BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 831|
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THIRD READING
Bill No: SB 831
Author: Hill (D), et al.
Amended: 5/27/14
Vote: 27 - Urgency
SENATE ELECTIONS & CONST. AMEND. COMM. : 4-1, 4/22/14
AYES: Torres, Hancock, Jackson, Padilla
NOES: Anderson
SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/23/14
AYES: De Le�n, Walters, Gaines, Hill, Lara, Padilla, Steinberg
SUBJECT : Political Reform Act of 1974
SOURCE : Author
DIGEST : This bill makes several changes to the Political
Reform Act (PRA) relating to behested payments, travel gifts,
and the use of campaign funds.
ANALYSIS :
Existing law:
1.Provides, pursuant to the PRA, 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
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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.
2.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.
3.Exempts gift payments for the actual costs of 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:
A. 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 preceding the
day of, and the day immediately following the speech, and
the travel is within the United States.
B. 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, or by
a person domiciled outside the U.S. who substantially
satisfies the requirements for tax-exempt status.
1.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.
2.Authorizes the use of campaign funds to make donations or
loans to bona fide charitable, educational, civic, religious,
or similar tax-exempt nonprofit organizations.
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3.Provides that expenditures which confer a substantial personal
benefit must be directly related to a political, legislative,
or governmental purpose.
4.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.
5.Permits the expenditure of campaign funds for attorney's fees
and other costs in connection with administrative, civil, or
criminal litigation, as specified.
6.Authorizes a candidate or an elected officer to establish a
separate legal defense account to defray attorney's fees and
other related legal costs incurred for the officer's legal
defense in an administrative, civil, or criminal proceeding
arising directly out of the conduct of an election campaign,
the electoral process, or the performance of the officer's
governmental activities or duties. A candidate or elected
officer may receive contributions to this account that are not
subject to applicable state contribution limits. However, all
contributions must be reported in a manner prescribed by the
Fair Political Practices Commission (FPPC).
7.Provides, pursuant to FPPC regulations, that legal defense
funds may not be raised in connection with a proceeding until
the following has occurred:
A. In a proceeding brought by a government agency, when the
candidate or officer reasonably concludes the agency has
commenced an investigation or the agency formally commences
the proceeding, whichever is earlier.
B. In a civil proceeding brought by a private person, after
the person files the civil action.
This bill:
1.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
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elective body, or a family member of any elected officer who
serves on that elective body. For the purposes of this
prohibition, this bill provides for all of the following:
A. An elected officer is deemed to have complied with the
requirements of this provision if the FPPC determines that
the elected officer has made a reasonable effort to
ascertain whether a nonprofit organization is owned or
controlled by any individual subject to the prohibition.
B. For purposes of this provision, a nonprofit organization
is owned or controlled by an elected officer or family
member of an elected officer if the elected officer or
family member of the elected 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 nonprofit organization.
C. For the purposes of this provision "family member of an
elected officer" means the spouse, child, sibling, or
parent of an elected officer.
D. This prohibition shall not apply to behested payments
made to a nonprofit organization that is formed for the
purpose of coordinating or performing disaster relief
services.
1.Requires a nonprofit organization that pays for specified
types of travel related to a legislative or governmental
purpose, to disclose the names of donors responsible for
funding the payments who knew or had reason to know that their
donation will be used for a payment, advance, or reimbursement
for the travel. The nonprofit organization shall not report a
donor if the organization has evidence indicating that the
donor restricted or otherwise did not intend the donation to
be used for such travel. A donor knows or has reason to know
that his/her donation will be used for the travel under any of
the following conditions:
A. The donor directed the nonprofit organization to use the
donation for the travel.
B. The donation was made in response to a solicitation for
donations for the travel.
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C. The nonprofit organization made payments for this type
of travel in the current calendar year or any of the
immediately preceding four calendar years.
1.Provides that 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
or a family member of the elected officer 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 existing law. For the
purposes of this prohibition, this bill provides for all of
the following:
A. An elected officer is deemed to have complied with the
requirements of this provision if the FPPC determines that
the elected officer has made a reasonable effort to
ascertain whether a nonprofit organization is owned or
controlled by any individual subject to the prohibition.
B. For purposes of this provision, a nonprofit organization
is owned or controlled by an elected officer or family
member of the elected officer if the elected officer or
family member of the elected 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 nonprofit organization, and is paid for his/her
services.
C. For the purposes of this provision, "family member of
the elected officer" means the spouse, child, sibling, or
parent of an elected officer.
4.Authorizes, payments, advances, or reimbursements 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, if either of the following
applies:
A. The travel is in connection with a speech given by the
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elected state officer, local elected officeholder,
candidate for elective state office or local elective
office, an individual, 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 U.S.
B. 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, or by
a person domiciled outside the U.S. who substantially
satisfies the requirements for tax-exempt status.
1.Prohibits the expenditure of campaign funds for other
purposes, as specified, including:
A. Personal vacations.
B. Payments for membership dues for a country club, health
club, or other recreational facility.
C. Clothing to be worn by the candidate or officeholder.
D. Tuition payments.
E. Utility payments and real property leases where the
lessee or sub lessor is, or the legal title resides 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 member of
his/her immediate family.
F. Vehicle use and sports or entertainment tickets not
directly related to an election campaign.
G. Specified 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.
Background
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Behested payments . Behested payments are payments made
principally for legislative, governmental, or charitable
purposes. These payments are not for personal or campaign
purposes. For example, an elected official may ask a
third-party to contribute funds to a charity, a school in his
district, or to a job fair or health fair. Generally, a
donation will be "made at the behest" if it is requested,
solicited, or suggested by the elected officer, or otherwise
made to a person in cooperation, consultation, coordination
with, or at the consent of, the elected officer. This includes
payments behested on behalf of the official by his/her agent or
employee. Behested payments totaling $5,000 or more from a
single source in a calendar year must be disclosed by the
official, which is filed with the official's agency, within 30
days of the date of the payment(s).
Travel Payment Exceptions . The following travel payments are
not prohibited or subject to the $440 gift limit, but may be
reportable on a statement of economic interests. If the travel
payment would otherwise be considered a gift under the PRA
(i.e., the recipient did not provide equal or greater
consideration for the payment), the payment would be subject to
the existing $10 lobbyist/lobbying firm gift limit.
Travel that is reasonably necessary in connection with a bona
fide business, trade, or profession, as specified.
Travel within the U.S. that is reasonably related to a
legislative or governmental purpose in connection with an event
at which the recipient gives a speech, participates in a panel
or seminar or provides a similar service, as specified.
Travel not in connection with giving a speech, participating in
a panel or seminar, or providing a similar service, but which is
reasonably related to a legislative or governmental purpose, or
to an issue of state, national, or international public policy,
and which is provided by a government, governmental agency,
foreign government, or government authority, a bona fide public
or private educational institution, a non-profit organization
that is exempt from taxation under Section 501(c)(3) of the
Internal Revenue Code, or a foreign organization that
substantially satisfies the requirements for tax-exempt status
under Section 501(c)(3) of the Internal Revenue Code.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee, annual costs
of $130,000 to the FPPC (General).
The FPPC indicates the need for personnel year of a Political
Reform Consultant position, and personnel year for an Attorney
IV position to handle increased requests for advice, promulgate
regulations, and the potential for litigation relating to the
disclosure issues.
SUPPORT : (Verified 5/27/14)
California Common Cause
California Public Interest Research Group
League of Women Voters of California
RM:e 5/27/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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