BILL ANALYSIS Ó
AB 2318
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ASSEMBLY THIRD READING
AB
2318 (Low)
As Amended May 18, 2016
2/3 vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Elections |7-0 |Weber, Harper, Travis | |
| | |Allen, Gordon, Low, | |
| | |Mullin, Nazarian | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Judiciary |10-0 |Mark Stone, Wagner, | |
| | |Alejo, Chau, Chiu, | |
| | |Gallagher, | |
| | | | |
| | | | |
| | |Cristina Garcia, | |
| | |Holden, Maienschein, | |
| | |Ting | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |20-0 |Gonzalez, Bigelow, | |
| | |Bloom, Bonilla, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
| | |Gallagher, Eduardo | |
AB 2318
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| | |Garcia, Roger | |
| | |Hernández, Holden, | |
| | |Jones, Obernolte, | |
| | |Quirk, Santiago, | |
| | |Wagner, Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Gives the Fair Political Practices Commission (FPPC)
jurisdiction over specified state laws that restrict nonprofit
organizations from using certain resources for campaign purposes
and that require specified nonprofit organizations to disclose
the sources of funds used for campaign activity. Specifically,
this bill:
1)Allows the FPPC to enforce a state law that prohibits a
nonprofit organization, as defined, or an officer, employee,
or agent of such an organization, from using public resources
that are received from a local agency, as specified, for
campaign activity not authorized by law. Provides that
enforcement by the FPPC may be brought as a civil action or
through an administrative action. Eliminates the potential
for enforcement by city attorneys or by any district attorney
other than the district attorney of the county in which the
organization is domiciled. Recodifies this law so that it is
part of the Political Reform Act (PRA).
2)Allows the FPPC to enforce a state law that requires a
nonprofit organization that receives more than 20% of its
revenues from one or more local agencies to use a separate
bank account for campaign activity and to publicly report
campaign activity, including disclosing the sources of funds
used for that activity, if certain thresholds are met.
Transfers the responsibility for administering this law from
the Franchise Tax Board (FTB) to the FPPC. Conforms this law
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to another law within the PRA that regulates political
spending by specified nonprofit organizations. Recodifies
this law so that it is part of the PRA.
a) Requires disclosures made under this law to be made in
the same manner as reports filed by multipurpose
organizations (MPOs) that are subject to another provision
of the PRA that establishes the conditions under which MPOs
are required to disclose their donors.
b) Transfers the following responsibilities under this law
from the FTB to the FPPC:
i) Deciding whether to require an audit of reports
filed by nonprofit organizations; and,
ii) Determining, as part of an audit or at the
conclusion of an audit, whether a nonprofit organization
has complied with specified provisions of state law.
3)Makes minor, technical, and corresponding changes.
EXISTING LAW:
1)Makes it unlawful for a nonprofit organization or an officer,
employee, or agent of a nonprofit organization to use or
permit others to use public resources from a local agency for
any campaign activity not authorized by law, as specified.
Defines "public resources," for the purposes of this
restriction, to include funds received by a nonprofit
organization which were generated from activities related to
conduit bond financing, as specified.
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2)Requires a nonprofit organization for which public resources
from local agencies (including funds generated from activities
related to conduit bond financing) accounts for more than 20%
of the organization's gross revenues in the current fiscal
year or either of the previous two fiscal years, to deposit
funds designated for campaign use into a separate account and
to prepare periodic reports disclosing its campaign
activities.
FISCAL EFFECT: According to the Assembly Appropriations
Committee analysis, ongoing General Fund costs to the FPPC of
$110,000 for one position for enforcement.
COMMENTS: According to the author, "AB 2318 modifies the
definition of a reporting nonprofit organization and shifts the
current enforcement authority from the [FTB] to the [FPPC].
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 necessary to streamline the disclosure and
reporting rules, while also synchronizing their reporting
threshold requirements in an effort to reduce redundancy and
maximize transparency."
SB 594 (Hill), Chapter 773, Statutes of 2013, was enacted in
response to concerns that public resources were being used
indirectly for campaign purposes. In particular, the author of
SB 594 expressed concern that revenues from a Joint Powers
Authority that provides bond financing were potentially being
used for campaign purposes. 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.
Although SB 594 and SB 27 were intended to address different
perceived problems, both bills regulate political activity by
certain nonprofit organizations. This bill changes the
reporting requirements of SB 594 to be more consistent with
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reports filed pursuant to SB 27, moves the provisions of SB 594
into the PRA, and makes the FPPC responsible for administering
and enforcing SB 594.
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.
Please see the policy committee analysis for a full discussion
of this bill.
Analysis Prepared by:
Ethan Jones / E. & R. / (916) 319-2094 FN:
0003125