BILL ANALYSIS Ó
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UNFINISHED BUSINESS
Bill No: SB 1443
Author: De León (D), Corbett (D), Hill (D), Lara (D), Monning
(D),
Roth (D), Steinberg (D), and Torres (D)
Amended: 7/1/14
Vote: 27
SENATE ELEC. & CONST. AMEND. COMMITTEE : 5-0, 4/22/14
AYES: Torres, Anderson, Hancock, Jackson, Padilla
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 34-0, 5/19/14
AYES: Anderson, Beall, Berryhill, Block, Corbett, Correa, De
León, Evans, Fuller, Gaines, Galgiani, Hancock, Hernandez,
Hill, Hueso, Huff, Jackson, Knight, Lara, Leno, Lieu, Liu,
Mitchell, Monning, Morrell, Padilla, Pavley, Roth, Steinberg,
Torres, Vidak, Walters, Wolk, Wyland
NO VOTE RECORDED: Calderon, Cannella, DeSaulnier, Nielsen,
Wright, Yee
ASSEMBLY FLOOR : 75-4, 8/18/14 - See last page for vote
SUBJECT : Political Reform Act of 1974: gift limitations
SOURCE : Author
DIGEST : This bill prohibits a lobbyist or lobbying firm from
making a gift of any amount to a state candidate, elected state
officer, or legislative official, or to a specified agency
CONTINUED
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official; and lowers the existing gift limit from $440 per
calendar year from a single source to $200 per year from a
single source.
Assembly Amendments reduce to $200 the aggregate value of gifts
that create a financial interest for a public official in the
gift's donor; require the Fair Political Practices Commission
(FPPC) to adjust this amount to equal the amount of any
adjustment made by the FPPC to the gift limitation, as
described, on the value of gifts from single source in a
calendar year.
ANALYSIS :
Existing law:
1. Prohibits, pursuant to the Political Reform Act (PRA), 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.
2. 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 $440, with
certain limited exceptions. The 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.
3. 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.
4. Prohibits, pursuant to the PRA, a public official at any
level of state or local government from making, participating
in making, or in any way attempting to use the official's
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position to influence a governmental decision in which the
official knows or has reason to know that he/she has a
financial interest. The PRA provides that the public
official has a financial interest in a decision if it is
reasonably foreseeable that the decision will have a material
financial effect on the official, the official's immediate
family, or other prescribed persons, including a donor of a
gift or gifts aggregating $250 or more in value within the 12
months preceding the decision. The PRA requires the FPPC to
adjust the gift value amount to equal the above-described
limitation amount on the value of gifts from a single source
in a calendar year.
This bill:
1. Prohibits a lobbyist or lobbying firm from making a gift of
any amount to a state candidate, elected state officer, or
legislative official, or to a specified agency official.
2. Lowers the existing gift limit from $440 per calendar year
from a single source to $200 per year from a single source.
Permits 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.
3. Prohibits a candidate for elective state office, an elected
state officer, or a legislative official from accepting 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.
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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.
4. Defines "professional," for purposes of the above
prohibition, to mean an event with performers who are
compensated for the event or who engage in the performance
activity as their vocation.
5. Prohibits a candidate for elective state office, an elected
state officer, or a legislative official from accepting 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.
6. Reduces to $200 the aggregate value of gifts that create a
financial interest for a public official in the gift's donor.
Requires the FPPC to adjust this amount to equal the amount
of any adjustment made by the FPPC to the above-described
gift limitation on the value of gifts from single source in a
calendar year.
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
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state officers, candidates for elective state office, members of
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/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.
2. Items that are donated unused to a non-profit, tax-exempt
organization or to a government agency without claiming a tax
deduction.
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3. Gifts from a family member unless he/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/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
loan of an item, an occasional ride, or help with a repair.
16.Personal benefits commonly received from a dating partner.
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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:
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
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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 will 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/18/14)
California Common Cause
League of Women Voters of California
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OPPOSITION : (Verified 8/18/14)
Professional Beauty Federation of California
ARGUMENTS IN SUPPORT : California Common Cause writes, "The
practice of gift giving has become an unseemly problem. In 2012
alone, special interests gave over $32,000 in event and
admission tickets to state elected officials, all of it legally.
California voters should be concerned about the relationship
that this type of gift giving creates between legislators with
significant decision-making authority and powerful special
interests. While there is nothing inherently illegal with gift
giving, serious ethical concerns arise when elected officials
feel the need to reciprocate to these special interests, who do
not necessarily have the public interest in mind.
This bill will, "? take [a]n important step in closing the
gifts loophole and help prevent future abuses."
ARGUMENTS IN OPPOSITION : The Professional Beauty Federation
of California writes in opposition, "While we embrace the
overall intent of SB 1443, we have a narrow concern about the
broadly worded prohibition against complimentary beauty services
found under section (h)(3), page 4, lines 32-33.
"The beauty industry in California provides many educational
opportunities for state regulators and policymakers to learn
more about our industry by experiencing the services and
techniques employed by beauty industry professionals. Such
educational services are provided at industry trade shows -- not
licensed salons -- such as the PBFC's annual "Welcome to Our
World" event held on the steps of the State Capitol each spring.
We strongly urge your committee to clarify the scope of the
beauty service gift prohibition to avoid precluding the
participation of regulators and policymakers in such educational
events by inserting the following line to this section of the
measure.
"(3) Spa treatments, spa access fees, or other equivalent
complimentary beauty or cosmetic services provided at licensed
establishments ."
ASSEMBLY FLOOR : 75-4, 8/18/14
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AYES: Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gonzalez, Gordon, Gorell,
Gray, Grove, Hagman, Hall, Harkey, Roger Hernández, Holden,
Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Mansoor, Medina, Muratsuchi, Nazarian, Nestande,
Olsen, Pan, Perea, John A. Pérez, V. Manuel Pérez, Quirk,
Quirk-Silva, Rendon, Ridley-Thomas, Rodriguez, Salas, Skinner,
Stone, Ting, Wagner, Waldron, Weber, Wieckowski, Wilk,
Williams, Yamada, Atkins
NO VOTE RECORDED: Gomez, Melendez, Mullin, Patterson
RM:d 8/18/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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