Amended in Senate January 14, 2014

Amended in Senate June 13, 2013

Amended in Assembly April 30, 2013

Amended in Assembly April 15, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 800

Introduced by Assembly Member Gordon

(Coauthor: Assembly Member Dickinson)

February 21, 2013

An act to amend Sections 84303,89519, 90002, 90003, 90004, and 90005 of, and to add Sections 90008 and 90009 to, the Government Code, relating to the Political Reform Act of 1974 begin insert , and declaring the urgency thereof, to take effect immediately end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 800, as amended, Gordon. Political Reform Act of 1974

(1) The Political Reform Act of 1974 prohibits an agent or independent contractor from making an expenditure of $500 or more, other than overhead or normal operating expenses, on behalf of or for the benefit of any candidate or committee unless it is reported by the candidate or committee as if the expenditure were made directly by the candidate or committee. The act requires an agent or independent contractor to make known to the candidate or committee all information subject to this reporting requirement.

This bill, in addition, would require a subagent or subcontractor who provides goods or services to or for the benefit of a candidate or committee to make known to the agent or independent contractor all of the information subject to the reporting requirement described above, and would require that disclosure of this information by a subagent or subcontractor to the agent or independent contractor or by the agent or independent contractor to the candidate or committee occur no later than three working days prior to the time the campaign statement reporting the expenditure is required to be filed, except that an expenditure that is required to be reported as a late contribution or late independent expenditure must be reported to the candidate or committee within 24 hours of the time that it is made.

(2) The act defines as “surplus campaign funds” campaign funds that are under the control of a former candidate or former elected officer as of the date of leaving elective office or the end of the postelection reporting period following the defeat of the candidate for elective office, whichever occurs last. The act restricts the purposes for which surplus campaign funds may be expended.

This bill would increase the time at which campaign funds become surplus campaign funds by 90 days following either the officer leaving elective office or the end of the postelection reporting period following the defeat of a candidate, whichever occurs last.

(3) The act requires the Franchise Tax Board to conduct audits and field investigations of various financial statements required to be submitted by lobbying firms, lobbyist employers, candidates, and specified committees.

The act prohibits the commencement of an audit or investigation of a candidate, controlled committee, or committee primarily supporting or opposing a candidate or a measure in connection with a report or statement required by specified provisions of the act until after the last date for filing the first report or statement following the general, runoff, or special election for the office for which the candidate ran, or following the election at which the measure was adopted or defeated, except as provided. The act prescribes the scope of campaign statements and reports to be included in audits and investigations of candidates, controlled committees, or committees primarily supporting or opposing a candidate or a measure.

This bill would delete these provisions that delay the commencement of an audit or investigation and prescribe the scope of audits and investigations.

In addition to the general auditing requirements imposed on the Franchise Tax Board as described above, the act authorizes the Franchise Tax Board and the Fair Political Practices Commission to make investigations and audits with respect to any reports or statements required by specified provisions of the act regarding campaign disclosure, limitations on contributions, and lobbyists.

This bill would expand this authority to allow the Franchise Tax Board and the Fair Political Practices Commission to make investigations and audits with respect to any reports or statements required under the act.

The act requires the Franchise Tax Board periodically to prepare reports regarding its audit and investigations under the act and send them to the Commission, the Secretary of State, and the Attorney General. The act requires the board to complete its report of any audit conducted on a random basis pursuant to a specified statute within one year after the person or entity subject to the audit is selected by the Commission to be audited.

This bill would extend the deadline for the Franchise Tax Board to complete its report of an audit conducted on a random basis from one to two years after the person or entity to be audited is selected by the Fair Political Practices Commission.

The act prohibits a member, employee, or agent of the Franchise Tax Board from divulging or making known in any manner any particulars of any record, documents, or information which he or she receives by virtue of conducting audits and investigations, except as provided.

This bill, in addition, would make this prohibition applicable to a member, employee, or agent of the Fair Political Practices Commission.

This bill would authorize the Fair Political Practices Commission, and the Franchise Tax Board at the direction of the Commission, to audit any record required to be maintained under the act in order to ensure compliance with the act prior to an election, even if the record is a report or statement that has not yet been filed. The bill would authorize the Commission to seek injunctive relief in a superior court to compel disclosure consistent with the act, and would require a court to grant expedited review of an action filed pursuant to this provision, as specified.

(4) Existing law makes a knowing or willful violation of the Political Reform Act of 1974 a misdemeanor and subjects offenders to criminal penalties.

This bill would impose a state-mandated local program by creating additional crimes.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

(5) The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the act’s purposes upon a 2⁄3 vote of each house and compliance with specified procedural requirements.

This bill would declare that it furthers the purposes of the act.

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(6) This bill would declare that it is to take effect immediately as an urgency statute.

end insert begin insert

The bill would delay the operative date of its provisions until July 1, 2014.

end insert

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

The Legislature finds and declares all of the
following:

(a) The people of this state have a compelling interest in
ensuring that the political contributions and expenditures of
nonprofit entities, multipurpose organizations, and other
committees are subject to prompt public disclosure prior to
elections in order to provide as much information to the public as
possible in a timely manner.

(b) If the Fair Political Practices Commission determines that
an audit or investigation is in the best interests of the public in
order to detect violations of the Political Reform Act of 1974,
judicial review of an action in this regard should receive expedited
review.

(c) It is therefore the intent of the Legislature to ensure that the
Fair Political Practices Commission be given the authority to carry
out the provisions of the Political Reform Act of 1974 in a manner
that ensures information regarding political contributions and
expenditures is provided to the public in an expedited manner prior
to elections.

SEC. 2.  

Section 84303 of the Government Code is amended
to read:

84303.  

(a) An expenditure of five hundred dollars ($500) or
more shall not be made, other than for overhead or normal
operating expenses, by an agent or independent contractor,
including, but not limited to, an advertising agency, on behalf of
or for the benefit of a candidate or committee unless it is reported
by the candidate or committee as if the expenditure were made
directly by the candidate or committee.

(b) A subagent or subcontractor who provides goods or services
to or for the benefit of a candidate or committee shall make known
to the agent or independent contractor all of the information
required to be reported by this section, and the agent or independent
contractor shall then make known to the candidate or committee
all of the information required to be reported by this section no
later than three working days prior to the time the campaign
statement reporting the expenditure is required to be filed, except
that an expenditure that is required to be reported by Section 84203
or 84204 shall be reported to the candidate or committee within
24 hours of the time that it is made.

SEC. 3.  

Section 89519 of the Government Code is amended
to read:

89519.  

(a) Upon the 90th day after leaving an elective office,
or the 90th day following the end of the postelection reporting
period following the defeat of a candidate for elective office,
whichever occurs last, campaign funds under the control of the
former candidate or elected officer shall be considered surplus
campaign funds and shall be disclosed pursuant to Chapter 4
(commencing with Section 84100).

(b) Surplus campaign funds shall be used only for the following
purposes:

(1) The payment of outstanding campaign debts or elected
officer’s expenses.

(2) The repayment of contributions.

(3) Donations to a bona fide charitable, educational, civic,
religious, or similar tax-exempt, nonprofit organization, where no
substantial part of the proceeds will have a material financial effect
on the former candidate or elected officer, any member of his or
her immediate family, or his or her campaign treasurer.

(4) Contributions to a political party committee, provided the
campaign funds are not used to support or oppose candidates for
elective office. However, the campaign funds may be used by a
political party committee to conduct partisan voter registration,
partisan get-out-the-vote activities, and slate mailers as that term
is defined in Section 82048.3.

(5) Contributions to support or oppose a candidate for federal
office, a candidate for elective office in a state other than
California, or a ballot measure.

(6) The payment for professional services reasonably required
by the committee to assist in the performance of its administrative
functions, including payment for attorney’s fees for litigation that
arises directly out of a candidate’s or elected officer’s activities,
duties, or status as a candidate or elected officer, including, but
not limited to, an action to enjoin defamation, defense of an action
brought for a violation of state or local campaign, disclosure, or
election laws, and an action from an election contest or recount.

(c) For purposes of this section, the payment for, or the
reimbursement to the state of, the costs of installing and monitoring
an electronic security system in the home or office, or both, of a
candidate or elected officer who has received threats to his or her
physical safety shall be deemed an outstanding campaign debt or
elected officer’s expense, provided that the threats arise from his
or her activities, duties, or status as a candidate or elected officer
and that the threats have been reported to and verified by an
appropriate law enforcement agency. Verification shall be
determined solely by the law enforcement agency to which the
threat was reported. The candidate or elected officer shall report
an expenditure of campaign funds made pursuant to this section
to the Commission. The report to the Commission shall include
the date that the candidate or elected officer informed the law
enforcement agency of the threat, the name and the telephone
number of the law enforcement agency, and a brief description of
the threat. No more than five thousand dollars ($5,000) in surplus
campaign funds may be used, cumulatively, by a candidate or
elected officer pursuant to this subdivision. Payments made
pursuant to this subdivision shall be made during the two years
immediately following the date upon which the campaign funds
become surplus campaign funds. The candidate or elected officer
shall reimburse the surplus fund account for the fair market value
of the security system no later than two years immediately
following the date upon which the campaign funds became surplus
campaign funds. The campaign funds become surplus campaign
funds upon sale of the property on which the system is installed,
or prior to the closing of the surplus campaign fund account,
whichever comes first. The electronic security system shall be the
property of the campaign committee of the candidate or elected
officer.

SEC. 4.  

Section 90002 of the Government Code is amended
to read:

90002.  

(a) Audits and investigations of lobbying firms and
lobbyist employers shall be performed on a biennial basis and shall
cover reports filed during a period of two years.

(b) If a lobbying firm or lobbyist employer keeps a separate
account for all receipts and payments for which reporting is
required by this chapter, the requirement of an audit under
subdivision (a) of Section 90001 shall be satisfied by an audit of
that account and the supporting documentation required to be
maintained by Section 86110.

SEC. 5.  

Section 90003 of the Government Code is amended
to read:

90003.  

In addition to the audits and investigations required by
Section 90001, the Franchise Tax Board and the Commission may
make investigations and audits with respect to any reports or
statements required by this title.

SEC. 6.  

Section 90004 of the Government Code is amended
to read:

90004.  

(a) The Franchise Tax Board shall periodically prepare
reports, which, except as otherwise provided in this section, shall
be sent to the Commission, the Secretary of State, and the Attorney
General. If the reports relate to candidates for or committees
supporting or opposing candidates for the office of Attorney
General, the reports shall be sent to the Commission, the Secretary
of State, and the District Attorneys of the Counties of Los Angeles,
Sacramento, and San Francisco. If the reports relate to local
candidates and their controlled committees, the reports shall be
sent to the Commission, the local filing officer with whom the
candidate or committee is required to file the originals of campaign
reports pursuant to Section 84215, and the district attorney for the
candidate’s county of domicile.

(b) The Franchise Tax Board shall complete its report of any
audit conducted on a random basis pursuant to Section 90001
within two years after the person or entity subject to the audit is
selected by the Commission to be audited.

(c) The reports of the Franchise Tax Board shall be public
documents and shall contain in detail the Franchise Tax Board’s
findings with respect to the accuracy and completeness of each
report and statement reviewed and its findings with respect to any
report or statement that should have been but was not filed. The
Secretary of State and the local filing officer shall place the audit
reports in the appropriate campaign statement or lobbying files.

SEC. 7.  

Section 90005 of the Government Code is amended
to read:

90005.  

A member, employee, or agent of the Franchise Tax
Board or the Commission shall not divulge or make known in any
manner the particulars of any record, documents, or information
that he or she receives by virtue of this chapter, except in
furtherance of the work of the Franchise Tax Board or the
Commission or in connection with a court proceeding or the lawful
investigation of any agency.

SEC. 8.  

Section 90008 is added to the Government Code, to
read:

90008.  

(a) It is the intent of the Legislature that the people of
California have timely access to information concerning the
campaign contributions and expenditures of all committees,
corporations, and individuals, and that this information be provided
before the election, when it is relevant, in accordance with the
requirements of this title. It is the further intent of the Legislature
that the Commission ensure that these disclosures are being made,
and that this title be liberally construed and any judicial process
be expedited to achieve this purpose.

(b) The Commission, and the Franchise Tax Board at the
direction of the Commission, may audit any record required to be
maintained under this title to ensure compliance with this title prior
to an election, even if the record is a report or statement that has
not yet been filed.

SEC. 9.  

Section 90009 is added to the Government Code, to
read:

90009.  

(a) To further the purposes of this title, the Commission
may seek injunctive relief in a superior court to compel disclosure
consistent with this title.

(b) A court shall grant expedited review to an action filed
pursuant to subdivision (a) as follows:

(1) The court shall conduct an expedited hearing with an
opportunity for the defendant to respond.

(2) Briefs of the parties shall be required pursuant to an
expedited schedule.

(c) A superior or appellate court may, at its discretion, grant a
stay of an order granting relief pursuant to subdivision (a).

SEC. 10.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

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begin insert SEC. 11 end insert begin insert . end insert   

end insert

begin insert Sections 1, 8, and 9 of this act shall become operative
on July 1, 2014. The changes made to Sections 84303, 89519,
90002, 90003, 90004, and 90005 of the Government Code by
Sections 2 to 7, inclusive, of this act shall become operative on
July 1, 2014. end insert

begin delete SEC. 11. end delete
begin insert SEC. 12. end insert   

The Legislature finds and declares that this bill
furthers the purposes of the Political Reform Act of 1974 within
the meaning of subdivision (a) of Section 81012 of the Government
Code.

begin insert

begin insert SEC. 1 end insert begin insert 3. end insert   

end insert begin insert

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

end insert begin insert

In order to implement these proposals at the earliest possible
time prior to the 2014 General Election, it is necessary that this
act take immediate effect.

end insert