BILL ANALYSIS
AB 1181
Page 1
Date of Hearing: April 21, 2009
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
AB 1181 (Huber) - As Amended: April 14, 2009
SUBJECT : Political Reform Act of 1974: statements and reports.
SUMMARY : Requires all campaign reports that are filed with the
Secretary of State (SOS) to be filed online or electronically,
with limited exceptions. Specifically, this bill :
1)Requires all campaign statements and reports and lobbying
disclosure reports that are required to be filed with the SOS
to be filed online or electronically, regardless of the amount
of contributions received, expenditures made, payments made or
received, or payments, expenses, contributions, or gifts
reported. Exempts a statement of organization filed by a
local committee, a short form report by a candidate who
receives contributions or makes expenditures of less than
$1,000 in a calendar year, and a statement of intention to be
a candidate from this requirement.
2)Eliminates the requirement that candidates for statewide
elective office, committees formed to support or oppose those
candidate or statewide measures, and state general purpose
committees file a paper copy of all campaign reports with the
Registrar-Recorder of Los Angeles County and with the
Registrar of Voters of the City and County of San Francisco.
Eliminates the requirement that members of the Legislature and
Board of Equalization, court of appeal justices, superior
court judges, and candidates for those offices file a paper
copy of all campaign reports with the elections official of
the county with the largest number of registered voters in the
districts affected.
3)Requires candidates for the Board of Administration of the
Public Employees Retirement System to file campaign reports
online or electronically with the SOS.
4)Provides that if a late contribution is required to be
reported to the SOS, that report is to be submitted by online
or electronic transmission only, and a paper copy of the
report is not required.
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5)Provides that if a late independent expenditure is required to
be reported to the SOS, that report is to be submitted by
online or electronic transmission only, and a paper copy of
the report is not required.
6)Requires lobbyist registration statements and amendments to
those statements to be filed both by online or electronic
means and physically, submitting the original statement and
one copy in paper format.
EXISTING LAW :
1)Requires all candidates and committees who are required to
file campaign reports in connection with a state elective
office or state measure to file those reports online or
electronically if the cumulative amount of contributions
received, expenditures made, loans made, or loans received is
$50,000 or more.
2)Requires general purpose committees, including political party
committees and small contributor committees, that cumulatively
receive contributions or make expenditures of $50,000 or more
to support or oppose candidates for any elective state office
or state measures, to file campaign reports online or
electronically.
3)Requires slate mailer organizations to file campaign reports
online or electronically if the cumulative reportable payments
received or made for the purposes of producing slate mailers
is $50,000 or more.
4)Requires lobbyists, lobbying firms, lobbyist employers, and
other persons required to file periodic lobbying disclosure
reports to file such reports online or electronically if the
total amount of any category of reportable payments, expenses,
contributions, gifts, or other items is $5,000 or more in a
calendar quarter.
5)Allows any committee or other person who is required to file a
campaign report or lobbying disclosure report to file that
report online or electronically, even if he or she is not
required to do so.
6)Provides that once a person or entity files a campaign report
or lobbying disclosure report online or electronically, that
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person or entity shall file all subsequent reports online or
electronically.
FISCAL EFFECT : Unknown. State-mandated local program; contains
a crimes and infractions disclaimer.
COMMENTS :
1)Purpose of the Bill : According to the author:
Senate Bill 49 (Karnette, 1997) created online disclosure
of campaign reports in order to cast public sunshine on the
campaign contribution statements and political activities
of state leaders and lobbyists. In doing so, SB 49
provided a mechanism to carry out the stated purpose of the
Political Reform Act (PRA) that: "Receipts and expenditures
in election campaigns should be fully and truthfully
disclosed in order that the voters may be fully informed
and improper practices may be inhibited" (Government Code
81002a). Prior to SB 49, voters requested campaign
disclosure statements directly from the Secretary of State.
They were subsequently forced to sift through stacks of
bureaucratic paperwork in order to determine how campaign
contributions might affect a political or governmental
issue.
However, SB 49 is limited in scope. For example, as long
as campaigns spend or receive less than $50,000 per year,
their activities are not subject to online public review.
Similarly, lobbyists or lobbyist employers are not required
to submit electronic disclosure reports of their
expenditures unless they spend over $5,000 on political
lobbying. Thus, thousands of candidates, donors, campaign
officials and special interests are still allowed to submit
disclosure forms that are not available online.
Consequently, California currently does not meet the PRA
goal of keeping voter "fully informed."
Assembly Bill 1181 . . . provides the openness and
disclosure envisioned by the voters when they approved the
Political Reform Act without placing an undue burden on
electronic filers. Currently, the Secretary of State
provides free electronic filing software for online
disclosures as well as free assistance to online filers
help them complete the reports electronically. As a
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result, virtually all candidates, special interests and
lobbyists have the means to submit electronic finance
reports for easy voter review. In order to avoid
discouraging candidates or groups from pursuing civic or
political engagement, AB 1181 would not require candidates
to file online until they have received contributions
totaling $1,000 or more.
2)Online Disclosure and Free Electronic Filing : 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 Political
Reform Act (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 a means or method whereby individuals subject
to mandatory electronic or online filing may submit required
filings free of charge. AB 696 additionally contained a
$600,000 appropriation to the SOS to cover the costs of
developing a system for free electronic filing. AB 696
required the free filing option to be developed by December
31, 2002; however, the SOS did not report completing that free
filing option until February 1, 2007.
3)Could This Bill Be Excessively Burdensome on Small Campaigns ?
The sponsor of this bill, the SOS, argues that it is
appropriate to eliminate the thresholds at which candidates,
committees, lobbyists, lobbying firms, lobbyist employers, and
other entities are required to file reports online or
electronically because of the availability of free electronic
filing software. However, while it is true that an electronic
filing option exists that allows candidates, committees, and
other filers to file required reports electronically free of
charge, it is unclear whether this option is sufficient to
prevent this bill from imposing an unreasonable burden on
candidates and committees that raise and spend relatively
small amounts of money. Additionally, while the lack of a
free filing option was part of the reason why the Legislature
chose to establish a threshold at which individuals would be
required to file reports online or electronically, it was not
the sole reason that the Legislature felt that imposing such a
requirement on all filers could be an undue burden.
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When the Legislature enacted SB 49, one of the concerns
expressed about the requirement that campaign and lobbying
reports be filed online or electronically was that a candidate
or committee that was forced to file reports online or
electronically with the SOS could be forced to pay thousands
of dollars to a private vendor to file the reports online or
electronically. As a result, when a low cost electronic
filing option did not develop promptly after the enactment of
SB 49, the Legislature followed up with AB 696, requiring the
SOS to create a free filing option, and appropriating the
funds to the SOS to create that free filing option. While
that free filing option is now available, it is unclear
whether it is sufficiently user-friendly for the candidates,
campaigns, and other filers that would be required to use that
option (or contract with a private vendor, at a cost) under
this bill. In fact, the sponsor of this bill - the SOS -
reported to the Legislature in February 2007 that although the
free filing option had been developed and implemented, "the
forms . . . aren't nearly as 'user-friendly' as they should
be."
Additionally, when the Legislature was considering SB 49, one of
the concerns about requiring campaign and lobbying statements
to be filed online or electronically was that such a
requirement would force campaigns to have access to a computer
and an Internet connection. While it is likely much more
common that campaigns would have a computer and an Internet
connection today than in 1997, some candidates for state
office who don't raise or spend much money may not necessarily
have ready access to a computer and an Internet connection to
file campaign reports, especially since at certain times of
year and of the election cycle, reports may need to be filed
within 24-hours of receipt of a contribution.
Given these concerns, the committee may wish to consider whether
it is appropriate to completely eliminate a threshold at which
campaign and lobbying reports must be filed online or
electronically. For a candidate for Assembly who receives
contributions of $1,500 (and thus, who is required to form a
committee and file campaign reports), this bill could present
an undue burden on that candidate to report relatively little
campaign activity. Instead of eliminating the threshold at
which campaign and lobbying reports must be filed online or
electronically altogether, the committee may wish to consider
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lowering the threshold at which candidates and committees must
file reports online or electronically from $50,000 to $25,000,
and lowering the threshold at which lobbying reports must be
filed online or electronically from $5,000 to $2,500. This
amendment would significantly expand the amount of campaign
finance information that is available online without imposing
potentially significant new burdens on candidates and
committees that have relatively little campaign activity.
4)Is the Online Disclosure System Operating Effectively ? Under
existing law, the SOS is required to determine and publicly
disclose when the online and electronic campaign disclosure
systems are operating effectively. Despite the fact that
legislation requiring the development of an online campaign
disclosure system was enacted in 1997, the SOS has never made
a public determination that the online campaign disclosure
system is operating effectively. The SOS held a joint public
hearing with the Fair Political Practices Commission (FPPC) to
determine whether the online disclosure system was operating
effectively in September 2007, but that hearing was not
followed by any public determination on the system's
effectiveness by the SOS.
Given that it has been 12 years since the Legislature required
the creation of an online campaign disclosure system, and
given the fact that the SOS still has not determined that the
system is operating effectively, it is unclear whether it is
timely and appropriate to expand the situations under which
reports are required to be filed using that system.
5)Reports Required of Electronic Filers : One of the collateral
consequences of the enactment of this bill is that candidates
and campaigns that are not presently subject to the online or
electronic filing requirement may be forced to file new
campaign reports that they are not presently required to file.
Under existing law, any candidate or committee that is required
to file campaign reports online or electronically is required
to file a report online or electronically within 10 business
days each time it makes contributions or independent
expenditures totaling $5,000 or more to support or oppose the
qualification or passage of a single state ballot measure.
Candidates and primarily formed ballot measure committees that
are subject to the online or electronic filing requirement
must also file a report within 24 hours of receiving a
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contribution of $1,000 or more during the last 90 days before
an election, and must file a report within 10 business days of
receiving a contribution of $5,000 or more at any time other
than the last 90 days before an election. Finally, all
committees that are required to file campaign reports online
or electronically must file a report within 24 hours of making
an independent expenditure of $1,000 or more during the last
90 days before the election in connection with a candidate for
elective state office or a state ballot measure. These
reports are not required of candidates or committees that are
not required to file reports online or electronically.
6)Technical Amendments : The most recent amendments to this bill
contained a few minor drafting errors. To correct those
drafting errors, committee staff recommends the following
amendments:
On page 10, line 14, strike out "or Chapter 6 (commencing with
Section 86100)" and insert "Section 86100".
On page 12, line 21, strike out "be".
On page 12, line 30, strike out "be".
7)Arguments in Support : According to the sponsor of this bill,
Secretary of State Debra Bowen:
SB 49 (Karnette), Chapter 866, Statutes of 1997, requires
state candidates, committees and slate mailing
organizations to file campaign statements and reports
online if the cumulative amount of reportable
contributions, expenditures and loans made or received is
$50,000 or more. Similarly, state lobbying entities are
required to file reports online if the total amount of any
category of reportable payments, expenses, contributions,
gifts or other items is $5,000 or more in any calendar
quarter.
While the under $50,000 and under $5,000 exemptions may
have been logical when the online filing statutes were
created in 1997, the availability of free electronic filing
software makes these exemptions no longer necessary for
state lobbying entity documents and the vast majority of
state campaign documents.
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AB 1181 eliminates the under $50,000 and under $5,000
exemptions for all state lobbying entity documents and most
state campaign documents, requiring these documents to be
filed online. AB 1181 will improve transparency and make
it easier for the public to track how money is raised and
spent by state candidates, committees, slate mailing
organizations and lobbying entities.
8)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
two-thirds vote of both houses of the Legislature.
REGISTERED SUPPORT / OPPOSITION :
Support
Secretary of State Debra Bowen (sponsor)
California Common Cause
CALPIRG
League of Women Voters of California
Opposition
None on file.
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094