BILL ANALYSIS
SENATE RULES COMMITTEE SB 49
Office of Senate Floor Analyses
1020 N Street, Suite 524
(916) 445-6614 Fax: (916) 327-4478
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UNFINISHED BUSINESS
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Bill No: SB 49
Author: Karnette (D), et al
Amended: 8/7/97
Vote: 27 - Urgency
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SENATE ELECTIONS & REAP. COMMITTEE : 3-0, 4/16/97
AYES: Karnette, Polanco, Rosenthal
NOT VOTING: Craven, Lewis
SENATE APPROPRIATIONS COMMITTEE : 12-0, 5/29/97
AYES: Johnston, Alpert, Burton, Calderon, Johnson,
Karnette, Kelley, Lee, Leslie, McPherson, Mountjoy,
Vasconcellos
NOT VOTING: Dills
SENATE FLOOR : 31-7, 6/4/97
AYES: Alpert, Brulte, Burton, Calderon, Costa, Dills,
Hayden, Hughes, Hurtt, Johannessen, Johnston, Karnette,
Kelley, Kopp, Lee, Leslie, Lockyer, Maddy, McPherson,
Monteith, O'Connell, Peace, Polanco, Rainey, Rosenthal,
Schiff, Sher, Solis, Thompson, Vasconcellos, Watson
NOES: Greene, Haynes, Johnson, Knight, Lewis, Mountjoy,
Wright
NOT VOTING: Ayala, Craven
ASSEMBLY FLOOR : 73-3, 9/8/97 - See last page for vote
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SUBJECT : Political Reform Act: on-line disclosure
SOURCE : The author
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DIGEST : This bill enacts the On-line Disclosure Act
requiring the Secretary of State to develop a process
whereby reports and statements required under the Political
Reform Act can be filed on-line and viewed by the public,
as specified.
Assembly Amendments :
1.Increase the appropriation from $750,000 to $1.1 million.
2.Eliminate the requirement that any software in compliance
be available at a cost not to exceed $99.
3.Eliminate the provision which would have made this bill
inoperative if no software was available by June 1, 2000.
4.Require the Secretary of State to accept test files of
software programs to ensure compliance with the required
format, and to publish a list of those programs which
have been certified.
ANALYSIS : Existing law, the Political Reform Act (PRA),
requires that candidates, lobbyists, campaign committees
and others file statements and reports documenting their
activities. These reports and statements are filed at a
variety of locations, but primarily with the Secretary of
State, appropriate county clerks, and the Fair Political
Practices Commission (FPPC). These filings must be
personally signed by designated individuals (either the
candidate, campaign treasurer, lobbyist or other
individual, or a combination thereof).
AB 3575 (Speier, Chapter 1136, Statutes of 1994), required
the Secretary of State to conduct a study on the
feasibility of implementing a computerized system for the
electronic filing of documents required by the PRA. That
study, "Electronic Filing: A New Era in Campaign and
Lobbying Financial Disclosure," was completed in December
1995. The advisory panel that conducted the study included
representatives from the Secretary of State's office, the
FPPC, county and city clerks and other elections officials,
lobbyists, campaign treasurers, computer consultants and
public interest groups.
The Secretary of State reports that more than 30,000
documents constituting over 500,000 pages will be filed in
connection with the 1998 election cycle. Additionally,
lobbying registrations and disclosure reports aggregate
more than 30,000 documents and 80,000 pages during an
average two year legislative session.
According to the National Resource Center for State & Local
Campaign Finance Reform, during 1995-1996, two states,
Hawaii and Missouri, mandated that campaign related
documents be filed electronically. Seven other states had
voluntary programs in place. Close to half of the states
are studying the issue or have projects in development.
San Francisco, New York, and Seattle already have or are in
various stages of implementing electronic filing systems.
Five different pieces of legislation during the 1995-96
legislative session contained, at one time or another,
provisions to implement an electronic filing system for
specified campaign and lobbying documents. None of those
bills became law.
This bill enacts the On-line Disclosure Act of 1997. It
directs the Secretary of State, in consultation with the
FPPC, to develop and implement an on-line filing and
disclosure system for specified documents mandated to be
filed by the PRA.
This bill specifically requires the Secretary of State to:
1.Develop a system that provides for the on-line transfer
and acceptance of data. The system must insure the
integrity of the data and institute safeguards against
efforts to tamper with or subvert the data. In
developing the system, the Department of Information
Technology must be consulted regarding implementing
sufficient technology to prevent alteration or
manipulation of the data. The system must be approved by
the department before becoming operational.
2.Specify a non-proprietary, standardized record format or
formats using industrywide standards for transmission of
the data. Require the Secretary of State to hold public
hearings prior to development of the record format as a
means to ensure that affected entities have an
opportunity to provide input into the development
process. The format or formats are to be made public not
later than September 1, 1999 to ensure sufficient time to
comply with the requirements of this bill. Filers can
only use software that has been certified.
3.Accept test files from software vendors and other wishing
to file reports electronically for the purposes of
determining whether the file format developed pursuant to
(2) above is compatible with the Secretary of State's
system for receiving data. A list of software ad service
providers who have submitted acceptable test files is to
be published by the Secretary of State and made available
to the public. Acceptably formatted files are to be
submitted by a filer in order to meet the requirements of
this bill.
4.Develop a procedure to enable filers to comply with
existing requirements that reports be personally signed
under penalty of perjury.
5.Make the electronically filed data available at no cost
on the "largest non-proprietary, nonprofit, cooperative
computer network", a.k.a., the Internet, in a format that
is easily understood and provides the greatest public
access. The data shall be made available free of charge,
and as soon as possible after receipt. Data made
available on the public computer network shall not
contain the residential street address and building
number of any person.
6.Maintain the data on-line for a period of 10 years, and
then archive it in a secure format. In addition, a
secured, official version of all originally
electronically filed statements and reports will be
maintained for audit and other legal purposes once the
system is operational.
7.Provide assistance to those seeking public access to the
information.
8.Provide the FPPC with necessary information to enable it
to assist agencies, public officials and others with the
compliance and administration of this bill.
This bill requires that all statewide candidates and ballot
measures appearing on the November 1998 ballot, in addition
to paper filings, to submit a copy of their reports on
computer disk. The Secretary of State will provide copies
of the computer disks at cost to the public. The Secretary
of State must also disclose on-line all late contributions
and late independent expenditures made in connection with
the 1998 General Election.
This bill states that filers may voluntarily begin filing
appropriate reports on-line once the Secretary of State
publicly announces that all state-mandated development,
procurement and oversight requirements have been met.
There will be an on-line disclosure program in connection
with the 2000 primary election with the following
participants:
1.Candidates, committees, or other persons who cumulatively
receive contributions or make expenditures (including
loans) of $100,000 or more in an election cycle in
connection with a state elective office or a state ballot
measure.
2.General purpose and small contributor committees that
cumulatively receive contributions or make expenditures
totaling $100,00 or more to support or oppose candidates
for any elective state office or state ballot measure.
3.Slate mailer organizations with cumulative reportable
payments received or made of $100,000 or more.
4.Lobbyists, lobbyist employers, and lobbying firms who
have reportable payments, expenses, contributions, or
gifts of $100,000 or more in a calendar quarter.
5.The Secretary of State will be responsible for disclosing
on-line all late contributions and late independent
expenditures.
Starting July 1, 2000, on-line filing and disclosure of
reports becomes mandatory for all candidates, committees,
and lobbyists. The threshold for having to file is lowered
to $50,000 in an election cycle for candidates, committees,
and slate mailer organizations and $5,000 in a calendar
quarter for lobbyists. In determining the threshold, all
controlled committees and office holder accounts will be
included.
This bill would require the Secretary of State, in addition
to the filings listed above, to continue to disclose
on-line all late contributions and late independent
expenditures.
This bill specifies that any entity not mandated to file
on-line may do so voluntarily. Once an entity, whether by
mandate or choice, files required reports on-line, all
subsequent reports must also be filed on-line.
Paper copies of documents would still be required. The
paper copy will continue to be the official filing for
audit and legal purposes until the Secretary of State
publicly determines that the system is operating securely
and effectively. In making that determination, the
Secretary of State shall consult with the FPPC, the
Department of Information Technology, and any other
appropriate public or private entities they choose. Once
that determination is made, the requirement to file paper
forms with local filing officers would be repealed.
This bill requires the Secretary of State to report to the
Legislature on the implementation and development of the
on-line filing and disclosure requirement of the bill. One
report is due before the system is operational and a second
report after completion of the 2000 election cycle. The
FPPC may present their suggestions and comments along with
the reports.
This bill appropriates $1.1 million to develop the on-line
filing system and other provisions of the bill.
A similar bill was SB 7 (Kopp), which failed passage in the
Senate Elections and Reapportionment Committee. It was
subsequently used for another purpose.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: Yes
Appropriates $1.1 million.
SUPPORT : (Verified 9/9/97
Secretary of State
League of Women Voters
American Association of Retired Persons (AARP)
California Teachers Association
California League of Conservation Voters
Center for Civic Literacy
Mexican American Legal Defense and Educational Fund
(MALDEF)
Californians for Political Reform
California Newspaper Publishers Association
Consumers Union
California Association of Licensed Investigators
Common Cause
Fair Political Practices Commission
California Public Interest Research Group
California Commission on Aging
Your Voices Count
Silicon Valley Software Industry Coalition
OPPOSITION : (Verified 9/9/97)
Department of Finance
Office of Planning and Research
ARGUMENTS IN SUPPORT : According to the author's office,
providing easy public access to campaign and lobbying
reports over the Internet is an idea whose time has
arrived. For too long, California has relied on an
antiquated system of paper filings that makes it difficult
for the average person to find out who is giving money to
their elected officials. This bill will bring California's
campaign and lobbying reporting into the 21st century.
ARGUMENTS IN OPPOSITION : According to the Department of
Finance, "While there may be merit to the concept of
enhancing public access to campaign contribution,
expenditure and lobbying data and information by means of
the Internet, we are opposed to this measure because it
would appropriate limited General Fund resources to cover
the costs of the implementation of the system. We estimate
that this appropriation would be sufficient to fund initial
SOS costs, but any ongoing costs would represent unfunded
costs. Further, we believe this bill is premature pending
completion of a feasibility study report (FSR) and
submission of the FSR to the Department of Information
Technology for their review of the applications and the
costs, potential savings, benefits, alternatives, and other
information relating the merits of the system."
ASSEMBLY FLOOR :
AYES: Aguiar, Alby, Alquist, Aroner, Ashburn, Baca,
Baldwin, Battin, Baugh, Bordonaro, Bowen, Bowler, Brown,
Campbell, Cardenas, Cardoza, Cunneen, Davis, Ducheny,
Escutia, Figueroa, Firestone, Frusetta, Gallegos,
Goldsmith, Granlund, Havice, Hertzberg, Honda, House,
Kaloogian, Keeley, Knox, Kuehl, Kuykendall, Leach,
Lempert, Leonard, Machado, Margett, Martinez, Mazzoni,
McClintock, Migden, Morrissey, Morrow, Murray,
Napolitano, Olberg, Oller, Ortiz, Pacheco, Papan,
Poochigian, Prenter, Pringle, Richter, Runner, Scott,
Shelley, Strom-Martin, Sweeney, Takasugi, Thomson,
Torlakson, Villaraigosa, Vincent, Washington, Wayne,
Wildman, Woods, Wright, Bustamante
NOES: Ackerman, Miller, Thompson
NOT VOTING: Brewer, Floyd, Perata
DLW:ctl 9/8/97 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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