Amended in Senate March 20, 2014

Senate Bill No. 831

Introduced by Senator Hill

(Principal coauthor: Senator Beall)

(Principal coauthors: Assembly Members Garcia and Levine)

January 6, 2014

An act to amend Sections 82015, 89506, begin delete and end delete begin insert 89513, end insert 89515 begin insert , 89516, and 89517 end insert of, and to add Sections 87106 begin delete , 89512.7, end delete and 89515.5 to, the Government Code, relating to the Political Reform Act of 1974.

LEGISLATIVE COUNSEL’S DIGEST

SB 831, as amended, Hill. Political Reform Act of 1974.

(1) The Political Reform Act of 1974 provides for the comprehensive regulation of campaign financing and related matters, including the reporting of campaign contributions, as defined. Under existing law, a payment made at the behest of a candidate for elective office is considered a contribution unless the payment is made for purposes unrelated to the candidate’s candidacy, and a payment is presumed to be unrelated to a candidate’s candidacy if it is made principally for legislative, governmental, or charitable purposes. Pursuant to the act, payments principally for legislative, governmental, or charitable purposes made at the behest of a candidate who is an elected officer must be reported within 30 days following the date on which the payment or payments equal or exceed $5,000 in the aggregate from the same source in the same calendar year in which they are made.

This bill would reduce the reporting threshold for a behested payment to $2,500. The bill would also require the Fair Political Practices Commission to post certain behested payment reports on its Internet Web site within 30 days of receipt of the report. The bill would prohibit an elected officer from requesting that a payment be made, or a person from making a payment, at the behest of the elected officer to a begin delete business entity or end delete nonprofit organization owned or controlled by specified persons, as specified, including that officer, any other elected officer who serves on the same elective body as the behesting officer begin delete and end delete begin insert , or end insert family members, as defined, of begin delete elective end delete begin insert elected end insert officers serving on that elective body begin insert , except as specified end insert .

(2) The act prohibits specified officers from receiving gifts, as defined, in excess of $440 in value from a single source in a calendar year. The act exempts gift payments for the actual costs of specified types of travel that are reasonably related to a legislative or governmental purpose, or to an issue of state, national, or international public policy begin insert , end insert from the annual limit on the value of gifts from a single source.

This bill would impose an annual limit on gift payments from a single source for these types of travel at $5,000. begin insert The bill would also require a nonprofit organization that pays for these types of travel to disclose the names of donors responsible for funding the payments, as specified. end insert

(3) The act requires that contributions deposited into a campaign account be held in trust for expenses associated with the election of the candidate or for expenses associated with holding office. The act provides that an expenditure to seek office is within the lawful execution of this trust if it is reasonably related to a political purpose and an expenditure associated with holding office is within the lawful execution of this trust if it is reasonably related to a legislative or governmental purpose. Expenditures begin delete which end delete begin insert that end insert confer a substantial personal benefit must be directly related to a political, legislative, or governmental purpose. The act authorizes the use of campaign funds to make donations or loans to bona fide charitable, educational, civic, religious, or similar tax-exempt nonprofit organizations. The act imposes additional limitations on certain expenditures, including those relating to automotive expenses, travel expenses, tickets for entertainment or sporting events, personal gifts, and real property expenses.

The bill would prohibit an elected officer or a committee controlled by the elected officer from making an expenditure of campaign funds to a begin delete business entity or end delete nonprofit organization owned or controlled by the officer, any other elected officer who serves on the same elective body, or family members, as defined, of begin delete elective end delete begin insert elected end insert officers serving on that elective body, as specified.

This bill would also limit the expenditure of campaign funds for other purposes, begin insert as specified, end insert including begin delete country club memberships, household food items, tuition payments, and payments to a health club or recreational facility end delete begin insert personal vacations, payments for membership dues for a country club, health club, or other recreational facility, tuition payments, utility payments, vehicle use that is not directly related to an election campaign, and certain gifts for specified family members of a candidate, elected officer, or other individuals with the authority to approve the expenditure of campaign funds held by a committee end insert .

(4) A violation of the act’s provisions is punishable as a misdemeanor. By expanding the scope of an existing crime, this bill would impose a state-mandated local program.

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.

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.  

Section 82015 of the Government Code is
amended to read:

82015.  

(a) “Contribution” means a payment, a forgiveness of
a loan, a payment of a loan by a third party, or an enforceable
promise to make a payment begin insert , end insert 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.

(b) (1) A payment made at the behest of a committee begin insert , end insert as defined
in subdivision (a) of Section 82013 begin insert , end insert is a contribution to the
committee unless full and adequate consideration is received from
the committee for making the payment.

(2) A payment made at the behest of a candidate is a contribution
to the candidate unless the criteria in either subparagraph (A) or
(B) are satisfied:

(A) Full and adequate consideration is received from the
candidate.

(B) It is clear from the surrounding circumstances that the
payment was made for purposes unrelated to his or her candidacy
for elective office. The following types of payments are presumed
to be for purposes unrelated to a candidate’s candidacy for elective
office:

(i) A payment made principally for personal purposes, in which
case it may be considered a gift under the provisions of Section
82028. Payments that are otherwise subject to the limits of Section
86203 are presumed to be principally for personal purposes.

(ii) A payment made by a state, local, or federal governmental
agency or by a nonprofit organization that is exempt from taxation
under Section 501(c)(3) of the Internal Revenue Code.

(iii) A payment not covered by clause (i), made principally for
legislative, governmental, or charitable purposes, in which case it
is neither a gift nor a contribution. However, payments of this type
that are made at the behest of a candidate who is an elected officer
shall be reported within 30 days following the date on which the
payment or payments equal or exceed two thousand five hundred
dollars ($2,500) in the aggregate from the same source in the same
calendar year in which they are made. The report shall be filed by
the elected officer with the elected officer’s agency and shall be
a public record subject to inspection and copying pursuant to
subdivision (a) of Section 81008. The report shall contain the
following information: name of payor, address of payor, amount
of the payment, date or dates the payment or payments were made,
the name and address of the payee, a brief description of the goods
or services provided or purchased, if any, and a description of the
specific purpose or event for which the payment or payments were
made. Once the two-thousand-five-hundred-dollar ($2,500)
aggregate threshold from a single source has been reached for a
calendar year, all payments for the calendar year made by that
source begin delete must end delete begin insert shall end insert be disclosed within 30 days after the date the
threshold was reached or the payment was made, whichever occurs
later. Within 30 days after receipt of the report, state agencies shall
forward a copy of these reports to the Commission, and local
agencies shall forward a copy of these reports to the officer with
whom elected officers of that agency file their campaign
statements. Reports filed with the Commission pursuant to this
clause shall be posted on the Commission’s Internet Web site not
later than 30 days after receipt by the Commission.

(C) For purposes of subparagraph (B), a payment is made for
purposes related to a candidate’s candidacy for elective office if
all or a portion of the payment is used for election-related activities.
For purposes of this subparagraph, “election-related activities”
shall include, but are not limited to, the following:

(i) Communications that contain express advocacy of the
nomination or election of the candidate or the defeat of his or her
opponent.

(ii) Communications that contain reference to the candidate’s
candidacy for elective office, the candidate’s election campaign,
or the candidate’s or his or her opponent’s qualifications for
elective office.

(iii) Solicitation of contributions to the candidate or to third
persons for use in support of the candidate or in opposition to his
or her opponent.

(iv) Arranging, coordinating, developing, writing, distributing,
preparing, or planning of any communication or activity described
in clause (i), (ii), or (iii).

(v) Recruiting or coordinating campaign activities of campaign
volunteers on behalf of the candidate.

(vi) Preparing campaign budgets.

(vii) Preparing campaign finance disclosure statements.

(viii) Communications directed to voters or potential voters as
part of activities encouraging or assisting persons to vote begin insert , end insert if the
communication contains express advocacy of the nomination or
election of the candidate or the defeat of his or her opponent.

(D) A contribution made at the behest of a candidate for a
different candidate or to a committee not controlled by the
behesting candidate is not a contribution to the behesting candidate.

(3) A payment made at the behest of a member of the Public
Utilities Commission, made principally for legislative,
governmental, or charitable purposes, is not a contribution.
However, payments of this type shall be reported within 30 days
following the date on which the payment or payments equal or
exceed two thousand five hundred dollars ($2,500) in the aggregate
from the same source in the same calendar year in which they are
made. The report shall be filed by the member with the Public
Utilities Commission and shall be a public record subject to
inspection and copying pursuant to subdivision (a) of Section
81008. The report shall contain the following information: name
of payor, address of payor, amount of the payment, date or dates
the payment or payments were made, the name and address of the
payee, a brief description of the goods or services provided or
purchased, if any, and a description of the specific purpose or event
for which the payment or payments were made. Once the
two-thousand-five-hundred-dollar ($2,500) aggregate threshold
from a single source has been reached for a calendar year, all
payments for the calendar year made by that source begin delete must end delete begin insert shall end insert be
disclosed within 30 days after the date the threshold was reached
or the payment was made, whichever occurs later. Within 30 days
after receipt of the report, the Public Utilities Commission shall
forward a copy of these reports to the Fair Political Practices
Commission. Reports filed with the Fair Political Practices
Commission pursuant to this begin delete subparagraph end delete begin insert paragraph end insert shall be
posted on the Commission’s Internet Web site not later than 30
days after receipt by the Commission.

(4) For purposes of this subdivision and subdivision (h), “made
at the behest of” means made under the control or at the direction
of; in cooperation, consultation, coordination, or concert with; at
the request or suggestion of; or with the express, prior consent of.

(c) “Contribution” includes the purchase of tickets for events
such as dinners, luncheons, rallies, and similar fundraising events;
the candidate’s own money or property used on behalf of his or
her candidacy begin insert , end insert other than personal funds of the candidate used to
pay either a filing fee for a declaration of candidacy or a candidate
statement prepared pursuant to Section 13307 of the Elections
Code; the granting of discounts or rebates not extended to the
public generally or the granting of discounts or rebates by television
and radio stations and newspapers not extended on an equal basis
to all candidates for the same office; the payment of compensation
by any person for the personal services or expenses of any other
person begin insert , end insert if the services are rendered or expenses incurred on behalf
of a candidate or committee without payment of full and adequate
consideration.

(d) “Contribution” further includes any transfer of anything of
value received by a committee from another committee, unless
full and adequate consideration is received.

(e) “Contribution” does not include amounts received pursuant
to an enforceable promise to the extent those amounts have been
previously reported as a contribution. However, the fact that those
amounts have been received shall be indicated in the appropriate
campaign statement.

(f) “Contribution” does not include 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 five hundred dollars ($500)
or less.

(g) Notwithstanding the foregoing definition of “contribution,”
the term does not include volunteer personal services or payments
made by any individual for his or her own travel expenses if the
payments are made voluntarily without any understanding or
agreement that they shall be, directly or indirectly, repaid to him
or her.

(h) “Contribution” further includes the payment of public
moneys by a state or local governmental agency for a
communication to the public that satisfies both of the following:

(1) The communication expressly advocates the election or
defeat of a clearly identified candidate or the qualification, passage,
or defeat of a clearly identified measure, or, taken as a whole and
in context, unambiguously urges a particular result in an election.

(2) The communication is made at the behest of the affected
candidate or committee.

SEC. 2.  

Section 87106 is added to the Government Code, to
read:

87106.  

(a) An elected officer shall not request that a payment
be made, and a person shall not make a payment, at the behest of
the elected officer, as described in Section 82015, to a begin delete business
entity or end delete nonprofit organization that is owned or controlled by that
officer, any other elected officer who serves on the same elective
body, or a family member of any begin delete elective end delete begin insert elected end insert officer who
serves on that elective body.

(b) For purposes of this section, as applied to a Member of the
Legislature, “same elective body” includes both houses of the
Legislature.

(c) For purposes of this section, a begin delete business entity or end delete nonprofit
organization is owned or controlled by an begin delete elective end delete begin insert elected end insert officer
or family member of an elected officer if either of the following
conditions is satisfied:

(1) The begin delete elective end delete begin insert elected end insert officer or family member of the begin delete elective end delete
begin insert elected end insert officer, or a member of that person’s immediate family,
has a direct or indirect interest worth two thousand dollars ($2,000)
or more in the begin delete business entity or end delete nonprofit organization.

(2) The begin delete elective end delete begin insert elected end insert officer or family member of the begin delete elective end delete
begin insert elected end insert officer, or a member of that person’s immediate family, is
a director, officer, partner, or trustee of, or holds any position of
management with, the begin delete business entity or end delete nonprofit organization.

(d) For purposes of this section, “family member of an elected
officer” means the spouse, child, sibling, or parent of an elected
officer.

begin insert

(e) This section shall not apply to behested payments made to
a nonprofit organization that is formed for the purpose of
coordinating or performing disaster relief services.

end insert

SEC. 3.  

Section 89506 of the Government Code is amended
to read:

89506.  

(a) Payments, advances, or reimbursements begin delete , end delete for travel,
including actual transportation and related lodging and subsistence
that is reasonably related to a legislative or governmental purpose,
or to an issue of state, national, or international public policy, shall
not exceed five thousand dollars ($5,000) in a calendar year from
a single source, but are otherwise not prohibited or limited by this
chapter if either of the following begin delete apply end delete begin insert applies end insert :

(1) The travel is in connection with a speech given by the elected
state officer, local elected officeholder, candidate for begin delete elected end delete
begin insert elective end insert state office or local begin delete elected end delete begin insert elective end insert office, an individual
specified in Section 87200, member of a state board or commission,
or designated employee of a state or local government agency, the
lodging and subsistence expenses are limited to the day
immediately preceding, the day of, and the day immediately
following the speech, and the travel is within the United States.

(2) The travel is provided by a government, a governmental
agency, a foreign government, a governmental authority, a bona
fide public or private educational institution, as defined in Section
203 of the Revenue and Taxation Code, a nonprofit organization
that is exempt from taxation under Section 501(c)(3) of the Internal
Revenue Code, or by a person domiciled outside the United States
begin delete which end delete begin insert who end insert substantially satisfies the requirements for tax-exempt
status under Section 501(c)(3) of the Internal Revenue Code.

(b) Gifts of travel not described in subdivision (a) are subject
to the limits in Section 89503.

(c) Subdivision (a) applies only to travel that is reported on the
recipient’s statement of economic interests.

(d) For purposes of this section, a gift of travel does not include
any of the following:

(1) Travel that is paid for from campaign funds, as permitted
by Article 4 (commencing with Section 89510), or that is a
contribution.

(2) Travel that is provided by the agency of a local elected
officeholder, an elected state officer, member of a state board or
commission, an individual specified in Section 87200, or a
designated employee.

(3) Travel that is reasonably necessary in connection with a
bona fide business, trade, or profession and that satisfies the criteria
for federal income tax deduction for business expenses in Sections
162 and 274 of the Internal Revenue Code, unless the sole or
predominant activity of the business, trade, or profession is making
speeches.

(4) Travel that is excluded from the definition of a gift by any
other provision of this title.

(e) This section does not apply to payments, advances, or
reimbursements for travel and related lodging and subsistence
permitted or limited by Section 170.9 of the Code of Civil
Procedure.

begin insert

(f) (1) A nonprofit organization that makes a payment, advance,
or reimbursement for travel described in subdivision (a) shall
disclose to the Commission the name of the donors responsible
for funding that payment, advance or reimbursement. The
disclosure of donor names shall be limited to donors who knew or
had reason to know that the donation would be used for a payment,
advance, or reimbursement for travel described in subdivision (a).

end insert begin insert

(2) A donor knows or has reason to know that his or her
donation will be used in the manner described in paragraph (1)
under any of the following conditions:

end insert begin insert

(A) The donor directed the nonprofit organization to use the
donation to make a payment, advance, or reimbursement for travel
described in subdivision (a).

end insert begin insert

(B) The donor made the donation in response to a message or
solicitation for donations for the stated purpose of making a
payment, advance, or reimbursement for travel described in
subdivision (a).

end insert begin insert

(C) The nonprofit organization made a payment, advance, or
reimbursement for travel described in subdivision (a) in the current
calendar year or any of the immediately preceding four calendar
years. The nonprofit organization shall disclose donors identified
pursuant to this subparagraph only to the extent that donations
made pursuant to subparagraphs (A) and (B) are less than the
amount of the payment, advance, or reimbursement made by the
organization. The nonprofit organization shall not report a donor
identified pursuant to this subparagraph if the organization has
evidence indicating that the donor restricted or otherwise did not
intend the donation to be used for a payment, advance, or
reimbursement for travel described in subdivision (a).

end insert

begin delete

SEC. 4.  

Section 89512.7 is added to the Government Code, to
read:

89512.7.  

Except as expressly authorized by this article,
expenditures for the following are prohibited as inconsistent with
the trust imposed by Section 89510:

(a) A home mortgage, rent, or utility payment.

(b) A clothing purchase.

(c) A noncampaign-related automobile expense.

(d) A country club membership.

(e) A vacation or other noncampaign-related travel payment.

(f) A household food item.

(g) A tuition payment.

(h) Admission to a sporting event, concert, theater, or other
form of entertainment not related to an election campaign.

(i) The dues, fees, and other payments to a health club or
recreational facility.

(j) A gift to a spouse, child, sibling, or parent of a candidate,
elected officer, or other individual with authority to approve the
expenditure of campaign funds held by a committee.

end delete

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 89513 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

89513.  

This section governs the use of campaign funds for the
specific expenditures set forth in this section. It is the intent of the
Legislature that this section shall guide the interpretation of the
standard imposed by Section 89512 as applied to other expenditures
not specifically set forth in this section.

(a) (1) Campaign funds shall not be used to pay or reimburse
begin delete the end delete begin insert a end insert candidate, begin delete the end delete elected officer, or any individual or individuals
with authority to approve the expenditure of campaign funds held
by a committee, or employees or staff of the committee or the
elected officer’s governmental agency begin insert , end insert for travel expenses and
necessary accommodations begin insert , end insert except when these expenditures are
directly related to a political, legislative, or governmental purpose.

(2) For begin delete the end delete purposes of this section, payments or reimbursements
for travel and necessary accommodations shall be considered begin delete as end delete
directly related to a political, legislative, or governmental purpose
if the payments would meet standards similar to the standards of
the Internal Revenue Service pursuant to Sections 162 and 274 of
the Internal Revenue Code for deductions of travel expenses under
the federal income tax law.

(3) For begin delete the end delete purposes of this section, payments or reimbursement
for travel by the household of a candidate or elected officer when
traveling to the same destination in order to accompany the
candidate or elected officer shall be considered for the same
purpose as the candidate’s or elected officer’s travel.

(4)  begin delete Whenever end delete begin insert If end insert campaign funds are used to pay or reimburse
a candidate, elected officer, his or her representative, or a member
of the candidate’s household for travel expenses and necessary
accommodations, the expenditure shall be reported as required by
Section 84211.

(5)  begin delete Whenever end delete begin insert If end insert campaign funds are used to pay or reimburse
for travel expenses and necessary accommodations, any mileage
credit that is earned or awarded pursuant to an airline bonus
mileage program shall be deemed personally earned by or awarded
to the individual traveler. Neither the earning or awarding of
mileage credit, nor the redeeming of credit for actual travel, shall
be subject to reporting pursuant to Section 84211.

begin insert

(6) Campaign funds shall not be used to make a payment for a
personal vacation for a candidate; elected officer; immediate
family member of a candidate or elected officer; or an officer,
director, employee, or member of the staff of a candidate, elected
officer, or committee.

end insert

(b) (1) Campaign funds shall not be used to pay for or reimburse
the cost of professional services unless the services are directly
related to a political, legislative, or governmental purpose.

(2) Expenditures by a committee to pay for professional services
reasonably required by the committee to assist it in the performance
of its administrative functions are directly related to a political,
legislative, or governmental purpose.

(3) Campaign funds shall not be used to pay health-related
expenses for a candidate, elected officer, or any individual or
individuals with authority to approve the expenditure of campaign
funds held by a committee, or members of his or her household.
“Health-related expenses” includes, but is not limited to,
examinations by physicians, dentists, psychiatrists, psychologists,
or counselors, expenses for medications, treatments or medical
equipment, begin delete and end delete expenses for hospitalization, begin delete health club dues, end delete and
special dietary foods. However, campaign funds may be used to
pay employer costs of health care benefits of a bona fide employee
or independent contractor of the committee.

begin insert

(4) Campaign funds shall not be used to make a payment for
membership dues for a country club, health club, or other
recreational facility.

end insert begin insert

(5) Campaign funds shall not be used to make tuition payments.

end insert

(c) Campaign funds shall not be used to pay or reimburse fines,
penalties, judgments, or settlements, except those resulting from
either of the following:

(1) Parking citations incurred in the performance of an activity
that was directly related to a political, legislative, or governmental
purpose.

(2) Any other action for which payment of attorney’s fees from
contributions would be permitted pursuant to this title.

(d) Campaign funds shall not be used begin delete for campaign, business,
or casual clothing except specialty clothing that is not suitable for
everyday use, including, but not limited to, formal wear, if this
attire is to be worn by the candidate or elected officer and is directly
related to a political, legislative, or governmental purpose end delete begin insert to
purchase clothing to be worn by a candidate or elected officer end insert .

(e) (1) Except where otherwise prohibited by law, campaign
funds may be used to purchase or reimburse for the costs of
purchase of tickets to political fundraising events for the attendance
of a candidate, elected officer, or his or her immediate family, or
an officer, director, employee, or staff of the committee or the
elected officer’s governmental agency.

(2) Campaign funds shall not be used to pay for or reimburse
for the costs of begin delete tickets for entertainment or sporting events end delete
begin insert admission to a sporting event, concert, theater, or other form of
entertainment end insert for the candidate, elected officer, or members of his
or her immediate family, or an officer, director, employee, or staff
of the committee, unless their attendance at the event is directly
related to begin delete a political, legislative, or governmental purpose end delete begin insert the
election campaign of the candidate or elected officer end insert .

(3) The purchase of tickets for entertainment or sporting events
for the benefit of persons other than the candidate, elected officer,
or his or her immediate family are governed by subdivision (f).

(f) (1) Campaign funds shall not be used to make begin insert a gift to a
spouse, child, sibling, or parent of a candidate, elected officer, or
other individual with authority to approve the expenditure of
campaign funds held by a committee, except for a gift of nominal
value that is substantially similar to a gift made to other persons
and that is directly related to a political, legislative, or
governmental purpose. Campaign funds shall not be used to make end insert
personal gifts begin insert to any other person not described in this paragraph end insert
unless the gift is directly related to a political, legislative, or
governmental purpose. The refund of a campaign contribution
does not constitute the making of a gift.

(2)  begin delete Nothing in this end delete begin insert This end insert section begin delete shall end delete begin insert does not end insert prohibit the use
of campaign funds to reimburse or otherwise compensate a public
employee for services rendered to a candidate or committee while
on vacation, leave, or otherwise outside of compensated public
time.

(3) An election victory celebration or similar campaign event,
or gifts with a total cumulative value of less than two hundred fifty
dollars ($250) in a single year made to an individual employee, a
committee worker, or an employee of the elected officer’s agency,
are considered to be directly related to a political, legislative, or
governmental purpose. For purposes of this paragraph, a gift to a
member of a person’s immediate family shall be deemed to be a
gift to that person.

(g) Campaign funds shall not be used to make loans other than
to organizations pursuant to Section 89515, or, unless otherwise
prohibited, to a candidate for elective office, political party, or
committee.

SEC. 5.  

Section 89515 of the Government Code is amended
to read:

89515.  

Campaign funds may be used to make donations or
loans to bona fide charitable, educational, civic, religious, or similar
tax-exempt, nonprofit organizations, begin delete where end delete begin insert if end insert no substantial part
of the proceeds will have a material financial effect on the
candidate, campaign treasurer, or any individual or individuals
with authority to approve the expenditure of campaign funds held
by a committee, or member of his or her immediate family, and
begin delete where end delete begin insert if end insert the donation or loan bears a reasonable relation to a
political, legislative, or governmental purpose, except as prohibited
by Section 89515.5.

SEC. 6.  

Section 89515.5 is added to the Government Code, to
read:

89515.5.  

(a) An expenditure of campaign funds by an elected
officer or committee controlled by the begin delete elective end delete begin insert elected end insert officer to
a begin delete business entity or end delete nonprofit organization that is owned or
controlled by the begin delete elective end delete begin insert elected end insert officer, any other elected officer
who serves on the same elective body, or a family member of any
begin delete elective end delete begin insert elected end insert officer who serves on that body is deemed to serve
the primary purpose of conferring a personal financial benefit on
the recipient and is prohibited as being unrelated to a political,
legislative, or governmental purpose and inconsistent with the trust
imposed by Section 89510.

(b) For purposes of this section, as applied to a Member of the
Legislature, “same elective body” includes both houses of the
Legislature.

(c) For purposes of this section, a begin delete business entity or end delete nonprofit
organization is owned or controlled by an begin delete elective end delete begin insert elected end insert officer
or family member of an elected officer if either of the following
conditions is satisfied:

(1) The begin delete elective end delete begin insert elected end insert officer or family member of the begin delete elective end delete
begin insert elected end insert officer, or a member of that person’s immediate family begin insert , end insert
has a direct or indirect interest worth two thousand dollars ($2,000)
or more in the begin delete business entity or end delete nonprofit organization.

(2) The begin delete elective end delete begin insert elected end insert officer or family member of the begin delete elective end delete
begin insert elected end insert officer, or a member of that person’s immediate family begin insert , end insert is
a director, officer, partner, or trustee of, or holds any position of
management with, the begin delete business entity or end delete nonprofit organization.

(d) For purposes of this section, “family member of an elected
officer” means the spouse, child, sibling, or parent of an elected
officer.

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 89516 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

89516.  

Notwithstanding Sections 89512 and 89513, this section
governs the use of campaign funds for vehicle expenses.

(a) Campaign funds shall not be used to purchase a vehicle
unless both of the following apply:

(1) Title to the vehicle is held by the committee and not the
candidate, elected officer, campaign treasurer, or any other
individual or individuals with authority to approve the expenditure
of campaign funds held by a committee, or a member of his or her
immediate family.

(2) The use of the vehicle is directly related to begin delete a political,
legislative, or governmental purpose end delete begin insert an election campaign end insert .

(b) Campaign funds shall not be used to lease a vehicle unless
both of the following apply:

(1) The lessee is the committee, or a state or local government
agency begin insert , end insert and not the candidate, elected officer, or a member of his
or her immediate family; or the lessor is a state or local government
agency.

(2) The use of the vehicle is directly related to begin delete a political,
legislative, or governmental purpose end delete begin insert an election campaign end insert .

(c) Campaign funds may be used to pay for or reimburse the
operating costs, including, but not limited to, insurance,
maintenance, and repairs, for any vehicle for which campaign
funds may be spent pursuant to this section.

(d) Campaign funds may be used to reimburse a candidate,
elected officer, his or her immediate family, or any individual or
individuals with authority to approve the expenditure of campaign
funds held by a committee, or an employee or member of the staff
of the committee or of the elected officer’s governmental agency,
for the use of his or her vehicle at the rate approved by the Internal
Revenue Service pursuant to Section 162 of the Internal Revenue
Code in connection with deductible mileage expenses under the
federal income tax law, if both of the following requirements are
met:

(1) The vehicle use for which reimbursement is sought is directly
related to begin delete political, governmental, or legislative purposes end delete begin insert an
election campaign end insert .

(2) The specific purpose and mileage in connection with each
expenditure is documented in a manner approved by the Internal
Revenue Service in connection with deductible mileage expenses.

(e) For the purposes of this section, use of a vehicle is considered
to be directly related to begin delete a political, legislative, or governmental
purpose end delete begin insert end insert begin insert an election campaign end insert as long as its use for other purposes
is only incidental to its use for begin delete political, legislative, or
governmental purposes end delete begin insert an election campaign end insert .

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 89517 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

89517.  

(a) Campaign funds shall not be used for payment or
reimbursement for the lease of real property begin insert , for a utility bill for
real property end insert begin insert , end insert or for the purchase, lease, or refurbishment of any
appliance or equipment, where the lessee or sublessor is, or the
legal title resides begin insert in end insert , in whole or in part, begin delete in end delete a candidate, elected
officer, campaign treasurer, or any individual or individuals with
authority to approve the expenditure of campaign funds, or member
of his or her immediate family.

(b) Campaign funds shall not be used to purchase real property.
Except as prohibited by subdivision (a), campaign funds may be
used to lease real property for up to one year at a time begin delete where end delete begin insert if end insert the
use of that property is directly related to political, legislative, or
governmental purposes begin insert and the lessee or sublessor is not, or the
legal title does not reside in, in whole or in part, a candidate,
elected officer, campaign treasurer, or any individual or
individuals with authority to approve the expenditure of campaign
funds, or a member of his or her immediate family end insert .

(c) For the purposes of this section, real property, appliance, or
equipment is considered to be directly related to a political,
legislative, or governmental purpose begin delete as long as end delete begin insert if end insert its use for other
purposes is only incidental to its use for political, legislative, or
governmental purposes begin insert and the lessee or sublessor of the real
property is not, or the legal title for the real property does not
reside in, in whole or in part, a candidate, elected officer,
campaign treasurer, or any individual or individuals with authority
to approve the expenditure of campaign funds, or a member of his
or her immediate family end insert .

begin delete SEC. 7. end delete
begin insert SEC. 9. end insert   

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.

begin delete SEC. 8. end delete
begin insert SEC. 10. 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.