BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 700|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: AB 700
Author: Gomez (D) and Levine (D)
Amended: 8/17/16 in Senate
Vote: 27
SENATE ELECTIONS & C.A. COMMITTEE: 4-1, 6/21/16
AYES: Allen, Hancock, Hertzberg, Liu
NOES: Anderson
SENATE FLOOR: 26-12, 8/30/16 (FAIL)
AYES: Allen, Beall, Block, De León, Galgiani, Glazer, Hall,
Hancock, Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara,
Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Pan,
Pavley, Roth, Wieckowski, Wolk
NOES: Anderson, Bates, Berryhill, Cannella, Fuller, Gaines,
Huff, Morrell, Nguyen, Nielsen, Stone, Vidak
NO VOTE RECORDED: Moorlach
ASSEMBLY FLOOR: 60-15, 1/27/16 - See last page for vote
SUBJECT: Political Reform Act of 1974: campaign disclosures
SOURCE: California Clean Money Campaign
DIGEST: This bill 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 and implements new requirements for the disclosure of
earmarked contributions.
ANALYSIS:
AB 700
Page 2
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)Defines "expenditure," for purposes of the PRA, as a payment,
a forgiveness of a loan, a payment of a loan by a third party,
or an enforceable promise to make a payment, unless it is
clear from the surrounding circumstances that it is not made
for political purposes.
3)Requires an advertisement for or against any ballot measure to
include a disclosure statement identifying any person whose
cumulative contributions are $50,000 or more. Provides that
if there are more than two donors of $50,000 or more, the
disclosure only needs to include the highest and second
highest donors in that order.
4)Requires a committee that supports or opposes one or more
ballot measures to name itself using a name or phrase that
identifies the economic or other special interest of its major
donors of $50,000 or more. Provides that if the major donors
of $50,000 or more share a common employer, the identity of
the employer must also be disclosed.
5)Requires a broadcast or mass mailing advertisement supporting
or opposing a candidate or ballot measure that is paid for by
an independent expenditure to 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.
AB 700
Page 3
6)Provides that when a disclosure of the top two donors is
required on an advertisement pursuant to either of the above
provisions, only the largest donor needs to be disclosed on an
advertisement that is an electronic broadcast of 15 seconds or
less or a print advertisement of 20 square inches or less.
7)Provides that no candidate or committee shall send a mass
mailing unless the name, street address, and city of the
candidate or committee are shown on the outside of each piece
of mail in the mass mailing and on at least one of the inserts
included within each piece of mail of the mailing in no less
than 6-point type which shall be in a color or print which
contrasts with the background so as to be easily legible. If
the sender of the mass mailing is a single candidate or
committee, the name, street address, and city of the candidate
or committee need only be shown on the outside of each piece
of mail. If the sender of a mass mailing is a controlled
committee, the name of the person controlling the committee
shall also be included.
8)Requires an advertisement supporting or opposing a candidate
that is paid for by an independent expenditure to include the
following statement in no less than 14-point, bold, sans serif
type: "This advertisement was not authorized or paid for by a
candidate for this office or a committee controlled by a
candidate for this office." When included in a mailed
advertisement paid for by an independent expenditure, this
statement must be located within one quarter of an inch of the
recipient's name and address as printed on the advertisement
and further requires that text of the statement must be
contained in a box with an outline that has a line weight of
at least 3.25 pt. The text, the interior of the box, the
outline of the box, and the background of the advertisement
must be in contrasting colors.
9)Provides that a candidate, committee, or slate mailer
organization may not expend campaign funds to pay for
telephone calls that are similar in nature and aggregate 500
or more in number, made by an individual, or individuals, or
by electronic means and that advocate support of, or
opposition to, a candidate, ballot measure, or both, unless
AB 700
Page 4
during the course of each call the name of the entity that
authorized or paid for the call is disclosed to the recipient
of the call, as specified. This requirement does not apply to
telephone calls made by the candidate, the campaign manager,
or individuals who are volunteers.
10)Provides that a committee primarily formed to support or
oppose a state ballot measure or state candidate that raises
$1 million or more for an election shall maintain an accurate
list of the committee's top 10 contributors, as specified. A
current list of the top 10 contributors shall be provided to
the FPPC for disclosure on their Internet Web site.
11)Provides that a person may not make any contribution to a
committee on the condition or with the agreement that it will
be contributed to any particular candidate unless the
contribution is fully disclosed, as specified.
This bill:
1) Defines the following terms, for the purposes of this bill:
a) "Advertisement" means 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. "Advertisement" does not include any
of the following:
i) A communication paid for by a political party
committee or a candidate controlled committee
established for elective office for the controlling
candidate;
ii) A communication from an organization, other than
a political party, to its members;
iii) 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
AB 700
Page 5
sky writing); or,
iv) Any other advertisement as determined by
regulations of the FPPC.
a) "Cumulative contributions" means the cumulative amount
of contributions received by a committee beginning 12
months prior to the date of the expenditure and ending
seven days before the time the advertisement is sent to
the printer or broadcaster.
b) "Top contributors" means the persons from whom the
committee paying for an advertisement has received its
three highest cumulative contributions of $50,000 or more,
as specified. 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 and gave those funds to the contributor shall
instead be disclosed as the top contributor. The person
or committee transferring earmarked funds shall disclose
the true source of the funds to the committee receiving
the earmarked funds at the time the funds are transferred,
and the committee receiving those funds may reasonably
rely upon that disclosure for purposes of compliance.
c) Funds are "earmarked" in the following circumstances:
i) The contributor solicited and received the funds
from donors for the express purpose of making a
contribution to the committee paying for the
advertisement.
ii) The funds were given to the contributor subject to
an express condition or agreement with the donor that
all or a portion would be used to make a contribution to
the committee paying for the advertisement.
iii) The contributor had existing funds from a donor
and a subsequent agreement was reached with the donor
that all or a portion of the funds would be used to
contribute to the committee paying for the
advertisement.
AB 700
Page 6
2) Delineates the circumstances in which a payment would be
made for political purposes within the meaning of the
definition of "expenditure" that conforms to existing FPPC
regulations.
3) Provides that a candidate, candidate controlled committee
established for an elective office for the controlling
candidate, or political party committee shall not send a mass
mailing unless the name, street address, and city of the
candidate or committee are shown, as specified.
4) Provides that a candidate, candidate controlled committee
established for an elective office for the controlling
candidate, or political party committee shall not send a mass
electronic mailing unless the name of the candidate or
committee are shown in the electronic mailing preceded by the
words "Paid for by" in at least the same size font as a
majority of the text in the electronic mailing. A "mass
electronic mailing" has been made when more than two hundred
substantially similar pieces of electronic mail have been
sent within a calendar month. The "sender" is the candidate,
candidate controlled committee established for an elective
office for the controlling candidate, or political party
committee who pays for the largest portion of expenditures
attributable to the designing, printing, and posting of the
mailing which is reportable as specified.
5) Requires any advertisement paid for by a committee to
include the words "Paid for by" followed by the name of the
committee as specified.
6) Requires that any advertisement paid for by a committee that
receives contributions to include the words "This committee
has major funding from" followed by the names of the top
three contributors to the committee paying for the
advertisement, unless otherwise specified. If fewer than
three contributors qualify as top contributors, only those
contributors that qualify shall be disclosed pursuant to this
section. If there are no contributors that qualify as top
AB 700
Page 7
contributors, this disclosure is not required.
7) Requires that an advertisement that is disseminated over the
radio or by telephonic means shall include the required
disclosures 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
shall last no less than three seconds. Radio and prerecorded
telephonic advertisements shall be required to disclose only
the top two contributors of $50,000 or more unless the
advertisement lasts 15 seconds or less or the disclosure
statement would last more than eight seconds, in which case
only the single top contributor of $50,000 or more shall be
disclosed.
8) Requires an advertisement that is disseminated as a video,
including advertisements on television and videos
disseminated over the Internet, shall include the required
disclosures at the beginning or end of the advertisement as
follows:
a) The disclosure shall be written and displayed for at
least five seconds of a broadcast of thirty seconds or
less or for at least ten seconds of a broadcast that lasts
longer than thirty seconds.
b) The written disclosure shall appear on a solid black
background on the entire bottom one-third of the
television or video display screen, or bottom one-fourth
of the screen if the committee does not have or is
otherwise not required to list top contributors, and shall
be in a contrasting color in Arial equivalent type, and
the type size for the smallest letters in the written
disclosure shall be 4 percent of the height of the
television or video display screen.
c) The top contributors, if any, shall each be disclosed
on a separate horizontal line, in descending order,
beginning with the top contributor who made the largest
cumulative contributions on the first line. The name of
each of the top contributors shall be centered
horizontally. The written disclosures shall be
underlined, except for the names of the top contributors,
AB 700
Page 8
if any.
d) A committee not making independent expenditures
supporting or opposing a candidate but is required to
provide their top ten contributor list as described above,
shall include the text "Funding Details At [insert FPPC
Internet Web site]." The text shall be below all other
text in contrasting color to the background color in Arial
equivalent type and the type size shall be equivalent to
at least 2.5 percent of the height of the television or
video display screen.
e) An advertisement that is an independent expenditure
supporting or opposing a candidate shall include the
required statement that it was not authorized by a
candidate or a committee controlled by a candidate in the
aforementioned solid black background below all other text
required to appear in that area in a contrasting color and
in Arial equivalent type no less than 2.5 percent of the
height of the television or video display screen.
f) If using a type size of 4 percent of the height of the
television or video display screen causes the name of any
of the top contributors to exceed the width of the screen
or causes the disclosures to exceed one-third of the
television or video display screen, the type size of the
name of the top contributor shall be reduced until the top
contributor's name fits on the width of the screen or the
entire disclosure fits within one-third of the television
or video display screen, but in no case shall the type
size be smaller than 2.5 percent of the height of the
screen.
1) A print advertisement shall include the required disclosures
as follows:
a) The disclosure area shall have a solid white
background and shall be in a printed or drawn box on the
bottom of at least one page that is set apart from any
other printed matter. All text in the disclosure area
shall be in contrasting color.
b) The text shall be in an Arial equivalent type with a
type size of at least 10-point for printed advertisements
designed to be individually distributed, including, but
not limited to, mailers, flyers, and door hangers.
AB 700
Page 9
c) The top contributors, if any, shall each be disclosed
on a separate horizontal line, in descending order,
beginning with the top contributor who made the largest
cumulative contributions on the first line. The name of
each of the top contributors shall be centered
horizontally in the disclosure area. Immediately below
this text, committees required to provide their top ten
contributor list shall include the text "Funding Details
At [insert FPPC Internet Web site]."
d) Required disclosures on a printed advertisement that
is larger than those designed to be individually
distributed, including, but not limited to, yard signs or
billboards, shall be in Arial equivalent type with a type
size of at least 5 percent of the height of the
advertisement, and printed on a solid background with
sufficient contrast that is easily readable by the average
viewer. The text may be adjusted so it does not appear on
separate horizontal lines, with the top contributors
separated by a comma.
e) Newspaper, magazine, or other public print
advertisements that are 20 square inches or less shall be
required to disclose only the single top contributor of
$50,000 or more.
1) An electronic media advertisement, other than an Internet
Web site (such as a banner advertisement on a website) shall
include the text "Who funded this ad?" in a contrasting color
and a font size that is easily readable to the average
viewer. This text shall be a hyperlink to an Internet Web
site containing the required disclosures. Only the hyperlink
is required where the aforementioned text would be
impracticable. An Internet Web site that is hyperlinked
shall remain online and available to the public until 30 days
after the date of the election in which the candidate or
ballot measure supported or opposed by the advertisement was
voted upon.
2) An Internet Web site shall include the required disclosures
in a contrasting color and in no less than 8 point font.
3) An advertisement made via a form of electronic media that is
AB 700
Page 10
audio only and therefore cannot include written disclaimers
shall comply with the same disclaimer requirements for radio
advertisements.
4) An advertisement made via a form of electronic media that
allows users to engage in discourse and post content, or any
other type of social media, shall only be required to include
the disclosures in a contrasting color and in no less than 8
point font on the committee's profile, landing page, or
similar location and shall not be required to include a
disclaimer on each individual post, comment, or other similar
communication.
5) These disclaimers do not apply to 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 PRA.
6) Provides that an advertisement supporting or opposing a
candidate that is paid for by an independent expenditure must
include a statement that it was not authorized by a candidate
or a committee controlled by a candidate. If the
advertisement was authorized or paid for by a candidate for
another office, the expenditure shall instead include a
statement that "This advertisement was not authorized or paid
for by a candidate for this office or a committee controlled
by a candidate for this office."
7) Repeals the requirement that the existing statement
regarding independent expenditures on a mailed advertisement
be located within one quarter of an inch of the recipient's
name and address as printed on the advertisement. Instead,
they would be required to appear with the top three
disclosure statements.
8) If the order of top contributors required to be disclosed
changes or a new contributor qualifies as a top contributor,
the disclosure in the advertisement shall be updated as
AB 700
Page 11
follows:
a) A television, radio, telephone, electronic billboard,
or other electronic media advertisement shall be updated
to reflect the new top contributors within five business
days. A committee shall be deemed to have complied if the
amended advertisement is delivered, containing a request
that the advertisement immediately be replaced, to all
affected broadcast stations or other location where the
advertisement is placed no later than the fifth business
day.
b) A print media advertisement, including non-electronic
billboards, shall be updated to reflect the new top
contributors before placing a new or modified order for
additional printing of the advertisement.
9) Provides that a person shall not make any contribution to
any committee or candidate that is earmarked for a
contribution to any other particular committee, ballot
measure, or candidate unless the contribution is fully
disclosed, as specified. For this purpose a contribution is
earmarked if the contribution is made under any of the
following circumstances:
a) The committee or candidate receiving the contribution
solicited the contribution for the purpose of making a
contribution to another specifically identified committee,
ballot measure, or candidate, requested the contributor to
expressly consent to such use, and the contributor
consents to such use.
b) The contribution was made subject to a condition or
agreement with the contributor that all or a portion of
the contribution would be used to make a contribution to
another specifically identified committee, ballot measure,
or candidate.
c) After the contribution was made, the contributor and
the committee or candidate receiving the contribution
reached a subsequent agreement that all or a portion of
the contribution would be used to make a contribution to
another specifically identified committee, ballot measure,
or candidate.
AB 700
Page 12
1) Makes the following findings and declarations:
a) For voters to make an informed choice in the political
marketplace, political advertisements should not
intentionally deceive voters about the identity of who or
what interest is trying to persuade them how to vote.
Disclosing who or what interest paid for a political
advertisement will help voters be able to better evaluate
the arguments to which they are being subjected during
political campaigns and therefore make more informed
voting decisions.
1) Makes other technical and conforming changes.
Background
Existing Political Advertising Disclaimers. Under the PRA,
committees must put "paid for by" disclaimers on campaign
advertising, including campaign mailers, radio and television
ads, telephone robocalls, and electronic media ads.
Comments
1)According to the author, AB 700 will dramatically improve
disclosure of the top funders on ads for ballot measures and
independent expenditures for and against candidates. Knowing
the true source of funds for ads will prevent voters from
being deceived about who is truly paying for them, help voters
better evaluate the credibility and content of ads, and
promote greater confidence in the electoral process.
2)Constitutional Issues. This measure could be interpreted as a
violation of the United States and California Constitutions'
guarantees to free speech. While the right to freedom of
speech is not absolute, when a law burdens core political
AB 700
Page 13
speech, the restrictions on speech generally must be "narrowly
tailored to serve an overriding state interest," McIntyre v.
Ohio Elections Commission (1995), 514 US 334.
Related/Prior Legislation
SB 52 (Leno of 2013-14) 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, of 2011-12) 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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee: The Fair
Political Practices Commission (FPPC) indicates that it would
incur annual costs of $350,000 (General Fund) to implement the
provisions of the bill.
SUPPORT: (Verified8/19/16)
Insurance Commissioner Dave Jones
California Alliance of Retired Americans
California Church IMPACT
California Clean Money Campaign
California Common Cause
California League of Conservation Voters
AB 700
Page 14
California Public Interest Research Group
Consumer Federation of California
CounterPAC
Courage Campaign
DailyKos
Democracy for America
Endangered Habitats League
Friends Committee on Legislation of California
Friends of the Earth
GMO Free USA
JERICHO: A Voice for Justice
Label GMOs
Lutheran Office of Public Policy - California
Maplight
Money Out Voters In
New Progressive Alliance
People Demanding Action
Public Citizen
Represent.Us
Roostaction.org
Bob Stern, Principal co-author of the Political Reform Act of
1974
In addition, the California Clean Money Campaign submitted
copies of petitions signed by a little more than 20,000
individuals in support of AB 700.
OPPOSITION: (Verified8/19/16)
Fair Political Practices Commission
Howard Jarvis Taxpayers Association
ASSEMBLY FLOOR: 60-15, 1/27/16
AYES: Achadjian, Alejo, Baker, Bloom, Bonilla, Bonta, Brown,
Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley,
Cooper, Dababneh, Daly, Dodd, Eggman, Frazier, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Hadley, Roger Hernández, Holden, Irwin,
Jones-Sawyer, Lackey, Levine, Linder, Lopez, Low, McCarty,
Medina, Mullin, Nazarian, O'Donnell, Olsen, Quirk, Rendon,
Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark
Stone, Thurmond, Ting, Weber, Wilk, Williams, Wood, Atkins
NOES: Travis Allen, Brough, Chávez, Dahle, Beth Gaines,
AB 700
Page 15
Gallagher, Grove, Harper, Jones, Kim, Maienschein, Mayes,
Melendez, Obernolte, Wagner
NO VOTE RECORDED: Bigelow, Mathis, Patterson, Waldron
Prepared by:Darren Chesin / E. & C.A. / (916) 651-4106
8/31/16 9:40:16
**** END ****