BILL ANALYSIS Ó
AB 594
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Date of Hearing: April 15, 2015
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Sebastian Ridley-Thomas, Chair
AB 594
(Gordon) - As Amended April 7, 2015
SUBJECT: Political Reform Act of 1974: campaign statements.
SUMMARY: Eliminates certain campaign reporting requirements.
Standardizes the dates by which preelection reports must be
filed. Requires contributions and independent expenditures of
$1,000 or more that are received or made on election day to be
reported within 24 hours. Specifically, this bill:
1)Provides that a contribution or an independent expenditure of
$1,000 or more that is received or made on election day is a
"late contribution" or a "late independent expenditure" that
is required to be reported within 24 hours of having been
received or made.
2)Eliminates supplemental preelection and supplemental
independent expenditure reporting requirements.
3)Requires all preelection reports to be filed pursuant to the
same schedule, instead of having a slightly different schedule
for preelection reports that are filed in connection with
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statewide elections held in June and November of even-numbered
years.
4)Eliminates the requirement for city general purpose committees
to file preelection reports if they do not receive
contributions of $1,000 or more.
5)Makes corresponding and technical changes.
EXISTING LAW:
1)Creates the Fair Political Practices Commission (FPPC), and
makes it responsible for the impartial, effective
administration and implementation of the Political Reform Act
(PRA).
2)Provides that any person or combination of persons who
directly or indirectly does any of the following is considered
a "committee" for the purposes of the PRA:
a) Receives contributions of $1,000 or more in a calendar
year (these committees are commonly known as "recipient
committees");
b) Makes independent expenditures of $1,000 or more in a
calendar year (these committees are commonly known as
"independent expenditure committees"); or,
c) Makes contributions totaling $10,000 or more per year to
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or at the behest of candidates or committees (these
committees are commonly known as "major donor committees").
3)Requires candidates, political committees, and slate mail
organizations to file specified periodic and activity-based
campaign finance reports, including semiannual statements,
pre-election statements, supplemental pre-election statements,
and late contribution/independent expenditure reports that
include specified campaign finance information.
4)Defines "late contribution" as either of the following:
a) A contribution, including a loan, that totals $1,000 or
more in the aggregate and that is made to or received by a
candidate, controlled committee, or committee primarily
formed or existing primarily to support or oppose a
candidate or measure within 90 days before the date of the
election at which candidate or measure is to be voted on;
or,
b) A contribution, including a loan, that totals $1,000 or
more in the aggregate and that is made to or received by a
political party committee within 90 days before a state
election.
5)Defines "late independent expenditure" as an independent
expenditure that totals $1,000 or more in the aggregate and
that is made for or against a specific candidate or measure
involved in an election within 90 days before the date of the
election.
6)Requires a "late contribution" or a "late independent
expenditure," as defined, to be publicly reported within 24
hours of the time that it is made or received, as specified.
FISCAL EFFECT: Unknown. State-mandated local program; contains
a crimes and infractions disclaimer.
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COMMENTS:
1)Purpose of the Bill: According to the author:
I have long believed in the purposes of California's
Political Reform Act and its goal of enabling a
knowledgeable electorate. This includes helping
voters become fully informed as they make decisions
that will impact the governance of this state. For
this reason, it is essential that there is a fair,
efficient, and effective means of holding entities
involved with campaigns accountable for violations of
the law. AB 594 would streamline some of the campaign
finance rules in the Political Reform Act to reduce
redundancy and improve accountability. Overall, the
bill would make small, but meaningful reforms to the
Political Reform Act, while maintaining the highest
ethical standards.
2)Periodic and Activity Based Reports: Under the PRA, there are
two general types of reporting requirements. The first type
of report is commonly referred to as a periodic report.
Periodic reports must be filed according to a specified time
schedule for all similarly-situated candidates and committees,
regardless of the amount of campaign activity during the
period of time covered by the report. These reports generally
include all campaign activity (contributions, loans,
expenditures, etc.) that occurred over a specified period of
time. Semi-annual reports and preelection reports are two
examples of periodic reports that are required under the PRA.
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The second type of report that the PRA requires is an
activity-based report. An activity-based report is triggered
when a candidate or committee has campaign activity that meets
or exceeds a specific dollar threshold. Late contribution
reports and late independent expenditure reports are examples
of activity-based reports.
This bill seeks to eliminate two types of special activity-based
reports in an effort to streamline the campaign reporting
process. The reports that would be eliminated are supplemental
preelection statements and supplemental independent
expenditure reports. Due to modifications made to campaign
limits and disclosure requirements after these reporting
requirements were established, these special activity-based
reporting requirements no longer serve their original
purposes.
a) Supplemental Preelection Statements: Existing law
requires a recipient committee to file a supplemental
preelection statement if it makes contributions of $10,000
or more in connection with an election for which the
committee otherwise would not be required to file
preelection statements. This reporting requirement, which
was created in 1985, was designed to ensure that a
committee that is making significant contributions in an
election is required to disclose its donors prior to the
election. For example, if an individual made a $50,000
contribution to a state general purpose committee a month
before a legislative special election, and the state
general purpose committee then used those funds to make a
$50,000 contribution to a candidate who was running in that
special election, the supplemental preelection statement
ensured that the state general purpose committee was
required to disclose the $50,000 contribution it received
from the individual prior to the special election.
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At the time the supplemental preelection statement
requirements were put into law, there were no contribution
limits for elections for state office. As a result, the
requirement to file supplemental preelection statements was
an important tool to ensure that the true source of
significant campaign contributions to candidates was
disclosed prior to the election. Since that time, however,
Proposition 34 of 2000 imposed contribution limits for
elections for state office, and many local jurisdictions
have enacted local contribution limits. As a result, it
has become relatively uncommon for committees to meet the
$10,000 threshold that requires filing a supplemental
preelection statement.
b) Supplemental Independent Expenditure Reports: Existing
law requires a candidate or committee that makes
independent expenditures of $1,000 or more in a calendar
year in connection with an election to file a supplemental
independent expenditure report at the same times and in the
same places as the committee would be required to file
campaign statements if it were primarily formed to support
or oppose the candidate or measure that it supported or
opposed with the independent expenditure. This reporting
requirement, which was created in 1985, was designed to
ensure that a committee that is making significant
independent expenditures in an election is required to
disclose its donors prior to the election.
Since the requirement for supplemental independent
expenditure reports was enacted into law, however,
disclosure laws have been amended to require similar
information to be reported within 24 hours whenever a
committee makes independent expenditures of $1,000 or more
in the last 90 days before an election. Since it is rare
for independent expenditures to be made more than 90 days
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before the election, supplemental independent expenditure
reports largely have become duplicative of other reports
that are filed in a timelier manner.
3)Preelection Reporting Changes: Existing law requires
specified elected officials, candidates, and committees to
file two preelection campaign disclosure statements prior to
elections in which those entities are participating. The
preelection statements ensure that significant campaign
contributions and expenditures are disclosed prior to the
election. This bill makes minor changes to the timing of such
preelection statements and to the entities that are required
to file preelection statements. (This bill does not affect
preelection reporting requirements in connection with
elections for the boards of the Public Employees Retirement
System and the Teachers' Retirement Board.)
a) Date Changes: Under existing law, preelection reports
are filed on a slightly different timeline for elections
held on the first Tuesday after the first Monday in June or
November of even-numbered years than for elections held at
other times. The deadline for the first preelection report
for an election held on the first Tuesday after the first
Monday in June is always March 22, and the report is
required to cover campaign activity through March 17. For
elections held on the first Tuesday after the first Monday
in November, the deadline for the first preelection report
is always October 5, covering all activity through
September 30. For elections held at other times, the
deadline for the first preelection report is the 40th day
before the election, covering all activity through the 45th
day before the election. (The second preelection report is
always due on the 12th day before the election, covering
all activity through the 17th day before the election,
regardless of when the election is held.)
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This bill standardizes the schedule for filing preelection
reports so that the first preelection report is always due
by the 40th day before the election, covering all activity
through the 45th day before the election, regardless of
when the election is held. As a result, the first
preelection report for elections on the first Tuesday after
the first Monday in June of even-numbered years will be due
between April 23-29 (depending on the exact date of the
election) instead of on March 22, and the first preelection
report for elections on the first Tuesday after the first
Monday in November of even-numbered years will be due
between September 23-29 (depending on the exact date of the
election), instead of on September 30.
b) City General Purpose Committees: This bill eliminates
the requirement for city general purpose committees to file
preelection reports in connection with an election if the
committees are not recipient committees (that is, if they
do not receive contributions of $1,000 or more).
Generally, state and county general purpose committees are
required to file preelection reports only if they are
recipient committees. The preelection report is intended
to ensure that a committee must report the donations that
it receives prior to an election, if the committee is
making contributions or independent expenditures in
connection with that election. State and county general
purpose committees that are not recipient committees-that
is, committees that make independent expenditures or
contributions, but that do not receive contributions-are
not required to file preelection reports. Those
committees' preelection activities typically will be
disclosed on other reports (including through late
independent expenditure reports and late contribution
reports). This bill extends the same policy to city
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general purpose committees.
4)Previous Legislation: SB 1442 (Lara) of 2014 would have
required most state candidates and campaign committees to file
quarterly campaign reports, instead of semi-annual campaign
reports, would have eliminated requirements for committees to
file certain activity-based reports (including supplemental
preelection statements and supplemental independent
expenditure reports), and would have required the development
of a new Internet-based campaign finance reporting and
disclosure system. SB 1442 was vetoed by Governor Brown, who
stated in his veto message that it would be premature to
adjust the campaign reporting schedules until a new campaign
finance disclosure system was in place, and who argued that
the Secretary of State's office should complete two existing
information technology projects before beginning to replace
the existing campaign finance disclosure system.
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 initiative and require a
two-thirds vote of both houses of the Legislature.
REGISTERED SUPPORT / OPPOSITION:
Support
None on file.
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Opposition
None on file.
Analysis Prepared by:Ethan Jones / E. & R. / (916) 319-2094