BILL ANALYSIS Ó
SENATE COMMITTEE ON
ELECTIONS AND CONSTITUTIONAL AMENDMENTS
Senator Ben Allen, Chair
2015 - 2016 Regular
Bill No: SB 21 Hearing Date: 4/7/15
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|Author: |Hill |
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|Version: |12/1/14 | | |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Darren Chesin |
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Subject: Political Reform Act of 1974: gifts of travel
DIGEST
This bill requires a nonprofit organization that pays for
specified types of travel for elected officeholders to disclose
the names of donors responsible for funding the travel. This
bill requires an officeholder who receives a gift of a travel
payment from any source to report the travel destination on his
or her statement of economic interests (SEI).
ANALYSIS
Existing law:
1.Prohibits specified elected officeholders and other public
officials from receiving gifts, as defined, in excess of $440
in value from a single source in a calendar year.
2.Exempts payments for the actual costs of specified types of
travel from the annual gift limit. Specifically, payments for
travel that is reasonably related to a legislative or
governmental purpose, or to an issue of state, national, or
international public policy are not subject to the gift limit
if either of the following applies:
A. The travel is in connection with a speech given by the
officeholder or official and the lodging and subsistence
expenses are limited to the day immediately preceding, the
day of, and the day immediately following the speech, and
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the travel is within the United States.
B. The travel is provided by a government, a governmental
agency, a foreign government, a governmental authority, a
bona fide public or private educational institution, 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 who
substantially satisfies the requirements for tax-exempt
status under Section 501(c)(3) of the Internal Revenue
Code.
1.Requires candidates for, and current holders of, specified
elected or appointed state and local offices and designated
employees of state and local agencies to file periodic SEI
rests disclosing their financial interests, including
investments, real property interests, income, and gifts,
including gifts of travel. SEI must include a description of
the gift as well as the amount and the date on which the gift
was received.
2.Pursuant to Fair Politicial Practices Commission (FPPC)
regulations, a person who makes a gift to a public official is
the source of the gift for reporting and other applicable
purposes unless that person is acting as an intermediary. The
person is acting as an intermediary for the source of the gift
when the gift to the official was provided under any of the
following conditions:
A. The person receives a payment from a source and the
payment is made to the official after the source identifies
the official as the intended recipient of the gift;
B. The person receives a payment from a source after
soliciting the payment with the understanding that the
payment will be used for the sole or primary purpose of
making a gift to an official; or
C. The person receives a payment from a source after the
payment was solicited by the official or the official's
agent for the purpose of making a gift to the official.
This bill:
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1.Provides that a nonprofit organization that makes payments,
advances, or reimbursements that total more than $10,000 in a
calendar year, or that total more than $5,000 in a calendar
year for a single person, for travel by an elected state
officer or local elected officeholder must disclose the names
of the donors responsible for funding those payments,
advances, or reimbursements.
2.Limits disclosure of donor names to those who donated $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 travel by an elected state officer or local elected
officeholder.
3.Provides that a donor knows or has reason to know that his or
her donation will be used for such travel under any of the
following conditions:
A. The donor directed the nonprofit organization to use the
donation to make a payment, advance, or reimbursement for
the travel.
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 such travel.
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 the travel.
1.Specifies that a nonprofit organization that makes payments,
advances, or reimbursements for such travel is the source of
the gift for reporting and other applicable purposes 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, the donor is the
source of the gift for reporting and other applicable purposes
including the $440 per year limit.
2.Requires that gifts that are travel payments, advances, or
reimbursements disclosed on an official's SEI must also
include the travel destination.
BACKGROUND
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Travel Payment Exceptions . As discussed above, some travel
payments are not subject to the $440 gift limit but are
reportable on an official's statement of economic interests,
e.g., certain travel in connection with a speech, panel or
seminar and certain travel provided by specified nonprofit
organizations.
While nonprofit organizations must submit some specified
financial information to the United States Internal Revenue
Service and make it publicly available, they are not generally
required to publicly disclose the identity of their donors.
Hence, nonprofit organizations that provide payments for foreign
and domestic travel for California public officials are not
required to publicly disclose this information either even when
donations are solicited for those purposes provided they are not
solicited for a specific recipient of the travel payment.
COMMENTS
1.According to the Author : Under current law, the public has no
way of knowing who is paying for legislator travel or where
they are going. Donors hide behind non-profits preventing the
public from knowing who was behind the gift to the elected
official. The public has a right to know where elected
officials are traveling when the travel is paid for by special
interests. The public also has a right to know which special
interests are paying for the travel.
Examples of non-profits that fund legislator travel include:
California Foundation on the Environment and the Economy,
California Independent Voter Project, and the Pacific Policy
Research Foundation. An analysis by the Sacramento Bee found
that California lawmakers received more than $550,000 in
travel-related expenses from outside organizations in 2013.
This bill is a reintroduction of a portion of SB 831 (Hill) from
the 2014 legislative session, which was vetoed by the
Governor. The Governor vetoed the measure because it
contained many restrictions in addition to disclosure
requirements. The restrictions in SB 831 included:
Prohibiting elected officials from contributing campaign
funds to 501(c)(4) nonprofits owned or operated by their
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family members.
Prohibiting elected officials from asking people to
donate to a 501(c)(4) nonprofit owned or operated by a
family member.
Prohibiting elected officials from contributing campaign
funds to 501(c)(4) nonprofits operated by another elected
official on the same governing body.
Prohibiting the expenditure of campaign funds for an
elected official's mortgage, rent, utility bills, clothing,
club memberships, vacations, tuition, vehicles, and gifts
to family members.
SB 21 removes the prohibitions in last year's SB 831 and only
requires increased transparency for elected official travel.
In his veto meassage, the Governor stated the following: "The
activities that are addressed by this bill are already subject
to extensive regulation, including robust disclosure
requirements. The additional restrictions proposed by this
bill would add more complexity to the regulations governing
elected officials, without reducing undue influence."
RELATED/PRIOR LEGISLATION
This bill is identical to portions of SB 831 (Hill) of 2014
which was vetoed by the Governor.
POSITIONS
Sponsor: Author
Support: None recieved
Oppose: None received
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