statement.

(b) Except as otherwise provided by this section, a television
or video advertisement regarding a campaign shall include at the
end of the advertisement a disclosure that includes all of the
following:

(1) A full-screen without audio on a black background for a
minimum of three seconds that is dedicated to the disclosure
described in this section.

(2) If the advertisement identifies one or two ballot measures,
the text “Top Funders of This Ad for [“Yes on” followed by the
ballot measure number or letter for any ballot measures it supports
or “No on” followed by the ballot measure number or letter for
any ballot measures it opposes].” If the advertisement does not
identify ballot measures or identifies more than two ballot
measures, the text “Top Funders of This Ad.” The text shall be
located at the top of the television or video display screen and
centered horizontally, shall be yellow in color in Arial equivalent
font, and the font size shall be at least 5 percent of the height of
the television or video display screen.

(3) Immediately below the text described in paragraph (2), the
logos, if any, as they appear on the Internet Web site homepage
of the identifiable contributor, for the identifiable contributors
who have made the three largest earmarked original contributions
to the committee that paid for the advertisement. Each logo shall
occupy at least 15 percent of the width or height of the television
or video display screen and the logos shall be displayed from left
to right in descending order beginning with the largest identifiable
contributor.

(4) Immediately below the logos, if any, described in paragraph
(3), or beneath the text described in paragraph (2), if no
identifiable contributor has a logo, the identifiable contributors
who have made the three largest earmarked original contributions
to the committee that paid for the advertisement. The three
identifiable contributors shall each be disclosed on a separate
vertical line, in descending order, beginning with the identifiable
contributor who made the largest earmarked original contribution
on the first line. The name of each of the three identifiable
contributors shall be centered horizontally. The text shall be white
in color in Arial Narrow equivalent font and the font size shall be
at least 5 percent of the height of the television or video display
screen.

(5) Immediately below the text described in paragraph (4), the
text “Full Funding Details At [insert Internet Web site address of
the campaign disclosure Internet Web site].” The text shall be
yellow in color in Arial Narrow equivalent font and the font size
shall be equivalent to 4 percent of the height of the television or
video display screen.

(6) The text “Paid for by [name of the committee that paid for
the advertisement].” The text shall be yellow in color in Arial
Narrow equivalent font and the font size shall be equivalent to 3
percent of the height of the television or video display screen. The
text shall be located in a position that is vertically 3 percent above
the bottom of the television or video display screen and centered
horizontally.

(7) If there are fewer than three identifiable contributors, the
disclosure required by this subdivision shall be adjusted
accordingly to disclose only those that qualify as identifiable
contributors, if any. If the committee does not have any identifiable
contributors, the disclosure shall be adjusted to include the name
of the committee in place of the names of identifiable contributors.

(c) The disclosures described in subdivision (b) shall not be
required if the advertisement is paid for by a candidate-controlled
committee and clearly identifies the candidate or one or more of
the opponents of the candidate or if the committee paying for the
advertisement has not expended an amount on the campaign that
meets or exceeds the campaign disclosure threshold.

end insert

begin insert

begin insert SEC. 11. end insert   

end insert

begin insert Section 84506.2 is added to the end insert begin insert Government Code end insert begin insert ,
to read: end insert

begin insert

begin insert 84506.2. end insert   

(a) Except for slate mailers or as otherwise provided
by this section, a mass mailing or print advertisement regarding
a campaign shall include a disclosure area on the largest page of
the mass mailing or print advertisement that satisfies all of the
following:

(1) The disclosure area shall be set apart from the rest of the
page on which it is located by a line framing the disclosure area
in the shape of a square or rectangle and the line shall be a color
that establishes a contrast with the background color of the
remainder of the disclosure area. The disclosure area within the
border line shall have a solid background color that establishes
a contrast to the color of the disclosure text that is equivalent to
or greater than the text and background color contrast in the other
areas of the mass mailing or print advertisement.

(2) The text “Top Funders of This Ad” shall be located at the
top of the disclosure area and centered horizontally in the
disclosure area. The text shall be in an Arial equivalent font with
a font size of at least 14-point for pages smaller than 8.5 inches
by 11 inches and at least 16-point for pages that are equal to, or
larger than, 8.5 inches by 11 inches.

(3) Immediately below the text described in paragraph (2) shall
be printed the logos, if any, as they appear on the Internet Web
site homepage of the identifiable contributor, for the identifiable
contributors who have made the three largest earmarked original
contributions to the committee that paid for the mass mailing or
print advertisement. Each logo shall occupy at least 8 percent of
the width or height of the page on which the disclosure area is
located and the logos shall be displayed from left to right in
descending order beginning with the largest identifiable
contributor.

(4) Immediately below the logos, if any, described in paragraph
(3), or beneath the text described in paragraph (2) if no identifiable
contributor has a logo, shall be identified by name the identifiable
contributors who have made the three largest earmarked original
contributions for the campaign that paid for the mass mailing or
print advertisement. The three identifiable contributors shall each
be disclosed on a separate vertical line, in descending order,
beginning with the identifiable contributor who made the largest
earmarked original contributions on the first line. The name of
each of the three identifiable contributors shall be centered
horizontally. The text shall identify each identifiable contributor
in an Arial Narrow equivalent font with a font size of at least
10-point for pages smaller than 8.5 inches by 11 inches and at
least 12-point for pages that are equal to, or larger than, 8.5 inches
by 11 inches.

(5) Immediately below the text described in paragraph (4), the
text “Full Funding Details At [insert Internet Web site address of
the campaign disclosure Internet Web site].” The text shall be in
an Arial Narrow equivalent font with at least 10-point font size
for pages smaller than 8.5 inches by 11 inches and at least 12-point
font size for pages that are equal to, or larger than, 8.5 inches by
11 inches.

(6) The text “Paid for by [name of the committee that paid for
the advertisement].” The text shall be located at the bottom of the
disclosure area and shall be in an Arial Narrow equivalent font
with at least 8-point font size for pages smaller than 8.5 inches
and at least 10-point font size for pages that are equal to, or larger
than, 8.5 inches by 11 inches.

(7) If there are fewer than three identifiable contributors, the
disclosure shall be adjusted accordingly to disclose the qualifying
identifiable contributors, if any. If the committee does not have
any identifiable contributors, the disclosure shall be adjusted to
include the name of the committee in place of the names of
identifiable contributors.

(b) The disclosures described in subdivision (a) shall not be
required if the committee paying for the advertisement is a
candidate-controlled committee that pays for advertisements in
support of the candidate or if the committee paying for the
advertisement has not expended an amount on the campaign that
meets or exceeds the campaign disclosure threshold.

end insert

begin insert

begin insert SEC. 12. end insert   

end insert

begin insert Section 84506.3 is added to the end insert begin insert Government Code end insert begin insert ,
to read: end insert

begin insert

begin insert 84506.3. end insert   

Except for a committee that is controlled by a
candidate and that is paying for advertisements in support of the
candidate, a committee shall establish and maintain a separate
campaign disclosure Internet Web site for each of its campaigns
for which it has expended an amount that meets or exceeds the
campaign disclosure threshold and for which it pays for an
advertisement described in this article. If the campaign has an
Internet Web site homepage, that Internet Web site may also serve
as the campaign disclosure Internet Web site. The homepage of
the campaign disclosure Internet Web site and any other Internet
Web sites maintained by the committee shall include a disclosure
statement area for the purpose of making a contribution disclosure
statement that satisfies all of the following:

(a) The disclosure statement area shall be at least 250 pixels
wide. The disclosure statement area shall have a white background
and a border that is dark in color.

(b) If the campaign involves one or more ballot measures, the
disclosure statement shall include the text “Top Funders of This
Campaign for [“Yes on” followed by the ballot measure number
or letter for any ballot measures it supports or “No on” followed
by the ballot measure number or letter for any ballot measures it
opposes].” This text shall be located at the top of the disclosure
statement area and centered horizontally in the disclosure
statement area. The text shall be black in color in an Arial
equivalent font and shall be at least 10-point font size.

(c) Immediately below the text described in subdivision (b), the
disclosure statement shall include a list of the identifiable
contributors who have made the 10 largest earmarked original
contributions to the committee. Each of the 10 identifiable
contributors shall be disclosed on a separate vertical line, in
descending order, beginning with the identifiable contributor who
made the largest cumulative contribution on the first line. The text
shall be black in color in an Arial Narrow equivalent font and
shall be at least 9-point font size.

(d) Immediately below the text described in subdivision (c), the
disclosure statement shall include the logos, if any, as they appear
on the Internet Web site homepage of the identifiable contributor,
for the identifiable contributors who made the 10 largest
earmarked original contributions to the committee. Each logo
shall occupy at least 75 horizontal or vertical pixels and shall be
displayed from left to right in descending order beginning with
the largest identifiable contributor.

(e) (1) The disclosure statement shall include a hyperlink to
another page on the campaign disclosure Internet Web site that
lists all of the campaign’s identifiable contributors. The hyperlink
shall be labeled “More funding info” and shall be a standard
hyperlink centered at the bottom of the disclosure area that is
displayed as blue underlined text in Arial-equivalent font in at
least 9-point font size.

(2) The hyperlinked page on the committee disclosure Internet
Web site shall have a title that reads “Large Funders of this
Campaign.” The linked page shall disclose each identifiable
contributor of the committee on a separate vertical line, in
descending order, beginning with the identifiable contributor that
had the largest earmarked original contribution on the first line.
Each line shall show the name of the identifiable contributor and
the amount of its earmarked original contributions, current within
three days. These disclosures shall be clear and shall be the only
content on the page other than the campaign disclosure Internet
Web site’s standard navigation features.

(f) If there are fewer than 10 identifiable contributors, the
disclosure statement shall be adjusted accordingly to disclose the
qualifying identifiable contributors, if any. If the committee does
not have any identifiable contributors, the disclosure shall be
adjusted to include the name of the committee in place of the names
of identifiable contributors.

end insert

begin insert

begin insert SEC. 13. end insert   

end insert

begin insert Section 84506.4 is added to the end insert begin insert Government Code end insert begin insert ,
to read: end insert

begin insert

begin insert 84506.4. end insert   

The Commission shall promulgate regulations to
require disclosures on all forms of advertisements not covered by
this article, including, but not limited to, electronic media
advertisements and billboards. If feasible, the regulations shall
require the listing of the name of the committee and as many of
the three identifiable contributors that made the largest earmarked
original contributions to the campaign as possible in a conspicuous
manner. This disclosure area shall occupy no more than 10 percent
of the advertisement. If the advertisement medium allows, the
disclosure area shall contain a hyperlink to the campaign
disclosure Internet Web site.

end insert

begin insert

begin insert SEC. 14. end insert   

end insert

begin insert Section 84506.5 of the end insert begin insert Government Code end insert begin insert is repealed. end insert

begin delete

84506.5.  

An advertisement supporting or opposing a candidate
that is paid for by an independent expenditure must include a
statement that it was not authorized by a candidate or a committee
controlled by a candidate.

end delete

begin insert

begin insert SEC. 15. end insert   

end insert

begin insert Section 84507 of the end insert begin insert Government Code end insert begin insert is repealed. end insert

begin delete

84507.  

Any disclosure statement required by this article shall
be printed clearly and legibly in no less than 10-point type and in
a conspicuous manner as defined by the commission or, if the
communication is broadcast, the information shall be spoken so
as to be clearly audible and understood by the intended public and
otherwise appropriately conveyed for the hearing impaired.

end delete

begin insert

begin insert SEC. 16. end insert   

end insert

begin insert Section 84507 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

begin insert

begin insert 84507. end insert   

For purposes of a disclosure required by this article,
the following shall also apply in the event that an identifiable
contributor is a person who is an individual:

(a) If the committee receiving the earmarked original
contributions is supporting or opposing a candidate, the disclosure
shall include the occupation and employer of the identifiable
contributor in addition to the contributor’s name.

(b) If the committee receiving the earmarked original
contributions is supporting or opposing a ballot measure, and the
passage or defeat of the ballot measure directly benefits the
employer of the identifiable contributor, the disclosure shall
include the occupation and employer of the identifiable contributor
in addition to the contributor’s name. However, if an employer of
an identifiable contributor is also an identifiable contributor of
that committee, the earmarked original contributions of the
employees shall, instead, be deemed to be earmarked original
contributions by the employer for purposes of determining the total
earmarked original contribution made by the employer in order
to determine which identifiable contributors shall be disclosed on
an advertisement pursuant to this article.

(c) If the committee receiving the earmarked original
contributions is supporting or opposing a ballot measure, and the
passage or defeat of the ballot measure does not directly benefit
the employer of the identifiable contributor, the disclosure shall
include only the name of the identifiable contributor.

end insert

begin insert

begin insert SEC. 17. end insert   

end insert

begin insert Section 84508 of the end insert begin insert Government Code end insert begin insert is repealed. end insert

begin delete

84508.  

If disclosure of two major donors is required by Sections
84503 and 84506, the committee shall be required to disclose, in
addition to the committee name, only its highest major contributor
in any advertisement which is:

(a) An electronic broadcast of 15 seconds or less, or

(b) A newspaper, magazine, or other public print media
advertisement which is 20 square inches or less.

end delete

begin insert

begin insert SEC. 18. end insert   

end insert

begin insert Section 84508 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

begin insert

begin insert 84508. end insert   

(a) The disclosure of the name of an identifiable
contributor required by this article need not include such legal
terms as “incorporated,” “committee,” “political action
committee,” or “corporation,” or their abbreviations, unless the
term is part of the contributor’s name in common usage or
parlance. This section does not prevent a contributor from being
disclosed by a name used in common usage or parlance, including,
but not limited to, an abbreviation or acronym.

(b) For a disclosure made pursuant to Sections 84506 to
84506.3, inclusive, the committee name listed need not include its
economic or other special interests, nor the names of any major
donors.

end insert

begin insert

begin insert SEC. 19. end insert   

end insert

begin insert Section 84509 of the end insert begin insert Government Code end insert begin insert is repealed. end insert

begin delete

84509.  

When a committee files an amended campaign
statement pursuant to Section 81004.5, the committee shall change
its advertisements to reflect the changed disclosure information.

end delete

begin insert

begin insert SEC. 20. end insert   

end insert

begin insert Section 84509 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

begin insert

begin insert 84509. end insert   

If the order of the identifiable contributors required to
be displayed in an advertisement pursuant to this article changes
after a statement is filed pursuant to Section 84554, the disclosure
in the advertisement shall be updated as follows:

(a) A television, radio, or other electronic media advertisement
shall be updated to reflect the new ordering of identifiable
contributors within three calendar days.

(b) A print media advertisement, including nonelectronic
billboards, shall be updated to reflect the new ordering of
identifiable contributors prior to placing a new or modified order
for additional printing of the advertisement.

end insert

begin insert

begin insert SEC. 21. end insert   

end insert

begin insert Article 6 (commencing with Section 84550) is added
to Chapter 4 of Title 9 of the end insert begin insert Government Code end insert begin insert , to read: end insert

begin insert

 

Article begin insert 6. end insert   Expenditures of Organizations

 

begin insert 84550. end insert   

For purposes of this article, the following terms have
the following meanings:

(a) “Campaign” means the expenditures and other activities
of a covered organization in support of, or opposition to, or in
reference to, a specific ballot measure, candidate, legislative
action, or administrative action, or any combination thereof.

(b) “Campaign-related disbursement” means a disbursement
of money by a covered organization for any of the following:

(1) An expenditure in support of, or opposition to, a ballot
measure.

(2) An independent expenditure in support of, or opposition to,
a candidate.

(3) An electioneering communication.

(4) An issue advocacy advertisement.

(5) A covered transfer of political purpose funds.

(c) “Covered organization” means a person, other than an
individual or political party, that can accept contributions,
donations, payments, or any other form of funds, including, but
not limited to, a committee, a nonprofit organization, a business
entity, a labor organization, and a federal or out-of-state political
action committee.

(d) “Covered transfer of political purpose funds” means a
transfer or payment of political purpose funds in an aggregate
amount of one thousand dollars ($1,000) or more in a calendar
year by a covered organization to another covered organization.

(e) “Electioneering communication” means a communication
described in subdivision (a) of Section 85310.

(f) “Issue advocacy advertisement” means an advertisement in
a calendar quarter that is paid for by a person required to file a
statement under subdivision (b) of Section 86115 in the calendar
quarter and that does all of the following:

(1) Clearly refers to the subject matter, description, or name of
pending legislative or administrative action.

(2) Reflects a view on the legislative or administrative action
referred to in paragraph (1).

(3) Can only be reasonably interpreted as an appeal for the
recipient of the advertisement to take action by contacting an
employee or elected official of the state government or any local
government or encouraging others to contact those persons.

(g) “Ordinary business funds” means amounts received by a
covered organization in the ordinary course of any trade or
business conducted by the covered organization, or in the form of
investments in the covered organization.

(h) “Original contribution” means a contribution, donation,
transfer, or payment of dues made by an original contributor to
an original recipient. In the case of an original contributor that
is a covered organization, the original contribution amount is the
amount that is made up entirely of ordinary business funds and
contributions, donations, transfers, or payments of dues amounting
to less than an aggregate of one thousand dollars ($1,000) from
each person.

(i) “Original contributor” means a person that was the original
source of political purpose funds acquired by a covered
organization, notwithstanding the fact that the political purpose
funds were transferred, in whole or in part, through one or more
covered organizations. An original contributor includes any of the
following:

(1) An individual, political party, or other person that does not
accept political purpose funds from others and that makes one or
more contributions or payments of political purpose funds to a
covered organization in an aggregate amount of one thousand
dollars ($1,000) or more in a calendar year.

(2) If a covered organization makes a campaign-related
disbursement, any of the following persons or entities whose
political purpose funds were used in that disbursement:

(A) Any original contributor identified in a covered transfer
statement received by the covered organization.

(B) Any original contributor defined in paragraph (1).

(C) The covered organization, if it used ordinary business funds
totaling one thousand dollars ($1,000) or more.

(D) The covered organization, if it used one thousand dollars
($1,000) or more from persons who each made payments or
contributions totaling less than one thousand dollars ($1,000) in
a calendar year.

(j) “Original recipient” means the first covered organization
to which an original contribution is made.

(k) “Political purpose funds” means funds made up of any
payments, including contributions, donations, transfers, or
payments of dues, that qualify as contributions or that are made
to a covered organization by a person who does any of the
following:

(1) Requests or gives permission for the payment to be used for
campaign-related disbursements.

(2) Makes the payment in response to a solicitation or other
request for funds that are expected to be used for campaign-related
disbursements.

(3) Makes the payment to a covered organization that publicly
declares that any payments may be expected to be used for
campaign-related disbursements unless the person prohibits, in
writing, the use of their funds for campaign-related disbursements.

begin insert 84551. end insert   

(a) A covered organization that makes
campaign-related disbursements aggregating more than one
thousand dollars ($1,000) in a calendar year shall only expend
political purpose funds for those disbursements. A covered
organization shall not make any campaign-related disbursements
using funds received by a transfer or payment from another covered
organization if that organization has not provided a transfer of
political purpose funds statement pursuant to Section 84553.

(b) If a covered organization’s political purpose funds and
campaign-related disbursements are fully accounted for, no public
disclosure shall be required relating to the identity of the covered
organization’s other members and general donors. Any public
disclosure shall be limited to the sources, amounts, expenditures,
and transfers of the covered organization’s political purpose funds
and campaign-related disbursements.

begin insert 84552. end insert   

(a) A covered organization shall keep an accounting
of all of the original contributors of its political purpose funds.
The accounting shall be available for audit by the Commission
and shall include all of the following information relating to each
original contributor:

(1) The same identifying information required for persons who
make contributions.

(2) The date, amount, and original recipient of each original
contribution that makes up the covered organization’s political
purpose funds from the original contributor.

(3) Any amounts of each original contribution that are directed
to be used for specific campaigns.

(4) The dates, amounts, campaigns, and other purposes for
which original contributors’ funds were expended or the covered
organizations that they were transferred to, if any.

(b) Records for each original contribution shall be preserved
for at least 48 months after they are recorded as having been
expended, transferred, or used for other purposes.

begin insert 84553. end insert   

(a) If a covered organization makes a covered transfer
of political purpose funds, it shall provide a transfer of political
purpose funds statement made under penalty of perjury to both
the Commission and the recipient organization within 24 hours.
The statement shall include the same identifying information for
both the covered organization and the recipient organization as
required for committees, and a statement of what amounts, if any,
of the transferred funds are directed to be used for specific
campaigns.

(b) The transfer of political purpose funds statement shall
include an accounting of each original contribution making up
the transfer that includes all of the following:

(1) The same identifying information required for persons who
make contributions.

(2) The contribution’s date, amount, and original recipient.

(3) Any portions of the contribution that are directed to be used
for specific campaigns. If the transfer of political purpose funds
statement specifies that the transferred funds are directed to be
used for specific campaigns, then that direction shall be listed,
provided it is consistent with the original direction for the original
contribution’s use.

begin insert 84554. end insert   

(a) A covered organization that makes expenditures
for a specific campaign in an amount, in the aggregate, equal to
or greater than the applicable campaign disclosure threshold, as
defined in Section 84501, in a calendar year that are not covered
transfers of political purpose funds shall file a statement made
under penalty of perjury with the Secretary of State and the
Commission that includes the same identifying information for the
covered organization as required for committees.

(b) The statement required by subdivision (a) shall include an
accounting of each original contribution that was used for the
covered organization’s cumulative expenditures for the campaign,
plus any original contributions that have been directed to be used
for the campaign but have not yet been expended, and shall contain
all of the following information:

(1) The same identifying information required for persons who
make contributions.

(2) The contribution’s date, amount, and original recipient.

(3) The date or dates of the original statement or statements on
which it was listed as expended, if any.

(c) The statement described in subdivision (a) shall be amended
within 24 hours from the time at which the aggregated earmarked
original contributions, as defined in Section 84501, for the
campaign increase by an amount that meets or exceeds the
campaign disclosure threshold since the previous statement.

begin insert 84555. end insert   

A covered organization that makes campaign-related
disbursements shall be subject to discretionary audits conducted
by the Commission. An audit conducted pursuant to this section
shall be limited to examining the covered organization’s
campaign-related disbursements and sources and uses of its
political purpose funds. A covered organization shall keep copies
of records detailing a person’s request or granting of permission
to use its funds for campaign-related disbursements, any written
statements persons made prohibiting the use of their funds for
campaign-related disbursements, its fundraising solicitations, and
the transfer of political purpose funds statements from the covered
organizations that transfer political purpose funds to it. A covered
organization shall make these records available for inspection by
the Commission, if requested, during an audit.

begin insert 84556. end insert   

(a) In addition to the remedies provided for in Chapter
11 (commencing with Section 91000), a person who makes a
covered transfer of political purpose funds in violation of this
article is liable in a civil or administrative action brought by the
Commission or any person for a fine up to three times the amount
of the covered transfer of political purpose funds.

(b) The remedies provided for in subdivision (a) shall also apply
to any person who purposely causes any other person to violate
any provision of this article or who aids and abets any other person
in a violation.

(c) If a judgment is entered against the defendant or defendants
in an action brought under this section, the plaintiff shall receive
50 percent of the amount recovered. 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.

end insert

begin insert

begin insert SEC. 22. end insert   

end insert

begin insert Section 85310 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

85310.  

(a)  begin delete Any end delete begin insert A end insert person who makes a payment or a promise
of payment totaling begin delete fifty end delete begin insert ten end insert thousand dollars begin delete ($50,000) end delete begin insert ($10,000) end insert
or more for a communication that clearly identifies a candidate
for elective begin delete state end delete office, but does not expressly advocate the election
or defeat of the candidate, and that is disseminated, broadcast, or
otherwise published begin delete within 45 days of an election end delete begin insert during the period
beginning 120 days before the primary or special election and
ending on the date of the general or runoff election end insert , shall file online
or electronically with the Secretary of State a report disclosing the
name of the person, address, occupation, and employer, and amount
of the payment. The report shall be filed within 48 hours of making
the payment or the promise to make the payment.

(b) (1) Except as provided in paragraph (2), if begin delete any end delete begin insert a end insert person has
received a payment or a promise of a payment from other persons
totaling five thousand dollars ($5,000) or more for the purpose of
making a communication described in subdivision (a), the person
receiving the payments shall disclose on the report the name,
address, occupation and employer, and date and amount received
from the person.

(2) A person who receives or is promised a payment that is
otherwise reportable under paragraph (1) is not required to report
the payment if the person is in the business of providing goods or
services and receives or is promised the payment for the purpose
of providing those goods or services.

(c)  begin delete Any end delete begin insert A end insert payment received by a person who makes a
communication described in subdivision (a) is subject to the limits
specified in subdivision (b) of Section 85303 if the communication
is made at the behest of the clearly identified candidate.

begin insert

begin insert SEC. 23. end insert   

end insert begin insert

No reimbursement is required by this act pursuant
to Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

end insert

begin insert

begin insert SEC. 24. end insert   

end insert begin insert

The Legislature finds and declares that this bill
furthers the purposes of the Political Reform Act of 1974 within
the meaning of subdivision (a) of Section 81012 of the Government
Code.

end insert