BILL ANALYSIS Ó
AB 2318
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Date of Hearing: April 27, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2318 (Low) - As Amended March 28, 2016
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| |Judiciary | |10 - 0 |
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill shifts jurisdiction over enforcement of specified
state laws-that restrict nonprofit organizations from using
certain resources for campaign purposes and that require
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specified nonprofit organizations to disclose the sources of
funds used for campaign activity-from the Board of Equalization
(BOE) to the Fair Political Practices Commission (FPPC).
Specifically, this bill:
1)Authorizes the FPPC to enforce state law prohibiting a
nonprofit organization, as defined, or an officer, employee,
or agent of such an organization, from using public resources
that are received from any local agency, as specified, for any
campaign activity not authorized by law.
2)Allows the FPPC, rather than the BOE, to enforce state law
requiring a nonprofit organization that receives more than 20%
of its revenues from one or more local agencies to use a
separate bank account for all campaign activity and to
publicly report any campaign activity, including disclosing
the sources of funds used for campaign activity, if certain
thresholds are met.
3)Changes the types of nonprofit organizations that are subject
to this law such that it is also applicable to multipurpose
organizations (MPOs) currently subject to another disclosure
provisions of the Political Reform Act (PRA).
4)Increases, from $250 to $1,000, the amount of funding that a
nonprofit organization can receive from a single source before
the nonprofit may be required to disclose the identity of that
source on reports filed pursuant to current law.
5)Transfers from the FTB to the FPPC, with respect to the above
provisions, the responsibilities for receiving reports filed
by the nonprofit organizations and deciding whether to require
an audit of those reports, and determining via the audit
whether a nonprofit has complied with these provisions.
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FISCAL EFFECT:
The FPPC indicates annual GF costs of about $300,000 for three
positions: legal, investigations, and program specialist. The
Secretary of State is usually the filing officer for nearly all
campaign related forms; under this bill, the FPPC would to
accept, retain, and respond to disclosure requests for these
paper filings and respond to advice requests from nonprofits
uncertain whether they need to file pursuant to this bill. The
commission will also have to draft regulations and conduct
audits. The author is working with the commission on amendments
to reduce costs.
According to the FTB, since SB 594 (see below) went into effect
on January 1, 2014, only two nonprofit organizations have filed
reports in accordance with that bill, though it appears that
those reports may have been filed in error, since neither
organization reached the reporting thresholds. The low number of
reports filed pursuant to SB 594 does not necessarily mean that
nonprofit organizations are failing to comply with the
provisions of the law, but instead may reflect the very narrow
circumstances under which an organization is required to file a
report. Although the sponsor contends more nonprofits will file
pursuant to this bill over time, the FPPC's ongoing workload and
costs may be minor.
COMMENTS:
1)Purpose. According to the author, "This bill improves upon the
existing accountability and transparency provisions by
providing enforcement authority to the FPPC. The FPPC is the
appropriate oversight body to promote and foster the public's
trust in our state's political system. As such, AB 2318 is
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necessary to streamline the disclosure and reporting rules,
while also synchronizing their reporting threshold
requirements in an effort to reduce redundancy and maximize
transparency."
2)Background. SB 594 (Hill), Chapter 773, Statutes of 2013, was
enacted in response to concerns that public resources were
being used indirectly for campaign purposes. SB 594 contained
provisions targeted at nonprofit organizations that receive
more than 20% of their revenues from local agencies. One
provision required those organizations-to the extent that they
engage in campaign activity-to have a separate bank account
for all campaign activities. The other provision required the
nonprofit organizations to publicly report their campaign
activities and the sources of their campaign funds if certain
thresholds were met.
Subsequent to the passage of SB 594, SB 27 (Correa), Chapter 16,
Statutes of 2014, established conditions under which an MPO
that makes campaign contributions or expenditures is required
to disclose names of its donors. SB 27 was enacted in
response to situations where nonprofit organizations made
significant campaign contributions and expenditures, but were
not required to disclose the source of their donors. Although
SB 594 and SB 27 were intended to address two different
situations, both bills regulate political activity by certain
nonprofit organizations and, as a result, nonprofit
organizations can be required to comply with the requirements
of both bills under certain circumstances.
This bill changes the reporting requirements of SB 594 so that
the same rules and standards generally apply as to reports
filed pursuant to SB 27. By establishing greater consistency
in the reporting rules for nonprofit organizations, this bill
should help streamline compliance and enforcement of these two
laws. Additionally, this bill moves the reporting and
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separate bank account rules from SB 594 into the PRA and gives
the FPPC the authority to enforce and the responsibility to
administer those rules.
Analysis Prepared by:Chuck Nicol / APPR. / (916)
319-2081