BILL ANALYSIS �
AB 1673
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Date of Hearing: April 1, 2014
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
AB 1673 (Garcia) - As Amended: March 10, 2014
SUBJECT : Political Reform Act of 1974: contributions.
SUMMARY : Provides that a payment made by an occupant of a home
who is a lobbyist, lobbying firm, or lobbyist employer for costs
related to a meeting or fundraising event held in the occupant's
home is considered a "contribution" under the Political Reform
Act (PRA), regardless of the costs for the meeting or
fundraising event. Specifically, this bill exempts events held
in the home of a lobbyist, lobbying firm, or lobbyist employer
from a provision of law that provides that a payment made by an
occupant of a home for costs related to any meeting or
fundraising event held in the occupant's home is not considered
a contribution if the costs for the meeting or fundraising event
are five hundred dollars ($500) or less.
EXISTING LAW :
1)Creates the Fair Political Practices Commission (FPPC), and
makes it responsible for the impartial, effective
administration and implementation of the PRA.
2)Provides that an elected state officer or candidate for
elected state office may not accept a contribution from a
lobbyist, and a lobbyist may not make a contribution to an
elected state officer or candidate for elected state office,
if that lobbyist is registered to lobby the governmental
agency for which the candidate is seeking election or the
governmental agency of the elected state officer.
3)Defines "contribution," for the purposes of the PRA, to mean a
payment, a forgiveness of a loan, a payment of a loan by a
third party, or an enforceable promise to make a payment,
except to the extent that full and adequate consideration is
received, unless it is clear from the surrounding
circumstances that it is not made for political purposes, as
specified. Provides that a payment is made for political
purposes if it is for the purpose of influencing or attempting
to influence the action of the voters for or against the
nomination or election of a candidate or candidates, or the
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qualification or passage of any measure, or is received by or
made at the behest of a candidate.
4)Provides that a "contribution" does not include payments made
by an occupant of a home or office for costs related to any
meeting or fundraising event in the occupant's home or office
if the costs for the meeting or fundraising event are five
hundred dollars ($500) or less.
FISCAL EFFECT : Unknown. State-mandated local program; contains
a crimes and infractions disclaimer.
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COMMENTS :
1)Purpose of the Bill : According to the author:
AB 1673 will ban lobbyists hosting home fundraisers and
eliminate the dual standard that allows lobbyists to host
at their homes, non-reportable private affair fundraisers
for lawmakers, valued under $500, while at the same time
limiting direct gifts to lawmakers to only $10 per month.
2)Hosted Fundraisers : The PRA, among other things, requires
candidates and committees to disclose contributions made and
received and expenditures made in connection with campaign
activities. The term "contribution" is defined as any payment
for political purposes for which full and adequate
consideration is not provided to the donor.
When individuals or entities make payments in connection with
holding a fundraiser for a candidate, such payments ordinarily
are considered contributions to the candidate. However,
current law allows for some exceptions. For example, payments
made by the occupant of a home or office for costs related to
any meeting or fundraising event in the occupant's home or
office are not considered contributions under the PRA if the
costs for the meeting or fundraising event are five hundred
dollars ($500) or less.
Although existing law prohibits lobbyists from making
contributions to elected state officers or candidates for
elected state office if that lobbyist is registered to lobby
the governmental agency for which the candidate is seeking
election or the governmental agency of the elected state
officer, the exception to the definition of the term
"contribution" for the purposes of hosted fundraising events
does not exclude events hosted by lobbyists. As a result, a
lobbyist could hold a fundraiser at his or her home and the
cost would not be considered a contribution, as long as the
total cost of such an event did not exceed five hundred
dollars ($500). If other parties donate money or goods in
connection with the event, their payments must also be counted
to determine if five hundred dollars ($500) has been spent in
connection with the fundraiser. This includes goods or
services provided by the candidate or any other person
attending the event. If the cost of the event exceeds five
hundred dollars ($500), all payments are counted as
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contributions.
3)Recent Events : In February of this year, the FPPC approved a
settlement in a case in which a registered lobbyist hosted
campaign fundraisers for state elective officers and
candidates at his house where he provided items such as
beverages, flower arrangements, and cigars. The FPPC
investigated and determined that the total cost of the
fundraisers hosted by the lobbyist at his home, including the
value the items provided by the lobbyist, exceeded five
hundred dollars ($500). As a result, the items provided by
the lobbyist during the fundraisers constituted non-monetary
contributions to the campaign committees of the elective
officers and candidates who benefitted from the fundraisers -
all violations of the PRA. As a result, the FPPC levied one
of the largest penalties against a lobbyist and issued warning
letters to the elected officers and candidates who benefitted
from the fundraisers.
4)Does this Solve the Problem ? While this bill does exclude a
lobbyist, lobbying firm, or lobbyist employer from the
exception in current law that provides that payments made by
the occupant of a home to host a fundraiser in his or her home
are not contributions as long as the total of the event is
five hundred dollars ($500) or less, this bill still permits a
lobbyist, lobbying firm, or lobbyist employer to host a
fundraising event at an office and be included in the current
exemption as long as the total cost of the event is five
hundred dollars ($500) or less. To truly crack down on these
non-reportable private affairs, the committee may wish to
consider amending the bill to also prevent a lobbyist,
lobbying firm, or lobbyist employer from hosting a fundraising
event at an office and still be included in the current
exemption.
5)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 proposition and require a
two-thirds vote of each house of the Legislature.
REGISTERED SUPPORT / OPPOSITION :
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Support
None on file.
Opposition
None on file.
Analysis Prepared by : Nichole Becker / E. & R. / (916)
319-2094