BILL ANALYSIS �
SENATE COMMITTEE ON ELECTIONS
AND CONSTITUTIONAL AMENDMENTS
Senator Norma J. Torres, Chair
BILL NO: SB 1102 HEARING DATE: 4/22/14
AUTHOR: PADILLA ANALYSIS BY: Darren Chesin
AMENDED: 4/21/14
FISCAL: YES
SUBJECT
Political Reform Act: election cycle contributions: reporting
threshold
DESCRIPTION
Existing law , pursuant to the Political Reform Act (PRA),
requires candidates, political committees, and slate mail
organizations to file specified periodic and activity-based
campaign finance reports, including semiannual statements,
pre-election statements, supplemental pre-election statements,
and late contribution/expenditure reports that include specified
campaign finance information.
Existing law requires these campaign statements to disclose,
among other things, specified information about contributors who
have made aggregate contributions, as defined, of $100 or more
as well as similar information about expenditures of $100 or
more.
Existing law also requires candidates for elective state office
and committees primarily formed to support or oppose a state
ballot measure, if the candidate or committee has reportable
contributions or expenditures of $25,000 or more, to file the
following reports online or electronically with the Secretary of
State (SOS):
Disclosing the receipt of a contribution of $1,000 or more
during the last 90 days prior to an election (an election
cycle), within 24 hours of receiving the contribution.
Disclosing the receipt of a contribution of $5,000 or more
during all times other than during an election cycle within 10
business days of receipt of the contribution.
This bill would make the following changes to these election
cycle and non-election cycle reports and additionally apply them
to committees that make expenditures in support of or in
opposition to one or more candidates for elective state office
or state ballot measures (i.e., general purpose committees or
"PACS" and independent expenditure committees):
Lower the reporting threshold for the 24-hour election cycle
reports from $1,000 to $100.
Lower the reporting threshold for the non-election cycle
reports from $5,000 to $100.
Reduce the deadline for the non-election cycle reports from 10
business days of receipt of the contribution to five days.
BACKGROUND
Periodic and Activity-Based Reports . Under the PRA, there are
two general types of reporting requirements. The first type of
report is referred to as a periodic report. Periodic reports
must be filed according to a specified time schedule for all
similarly-situated candidates and committees, regardless of the
amount of campaign activity during the period of time covered by
the report. These reports generally include all campaign
activity (contributions, loans, expenditures, etc.) that
occurred over a specified period of time. Semi-annual reports
and pre-election reports are two examples of periodic reports
that are required under the PRA.
The second type of report that the PRA requires is an
activity-based report. An activity-based report is triggered
when a candidate or committee has campaign activity that meets
or exceeds a specific dollar threshold. Election cycle 24-hour
reports for contributions of $1,000 or more and non-election
cycle 10-business day reports of contributions of $5,000 or more
are examples of activity-based reports.
As a general rule, the thresholds for campaign activities that
trigger an activity-based report under the PRA are significantly
higher than the thresholds for campaign activities that are
required to be reported on a periodic report. For instance,
while the PRA generally requires contributions of $100 or more
to be itemized on a periodic report, activity-based reporting
requirements for contributions received by committees do not
kick in for contributions of less than $1,000, and for some
activity-based reports, the threshold is much higher.
SB 1102 (PADILLA)
Page 2
There are two primary reasons for this distinction in reporting
thresholds. First, the fact that activity-based reports target
higher-dollar transactions acknowledges that there may be a
public interest for requiring higher-dollar activity to be
reported more promptly than lower-dollar activity.
Second, the distinction in thresholds reflects the fact that
activity-based reporting can be more burdensome than periodic
reports. There are a number of reasons why this may be the
case. First, activity-based reports generally must be prepared
in a much shorter period of time than periodic reports (often
within 24 hours of the time the activity occurs). Second,
activity-based reports can be triggered by activity that is
unpredictable to, or otherwise outside the control of, the
candidate or the committee (for instance, if a person made a
contribution to a candidate through his or her website on
Christmas Day, that contribution could trigger an activity-based
reporting requirement even if the candidate did not know in
advance that the person planned to make that contribution).
Finally, activity-based reporting can significantly increase the
volume of reports that are required to be filed in order to
disclose the same amount of activity (for instance, a committee
that received contributions from 50 different donors in a
specified time period might be able to report all of those
contributions on a single periodic report, whereas an
activity-based reporting requirement could require a separate
report for each of those contributions, resulting in the need to
file 50 different reports).
COMMENTS
1.According to the Author : A key provision of the Political
Reform Act of 1974 requires full disclosure of campaign
contributions. While our current system does provide full
disclosure, the existing reporting schedule fails to provide
timely disclosure year-round, keeping the public in the dark
much of the year. All contributions made to state candidates
or committees are generally only reported on a semi-annual
basis (Government Code � 84200).
A lack of timely disclosure of campaign contributions often
prevents the public and the press from knowing who has made a
SB 1102 (PADILLA)
Page 3
contribution and who has received one until months after the
contribution is actually made. Denying the press and the
public timely access fuels distrust.
According to the National Conference of State Legislatures,
"disclosure is the most basic form of campaign finance
regulation." Currently, additional disclosure is limited to
very large contributions and as Election Day approaches. All
reportable contributions are important and should be disclosed
online in a timely manner.
Since the year 2000, the office of the Secretary of State has
provided a web-based filing system for state-level campaign
filers. Uploading the size and source of all reportable
contributions in a timely manner would increase transparency
and accountability and serve as a strong check and balance to
our system of state government.
Current California law only requires bi-annual reporting in
non-election years. Timely disclosure is limited to very
large contributions and contributions made as Election Day
approaches. For example, contributions of $5000 and above
must be reported electronically within 10 days and
contributions of $1000 and above must be reported within 24
hours within 90 days of an election.
This bill would require contributions of $100 or more to be
electronically reported within 24 hours during the 90 days
preceding an election and within 5 business days the rest of
the year. The bill would apply to campaigns for elective
state offices including the legislature, constitutional
offices and the state board of equalization. Additionally, it
would apply to independent expenditure committees supporting
or opposing these offices and statewide ballot measure
committees.
2.Is This Bill Too Burdensome ? As stated above, this bill would
lower the reporting threshold for the 24-hour election cycle
reports from $1,000 to $100; lower the reporting threshold for
the non-election cycle reports from $5,000 to $100, and;
reduce the deadline for the non-election cycle reports from 10
business days of receipt of the contribution to five days.
The net effect being that candidates for elective state office
and virtually all state committees will have to report all
SB 1102 (PADILLA)
Page 4
contributions of $100 or more within either five days or 24
hours every year, year round.
Such requirements could be unduly burdensome for candidates and
committees with large amounts of campaign activity. For
instance, the largest committees in support of, and in
opposition to, Proposition 8 at the November, 2008 Statewide
General Election received thousands of contributions of $100
or more. Every one of these contributions would have been
required to be reported within 24 hours under this bill during
the last 90 days prior to the election and within five
business days at all other times. While it is likely that
many contributions could have been included on a single report
that was filed daily, the reporting system envisioned by this
bill nonetheless would have significantly increased the number
of reports that these committees would have had to file, and
would have significantly reduced the amount of time that these
committees had to prepare those reports.
3.Related Legislation . SB 1442 (Lara) which is also before this
committee, would enact a quarterly, rather than semi-annual,
campaign reporting schedule while maintaining the existing
election cycle and $5,000 non-election cycle activity reports.
POSITIONS
Sponsor: Author
Support: None received
Oppose: None received
SB 1102 (PADILLA)
Page 5