BILL ANALYSIS �
SB 1553
Page 1
Date of Hearing: June 19, 2012
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
SB 1553 (Lowenthal) - As Amended: April 9, 2012
SENATE VOTE : 37-0
SUBJECT : Political Reform Act of 1974: campaign statements:
electronic filing.
SUMMARY : Establishes a pilot project whereby the City of Long
Beach may permit the electronic filing of campaign disclosure
statements. Specifically, this bill :
1)Establishes a pilot program, commencing on or after January 1,
2013 and ending by January 31, 2015, that permits the City of
Long Beach to permit any person who files a campaign
disclosure statement with the city clerk to file that
statement online or electronically. Provides that the pilot
program shall include all reporting periods commencing January
1, 2013, and ending on December 31, 2014. Requires any system
for online or electronic filing of campaign disclosure
documents used as part of the pilot program to comply with the
following:
a) Requires the online or electronic filing system to
accept a filing only in the standardized record format
developed by the Secretary of State (SOS) pursuant to a
provision of existing law, and that is compatible with the
SOS's system for online or electronic filing.
b) Requires the online or electronic filing system to
ensure the integrity of the data transmitted and to include
safeguards against efforts to tamper with, manipulate,
alter, or subvert the data.
c) Provides that the date of filing for a statement,
report, or other document that is filed online or
electronically shall be the day that it is received by the
city clerk.
d) Requires the city clerk to make all the data filed
available on the Internet in an easily understood format
that provides the greatest public access. Requires the
SB 1553
Page 2
data to be made available free of charge as soon as
possible after receipt. Prohibits the data made available
on the Internet from containing the street name and
building number of the persons or entity representatives
listed on the electronically filed forms or any bank
account number required to be disclosed by the filer.
e) Requires the online or electronic filing system to
include a procedure for filers to comply with the
requirements that they sign statements and reports under
penalty of perjury.
f) Requires the city clerk to enable filers to submit
filings free of charge.
g) Requires the city clerk to maintain a secured, official
version of each online or electronic statement, report, or
other document filed pursuant to this bill online for a
period of 10 years commencing from the date filed.
Provides that the secured, official version of each online
statement, report, or other document shall serve as the
official version of that report for purpose of audits and
any other legal purpose.
h) Provides that, notwithstanding any other provision of
law, any statement, report, or other document filed online
or electronically pursuant to this bill shall not be
required to be filed with the city clerk in paper format.
2)Requires the City of Long Beach, if it chooses to participate
in the pilot program created pursuant to this bill, to submit
a report on the pilot program to the Fair Political Practices
Commission (FPPC) by July 1, 2015. Requires the report to
include all of the following:
a) A listing and estimate of associated operational
efficiencies and related savings;
b) A listing and estimate of associated costs from
implementing and operating the pilot program;
c) A listing of safety, security, or privacy issues
encountered and an explanation of the manner in which those
issues were addressed;
SB 1553
Page 3
d) Available information relating to feedback from
electronic filing participants; and,
e) Any other relevant information on the pilot program.
3)Requires the FPPC to transmit any report received pursuant to
this bill, as well as any comments on the report, to the
Legislative Analyst's Office (LAO) by August 15, 2015.
Requires the LAO to provide a report to the Legislature
evaluating the pilot program by February 1, 2016.
4)Permits the FPPC, in consultation with the LAO, to develop
additional criteria for the report to be submitted by the City
of Long Beach pursuant to this bill.
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 the SOS, in consultation with the FPPC, to develop
online and electronic filing processes for use by persons and
entities that are required to file campaign disclosure reports
and lobbying disclosure reports with the SOS's office.
Required the SOS, not later than July 1, 1999, to develop a
nonproprietary standardized record format or formats for the
transmission of data required to be filed online or
electronically with the SOS under the PRA.
3)Required the SOS, not later than December 31, 2002, to develop
at least one means or method whereby filers subject to the
online or electronic disclosure requirements of the PRA are
able to submit required filings free of charge.
4)Requires certain elected officials, candidates, committees,
slate mailer organizations, lobbyists, lobbying firms,
lobbyist employers, and other persons required to file
periodic lobbying disclosure reports, to file campaign and
lobbying disclosure reports online or electronically with the
SOS.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
SB 1553
Page 4
COMMENTS :
1)Purpose of the Bill : According to the author:
The Political Reform Act of 1974 requires elected
officials, candidates for elective office and campaign
committees to file campaign statements reporting
contributions and expenditures for specified reporting
periods.
The Long Beach City Attorney's office has opined that
this option cannot be implemented without State
Legislative approval. The Political Reform Act of 1974
precludes the City from acting to adopt, by municipal
ordinance, a submittal standard different than the
traditional paper option, despite the City's charter city
status.
Paper reports can be confusing at times. Candidates may
inadvertently miss a particular field of information or
misinterpret the information required. Further, paper
reports must be transported from the location at which
they were prepared, to the City Clerks Offices.
In contrast, electronic filing minimizes the
opportunities for error on the part of the candidate, as
the program provided by the City Clerk's office can
prevent a form from being submitted by highlighting
fields of information that still need to be addressed
before the candidate is allowed to click "submit." This
ensures the form is completely filled out, and can
promote local candidate compliance with requirements of
State Law.
SB 1553 is the correct and prudent solution to doing more
with less and for promoting compliance with the Political
Reform Act and the Long Beach Municipal Code.
The City of Long Beach believes that its experience with
electronic filing of? Form 700s demonstrates a highly
successful track record of launching innovative business
processes; and we believe that this experience warrants
consideration for adoption of a pilot electronic filing
campaign finance reporting program that someday can be
authorized throughout the State of California.
SB 1553
Page 5
2)Existing Online and Electronic Disclosure : SB 49 (Karnette),
Chapter 866, Statutes of 1997, the Online Disclosure Act,
required the SOS to develop a process whereby reports and
statements required to be filed with the SOS 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 disclosure reports online. Since that time,
subsequent legislation has gradually expanded the
circumstances under which campaign and lobbying reports are
required to be filed online or electronically. Most recently,
the Legislature approved and Governor Schwarzenegger signed AB
1181 (Huber), Chapter 18, Statutes of 2010, which lowered the
monetary thresholds that trigger mandatory online or
electronic filing of reports required to be filed with the SOS
under the PRA.
While the Online Disclosure Act and subsequent amendments have
made information about certain candidates and committees
widely available on the Internet, the information that is
available through the SOS's website generally does not include
information about local candidates or about committees that
make contributions and expenditures exclusively or primarily
in local campaigns. That's because the requirements of the
Online Disclosure Act generally were limited to candidates,
committees, and other entities that were required to file
disclosure reports with the SOS. Campaign disclosure reports
filed in connection with local candidates or ballot measures
generally must be filed with local clerks or elections
officials.
Many local clerks and elections officials have implemented their
own online or electronic disclosure systems. In some cases,
the local jurisdictions require certain candidates and
committees to file disclosure reports online or electronically
pursuant to a local campaign ordinance. Even in circumstances
where local candidates and committees are required to file
reports online or electronically, however, the PRA still
generally requires paper copies of those reports to be filed
with the local clerk or elections official. As a result, even
in circumstances where local jurisdictions have taken steps to
make campaign disclosure reports more broadly available by
moving to an electronic reporting system, the local
jurisdictions still must maintain paper versions of those
SB 1553
Page 6
reports.
3)Statements of Economic Interests Electronic Filing Pilot
Project : As part of the PRA's comprehensive scheme to prevent
conflicts of interest by state and local public officials,
certain public officials are required to file statements of
economic interests (SEIs). AB 2607 (Davis), Chapter 498,
Statutes of 2008, and subsequent legislation established a
pilot project which permitted certain jurisdictions to permit
the electronic filing of an SEI in accordance with regulations
adopted by the FPPC. That pilot project began in 2009 and is
scheduled to end in December 2012. Participants in the pilot
project were required to submit a report to the FPPC in 2011,
and in turn the FPPC was required to forward the reports to
the LAO along with comments that the FPPC had on those reports
or the pilot project. Based on that information, the LAO
submitted a report to the Legislature evaluating the pilot
project in January of this year. According to the LAO report,
the participating government entities indicated that the
paper-based filing process was time-consuming and required
significant amounts of staff time to review the SEIs, work
with the filers to correct errors and maintain the paper file
systems. However, after implementing the electronic filing
system, participating entities found that electronic filing
resulted in operational efficiencies through reduced personnel
due to the significant reduction in the number of errors in
the filers' SEIs and other operational costs. Additionally,
it was reported to the LAO that none of government entities
reported any security issues with the electronic filing
systems and found that most of the public officials and
employees who filed using the electronic filing system
considered it to be a useful and an easy process.
Although the process for filing campaign reports is not
identical to the process for filing SEIs, the author and the
sponsor of this bill nonetheless argue that the pilot project
demonstrates that moving from a paper-based filing process for
campaign reports to an electronic-based process can
significantly reduce costs to local governments.
4)Filing Confirmation and Suggested Amendment : Under the SEI
pilot project that is described above, any person who files an
SEI online or electronically receives a confirmation that the
filing was received, along with the date and time that the
filing was received and a method by which the filer may view
SB 1553
Page 7
and print the data received by the filing officer. A paper
copy of the SEI and of the confirmation creates a rebuttable
presumption that the filer filed his or her SEI on time.
These provisions were included in the pilot project due to a
concern that if a person submitted his or her SEI
electronically, and that SEI was not received by the agency or
if information was lost after being received by the agency,
the filer could face penalties for failure to file due to no
fault of the filer, and would have no way of proving that the
SEI was filed in a timely manner.
The committee may wish to consider including similar provisions
in this bill, thereby providing that any entity that files
campaign disclosure reports online or electronically pursuant
to this bill will be provided with a confirmation that the
filing was received, and that the confirmation generated by
the electronic filing system indicating that the entity timely
filed the report would create a rebuttable presumption that
the report was timely filed.
5)Access to Redacted Information and Suggested Amendment : Under
existing law, certain information that is included in campaign
reports is not included on the version of campaign reports
that are made available on the Internet through the website of
the SOS. Specifically, subdivision (d) of Section 84602 of
the Government Code provides that street addresses and bank
account numbers that are required to be disclosed on campaign
reports will not appear on the versions of those reports that
are available on the Internet. This redacted information
remains available to individuals who view paper copies of
reports at the office of the SOS or at the office of the local
filing official, or who order an electronic copy of the
campaign disclosure database from the SOS.
This bill similarly requires street address and bank account
information to be excluded from the versions of reports that
appear on the Internet. However, this bill also provides that
any report filed online or electronically pursuant to this
bill is not required to be filed with the Long Beach city
clerk in paper format. Because paper copies would not be
available for public inspection by individuals who wished to
view the information that is redacted from the online versions
of the reports, the committee may wish to consider amending
this bill to require the City of Long Beach to make the
complete, unredacted version of campaign reports filed
SB 1553
Page 8
electronically available to any member of the public upon
request.
6)Period for Retention of Campaign Reports and Suggested
Amendments : This bill requires the Long Beach city clerk to
maintain all data filed pursuant to this bill for a period of
10 years, commencing from the date that the report is filed.
This retention policy differs somewhat from the policy for the
retention of data from reports that are filed online or
electronically with the SOS. In the case of reports filed
online or electronically with the SOS, existing law requires
the data from those reports to be maintained online for a
period of 10 years, and then archived in a secure format after
that period of time. The committee may wish to consider
amending this bill to establish a data retention policy for
reports filed pursuant to this bill that is similar to the
data retention policy that applies to reports filed with the
SOS. Additionally, the committee may wish to consider
amending this bill to require the data from reports to be
maintained online for a period of not less than 10 years, in
order to make it clear that the City of Long Beach can
maintain data online for a longer period of time if it so
desires.
7)Related Legislation : AB 2452 (Ammiano), which is pending in
the Senate Committee on Elections and Constitutional
Amendments, permits local government agencies to require
elected officials, candidates, and campaign committees to file
campaign disclosure reports online or electronically, subject
to certain conditions. AB 2452 was approved by this committee
by a 7-0 vote and was approved on the Assembly Floor by a 77-0
vote.
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
SB 1553
Page 9
City of Long Beach
Fair Political Practices Commission
Opposition
None on file.
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094