BILL ANALYSIS Ó
SB 21
Page 1
SENATE THIRD READING
SB
21 (Hill)
As Amended August 26, 2015
2/3 vote
SENATE VOTE: 36-1
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Elections |6-0 |Ridley-Thomas, Grove, | |
| | |Gatto, Gordon, | |
| | |Mullin, Perea | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |17-0 |Gomez, Bigelow, | |
| | |Bloom, Bonta, | |
| | |Calderon, Chang, | |
| | |Nazarian, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, Holden, | |
| | |Jones, Quirk, Rendon, | |
| | |Wagner, Weber, Wood | |
| | | | |
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SB 21
Page 2
SUMMARY: Requires specified nonprofit organizations that make
payments for travel by public officials to disclose the names of
certain donors. Requires a public official who receives a gift of
travel to disclose the destination of the travel. Specifically, this
bill:
1)Requires a tax exempt 501(c)(3) or 501(c)(4) nonprofit organization
to disclose the names of certain donors to the organization if both
of the following apply:
a) The organization 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 or local officer related to a
legislative or governmental purpose, or to an issue of state,
national, or international public policy; and,
b) The sum of the organization's expenses that relate to elected
officials' travel, study tours, or conferences, conventions, or
meetings was greater than one-third of its total expenses
reflected on the organization's most recently filed Internal
Revenue Service Form 990.
2)Requires an organization that meets the criteria in 1) above, to
disclose to the Fair Political Practices Commission (FPPC) the names
of those donors who did both of the following in the preceding
calendar year:
a) Donated at least $1,000 to the nonprofit organization; and,
b) Accompanied the elected official, either personally or through
a representative of the donor, for any portion of the travel.
SB 21
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3)Provides that this bill shall not preclude a finding that a
nonprofit organization is acting as an intermediary or agent of a
donor of a gift of travel. Provides that if the nonprofit is acting
as an intermediary or agent, all of the following apply:
a) The donor to the nonprofit organization is the source of the
gift;
b) The donor shall be identified as a financial interest, as
specified;
c) The gift is required to be reported, as specified; and,
d) The gift is subject to the limitation on gifts, as specified.
4)Requires a public official who receives a gift that is a travel
payment, advance, or reimbursement that must be disclosed on the
official's Statement of Economic Interests (SEI), to disclose the
travel destination on the SEI.
5)Contains double-jointing language to avoid chaptering problems with
AB 10 (Gatto) of the current legislative session.
FISCAL EFFECT: According to the Assembly Appropriations Committee,
the FPPC will incur one-time General Fund costs of $90,000 for
one-half position to develop the forms and procedures for implementing
the new reporting requirements. Ongoing General Fund costs would be
around $170,000 for regulations, responding to advice requests,
monitoring filings, and enforcement.
COMMENTS: According to the author, "SB 21 increases transparency
within the Political Reform Act [PRA] by requiring non-profits that
pay for elected official travel to disclose to the FPPC the names of
the donors responsible for funding the travel. Currently non-profits
do not have to disclose the source of travel funding preventing the
public from knowing who was behind the gift to the elected official.
SB 21
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The bill would also require elected officials to disclose to the FPPC
the destination of the travel."
Certain payments for travel related to a legislative or governmental
purpose, or to an issue of state, national, or international public
policy, are not subject to gift limits if the travel is: 1) in
connection with a speech given by the official, or 2) provided by a
government agency, a bona fide public or private educational
institution, as specified, or a nonprofit organization pursuant to
Section 501(c)(3) of the Internal Revenue Code or a similar foreign
organization.
While nonprofit organizations must submit some 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. As a result, nonprofit organizations that
provide payments for foreign and domestic travel for California public
officials are not required to publicly disclose this information, even
when donations are solicited for those purposes, as long as the
payments are not solicited for a specific recipient of the travel
payment.
This bill is similar to portions of SB 831 (Hill) of 2014, which was
vetoed by Governor Brown. In his veto message, the Governor wrote,
"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."
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,
SB 21
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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: 0001660