BILL NUMBER: SB 594 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY SEPTEMBER 4, 2013
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 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, public resources received in exchange for
consideration, use public resources received
from a local agency for campaign 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 owned by a local agency
mean any property or asset owned by a local agency and
funds received by a nonprofit organization which have been generated
from any activities related to conduit bond financing by those
entities subject to specified conduit financing and transparency and
accountability provisions , and "nonprofit organization" to
mean an entity incorporated under the 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 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 a
reporting 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 "reporting
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 reporting
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
a reporting nonprofit organization that engages in
campaign activity of specified amounts or more to
periodically disclose to the Attorney General
Franchise Tax Board , 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
biennially audit each auditable authorize the
Franchise Tax Board to conduct an audit of any reporting
nonprofit organization, require the board to conduct an audit of
any reporting nonprofit organization that engages in campaign
activity in excess of $500,000 in a calendar year, issue a
written audit report, and transmit the report to the Attorney
General and the district attorney for the county in which the
auditable reporting nonprofit
organization is domiciled. This bill would authorize the Attorney
General or the district attorney for the county in which the
reporting nonprofit organization is domiciled to assess a
monetary civil penalty of up to $10,000 against an auditable
a reporting nonprofit organization for 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 54964.5 is added to the Government Code, to
read:
54964.5. (a) A nonprofit organization or an officer, employee, or
agent of a nonprofit organization 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, received from any local
agency for any campaign activity not authorized by law.
(b) As used in this section and Section 54964.6 , 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 or other measure submitted to the voters by
the Legislature or the governing body of a local agency 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 ballot 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
"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
adopting a position or a resolution supporting
or opposing the a clearly identified
ballot measure or candidate, including, but not limited to, posting
the endorsement position or resolution
on the nonprofit organization's Internet Web site, communicating the
endorsement position or resolution to
members of the nonprofit organization, or issuing a press statement.
(B) For the purposes of this section, "campaign
"Campaign activity" does not include
incidental or minimal inadvertent use of public
resources.
(C) For purposes of this section, "campaign
"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. 82048.7.
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.
(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.
(4) "Expenditure" means a payment 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.
(5) "Local agency" shall have the same meaning as that term
is defined in paragraph (4) of subdivision (b) of Section 54964 and
shall also 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 described in Section 54964 .
(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) of the Internal Revenue Code. "Nonprofit
Code, provided, however, that "nonprofit organization"
shall does not include a
any nonprofit organization exempt
that qualifies for tax-exempt status under
Section 501(c)(3) of the Internal Revenue Code.
(7) "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.
(7) "Public resources" means the following:
(A) 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 work time that is provided to a nonprofit
organization, except funds received in exchange for consideration for
goods or services.
(B) Funds received by a nonprofit organization which have been
generated from any activities related to conduit bond financing by
those entities subject to the conduit financing and transparency and
accountability provisions of Chapter 10.7 (commencing with Section
5870) of Division 6 of Title 1, whether or not those funds are
received by the nonprofit in exchange for consideration for goods or
services.
(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 ballot measure on the activities, operations, or policies of the
state or a local agency, provided that the informational activities
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 A reporting
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 "Reporting 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
years. A reporting 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 reporting
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, organization
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 Thirty days after the
end of each quarter, an auditable a reporting
nonprofit organization that engages in campaign activity
of fifty thousand dollars ($50,000) or more related to statewide
candidates or ballot measures or engages in campaign activity of two
thousand five hundred dollars ($2,500) or more related to
local candidates or ballot measures , 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 a reporting 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 Thirty days after the
end of each even year, an auditable a
reporting nonprofit organization that engages in campaign
activity of one hundred thousand ($100,000) or more related to
statewide candidates or ballot measures or engages in campaign
activity of ten thousand dollars ($10,000) or more related to local
candidates or ballot measures , 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 a reporting 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 reporting
nonprofit organization that engages in campaign activity, either
directly or through the control of another entity, shall provide
to the Franchise Tax Board and 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 Franchise
Tax Board may conduct a biennial an
audit of each auditable any reporting
nonprofit organization that engages in campaign
activity. Each auditable is required to provide
records to the board pursuant to this section. The Franchise Tax
Board shall conduct an audit of any reporting nonprofit organization
that engages in campaign activity in excess of five hundred thousand
dollars ($500,000) in a calendar year. The reporting nonprofit
organization shall provide records to the Attorney General
Franchise Tax Board that substantiate the
information required to be disclosed by this section. The
Attorney General Franchise Tax Board 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 Attorney General and
the district attorney for the county in which the
auditable reporting nonprofit organization is
domiciled.
(g) If the Attorney General Franchise Tax
Board determines at the conclusion of an audit that an
auditable a reporting nonprofit organization
has violated Section 54964.5 or this section, the Attorney General
or the district attorney for the county in which the reporting
nonprofit organization is domiciled may impose a civil fine
upon the auditable reporting nonprofit
organization in an amount up to ten thousand dollars ($10,000) for
each violation.