Amended in Assembly July 1, 2014

Amended in Assembly June 18, 2014

Amended in Senate May 16, 2013

Amended in Senate May 7, 2013

Amended in Senate April 24, 2013

Amended in Senate April 1, 2013

Senate Bill No. 52

Introduced by Senators Leno and Hill

(Principal coauthors: Senators Correa and DeSaulnier)

(Principal coauthor: Assembly Member Fong)

(Coauthors: Senators Block, Hancock, and Wolk)

(Coauthors: Assembly Members Ammiano, Buchanan, and Wieckowski)

December 20, 2012

An act to amend Sections 84505, 84506, and 84508 of, to add Sections 84503.1, 84503.2, 84503.3, 84503.4, and 84503.5 to, to repeal Sections 84502 and 84504 of, and to repeal and add Sections 84501, 84502, and 84503 of, the Government Code, 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. 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. Existing law makes a knowing or willful violation of the Political Reform Act of 1974 a misdemeanor and subjects offenders to criminal penalties.

This bill would repeal and recast several definitions. The bill would repeal a committee identification requirement and a disclosure statement requirement relating to advertisements for or against any ballot measure paid for by a committee. The bill would impose new disclosure statement requirements for political advertisements regarding a ballot measure that are radio advertisements, prerecorded telephonic messages, television or video advertisements, or mass mailing or print advertisements that would require the identification of identifiable contributors, ballot measures, and other funding details, as specified. 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.

Existing law creates the Fair Political Practices Commission, and gives it primary responsibility for the impartial, effective administration and implementation of the Political Reform Act of 1974.

The bill would require the Fair Political Practices Commission to promulgate regulations related to the reporting and tracking of funds transferred by an identifiable contributor to committees and persons by January 1, 2016. The bill would authorize the Commission to promulgate regulations to require disclosures on all forms of advertisements regarding ballot measures not covered by the act, as specified.

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.

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

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.

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

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

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

SECTION 1.  

This act shall be known as the California Disclose
Act.

SEC. 2.  

The Legislature finds and declares all of the following:

(a) Ever-increasing amounts of funds are raised and spent in
support of and opposition to state and local ballot measures,
especially in the form of advertisements. The outcomes of such
elections are disproportionately impacted by begin delete whichever side is
able to raise and spend the most money to advance its position end delete
begin insert campaign expenditures in support of and opposition to those
measures end insert .

(b) Ever-increasing amounts of funds are spent on campaigns
by persons who do one or more of the following:

(1) Frequently use their wealth to fund local and state ballot
measures designed to advance their own economic interests.

(2) Increasingly avoid having their identities disclosed in
election-related advertisements by channeling funds through one
or more persons before those funds are received by a committee,
thereby undermining the purpose and intent of laws requiring
disclosure on such advertisements.

(3) Spend extraordinary amounts of money running
election-related advertisements while hiding behind dubious and
misleading names, including, but not limited to, advertisements
by primarily formed committees and general purpose committees.

(4) Increasingly evade disclosure by funding advertisements
designed to persuade voters without expressly advocating support
or opposition.

(c) The activities described in subdivision (b) cause the public
to become increasingly disaffected with the democratic process,
discouraging participation in elections and coloring public
perceptions of the legitimacy and integrity of state and local
government.

(d) The people of California and their government officials have
a compelling interest in knowing the true and original source of
committee funding and receiving clear information identifying the
largest original contributors responsible for political advertisements
funded by such committees.

(e) The disclosure of original contributors on advertisements
serves the following important governmental and societal purposes:

(1) Providing the people and government officials current and
easily accessible information regarding who is funding
advertisements that are intended to influence their votes on ballot
measures.

(2) Enabling the people and government officials to identify
potential bias in advertisements to assist them in making more
informed decisions and giving proper weight to different speakers
and messages.

(3) Deterring actual corruption and avoiding the appearance of
corruption by providing increased transparency of contributions
and expenditures.

(4) Improving the people’s confidence in the democratic process
and increasing their motivation to actively participate in that
process by regular voting and other forms of civic engagement.

(5) Promoting compliance with and detecting violations of the
Political Reform Act of 1974 (Title 9 (commencing with Section
81000) of the Government Code), while also addressing the
problems and advancing the state interests described in that act.

SEC. 3.  

Section 84501 of the Government Code is repealed.

SEC. 4.  

Section 84501 is added to the Government Code, to
read:

84501.  

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

(a) (1) “Advertisement” means any general or public
communication that is either of the following:

(A) Authorized and paid for by a committee for the purpose of
supporting or opposing a candidate for elective office.

(B) A ballot measure advocacy communication supporting or
opposing the qualification, passage, or defeat of a ballot measure.

(2) “Advertisement” does not include any of the following:

(A) A communication from an organization, other than a
political party, to its members.

(B) A campaign button smaller than 10 inches in diameter; a
bumper sticker smaller than 60 square inches; or a small tangible
promotional item, including, but not limited to, a pen, pin, or key
chain, upon which the disclosures required by this article cannot
be conveniently printed or displayed.

(C) Clothing apparel.

(D) Sky writing.

(E) An electronic media communication, if inclusion of the
disclosures required by this article is impracticable or would
severely interfere with the committee’s ability to convey the
intended message because of the nature of the technology used to
make the communication.

(F) Any other communication as determined by regulations of
the Commission.

(b) “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 for the
purpose of supporting or opposing a candidate for elective office
or for the purpose of qualification, passage, or defeat of a ballot
measure, and ending seven days before the time the advertisement
is disseminated or broadcast.

(c) “Identifiable contributor” means a person that is the original
source of funds for contributions received by a committee that
cumulatively total fifty thousand dollars ($50,000) or more,
notwithstanding the fact that the contributions were transferred,
in whole or in part, through one or more other committees or
persons.

SEC. 5.  

Section 84502 of the Government Code is repealed.

SEC. 6.  

Section 84502 is added to the Government Code, to
read:

84502.  

On or before January 1, 2016, the Commission shall
promulgate regulations, in furtherance of the purposes of this
article, related to the reporting and tracking of funds transferred
by an identifiable contributor to committees and other persons.

SEC. 7.  

Section 84503 of the Government Code is repealed.

SEC. 8.  

Section 84503 is added to the Government Code, to
read:

84503.  

(a) An advertisement regarding a ballot measure,
disseminated by a political party or candidate-controlled committee,
that is a radio advertisement or prerecorded telephonic message
shall include a disclosure statement at the beginning or 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: “Paid for by [name of the committee that paid for the
advertisement].”

(b) (1) An advertisement regarding a ballot measure,
disseminated by a committee other than a political party or
candidate-controlled committee, that is a radio advertisement or
prerecorded telephonic message shall include a disclosure statement
at the beginning or 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: “This ad has major
funding from [state names in descending order of identifiable
contributors who have made the two largest cumulative
contributions to the committee that paid for the advertisement].
Paid for by [name of the committee that paid for the
advertisement].”

(2) If there is only one identifiable contributor or the
advertisement lasts 15 seconds or less, the disclosure statement
required by paragraph (1) shall be adjusted to read as follows:
“This ad has major funding from [state name of identifiable
contributor who made the largest cumulative contributions to the
committee that paid for the advertisement]. Paid for by [name of
the committee that paid for the advertisement].”

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

(4) If the content of the advertisement names each of the
identifiable contributors required to be named pursuant to
paragraphs (1) and (2) as top funders of the advertisement, it may
replace the disclosure statement required by paragraph (1) with
the following: “Paid for by [name of the committee that paid for
the advertisement].”

SEC. 9.  

Section 84503.1 is added to the Government Code, to
read:

84503.1.  

(a) An advertisement regarding a ballot measure,
disseminated by a political party or candidate-controlled committee,
that is a television or video advertisement shall include a disclosure
area with a solid black background on the entire bottom one-third
of the television or video display screen at the beginning or end
of the advertisement for a minimum of five seconds in the case of
an advertisement that lasts 30 seconds or less or a minimum of 10
seconds in the case of an advertisement that lasts longer than 30
seconds. The disclosure area shall include the following text: “Paid
for by [name of the committee that paid for the advertisement].”
The text shall be in a contrasting color in Arial Narrow equivalent
type, and the type size shall be at least 4 percent of the height of
the television or video display screen and shall be centered
horizontally.

(b) An advertisement regarding a ballot measure, disseminated
by a committee other than a political party or candidate-controlled
committee, that is a television or video advertisement shall include
a disclosure area with a solid black background on the entire
bottom one-third of the television or video display screen at the
beginning or end of the advertisement for a minimum of five
seconds in the case of an advertisement that lasts 30 seconds or
less or a minimum of 10 seconds in the case of an advertisement
that lasts longer than 30 seconds. The disclosure area shall include
all of the following:

(1) The text “Ad Paid for by a Committee whose Top Funders
are:”. The text shall be located at the top of the disclosure area and
centered horizontally, shall be in a contrasting color in Arial
Narrow equivalent type, and the type size shall be at least 4 percent
of the height of the television or video display screen.

(2) Immediately below the text described in paragraph (1), the
names of the identifiable contributors who have made the three
largest cumulative contributions to the committee that paid for the
advertisement. The identifiable contributors shall each be disclosed
on a separate horizontal line, in descending order, beginning with
the identifiable contributor who made the largest cumulative
contributions on the first line. The name of each of the identifiable
contributors shall be centered horizontally in the disclosure area.
The text shall be in a contrasting color in Arial Narrow equivalent
type, and the type size shall be at least 4 percent of the height of
the television or video display screen.

(3) The text “Funding Details At [insert Commission Internet
Web site address with information required to be posted pursuant
to Section 84223].” The text shall be in a contrasting color in Arial
Narrow equivalent type, and the type size shall be at least 2.5
percent of the height of the television or video display screen. The
text shall be right-aligned and located in a position that is at least
2.5 percent of the height of the television or video display screen
away from the bottom right of the television or video display
screen.

(4) The text “Paid for by [name of the committee that paid for
the advertisement].” The text shall be in a contrasting color in
Arial Narrow equivalent type, and the type size shall be at least 4
percent of the height of the television or video display screen. The
text shall be left-aligned and located in a position that is vertically
at least 2 percent of the height of the television or video display
screen away from the bottom left of the television or video display
screen.

(5) If there are fewer than three identifiable contributors to the
committee that paid for the advertisement, the disclosure statement
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
text required by paragraph (1) shall be adjusted to read “Ad Paid
for by” and the name of the committee shall be printed immediately
below it, centered horizontally. The text shall be in a contrasting
color in Arial Narrow equivalent type, and the type size shall be
at least 4 percent of the height of the television or video display
screen.

SEC. 10.  

Section 84503.2 is added to the Government Code,
to read:

84503.2.  

(a) An advertisement regarding a ballot measure,
disseminated by a political party or candidate-controlled committee,
that is a mass mailing or a print advertisement designed to be
distributed personally shall include a disclosure area on the outside
display surface of the mass mailing or print advertisement that
reads as follows: “Paid for by [name of the committee that paid
for the advertisement].” The text shall be in an Arial Narrow
equivalent type with a type size of at least 10-point in a color or
print that contrasts with the background so that it is easily read.

(b) An advertisement regarding a ballot measure, disseminated
by a committee other than a political party or candidate-controlled
committee, that is a mass mailing or a print advertisement designed
to be distributed personally shall include a disclosure area on the
largest page of the mass mailing or print advertisement that satisfies
all of the following requirements:

(1) The disclosure area shall have a solid white background so
as to be easily legible, and shall be in a printed or drawn box on
the bottom of the page that is set apart from any other printed
matter. All text in the disclosure area shall be black in color. The
text in the disclosure area shall be written in the same direction as
the text or graphics on the majority of the page that has the
disclosure.

(2) The text “Ad Paid for by a Committee whose Top Funders
are” shall be located at the top of the disclosure area and centered
horizontally in the disclosure area. The text shall be in an Arial
Narrow equivalent type with a type size of at least 12-point for
advertisements smaller than 93 square inches and at least 14-point
for advertisements that are equal to, or larger than, 93 square
inches.

(3) Immediately below the text described in paragraph (2) shall
be the names of the identifiable contributors who have made the
three largest cumulative contributions to the committee that paid
for the advertisement. The identifiable contributors shall each be
disclosed on a separate horizontal line, in descending order,
beginning with the identifiable contributor who made the largest
cumulative contributions on the first line. The name of each of the
identifiable contributors shall be centered horizontally in the
disclosure area. The text shall identify each identifiable contributor
in an Arial Narrow equivalent type with a type size of at least
10-point for advertisements smaller than 93 square inches and at
least 12-point for advertisements that are equal to, or larger than,
93 square inches.

(A) If the advertisement is four inches tall or less, it need only
show the names of the identifiable contributors who have made
the two largest cumulative contributions.

(B) If the advertisement is three inches tall or less, it need only
show the name of the identifiable contributor who made the largest
cumulative contributions, and the text required by paragraph (2)
shall read “Ad Paid for by a Committee whose Top Funder is.”

(4) Immediately below the text described in paragraph (3), the
text “Funding Details At [insert Commission Internet Web site
address with information required to be posted pursuant to Section
84223].” The text shall be in an Arial Narrow equivalent type with
at least 10-point type size for advertisements smaller than 93 square
inches and at least 12-point type size for advertisements that are
equal to, or larger than, 93 square inches. This text shall not be
required if the advertisement is five inches tall or less.

(5) The text “Paid for by [name of the committee that paid for
the advertisement]” shall be located at the bottom of the disclosure
area and shall be in an Arial Narrow equivalent type with at least
8-point type size for pages smaller than begin delete 8.5 end delete begin insert 93 square end insert inches and
at least 10-point type size for pages that are equal to, or larger than,
begin delete 8.5 inches by 11 end delete begin insert 93 square end insert inches.

(6) If there are fewer than three identifiable contributors to the
committee that paid for the advertisement, the disclosure shall be
adjusted accordingly to disclose the qualifying identifiable
contributors, if any. If the committee does not have any identifiable
contributors, the disclosures described in paragraphs (2) and (3)
are not required.

SEC. 11.  

Section 84503.3 is added to the Government Code,
to read:

84503.3.  

The Commission may promulgate regulations to
require disclosures on all forms of advertisements regarding ballot
measures 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 cumulative contributions as possible in a conspicuous
manner, unless the committee that paid for the advertisement is a
political party or candidate-controlled committee, in which case
only the name of the committee must be shown. This disclosure
area shall occupy no more than 10 percent of the advertisement.

SEC. 12.  

Section 84503.4 is added to the Government Code,
to read:

84503.4.  

(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.

(b) If this article requires the disclosure of the name of an
identifiable contributor that is a sponsored committee that has a
single sponsor, only the name of the committee’s sponsoring
organization shall be disclosed.

(c) If the identifiable contributor is the parent of a subsidiary
corporation whose economic interest is more directly impacted
than the parent by a measure that is the subject of the
advertisement, then the subsidiary’s name shall be disclosed.
Disclosure of the parent’s name is optional, but shall not replace
the required disclosure of other identifiable contributors otherwise
required by this article.

(d) All disclosure text required by this article shall be displayed
in the capitalization shown in this article, such as “Ad Paid for by
a Committee whose Top Funders are”. Names of identifiable
contributors and committees shall be displayed in title capitalization
(e.g. “John Smith“), except for names that are acronyms (e.g.
“ACME Hunting Supplies”).

SEC. 13.  

Section 84503.5 is added to the Government Code,
to read:

84503.5.  

If the order of the identifiable contributors required
to be displayed in an advertisement pursuant to this article changes,
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 seven business days, or five business days if
the change in the order of identifiable contributors occurs within
30 days of an election.

(b) A print media advertisement, including non-electronic
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.

SEC. 14.  

Section 84504 of the Government Code is repealed.

SEC. 15.  

Section 84505 of the Government Code is amended
to read:

84505.  

In addition to the requirements of Sections 84503,
84503.1, 84503.2, and 84503.3, the committee paying for an
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.

SEC. 16.  

Section 84506 of the Government Code is amended
to read:

84506.  

(a) An advertisement supporting or opposing a
candidate, 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.

SEC. 17.  

Section 84508 of the Government Code is amended
to read:

84508.  

If disclosure of two major donors is required by Section
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.

SEC. 18.  

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.

SEC. 19.  

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.