BILL NUMBER: SB 701 CHAPTERED BILL TEXT CHAPTER 690 FILED WITH SECRETARY OF STATE OCTOBER 10, 1995 APPROVED BY GOVERNOR OCTOBER 9, 1995 PASSED THE ASSEMBLY SEPTEMBER 14, 1995 PASSED THE SENATE MAY 18, 1995 AMENDED IN SENATE MAY 2, 1995 AMENDED IN SENATE MARCH 27, 1995 INTRODUCED BY Senator Craven FEBRUARY 22, 1995 An act to amend Section 89506 of, to repeal Sections 89504 and 89505 of, and to repeal and add Sections 89501, 89502, and 89503 of, the Government Code, relating to the Political Reform Act of 1974. LEGISLATIVE COUNSEL'S DIGEST SB 701, Craven. Political Reform Act of 1974: gifts to public officials. Existing provisions of the Political Reform Act of 1974 require specified state officials and candidates for state office to file statements of economic interests disclosing, among other things, specified sources of gifts and income to the official. Existing provisions of the Political Reform Act of 1974 prohibit these state officials and candidates, with certain exceptions concerning travel, from receiving gifts in excess of $280 from a single source in a calendar year and from receiving honoraria if they are required to report these gifts or honoraria on their statements of economic interests. Similar provisions apply to specified local officials and candidates, except that the gift limitation and honoraria prohibition generally applies to all sources of gifts or honoraria regardless of whether or not a gift or honorarium must be reported on his or her statement of economic interests. This bill would reorganize the gift limitation and honoraria prohibition provisions of the act so that the rules currently applicable to state officials and candidates are made equally applicable to local officials and candidates, meaning that these provisions will only apply to local officials and candidates if a gift or honorarium received by the official or candidate is required to be reported on his or her statement of economic interests. The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the act's purposes with a 2/3 vote of each house and compliance with specified procedural requirements. This bill, which would declare that it furthers the purposes of the act, would therefore require a 2/3 vote. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 89501 of the Government Code is repealed. SEC. 2. Section 89501 is added to the Government Code, to read: 89501. (a) For purposes of this chapter, "honorarium" means, except as provided in subdivision (b), any payment made in consideration for any speech given, article published, or attendance at any public or private conference, convention, meeting, social event, meal, or like gathering. (b) The term "honorarium" does not include: (1) Earned income for personal services which are customarily provided in connection with the practice of a bona fide business, trade, or profession, such as teaching, practicing law, medicine, insurance, real estate, banking, or building contracting, unless the sole or predominant activity of the business, trade, or profession is making speeches. The commission shall adopt regulations to implement this subdivision. (2) Any honorarium which is not used and, within 30 days after receipt, is either returned to the donor or delivered to the State Controller for donation to the General Fund, or in the case of a public official for local government agency, delivered to his or her agency for donation to an equivalent fund, without being claimed as a deduction from income for tax purposes. (c) Section 89506 shall apply to all payments, advances, or reimbursements for travel and related lodging and subsistence. SEC. 3. Section 89502 of the Government Code is repealed. SEC. 4. Section 89502 is added to the Government Code, to read: 89502. (a) No elected state officer, elected officer of a local government agency, or other individual specified in Section 87200 shall accept any honorarium. (b) No candidate for elective state office or for elective office in a local government agency shall accept any honorarium. A person shall be deemed a candidate for purposes of this subdivision when the person has filed a statement of organization as a committee for election to a state or local office, a declaration of intent, or a declaration of candidacy, whichever occurs first. A person shall not be deemed a candidate for purposes of this subdivision after he or she is sworn into the elective office, or, if the person lost the election after the person has terminated his or her campaign statement filing obligations for that office pursuant to Section 84214 or after certification of the election results, whichever is earlier. (c) No member of a state board or commission and no designated employee of a state or local government agency shall accept an honorarium from any source if the member or employee would be required to report the receipt of income or gifts from that source on his or her statement of economic interests. (d) This section shall not apply to a person in his or her capacity as judge or candidate for judicial office. This section shall not apply to a person in his or her capacity as a part-time member of the governing board of any public institution of higher education unless that position is an elective office. SEC. 5. Section 89503 of the Government Code is repealed. SEC. 6. Section 89503 is added to the Government Code, to read: 89503. (a) No elected state officer, elected officer of a local government agency, or other individual specified in Section 87200 shall accept gifts from any single source in any calendar year with a total value of more than two hundred fifty dollars ($250). (b) No candidate for elective state office or for elective office in a local government agency shall accept gifts from any single source in any calendar year with a total value of more than two hundred fifty dollars ($250). A person shall be deemed a candidate for purposes of this subdivision when the person has filed a statement of organization as a committee for election to a state or local office, a declaration of intent, or a declaration of candidacy, whichever occurs first. A person shall not be deemed a candidate for purposes of this subdivision after he or she is sworn into the elective office, or, if the person lost the election, after the person has terminated his or her campaign statement filing obligations for that office pursuant to Section 84214 or after certification of the election results, whichever is earlier. (c) No member of a state board or commission or designated employee of a state or local government agency shall accept gifts from any single source in any calendar year with a total value of more than two hundred fifty ($250) if the member or employee would be required to report the receipt of income or gifts from that source on his or her statement of economic interests. (d) This section shall not apply to a person in his or her capacity as judge or candidate for judicial office. This section shall not apply to a person in his or her capacity as a part-time member of the governing board of any public institution of higher education unless that position is an elective office. (e) This section shall not prohibit or limit the following: (1) Payments, advances, or reimbursements for travel and related lodging and subsistence permitted by Section 89506. (2) Wedding gifts and gifts exchanged between individuals on birthdays, holidays, and other similar occasions, provided that the gifts exchanged are not substantially disproportionate in value. (f) Beginning on January 1, 1993, the commission shall adjust the gift limitation in this section on January 1 of each odd-numbered year to reflect changes in the Consumer Price Index, rounded to the nearest ten dollars ($10). (g) The limitations in this section are in addition to the limitations on gifts in Section 86203. SEC. 7. Section 89504 of the Government Code is repealed. SEC. 8. Section 89505 of the Government Code is repealed. SEC. 9. Section 89506 of the Government Code is amended to read: 89506. (a) Payments, advances, or reimbursements, for travel, including actual transportation and related lodging and subsistence which 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 apply: (1) The travel is in connection with a speech given by the elected state officer, local elected officeholder, candidate for elected state office or local elected 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 charitable or religious organization which is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code, or by a person domiciled outside the United States which 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 which 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 which is paid for from campaign funds, as permitted by Article 4 (commencing with Section 89510), or which is a contribution. (2) Travel which 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 which is reasonably necessary in connection with a bona fide business, trade, or profession and which 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 which 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. SEC. 10. The Legislature finds and declares that the provisions of this act further the purpose of the Political Reform Act of 1974 within the meaning of subdivision (a) of Section 81012 of the Government Code.