Bill Text: CA SB831 | 2013-2014 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Political Reform Act of 1974.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Vetoed) 2014-09-30 - In Senate. Consideration of Governor's veto pending. [SB831 Detail]
Download: California-2013-SB831-Amended.html
Bill Title: Political Reform Act of 1974.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Vetoed) 2014-09-30 - In Senate. Consideration of Governor's veto pending. [SB831 Detail]
Download: California-2013-SB831-Amended.html
BILL NUMBER: SB 831 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 7, 2014
AMENDED IN ASSEMBLY JULY 1, 2014
AMENDED IN ASSEMBLY JUNE 18, 2014
AMENDED IN SENATE MAY 27, 2014
AMENDED IN SENATE MAY 14, 2014
AMENDED IN SENATE APRIL 10, 2014
AMENDED IN SENATE MARCH 20, 2014
INTRODUCED BY Senator Hill
(Principal coauthor: Senator Beall)
(Principal coauthors: Assembly Members Garcia and Levine)
JANUARY 6, 2014
An act to amend Sections 87207, 89506, 89513, 89515, 89516, and
89517 of, and to add Sections 87106 and 89515.5 to, the Government
Code, relating to the Political Reform Act of 1974.
LEGISLATIVE COUNSEL'S DIGEST
SB 831, as amended, Hill. Political Reform Act of 1974.
(1) The Political Reform Act of 1974 provides for the
comprehensive regulation of campaign financing and related matters,
including the reporting of campaign contributions, as defined. Under
existing law, a payment made at the behest of a candidate for
elective office is considered a contribution unless the payment is
made for purposes unrelated to the candidate's candidacy, and a
payment is presumed to be unrelated to a candidate's candidacy if it
is made principally for legislative, governmental, or charitable
purposes.
The bill would prohibit an elected officer from requesting that a
payment be made, or a person from making a payment, at the behest of
the elected officer to a nonprofit organization that is exempt
from taxation under Section 501(c)(4) of the Internal
Revenue Code and that the elected officer knows or has reason
to know is owned or controlled by that officer or specified family
members of the officer, except as specified. The bill would provide
that an elected officer is deemed to have complied with that
requirement if the Commission determines that the elected officer has
made a reasonable effort to ascertain whether a nonprofit
organization is owned or controlled by any of the specified persons.
(2) The act prohibits specified officers from receiving gifts, as
defined, in excess of $440 in value from a single source in a
calendar year. The act exempts gift payments for the actual costs of
specified types of travel that are reasonably related to a
legislative or governmental purpose, or to an issue of state,
national, or international public policy, from the annual limit on
the value of gifts from a single source.
This bill would require a nonprofit organization that pays for
these types of travel for an elected state officer or local
elected officeholder to disclose the names of donors
responsible for funding the payments, as specified. The bill would
require a person who receives a gift of a travel payment to report
the travel destination on his or her statement of economic interests.
(3) The act requires that contributions deposited into a campaign
account be held in trust for expenses associated with the election of
the candidate or for expenses associated with holding office. The
act provides that an expenditure to seek office is within the lawful
execution of this trust if it is reasonably related to a political
purpose and an expenditure associated with holding office is within
the lawful execution of this trust if it is reasonably related to a
legislative or governmental purpose. Expenditures that confer a
substantial personal benefit must be directly related to a political,
legislative, or governmental purpose. The act authorizes the use of
campaign funds to make donations or loans to bona fide charitable,
educational, civic, religious, or similar tax-exempt nonprofit
organizations. The act imposes additional limitations on certain
expenditures, including those relating to automotive expenses, travel
expenses, tickets for entertainment or sporting events, personal
gifts, and real property expenses.
The bill would prohibit an elected officer or a committee
controlled by the elected officer from making an expenditure of
campaign funds to a nonprofit organization that is exempt from
taxation under Section 501(c)(4) of the Internal Revenue Code and
that is owned or controlled by the officer or specified family
members of the officer, as specified.
This bill would also limit the expenditure of campaign funds for
other purposes, as specified, including personal vacations, payments
for membership dues for a country club, health club, or other
recreational facility, specified tuition payments, utility payments,
vehicle use that is not directly related to an election campaign, and
certain gifts for specified family members of a candidate, elected
officer, or other individuals with the authority to approve the
expenditure of campaign funds held by a committee.
(4) A violation of the act's provisions is punishable as a
misdemeanor. By expanding the scope of an existing crime, this bill
would impose a state-mandated local program.
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.
(5) 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. Section 87106 is added to the Government Code, to read:
87106. (a) An elected officer shall not request that a payment be
made, and a person shall not make a payment at the behest of the
elected officer, as described in Section 82015, to a nonprofit
organization that the elected officer knows or has reason to know is
owned or controlled by that officer or a family member of the elected
officer.
(b) An elected officer is deemed to have complied with the
requirements of subdivision (a) if the Commission determines that the
elected officer has made a reasonable effort to ascertain whether a
nonprofit organization is owned or controlled by any individual
described in subdivision (a).
(c) For purposes of this section, a nonprofit organization is
owned or controlled by an elected officer or family member of the
elected officer if the elected officer or family member of the
elected officer, or a member of that person's immediate family, is a
director, officer, partner, or trustee of, or holds any position of
management with, the nonprofit organization, and is paid for his or
her services.
(d) For purposes of this section, "family
the following terms have the following meanings:
(1) "Family member of the elected
officer" means the spouse, child, sibling, or parent of an elected
officer.
(2) "Nonprofit organization" means an organization that is exempt
from taxation under Section 501(c)(4) of the Internal Revenue Code.
(e) This section shall not apply to behested payments made to a
nonprofit organization that is formed for the purpose of coordinating
or performing disaster relief services.
SEC. 2. Section 87207 of the Government Code is amended to read:
87207. (a) If income is required to be reported under this
article, the statement shall contain, except as provided in
subdivision (b):
(1) The name and address of each source of income aggregating five
hundred dollars ($500) or more in value, or fifty dollars ($50) or
more in value if the income was a gift, and a general description of
the business activity, if any, of each source.
(2) A statement whether the aggregate value of income from each
source, or in the case of a loan, the highest amount owed to each
source, was at least five hundred dollars ($500) but did not exceed
one thousand dollars ($1,000), whether it was in excess of one
thousand dollars ($1,000) but was not greater than ten thousand
dollars ($10,000), whether it was greater than ten thousand dollars
($10,000) but not greater than one hundred thousand dollars
($100,000), or whether it was greater than one hundred thousand
dollars ($100,000).
(3) A description of the consideration, if any, for which the
income was received.
(4) In the case of a gift, the amount and the date on which the
gift was received, and the travel destination for purposes of a gift
that is a travel payment, advance, or reimbursement.
(5) In the case of a loan, the annual interest rate, the security,
if any, given for the loan, and the term of the loan.
(b) If the filer's pro rata share of income to a business entity,
including income to a sole proprietorship, is required to be reported
under this article, the statement shall contain:
(1) The name, address, and a general description of the business
activity of the business entity.
(2) The name of every person from whom the business entity
received payments if the filer's pro rata share of gross receipts
from that person was equal to or greater than ten thousand dollars
($10,000) during a calendar year.
(c) If a payment, including an advance or reimbursement, for
travel is required to be reported pursuant to this section, it may be
reported on a separate travel reimbursement schedule which shall be
included in the filer's statement of economic interest. A filer who
chooses not to use the travel schedule shall disclose payments for
travel as a gift, unless it is clear from all surrounding
circumstances that the services provided were equal to or greater in
value than the payments for the travel, in which case the travel may
be reported as income.
SEC. 3. Section 89506 of the Government Code is amended to read:
89506. (a) Payments, advances, or reimbursements for travel,
including actual transportation and related lodging and subsistence
that is reasonably related to a legislative or governmental purpose,
or to an issue of state, national, or international public policy,
are not prohibited or limited by this chapter if either of the
following applies:
(1) The travel is in connection with a speech given by the elected
state officer, local elected officeholder, candidate for elective
state office or local elective office, an individual specified in
Section 87200, member of a state board or commission, or designated
employee of a state or local government agency, the lodging and
subsistence expenses are limited to the day immediately preceding,
the day of, and the day immediately following the speech, and the
travel is within the United States.
(2) The travel is provided by a government, a governmental agency,
a foreign government, a governmental authority, a bona fide public
or private educational institution, as defined in Section 203 of the
Revenue and Taxation Code, a nonprofit organization that is exempt
from taxation under Section 501(c)(3) of the Internal Revenue Code,
or by a person domiciled outside the United States who substantially
satisfies the requirements for tax-exempt status under Section 501(c)
(3) of the Internal Revenue Code.
(b) Gifts of travel not described in subdivision (a) are subject
to the limits in Section 89503.
(c) Subdivision (a) applies only to travel that is reported on the
recipient's statement of economic interests.
(d) For purposes of this section, a gift of travel does not
include any of the following:
(1) Travel that is paid for from campaign funds, as permitted by
Article 4 (commencing with Section 89510), or that is a contribution.
(2) Travel that is provided by the agency of a local elected
officeholder, an elected state officer, member of a state board or
commission, an individual specified in Section 87200, or a designated
employee.
(3) Travel that is reasonably necessary in connection with a bona
fide business, trade, or profession and that satisfies the criteria
for federal income tax deduction for business expenses in Sections
162 and 274 of the Internal Revenue Code, unless the sole or
predominant activity of the business, trade, or profession is making
speeches.
(4) Travel that is excluded from the definition of a gift by any
other provision of this title.
(e) This section does not apply to payments, advances, or
reimbursements for travel and related lodging and subsistence
permitted or limited by Section 170.9 of the Code of Civil Procedure.
(f) (1) A nonprofit organization that makes payments, advances, or
reimbursements that total more than ten thousand dollars ($10,000)
in a calendar year, or that total more than five thousand dollars
($5,000) in a calendar year for a single person, for travel by
an elected state officer or local elected officeholder as
described in subdivision (a) shall disclose to the Commission the
names of the donors responsible for funding those payments, advances,
or reimbursements. The disclosure of donor names shall be limited to
donors who donated one thousand dollars ($1,000) or more to the
nonprofit organization in a calendar year and who knew or had reason
to know that the donation would be used for a payment, advance, or
reimbursement for travel by an elected state officer or local
elected officeholder as described in subdivision (a).
(2) A donor knows or has reason to know that his or her donation
will be used in the manner described in paragraph (1) under any of
the following conditions:
(A) The donor directed the nonprofit organization to use the
donation to make a payment, advance, or reimbursement for travel
by an elected state officer or local elected officeholder as
described in subdivision (a).
(B) The donor made the donation in response to a message or
solicitation for donations for the stated purpose of making a
payment, advance, or reimbursement for travel by an elected
state officer or local elected officeholder as described in
subdivision (a).
(C) The nonprofit organization made payments, advances, or
reimbursements that totaled more than ten thousand dollars ($10,000)
in a calendar year, or that totaled more than five thousand dollars
($5,000) in a calendar year for a single person, for travel described
in subdivision (a) in the current calendar year or any of the
immediately preceding four calendar years. The nonprofit organization
shall disclose donors identified pursuant to this subparagraph only
to the extent that donations made pursuant to subparagraphs (A) and
(B) are less than the amount of the payments, advances, or
reimbursements made by the organization. The nonprofit organization
shall not report a donor identified pursuant to this subparagraph if
the organization has evidence indicating that the donor restricted or
otherwise did not intend the donation to be used for a payment,
advance, or reimbursement for travel described in subdivision (a).
(C) The donor, or an agent, employee, or representative of the
donor, accompanied an elected state officer or local elected
officeholder for any portion of travel as described in subdivision
(a).
(3) For purposes of Sections 87103, 87207, and 89503, a nonprofit
organization that makes payments, advances, or reimbursements for
travel by an elected state officer or local elected officeholder as
described in subdivision (a) is the source of the gift unless the
nonprofit organization is acting as an intermediary or agent of the
donor. If the nonprofit organization is acting as an intermediary or
agent of the donor, all of the following apply:
(A) The donor to the nonprofit organization is the source of the
gift.
(B) The donor shall be identified as a financial interest under
Section 87103.
(C) The gift shall be reported as required by Section 87207.
(D) The gift shall be subject to the limitations on gifts
specified in Section 89503.
SEC. 4. Section 89513 of the Government Code is amended to read:
89513. This section governs the use of campaign funds for the
specific expenditures set forth in this section. It is the intent of
the Legislature that this section guide the interpretation of the
standard imposed by Section 89512 as applied to other expenditures
not specifically set forth in this section.
(a) (1) Campaign funds shall not be used to pay or reimburse a
candidate, elected officer, or any individual or individuals with
authority to approve the expenditure of campaign funds held by a
committee, or employees or staff of the committee or the elected
officer's governmental agency, for travel expenses and necessary
accommodations, except when these expenditures are directly related
to a political, legislative, or governmental purpose.
(2) For purposes of this section, payments or reimbursements for
travel and necessary accommodations shall be considered directly
related to a political, legislative, or governmental purpose if the
payments would meet standards similar to the standards of the
Internal Revenue Service pursuant to Sections 162 and 274 of the
Internal Revenue Code for deductions of travel expenses under the
federal income tax law.
(3) For purposes of this section, payments or reimbursement for
travel by the household of a candidate or elected officer when
traveling to the same destination in order to accompany the candidate
or elected officer shall be considered for the same purpose as the
candidate's or elected officer's travel.
(4) If campaign funds are used to pay or reimburse a candidate,
elected officer, his or her representative, or a member of the
candidate's household for travel expenses and necessary
accommodations, the expenditure shall be reported as required by
Section 84211.
(5) If campaign funds are used to pay or reimburse for travel
expenses and necessary accommodations, any mileage credit that is
earned or awarded pursuant to an airline bonus mileage program shall
be deemed personally earned by or awarded to the individual traveler.
Neither the earning or awarding of mileage credit, nor the redeeming
of credit for actual travel, shall be subject to reporting pursuant
to Section 84211.
(6) Campaign funds shall not be used to make a payment for a
personal vacation for a candidate; elected officer; immediate family
member of a candidate or elected officer; or an officer, director,
employee, or member of the staff of a candidate, elected officer, or
committee.
(b) (1) Campaign funds shall not be used to pay for or reimburse
the cost of professional services unless the services are directly
related to a political, legislative, or governmental purpose.
(2) Expenditures by a committee to pay for professional services
reasonably required by the committee to assist it in the performance
of its administrative functions are directly related to a political,
legislative, or governmental purpose.
(3) Campaign funds shall not be used to pay health-related
expenses for a candidate, elected officer, or any individual or
individuals with authority to approve the expenditure of campaign
funds held by a committee, or members of his or her household.
"Health-related expenses" includes, but is not limited to,
examinations by physicians, dentists, psychiatrists, psychologists,
or counselors; expenses for medications, treatments, or medical
equipment; and expenses for hospitalization and special dietary
foods. However, campaign funds may be used to pay employer costs of
health care benefits of a bona fide employee or independent
contractor of the committee.
(4) Campaign funds shall not be used to make a payment for
membership dues for a country club, health club, or other
recreational facility.
(5) Campaign funds shall not be used to make tuition payments,
unless the payments are directly related to a political, legislative,
or governmental purpose.
(c) Campaign funds shall not be used to pay or reimburse fines,
penalties, judgments, or settlements, except those resulting from
either of the following:
(1) Parking citations incurred in the performance of an activity
that was directly related to a political, legislative, or
governmental purpose.
(2) Any other action for which payment of attorney's fees from
contributions would be permitted pursuant to this title.
(d) Campaign funds shall not be used to purchase clothing to be
worn by a candidate or elected officer.
(e) (1) Except where otherwise prohibited by law, campaign funds
may be used to purchase or reimburse for the costs of purchase of
tickets to political fundraising events for the attendance of a
candidate, elected officer, or his or her immediate family, or an
officer, director, employee, or staff of the committee or the elected
officer's governmental agency.
(2) Campaign funds shall not be used to pay for or reimburse for
the costs of admission to a sporting event, concert,
theater, or other form of entertainment tickets for
entertainment or sporting events for the candidate, elected
officer, or members of his or her immediate family, or an officer,
director, employee, or staff of the committee, unless their
attendance at the event is directly related to the election
campaign of the candidate or elected officer. a
political, legislative, or governmental purpose.
(3) The purchase of tickets for entertainment or sporting events
for the benefit of persons other than the candidate, elected officer,
or his or her immediate family are governed by subdivision (f).
(f) (1) Campaign funds shall not be used to make a gift to a
spouse, child, sibling, or parent of a candidate, elected officer, or
other individual with authority to approve the expenditure of
campaign funds held by a committee, except for a gift of nominal
value that is substantially similar to a gift made to other persons
and that is directly related to a political, legislative, or
governmental purpose. Campaign funds shall not be used to make
personal gifts to any other person not described in this paragraph
unless the gift is directly related to a political, legislative, or
governmental purpose. The refund of a campaign contribution does not
constitute the making of a gift.
(2) This section does not prohibit the use of campaign funds to
reimburse or otherwise compensate a public employee for services
rendered to a candidate or committee while on vacation, leave, or
otherwise outside of compensated public time.
(3) An election victory celebration or similar campaign event, or
gifts with a total cumulative value of less than two hundred fifty
dollars ($250) in a single year made to an individual employee, a
committee worker, or an employee of the elected officer's agency, are
considered to be directly related to a political, legislative, or
governmental purpose. For purposes of this paragraph, a gift to a
member of a person's immediate family shall be deemed to be a gift to
that person.
(g) Campaign funds shall not be used to make loans other than to
organizations pursuant to Section 89515, or, unless otherwise
prohibited, to a candidate for elective office, political party, or
committee.
SEC. 5. Section 89515 of the Government Code is amended to read:
89515. Campaign funds may be used to make donations or loans to
bona fide charitable, educational, civic, religious, or similar
tax-exempt, nonprofit organizations, if no substantial part of the
proceeds will have a material financial effect on the candidate,
campaign treasurer, or any individual or individuals with authority
to approve the expenditure of campaign funds held by a committee, or
member of his or her immediate family, and if the donation or loan
bears a reasonable relation to a political, legislative, or
governmental purpose, except as prohibited by Section 89515.5.
SEC. 6. Section 89515.5 is added to the Government Code, to read:
89515.5. (a) An expenditure of campaign funds by an elected
officer or committee controlled by the elected officer to a nonprofit
organization that the elected officer knows or has reason to know is
owned or controlled by the elected officer or a family member of the
elected officer is deemed to serve the primary purpose of conferring
a personal financial benefit on the recipient and is prohibited as
being unrelated to a political, legislative, or governmental purpose
and inconsistent with the trust imposed by Section 89510.
(b) An elected officer is deemed to have complied with the
requirements of subdivision (a) if the Commission determines that the
elected officer has made a reasonable effort to ascertain whether a
nonprofit organization is owned or controlled by any individual
described in subdivision (a).
(c) For purposes of this section, a nonprofit organization is
owned or controlled by an elected officer or family member of the
elected officer if the elected officer or family member of the
elected officer, or a member of that person's immediate family, is a
director, officer, partner, or trustee of, or holds any position of
management with, the nonprofit organization and is paid for his or
her services.
(d) For purposes of this section, "family
the following terms have the following meanings:
(1) "Family member of the elected
officer" means the spouse, child, sibling, or parent of an elected
officer.
(2) "Nonprofit organization" means an organization that is exempt
from taxation under Section 501(c)(4) of the Internal Revenue Code.
SEC. 7. Section 89516 of the Government Code is amended to read:
89516. Notwithstanding Sections 89512 and 89513, this section
governs the use of campaign funds for vehicle expenses.
(a) Campaign funds shall not be used to purchase a vehicle unless
both of the following apply:
(1) Title to the vehicle is held by the committee and not the
candidate, elected officer, campaign treasurer, or any other
individual or individuals with authority to approve the expenditure
of campaign funds held by a committee, or a member of his or her
immediate family.
(2) The use of the vehicle is directly related to an election
campaign.
(b) Campaign funds shall not be used to lease a vehicle unless
both of the following apply:
(1) The lessee is the committee, or a state or local government
agency, and not the candidate, elected officer, or a member of his or
her immediate family; or the lessor is a state or local government
agency.
(2) The use of the vehicle is directly related to an election
campaign.
(c) Campaign funds may be used to pay for or reimburse the
operating costs, including, but not limited to, insurance,
maintenance, and repairs, for any vehicle for which campaign funds
may be spent pursuant to this section.
(d) Campaign funds may be used to reimburse a candidate, elected
officer, his or her immediate family, or any individual or
individuals with authority to approve the expenditure of campaign
funds held by a committee, or an employee or member of the staff of
the committee or of the elected officer's governmental agency, for
the use of his or her vehicle at the rate approved by the Internal
Revenue Service pursuant to Section 162 of the Internal Revenue Code
in connection with deductible mileage expenses under the federal
income tax law, if both of the following requirements are met:
(1) The vehicle use for which reimbursement is sought is directly
related to an election campaign.
(2) The specific purpose and mileage in connection with each
expenditure is documented in a manner approved by the Internal
Revenue Service in connection with deductible mileage expenses.
(e) For purposes of this section, use of a vehicle is considered
to be directly related to an election campaign as long as its use for
other purposes is only incidental to its use for an election
campaign.
SEC. 8. Section 89517 of the Government Code is amended to read:
89517. (a) Campaign funds shall not be used for payment or
reimbursement for the lease of real property, for a utility bill for
real property, or for the purchase, lease, or refurbishment of any
appliance or equipment, where the lessee or sublessor is, or the
legal title resides in, in whole or in part, a candidate, elected
officer, campaign treasurer, or any individual or individuals with
authority to approve the expenditure of campaign funds, or member of
his or her immediate family.
(b) Campaign funds shall not be used to purchase real property.
Except as prohibited by subdivision (a), campaign funds may be used
to lease real property for up to one year at a time if the use of
that property is directly related to political, legislative, or
governmental purposes and the lessee or sublessor is not, or the
legal title does not reside in, in whole or in part, a candidate,
elected officer, campaign treasurer, or any individual or individuals
with authority to approve the expenditure of campaign funds, or a
member of his or her immediate family.
(c) For purposes of this section, real property, appliance, or
equipment is considered to be directly related to a political,
legislative, or governmental purpose if its use for other purposes is
only incidental to its use for political, legislative, or
governmental purposes and the lessee or sublessor of the real
property is not, or the legal title for the real property does not
reside in, in whole or in part, a candidate, elected officer,
campaign treasurer, or any individual or individuals with authority
to approve the expenditure of campaign funds, or a member of his or
her immediate family.
SEC. 9. 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. 10. 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.
