BILL ANALYSIS
AB 2007
Page 1
Date of Hearing: April 20, 2010
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
AB 2007 (Adams) - As Amended: April 5, 2010
SUBJECT : Political Reform Act of 1974: gifts.
SUMMARY : Requires the Fair Political Practices Commission
(FPPC) to post information on its Web site about gifts that are
reported to have been given to members of the Legislature and
legislative staff on lobbying disclosure reports. Specifically,
this bill requires the FPPC, on or before February 1 of each
year, to post on its Internet Web site information describing
all gifts that were reported to have been donated to Members of
the Legislature and designated employees of the Legislature in
the previous calendar year on lobbying disclosure reports that
are filed pursuant to existing law.
EXISTING LAW :
1)Creates the FPPC, and makes it responsible for the impartial,
effective administration and implementation of the Political
Reform Act (PRA).
2)Requires any entity that is required to file a lobbying
disclosure report to include a list of activity expenses made
by the filer. Defines "activity expense" to mean any expense
incurred or payment made by a filer, or arranged by a lobbyist
or lobbying firm, which benefits in whole or in part any
elective state official, legislative official, agency
official, state candidate, or member of the immediate family
of one of those individuals. Provides that activity expenses
include gifts.
3)Requires any entity that is required to file a lobbying
disclosure report to provide each beneficiary of a gift listed
within the report information about the date and amount of
each gift reportable by the beneficiary and a description of
the goods or services provided to the beneficiary.
4)Requires candidates for and current holders of specified
elected or appointed state and local offices and designated
employees of state and local agencies to file a Statement of
Economic Interests (SEI) disclosing their financial interests,
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including investments, real property interests, and income.
Provides that, for the purposes of disclosing income on an
SEI, income includes gifts.
5)Makes violations of the PRA subject to administrative, civil,
and criminal penalties.
FISCAL EFFECT : Unknown
COMMENTS :
1)Purpose of the Bill : According to the author, "this bill
requires the [FPPC] to post on its internet website, on or
before February 1 of each year, information describing all
gifts donated to members of the Legislature and designated
employees of the Legislature in the previous calendar year and
reported to the Secretary of State."
2)Recent Fines Imposed for Failure to Report Gifts : This bill
appears to be motivated, at least in part, by a number of
fines recently imposed by the FPPC on several members of the
Legislature and legislative employees for failure to disclose
the receipt of gifts that lobbyist employers reported making
to those members and employees. Because the PRA requires
lobbyist employers to disclose any activity expenses (which
includes gifts to members of the Legislature and legislative
employees) that they incur on their lobbying disclosure
reports, the FPPC was able to compare the gifts reported as
having been made by lobbyist employers with the gifts reported
as having been received by members of the Legislature and
legislative employees on their SEIs. In cases where a
lobbyist employer reported making a gift to a member of the
Legislature or a legislative employee that was valued at $50
or more, and the member or employee did not report that gift
on his or her SEI, the FPPC initiated an investigation and
pursued enforcement actions.
This bill would require the FPPC to post information on its
Internet Web site about gifts that lobbyist employers (and
other entities that are required to file lobbying disclosure
reports) disclosed making to members of the Legislature and to
legislative employees. While the posting of this information
on the Internet may make it easier for Legislators and
legislative employees to ensure that they are disclosing gifts
that were given to them, it would not relieve Legislators and
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legislative employees of the obligation under the PRA to
report having received gifts of $50 or more in a calendar year
from a single source if that source did not report having made
a gift to that Legislator or employee.
3)Accuracy of Lobbying Reports : The information that would be
posted on the Internet by the FPPC pursuant to the provisions
of this bill would be based entirely on reports filed by
entities that are required to file lobbying disclosure
reports. In some cases, those reports may be inaccurate, and
may result in an Internet posting that misrepresents the gifts
actually received by a member of the Legislature or by a
legislative employee.
For instance, in the cases discussed above, the FPPC dropped
investigations against a number of members of the Legislature
and legislative employees who indicated that a lobbying
disclosure report that indicated that a gift had been made to
that member or employee was in error. Such erroneous reports
can occur when a member or employee RSVPs to attend a
reception, for instance, but then fails to attend, or when a
member or employee attends a reception but does not consume
and food or beverages, but fails to notify the entity filing
the lobbying disclosure report of that fact.
The committee may wish to consider whether having the FPPC post
information about gifts reported as having been made by
entities filing lobbying disclosure reports to members of the
Legislature and legislative employees could give the public an
inaccurate impression that the state agency responsible for
the enforcement of the PRA had made a determination that those
gifts actually were received.
4)Gifts Made by Entities That Don't File Lobbying Reports : In
addition to the fact that the information posted by the FPPC
pursuant to this bill may be overinclusive as indicated above,
that information would also be underinclusive in providing an
accurate picture of gifts received by members of the
Legislature and legislative employees. This is because the
FPPC only has information about gifts that are reported to
have been made by entities that are required to file lobbing
reports. When members of the Legislature and legislative
employees receive gifts that are made by an entity that does
not file lobbying reports, those gifts must be reported unless
an exemption in the PRA applies.
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5)FPPC Workload : Approximately 4,500 entities have filed
lobbyist disclosure reports with the Secretary of State (SOS)
during the 2009-2010 Legislative Session. Under the
provisions of this bill, the FPPC would be required to examine
the reports filed by each of those entities to determine if
they reported making gifts to a member of the Legislature or a
legislative employee, and if so, to post that information on
the Internet. This requirement could impose a significant new
workload on the FPPC.
6)Reports Already Available Online : Almost all of the
information that the FPPC would be required to post online
under the provisions of this bill is already available online.
Because most lobbyist disclosure reports are required to be
filed electronically with the SOS, the only information that
would be posted online under this bill that is not already
available through the Web site of the SOS is information from
lobbying disclosure reports of entities that did not reach the
threshold at which they are required to file reports
electronically. Under existing law, any person who is
required to file lobbying disclosure reports must file those
reports electronically if the total amount of reportable
payments, expenses, contributions, gifts, or other items was
$5,000 or more in any calendar quarter. Any entity that
reached that $5,000 threshold in any calendar quarter since
July 1, 2000 is required to file all subsequent lobbying
disclosure reports electronically, even if they do not reach
that $5,000 threshold in subsequent quarters. As such, it is
likely that the vast majority of gifts reported as having been
given to members of the Legislature and legislative employees
are already reported electronically and immediately posted to
the web site of the SOS. Given this fact, the desirability
for having the FPPC post this information as well is unclear.
Furthermore, this bill does not explicitly require the FPPC to
post this information in any specific format. Given that
fact, it would appear that the FPPC could comply with the
provisions of this bill simply by re-posting the lobbying
disclosure reports that appear on the SOS's Web site on its
own Web site, though it would also have to review any lobbying
disclosure filings that were not filed electronically to
determine if those would need to be made available online. If
it is the author's intent that the FPPC be required to provide
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this information in a specific format, such as in a listing by
member of the Legislature or by employee, that should be
specified in this bill to ensure that the author's intent is
realized.
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 Opposition
None on file. Fair Political Practices
Commission
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094