BILL NUMBER: SB 27	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Correa

                        DECEMBER 3, 2012

   An act to amend Section 82015 of, and to add Sections 84222 and
84223 to, the Government Code, relating to the Political Reform Act
of 1974.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 27, as introduced, Correa. Political Reform Act of 1974.
   Existing law, the Political Reform Act of 1974, provides for the
comprehensive regulation of campaign financing, including requiring
the reporting of campaign contributions and expenditures, as defined,
and imposing other reporting and recordkeeping requirements on
campaign committees, as defined. The Fair Political Practices
Commission administers and enforces the act. A violation of the act's
provisions is punishable as a misdemeanor.
   This bill would revise the definition of a "contribution" to
include payments made by a donor who, at the time of making the
payment, knows or has reason to know that the payment, or funds with
which the payment will be commingled, will be used to make
contributions or expenditures. The bill establishes presumptions as
to whether a donor has reason to know that a payment will be used to
make contributions or expenditures based on the number of years the
recipient has existed and the amount of the recipient's first
contribution or expenditure, as specified.
   This bill would impose reporting requirements on a multipurpose
organization, as defined, that receives donations and uses those
donations to make contributions or expenditures of $1,000 or more in
a calendar year in this state. The bill would also authorize the
Commission to perform discretionary audits of these reports, as
specified.
   This bill would require ballot measure committees and candidate
committees that raise $1,000,000 or more for an election to maintain
an accurate list of the committee's top 10 contributors, which are to
be posted on the Commission's Internet Web site as well as the
committee's Internet Web site, if any.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   The Political Reform Act of 1974, an initiative measure, provides
that the Legislature may amend the act to further the act's purposes
upon a 2/3 vote of each house and compliance with specified
procedural requirements.
   This bill would declare that it furthers the purposes of the act.

   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) Nonprofit and other multipurpose organizations are increasing
their political activities and some are seeking to make contributions
and expenditures in California elections without revealing their
financial backers.
   (b) Certain donors attempt to obscure their identities from the
public by making donations to one organization or entity which then
makes donations to a separate organization or campaign committee, or
by routing funds through a succession of committees. Committees
themselves are in the best position to know who their financial
backers are and to provide this information to the public in an
accurate, timely, and transparent manner.
   (c) Under the Political Reform Act of 1974, nonprofit and other
multipurpose organizations that make contributions or expenditures to
support or oppose California candidates or ballot measures are
subject to the same rules as those entities that raise funds
specifically for California elections - they must disclose the
sources of funds used for their political expenditures.
   (d) It is therefore the intent of the Legislature to strengthen
the laws requiring the disclosure of contributions and expenditures
in California elections by nonprofit and other multipurpose
organizations and to require Internet posting of a list of the top
ten contributors to a committee primarily formed to support or
oppose, and raising or spending one million dollars ($1,000,000) or
more to support or oppose, ballot measures or candidates.
  SEC. 2.  Section 82015 of the Government Code is amended to read:
   82015.  (a) "Contribution" means a payment, a forgiveness of a
loan, a payment of a loan by a third party, or an enforceable promise
to make a payment except to the extent that full and adequate
consideration is received, unless it is clear from the surrounding
circumstances that it is not made for political purposes.
   (b) (1) A payment made at the behest of a committee as defined in
subdivision (a) of Section 82013 is a contribution to the committee
unless full and adequate consideration is received from the committee
for making the payment.
   (2) A payment made at the behest of a candidate is a contribution
to the candidate unless the criteria in either subparagraph (A) or
(B) are satisfied:
   (A) Full and adequate consideration is received from the
candidate.
   (B) It is clear from the surrounding circumstances that the
payment was made for purposes unrelated to his or her candidacy for
elective office. The following types of payments are presumed to be
for purposes unrelated to a candidate's candidacy for elective
office:
   (  i   I  ) A payment made principally
for personal purposes, in which case it may be considered a gift
under the provisions of Section 82028. Payments that are otherwise
subject to the limits of Section 86203 are presumed to be principally
for personal purposes.
   (ii) A payment made by a state, local, or federal governmental
agency or by a nonprofit organization that is exempt from taxation
under Section 501(c)(3) of the Internal Revenue Code.
   (iii) A payment not covered by clause (  i  
I  ), made principally for legislative, governmental, or
charitable purposes, in which case it is neither a gift nor a
contribution. However, payments of this type that are made at the
behest of a candidate who is an elected officer shall be reported
within 30 days following the date on which the payment or payments
equal or exceed five thousand dollars ($5,000) in the aggregate from
the same source in the same calendar year in which they are made. The
report shall be filed by the elected officer with the elected
officer's agency and shall be a public record subject to inspection
and copying pursuant to subdivision (a) of Section 81008. The report
shall contain the following information: name of payor, address of
payor, amount of the payment, date or dates the payment or payments
were made, the name and address of the payee, a brief description of
the goods or services provided or purchased, if any, and a
description of the specific purpose or event for which the payment or
payments were made. Once the five-thousand-dollar ($5,000) aggregate
threshold from a single source has been reached for a calendar year,
all payments for the calendar year made by that source must be
disclosed within 30 days after the date the threshold was reached or
the payment was made, whichever occurs later. Within 30 days after
receipt of the report, state agencies shall forward a copy of these
reports to the Fair Political Practices Commission, and local
agencies shall forward a copy of these reports to the officer with
whom elected officers of that agency file their campaign statements.
   (C) For purposes of subparagraph (B), a payment is made for
purposes related to a candidate's candidacy for elective office if
all or a portion of the payment is used for election-related
activities. For purposes of this subparagraph, "election-related
activities" shall include, but are not limited to, the following:
   (  i   I ) Communications that contain
express advocacy of the nomination or election of the candidate or
the defeat of his or her opponent.
   (ii) Communications that contain reference to the candidate's
candidacy for elective office, the candidate's election campaign, or
the candidate's or his or her opponent's qualifications for elective
office.
   (iii) Solicitation of contributions to the candidate or to third
persons for use in support of the candidate or in opposition to his
or her opponent.
   (iv) Arranging, coordinating, developing, writing, distributing,
preparing, or planning of any communication or activity described in
clause (  i   I  ), (ii), or (iii).
   (v) Recruiting or coordinating campaign activities of campaign
volunteers on behalf of the candidate.
   (vi) Preparing campaign budgets.
   (vii) Preparing campaign finance disclosure statements.
   (viii) Communications directed to voters or potential voters as
part of activities encouraging or assisting persons to vote if the
communication contains express advocacy of the nomination or election
of the candidate or the defeat of his or her opponent.
   (D) A contribution made at the behest of a candidate for a
different candidate or to a committee not controlled by the behesting
candidate is not a contribution to the behesting candidate.
   (3) A payment made at the behest of a member of the Public
Utilities Commission, made principally for legislative, governmental,
or charitable purposes, is not a contribution. However, payments of
this type shall be reported within 30 days following the date on
which the payment or payments equal or exceed five thousand dollars
($5,000) in the aggregate from the same source in the same calendar
year in which they are made. The report shall be filed by the member
with the Public Utilities Commission and shall be a public record
subject to inspection and copying pursuant to subdivision (a) of
Section 81008. The report shall contain the following information:
name of payor, address of payor, amount of the payment, date or dates
the payment or payments were made, the name and address of the
payee, a brief description of the goods or services provided or
purchased, if any, and a description of the specific purpose or event
for which the payment or payments were made. Once the
five-thousand-dollar ($5,000) aggregate threshold from a single
source has been reached for a calendar year, all payments for the
calendar year made by that source must be disclosed within 30 days
after the date the threshold was reached or the payment was made,
whichever occurs later. Within 30 days after receipt of the report,
the Public Utilities Commission shall forward a copy of these reports
to the Fair Political Practices Commission.
   (c) "Contribution" includes the purchase of tickets for events
such as dinners, luncheons, rallies, and similar fundraising events;
the candidate's own money or property used on behalf of his or her
candidacy other than personal funds of the candidate used to pay
either a filing fee for a declaration of candidacy or a candidate
statement prepared pursuant to Section 13307 of the Elections Code;
the granting of discounts or rebates not extended to the public
generally or the granting of discounts or rebates by television and
radio stations and newspapers not extended on an equal basis to all
candidates for the same office; the payment of compensation by any
person for the personal services or expenses of any other person if
the services are rendered or expenses incurred on behalf of a
candidate or committee without payment of full and adequate
consideration.
   (d) "Contribution" further includes any transfer of anything of
value received by a committee from another committee, unless full and
adequate consideration is received.
   (e) "Contribution" does not include amounts received pursuant to
an enforceable promise to the extent those amounts have been
previously reported as a contribution. However, the fact that those
amounts have been received shall be indicated in the appropriate
campaign statement.
   (f) "Contribution" does not include a payment made by an occupant
of a home or office for costs related to any meeting or fundraising
event held in the occupant's home or office if the costs for the
meeting or fundraising event are five hundred dollars ($500) or less.

   (g) Notwithstanding the foregoing definition of "contribution,"
the term does not include volunteer personal services or payments
made by any individual for his or her own travel expenses if the
payments are made voluntarily without any understanding or agreement
that they shall be, directly or indirectly, repaid to him or her.
   (h) "Contribution" further includes the payment of public moneys
by a state or local governmental agency for a communication to the
public that satisfies both of the following:
   (1) The communication expressly advocates the election or defeat
of a clearly identified candidate or the qualification, passage, or
defeat of a clearly identified measure, or, taken as a whole and in
context, unambiguously urges a particular result in an election.
   (2) The communication is made at the behest of the affected
candidate or committee. 
   (I) (1) "Contribution" further includes a payment made to a person
if, at the time of making the payment, the donor knows or has reason
to know that the payment, or funds with which the payment will be
commingled, will be used to make a contribution or expenditure. If
the donor knows or has reason to know that only part of the payment
will be used to make a contribution or expenditure, the payment shall
be apportioned on a reasonable basis in order to determine the
amount of the contribution.  
   (2) For purposes of paragraph (1), if the person receiving the
payment has been in existence for two years or more prior to making a
contribution or expenditure in this state and the person's first
contribution or expenditure in this state is less than five hundred
thousand dollars ($500,000), there shall be a presumption that the
donor does not have reason to know that all or part of the payment
will be used to make a contribution or expenditure, unless the person
has made contributions or expenditures of one thousand dollars
($1,000) or more in the aggregate during the calendar year in which
the payment occurs, or in any of the immediately preceding four
calendar years.  
   (3) For purposes of paragraph (1), if the person receiving the
payment has been in existence for less than two years prior to making
a contribution or expenditure in this state or the person's first
contribution or expenditure in this state is five hundred thousand
dollars ($500,000) or more, there shall be a presumption that the
donor has reason to know that all or part of the payment will be used
to make a contribution or expenditure.  
   (4) A donor who makes a contribution described in paragraph (1)
shall be identified and reported by the person receiving the
contribution in accordance with regulations adopted by the
Commission. 
  SEC. 3.  Section 84222 is added to the Government Code, to read:
   84222.  (a) For purposes of this section, "multipurpose
organization" means a nonprofit organization, a federal or
out-of-state political action committee, or a local club focusing on
educational or social activities.
   (b) A multipurpose organization that receives donations and uses
those donations to make contributions or expenditures of one thousand
dollars ($1,000) or more in a calendar year in this state shall
disclose the donors that are the sources of the donations used to
make contributions or expenditures, in accordance with regulations
adopted by the Commission.
   (c) A multipurpose organization that makes contributions or
expenditures in this state is subject to discretionary audits
conducted by the Commission. An audit conducted pursuant to this
subdivision shall be limited to examining the multipurpose
organization's contributions or expenditures in this state and the
donations that are the sources of the funds for those contributions
or expenditures. During an audit, a multipurpose organization shall
make its records of donors available for inspection by the
Commission, if requested. A multipurpose organization shall keep
copies of its fundraising solicitations and, during an audit, make
those solicitations available for inspection by the Commission, if
requested.
  SEC. 4.  Section 84223 is added to the Government Code, to read:
   84223.  (a) A committee primarily formed to support or oppose a
ballot measure or candidate that raises one million dollars
($1,000,000) or more for an election shall maintain an accurate and
publicly available list of the committee's top ten contributors, as
specified by Commission regulations. The list of top ten contributors
shall be posted on the Commission's Internet Web site and posted
prominently on the committee's Internet Web site, if any.
   (b) In listing the top ten contributors, the committee shall use
reasonable efforts to identify the actual individuals or corporations
that are the true sources of the contributions made to the committee
from other persons or committees.
  SEC. 5.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
  SEC. 6.  The Legislature finds and declares that this bill furthers
the purposes of the Political Reform Act of 1974 within the meaning
of subdivision (a) of Section 81012 of the Government Code.