BILL ANALYSIS Ó
AB 2318
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CONCURRENCE IN SENATE AMENDMENTS
AB
2318 (Low)
As Amended August 15, 2016
2/3 vote
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|ASSEMBLY: |80-0 |(May 31, 2016) |SENATE: | 39-0 |(August 29, |
| | | | | |2016) |
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Original Committee Reference: E. & R.
SUMMARY: Gives the Fair Political Practices Commission (FPPC)
jurisdiction over a state law that requires 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 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.
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2)Transfers the responsibility for administering this law from
the Franchise Tax Board (FTB) to the FPPC. Conforms this law
to another law within the Political Reform Act (PRA) that
regulates political spending by specified nonprofit
organizations. Recodifies this law so that it is part of the
PRA.
3)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.
4)Transfers the following responsibilities under this law from
the FTB to the FPPC:
a) Deciding whether to require an audit of reports filed by
nonprofit organizations; and,
b) 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.
The Senate amendments:
1)Remove provisions of this bill that would have allowed the
FPPC to enforce an existing 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. Remove provisions of
this bill that would hare recodified that law so that it was
part of the PRA.
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2)Make minor, technical, and corresponding changes.
FISCAL EFFECT: According to the Senate Appropriations
Committee, the FPPC indicates that it would incur first-year
costs of $126,000, and ongoing annual costs of $119,000 to
implement the provisions of the bill (General Fund).
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
reports filed pursuant to SB 27, moves certain provisions of SB
594 into the PRA, and makes the FPPC responsible for
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administering and enforcing parts of 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.
As approved by the Assembly, this bill proposed to give the FPPC
jurisdiction over two related state laws that govern the use of
certain resources by nonprofit organizations for campaign
activity. The Senate amendments narrow the bill so that the
FPPC is given jurisdiction over just one of those two laws,
thereby leaving the administration and enforcement of the other
law unchanged, except for various minor, technical, clarifying,
and corresponding changes. This bill, as amended in the Senate,
is generally consistent with Assembly actions.
Please see the policy committee analysis for a full discussion
of this bill.
Analysis Prepared by:
Ethan Jones / E. & R. / (916) 319-2094 FN:
0004069
AB 2318
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