BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 831 (Hill) - Political Reform Act
Amended: April 10, 2014 Policy Vote: E&CA 4-1
Urgency: No Mandate: No
Hearing Date: May 5, 2014 Consultant: Maureen Ortiz
This bill meets the criteria to be referred to the Suspense
File.
Bill Summary: SB 831 makes several changes to the Political
Reform Act relating to behested payments, travel gifts, and the
use of campaign funds.
Fiscal Impact:
Annual costs of $130,000 to the FPPC (General).
The Fair Political Practices Commission indicates the need for
PY of a Political Reform Consultant position, and PY for an
Attorney IV position to handle increased requests for advice,
promulgate regulations, and the potential for litigation
relating to the disclosure issues.
Background: Behested Payments : Existing law, pursuant to the
Political Reform Act (PRA), provides that a payment made at the
behest of a candidate for state or local elective office is
considered a contribution unless the payment is made for
purposes unrelated to the candidate's candidacy. A payment is
presumed to be unrelated to a candidate's candidacy if it is
made principally for legislative, governmental, or charitable
purposes. Payments principally for legislative, governmental,
or charitable purposes made at the behest of 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.
Gifts of Travel : Existing law prohibits specified elected
officers and other public officials from receiving gifts, as
defined, in excess of $440 in value from a single source in a
calendar year; but exempts gift payments for the actual costs of
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specified types of travel from the annual limit on the value of
gifts from a single source. Payments for travel that is
reasonably related to a legislative or governmental purpose, or
to an issue of state, national, or international public policy
are not limited if either of the following applies:
The travel is in connection with a speech given by the
officeholder or official and the lodging and subsistence
expenses are limited to the day immediately preceeding, the
day of, and the day immediately following the speech, and the
travel is within the United States.
The travel is provided by a government, a governmental agency,
a foreign government, a governmental authority, a bona fide
public or private educational institution, 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 who substantially
satisfies the requirements for tax-exempt status under Section
501(c)(3) of the Internal Revenue Code.
Use of Campaign Funds : Existing law 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. 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.
The use of campaign funds is authorized for making donations or
loans to bona fide charitable, educational, civic, religious, or
similar tax-exempt nonprofit organizations.
Existing law also provides that expenditures which confer a
substantial personal benefit must be directly related to a
political, legislative, or governmental purpose, but 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.
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Proposed Law: SB 831 does the following:
1) Reduces the current reporting threshold for a behested
payment from $5,000 to $2,500 and also requires the FPPC to post
behested payment reports from state agencies on its Internet Web
site within 30 days of receipt of the report.
2) Codifies the existing regulatory definition of "made at the
behest of" as "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."
3) Prohibits an elected officer from requesting that a payment
be made, and a person from making a payment at the behest of the
elected officer, to a nonprofit organization that the elected
officer knows or has reason to know is owned or controlled by
that officer, any other elected officer who serves on the same
elective body, or a family member of any elected officer who
serves on that elective body.
4) Imposes an annual limit on gift payments from a single source
for specified types of travel at $5,000, and requires a
nonprofit organization that pays for these types of travel to
disclose the names of donors responsible for funding the
payments who knew or had reason to know that their donation
would be used for a payment, advance, or reimbursement for the
travel.
5) Prohibits an expenditure of campaign funds by an elected
officer or committee controlled by the elected officer to a
nonprofit organization that the elected officer knows or has
reason to know is owned or controlled by the elected officer,
any other elected officer who serves on the same elective body,
or a family member of any elected officer who serves on that
body.
6) Prohibits the expenditure of campaign funds for other
purposes, as specified, including personal vacations; payments
for membership dues for a country club, health club, or other
recreational facility; clothing to be worn by the candidate or
officeholder; tuition payments; utility payments and real
property leases as specified; vehicle use and sports or
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entertainment tickets not directly related to an election
campaign; and specified gifts for family members of a candidate,
elected officer, or other individuals with the authority to
approve the expenditure of campaign funds held by a committee.
7) Prohibits the expenditure of campaign funds for attorney's
fees and other costs in connection with criminal litigation but
would continue to permit elected officers to establish a legal
defense account
Staff Comments: SB 831 is intended to modernize California's
Political Reform Act by increasing transparency of behested
payments, create new limits and disclosures for travel related
gifts, and prohibit certain types of campaign expenditures.