BILL ANALYSIS Ó
SENATE COMMITTEE ON ELECTIONS
AND CONSTITUTIONAL AMENDMENTS
Senator Lou Correa, Chair
BILL NO: SB 52 HEARING DATE: 04/30/13
AUTHOR: LENO ANALYSIS BY: Darren Chesin
AMENDED: 04/24/13
FISCAL: YES
SUBJECT
Political Reform Act: advertisement disclosures;
contribution origination
DESCRIPTION
Definitions
For purposes of this bill, the following terms have the
following meanings:
" Advertisement " means a general or public advertisement
that is any of the following:
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.
An electioneering communication.
An issue advocacy advertisement.
"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 Fair
Political Practices Commission (FPPC).
" Cumulative contributions " means the cumulative amount of
contributions received by a committee beginning 18 months
prior to the date the committee made its first expenditure
for a political advertisement or for the purpose of
qualifying, supporting, or opposing a candidate for
elective office or a ballot measure.
" 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 required by this bill.
" Disclosure threshold " means $10,000 in the case of a
campaign regarding a statewide ballot measure or a state
candidate or in the case of a statewide issue advocacy
advertisement, or $2,000 in the case of a campaign
regarding a local ballot measure or a local candidate or in
the case of a local issue advocacy advertisement.
" Identifiable contributor " means a person that is the
original source of contributions received by a committee
that cumulatively meet or exceed the disclosure threshold,
notwithstanding the fact that the contributions were
transferred, in whole or in part, through one or more other
committees or persons.
" Political advertisement " means an advertisement, unless it
is paid for by a candidate-controlled committee and is an
advertisement relating to the candidate's own election and
not for any other campaign.
Advertisement Disclosures
Existing law pursuant to the Political Reform Act (PRA),
provides for all of the following regarding political
advertisement disclosures:
Requires an advertisement for or against any ballot
measure to include a disclosure statement identifying any
person whose cumulative contributions are $50,000 or
more. Provides that if there are more than two donors of
$50,000 or more, the disclosure only needs to include the
highest and second highest donors in that order.
Requires a committee that supports or opposes one or more
ballot measures to name itself using a name or phrase
that identifies the economic or other special interest of
its major donors of $50,000 or more. Provides that if
the major donors of $50,000 or more share a common
employer, the identity of the employer must also be
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disclosed.
Requires a broadcast or mass mailing advertisement
supporting or opposing a candidate or ballot measure that
is paid for by an independent expenditure (IE) to include
a disclosure statement identifying the name of the
committee making the expenditure and the names of the
persons from whom the committee making the IE received
its two highest cumulative contributions of $50,000 or
more during the 12-month period prior to the expenditure.
Provides that when a disclosure of the top two donors is
required on an advertisement pursuant to either of the
above provisions, only the largest donor needs to be
disclosed on an advertisement that is an electronic
broadcast of 15 seconds or less or a print advertisement
of 20 square inches or less.
This bill would repeal these advertisement disclosure
requirements and impose new disclosure requirements for
radio, prerecorded telephonic messages, television or
video, mass mailing or printed political advertisements as
follows.
Radio and Telephone
A political radio advertisement or prerecorded telephonic
message must 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 cumulative
contributions, if applicable]. Paid for by [name of the
committee that paid for the advertisement]."
Television and Video
A political television or video advertisement must include
a disclosure area with a solid black background on the
entire bottom one-third of the television or video display
screen for a minimum of six seconds at the beginning of the
advertisement that includes all of the following:
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The text "Top Funders of This Ad" shall be located at the
top of the disclosure area, centered horizontally, yellow
in color in Arial equivalent font and at least 4 percent
of the height of the television or video display screen
in size.
The names of the identifiable contributors who have made
the three largest cumulative contributions shall be
immediately below that text in a similar fashion except
white in color.
The text "Funding Details At [insert Internet Web site
address of the disclosure Internet Web site]." This text
must be yellow in color in Arial Narrow equivalent font
2.5 percent of the height of the television or video
display screen in size and left-aligned, as specified.
The text "Paid for by [name of the committee that paid
for the advertisement]." This text shall also be yellow
in color in Arial Narrow equivalent 2.5 percent of the
height of the television or video display screen in size
but right-aligned, as specified.
If there are fewer than three identifiable contributors,
the disclosure shall be adjusted accordingly. 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.
Mass Mailing and Print
Except for slate mailers, a political advertisement that is
a mass mailing or a print advertisement and that is 12
square inches or more in size shall include a disclosure
area on the largest page of the advertisement that
satisfies all of the following:
The disclosure area must have a solid white background so
as to be easily legible 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 must be
black in color.
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The text "Top Funders of This Ad" shall be centered
horizontally at the top of the disclosure area in an
Arial equivalent font at least 12-point in size for
advertisements smaller than 93 square inches and at least
14-point in size for advertisements that are equal to, or
larger than, 93 square inches.
Immediately below the text shall be the names of the
identifiable contributors who have made the three largest
cumulative contributions centered horizontally in an
Arial Narrow equivalent font at least 10-point in size
for advertisements smaller than 93 square inches and at
least 12-point in size for advertisements that are equal
to, or larger than, 93 square inches. The text "Funding
Details At [insert Internet Web site address of the
disclosure Internet Web site]" shall be similarly
displayed unless the advertisement is 5 inches tall or
less.
If the advertisement is 4 inches tall or less, it need
only show the names of the identifiable contributors who
have made the two largest cumulative contributions. If
the advertisement is 3 inches tall or less, it need only
show the name of the identifiable contributor who made
the largest cumulative contribution.
The text "Paid for by [name of the committee that paid
for the advertisement]" shall be located at the bottom of
the disclosure area in an Arial Narrow equivalent font at
least 8-point in size for pages smaller than 8.5 inches
and at least 10-point in size for pages that are equal
to, or larger than, 8.5 inches by 11 inches.
If there are fewer than three identifiable contributors,
the disclosure shall be adjusted accordingly. 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.
Identifiable Contributors Who are Individuals
For purposes of a disclosure required by this bill, the
following shall also apply in the event that an
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identifiable contributor is a person who is an individual:
If the committee receiving the cumulative 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. If the identifiable contributor is not employed,
no occupation or employer shall be listed.
If the committee receiving the cumulative 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.
If the employer of an identifiable contributor is also an
identifiable contributor of that committee, the
cumulative contributions of its employees shall be deemed
to be cumulative contributions by the employer for
purposes of determining which identifiable contributors
shall be disclosed on an advertisement. This does not
apply however to an employee whose cumulative
contributions amount to more than 75 percent of the
cumulative contributions of the employer.
Miscellaneous
The disclosure of the name of an identifiable contributor
required by this bill 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. If this bill requires the disclosure of the
name of an identifiable contributor that is a sponsored
committee, the name of the committee's sponsoring
organization shall be disclosed. The committee name listed
also need not include its economic or other special
interests, nor the names of any major donors, as specified.
Issue Advocacy Advertisements
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Existing law does not require disclosure of major funders
of issue advocacy advertisements on the advertisements
themselves however, radio and television advertisements
must include a "paid for by" disclaimer under Federal
Communications Commission (FCC) law.
This bill would define "issue advocacy advertisement" as an
advertisement that clearly refers to and reflects a view on
the subject matter, description, or name of a pending
legislative action, administrative action, or one or more
ballot measures and does any of the following:
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.
Refers to a pending legislative action and is
disseminated, broadcast, or otherwise communicated within
60 days of the end of the legislative session.
Refers to one or more ballot measures and is
disseminated, broadcast, or otherwise communicated within
120 days of the election concerning that measure or
measures.
This bill would require issue advocacy advertisements to
disclose their top three funders in the same manner as
other political advertisements.
Non-Express Advocacy Communications Identifying State
Candidates
Existing law provides that any person who makes a payment
totaling $50,000 or more for a communication that clearly
identifies a candidate for elective state office, but does
not expressly advocate the election or defeat of the
candidate, and that is disseminated, broadcast, or
otherwise published within 45 days of an election, shall
file online or electronically with the Secretary of State a
report disclosing their name, address, occupation,
employer, and amount of the payment. The report must be
filed within 48 hours of making the payment or the promise
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to make the payment.
Existing law does not require disclosure of major funders
of these non-express advocacy communications on the
communications themselves however, radio and television
advertisements must include a "paid for by" disclaimer
under FCC law.
This bill would define these communications as
"electioneering communications" and 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.
This bill would require electioneering communications to
disclose their top three funders in the same manner as
other political advertisements.
Campaign Committee Websites
Existing law does not require committees to establish or
maintain their own Internet Web sites nor does it require
them to disclose their campaign finance information on
them.
This bill would provide that a committee that has paid for
political advertisements and that has received cumulative
contributions that meet or exceed the disclosure threshold,
as defined, must establish and maintain a disclosure
Internet Web site. The homepage of the disclosure Internet
Web site and any landing pages that visitors are directed
to on the disclosure Internet Web site and any other
Internet Web sites maintained by the committee shall
include a disclosure area that satisfies specified
criteria.
This bill requires that these Internet Web sites include a
list of the identifiable contributors who have made the 10
largest cumulative contributions to the committee and a
hyperlink to another page on the disclosure Internet Web
site that lists all of the committee's identifiable
contributors, as specified.
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This bill would also require that every page of these
Internet Web sites include the statement "Paid for by [name
of the committee that paid for the advertisement]" and any
other identifying information specified by the FPPC.
FPPC Regulations
This bill would require the FPPC to promulgate regulations
to require disclosures on all forms of political
advertisements not covered by this bill, 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, as
specified.
This bill would also require the FPPC to promulgate
regulations to require disclosure of the name of the
committee, if feasible, on all advertisements that are paid
for by a candidate-controlled committee and that are
advertisements relating to the candidate's own election and
not for any other campaign.
BACKGROUND
Existing Political Advertising Disclaimers . Under the
PRA, committees must put "paid for by" disclaimers on
campaign advertising, including campaign mailers, radio and
television ads, telephone robocalls, and electronic media
ads. The following, which is based on a publication
produced by the FPPC, discusses disclaimer requirements for
committees that purchase advertisements or circulate
material supporting or opposing a state or local candidate
or ballot measure in California.
Mass mailings, including blast campaign emails, must
include identification of the sender.
Paid telephone calls must identify the candidate or
committee who paid for or authorized the call.
Radio and television ads must include "paid for by"
disclaimer under FCC law.
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Ballot measure ads and independent expenditure ads must
include "paid for by committee name" and such ads by
primarily formed committees must also list top two donors
of $50,000 or more. This applies to television, radio,
and electronic media advertisements, robocalls, mass
mailings, and print ads such as newspaper ads, billboards
and yard signs.
Are the PRA's disclaimer rules the same for all
committees and all ads? No. Basic disclaimer rules apply
to campaign materials disseminated by a candidate for
their own election campaign because it is generally clear
to the public that the candidate is sending the
communication. Stricter disclaimer rules apply to (1)
ballot measure advertisements and (2) independent
expenditure advertisements on candidates and ballot
measures, because it is less clear to the public who is
responsible for these ads.
What does the disclaimer have to state? The basic
disclaimer must state: "Paid for by committee name."
Ballot measure and independent expenditure ads paid for
by primarily formed committees must also list top two
donors of $50,000 or more and special committee name
rules apply. All independent expenditure ads for or
against a candidate must state that the ad was: "Not
authorized by a candidate or a committee controlled by a
candidate."
What is an independent expenditure? An "independent
expenditure" is an expenditure made by any person in
connection with a communication that expressly advocates
the election or defeat of a clearly identified candidate
or measure, or taken as a whole and in context,
unambiguously urges a particular result in an election
but which is not made at the behest of (e.g., in
consultation, cooperation or coordination with) the
affected candidate or committee.
Updating a disclaimer. When a committee's name changes
because of new top donors or otherwise, advertisement
disclaimers must be revised. Television, radio,
electronic media, or robocalls must be amended within
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five calendar days. Print media, mass mailings, or other
tangible items must be amended every time an order to
reproduce is placed.
Advertisements in languages other than English.
Disclaimers on political advertisements should be written
or spoken in the same language used in the advertisement.
Does a disclaimer have to appear on ALL printed materials
or campaign items? No. A disclaimer is not required on
regular-size campaign buttons, pins, bumper stickers, or
magnets. It is not required on pens, pencils, rulers,
mugs, potholders, key tags, golf balls and similar small
campaign promotional items where a disclaimer cannot be
conveniently printed. The disclaimer is not required on
t-shirts, caps, hats, and other articles of clothing;
skywriting and airplane banners; or committee checks and
receipts.
Does a disclaimer have to appear on communications from
an organization to its members? For political party
communications, yes. For communications from other
organizations to their members, a disclaimer is not
required.
Is there a penalty for circulating or publishing
literature or other material concerning a candidate or
ballot measure without a disclaimer? Yes. The penalty
for failing to comply with the PRA's disclaimer
requirements is a fine of up to $5,000 per violation. In
addition, any person who violates the disclaimer
requirements concerning ballot measure and independent
expenditure advertisements may be liable for a fine of up
to three times the cost of the advertisement, including
placement costs.
COMMENTS
1.According to the author : Campaign spending has reached
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unprecedented levels in recent years. In California,
over $450 million was spent on ballot measures alone in
2012. Although there are limits on the amount of direct
contributions candidates can receive, funders can make
unlimited contributions to candidates through independent
expenditure committees and to ballot measure committees
that have significantly shaped the way California is
governed. Furthermore, many of these committees are
purposely established to disguise who exactly is funding
the campaign messages that voters see and hear, hiding
behind vague names such as "Californians for Progress."
As a result, the March 2013 PPIC Poll found that 84% of
all likely voters, across political ideology, want
increased public disclosure of funding sources for
signature gathering and initiative campaigns.
While it is essential for individuals and organizations in
a democracy to be able to communicate effectively and
efficiently with voters, it is equally important that
voters are not intentionally deceived and elections are
not decided upon misinformation. SB 52 will increase
transparency of campaign spending in elections by
disclosing major contributors on campaign advertisements
and ensuring that the true major contributor are known.
SB 52 requires all state and local political ads in
California, except those paid for by candidate-controlled
committees for their own races, to clearly and
prominently list their top three funders of $10,000 or
more for state races and $2,000 for local races. It also
requires committees to maintain a campaign website that
lists all funders of $10,000 or more for state races and
$2,000 for local races. Strengthening disclosure
requirements on political advertisements is necessary to
help Californians be better informed and feel more
represented by their government.
Current law does not require disclosure of any major
funders for electioneering communications - political
advertisements that clearly identify candidates but do
not expressly advocate for their election or defeat - or
for issue advocacy advertisements - political
advertisements meant to influence state legislative or
administrative action, whether or not they identify
specific candidates. Electioneering communications,
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commonly referred to as "sham issue ads," are an
increasing problem at both the state and national levels.
For example, 64 days before the 2010 primary, sham issue
ads ran against Jerry Brown in an attempt to influence
voters. Issue advocacy advertisements that appeal to
voters to lobby for or against legislative or
administrative proposals while hiding who is behind the
ads are a growing problem in California and nationally.
For example, in Michigan last year, a secretive new
non-profit called "Michigan Freedom Fund" spent $1
million on issue ads supporting right-to-work
legislation.
SB 52 addresses these problems by applying clear and
prominent disclosure requirements of the top three
funders to political advertisements including
electioneering communications that clearly identify
candidates in the period beginning 120 days before the
primary and until the general election. The top three
disclosure requirements also apply to issue advocacy
advertisements that clearly refer to and reflect a view
on pending legislative action, administrative action, or
ballot measures.
2.Constitutionality . Some provisions of this bill could be
interpreted as a violation of the United States and
California Constitutions' guarantees to free speech.
While the right to freedom of speech is not absolute,
when a law burdens core political speech, the
restrictions on speech generally must be "narrowly
tailored to serve an overriding state interest," McIntyre
v. Ohio Elections Commission (1995), 514 U.S. 334. It
should be noted however, that the McIntyre case involved
the distribution by hand of homemade leaflets, which
would not fall under the advertising disclosure
requirements of this bill nor those of existing law.
Supporters of this bill argue that, notwithstanding the
McIntyre case and other similar cases, the provisions of
this bill nonetheless are constitutional, particularly in
light of disclosure requirements that were upheld by the
United States Supreme Court in Citizens United v. Federal
Election Commission (2010), 130 S.Ct. 876. While
Citizens United is probably best known as the case in
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which the United States Supreme Court struck down a 63
year old law that prohibited corporations and unions from
using general treasury funds to make independent
expenditures in federal elections, in the same case, the
Court also upheld certain disclaimer and disclosure
provisions of the federal Bipartisan Campaign Reform Act
of 2002.
While some of the requirements of this bill are comparable
to provisions of federal law that were at issue in
Citizens United, other requirements in this bill, as well
as existing law regarding political advertising
disclosures, go beyond what was considered by the court.
Specifically, the provisions of this bill and existing
law that require the identities of certain campaign
contributors - entities that were not responsible for the
content or the production of the advertising - to be
included in campaign advertising go beyond what was
upheld in the Citizens United case. In light of that
fact, while the court in Citizens United did uphold
certain disclaimer requirements, it is unclear whether
the broader requirements in this bill or existing law
would similarly be upheld against a constitutional
challenge on the grounds that those requirements violate
the First Amendment.
3.Definitions With Benefits . This bill provides that if
the passage or defeat of a ballot measure directly
benefits the employer of an identifiable contributor, the
disclosure shall include the occupation and employer of
the identifiable contributor in addition to the
contributor's name. However, since this bill does not
define "directly benefit" it would be incumbent upon the
FPPC to define it via regulation or advice.
4.Related Legislation . This bill is similar to AB 1148
(Brownley) of 2011 and AB 1648 (Brownley) of 2012. AB
1148 failed passage on the Assembly floor. AB 1648
passed the Assembly very late in the session (August 20,
2012) and was therefore never heard in the Senate.
This bill conflicts with portions of SB 2 (Lieu) which is
also before this committee as both bills seek to amend
the law regarding disclosure of major donors who must be
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identified on specified advertisements.
The provisions of this bill regarding identification of top
contributors on a committee's website are similar to
provisions in SB 27 (Correa) which is also before this
committee.
POSITIONS
Sponsor: California Clean Money Campaign
Support: Brennan Center for Justice at New York University
School of Law
California Alliance of Retired Americans
California Church IMPACT
California Common Cause
California League of Conservation Voters
California National Organization for Women
California Public Interest Research Group
(CalPIRG)
Common Cause
Consumer Federation of California
Endangered Habitats League
Fresno Stonewall Democrats
Friends Committee on Legislation
Green Chamber of Commerce
League of Women Voters of California
Lutheran Office of Public Policy - California
MapLight
National Council of Jewish Women
Pacific Palisades Democratic Club
Progressives United
Public Citizen's Congress Watch
Sierra Club of California
Southwest California Synod, Evangelical Lutheran
Church in America
Southwest Voter Registration Education Project
(The sponsors, California Clean Money Campaign,
have also submitted petitions in support of SB 52
signed by 5,000 individuals.)
Oppose: None received
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