BILL ANALYSIS
SB 124
Page 1
SENATE THIRD READING
SB 124 (Karnette)
As Amended July 21, 1997
2/3 vote. Urgency
ELECTIONS 5-0 APPROPRIATIONS 21-0
Ayes: Vincent, Ackerman, Shelley,Ayes: Migden, Poochigian,
Ackerman,
Runner, Wright Aguiar, Baca, Bordonaro,
Brewer, Cardenas, Granlund,
Kuehl, Machado, Martinez,
Olberg, Papan, Perata,
Shelley,
Sweeney, Thompson, Thomson,
Honda, Washington
SUMMARY : Amends the definitions of a "contribution," in the
Political Reform Act of 1974 (PRA) to specify when a payment made
at the behest of a candidate is or is not a contribution to the
candidate. Amends provisions of PRA that exclude certain payments
from the definitions of "gift" and "income." Specifically, this
bill :
1) Provides that a payment made at the behest of a candidate is a
contribution to the candidate unless full and adequate
consideration is received from the candidate, or it is clear from
the surrounding circumstances that the payment was made for
purposes unrelated to a candidate's candidacy for elective office.
2) Provides that a payment made at the behest of a candidate is
presumed to be unrelated to candidacy if the payment is:
a) Made principally for personal purposes, in which case the
payment may be considered a gift under PRA;
b) Made by a state, local or federal governmental agency, or
by a nonprofit organization exempt from taxation under
Section 501(c)(3) of the Internal Revenue Code; or
c) Made principally for legislative, governmental or
charitable purposes, in which case the payment is neither a
gift nor a contribution. A payment of this type at the
behest of a candidate who is an elected officer must be
reported to the elected officer's agency within 30 days
after the date the payment or payments reach $5,000 or
more, in the aggregate, from the same source in a calendar
year. A copy of that document must be forwarded to the
Fair Political Practices Commission (FPPC) or other
appropriate filing officer within 30 days of receipt of the
report.
3) Requires the elected officer's report to state the name and
SB 124
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address of the payor, the amount of the payment, the dates of
the payments, the name and address of the payee, a brief
description of the goods or services provided or purchased and
a description of the specific purpose or event for which the
payments were made.
4) Provides that a payment made at the behest of a candidate is
made for purposes related to a candidate's candidacy for
elective office if all or a portion of the payment is used for
election-related activities, as indicated in this bill.
5) Provides that a contribution at the behest of a candidate to a
different candidate or to a committee that is not controlled by
the behesting candidate is not a contribution to the behesting
candidate.
6) Provides that a payment at the behest of a committee is a
contribution to the committee unless full and adequate
consideration is received from the committee.
7) Amends the definition of "gift" to mean, in addition to other
requirements under current law, a payment that confers a
personal benefit on the recipient. Amends an exclusion from
the definition of "gift" to mean an unused gift that, within 30
days of receipt, either is returned to the donor or delivered
to a nonprofit entity exempt from taxation without being
claimed as a charitable contribution [Section 501(c)(3) of the
Internal Revenue Code].
8) Amends an exclusion from the definition of "income" to mean
reimbursement for travel expenses and per diem received from a
nonprofit entity exempt from taxation [Section 501(c)(3) of the
Internal Revenue Code].
9) Adds provisions to avoid chaptering conflicts with SB 363
(Lewis) and SB 946 (Maddy), both pending in the Assembly.
FISCAL EFFECT : Unknown
COMMENTS : According to the author, this bill supersedes rulings
by FPPC in a series of advice letters commencing in 1996 in which
FPPC concluded that any payment made at the behest of an elected
officer is a contribution to the officer unless a specific
statutory or regulatory exception applies, as determined on a case
by case basis. FPPC, in recent advice letters issued during the
past several months, further determined that certain behested
payments not only were reportable as campaign contributions but
also were prohibited under the ban on "off year" fundraising
imposed by Proposition 208. It is not possible for FPPC to
provide timely advice on a case-by-case basis on the myriad
situations that may arise with respect to events cosponsored by
elected officers. This bill attempts to provide a set of rules to
enable persons to determine when a behested payment constitutes a
contribution.
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FPPC rulings have limited the ability of elected officers to
cosponsor previously acceptable and common governmental events
involving the participation of private parties or other
governmental entities or officials. This has impacted the ability
of elected officers to carry out an important aspect of their
responsibilities. The rulings also have created the possibility
of unintended violations of the ban on off-year fundraising and
the contribution limits imposed by Proposition 208 (e.g., If a
private entity at the behest of an officeholder pays for air fare
and lodging for a witness to testify at a legislative hearing, the
payment is deemed a contribution to the member).
Analysis prepared by : Romulo I. Lopez / aerca / (916) 322-5249
FN
034004