BILL ANALYSIS
AB 2771
Page 1
Date of Hearing: April 18, 2006
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Tom Umberg, Chair
AB 2771 (Leno) - As Amended: April 3, 2006
SUBJECT : Political Reform Act of 1974: electronic filing.
SUMMARY : Suspends the requirement that certain specified
entities must file campaign reports online or electronically
until January 1, 2010 or until the first filing due six months
after the Secretary of State (SOS) has developed a free online
filing process, whichever is earlier. Specifically, this bill :
1)Makes various findings and declarations about the cost to
committees for complying with the requirement that they file
online or electronically and about the failure of the SOS to
timely provide a means of free online or electronic filing.
2)Provides that any general purpose committee, small contributor
committee, or slate mailer organization that is otherwise
required by existing law to file online or electronically that
has not cumulatively received contributions or made
expenditures totaling $50,000 within three years of the
applicable beginning date for calculating cumulative totals
need not file online or electronically until January 1, 2010,
or until the first filing date more than six months after the
Fair Political Practices Commission (FPPC) has certified that
the free online filing processes developed by the SOS are
sufficiently simple to access and use that a person without
technical training or support can reasonably be expected to
file without that training or support, whichever is earlier.
3)Permits the SOS, when developing a means or method whereby
filers required to file campaign reports online or
electronically can do so free of charge, to include some
enhanced functions as long as the method does not include any
additional services beyond those needed to file the campaign
reports.
EXISTING LAW :
1)Requires, by December 31, 2002, that the SOS, in consultation
with the FPPC, develop a means or method whereby filers who
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are required to submit campaign filings online or
electronically may do so free of charge.
2)Requires the following persons to file all campaign reports
online or electronically with the SOS;
a) Candidates who have received contributions or loans, or
made expenditures or loans, cumulatively totaling $50,000
or more;
b) General purpose committees that have received
contributions or made expenditures cumulatively totaling
$50,000 or more to support or oppose candidates for
elective state office or state measures;
c) Slate mailer organizations with cumulative reportable
payments received or made of $50,000 or more; and,
d) Lobbyists, lobbying firms, or lobbyist employers with
reportable payments, expenses, contributions, gifts, or
other items of $5,000 or more in any calendar quarter.
3)Provides that the beginning date for calculating cumulative
totals to determine whether a candidate, general purpose
committee, or slate mailer organization is required to file
online or electronically is January 1, 2000 for a committee or
slate mailer organization that existed prior to January 1,
2000. For a committee or slate mailer organization that did
not exist prior to January 1, 2000, the beginning date is the
date the committee first became a committee or slate mailer
organization.
FISCAL EFFECT : Unknown
COMMENTS :
1)Purpose of the Bill : According to the author, local slate
mailer organizations that are required to file campaign
reports online have been put in an unfair position because the
SOS has not yet completed a free online filing method, as
required by law, and the two private vendors who provide
online filing services for slate mailer organizations are
unwilling to take the local slate mailer organizations as
clients because those organizations do not provide a
sufficient amount of business. As a result, these local slate
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mailer organizations are facing fines of $100 per day for
failure to file online, as required by law. The FPPC is aware
of the situation and is declining to take enforcement actions
against these local slate mailer organizations. However, a
local slate mailer organization could be subject to fines and
civil penalties if a citizen took advantage of the provisions
of the Political Reform Act (PRA) that allow any citizen to
file a civil suit to enforce the PRA.
2)Electronic Campaign Filing and Previous Legislation : SB 49
(Karnette), Chapter 866, Statutes of 1997, the Online
Disclosure Act of 1997, required the SOS to develop a process
whereby reports and statements required under the PRA could be
filed online and viewed by the public. SB 49 also required
certain candidates, committees, slate mailer organizations,
lobbyists, lobbyist employers, and lobbying firms to file
campaign reports online.
AB 696 (Longville), Chapter 917, Statutes of 2001, required the
SOS to provide, by December 31, 2002, a means or method
whereby individuals subject to online and electronic filing
disclosure requirements of the PRA may submit required filings
free of charge. At the time AB 696 was moving through the
Legislature, the SOS indicated that it would cost $600,000 to
develop a method whereby individuals subject to electronic
filing disclosure requirements of the PRA could submit those
filings free of charge. As such, AB 696 appropriated $600,000
to the SOS for that purpose.
However, more than three years after the deadline, the SOS has
not yet completed the free online filing method for all
individuals who are required to file online or electronically.
While all quarterly lobbying disclosure forms can be filed
online or electronically for free, there are a number of
campaign disclosure forms that cannot be filed online or
electronically for free. None of the required campaign
filings for slate mailer organizations can be filed online
through the SOS's web site for free.
The failure of the SOS to develop a free online filing method in
a timely manner has slowed attempts to provide for more timely
and thorough campaign disclosure. SB 1849 (Karnette) of 2004,
would have lowered certain monetary thresholds which trigger
electronic filing requirements. The lower thresholds in SB
1849 would have expanded access to campaign disclosure reports
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by requiring a larger number of candidates and committees to
file campaign reports electronically. However, Governor
Schwarzenegger vetoed SB 1849, noting in his veto message that
it would be premature to lower the filing thresholds until the
SOS finished the free online filing system.
This bill would temporarily suspend the electronic filing
requirement for certain general purpose committees and slate
mailer organizations until 2010 or until the first filing due
six months after SOS has finished the free filing system,
whichever comes first. The suspension of that requirement
would apply only for those committees and slate mailer
organizations that did not reach the cumulative thresholds for
filing electronically within the first three years of the
beginning date for calculating cumulative totals. That means
that committees and slate mailer organizations that existed
prior to January 1, 2000 will not be required to file online
or electronically unless they reached the threshold for
mandatory online filing before January 1, 2003-the date by
which the free filing system was required to be in operation.
3)Enhanced Functions ? One of the provisions of AB 696
prohibited the SOS, when developing the free filing method,
from providing "any additional or enhanced functions or
services that exceed the minimum requirements necessary to
fulfill the disclosure provisions" of state law. This
provision was included in AB 696 to protect the investment of
private vendors who had spent time and money developing
software to submit required campaign filings electronically.
Because most private vendors offered campaign services that
went beyond the electronic filing of campaign reports, the
vendors were confident that they could recoup their
investments in developing the electronic filing software as
long as the SOS was prohibited from providing these additional
services for free.
This bill would instead prohibit the SOS from providing "any
additional services that exceed the minimum requirements
necessary to fulfill the disclosure provisions" of state law.
According to the author's office, this change in law is
intended to allow the SOS to add minimal additional
functionality to the free filing method, such as offering
"pre-populated data" on the online filing option, that will
provide for greater ease of use without competing against the
additional services offered by private vendors.
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4)Related Legislation : AB 2902 (N??ez), also being heard in
this committee today, requires the SOS to report to the
Legislature on the implementation and development of online
and electronic filing of campaign reports, with a specific
emphasis on the status of the development of a method by which
filers may file required reports online or electronically free
of charge.
5)Political Reform Act of 1974 : California voters passed an
initiative, Proposition 9, in 1974 that created the FPPC and
codified significant restrictions and prohibitions on
candidates, officeholders and lobbyists. That initiative is
commonly known as the PRA. Amendments to the PRA that are not
submitted to the voters, such as those contained in this bill,
must further the purposes of the initiative and require a 2/3
vote of both houses of the Legislature.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094