BILL ANALYSIS Ó
AB 700
Page 1
ASSEMBLY THIRD READING
AB
700 (Gomez and Levine)
As Amended January 14, 2016
2/3 vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Elections |4-2 |Ridley-Thomas, Gatto, |Grove, Travis Allen |
| | |Gordon, Mullin | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |11-0 |Gomez, Bloom, Bonta, | |
| | |Calderon, Eggman, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Holden, Quirk, | |
| | |Rendon, Weber, Wood | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |12-0 |Gomez, Bloom, | |
| | |Bonilla, Bonta, | |
| | |Calderon, Daly, | |
| | |Eggman, Eduardo | |
| | |Garcia, Holden, | |
| | |Quirk, Weber, Wood | |
| | | | |
AB 700
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| | | | |
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SUMMARY: Changes the content and format of disclosure
statements required on specified campaign advertisements in a
manner that generally requires such disclosures to be more
prominent. Specifically, this bill:
1)Defines the following terms, for the purposes of this bill:
a) "Advertisement" to mean any general or public
communication which is authorized and paid for by a
committee for the purpose of supporting or opposing a
candidate or candidates for elective office or a ballot
measure or measures.
i) Provides that the term "advertisement" does not
include any of the following:
(1) A communication paid for by a political party
committee or a candidate controlled committee
established for elective office for the controlling
candidate;
(2) A communication from an organization, other
than a political party, to its members;
(3) Various specified types of communications
where the inclusion of disclosures is impractical due
to the size or medium of the communication (such as a
pen, or sky writing); or,
(4) Any other advertisement as determined by
regulations of the Fair Political Practices Commission
(FPPC).
b) "Cumulative contributions" to mean the cumulative amount
of contributions received by a committee beginning 12
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months prior to the date of the expenditure and ending
seven days before the time the advertisement is sent to the
printer or broadcaster.
c) "Top contributors" to mean the persons from whom the
committee paying for an advertisement has received its
three highest cumulative contributions of $50,000 or more,
as specified.
i) Provides that if a contributor appears to qualify as
a top contributor but received earmarked funds to make
the contribution, the person or committee that earmarked
the funds shall be disclosed as the top contributor
instead. Requires a person or committee that is
transferring earmarked funds to disclose the true source
of the funds at the time of the transfer. Provides that
funds are "earmarked," for these purposes in the
following circumstances:
(1) The contributor solicited and received the
funds for the purpose of making a contribution to the
committee paying for the advertisements;
(2) The funds were given subject to a condition,
agreement, or understanding that the funds would be
used to make a contribution to the committee paying
for the advertisement, as specified; or,
(3) The contributor had existing funds from a
donor and a subsequent agreement or understanding was
reached that all or a portion of the funds would be
used to contribute to the committee paying for the
advertisement, as specified.
2)Requires an advertisement, as defined, to include a disclosure
statement in accordance with the following:
a) In the case of an advertisement paid for by a committee
that has not received contributions of $2,000 or more in a
calendar year:
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"Paid for by [name of the committee as required to appear
on campaign statements]."
b) In the case of an advertisement that is paid for by a
committee that has received contributions of $2,000 or more
in a calendar year:
"Paid for by [name of the committee as required to appear
on campaign statements]. This committee has major funding
from [names of the top contributors to the committee that
is paying for the advertisement]."
Provides that if the content of the advertisement names
each of the top contributors as major funding sources, the
disclosure statement in the advertisement is not required
to include the portion that identifies the sources of the
committee's major funding.
3)Imposes the following requirements on the disclosure
statements required by this bill:
a) In the case of an advertisement disseminated by radio or
telephone, the statement must be at the beginning or end of
the advertisement, read in a clearly spoken manner and in a
pitch and tone substantially similar to the rest of the
advertisement, and last no less than three seconds.
Provides that radio and prerecorded telephonic
advertisements are only required to disclose the single top
contributor of $50,000 or more.
b) In the case of a television or video advertisement, the
statement must comply with the following:
i) Appear at the beginning or end of the advertisement
for a minimum of five seconds in the case of an
advertisement lasting 30 seconds or less, or for a
minimum of 10 seconds in the case of an advertisement
lasting longer than 30 seconds;
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ii) Appear on a solid black background on the entire
bottom one-third of the screen; and,
iii) Include a link to the FPPC's Internet Web site
containing a list of the top donors to the committee
paying for the advertisement, in the case of
advertisements that are paid for by committees that are
required to file a list of their top 10 contributors with
the FPPC pursuant to existing law.
c) In the case of a print advertisement, the statement must
appear in a printed or drawn box with a solid white
background on the bottom of at least one page, and must
include a link to the FPPC's Internet Web site containing a
list of the top donors to the committee paying for the
advertisement, in the case of advertisements that are paid
for by committees that are required to file a list of their
top 10 contributors with the FPPC pursuant to existing law.
Provides that newspaper, magazine, or other public print
advertisements that are 20 square inches or less are only
required to disclose the single top contributor of $50,000
or more.
d) In the case of an electronic media advertisement, the
statement must comply with the following:
i) Be visible for a period of at least four seconds;
ii) Include a hyperlink to an Internet Web site
containing the text of the disclosure statement. The
Internet Web site is required to remain online for at
least 30 days after the election where the candidate or
measure was voted upon;
iii) If made by a form of electronic media that is audio
only, comply with the requirements for radio
advertisements;
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iv) If made by a form of electronic media that allows
users to engage in discourse and post content, or any
other social media, the statement is only required to be
included on the home page, landing page, or similar
location; and,
v) Is not required on advertisements made via social
media where the only expense or cost of the communication
is compensated staff time unless the social media account
where the content is posted was created only for the
purpose of advertisements governed by the Political
Reform Act (PRA).
4)Specifies requirements for the font type, size, color, and
placement of the text of disclosure statements required by
this bill.
5)Provides that the disclosure of a top contributor under this
bill does not need to include legal terms such as
"incorporated," "committee," "political action committee," or
"corporation" or their abbreviations, unless the term is part
of the contributor's name in common usage.
6)Requires disclosure statements to be updated to reflect any
changes in the order of top contributors as follows:
a) In the case of television, radio, telephone, or other
electronic media advertisements, within seven business
days, or within five business days if the change in top
contributors occurs within 30 days of an election; and,
b) In the case of a print advertisement, including
non-electronic billboards, prior to placing a new or
modified order for additional printing of the
advertisement.
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7)Repeals existing, conflicting requirements governing
disclaimers and disclosure statements that must appear on
specified campaign advertisements, including all of the
following:
a) A requirement that an advertisement for or against a
ballot measure include a disclosure statement identifying
the two highest cumulative contributors of $50,000 or more
to the committee funding the advertisement;
b) A requirement that a committee that supports or opposes
one or more ballot measures must name and identify itself
using a name or phrase that clearly identifies the economic
or other special interest of its major donors of $50,000 or
more in any reference to the committee required by law;
and,
c) A requirement that an advertisement that is paid for by
an independent expenditure (IE) must include a disclosure
statement identifying the name of the committee making the
expenditure and the names of the persons from whom the
committee making the IE received its two highest cumulative
contributions of $50,000 or more during the 12-month period
prior to the expenditure.
8)Makes technical and conforming changes.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, the FPPC will incur annual General Fund costs of
around $350,000 for three positions to promulgate regulations,
update educational materials, process increased requests for
advice, provide additional enforcement, and for potential
litigation over the bill's provisions or the resulting
regulations.
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COMMENTS: According to the author, "AB 700 (Gomez and Levine),
the California DISCLOSE Act, will dramatically improve
disclosure on ballot measure ads and ads about candidates about
who has paid for the ad. Knowing? the true source of funds for
ads will prevent voters from being deceived about who is truly
paying for it, help voters better evaluate the credibility and
content of ads, and promote greater confidence in the electoral
process. The bill codifies verbatim the on-ad disclosure
portions of the currently-circulating Voters' Right to Know Act?
Ads paid for by candidate committees and political parties do
not have to comply with the new rules."
Under the PRA, committees must include "paid for by" disclaimers
on certain campaign advertising, including campaign mailers,
radio and television ads, telephone robocalls, and electronic
ads. According to a publication produced by the FPPC, "Basic
disclaimer rules apply to campaign materials disseminated by a
candidate for their own election campaign because it is
generally clear to the public that the candidate is sending the
communication. Stricter disclaimer rules apply to 1) ballot
measure advertisements and 2) [IE] advertisements on candidates
and ballot measures, because it is less clear to the public who
is responsible for these ads."
In certain situations, advertisements related to ballot measures
or that are paid for by IEs are required to include a disclaimer
that identifies the two top contributors of $50,000 or more to
the committee that is funding the advertisement, but this
requirement does not apply to all committees. Primarily formed
committees generally must include the disclaimer identifying top
contributors in their advertisements, while general purpose
committees (including political party committees) do not. (A
primarily formed committee makes a significant majority of its
contributions and expenditures to support or oppose a single
candidate or a group of specific local candidates on the same
ballot, or to support or oppose a single measure or two or more
measures being voted on in the same election. By contrast, a
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general purpose committee is usually ongoing in nature and
supports or opposes a variety of candidates and ballot measures
over the course of several years.)
Even though state statute does not make a distinction between
advertisements paid for by primarily formed committees and those
paid for by general purpose committees, the FPPC has specified
by regulation that general purpose committees are not required
to identify their top contributors on advertisements they fund.
This regulation was adopted in response to two court cases in
which courts struck down requirements for committees to identify
certain contributors in political advertisements funded by those
committees. In one of those cases, the FPPC was enjoined from
enforcing the PRA's on-advertisement contributor disclaimer
requirements against general purpose committees.
While this bill does not change the rules for disclaimers on
campaign materials disseminated by a candidate for his or her
own election campaign, it significantly overhauls the content
and format of disclosure statements required on certain other
campaign advertisements in a way that generally requires such
disclosures to be more prominent. Additionally, this bill
requires many advertisements to include an identification of the
three top contributors to the committee funding the
advertisement, instead of the two top contributors that are
required to be identified under existing law. Certain types of
advertisements, however, may contain less information about the
contributors to committees funding the advertisements under this
bill. (For example, under existing state law, a 30-second radio
advertisement supporting or opposing a ballot measure that is
paid for by a primarily formed committee would be required to
include the two top contributors of $50,000 or more to the
committee funding the advertisement. Under this bill, only the
single top contributor of $50,000 or more would be disclosed.)
This bill exempts political party committees from the
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requirement to disclose their top contributors on advertisements
that they fund, but does not similarly exclude other general
purpose committees from those requirements. However, in light
of the FPPC's regulation that exempts general purpose committees
from the PRA's on-advertisement contributor disclaimer
requirements, and in light of the court cases that led the FPPC
to adopt that regulation, it is unclear whether the
on-advertisement contributor disclaimer requirements of this
bill can be made applicable to general purpose committees.
In ACLU v. Heller (2004), 378 F.3d 979, the Ninth Circuit Court
of Appeals struck down a Nevada law that required any published
material concerning a campaign to identify the person paying for
the publication. In that case, the state of Nevada argued that
its law served three state interests, including helping voters
evaluate the usefulness of information in a campaign
communication, preventing fraud and libel, and furthering
enforcement of disclosure and contribution election laws. The
court concluded that Nevada failed to demonstrate that its
statute was "narrowly tailored to serve an overriding state
interest." The court did note in its ruling, however, that
"[a]n on-publication identification requirement carefully
tailored to further a state's campaign finance laws, or to
prevent the corruption of public officials, could well pass
constitutional muster." The Heller case is one of the two cases
that prompted the FPPC to adopt its regulation that exempted
general purpose committees from the requirement to identify
their top contributors on advertisements they fund.
Supporters of this bill have argued that, notwithstanding the
decision in the Heller case, the provisions of this bill are
constitutional in light of disclosure requirements that were
upheld by the United States Supreme Court in Citizens United v.
Federal Election Commission (2010), 558 US 310. While the
Citizens United case is probably best known as the case in which
the United States Supreme Court struck down a 63-year-old law
that prohibited corporations and unions from using their general
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treasury funds to make IEs in federal elections, in the same
case, the Court also upheld certain disclaimer and disclosure
provisions of the federal Bipartisan Campaign Reform Act (BCRA)
of 2002, also sometimes called "McCain-Feingold" for its Senate
authors.
The Citizens United case involved a nonprofit corporation
(Citizens United) that sought to run television commercials
promoting a film it produced that was critical of then-Senator
and presidential candidate Hillary Clinton. Under BCRA, the
film produced by Citizens United and the television commercials
promoting that movie were subject to certain disclaimer and
disclosure requirements - specifically, a requirement that
televised electioneering communications must include a
disclaimer indicating the name of the person or organization
that was "responsible for the content" of the advertising.
Additionally, each communication was required to include a
statement that the communication was "not authorized by any
candidate or candidate's committee," and was required to display
the name and address of the person or group that funded the
advertisement. Finally, under a different provision of BCRA,
any person who spent more than $10,000 in a calendar year is
required to file a disclosure statement with the Federal
Elections Commission identifying the person making the
expenditure, the amount of the expenditure, the election to
which the communication was directed, and the names of
contributors in certain circumstances.
Citizens United (the corporation) challenged these disclaimer
and disclosure requirements as applied to the film and the
television advertisements promoting that film. Specifically,
Citizens United argued that the disclaimer and disclosure
requirements were unconstitutional on the grounds the
governmental interest in providing information to the electorate
did not justify requiring disclaimers for commercial
advertisements. The court disagreed, finding that the
disclaimers provided the electorate with important information,
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helping to ensure that voters were informed, and "avoid[ed]
confusion by making clear that the ads are not funded by a
candidate or political party."
While some of the requirements of this bill are comparable to
provisions of federal law that were at issue in Citizens United
(for instance, certain disclaimer requirements included in this
bill are similar to those required under federal law that were
upheld by the court in Citizens United), other requirements in
this bill go beyond what is required by federal law, and beyond
what was considered by the court in Citizens United.
Specifically, the provisions of this bill that require the
identities of certain campaign contributors - entities that were
not individually responsible for the content or the production
of the advertising - to be included in campaign advertising go
beyond what is required by federal law.
SB 52 (Leno) of the 2013-14 Legislative Session similarly
proposed to change the content and format of disclosure
statements on specified campaign advertisements to make those
statements more prominent, among other provisions. SB 52 died
on the Assembly's Inactive file.
AB 1148 (Brownley) and AB 1648 (Brownley) from the 2011-12
Legislative Session also proposed increasing the prominence of
disclosure statements on campaign advertisements, among other
provisions. AB 1148 failed passage on the Assembly Floor, while
AB 1648 was approved by the Assembly, but was not heard in the
Senate.
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
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this bill, must further the purposes of the initiative and
require a two-thirds vote of both houses of the Legislature.
Analysis Prepared by:
Ethan Jones / E. & R. / (916) 319-2094 FN:
0002582