BILL ANALYSIS Ó
SB 1441
Page 1
Date of Hearing: June 10, 2014
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
SB 1441 (Lara, et al.) - As Amended: April 3, 2014
SENATE VOTE : 33-0
SUBJECT : Political Reform Act of 1974: contributions.
SUMMARY : Provides that specified payments made by lobbyists
and lobbying firms are considered "contributions" under the
Political Reform Act (PRA). Specifically, this bill :
1)Provides that a payment made by a lobbyist or a cohabitant of
a lobbyist for costs related to a fundraising event held at
the home of the lobbyist, including the value of the use of
the home as a fundraising event venue, is a contribution for
the purposes of the PRA regardless of the amount of the
payment. Provides that a payment described above is
attributable to the lobbyist for purposes of the prohibition
against a lobbyist making a contribution to an elected state
officer or candidate for elected state office.
2)Provides that a payment made by a lobbying firm for costs
related to a fundraising event held at the office of the
lobbying firm, including the value of the use of the office as
a fundraising event venue, is a contribution for the purposes
of the PRA regardless of the amount of the payment.
EXISTING LAW :
1)Creates the Fair Political Practices Commission (FPPC), and
makes it responsible for the impartial, effective
administration and implementation of the PRA.
2)Provides that an elected state officer or candidate for
elected state office may not accept a contribution from a
lobbyist, and a lobbyist may not make a contribution to an
elected state officer or candidate for elected state office,
if that lobbyist is registered to lobby the governmental
agency for which the candidate is seeking election or the
governmental agency of the elected state officer.
3)Defines "contribution," for the purposes of the PRA, to mean a
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payment, a forgiveness of a loan, a payment of a loan by a
third party, or an enforceable promise to make a payment,
except to the extent that full and adequate consideration is
received, unless it is clear from the surrounding
circumstances that it is not made for political purposes, as
specified. Provides that a payment is made for political
purposes if it is for the purpose of influencing or attempting
to influence the action of the voters for or against the
nomination or election of a candidate or candidates, or the
qualification or passage of any measure, or is received by or
made at the behest of a candidate.
4)Provides that a "contribution" does not include payments made
by an occupant of a home or office for costs related to any
meeting or fundraising event in the occupant's home or office
if the costs for the meeting or fundraising event are five
hundred dollars ($500) or less.
FISCAL EFFECT : According the Senate Appropriations Committee,
minor, absorbable enforcement costs to the FPPC from the General
Fund.
COMMENTS :
1)Purpose of the Bill : According to the author:
This bill is a part of a package of bills that are aimed at
strengthening the relationship between the citizens of
California and their state government - the California
Accountability in Public Service Act (CAPS Act). Recent
events have raised significant questions about the
transparency and accountability of rules and political
practices in state government. In an effort to tighten
state law, we are authoring SB 1441 which bans fundraisers
from being held at the home of a lobbyist or at a lobbying
firm. This will delete ambiguity and ensure that lobbyists
are not providing illegal contributions to state elected
officials.
Currently, the Political Reform Act provides for a $500
home hospitality exception for fundraisers, where the first
$500 does not count as a contribution. This exception does
not specifically exclude lobbyists. At the same time
lobbyists are prohibited entirely from giving any campaign
contributions to elected officials. The value of all goods
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provided, regardless of source, counts towards the $500
threshold. Once the threshold is met the value of all goods
count as campaign contributions. This leads to a situation
where it is virtually impossible to have a fundraiser in a
lobbyist's home or office without having an illegal
contribution.
2)Hosted Fundraisers : The PRA, among other things, requires
candidates and committees to disclose contributions made and
received and expenditures made in connection with campaign
activities. The term "contribution" is defined as any payment
for political purposes for which full and adequate
consideration is not provided to the donor.
When individuals or entities make payments in connection with
holding a fundraiser for a candidate, such payments ordinarily
are considered contributions to the candidate. However,
current law allows for some exceptions. For example, payments
made by the occupant of a home or office for costs related to
any meeting or fundraising event in the occupant's home or
office are not considered contributions under the PRA if the
costs for the meeting or fundraising event are $500 or less.
Although existing law prohibits lobbyists from making
contributions to elected state officers or candidates for
elected state office if that lobbyist is registered to lobby
the governmental agency for which the candidate is seeking
election or the governmental agency of the elected state
officer, the exception to the definition of the term
"contribution" for the purposes of hosted fundraising events
does not exclude events hosted by lobbyists. As a result, a
lobbyist could hold a fundraiser at his or her home and the
cost would not be considered a contribution, as long as the
total cost of such an event did not exceed $500. If other
parties donate money or goods in connection with the event,
their payments must also be counted to determine if $500 has
been spent in connection with the fundraiser. This includes
goods or services provided by the candidate or any other
person attending the event. If the cost of the event exceeds
$500, all payments are counted as contributions.
3)Recent Events : In February of this year, the FPPC approved a
settlement in a case in which a registered lobbyist hosted
campaign fundraisers for state elective officers and
candidates at his house where he provided items such as
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beverages, flower arrangements, and cigars. The FPPC
investigated and determined that the total cost of the
fundraisers hosted by the lobbyist at his home, including the
value the items provided by the lobbyist, exceeded $500. As a
result, the items provided by the lobbyist during the
fundraisers constituted non-monetary contributions to the
campaign committees of the elective officers and candidates
who benefitted from the fundraisers - all violations of the
PRA. As a result, the FPPC levied one of the largest
penalties against a lobbyist and issued warning letters to the
elected officers and candidates who benefitted from the
fundraisers.
4)Related Legislation : AB 1673 (Garcia), which is pending in
the Senate Elections & Constitutional Amendments Committee,
provides that a payment made by an occupant of a home or an
office who is a lobbyist, lobbying firm, or lobbyist employer
for costs related to a meeting or fundraising event held in
the occupant's home or office is considered a contribution
under the PRA, regardless of the costs for the meeting or
fundraising event. AB 1673 passed out of this committee on
6-0 vote.
5)Political Reform Act of 1974 : California voters passed an
initiative, Proposition 9, in 1974 that created the FPPC and
codified significant restrictions and prohibitions on
candidates, officeholders, and lobbyists. That initiative is
commonly known as the PRA. Amendments to the PRA that are not
submitted to the voters, such as those contained in this bill,
must further the purposes of the proposition and require a
two-thirds vote of each house of the Legislature.
REGISTERED SUPPORT / OPPOSITION :
Support
California Common Cause
Opposition
None on file.
Analysis Prepared by : Nichole Becker / E. & R. / (916)
319-2094
SB 1441
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