BILL ANALYSIS Ó
SB 1441
Page 1
SENATE THIRD READING
SB 1441 (Lara, et al.)
As Amended April 3, 2014
2/3 vote
SENATE VOTE :33-0
ELECTIONS 6-0 APPROPRIATIONS 17-0
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|Ayes:|Fong, Donnelly, Bonta, |Ayes:|Gatto, Bigelow, |
| |Hall, Perea, Rodriguez | |Bocanegra, Bradford, Ian |
| | | |Calderon, Campos, |
| | | |Donnelly, Eggman, Gomez, |
| | | |Holden, Jones, Linder, |
| | | |Pan, Quirk, |
| | | |Ridley-Thomas, Wagner, |
| | | |Lowenthal |
|-----+--------------------------+-----+--------------------------|
| | | | |
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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.
FISCAL EFFECT : According the Assembly Appropriations Committee,
minor absorbable costs to the Fair Political Practices
Commission (FPPC) for enforcement, potentially offset to some
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extent by penalty revenues.
COMMENTS : According to the author, "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 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."
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
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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.
In February 2014, 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 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.
AB 1673 (Garcia) of the current legislative session, 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.
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.
Analysis Prepared by : Nichole Becker / E. & R. / (916)
319-2094
FN:
0004215
SB 1441
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