BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2692
                                                                  Page  1

          Date of Hearing:   April 30, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                 AB 2692 (Fong) - As Introduced:  February 21, 2014 

          Policy Committee:                              ElectionsVote:6-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill amends the Political Reform Act (PRA) to provide that,  
          if the Fair Political Practices Commission (FPPC) determines in  
          an administrative action that an expenditure of campaign funds  
          was made that conferred a substantial personal benefit to a  
          person who had authority to approve the expenditure, but the  
          expenditure is not directly related to a political, legislative,  
          or governmental purpose, the individual who received the  
          substantial personal benefit must pay an equal amount to the  
          state General Fund. This payment is to be in addition to any  
          penalty imposed by the FPPC. 

           FISCAL EFFECT  

          Negligible costs to the FPPC and unknown, likely minor General  
          Fund revenue from penalty payments.

           COMMENTS  

           Background and Purpose  . Existing law generally prohibits  
          campaign funds from being used for personal expenses, and  
          instead requires campaign expenditures to be reasonably related  
          to a political, legislative, or governmental purpose. When a  
          campaign expenditure results in a personal benefit of more than  
          $200 to an individual who had the authority to approve the  
          expenditure, the expenditure must be directly related to a  
          political, legislative, or governmental purpose. The intent is  
          to ensure that campaign funds are not used to personally enrich  
          candidates and officers of political committees.

          The FPPC may bring an administrative enforcement action if it  
          believes an individual or a committee has improperly used  








                                                                  AB 2692
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          campaign funds for personal purposes. When the FPPC determines  
          that a violation has occurred, it can impose a penalty of up to  
          $5,000 per violation.  Given this limit, it is possible that a  
          person could receive an improper personal benefit from campaign  
          spending exceeding the maximum FPPC penalty. The FPPC can bring  
          a civil lawsuit for such a violation, where the maximum monetary  
          penalty available is three times the amount of the unlawful  
          expenditure.  Such civil lawsuits are uncommon, however, and the  
          FPPC deals with a substantial majority of enforcement cases  
          through its administrative enforcement process.  By requiring a  
          person to forfeit the value of an improper personal benefit,  
          this bill is intended to ensure that a person who uses campaign  
          funds for personal purposes does not receive a benefit in excess  
          of the maximum possible administrative fine.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081