BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 1442 (Lara) - Campaign Statements
Amended: May 12, 2014 Policy Vote: E&CA 5-0
Urgency: No Mandate: No
Hearing Date: May 23, 2014 Consultant: Maureen Ortiz
SUSPENSE FILE.
Bill Summary: SB 1442 requires elected state officers,
candidates for elective state office, and committees primarily
formed to support or oppose a candidate or ballot measure to
file quarterly statements instead of the current semiannual
requirement; revises definitions relating to contributions and
expenditures; and makes related changes to the Political Reform
Act (PRA). Additionally, the bill contains legislative intent
to require monthly reporting upon implementation of a statewide
electronic filing system.
Fiscal Impact:
First year costs of $156,000 and annual ongoing of $146,000
to the Secretary of State (General Fund)
Annual costs of $147,000 to the Fair Political Practices
Commission (General Fund)
The Secretary of State will require 2 PYs for Program Technician
III positions at a cost of $156,000 in the first year and
$146,000 ongoing resulting from increased workload associated
with the more frequent filing of the reports, as well as
compliance and fine enforcement.
The FPPC indicates the need for PY for an Attorney I position
and 1 PY for a Political Reform Consultant to handle new
regulations, increased requests for advice, and for the
revisions of forms and campaign manuals.
Preliminary estimates for implementing an online filing system
for campaign disclosure reports is $10 million to $15 million.
Background: Under existing law, candidates and committees
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generally are required to file regular campaign disclosure
reports semi-annually. When candidates and committees are
required to file these pre-election reports, they generally must
also file late contribution reports and late independent
expenditure reports, disclosing within 24-hours any
contributions that were made or received and independent
expenditures made of $1,000 or more in the last 90 days before
the election (election cycle). Candidates and committees can
also be required to file additional special campaign reports at
other times of year, based on the particular campaign finance
activity of the candidate or committee.
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.
The PRA defines "committee" to include recipient committees,
independent expenditure committees, and "any person or
combination of persons who directly or indirectly makes
contributions totaling $10,000 or more in a calendar year to or
at the behest of candidates or committees." These last groups
of committees are commonly referred to as "major donor"
committees since they use their own funds to make political
contributions rather than raising money from other sources.
Proposed Law: Existing law, pursuant to the Political Reform Act
(PRA), requires candidates, political committees, and slate mail
organizations to file specified periodic and activity-based
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campaign finance reports, including semiannual statements,
pre-election statements, supplemental pre-election statements,
and late contribution/expenditure reports that include specified
campaign finance information.
SB 1442 will require elected state officers, candidates for
elective state office, and committees primarily formed to
support or oppose a candidate for elective state office or one
or more statewide ballot measures to file quarterly statements
each year instead of semiannual statements. Specifically, an
elected state officer, a candidate for elective state office, or
a recipient committee that is primarily formed to support or
oppose a candidate for elective state office or one or more
statewide ballot measures would file quarterly campaign
statements each year, as follows:
No later than April 7 for the period commencing January 1 and
ending March 31.
No later than July 31 for the period commencing April 1 and
ending June 30.
No later than October 7 for the period commencing July 1 and
ending September 30.
No later than January 31 for the period commencing October 1
and ending December 31.
SB 1442 also requires independent expenditure committees and
"major donor" committees that are primarily formed to support or
oppose a candidate for elective state office or one or more
statewide ballot measures to file quarterly campaign statements
pursuant to the aforementioned schedule unless the committee has
not made contributions or independent expenditures during the
reporting period.
This bill will recast or repeal other specified reporting
requirements, including supplemental pre-election statements,
supplemental independent expenditure reports, and odd-numbered
year reports in order to conform to the proposed quarterly
reporting schedule.
Existing law defines "late contributions" and "late independent
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expenditures" to include certain contributions and independent
expenditures that are made within 90 days before the date of the
election. SB 1442 will revise these definitions to specify that
those terms also include contributions and independent
expenditures that are made on the date of the election.
Related Legislation: SB 1102 (Padilla) which is also pending in
this committee, would lower the reporting threshold for
non-election cycle reports from $5,000 to $1,000; and, reduce
the deadline for the non-election cycle reports from 10 business
days of receipt of the contribution to five days.
Staff Comments: This bill is part of a package of bills that are
aimed at strengthening the relationship between the citizens of
California and their state government - the California
Accountability in Public Service Act (CAPS Act). Recent events
have raised significant questions about the transparency and
accountability of rules and political practices in state
government. This package of bills is the most significant
change to political practices in California in at least twenty
years. SB 1442 is a part of the CAPS Act and replaces
semi-annual reporting statements with quarterly filing reports.
This doubles the amount of disclosure currently provided to the
public in order to streamline and consolidate the current
reporting process without losing transparency.