BILL ANALYSIS Ó
SB 1349
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Date of Hearing: June 15, 2016
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Shirley Weber, Chair
SB
1349 (Hertzberg) - As Amended April 18, 2016
SENATE VOTE: 38-0
SUBJECT: Political Reform Act of 1974: Secretary of State:
online filing and disclosure system.
SUMMARY: Requires the Secretary of State (SOS), in consultation
with the Fair Political Practices Commission (FPPC), to develop
and certify for public use a new online filing and disclosure
system for statements and reports that provides public
disclosure of campaign finance and lobbying information in a
user-friendly, easily understandable format, as specified.
Specifically, this bill:
1)Makes the following Legislative findings and declarations:
a) Advances in technology have made it necessary for the
State of California to develop a new, data-driven online
filing and disclosure system that provides public
disclosure of campaign finance and lobbying information in
a user-friendly, easily understandable format.
b) Members of the public, including voters, journalists,
and researchers, should be able to access campaign finance
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and lobbying information in a robust and flexible manner,
including through searches and visual displays such as
graphs and maps.
2)Requires the SOS, in consultation with the FPPC, to develop an
online filing and disclosure system for use by persons and
entities that are required to file statements and reports with
the SOS in accordance with Political Reform Act (PRA).
3)Requires the system to enable a user to comply with all the
disclosure requirements of the PRA and, at a minimum, include
all of the following:
a) A data-driven means or method that allows filers to
submit required filings free of charge in a manner that
facilitates public searches of the data and does all of the
following:
i) Enables a filer to comply with all of the disclosure
requirements of the PRA, including by entering or
uploading requisite data or by indicating that the filer
had no reportable activity during a particular reporting
period;
ii) Retains previously submitted data so that a filer
can access that data to amend disclosures or prepare
future disclosures;
iii) Ensures the security of data entered and stored in
the system; and,
iv) Is compatible, to the extent feasible, with
potential future capability to accept statements from
filers who are candidates for and holders of specified
local offices, elected members of the Board of
Administration of the Public Employees' Retirement
System, elected members of the Teachers' Retirement
Board, and their controlled committees, and committees
formed or existing primarily to support or oppose these
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candidates or elected officials.
b) The definition of a nonproprietary standardized record
format or formats using industry standards for the
transmission of the data that is required of those persons
and entities that are required to file online and that
conforms with the disclosure requirements of the PRA.
4)Requires the SOS to do all the following with respect to the
online filing and disclosure system developed pursuant to this
bill:
a) Accept test files from software vendors and others
wishing to file reports electronically for the purpose of
determining whether the file format is in compliance with
the standardized record format developed pursuant to this
bill and is compatible with the SOS's system for receiving
the data. Requires the SOS to publish and make available
to the public a list of the software and service providers
who have submitted acceptable test files. Requires a filer
to submit acceptably formatted files in order to meet the
requirements of this bill.
b) Make the data filed available on the Internet as
follows:
i) In a user-friendly, easily understandable format
that provides the greatest public access, including
online searches and machine-readable downloads of all
data contained in the system, as specified;
ii) Free of charge and as soon as possible after
receipt, or, in the case of late contribution, late
in-kind, and late independent expenditure reports, as
defined in current law, within 24 hours of receipt;
iii) In a form that does not contain the street name or
building number of the persons or entity representatives
listed on the electronically filed forms or any bank
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account number required to be disclosed pursuant to the
PRA; and,
iv) In a manner that allows the public to track and
aggregate contributions from the same contributor across
filers using a permanent unique identifier assigned by
the SOS for this purpose. Requires the SOS to assign
this identifier to, at minimum, to each contributor who
makes contributions totaling ten thousand dollars
($10,000) or more in a calendar year to, or at the behest
of, candidates or committees that file electronically
with the SOS, pursuant to existing law, or who is
registered with the SOS as a major donor committee
pursuant to current law.
c) Develop a procedure for filers to comply electronically
with the requirement to sign their submissions under
penalty of perjury pursuant to current law. Requires the
electronic signature procedure to allow the filer to file
with the SOS and shall not require an original signature to
be filed.
d) Maintain all filed data online for at least 10 years
after the date it is filed, and then archive the
information in a secure format.
e) Provide assistance to those seeking public access to the
information.
f) Implement sufficient technology to seek to prevent
unauthorized alteration or manipulation of the data.
g) Provide the FPPC with the necessary information to
enable it to assist agencies, public officials, and others
in complying with and administering the PRA.
5)Requires the SOS to do all of the following with respect to
developing the online filing and disclosure system and record
format pursuant to this bill:
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a) Consult with the Assembly Committee on Elections and
Redistricting, the Senate Committee on Elections and
Constitutional Amendments, the FPPC, users, filers, and
other stakeholders, as appropriate, about functions of the
online filing and disclosure system;
b) Hold at least one public hearing, in consultation with
the FPPC, no later than July 31, 2017, to receive input
about developing the online filing and disclosure system
and record format; and,
c) Submit a report, no later than December 31, 2017, to the
Assembly Committee on Elections and Redistricting and the
Senate Committee on Elections and Constitutional Amendments
that includes a plan for the online filing and disclosure
system, describes how members of the public will be able to
query and retrieve data from the system, and includes a
plan for integrating statements from other specified
fliers.
6)Requires the SOS to make the online filing and disclosure
system available for use no later than February 1, 2019.
Permits the SOS to extend this date to a date no later than
December 31, 2019 after consulting with the Assembly Committee
on Elections and Redistricting and the Senate Committee on
Elections and Constitutional Amendments and providing to those
committees a report that explains the need for the extension
and includes a plan for completion.
7)Permits the SOS to accept any funds, services, equipment or
grants to further the provisions of this bill provided that
the SOS notifies the Assembly Committee on Elections and
Redistricting and the Senate Committee on Elections and
Constitutional Amendments upon accepting any amount valued at
one hundred thousand dollars ($100,000) or more.
8)Exempts the SOS from various information technology
requirements, and from project and funding approvals, for the
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purposes of implementing this bill as expeditiously as
possible. Requires the SOS to consult with the Department of
Technology, as appropriate, in developing the online filing
and disclosure system.
9)Requires the SOS, in consultation with the FPPC, before making
the system available for public use, to test the system to
ensure its functionality and then certify that the system
meets all the requirements of this bill. Permits the SOS to
consult with the Department of Technology as needed to fulfill
these testing requirements.
10)Provides that after the system developed pursuant to this
bill is certified, the previous system developed pursuant to
existing law shall no longer accept reports and filings,
unless otherwise directed by the SOS and the FPPC. Requires
the previous system to continue to allow public access to past
disclosures unless the SOS migrates that data into the new
system.
EXISTING LAW:
1)Requires the SOS, in consultation with the FPPC, to provide
online and electronic filing processes for use by specified
political committees, lobbyists, lobbying firms, and lobbyist
employers pursuant to the PRA. This online reporting and
disclosure system is commonly referred to as the Cal-Access
system.
2)Requires the SOS to make all the data filed using the online
and electronic filing process available on the Internet for
public viewing in an easily understood format.
3)Requires the SOS to provide a means or method whereby entities
that are required to file statements or reports online or
electronically with the SOS can submit those required filings
free of charge.
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4)Requires all state candidates and state political committees
that are required to file campaign reports to file those
reports online or electronically if the cumulative amount of
contributions received, expenditures made, loans made, or
loans received is $25,000 or more.
5)Provides that the Department of Technology and the Department
of General Services maintain specified oversight
responsibilities regarding state informational technology
procurements.
FISCAL EFFECT: According to the Senate Appropriations
Committee, the Secretary of State's Office indicates that it
would incur one-time costs of $11.6 million and ongoing annual
costs of $2.8 million related to information technology (General
Fund).
Costs to FPPC would increase by $131,000 in the first year, and
$124,000 ongoing (General Fund) to allow it to interface with
the new system developed by SOS. Additionally, FPPC would
experience unknown, but probably minor, costs to update forms,
and modify regulations to reflect the new information technology
system.
COMMENTS:
1)Purpose of the Bill: According to the author:
In the 2014 election cycle, major donor and
independent expenditure committees spent over $80
million in California, an amount that increases each
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cycle. The [PRA] requires campaign contributors who
reach specified contribution thresholds to file
regular reports with the [SOS] of their contributions
and expenditures. In addition to candidates for
office, "major donors" and "independent expenditure
committees" are required to file reports.
Converting filed reports into a user-friendly database
has proved to be an ongoing challenge. The [SOS's]
current campaign finance database, Cal-Access, does
not allow the public to easily access records for
contributions made by major donors and independent
expenditure committees. For example, one committee may
use variations in the spelling of its name each year,
making it almost impossible to track contributions
over time. Secretary of State Alex Padilla has called
Cal-Access "a Frankenstein's monster of code" that is
in need of "a complete rebuild." It undermines
democracy when the public cannot easily access
information about campaign and lobbying disclosures.
2)Political Reform Act and Cal-Access: In 1974, California
voters approved Proposition 9, also known as the Political
Reform Act of 1974, which among other things, requires the
disclosure of campaign contributions and expenditures and
state lobbying activities. The requirements are intended to
ensure, among others, that "Receipts and expenditures in
election campaigns [are] fully and truthfully disclosed in
order that the voters may be fully informed and improper
practices may be inhibited," and that "The activities of
lobbyists [are] regulated and their finances disclosed in
order that improper influences will not be directed at public
officials."
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In 1997, the Legislature passed and Governor Pete Wilson signed
SB 49 (Karnette), Chapter 866, Statutes of 1997, which amended
the PRA and established the Online Disclosure Act of 1997. SB
49 required the SOS, in consultation with the FPPC, to develop
and implement, by the year 2000, an online filing and
disclosure system for reports and statements required to be
filed under the PRA, as specified. As a result, the SOS
created and deployed a system called the California Automated
Lobby Activity and Campaign Contribution and Expenditure
Search System, commonly referred to as Cal-Access.
3)Cal-Access Status: As mentioned above, Cal-Access is a
database and filing system the SOS has used to make much of
the lobbying and campaign finance information available online
at no cost to users. According to the SOS, the Cal-Access
system is fueled by a complex array of computer applications
written in 14 different programming languages including
hardware, firmware, and software - some no longer supported by
their vendor - that are beyond their useful age. As a result,
the Cal-Access system has denied public access, gone offline,
and put strain on SOS staff resources. In November 2011, the
Cal-Access system went down, and the system was unavailable
for most of the month of December.
Although the system has remained online since the cause of the
failure was addressed, frequent concerns have been expressed
by users and other observers regarding the current state and
usefulness of Cal-Access. In an effort to modernize the
Cal-Access system, this bill requires the SOS, in consultation
with the FPPC, to develop and certify for public use a new
online filing and disclosure system for statements and reports
that provide public disclosure of campaign finance and
lobbying information in a user-friendly, easily understandable
format, as specified.
4)MapLight Partnership: Last year, the SOS announced the launch
of Power Search, a privately developed, open source campaign
finance search engine available on the SOS's website. Power
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Search allows anyone to access electronically-reported,
state-level campaign contribution raw data from 2001 to the
present reported to the SOS's Cal-Access campaign finance
filing and disclosure system.
Power Search can be used to quickly search for contributions to
candidates and ballot measures and contributions from
individuals, businesses and other campaign committees. It can
also be used to search for independent expenditures made to
support or oppose candidates or ballot measures. However,
only electronically-reported, state-level, campaign
contribution and independent expenditure data is provided
through Power Search at this time.
5)Technology Oversight Exemption: This bill exempts the
development of the new online filing and disclosure system
from existing information technology procurement requirements
and project and funding approvals, for the purposes of
implementing this bill as expeditiously as possible.
Additionally, this bill requires the SOS to consult with the
Department of Technology, as appropriate, in developing the
online filing and disclosure system. The provisions that
exempt the SOS from various information technology procurement
requirements are similar to provisions of SB 397 (Yee),
Chapter 561, Statutes of 2011, which permitted online voter
registration to begin prior to the completion of a new
statewide voter registration database.
6)Funding for Replacing Cal-Access: In 2012, the Legislature
passed and the Governor signed SB 1001 (Yee), Chapter 506,
Statutes of 2012, which imposed a $50 annual fee on specified
committees that are required to file disclosure reports
pursuant to the PRA and increased the fee on lobbying firms
and lobbyist employers from $25 to $50 per year per lobbyist.
Additionally, SB 1001 required the revenue generated to be
deposited into a newly-created Political Disclosure,
Accountability, Transparency, and Access Fund (PDATA Fund) in
the State Treasury and be used to update or replace
Cal-Access. It is estimated that these fees will result in
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approximately $490,000 of new revenue yearly for the PDATA
Fund.
In a letter dated March 11, 2016, Senator Hertzberg, the author
of this bill, requested a budget augmentation to allow the SOS
to modernize the Cal-Access system. In that letter, Senator
Hertzberg stated that the SOS estimated the cost of replacing
the system at $13.5 million. The letter, however, does not
address existing and anticipated moneys from the PDATA Fund.
The Governor's May revision to the 2016-2017 budget proposed
$757,000 for the procurement of contracted services for the
improvement of Cal-Access. Additionally, the Assembly
proposed an augmentation to the Governor's Cal-Access proposal
with an additional $1 million. The budget conference
committee adopted the Assembly's proposal to provide
additional funding for the replacement of the Cal-Access
system.
7)Previous Legislation: SB 3 (Yee & Lieu) of 2013, would have
required, among other things, the SOS to develop a feasibility
study report to outline the technology requirements and the
costs of a new statewide electronic campaign filing and
disclosure system. SB 3 was vetoed by Governor Brown. In his
veto message, the Governor stated that other provisions of the
bill were "costly and unnecessary," but also acknowledged that
the current campaign filing and disclosure system needed to be
upgraded and he directed the Government Operations Agency
(GOA) to consult the FPPC and the SOS and make recommendations
on the best way to improve campaign disclosure. One of the
options presented in the GOA report was to replace Cal-Access.
SB 1442 (Lara) of 2014, would have required, among other
things, the SOS, in consultation with the FPPC, to develop a
new statewide Internet-based system for the electronic filing
and public display of all records filed pursuant to the PRA
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with search capabilities that are data-driven and
user-friendly for members of the public. SB 1442 was vetoed
by Governor Brown. In his veto message, the Governor stated
that before an additional information technology project is
authorized, the SOS should complete the two other projects
that were underway at the time.
8)Arguments in Support: In support of this bill, the FPPC
writes:
The bi-partisan Commission unanimously voted to
support [SB 1349] because the current campaign and
lobbying reporting system, also known as Cal-Access,
no longer meets the needs of the [PRA] and greatly
limits the Commission's ability to fulfill its
mission.
The current Cal-Access was built in 2000 and has
remained substantially unchanged to date. The
system's limitations have forced the Commission to
update regulations and propose legislation according
to the system's capacity rather than the best public
policy. This agency is greatly dependent on a
reliable, flexible, and streamlined database that will
assist in the administration and enforcement of the
[PRA].
9)Political Reform Act of 1974: 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,
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must further the purposes of the initiative and require a
two-thirds vote of both houses of the Legislature.
REGISTERED SUPPORT / OPPOSITION:
Support
Political Reform Act Modernization Coalition (co-sponsor)
Secretary of State Alex Padilla (co-sponsor)
AARP
American Sustainable Business Council
Business Council of San Joaquin County
CA Voices for Progress
CalChamber
California Alliance for Retired Americans
California Business Roundtable
California Church IMPACT
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California Clean Money Campaign
California Common Cause
California Forward
California Labor Federation
California League of Conservation Voters
California LULAC
California Newspaper Publishers Association
California OneCare
California Political Treasurers Association
California Professional Firefighters
California School Employees Association
California State Council of the Service Employees International
Union
California Teachers Association
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Cal Innovates
CALPIRG
Campaign Legal Center
Courage Campaign
Equality California
Fair Political Practices Commission
First Amendment Coalition
Fresno Business Council
Fresno Chamber of Commerce
Howard Jarvis Taxpayers Association
Innovate Your State
Insurance Commissioner Dave Jones
League of Women Voters of California
Los Angeles County Federation of Labor
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MapLight
National Institute on Money in State Politics
NFIB
Public Citizen
Sierra Club California
Small Business Majority
Sunlight Foundation
UFCW Western States Council
Opposition
None on file.
Analysis Prepared by:Nichole Becker / E. & R. / (916)
319-2094
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