BILL NUMBER: SB 658 CHAPTERED 09/16/99 CHAPTER 433 FILED WITH SECRETARY OF STATE SEPTEMBER 16, 1999 APPROVED BY GOVERNOR SEPTEMBER 16, 1999 PASSED THE SENATE SEPTEMBER 3, 1999 PASSED THE ASSEMBLY AUGUST 30, 1999 AMENDED IN ASSEMBLY AUGUST 16, 1999 AMENDED IN ASSEMBLY JULY 6, 1999 INTRODUCED BY Senator Karnette FEBRUARY 24, 1999 An act to amend Sections 84200.3, 84602, 84603, 84604, 84605, 84606, and 84610 of the Government Code, relating to the Political Reform Act of 1974, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST SB 658, Karnette. Political Reform Act of 1974: campaign statements: electronic filing. The existing Political Reform Act of 1974 (the act) provides that a city general purpose committee is required to file campaign statements in connection with a statewide direct primary held in March of an even-numbered year, and any other election held on that same day as that election, unless it has made contributions or independent expenditures totaling $500 or more during the period July 1 through September 30. This bill instead would require one of those committees to file those campaign statements in connection with those elections, unless it has not made contributions or independent expenditures totaling $500 or more during the period July 1 through September 30. Existing provisions of the act require specified candidates for public office and committees supporting or opposing candidates or ballot measures to periodically file reports with the Secretary of State and certain local officials setting forth information concerning contributions they received and expenditures they made during the specified reporting period. Existing provisions of the act also require lobbyists, lobbying firms, and lobbyist employers to periodically file specified reports and statements with the Secretary of State. Existing law requires the Secretary of State, in consultation with the Fair Political Practices Commission, to develop an online filing process for the purposes of filing statements and reports with the Secretary of State pursuant to the act, to develop a system that provides for the online transfer of data, as specified, to make all data filed online available, as specified, and to report to the Legislature on the implementation of the online filing and disclosure requirements. Under existing law, once all state-mandated development, procurement, and oversight requirements are met, the Secretary of State must make public its availability to accept reports and filings online. Existing law requires the Secretary of State to implement an online disclosure program in connection with the June 2000 ballot and specified lobbying activities. This bill would, in addition, require the Secretary of State to develop a prescribed electronic filing process for those purposes, to make public the availability of that electronic filing process, and to determine and publicly disclose when the electronic disclosure system is operating effectively. The bill would specifically require the information to be disclosed on the Internet. This bill would require the filing process and disclosure of information to be done both online and electronically. The bill would authorize an appropriation made to the Secretary of State for the purposes of developing the existing online disclosure system to also be expended for the purposes of developing the electronic disclosure system, and would thereby make an appropriation. Existing law requires the Secretary of State to commence online disclosure with the first preelection statement filed for the period ending March 17, 2000. Existing law specifies the entities subject to those provisions as any candidate, committee, or other persons who are required, as specified, to file statements, reports, or other documents in connection with a state elective office or state measure appearing on the June 2000 ballot, and general purpose committees, as specified, receiving contributions to support or oppose candidates for any elective state office or state measure appearing on the June 2000 ballot. This bill would instead require the Secretary of State to commence online and electronic disclosure with the first preelection statement filed in connection with the 2000 statewide direct primary election. Existing law requires, beginning on July 1, 2000, and for all applicable reporting periods thereafter, that specified persons file online with the Secretary of State. This bill would also specify that the entities subject to provisions pertaining to online and electronic filings include appellate court and Supreme Court candidates and officeholders. 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. 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 those criminal penalties on certain persons who violate provisions of the bill. 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. This bill would declare that it is to take effect immediately as an urgency statute. Appropriation: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 84200.3 of the Government Code, as added by Chapter 158 of the Statutes of 1999, is amended to read: 84200.3. (a) In connection with a statewide direct primary held in March of an even-numbered year, and any other election held on the same day as that election, the following candidates and committees shall file campaign statements pursuant to Section 84200.4 for the calendar year prior to the election: (1) All candidates who have filed or are required to file a statement of intention pursuant to Section 85200 in connection with the election, their controlled committees, and committees primarily formed to support or oppose those candidates. (2) Committees formed pursuant to subdivision (a) of Section 82013 that are primarily formed to support the qualification, passage, or defeat of a measure being voted upon in the election. (3) State and county general purpose committees formed pursuant to subdivision (a) of Section 82013, except that a committee covered by this subdivision is not required to file pursuant to subdivision (a) of Section 84200.4 if it has not made contributions or independent expenditures totaling five hundred dollars ($500) or more during the period July 1 through September 30. (4) City general purpose committees formed pursuant to Section 82013, except that a committee covered by this subdivision is not required to file pursuant to subdivision (a) of Section 84200.4 if it has not made contributions or independent expenditures totaling five hundred dollars ($500) or more during the period July 1 through September 30. (5) Candidates and committees not covered under paragraphs (1) to (4), inclusive, that make contributions totaling five thousand dollars ($5,000) or more to an elected state officer, a candidate for elective state office, his or her controlled committee, or a committee primarily formed to support or oppose any elected state officer or candidate for elective state office during the period July 1, through September 30 or July 1 through December 31. (6) Any slate mailer organization that produces a slate mailer supporting or opposing a candidate or measure being voted on in the election if the slate mailer organization receives payments totaling five hundred dollars ($500) or more from any person for the support of or opposition to a candidate or ballot measure in one or more slate mailers, or expends five hundred dollars ($500) or more to produce one or more slate mailers. (b) A candidate, committee, or slate mailer organization required to file a campaign statement pursuant to this section is not required to file a campaign statement pursuant to Section 84200 or 84218 for the period ending December 31 of the year prior to the statewide direct primary election. (c) A candidate or committee who has filed a campaign statement pursuant to this section is not required to file additional statements pursuant to Section 84202.3, 84202.5, or 84202.7. SEC. 2. Section 84602 of the Government Code is amended to read: 84602. To implement the Legislature's intent, the Secretary of State, in consultation with the commission, notwithstanding any other provision of this title or any other provision of the Government Code, shall do all of the following: (a) Develop online and electronic filing processes for use by persons and entities specified in Sections 84604 and 84605 required to file statements and reports with the Secretary of State's office pursuant to Chapter 4 (commencing with Section 84100) and Chapter 6 (commencing with Section 86100). As part of that process, the Secretary of State shall define a nonproprietary standardized record format or formats using industry standards for the transmission of the data that is required of those persons and entities specified in subdivision (a) of Section 84604 and Section 84605 and that conforms with the disclosure requirements of this title. The Secretary of State shall hold public hearings prior to development of the record format or formats as a means to ensure that affected entities have an opportunity to provide input into the development process. The format or formats shall be made public no later than July 1, 1999, to ensure sufficient time to comply with the requirements of this chapter. (b) 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 subdivision (a) and is compatible with the Secretary of State's system for receiving the data. A list of software and service providers who have submitted acceptable test files shall be published by the Secretary of State and made available to the public. Acceptably formatted files shall be submitted by a filer in order to meet the requirements of this chapter. (c) Develop a system that provides for the online or electronic transfer of the data specified in this section utilizing telecommunications technology that assures the integrity of the data transmitted and that creates safeguards against efforts to tamper with or subvert the data. (d) Make all the data filed available on the Internet in an easily understood format that provides the greatest public access. The data shall be made available free of charge and as soon as possible after receipt. All late contribution and late independent expenditure reports, as defined by Sections 84203 and 84204, respectively, shall be made available on the Internet within 24 hours of receipt. The data made available on the Internet shall not contain the street name and building number of the persons or entity representatives listed on the electronically filed forms. (e) Develop a procedure for filers to comply with the requirement that they sign under penalty of perjury pursuant to Section 81004. (f) Maintain all filed data online for 10 years after the date it is filed, and then archive the information in a secure format. (g) Provide assistance to those seeking public access to the information. (h) Consult with the Department of Information Technology and implement sufficient technology to seek to prevent unauthorized alteration or manipulation of the data. (i) Provide the commission with necessary information to enable it to assist agencies, public officials, and others, with the compliance and with administration of this title. (j) Report to the Legislature on the implementation and development of the online and electronic filing and disclosure requirements of this chapter. The report shall include an examination of system security, private security issues, software availability, compliance costs to filers, and other issues relating to this chapter, recommending appropriate changes if necessary. In preparing the report, the commission may present to the Secretary of State and the Legislature its comments regarding this chapter as it relates to the duties of the commission and suggest appropriate changes if necessary. There shall be one report due before the system is operational as set forth in Section 84603, and one due no later than June 1, 2001. SEC. 3. Section 84603 of the Government Code is amended to read: 84603. The Secretary of State, once all state-mandated development, procurement, and oversight requirements have been met, shall make public their availability to accept reports online or electronically. Any filer may then commence voluntarily filing online or electronically any required report or statement that is otherwise required to be filed with the Secretary of State pursuant to Chapter 4 (commencing with Section 84100) or Chapter 6 (commencing with Section 86100) of this title. SEC. 4. Section 84604 of the Government Code is amended to read: 84604. (a) The Secretary of State shall implement an online or electronic disclosure program in connection with the 2000 state primary election and the lobbying activities specified in paragraph (4). Entities specified in paragraphs (1), (2), and (3) shall commence online or electronic disclosure with the first preelection statement filed in connection with the 2000 statewide direct primary election for the period ending January 22, 2000, and shall continue to disclose online or electronically all required reports and statements up to and including the semiannual statement for the period ending June 30, 2000. Entities specified in paragraph (4) shall commence online or electronic disclosure with the quarterly report for the period ending March 31, 2000, and shall continue to disclose online or electronically all required reports and statements up to and including the quarterly report for the period ending June 30, 2000. The entities subject to this section are the following: (1) Any candidate, including appellate court and Supreme Court candidates and officeholders, committee, or other persons who are required, pursuant to Chapter 4 (commencing with Section 84100), to file statements, reports, or other documents in connection with a state elective office or state measure appearing on the 2000 statewide direct primary ballot, provided that the total cumulative reportable amount of contributions received, expenditures made, loans made, or loans received is one hundred thousand dollars ($100,000) or more. For the purpose of cumulating totals, the period covered shall commence January 1, 1999. (2) Any general purpose committees, as defined in Section 82027.5, including the general purpose committees of political parties, and small contributor committees, as defined in Section 85203, that cumulatively receive contributions or make expenditures totaling one hundred thousand dollars ($100,000) or more to support or oppose candidates for any elective state office or state measure appearing on the 2000 statewide direct primary ballot. For the purpose of cumulating totals, the period covered shall commence January 1, 1999. (3) Any slate mailer organization with cumulative reportable payments received or made for the purposes of producing slate mailers of one hundred thousand dollars ($100,000) or more in connection with the 2000 statewide direct primary election. For the purpose of cumulating totals, the period covered shall commence January 1, 1999. (4) Any lobbyist, lobbying firm, lobbyist employer, or other persons required, pursuant to Chapter 6 (commencing with Section 86100), to file statements, reports, or other documents, provided that the total amount of any category of reportable payments, expenses, contributions, gifts, or other items is one hundred thousand dollars ($100,000) or more in a calendar quarter. (b) Filers specified in subdivision (a) shall also continue to file required disclosure forms in paper format. The paper copy shall continue to be the official version for audit and other legal purposes. Committees and other persons that are not required to file online or electronically by this section may do so voluntarily. (c) The Secretary of State shall also disclose on the Internet any late contribution or late independent expenditure report, as defined by Sections 84203 and 84204, respectively, not covered by subdivision (a). (d) It shall be presumed that online or electronic filers file under penalty of perjury. SEC. 5. Section 84605 of the Government Code is amended to read: 84605. Beginning on July 1, 2000, and for all applicable reporting periods thereafter, the following persons shall file online or electronically with the Secretary of State: (a) Any candidate, including appellate court and Supreme Court candidates and officeholders, committee, or other persons who are required, pursuant to Chapter 4 (commencing with Section 84100), to file statements, reports, or other documents in connection with a state elective office or state measure, provided that the total cumulative reportable amount of contributions received, expenditures made, loans made, or loans received is fifty thousand dollars ($50,000) or more. In determining the cumulative reportable amount, all controlled committees, as defined by Section 82016, and officeholder accounts, as defined by Section 85313, shall be included. For a committee subject to this title prior to January 1, 2000, the beginning date for calculating cumulative totals is January 1, 2000. For a committee that is first subject to this title on or after January 1, 2000, the beginning date for calculating cumulative totals is the date the committee is first subject to this title. A committee, as defined in subdivision (c) of Section 82013, shall file online or electronically if it makes contributions of fifty thousand dollars ($50,000) or more in a calendar year. (b) Any general purpose committees, as defined in Section 82027.5, including the general purpose committees of political parties, and small contributor committees, as defined in Section 85203, that cumulatively receive contributions or make expenditures totaling fifty thousand dollars ($50,000) or more to support or oppose candidates for any elective state office or state measure. For a committee subject to this title prior to January 1, 2000, the beginning date for calculating cumulative totals is January 1, 2000. For a committee that first is subject to this title on or after January 1, 2000, the beginning date for calculating cumulative totals is the date the committee is first subject to this title. (c) Any slate mailer organization with cumulative reportable payments received or made for the purposes of producing slate mailers of fifty thousand dollars ($50,000) or more. For a slate mailer organization subject to this title prior to January 1, 2000, the beginning date for calculating cumulative totals is January 1, 2000. For a slate mailer organization that first is subject to this title on or after January 1, 2000, the beginning date for calculating cumulative totals is the date the organization is first subject to this title. (d) Any lobbyist, lobbying firm, lobbyist employer or other persons required, pursuant to Chapter 6 (commencing with Section 86100), to file statements, reports, or other documents, provided that the total amount of any category of reportable payments, expenses, contributions, gifts, or other items is five thousand dollars ($5,000) or more in a calendar quarter. (e) The Secretary of State shall also disclose on the Internet any late contribution or late independent expenditure report, as defined by Sections 84203 and 84204, respectively, not covered by subdivision (a), (b), or (c). (f) Committees and other persons that are not required to file online or electronically by this section may do so voluntarily. (g) Once a person or entity is required to file online or electronically, subject to subdivision (a), (b), (c), (d), or (f), the person or entity shall be required to file all subsequent reports online or electronically. (h) It shall be presumed that online or electronic filers file under penalty of perjury. (i) Persons filing online or electronically shall also continue to file required disclosure statements and reports in paper format. The paper copy shall continue to be the official filing for audit and other legal purposes until the Secretary of State, pursuant to Section 84606, determines the system is operating securely and effectively. (j) The Secretary of State shall maintain at all times a secured, official version of all original online and electronically filed statements and reports required by this chapter. Upon determination by the Secretary of State, pursuant to Section 84606, that the system is operating securely and effectively, this online or electronic version shall be the official version for audit and other legal purposes. SEC. 6. Section 84606 of the Government Code is amended to read: 84606. The Secretary of State shall determine and publicly disclose when the online and electronic disclosure systems are operating effectively. In making this determination, the Secretary of State shall consult with the commission, the Department of Information Technology, and any other appropriate public or private entity. The online or electronic disclosure system shall not become operative until the Department of Information Technology approves the system. Upon this determination, filers required by this chapter to file online or electronically will no longer be required to file a paper copy or with local filing officers. Furthermore, the date that a filer transmits an online or electronic report shall be the date the filed report is received by the Secretary of State. SEC. 7. Section 84610 of the Government Code is amended to read: 84610. There is hereby appropriated from the General Fund of the state to the Secretary of State the sum of one million one hundred thousand dollars ($1,100,000) for the purposes of developing the online and electronic disclosure systems provided by this chapter and reimbursing local agencies for any costs they incur in the development of these systems. SEC. 8. 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. SEC. 9. 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. 10. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order for the Secretary of State to implement the online and electronic filing and disclosure systems described in Sections 1 to 7 of the act in time for the 2000 statewide direct primary election, it is necessary that this act take effect immediately.