Senate Bill No. 21

Introduced by Senator Hill

December 1, 2014

An act to amend Sections 87207 and 89506 of the Government Code, relating to the Political Reform Act of 1974.

LEGISLATIVE COUNSEL’S DIGEST

SB 21, as introduced, Hill. Political Reform Act of 1974: gifts of travel.

The Political Reform Act of 1974 provides for the comprehensive regulation of campaign financing and related matters, including the reporting of gifts, as defined. The act prohibits specified officers from receiving gifts in excess of $440 in value from a single source in a calendar year. The act exempts gift payments for the actual costs of specified types of travel that are reasonably related to a legislative or governmental purpose, or to an issue of state, national, or international public policy, from the annual limit on the value of gifts from a single source.

This bill would require a nonprofit organization that pays for these types of travel for an elected state officer or local elected officeholder to disclose the names of donors responsible for funding the payments, as specified. The bill would require a person who receives a gift of a travel payment from any source to report the travel destination on his or her statement of economic interests.

A violation of the Act’s provisions is punishable as a misdemeanor. By expanding the scope of an existing crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the act’s purposes upon a 2⁄3 vote of each house and compliance with specified procedural requirements.

This bill would declare that it furthers the purposes of the act.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

Section 87207 of the Government Code is
amended to read:

87207.  

(a)  begin delete When end delete begin insert If end insert income is required to be reported under
this article, the statement shall contain, except as provided in
subdivision (b):

(1) The name and address of each source of income aggregating
five hundred dollars ($500) or more in value, or fifty dollars ($50)
or more in value if the income was a gift, and a general description
of the business activity, if any, of each source.

(2) A statement whether the aggregate value of income from
each source, or in the case of a loan, the highest amount owed to
each source, was at least five hundred dollars ($500) but did not
exceed one thousand dollars ($1,000), whether it was in excess of
one thousand dollars ($1,000) but was not greater than ten thousand
dollars ($10,000), whether it was greater than ten thousand dollars
($10,000) but not greater than one hundred thousand dollars
($100,000), or whether it was greater than one hundred thousand
dollars ($100,000).

(3) A description of the consideration, if any, for which the
income was received.

(4) In the case of a gift, the amount and the date on which the
gift was received begin insert , and the travel destination for purposes of a gift
that is a travel payment, advance, or reimbursement end insert .

(5) In the case of a loan, the annual interest rate, the security,
if any, given for the loan, and the term of the loan.

(b)  begin delete When end delete begin insert If end insert the filer’s pro rata share of income to a business
entity, including income to a sole proprietorship, is required to be
reported under this article, the statement shall contain:

(1) The name, address, and a general description of the business
activity of the business entity.

(2) The name of every person from whom the business entity
received payments if the filer’s pro rata share of gross receipts
from that person was equal to or greater than ten thousand dollars
($10,000) during a calendar year.

(c)  begin delete When end delete begin insert If end insert a payment, including an advance or reimbursement,
for travel is required to be reported pursuant to this section, it may
be reported on a separate travel reimbursement schedule which
shall be included in the filer’s statement of economic interest. A
filer who chooses not to use the travel schedule shall disclose
payments for travel as a gift, unless it is clear from all surrounding
circumstances that the services provided were equal to or greater
in value than the payments for the travel, in which case the travel
may be reported as income.

SEC. 2.  

Section 89506 of the Government Code is amended
to read:

89506.  

(a) Payments, advances, or reimbursements begin delete , end delete for travel,
including actual transportation and related lodging and subsistence
that is reasonably related to a legislative or governmental purpose,
or to an issue of state, national, or international public policy, are
not prohibited or limited by this chapter if either of the following
begin delete apply end delete begin insert applies end insert :

(1) The travel is in connection with a speech given by the elected
state officer, local elected officeholder, candidate for begin delete elected end delete
begin insert elective end insert state office or local begin delete elected end delete begin insert , elective end insert office, an individual
specified in Section 87200, member of a state board or commission,
or designated employee of a state or local government agency, the
lodging and subsistence expenses are limited to the day
immediately preceding, the day of, and the day immediately
following the speech, and the travel is within the United States.

(2) The travel is provided by a government, a governmental
agency, a foreign government, a governmental authority, a bona
fide public or private educational institution, as defined in Section
203 of the Revenue and Taxation Code, a nonprofit organization
that is exempt from taxation under Section 501(c)(3) of the Internal
Revenue Code, or by a person domiciled outside the United States
begin delete which end delete begin insert who end insert substantially satisfies the requirements for tax-exempt
status under Section 501(c)(3) of the Internal Revenue Code.

(b) Gifts of travel not described in subdivision (a) are subject
to the limits in Section 89503.

(c) Subdivision (a) applies only to travel that is reported on the
recipient’s statement of economic interests.

(d) For purposes of this section, a gift of travel does not include
any of the following:

(1) Travel that is paid for from campaign funds, as permitted
by Article 4 (commencing with Section 89510), or that is a
contribution.

(2) Travel that is provided by the agency of a local elected
officeholder, an elected state officer, member of a state board or
commission, an individual specified in Section 87200, or a
designated employee.

(3) Travel that is reasonably necessary in connection with a
bona fide business, trade, or profession and that satisfies the criteria
for federal income tax deduction for business expenses in Sections
162 and 274 of the Internal Revenue Code, unless the sole or
predominant activity of the business, trade, or profession is making
speeches.

(4) Travel that is excluded from the definition of a gift by any
other provision of this title.

(e) This section does not apply to payments, advances, or
reimbursements for travel and related lodging and subsistence
permitted or limited by Section 170.9 of the Code of Civil
Procedure.

begin insert

(f) (1) A nonprofit organization that makes payments, advances,
or reimbursements that total more than ten thousand dollars
($10,000) in a calendar year, or that total more than five thousand
dollars ($5,000) in a calendar year for a single person, for travel
by an elected state officer or local elected officeholder as described
in subdivision (a) shall disclose to the Commission the names of
the donors responsible for funding those payments, advances, or
reimbursements. The disclosure of donor names shall be limited
to donors who donated one thousand dollars ($1,000) or more to
the nonprofit organization in a calendar year and who knew or
had reason to know that the donation would be used for a payment,
advance, or reimbursement for travel by an elected state officer
or local elected officeholder as described in subdivision (a).

end insert begin insert

(2) A donor knows or has reason to know that his or her
donation will be used in the manner described in paragraph (1)
under any of the following conditions:

end insert begin insert

(A) The donor directed the nonprofit organization to use the
donation to make a payment, advance, or reimbursement for travel
by an elected state officer or local elected officeholder as described
in subdivision (a).

end insert begin insert

(B) The donor made the donation in response to a message or
solicitation for donations for the stated purpose of making a
payment, advance, or reimbursement for travel by an elected state
officer or local elected officeholder as described in subdivision
(a).

end insert begin insert

(C) The donor, or an agent, employee, or representative of the
donor, accompanied an elected state officer or local elected
officeholder for any portion of travel as described in subdivision
(a).

end insert begin insert

(3) For purposes of Sections 87103, 87207, and 89503, a
nonprofit organization that makes payments, advances, or
reimbursements for travel by an elected state officer or local
elected officeholder as described in subdivision (a) is the source
of the gift unless the nonprofit organization is acting as an
intermediary or agent of the donor. If the nonprofit organization
is acting as an intermediary or agent of the donor, all of the
following apply:

end insert begin insert

(A) The donor to the nonprofit organization is the source of the
gift.

end insert begin insert

(B) The donor shall be identified as a financial interest under
Section 87103.

end insert begin insert

(C) The gift shall be reported as required by Section 87207.

end insert begin insert

(D) The gift shall be subject to the limitations on gifts specified
in Section 89503.

end insert

SEC. 3.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

SEC. 4.  

The Legislature finds and declares that this bill furthers
the purposes of the Political Reform Act of 1974 within the
meaning of subdivision (a) of Section 81012 of the Government
Code.