BILL NUMBER: AB 974 CHAPTERED 07/19/00 CHAPTER 130 FILED WITH SECRETARY OF STATE JULY 19, 2000 PASSED THE ASSEMBLY JUNE 29, 2000 PASSED THE SENATE JUNE 22, 2000 AMENDED IN SENATE JUNE 8, 2000 AMENDED IN ASSEMBLY APRIL 5, 1999 INTRODUCED BY Assembly Member Papan FEBRUARY 25, 1999 An act to amend Sections 82033, 82034, 84200, 84202.5, 84202.7, 84203.5, 87103, 87206, 87207, 89511, and 91005 of the Government Code, relating to the Political Reform Act of 1974. e law without Governor's signature. Filed with Secretary of State July 19, 2000.) LEGISLATIVE COUNSEL'S DIGEST AB 974, Papan. Political Reform Act: monetary limits. (1) Under the existing Political Reform Act of 1974, public officials and designated employees of public agencies are required to annually file a written statement of the economic interests they possess during specified periods. Existing law requires various economic interests, such as interests in real property and investments, to be reported in those statements if the fair market value of the interest is of a specified minimum monetary amount. This bill would increase from $1,000 to $2,000 the minimum monetary amount of interests in real property and in investments required to be reported in those statements. Existing law prohibits a public official at any level of state or local government from making, participating in making, or in any way attempting to use his or her official position to influence a governmental decision in which he or she knows or has reason to know he or she has a financial interest. Existing law provides that a public official has a financial interest in a decision if it is reasonably foreseeable that the decision will have a material financial effect, distinguishable from the effect on the public generally, on any business entity in which the public official has a direct or indirect investment worth $1,000 or more, on any real property in which the public official has a direct or indirect interest worth $1,000 or more, or on any source of income, except gifts or certain loans, aggregating $250 or more in value provided to, received by, or promised to, the public official within 12 months prior to the time the decision was made. This bill would increase from $1,000 to $2,000 for both investments in business entities and interests in real property, and from $250 to $500 for amounts from sources of income, the minimum values that establish financial interests of a public official for purposes of his or her disqualification in making, participating in, of influencing, those governmental decisions. This bill also would increase the minimum amounts of contributions required to be reported in specified statements of committees. The bill would make other technical nonsubstantive changes to existing law. Existing law provides that any person who makes or receives a contribution, gift, or expenditure in violation of specified provisions of law is liable in a civil action brought by the civil prosecutor or by a person residing within the jurisdiction for an amount up to $500 or 3 times the amount of the contribution, gift, or expenditure, whichever amount is greater. This bill would increase from $500 to $1,000 the minimum amount of civil penalty that may be imposed under those circumstances. (2) Existing law makes a violation of the act subject to administrative, civil, and criminal penalties. This bill would impose a state-mandated local program by imposing these criminal penalties on persons who violate the provisions of the bill. (3) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. (4) 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 82033 of the Government Code is amended to read: 82033. "Interest in real property" includes any leasehold, beneficial or ownership interest or an option to acquire such an interest in real property located in the jurisdiction owned directly, indirectly or beneficially by the public official, or other filer, or his or her immediate family if the fair market value of the interest is two thousand dollars ($2,000) or more. Interests in real property of an individual includes a pro rata share of interests in real property of any business entity or trust in which the individual or immediate family owns, directly, indirectly or beneficially, a 10-percent interest or greater. SEC. 2. Section 82034 of the Government Code is amended to read: 82034. "Investment" means any financial interest in or security issued by a business entity, including but not limited to common stock, preferred stock, rights, warrants, options, debt instruments and any partnership or other ownership interest owned directly, indirectly or beneficially by the public official, or other filer, or his or her immediate family, if the business entity or any parent, subsidiary or otherwise related business entity has an interest in real property in the jurisdiction, or does business or plans to do business in the jurisdiction, or has done business within the jurisdiction at any time during the two years prior to the time any statement or other action is required under this title. No asset shall be deemed an investment unless its fair market value equals or exceeds two thousand dollars ($2,000). The term "investment" does not include a time or demand deposit in a financial institution, shares in a credit union, any insurance policy, interest in a diversified mutual fund registered with the Securities and Exchange Commission under the Investment Company Act of 1940 or a common trust fund which is created pursuant to Section 1564 of the Financial Code, or any bond or other debt instrument issued by any government or government agency. Investments of an individual includes a pro rata share of investments of any business entity, mutual fund, or trust in which the individual or immediate family owns, directly, indirectly or beneficially, a 10-percent interest or greater. The term "parent, subsidiary or otherwise related business entity" shall be specifically defined by regulations of the commission. SEC. 3. Section 84200 of the Government Code is amended to read: 84200. (a) Except as provided in paragraphs (1), (2), and (3), elected officers, candidates, and committees pursuant to subdivision (a) of Section 82013 shall file semiannual statements each year no later than July 31 for the period ending June 30, and no later than January 31 for the period ending December 31. (1) A candidate who, during the past six months has filed a declaration pursuant to Section 84206 shall not be required to file a semiannual statement for that six-month period. (2) Elected officers whose salaries are less than two hundred dollars ($200) a month, judges, judicial candidates, and their controlled committees shall not file semiannual statements pursuant to this subdivision for any six-month period in which they have not made or received any contributions or made any expenditures. (3) A judge who is not listed on the ballot for reelection to, or recall from, any elective office during a calendar year shall not file semiannual statements pursuant to this subdivision for any six-month period in that year if both of the following apply: (A) The judge has not received any contributions. (B) The only expenditures made by the judge during the calendar year are contributions from the judge's personal funds to other candidates or committees totaling less than one thousand dollars ($1,000). (b) All committees pursuant to subdivision (b) or (c) of Section 82013 shall file campaign statements each year no later than July 31 for the period ending June 30, and no later than January 31 for the period ending December 31, if they have made contributions or independent expenditures, including payments to a slate mailer organization, during the six-month period before the closing date of the statements. SEC. 4. Section 84202.5 of the Government Code is amended to read: 84202.5. (a) Any candidate or any committee pursuant to subdivision (a) of Section 82013 which makes contributions totaling ten thousand dollars ($10,000) or more in connection with an election, including a runoff election, shall file a supplemental preelection statement no later than 12 days before the election, for the period ending 17 days before the election. This statement shall be filed with each office with which the candidate or committee filing the statement is required to file its next campaign statement pursuant to Section 84215. (b) This section shall not apply to candidates or committees during any semiannual period in which the candidate or committee is required to file preelection statements pursuant to Section 84200.5. (c) If a candidate or committee makes contributions totaling ten thousand dollars ($10,000) or more in connection with an election and all of those contributions are reported pursuant to Section 84200 or 84202.7 on or before the closing date specified in subdivision (a), the candidate or committee shall not be required to file additional statements for that period pursuant to this section. SEC. 5. Section 84202.7 of the Government Code is amended to read: 84202.7. (a) Except as provided in subdivision (b), during an odd-numbered year, any committee by virtue of Section 82013 that makes contributions totaling ten thousand dollars ($10,000) or more to elected state officers, their controlled committees, or committees primarily formed to support or oppose any elected state officer during a period specified below shall file campaign statements on the following dates: (1) No later than April 30 for the period of January 1 through March 31. (2) No later than October 31 for the period of July 1 through September 30. (b) If a committee makes contributions totaling ten thousand dollars ($10,000) or more to elected state officers, their controlled committees, or committees primarily formed to support or oppose any elected state officer during a period specified in subdivision (a), and all of those contributions are reported pursuant to Section 84202.5 on or before the time specified in subdivision (a), the committee shall not be required to file additional statements for that period pursuant to this section. SEC. 6. Section 84203.5 of the Government Code is amended to read: 84203.5. (a) In addition to any campaign statements required by this article, if a candidate or committee has made independent expenditures totaling one thousand dollars ($1,000) or more in a calendar year to support or oppose a candidate, a measure or qualification of a measure, it shall file independent expenditure reports at the same time, covering the same periods, and in the places where the candidate or committee would be required to file campaign statements under this article, as if it were formed or existing primarily to support or oppose the candidate or measure or qualification of the measure. No independent expenditure report need be filed to cover a period for which there has been no activity to report. (b) An independent expenditure report shall contain the following information: (1) The name, street address, and telephone number of the candidate or committee making the expenditure and of the committee's treasurer, and the number assigned to the committee by the Secretary of State. (2) If the report is related to a candidate, the full name of the candidate and the office and district for which the candidate seeks nomination or election. If the report is related to a measure or qualification of a measure, the number or letter of the measure, or if none has yet been assigned, a brief description of the subject matter of the measure, and the jurisdiction in which the measure is to be voted on or would be voted on if it qualified. (3) The total amount of expenditures related to the candidate or measure during the period covered by the report made to persons who have received less than one hundred dollars ($100). (4) The total amount of expenditures related to the candidate or measure during the period covered by the report made to persons who have received one hundred dollars ($100) or more. (5) For each person to whom an expenditure of one hundred dollars ($100) or more related to the candidate or measure has been made during the period covered by the report and for each person who has provided consideration for an expenditure of one hundred dollars ($100) or more during the period covered by the report: (A) His or her full name. (B) His or her street address. (C) If the person is a committee, the name of the committee, the number assigned to the committee by the Secretary of State, or if no number has been assigned, the full name and street address of the treasurer of the committee. (D) The date of the expenditure. (E) The amount of the expenditure. (F) A brief description of the consideration for which each expenditure was made and the value of the consideration if less than the total amount of the expenditure. (G) The cumulative amount of expenditures to such person. (6) A list of all the filing officers with whom the committee filed its most recent campaign statement. SEC. 7. Section 87103 of the Government Code is amended to read: 87103. A public official has a financial interest in a decision within the meaning of Section 87100 if it is reasonably foreseeable that the decision will have a material financial effect, distinguishable from its effect on the public generally, on the official, a member of his or her immediate family, or on any of the following: (a) Any business entity in which the public official has a direct or indirect investment worth two thousand dollars ($2,000) or more. (b) Any real property in which the public official has a direct or indirect interest worth two thousand dollars ($2,000) or more. (c) Any source of income, except gifts or loans by a commercial lending institution made in the regular course of business on terms available to the public without regard to official status, aggregating five hundred dollars ($500) or more in value provided or promised to, received by, the public official within 12 months prior to the time when the decision is made. (d) Any business entity in which the public official is a director, officer, partner, trustee, employee, or holds any position of management. (e) Any donor of, or any intermediary or agent for a donor of, a gift or gifts aggregating two hundred fifty dollars ($250) or more in value provided to, received by, or promised to the public official within 12 months prior to the time when the decision is made. The amount of the value of gifts specified by this subdivision shall be adjusted biennially by the commission to equal the same amount determined by the commission pursuant to subdivision (f) of Section 89503. For purposes of this section, indirect investment or interest means any investment or interest owned by the spouse or dependent child of a public official, by an agent on behalf of a public official, or by a business entity or trust in which the official, the official's agents, spouse, and dependent children own directly, indirectly, or beneficially a 10-percent interest or greater. SEC. 8. Section 87206 of the Government Code is amended to read: 87206. If an investment or an interest in real property is required to be disclosed under this article, the statement shall contain: (a) A statement of the nature of the investment or interest. (b) The name of the business entity in which each investment is held, and a general description of the business activity in which the business entity is engaged. (c) The address or other precise location of the real property. (d) A statement whether the fair market value of the investment or interest in real property equals or exceeds two thousand dollars ($2,000) but does not exceed ten thousand dollars ($10,000), whether it exceeds ten thousand dollars ($10,000) but does not exceed one hundred thousand dollars ($100,000), whether it exceeds one hundred thousand dollars ($100,000) but does not exceed one million dollars ($1,000,000), or whether it exceeds one million dollars ($1,000,000). (e) In the case of a statement filed under Sections 87203 or 87204, if the investment or interest in real property was partially or wholly acquired or disposed of during the period covered by the statement, the date of acquisition or disposal. (f) For purposes of disclosure under this article, "interest in real property" does not include the principal residence of the filer or any other property which the filer utilizes exclusively as the personal residence of the filer. SEC. 9. Section 87207 of the Government Code is amended to read: 87207. (a) When income is required to be reported under this article, the statement shall contain, except as provided in subdivision (b): (1) The name and address of each source of income aggregating five hundred dollars ($500) or more in value, or fifty dollars ($50) or more in value if the income was a gift, and a general description of the business activity, if any, of each source. (2) A statement whether the aggregate value of income from each source, or in the case of a loan, the highest amount owed to each source, was at least five hundred dollars ($500) but did not exceed one thousand dollars ($1,000), whether it was in excess of one thousand dollars ($1,000) but was not greater than ten thousand dollars ($10,000), whether it was greater than ten thousand dollars ($10,000) but not greater than one hundred thousand dollars ($100,000), or whether it was greater than one hundred thousand dollars ($100,000). (3) A description of the consideration, if any, for which the income was received. (4) In the case of a gift, the amount and the date on which the gift was received. (5) In the case of a loan, the annual interest rate, the security, if any, given for the loan, and the term of the loan. (b) When the filer's pro rata share of income to a business entity, including income to a sole proprietorship, is required to be reported under this article, the statement shall contain: (1) The name, address, and a general description of the business activity of the business entity. (2) The name of every person from whom the business entity received payments if the filer's pro rata share of gross receipts from that person was equal to or greater than ten thousand dollars ($10,000) during a calendar year. (c) When a payment, including an advance or reimbursement, for travel is required to be reported pursuant to this section, it may be reported on a separate travel reimbursement schedule which shall be included in the filer's statement of economic interest. A filer who chooses not to use the travel schedule shall disclose payments for travel as a gift, unless it is clear from all surrounding circumstances that the services provided were equal to or greater in value than the payments for the travel, in which case the travel may be reported as income. SEC. 10. Section 89511 of the Government Code is amended to read: 89511. (a) This article applies to campaign funds held by candidates for elective office, elected officers, controlled committees, ballot measure committees, committees opposed to a candidate or measure, and any committee which qualifies as a committee pursuant to subdivision (a) of Section 82013. (b) (1) For purposes of this chapter, "campaign funds" includes any contributions, cash, cash equivalents, and other assets received or possessed by a committee as defined by subdivision (a) of Section 82013. (2) For purposes of this chapter, "committee" means a controlled committee, ballot measure committee, committee opposed to a candidate or measure, and any committee which qualifies as a committee pursuant to subdivision (a) of Section 82013. (3) For purposes of this chapter, "substantial personal benefit" means an expenditure of campaign funds which results in a direct personal benefit with a value of more than two hundred dollars ($200) to a candidate, elected officer, or any individual or individuals with authority to approve the expenditure of campaign funds held by a committee. (4) For purposes of this article, "household" includes the candidate's or elected officer's spouse, dependent children, and parents who reside with the candidate or elected officer. SEC. 11. Section 91005 of the Government Code is amended to read: 91005. (a) Any person who makes or receives a contribution, gift, or expenditure in violation of Section 84300, 84304, 86203, or 86204 is liable in a civil action brought by the civil prosecutor or by a person residing within the jurisdiction for an amount up to one thousand dollars ($1,000) or three times the amount of the unlawful contribution, gift, or expenditure, whichever amount is greater. (b) Any designated employee or public official specified in Section 87200, except an elected state officer, who realizes an economic benefit as a result of a violation of Section 87100 or of a disqualification provision of a conflict of interest code is liable in a civil action brought by the civil prosecutor or by a person residing within the jurisdiction for an amount up to three times the value of the benefit. SEC. 12. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. SEC. 13. The Legislature finds and declares that the provisions of this act further the purposes of the Political Reform Act of 1974 within the meaning of subdivision (a) of Section 81012 of the Government Code.