BILL ANALYSIS �
AB 481
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Date of Hearing: August 31, 2012
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
AB 481 (Gordon) - As Amended: August 13, 2012
CONCURRENCE IN SENATE AMENDMENTS
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|ASSEMBLY: | |(May 12, 2011) |SENATE: |38-0 |(August 30, |
| | | | | |2012) |
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(vote not relevant)
SUBJECT : Political Reform Act of 1974: campaign disclosure.
SUMMARY : Makes numerous substantive changes to state law
governing independent expenditures (IEs) in campaigns.
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Require every committee that makes an IE of $1,000 or more
within 90 days before the election involving the candidate or
measure that the IE supports or opposes, to file a report
publicly disclosing that IE within 24 hours, regardless of
whether the committee is required to file campaign reports
online or electronically with the Secretary of State (SOS).
2)Require every candidate, controlled committee, or committee
that is primarily formed or existing primarily to support or
oppose a candidate or measure, that receives a contribution of
$1,000 or more within 90 days before the election at which the
candidate or measure is to be voted on, to file a report
publicly disclosing the receipt of that contribution within 24
hours, regardless of whether the candidate or committee is
required to file campaign reports online or electronically
with the SOS. Require every political party committee that
receives a contribution of $1,000 or more within 90 days
before a state election to file a report publicly disclosing
the receipt of that contribution within 24 hours, regardless
of whether the committee is required to file campaign reports
online or electronically with the SOS.
3)Add the principal officers of campaign committees to a list of
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officials (including candidates, campaign treasurers, and
elected officers) that are required to maintain detailed
accounts, records, bills, and receipts necessary to prepare
campaign statements, to establish that campaign statements
were properly filed, and to comply with the other provisions
of the Political Reform Act (PRA). Define the term "principal
officer" for the purposes of the PRA.
4)Require a specified person, who is affiliated with a campaign
committee that is required to disclose an IE on a campaign
statement or report, to sign a verification on a report
prescribed by the Fair Political Practices Commission (FPPC),
declaring that the person has not received unreported
contributions or reimbursements for making the IE, and has not
coordinated any expenditure made during the reporting period
with the candidate, proponent of the measure, or opponent of
the candidate or measure, that is the subject of the IE.
5)Make every advertisement that is paid for by an IE under
specified circumstances, regardless of the medium, subject to
an existing requirement that currently applies only to
broadcast and mass mailing advertisements, whereby the
advertisement must include a disclosure of the name of the
committee making the IE and the names of two largest
contributors of $50,000 or more to the committee making the
IE, as specified.
6)Make corresponding changes.
EXISTING LAW :
1)Requires all candidates and committees that are required to
file campaign reports in connection with a state elective
office or state measure to file those reports online or
electronically with the SOS if the cumulative amount of
contributions received, expenditures made, loans made, or
loans received is $25,000 or more.
2)Requires general purpose committees, including political party
committees and small contributor committees, that cumulatively
receive contributions or make expenditures of $25,000 or more
to support or oppose candidates for any elective state office
or state measures, to file campaign reports online or
electronically with the SOS.
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3)Requires slate mailer organizations to file campaign reports
online or electronically with the SOS if the cumulative
reportable payments received or made for the purposes of
producing slate mailers is $25,000 or more.
4)Requires a committee that makes an IE of $1,000 or more, after
the closing date of the last campaign statement required to be
filed prior to the election but before election day, to report
the expenditure within 24 hours of the time the expenditure is
made.
5)Requires a committee that is required to file campaign reports
online or electronically with the SOS to report any IE of
$1,000 or more made in the last 90 days prior to an election
within 24 hours of the time the expenditure is made.
6)Requires a committee that receives a contribution of $1,000 or
more after the closing date of the last campaign statement
required to be filed prior to the election, but before
election day, to report the contribution within 24 hours of
the time the contribution is received.
7)Requires a committee that is required to file campaign reports
online or electronically with the SOS to report any
contribution of $1,000 or more received in the last 90 days
prior to an election within 24 hours of the time the
contribution is received.
8)Requires a broadcast or mass mailing advertisement supporting
or opposing a candidate or ballot measure that is paid for by
an IE to include a disclosure statement identifying the name
of the committee making the expenditure and the names of the
persons from whom the committee making the IE received its two
highest cumulative contributions of $50,000 or more during the
12-month period prior to the expenditure.
AS PASSED BY THE ASSEMBLY , this bill required a person who was
collecting petition signatures to wear a badge indicating
whether he or she was a paid signature gatherer or a volunteer
signature gatherer, and required similar information be
disclosed on any state or local initiative, referendum, or
recall petition.
FISCAL EFFECT : According to the Senate Appropriations
Committee, the FPPC indicates minor, absorbable General Fund
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costs.
COMMENTS :
1)Purpose of the Bill : According to the author:
More and more, voters receive information from or see
advertisements funded by �IE] committees. As with any
information, it is important to know the source. In
this case, voters should be entitled to know who is
responsible for and financing these campaigns.
According to the �FPPC], �IEs] have been on the rise
in California politics at both the state and local
level for the past decade. In June 2010, the �FPPC]
issued a finding that $127 million had been spent on
�IEs] in the previous ten years. Additional figures
from the �FPPC] show that between the June primary and
the November general election in 2010, more than $29
million in �IEs], or nearly 23% of the prior decade's
�IE] spending, was expended on the elections for four
constitutional offices. Similarly, in 2006, the Los
Angeles City Ethics Commission noted that "increasing
numbers of candidates elected in Los Angeles since
2001 have been supported by independent spending, and
few since that time have been successful without it."
The Political Reform Act (PRA) recognizes this form of
political involvement, but decisional law has also
made clear that �IEs] will continue to have a role in
elections. The Supreme Court's 2010 decisions in
Citizens United v. FEC and SpeechNow.org v. FEC
effectively allowed corporations, unions, individuals,
and associations to spend unlimited amounts of money
from their general treasuries on �IEs] for or against
candidates. The Court's decision in June to reverse
the Supreme Court of Montana in American Tradition
Partnership, Inc. v. Bullock signals that we are
entering a new era of �IEs].
This growth of �IEs] makes appropriate disclosure all
the more necessary. In order for voters to make fully
informed decisions, it is important that they know, in
a timely manner, who if not the candidate, is paying
for the political messaging. AB 481 makes four
distinct, but related changes to �IE] law. They are,
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in the order found in AB 481, as follows:
1. 24-Hour Reporting of �IEs] (SECTIONS 82036 and
82036.5)
At the state and local level virtually all �IEs] are
made within the three months prior to an election.
Under existing law applicable to state candidates or
measures, �IEs] of $1,000 or more made up to 90 days
prior to an election must be reported within 24 hours.
However, the law applicable to �IEs] on local
candidates or measures, only requires reporting within
24 hours for the last 16 days before an election. AB
481 would amend the latter section, thereby
standardizing the reporting time to 90 days prior to
an election for both state and local candidates or
measures. The bill would make a corresponding change
to the definition of "late contribution," so that it
too is consistent with the 90 days prior to an
election 24-hour reporting requirement.
The effect of the change would be simplification for
campaign report filing schedules, �FPPC] manuals, and
advice. This change would also provide the public
with increased disclosure about contributors to �IE]
committees, thereby allowing the public to make more
informed decisions about issues and candidates.
2. �IE] Committees: Principal Officers (SECTIONS
82047.6, 84102, and 84104)
According to the �FPPC], there have been a significant
number of enforcement situations where �IE] committees
are no longer active or have terminated by the time
violations are discovered or investigated. In these
circumstances, there may be no party left for the
�FPPC] to hold accountable for PRA violations. The
ability for an �IE] committee to violate the law then
disband and avoid liability is certainly inconsistent
with the spirit of the law.
AB 481 addresses the most direct remedy for this
situation, which is to establish principal officer
liability for PRA violations committed by their
committees. The bill adds principal officers to the
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existing law campaign statement-related requirements
of candidate, treasurers, and elected officers.
Beyond the circumstance where a committee is no longer
active or has terminated, the inclusion of principal
officer liability should also have the effect of
deterring violations such as failing to disclose
contributions and expenditures, and failing to
properly identify donors on campaign advertisements.
3. �IE] Source Verification (SECTION 84213)
In recent years, the �FPPC] has undertaken more money
laundering investigations and related administrative
prosecutions. AB 481 would amend the PRA to require
�IE] committees and major donors committees to verify
that they have used their own funds to qualify as a
major donor or �IE] committee. It would do so by
directing the �FPPC] to create a new verification form
that would be filed with the �FPPC]. By requiring a
signed verification, the bill would increase
accountability of existing law regarding the true
source of the contribution or expenditure.
4. Advertisement Disclosure for �IEs] (SECTION 84506)
For purposes of �IE] disclosure, an advertisement "is
authorized and paid for by a person or committee for
the purpose of supporting or opposing a candidate for
elective office or a ballot measure or ballot
measures." Under existing law, advertisements paid
for by an �IE] are required to include the name of the
committee that paid for the advertisement and the
names of the top two $50,000 contributors. There is,
however, an anomaly in the law - as the disclosure
applies only to "broadcast or mass mailing"
advertisement. Therefore, these disclosure provisions
do not apply to newspaper, other print advertisements,
or billboards.
AB 481 would require that any advertisement paid for
by an �IE] be required to include the name of the
committee that paid for the ad and the names of the
top two $50,000 contributors. There does not appear
to be a rationale why the law does not extend to all
forms of advertisement, nor should the distinction
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exist. Moreover, this change is consistent with
existing law regarding "primarily formed committees,"
which already requires disclosure of the top two
$50,000 donors to any advertisement for or against a
ballot measure. The effect of the change is to make
it easier for the public to know who is responsible
for an advertisement and the source of the
contributions being made to fund the �IE]. In turn,
voters can then make more informed decisions about
issues and candidates.
2)Proposition 34 and Growth of IEs : In 2000, the Legislature
passed and the Governor signed SB 1223 (Burton), Chapter 102,
Statutes of 2000, which became Proposition 34 on the November
2000 general election ballot. The proposition, which passed
with 60 percent of the vote, made numerous substantive changes
to the PRA, including enacting new campaign disclosure
requirements and establishing new campaign contribution
limits, limiting the amount that individuals could contribute
to state campaigns (ranging from $3,000 to $20,000 per
election at the time, depending on the office).
A study done by this committee in 2006 and a subsequent report
by the FPPC found that since campaign contribution limits went
into effect in California with the passage of Proposition 34
at the November 2000 statewide general election, the amount of
campaign spending done through IEs increased by more than
6,000 percent in Legislative elections, and more than 5,500
percent in statewide elections. In hotly contested campaigns
for seats in the Legislature, it is not uncommon for spending
through IEs to exceed the total amount of spending by all
candidates in the race. On the other hand, prior to the
enactment of contribution limits as a part of Proposition 34,
IEs were relatively rare. In the March 2000 and November 2000
elections, the last two elections that were not subject to the
Proposition 34 campaign contribution limits, the total amount
of money spent on IEs for all legislative races was less than
$500,000.
3)24 Hour Reporting of IEs and Contributions : Under existing
law, only committees that are required to file campaign
statements online or electronically with the SOS are required
to report, within 24 hours, all contributions and IEs of
$1,000 or more that are received or made during the last 90
days before an election. All other committees are required to
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report, within 24 hours, all contributions and IEs of $1,000
or more that are received or made in the last 16 days before
the election.
The requirement for committees to file campaign statements
online or electronically with the SOS generally applies only
to committees that make contributions or expenditures in
connection with races for elective state offices or state
measures, and that have received contributions or made
expenditures totaling $25,000 or more in connection with state
offices or state measures. Committees that are involved
exclusively in local races, and committees that are involved
in state races but that have not reached the $25,000
threshold, are not subject to the requirement that campaign
statements be filed online or electronically with the SOS, and
therefore are subject to a 24 hour reporting requirement for
the receipt of contributions of $1,000 or more, and the making
of IEs of $1,000 or more, only during the last 16 days before
the election.
This bill makes all committees, regardless of whether the
committee is active in state or local races, and regardless of
the cumulative amount of contributions received and
expenditures made, subject to the 24 hour reporting
requirements for the last 90 days before an election.
4)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. Most amendments to the PRA that
are not submitted to the voters, including those contained in
this bill, must further the purposes of the initiative and
require a two-thirds vote of both houses of the Legislature.
5)Prior Version : The prior version of this bill, which was
approved by the Assembly, dealt with individuals who collect
signatures on initiative, referendum, or recall petitions.
Those provisions were removed from this bill in the Senate,
and the current contents were added. As a result, this bill
has been re-referred to this committee pursuant to Assembly
Rule 77.2.
REGISTERED SUPPORT / OPPOSITION :
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Support
Fair Political Practices Commission (sponsor)
Secretary of State Debra Bowen
Opposition
None on file.
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094