BILL ANALYSIS �
SB 27
Page 1
SENATE THIRD READING
SB 27 (Correa)
As Amended January 17, 2014
2/3 vote
SENATE VOTE :28-8
ELECTIONS 5-1 APPROPRIATIONS
12-5
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|Ayes:|Fong, Bocanegra, Bonta, |Ayes:|Gatto, Bocanegra, Bradford, |
| |Hall, Perea | | |
| | | |Ian Calderon, Campos, |
| | | |Eggman, Gomez, Hall, |
| | | |Holden, Pan, Quirk, Weber |
| | | | |
|-----+-----------------------------+-----+----------------------------|
|Nays:|Donnelly |Nays:|Harkey, Bigelow, Donnelly, |
| | | |Linder, Wagner |
| | | | |
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SUMMARY : Establishes conditions under which a multipurpose
organization (MPO) that makes campaign contributions or expenditures
is required to disclose names of its donors. Requires the Fair
Political Practices Commission's (FPPC) Web site to include a list of
the largest contributors to committees that support or oppose state
ballot measures or candidates, as specified. Specifically, this bill :
1)Requires MPOs that make contributions or expenditures in California
campaigns to file campaign disclosure reports pursuant to the
following:
a) Defines an MPO as an organization described in Sections
501(c)(3) through (10) of the Internal Revenue Code that is
exempt from taxation under Section 501(a) of the Internal Revenue
Code; a federal or out-of-state political organization, as
specified; a trade or professional association; a civic or
religious organization; a fraternal society; an educational
institution; or any other association or group of persons acting
in concert; that is operating for purposes other than making
contributions or expenditures.
b) Provides that an MPO is a recipient committee, for the
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purposes of the Political Reform Act (PRA), only under one or
more of the following circumstances:
i) The MPO is a political committee registered with another
state or with the Federal Elections Commission (FEC), except as
specified, and it makes contributions or expenditures in this
state of at least $1,000;
ii) The MPO solicits and receives payments from donors
totaling $1,000 or more for the purpose of making contributions
or expenditures, or subject to an understanding that the
payments may be used for making contributions or expenditures;
iii) The MPO has funds from a donor and a subsequent
understanding is reached that the funds may be used for making
contributions or expenditures of $1,000 or more; or,
iv) The MPO makes contributions or expenditures totaling more
than $50,000 in 12 months, or more than $100,000 in four
consecutive years. Provides that such an MPO is not a
recipient committee if it uses only nondonor funds to make
contributions and expenditures, and it identifies the source of
the nondonor funds.
c) Provides that an MPO that is a recipient committee and a
federal or out-of-state political committee is not required to
itemize federal or out-of-state contributions and expenditures.
Provides that a committee registered with the FEC is not required
to provide detailed information about contributors of $100 or
more.
d) Provides that an MPO that is a recipient committee must
disclose donors as follows:
i) The committee must provide detailed information about
donors of $100 or more where those donations were solicited for
the purposes of making contributions or expenditures in
California, or where there was an understanding or agreement
that the donations may be used for making contributions or
expenditures in California;
ii) The total amount of contributions received that are
disclosed by the MPO on its campaign disclosure reports must
equal the total amount of contributions and expenditures made
by the MPO in California; and,
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iii) If the total contributions disclosed pursuant to i) is not
sufficient to account for all the contributions and
expenditures made by the MPO during the reporting period, the
MPO must disclose the identities of other donors of $1,000 or
more, using a last-in, first-out accounting method, until the
MPO has disclosed a total amount of contributions received to
equal the total amount of contributions and expenditures made
by the MPO in California. Provides that a donor is not subject
to disclosure if the donor prohibits the MPO from using the
donation for contributions or expenditures, or if the donation
is a grant from a private foundation, as specified.
e) Provides that an MPO that is a recipient committee by virtue
of making contributions or expenditures totaling more than
$50,000 in 12 months or more than $100,000 in a four year period
is not required to disclose the donors for contributions and
expenditures made in a prior calendar year in which the MPO did
not qualify as a committee.
f) Permits an MPO that is a membership organization, is a sponsor
of a committee, and makes all of its contributions and
expenditures from funds derived from dues, assessments, fees, and
similar payments that do not exceed $10,000 per calendar year
from a single source, to report contributions or expenditures
made from the sponsor's treasury funds on the campaign statements
of the sponsored committee, as specified.
2)Requires a committee that is primarily formed to support or oppose a
state ballot measure or candidate, and that raises $1 million or
more for an election, to maintain an accurate list of the
committee's top 10 contributors of $10,000 or more, as specified by
the FPPC. Requires a current list of the top 10 contributors to be
disclosed on the FPPC's Web site, as specified. Requires the
committee to update the top 10 contributor list whenever it changes.
Requires the FPPC to post or update the top contributor list within
five business days, or within 48 hours during the last 16 days
before the election.
3)Requires a committee to use reasonable efforts to identify the
individuals or corporations that are the true source of
contributions made to the committee when listing the top
contributors.
4)Requires the FPPC to compile, maintain, and display on its Web site
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a current list of the top contributors supporting and opposing each
state ballot measure.
5)Requires the state ballot pamphlet to contain a written explanation
of the top contributor lists described above, including a
description of the Web sites where the lists are available.
6)Contains an urgency clause and provides that this bill shall become
operative on July 1, 2014.
FISCAL EFFECT : According to the Assembly Appropriations Committee:
1)Any costs to the FPPC will be minor and absorbable. No additional
penalty revenues, as the penalty provisions are consistent with
existing commission regulations.
2)Annual general fund printing costs of $55,000 to the Secretary of
State for one additional page in the state ballot pamphlet to
include a written explanation of the top 10 contributor lists, as
specified.
COMMENTS : According to the author, "Everyone is aware of the
now-infamous $11 million contribution from an Arizona non-profit
organization to a committee that was opposing Proposition 30 and
supporting Proposition 32 last November. After a court battle with the
FPPC, this nonprofit group revealed that it was not the true source of
the $11 million contribution but merely an intermediary. They
disclosed that the actual source of the $11 million was another
nonprofit organization who had received it from yet another nonprofit
organization. The true, original source of this campaign money is
still unknown to the public?
"In light of this, I introduced SB 27 which is a simple measure that
will accomplish two important goals. First, it will enact a series of
tests and presumptions in the law so that campaign funds can no longer
be laundered through nonprofit corporations without them disclosing
the true source of the money. Second, it will require ballot measure
committees that raise one million dollars or more to give the FPPC a
current list of the committee's top ten contributors of ten thousand
dollars or more. The FPPC and the committee will be required to post
the list on their Internet web sites."
This bill is intended to address some of the challenges with ensuring
thorough campaign disclosure by specifying circumstances in which an
MPO is required to disclose its donors when it makes contributions or
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expenditures. Some of these provisions are similar to regulations
adopted by the FPPC. This bill also establishes a new situation in
which an MPO is required to disclose the identities of donors when it
makes contributions or expenditures of more than $50,000 in a 12 month
period, or more than $100,000 in a four year period.
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 Political Reform Act (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.
Please see the policy committee analysis for a full discussion of this
bill.
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094
FN: 0002949