BILL ANALYSIS
AB 1514
Page 1
Date of Hearing: April 21, 2009
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
AB 1514 (Hayashi) - As Amended: April 2, 2009
SUBJECT : Political Reform Act of 1974: reporting.
SUMMARY : Requires all state campaign committees that are
required to file campaign reports online or electronically to
report receiving a contribution of $1,000 or more within 24
hours during the last 90 days before an election. Requires such
campaign committees to report receiving contributions of $5,000
or more received at any other time within 10 business days.
Significantly increases reporting requirements for slate mailer
organizations. Specifically, this bill :
1)Requires slate mailer organizations to file semi-annual
campaign statements regardless of the amount of payments
received or expenditures made to produce slate mailers.
2)Requires all committees, instead of just candidates for
elective state office and committees primarily formed to
support or oppose one or more state ballot measures, that are
required to file campaign reports online or electronically
with the Secretary of State (SOS), to file an online or
electronic report disclosing any contribution of $1,000 or
more received during an election cycle within 24 hours of
receiving such a contribution.
3)Requires all committees, instead of just candidates for
elective state office and committees primarily formed to
support or oppose one or more state ballot measures, that are
required to file campaign reports online or electronically
with the SOS, to file an online or electronic report
disclosing any contribution of $5,000 or more received at any
time other than during an election cycle within 10 business
days of receiving such a contribution.
4)Requires a slate mailer organization that is required to file
campaign reports online or electronically with the SOS to file
an online or electronic report disclosing any payment of
$1,000 or more received during an election cycle within 24
hours of receiving such a payment.
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5)Requires a slate mailer organization that is required to file
campaign reports online or electronically with the SOS to file
an online or electronic report disclosing any payment of
$5,000 or more received at any time other than an election
cycle within 10 business days of receiving such a payment.
EXISTING LAW :
1)Requires a slate mailer organization to file semiannual
campaign statements for each period in which it has received
payments totaling $500 or more from any person for the support
of or opposition to candidates or ballot measures in a slate
mailer, or in which it has expended $500 or more to produce
one or more slate mailers.
2)Requires a candidate for state office to file campaign reports
online or electronically with the SOS if the candidate
receives contributions or loans or makes expenditures or loans
totaling $50,000 or more.
3)Requires a committee to file campaign reports online or
electronically with the SOS if the committee receives
contributions or makes expenditures totaling $50,000 or more
to support or oppose candidates for any elective state office
or state measure.
4)Defines "election cycle" as the period of time commencing 90
days prior to an election and ending on the date of the
election.
5)Requires a candidate for elective state office who is required
to file campaign reports online or electronically with the SOS
to file an online or electronic report disclosing any
contribution of $1,000 or more received during an election
cycle within 24 hours of receiving such a contribution.
Requires such a candidate to file an online or electronic
report disclosing any contribution of $5,000 or more received
at any time other than during an election cycle within 10
business days of receiving such a contribution.
6)Requires a committee that is primarily formed to support or
oppose one or more state ballot measures and that is required
to file campaign reports online or electronically with the SOS
to file an online or electronic report disclosing any
contribution of $1,000 or more received during an election
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cycle within 24 hours of receiving such a contribution.
Requires such a committee to file an online or electronic
report disclosing any contribution of $5,000 or more received
at any time other than during an election cycle within 10
business days of receiving such a contribution.
FISCAL EFFECT : Unknown. State-mandated local program; contains
a crimes and infractions disclaimer.
COMMENTS :
1)Purpose of the Bill : According to the author:
Existing law contains a number of financial disclosure
requirements for political organizations. Certain
exemptions were created in order to limit the filing
burden on political committees in the era before the
Secretary of State's office offered a free online
filing system. Now that a free online filing system
exists, the original rationale behind the exemptions
has largely vanished. California law requires slate
mailer organizations to file semiannual campaign
statements only if they have (a) received $500 or more
form any person in support or opposition of any
candidate or ballot measure, or (b) spent $500 or more
to produce one or more slate mailings.
AB 1514 calls for increased financial disclosure by
requiring all recipient political committees and slate
mailers to report significant financial contributions
consistent with the existing requirements for state
candidates and state ballot measure committees.
2)Does Election Cycle Reporting Make Sense for General Purpose
Committees ? Part of the reason why the "election cycle"
reporting requirements in state law apply only to candidates
and primarily formed ballot measure committees is that
candidates and primarily formed committees typically have an
interest in and participate in a single election, unlike
general purpose committees, which tend to exist for much
longer periods of time and may have an interest in and
participate in many elections, including state and local
elections. As such, a candidate is subject to the "election
cycle" reporting requirements during the last 90 days before
the election where that candidate will appear on the ballot.
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Similarly, a primarily formed ballot measure committee is
subject to the "election cycle" reporting requirements during
the last 90 days before the election where the ballot measure
or measures that the committee was primarily formed to support
or oppose will appear on the ballot.
Because general purpose committees are not formed for a single
election, it is unclear which election or elections would
trigger the "election cycle" reporting requirements for such
committees if this measure is approved. Without further
amendments to this bill, one reasonable interpretation of the
requirements of this bill is that general purpose committees
would be required to report contributions of $1,000 or more
within 24 hours if they are received within 90 days of any
election held anywhere in the state. To the extent that this
bill is interpreted in that manner, it would effectively serve
to require general purpose committees to report all
contributions of $1,000 or more within 24 hours every day of
the year, due to the number of local elections held around the
state throughout the year. That means that general purpose
committees that receive a large number of donations from a
broad spectrum of people could be forced to have a campaign
treasurer ready to file reports every day of the year,
including Christmas and Thanskgiving.
On the other hand, even though general purpose committees are
not subject to the election cycle reporting requirements under
existing law, any significant contributions received by those
committees before an election in which those committees are
participating are disclosed in advance of the election under
existing law. As such, the desirability of imposing
significantly burdensome new reporting requirements on general
purpose committees for disclosure that already occurs in
advance of any relevant election is unclear.
3)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 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
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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. However, it was not until February 1, 2007
that the SOS announced completion of the free online filing
method for all individuals who are required to file online or
electronically.
The sponsor of this bill, the SOS, argues that it is appropriate
to make the "election cycle" reporting requirements that
currently apply only to candidates and primarily formed ballot
measure committees applicable to all committees. In support
of such a policy, the SOS argues that the development of a
free filing system eliminates the rationale for excluding
other committees from this "election cycle" reporting.
However, as noted above, it is not clear that the "election
cycle" reporting requirements are designed in such a way as to
make them easily applicable to general purpose committees
without imposing significantly burdensome new reporting
requirements.
Additionally, while it is true that the SOS has deployed a free
filing system as required by law, it is unclear whether that
system 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."
4)Is The Electronic Filing 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 disclosure system is
operating effectively. The SOS did hold 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.
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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)Arguments in Support : According to the sponsor, Secretary of
State Debra Bowen:
Existing law contains a number of financial disclosure
requirements for political organizations, as well as
various exemptions based on the size of the organization
and the time frame prior to an election. These exemptions
were created in order to limit the filing burden on
political committees in an era before my office developed a
free online filing system.
For example, California law requires state level candidates
and ballot measure committees to report monetary
contributions of $1,000 or more within 24 hours of their
receipt within 90 days of an election or of $5,000 or more
within 10 business days of their receipt at any other time,
but does not impose the same standards on other recipient
political committees or slate mailer organizations.
Furthermore, current law requires slate mailer
organizations to file semiannual campaign statements only
if they have (a) received $500 or more from any person for
the support or opposition to any candidate or ballot
measure, or (b) spent $500 or more to produce on or more
slate mailings.
Now that a free online filing system exists, the original
rationale behind these exemptions has largely vanished.
AB 1514 mirrors the requirements that apply to state level
candidates and state ballot measure committees by requiring
all recipient political committees and slate mailer
organizations to file a report online with my office (a)
within 24 hours of receipt of a contribution of $1,000 or
more made within 90 days of an election and (b) within 10
business days of receipt of a contribution of $5,000 or
more made anytime other than the 90 days before an
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election.
AB 1514 also eliminates the under $500 exemption for slate
mailer organizations by requiring all slate mailer
organizations to file semiannual campaign reports
regardless of how much money they have spent or received.
6)Related Legislation : AB 1181 (Huber), which is also being
heard in this committee today, proposes to eliminate the
threshold levels at which certain candidates and committees
are required to file campaign reports online or
electronically, and instead to require that all campaign
reports that are filed with the SOS be filed online or
electronically, with very limited exceptions.
7)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)
CALPIRG
League of Women Voters of California
Opposition
None on file.
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094