BILL ANALYSIS �
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UNFINISHED BUSINESS
Bill No: SB 831
Author: Hill (D), et al.
Amended: 8/18/14
Vote: 27
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
SENATE FLOOR : 35-1, 6/9/14
AYES: Beall, Berryhill, Block, Cannella, Corbett, Correa, De
Le�n, DeSaulnier, Evans, Fuller, Gaines, Galgiani, Hancock,
Hernandez, Hill, Hueso, Huff, Jackson, Knight, Lara, Leno,
Liu, Mitchell, Monning, Morrell, Nielsen, Padilla, Pavley,
Roth, Steinberg, Torres, Vidak, Walters, Wolk, Wyland
NOES: Anderson
NO VOTE RECORDED: Calderon, Lieu, Wright, Yee
ASSEMBLY FLOOR : Not available
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.
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Assembly Amendments add double-jointing language with AB 1666
(Garcia) and AB 1692 (Garcia); remove the urgency clause;
require a person who receives a gift of a travel payment to
report the travel destination on his/her statement of economic
interests; specify travel payments, advances, or reimbursements
totals in a calendar year for a single person, as specified; and
make other clarifying and technical changes.
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
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
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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.
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).
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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.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 set forth in this bill 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 bill, "family member of the
elected officer" means the spouse, child, sibling, or
parent of an elected officer.
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1.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
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 an elected officer from requesting that a payment be
made, and prohibits a person from making a payment at the
behest of an elected officer, as specified, to a nonprofit
organization that is exempt from taxation that the elected
officer knows or has reason to know is owned or controlled by
that officer or a family member of the officer. Prohibits an
expenditure of campaign funds by an elected officer or
committee controlled by an elected officer to a nonprofit
organization that is exempt from taxation 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.
A. Provides, for the purposes of these restrictions, that
an elected officer is deemed to have complied with this law
if the FPPC determines that the elected officer made a
reasonable effort to ascertain whether the organization is
owned or controlled by the elected officer or a family
member of the elected officer.
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B. Provides, for the purposes of these restrictions, that
an organization is owned or controlled by an elected
officer or family member of an elected officer if the
elected officer or family member, 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. Defines the term "family member of the elected officer,"
for the purposes of these restrictions, as the spouse,
child, sibling, or parent of the elected officer.
D. Provides that the restrictions on payments made at the
behest of an elected officer do not apply to 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 is exempt from taxation
that makes payments, advances, or reimbursements that total
more than $10,000 in a calendar year, or that total more than
$5,000 in a calendar year for a single person, to an elected
state officer or local elected officeholder for specified
travel related to a legislative or governmental purpose, or to
an issue of state, national, or international public policy,
to disclose to the FPPC 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 by the elected officer. Provides
that 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. Provides that 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; or
C. The donor, or an agent, employee, or representative of
the donor, accompanied the elected state officer or local
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elected officeholder for any portion of the travel.
1.Requires a public official, when reporting a gift that is a
travel payment, advance, or reimbursement on his/her Statement
of Economic Interests, to disclose the travel destination.
2.Prohibits campaign funds from being used to pay for any of the
following:
A. 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;
B. Membership dues for a country club, health club, or
other recreational facility;
C. Tuition payments, unless the payments are directly
related to a political, legislative, or governmental
purpose;
D. Clothing of any kind to be worn by a candidate or
elected officer;
E. Vehicle use not directly related to an election
campaign;
F. A gift to a spouse, child, sibling, or parent of a
candidate, elected officer, or other individual with the
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; or
G. A utility bill for real property that is owned or leased
by a candidate, elected officer, campaign treasurer, or any
individual with authority to approve the expenditure of
campaign funds, or a member of his/her immediate family.
1.Makes technical and conforming changes.
2.Contains double-jointing language in order to avoid chaptering
problems with AB 1666 (Garcia) and AB 1692 (Garcia).
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Background
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
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substantially satisfies the requirements for tax-exempt status
under Section 501(c)(3) of the Internal Revenue Code.
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 8/29/14)
California Common Cause
California Public Interest Research Group
League of Women Voters of California
RM:e 8/29/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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