BILL ANALYSIS Ó
SENATE COMMITTEE ON ELECTIONS
AND CONSTITUTIONAL AMENDMENTS
Senator Norma J. Torres, Chair
BILL NO: SB 1443 HEARING DATE: 4/22/14
AUTHOR: DE LEON ANALYSIS BY: Darren Chesin
AMENDED: 4/10/14
FISCAL: YES
SUBJECT
Political Reform Act: gifts
DESCRIPTION
Existing law , pursuant to the Political Reform Act (PRA),
prohibits a lobbyist or lobbying firm from making gifts
aggregating more than $10 in a calendar month to a state
candidate, elected state officer, or legislative official, or to
an agency official of any agency required to be listed on the
registration statement of the lobbying firm or the lobbyist
employer of the lobbyist.
Existing law prohibits elected state and local officers,
candidates for elective state or local office, designated
employees of state or local government agencies, and members of
state boards and commissions from accepting gifts from any
single source in a calendar year with a total value of more than
$420, with certain limited exceptions. The Fair Political
Practices Commission (FPPC) is required to adjust this gift
limit on January 1 of each odd-numbered year to reflect changes
in the Consumer Price Index (CPI), rounded to the nearest $10.
Existing law requires specified state and local government
officials and candidates for elective office to file Statements
of Economic Interests (SEI). An SEI is a public document
disclosing investments, real property interests, travel, income
and gifts. Generally, a person must disclose gifts aggregating
$50 or more from a single source in a calendar year.
This bill would prohibit a lobbyist or lobbying firm from making
any gift to a state candidate, elected state officer, or
legislative official, or to a specified agency official.
This bill would lower the existing gift limit rom $420 per
calendar year from a single source to $200 per year from a
single source. This bill would also permit the FPPC, at its
discretion, to increase this gift limit amount but not more than
once in an odd-numbered year or by an amount that exceeds
changes reflected in the CPI.
This bill would also provide that a candidate for elective state
office, an elected state officer, or a legislative official
shall not accept a gift of tickets or the equivalent of tickets
to any of the following events or venues:
A professional concert or other professional entertainment
event.
A professional sporting event.
An amateur sporting event for which the value of the ticket
received exceeds $50.
A racetrack event.
A theme park, amusement park, or other similar venue.
An amateur theater, concert, or other entertainment event for
which the value of the ticket received exceeds $50.
For purposes of this prohibition, "professional" means an event
with performers who are compensated for the event or who engage
in the performance activity as their vocation.
This bill would also provide that a candidate for elective state
office, an elected state officer, or a legislative official
shall not accept a gift of any of the following:
Golfing green fees, complimentary golf course access, or the
equivalent.
Skiing, hunting, or fishing trips or other recreational
outings.
Spa treatments, spa access fees, or other equivalent
complimentary beauty or cosmetic services.
Cash, gift cards, or cash equivalents.
BACKGROUND
Gift Definitions and Exemptions . The following is a description
of existing statutory and regulatory gift definitions and a list
of exemptions taken from an FPPC fact sheet intended for elected
state officers, candidates for elective state office, members of
SB 1443 (De Leon)
Page 2
state boards and commissions, designated employees of state
government agencies, and state officials who manage public
investments. For a complete discussion of these definitions and
exemptions please consult the fact sheet at:
http://www.fppc.ca.gov/factsheets/StateGiftFactSheet2013.pdf.
Gift Definition
A "gift" is any payment or other benefit provided to a covered
individual that confers a personal benefit for which the
individual does not provide payment or services of equal or
greater value. A gift includes a rebate or discount in the
price of anything of value unless the rebate or discount is made
in the regular course of business to members of the public.
Gifts to Family Members
Under certain circumstances, a gift to an official's family
member is considered a gift to the official. Anything given to
a family member is presumed to be a gift to the official if: (1)
there is no established relationship between the donor and the
family member where it would generally be considered appropriate
for the family member to receive the gift or; (2) the donor is
someone who lobbies the official's agency, is involved in an
action before the official's agency in which the official may
foreseeably participate, or engages in business with the agency
in which the official will foreseeably participate. (Wedding
gifts are treated differently, see below.)
For purposes of this rule, an official's "family member"
includes the official's spouse; registered domestic partner; any
minor child of the official who the official can claim as a
dependent for federal tax purposes; and a child of the official
who is aged 18 to 23 years old, attends school, resides with the
official when not attending school, and provides less than
one-half of his or her own support.
Gift Exceptions
The following payments are not gifts:
1. Items that are returned unused to the donor or for which the
recipient reimburses the donor.
SB 1443 (De Leon)
Page 3
2. Items that are donated unused to a non-profit, tax-exempt
(501(c)(3)) organization or to a government agency without
claiming a tax deduction.
3. Gifts from a family member unless he or she is acting as an
agent or intermediary for another person who is the true
source of the gift.
4. Gifts of hospitality including food, drink or occasional
lodging that is received in an individual's home when the
individual or a member of his or her family is present. Such
hospitality provided by a lobbyist is a gift under specified
circumstances.
5. Gifts commonly exchanged between the recipient and another
individual (other than a lobbyist) on holidays, birthdays, or
similar occasions to the extent that the gifts exchanged are
not substantially disproportionate in value.
6. Reciprocal exchanges between the recipient and another
individual (other than a lobbyist) that occur on an ongoing
basis, as specified.
7. Informational material provided to assist the recipient in
the performance of official duties.
8. A devise or inheritance.
9. Campaign contributions.
10.Personalized plaques and trophies with an individual value
of less than $250.
11.Admission for the official and one guest at an event where
the official performs a ceremonial role.
12.A prize or award received in a bona fide contest or
competition, or game of chance. .
13.Benefits received as a guest attending a wedding reception.
14.Bereavement offerings, such as flowers at a funeral.
15.Benefits received as an act of neighborliness such as the
SB 1443 (De Leon)
Page 4
loan of an item, an occasional ride, or help with a repair.
16.Personal benefits commonly received from a dating partner.
17.Acts of human compassion, as specified.
18.Benefits received from a long-time personal friend where the
gift is unrelated to the official's duties.
19.Benefits received from an individual who is not a lobbyist
registered to lobby the official's agency, where it is clear
that the gift was made because of an existing personal or
business relationship unrelated to the official's position.
20.Two tickets for admission to attend a campaign or charity
fundraiser, as specified.
21.Passes or tickets that the recipient does not use and does
not give to another person.
22.Gifts provided to the recipient's government agency, as
specified.
23.Payments made by a third party to co-sponsor an event, or
that are principally legislative, governmental or charitable
in nature.
24.Leave credits (e.g., sick leave or vacation credits), as
specified.
25.Food, shelter, or similar assistance received in connection
with a disaster relief program.
26.Items received by an employee during an employee gift
exchange.
Reportable Gifts Not Subject to Limits
The following exceptions are also applicable to gifts, but the
recipient may be required to report these items on a SEI (Form
700) and they can subject the recipient to disqualification:
SB 1443 (De Leon)
Page 5
1.Certain payments for transportation, lodging, and subsistence.
2.Wedding gifts are not subject to the $440 gift limit, but they
are subject to the $10 lobbyist/lobbying firm gift limit and
they are reportable. For purposes of valuing wedding gifts,
one-half of the value of each gift is attributable to each
spouse.
3.A prize or award received in a bona fide competition not
related to the recipient's official status is not subject to
the gift limit, but must be reported as income.
Travel Payment Exceptions
The following travel payments are not prohibited or subject to
the $440 gift limit, but may be reportable on a SEI (Form 700).
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 $10 lobbyist/lobbying firm gift limit.
1.Travel that is reasonably necessary in connection with a bona
fide business, trade, or profession, as specified.
2.Travel within the United States 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.
3.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.
SB 1443 (De Leon)
Page 6
COMMENTS
1.According to the Author : SB 1443 is a product of the Senate
Ethics Working Group, and a part of a legislative package
supported by the Senate Democratic Caucus (the others are SB
1441 and SB 1442) aimed at bolstering public confidence in
California's elected officials and improving transparency in
the gift reporting process.
This measure seeks to severely reduce the gift limit and
completely ban gifts such as tickets to professional sporting
events and concerts, amusement parks, golfing green fees, spa
treatments, and recreational trips. Increasing of the gift
limit over the years, which is currently set at $440, is
approaching the conflict of interest threshold of $500. SB
1442 would reduce the gift limit to $200.
The legislative package put forward by the Senate Ethics Working
Group represents the most comprehensive reform to the
Political Reform Act in decades.
2.Previous Legislation : SB 1426 (Blakeslee) of 2012 which would
have prohibited specific types of gifts (such as gift cards,
amusement park and racetrack tickets) from lobbyists, lobbyist
firms, and lobbyist employers was held on the Assembly
Appropriations Committee's suspense file. A similar bill, SB
18 (Blakeslee) of 2011 was also held on the Senate
Appropriations Committee's suspense file.
AB 1412 (Torrico) of 2009, and AB 2368 (Blakeslee) of 2010,
would have prohibited a lobbyist employer from making gifts to
a Member of the Legislature aggregating more than $10 in a
calendar month. AB 1412 died on the inactive file on the
Assembly Floor. AB 2368 was held on the Assembly
Appropriations Committee's suspense file.
AB 2795 (Blakeslee) of 2008, would have prohibited a lobbyist
employer from making gifts to state candidates, elected state
officers, legislative officials, and certain agency officials
aggregating more than $10 in a calendar month with certain
exceptions for food or refreshments of a nominal value offered
other than as part of a meal and tickets to certain events
sponsored by the lobbyist employer. AB 2795 was held on the
SB 1443 (De Leon)
Page 7
Assembly Appropriations Committee's suspense file.
POSITIONS
Sponsor: Author
Support: None received
Oppose: None received
SB 1443 (De Leon)
Page 8