BILL NUMBER: SB 594 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 21, 2013
AMENDED IN ASSEMBLY AUGUST 7, 2013
AMENDED IN SENATE MAY 24, 2013
AMENDED IN SENATE APRIL 18, 2013
INTRODUCED BY Senator Hill
FEBRUARY 22, 2013
An act to add Sections 8314.1, 8314.2, and
54964.5 and 54964.6 to the Government Code, relating to
campaign activity.
LEGISLATIVE COUNSEL'S DIGEST
SB 594, as amended, Hill. Use of public resources.
(1) Existing law prohibits the use of public funds for campaign
activities.
This bill would prohibit a nonprofit organization or an
officer, employee, or agent of a nonprofit organization from
using, or permitting another to use, public resources, including but
not limited to to, public resources
received in exchange for consideration, from a local agency for
campaign activities. This bill would also prohibit an
officer, employee, or agent of a nonprofit organization from
expending, or authorizing the expenditure of, public resources from a
local agency to support or oppose a ballot measure or candidate.
activity, as defined and not authorized by law.
This bill would define, among other terms, "public resources" to
include, but not be limited to, cash, lands, buildings, funds, and
facilities, facilities owned by a local
agency, and "nonprofit organization" to mean an entity
incorporated under the California Nonprofit
Corporation Law or a nonprofit organization that qualifies for exempt
status under the federal Internal Revenue Code of 1986, except as
specified. This bill would authorize a civil cause of action for a
violation of these prohibitions and damages that include, but are not
limited to, 3 times the value of the unlawful use of the public
resources. This bill would authorize the Attorney General, a district
attorney, and a city attorney of a city having a population in
excess of 750,000 to seek the these
civil remedies.
(2) Existing law requires qualifying individuals and political
organizations to report specified information, including, but not
limited to, political contributions, in statements filed with the
Fair Political Practices Commission.
This bill would require an auditable nonprofit organization that
engages in campaign activity to deposit into a separate bank account
all "specific source or sources of funds" it receives and to pay for
all campaign activity from that separate bank account. This bill
would define, among other terms, "auditable nonprofit organization"
to mean a nonprofit organization for which public resources from one
or more local agencies account for more than 20% of the organization'
s annual gross revenue, as specified, and "specific source or sources
of funds" to mean any funds received by the auditable nonprofit
organization that have been designated for campaign activity use or
any other funds received by the nonprofit organization, including
funds received in exchange for consideration, as specified.
This bill would further require an auditable nonprofit
organization that engages in campaign activity to periodically
disclose to the Attorney General, and post on its Internet Web site
in a certain manner, the identity and amount of each specific source
or sources of funds it receives for campaign activity, a description
of the campaign activity, and the identity and amount of payments the
organization makes from the required separate bank account, as
specified. This bill would require the Attorney General to
regularly biennially audit each auditable
nonprofit organization, issue a written audit report, and transmit
the report to the district attorney for the county in which the
auditable nonprofit organization is domiciled. This bill would
require authorize the Attorney General
to assess a monetary civil penalty of up to $10,000
against an auditable nonprofit organization for a
each violation of these disclosure requirements,
as specified.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 8314.1 is added to the
Government Code, to read:
8314.1. (a) It is unlawful for any nonprofit organization to use
or permit others to use public resources, including, but not limited
to, public resources received in exchange for consideration, from any
local agency for any campaign activity not authorized by law.
(b) For purposes of this section:
(1) "Campaign activity" means a payment that is used for
communications that expressly advocates for the approval or rejection
of a clearly identified ballot measure or the election or defeat of
a clearly identified candidate by the voters, or constitutes a
campaign contribution.
(2) "Local agency" shall include those entities listed in Section
54951 and a public entity created pursuant to the Joint Exercise of
Powers Act (Chapter 5 (commencing with Section 6500) of Division 7 of
Title 1) by one or more entities listed in Section 54951, but "local
agency" shall not include a county superintendent of schools, a
school district, or a community college district.
(3) "Nonprofit organization" means an entity incorporated under
the Nonprofit Corporation Law (Division 2 (commencing with Section
5000) of Title 1 of the Corporations Code) or a nonprofit
organization that qualifies for exempt status under Section 115 or
501(c), excluding Section 501(c)(3), of the Internal Revenue Code of
1986.
(4) "Public resources" means any property or asset owned by a
local agency, including, but not limited to, cash, land, buildings,
facilities, funds, equipment, supplies, telephones, computers,
vehicles, travel, and local government compensated time that is
provided to a nonprofit organization.
(5) "Use" means a use of public resources from one or more local
agencies that is substantial enough to result in a gain or advantage
to the user or a loss to any local agency for which any monetary
value may be estimated.
(c) This section does not prohibit the use of public resources for
providing information to the public about the possible effects of
any bond issuance or other ballot measure on state activities,
operations, or policies, provided that the informational activities
are otherwise authorized by the California Constitution or the laws
of this state, and the information provided constitutes a fair and
impartial presentation of relevant facts to aid the electorate in
reaching an informed judgment regarding the bond issue or ballot
measure.
(d) (1) Any nonprofit organization that intentionally or
negligently violates this section is liable for a civil penalty not
to exceed one thousand dollars ($1,000) for each day on which a
violation occurs, plus three times the value of the unlawful use of
public resources. The penalty shall be assessed and recovered in a
civil action brought in the name of the people of the State of
California by the Attorney General or by any district attorney or any
city attorney of a city having a population in excess of 750,000. If
two or more nonprofit organizations are responsible for a violation,
they shall be jointly and severally liable for the penalty. If the
action is brought by the Attorney General, the moneys recovered shall
be paid into the General Fund. If the action is brought by a
district attorney, the moneys recovered shall be paid to the
treasurer of the county in which the judgment was entered. If the
action is brought by a city attorney, the moneys recovered shall be
paid to the treasury of that city.
(2) A civil action alleging a violation of this section shall not
be commenced more than four years after the date of the alleged
violation.
SEC. 2. Section 8314.2 is added to the
Government Code, to read:
8314.2. (a) An auditable nonprofit organization that engages in
campaign activity, either directly or through the control of another
entity, shall deposit into a separate bank account all specific
source or sources of funds received and shall pay for all campaign
activity from that separate bank account.
(b) For purposes of this section:
(1) "Auditable nonprofit organization" means a nonprofit
organization for which public resources from one or more local
agencies account for more than 20 percent of the organization's
annual gross revenue in the current fiscal year or either of the
previous two fiscal years, including gross revenue from public
resources received in exchange for consideration.
(2) "Specific source or sources of funds" shall mean any funds
received by the auditable nonprofit organization that have been
designated for campaign activity use or any other funds received by
the nonprofit organization, including, but not limited to, funds
received in exchange for consideration, that are used, in whole or in
part, within a two-year period from receipt for campaign activity.
(3) Unless otherwise defined herein, the definitions found in
subdivision (b) of Section 8314.1 shall apply to this section.
(c) Fifteen days after the end of each quarter, beginning with the
first quarter of each odd year through the fourth quarter of the
following even year, an auditable nonprofit organization that engages
in campaign activity, either directly or through the control of
another entity, at any point during that quarter shall disclose the
following information for that quarter:
(1) The name and amount of each specific source or sources of
funds used for campaign activity, provided that the aggregate amount
of funds received since January 1 of the most recent odd year by an
auditable nonprofit corporation from that specific source or sources
of funds is at least two hundred fifty dollars ($250).
(2) The name of the payee and amount of all payments aggregating
two hundred fifty dollars ($250) or more made from the single bank
account required under subdivision (a).
(3) A description of each campaign activity.
(d) Fifteen days after the end of each even year, an auditable
nonprofit organization that engages in campaign activity, either
directly or through the control of another entity, at any point
during that even year or the prior odd year shall disclose all the
following information for those two calendar years:
(1) The name and amount of any specific source or sources of funds
used for campaign activity, provided that the aggregate amount of
funds received since January 1 of the most recent odd year by an
auditable nonprofit corporation from that specific source or sources
of funds is at least two hundred fifty dollars ($250).
(2) The name of the payee and amount of all payments made from the
single bank account required under subdivision (a).
(3) A description of each campaign activity.
(e) Each auditable nonprofit organization that engages in campaign
activity, either directly or through the control of another entity,
shall display on its Internet Web site the information it is required
to disclose under this section. The information shall be clearly
described and identified on a separate Internet Web page, which shall
be linked from the home page of the organization's Internet Web
site. The link to this Internet Web page from the home page shall be
as visible as all similar links.
(f) The Attorney General shall conduct a biennial audit of each
auditable nonprofit organization. Each auditable nonprofit
organization shall provide records to the Attorney General that
substantiate the information required to be disclosed by this
section. The audit shall determine whether the organization complied
with the requirements of Sections 8314.1 and this section. The
Attorney General shall issue a written audit report and transmit it
to the district attorney for the county in which the auditable
nonprofit organization is domiciled.
(g) If the audit determines that an auditable nonprofit
organization has violated Section 8314.1 or this section, the
Attorney General may impose a fine upon the auditable nonprofit
organization in an amount up to ten thousand dollars($10,000) for
each violation.
SEC. 3. SECTION 1. Section 54964.5
is added to the Government Code, to read:
54964.5. (a) An A nonprofit organization
or an officer, employee, or agent of a nonprofit organization
may not expend or authorize the expenditure of any public
resources from any local agency to support or oppose the approval or
rejection of a ballot measure or the election or defeat of a
candidate by the voters. shall not use, or permit
another to use, public resources, including, but not limited to,
public resources received by the nonprofit organization in
exchange for consideration, from any local agency for any campaign
activity not authorized by law.
(b) As used in this section, the following terms shall have the
following meanings:
(1) "Ballot measure" means a state or local initiative,
referendum, or recall measure certified to appear on a regular or
special election ballot. ballot or other
measure submitted to the voters by the Legislature or the governing
body of a local age ncy at a regular or special election.
(2) "Campaign activity" means a payment that is used for
communications that expressly advocate for or against the
qualification of a clearly identified measure, the approval or
rejection of a clearly identified ballot measure, or the election or
defeat of a clearly identified candidate by the voters, or that
constitutes a campaign contribution.
(A) For the purposes of this section, "campaign activity" does not
include the costs of an endorsement of a clearly identified ballot
measure or candidate by a nonprofit organization through the adoption
of a resolution supporting or opposing the ballot measure or
candidate, including, but not limited to, posting the endorsement on
the nonprofit organization's Internet Web site, communicating the
endorsement to members of the nonprofit organization, or issuing a
press statement.
(B) For the purposes of this section, "campaign activity" does not
include incidental or minimal inadvertent use of public resources.
(C) For purposes of this section, "campaign activity" does not
include incidental costs related to the establishment or
administration of a sponsored committee as defined in Section
82048.7, provided public resources are not used to pay for that cost.
A reasonable accounting method may be used to determine the use of
nonpublic resources to pay for that cost. "Establishment and
administration" means the cost of office space, telephones, salaries,
utilities, supplies, legal and accounting fees, and other expenses
incurred in establishing and operating a sponsored committee.
(2)
(3) "Candidate" means an individual who has qualified
to have his or her name listed on the ballot, or who has qualified to
have write-in votes on his or her behalf counted by elections
officials, for nomination or election to an elective office at any
regular or special primary or general election, and includes any
officeholder who is the subject of a recall election.
(3)
(4) "Expenditure" means a payment that is
used for communications that expressly advocate the
approval or rejection of a clearly identified ballot measure, or the
election or defeat of a clearly identified candidate, by the voters
or that constitutes a campaign contribution.
(4)
(5) "Local agency" shall include those entities listed
in Section 54951 and a public entity created pursuant to the Joint
Exercise of Powers Act (Chapter 5 (commencing with Section 6500) of
Division 7 of Title 1) by one or more entities listed in Section
54951, but "local agency" shall not include a county
superintendent of schools, an elementary school, high school, or
unified school district, or a community college district
54951 .
(5)
(6) "Nonprofit organization" means any entity
incorporated under the Nonprofit Corporation Law (Division 2
(commencing with Section 5000) of Title 1 of the Corporations Code)
or a nonprofit organization that qualifies for exempt status under
Section 115 or 501(c), excluding 501(c) of
the Internal Revenue Code . "Nonprofit organization" shall
not include a nonprofit organization exempt under Section
501(c)(3), 501(c)(3) of the Internal
Revenue Code of 1986 .
(6)
(7) "Public resources" means any property or asset
owned by any a local agency, including,
but not limited to, cash, land, buildings, facilities, funds,
equipment, supplies, telephones, computers, vehicles, travel, and
local government compensated time that is provided to a nonprofit
organization.
(8) "Use" means a use of public resources from one or more local
agencies that is substantial enough to result in a gain or advantage
to the user or a loss to any local agency for which any monetary
value may be estimated.
(c) This section does not prohibit the use of public resources for
providing information to the public about the possible effects of
any bond issuance or other ballot measure on
state the activities, operations, or
policies, policies of the state or a local
agency, provided that the informational activities are
otherwise authorized by the California Constitution or the laws of
this state, and the information provided constitutes a fair and
impartial presentation of relevant facts to aid the electorate in
reaching an informed judgment regarding the bond issue or ballot
measure. meet both of the following conditions:
(1) The informational activities are not otherwise prohibited by
the California Constitution or the laws of this state.
(2) The information provided constitutes an accurate, fair, and
impartial presentation of relevant facts to aid the electorate in
reaching an informed judgment regarding the ballot measure.
(d) (1) Any person who intentionally or negligently violates this
section is liable for a civil penalty not to exceed one thousand
dollars ($1,000) for each day on which a violation occurs, plus three
times the value of the unlawful use of public resources. The penalty
shall be assessed and recovered in a civil action brought in the
name of the people of the State of California by the Attorney General
or by any district attorney or any city attorney of a city having a
population in excess of 750,000. If two or more persons are
responsible for any violation, they shall be jointly and severally
liable for the penalty. If the action is brought by the Attorney
General, the moneys recovered shall be paid into the General Fund. If
the action is brought by a district attorney, the moneys recovered
shall be paid to the treasurer of the county in which the judgment
was entered. If the action is brought by a city attorney, the moneys
recovered shall be paid to the treasury of that city.
(2) A civil action alleging a violation of this section shall not
be commenced more than four years after the date of the alleged
violation.
SEC. 2. Section 54964.6 is added to the
Government Code , to read:
54964.6. (a) An auditable nonprofit organization that engages in
campaign activity, either directly or through the control of another
entity, shall deposit into a separate bank account all specific
source or sources of funds received and shall pay for all campaign
activity from that separate bank account.
(b) As used in this section, the following terms shall have the
following meanings:
(1) "Auditable nonprofit organization" means a nonprofit
organization for which public resources from one or more local
agencies account for more than 20 percent of the nonprofit
organization's annual gross revenue in the current fiscal year or
either of the previous two fiscal years, including gross revenue from
public resources received by the nonprofit organization in exchange
for consideration. An auditable nonprofit organization shall not
include a nonprofit organization that sponsors a committee, as
defined in Section 82048.7 of the Government Code, if the nonprofit
organization reports all contributions it received and all
expenditures it made on campaign disclosure statements filed by the
sponsored committee and the nonprofit organization makes no payments
from its general treasury to the sponsored committee other than
payments for contributions by donors earmarked for the sponsored
committee. For purposes of this subdivision, "earmarked" means a
payment by a donor to a nonprofit organization subject to a
condition, agreement, or understanding that the payment will be used
for making contributions or independent expenditures by the sponsored
committee of the sponsoring nonprofit organization.
(2) "Specific source or sources of funds" shall mean any funds
received by the auditable nonprofit organization that have been
designated for campaign activity use or any other funds received by
the nonprofit organization, including, but not limited to, funds
received by the nonprofit in exchange for consideration, that are
used, in whole or in part, within a two-year period from receipt for
campaign activity.
(3) Unless otherwise defined herein, the definitions found in
subdivision (b) of Section 54964.5 shall apply to this section.
(c) Fifteen days after the end of each quarter, an auditable
nonprofit organization that engages in campaign activity, either
directly or through the control of another entity, at any point
during that quarter shall disclose the following information for that
quarter:
(1) The name and amount of each specific source or sources of
funds used for campaign activity, provided that the aggregate amount
of funds received since January 1 of the most recent odd year by an
auditable nonprofit organization from that specific source or sources
of funds is at least two hundred fifty dollars ($250).
(2) The name of the payee and amount of all payments aggregating
two hundred fifty dollars ($250) or more made from the single bank
account required under subdivision (a).
(3) A description of each campaign activity.
(d) Fifteen days after the end of each even year, an auditable
nonprofit organization that engages in campaign activity, either
directly or through the control of another entity, at any point
during that even year or the prior odd year shall disclose all the
following information for those two calendar years:
(1) The name and amount of any specific source or sources of funds
used for campaign activity, provided that the aggregate amount of
funds received since January 1 of the most recent odd year by an
auditable nonprofit organization from that specific source or sources
of funds is at least two hundred fifty dollars ($250).
(2) The name of the payee and amount of all payments made from the
single bank account required under subdivision (a).
(3) A description of each campaign activity.
(e) Each auditable nonprofit organization that engages in campaign
activity, either directly or through the control of another entity,
shall display on its Internet Web site the information it is required
to disclose under this section. The information shall be clearly
described and identified on a separate Internet Web page, which shall
be linked from the homepage of the organization's Internet Web site.
The link to this Internet Web page from the homepage shall be as
visible as all similar links.
(f) The Attorney General shall conduct a biennial audit of each
auditable nonprofit organization that engages in campaign activity.
Each auditable nonprofit organization shall provide records to the
Attorney General that substantiate the information required to be
disclosed by this section. The Attorney General shall determine
whether the organization complied with the requirements of Section
54964.5 and this section, issue a written audit report, and transmit
the written audit report to the district attorney for the county in
which the auditable nonprofit organization is domiciled.
(g) If the Attorney General determines at the conclusion of an
audit that an auditable nonprofit organization has violated Section
54964.5 or this section, the Attorney General may impose a civil fine
upon the auditable nonprofit organization in an amount up to ten
thousand dollars ($10,000) for each violation.