BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1673|
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CONSENT
Bill No: AB 1673
Author: Garcia (D)
Amended: 4/9/14 in Assembly
Vote: 27
SENATE ELECTIONS & CONST. AMEND. COMM. : 5-0, 6/24/14
AYES: Padilla, Anderson, Hancock, Jackson, Pavley
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 75-0, 5/8/14 - See last page for vote
SUBJECT : Political Reform Act of 1974: contributions
SOURCE : Author
DIGEST : This bill provides that a campaign contribution does
not include fundraising events held in a home or office if the
occupant is not a lobbyist, lobbying firm, or lobbyist employer.
ANALYSIS :
Existing law:
1. Provides, pursuant to the Political Reform Act (PRA),
provides for the comprehensive regulation of campaign
financing, including requiring the reporting of campaign
contributions and expenditures and imposing other reporting
and recordkeeping requirements on campaign committees.
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2. Defines "contribution" for purposes of the PRA as 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.
3. Does not include in the definition of "contribution" a
payment made by an occupant of a home or office for costs
related to any meeting or fundraising event held in the
occupant's home or office if the costs for the meeting or
fundraising event are $500 or less.
4. Prohibits a lobbyist from making, and an elected state
officer or candidate for elective state office from
accepting, a contribution if the lobbyist is registered to
lobby the governmental agency for which the candidate is
seeking election or the governmental agency of the elected
state officer.
This bill:
1. Provides that a payment made by an occupant of a home or an
office who is a lobbyist, lobbying firm, or lobbyist employer
for costs related to a meeting or fundraising event held in
the occupant's home or office is considered a "contribution"
under the PRA, regardless of the costs for the meeting or
fundraising event.
2. Exempts events held in the home or office 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 or
an office 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 $500 or less.
Background
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
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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 $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/her home and the cost would not be considered
a contribution, as long as the total cost of such an event did
not exceed $500. If other parties donate money or goods in
connection with the event, their payments must also be counted
to determine if $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 $500, all payments are counted as
contributions.
Recent Events . In February of this year, the Fair Political
Practices Commission (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
$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.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/6/14)
California Common Cause
ARGUMENTS IN SUPPORT : According to the author's office, this
bill bans lobbyists hosting home fundraisers and eliminates 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.
Recent new stories about lavish home parties have brought to
light a loophole that allows lobbyist and contributors to
circumvent the spirit of campaign finance laws.
While lobbyists are prohibited from donating to candidates
running for offices they are registered to lobby, they can host
fundraisers in their home or office. Under a separate section
of law that allows anyone to host campaign fundraisers,
lobbyists hold fundraisers in their private homes and offices,
claiming that the cost is under $500 - not defined as a
reportable contribution. Through this exemption lobbyists can
legally connect their clients, who give campaign contributions,
with the officials whose decisions they seek to sway.
ASSEMBLY FLOOR : 75-0, 5/8/14
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gray, Grove, Hagman, Hall, Harkey, Roger Hern�ndez, Holden,
Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Medina, Melendez, Mullin, Muratsuchi, Nazarian,
Nestande, Olsen, Pan, Patterson, Perea, Quirk, Quirk-Silva,
Rendon, Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting,
Wagner, Waldron, Weber, Wieckowski, Wilk, Williams, Yamada,
John A. P�rez
NO VOTE RECORDED: Eggman, Gorell, Mansoor, V. Manuel P�rez,
Vacancy
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RM:d 8/6/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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