HomeMy WebLinkAboutLegislative Review CMTE 2219 (Torrico)CITY OF PALM DESERT
Community Services Division
Staff Report
REQUEST: CONSIDERATION OF LEGISLATIVE REVIEW COMMITTEE
ACTION ON AB 2219 (TORRICO) AT ITS MEETING OF
APRIL 5, 2006
SUBMITTED BY: Patricia Scully, CFEE, Senior Management Analyst
DATE: April 27, 2006
CONTENTS: AB 2219 Language
RECOMMENDATION:
By Minute Motion, concur with the action taken by the Legislative Review Committee at its
meeting of April 5, 2006, and direct staff to prepare a letter of opposition for the Mayor's
signature with regard to AB 2219 (Torrico) relative to the Political Reform Act of 1974.
EXECUTIVE SUMMARY:
Passage of AB 2219 would require interest from accounts opened by candidates to be
surrendered to the State of California.
BACKGROUND:
The Political Reform Act of 1974 provides for specified appropriations to support the Fair
Political Practices Commission in enforcing the provisions of the Act. The language of AB
2219 would require campaign committees regulated underthe Political Reform Act of 1974
to make certain reports to the Director of Finance relating to their campaign accounts. It
would also require the interest on all of these accounts required by the act to be paid over
to the State Treasury, which would be appropriated to the Fair Political Practices
Commission for the carrying out of its duties under the Political Reform Act of 1974.
The taking of interest from private individuals by the State of Califomia would possibly
discourage qualified candidates from running for local office and appears to be yet one
more attempt by the State of Califomia to fund mandates on the backs of local agencies
and individuals.
CITY COUNCIL STAFF REPORT
RE: AB 2219 (TORRICO)
APRIL 27, 2006
Therefore, the Legislative Review Committee recommends that the City Council oppose
AB 2219 and direct staff to prepare a letter stating that position to appropriate legislators
for the Mayor's signature.
PATRICIA SCULLY, CFE
REN«R MAN AGFAAENT NALYST
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CARLOS L. ORT A
CITY MANAGER
CALIFORNIA LEGISLATURE-2005-o6 REGULAR SESSION
ASSEMBLY BILL No. 2219
Introduced by Assembly Member Torrico
February 22, 2006
An act to amend Sections 83122, 84102, and 84211 of, and to add
Section 85705 to, and Article 8 (coinrnencing with Section 85901) to
Chapter 5 of Title 9 of, the Government Code, relating to the Political
Reform Act of 1974, and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 2219, as introduced, Torrico. Political Reform Act of 1974.
(1) Existing provisions of the Political Reform Act of 1974 create
the Fair Political Practices Commission, provide for specified
appropriations to support the commission's efforts to enforcing the
provisions of the act, and require the Department of Finance to include
specified items of appropriation in the annual budget in support of
duties of the commission and other agencies under the act. Existing
provisions of the act require the campaign committee of a candidate
(a) to establish a campaign account into which all contributions to the
candidate and all personal funds of the candidate to be expended for
the campaign must be deposited, and (b) to provide specified
information about those accounts to the commission.
This bill would require all committees regulated under the act to
establish similar accounts, would require certain reports to be made
relating to the accounts, and would require the interest on all of the
accounts required by the act to be paid over to the State Treasury, for
deposit into a specified account. Moneys in that account would be
continuously appropriated to the coniniission for carrying out of its
duties under the act, as specified. The bill would specifically provide
that this appropriation would be in addition to those already in the act,
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AB 2219
and that interest deriving from those accounts that relate to campaigns
for or against only ballot measures would be placed in a specified
subaccount to be expended solely on carrying out those parts of the act
that regulate electoral and campaign processes relating to ballot
propositions.
(2) Existing law snakes a violation of the act subject to
administrative, civil, and criminal penalties.
This bill would impose a state -mandated local program by imposing
potential criminal penalties on filers and institutions that fail to
comply with the new reporting and remittance requirements.
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.
(3) The Political Refonn Act of 1974, an initiative measure,
provides that the Legislature may amend the act to further the act's
purposes with a '/, vote of each house and compliance with specified
procedural requirements.
This bill, which would declare that it furthers the purposes of the
act, would therefore require a z/, vote.
Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State -mandated local program: yes.
The people of the State of California do enact as follows:
1 SECTION 1. Section 83122 of the Government Code is
2 amended to read:
3 83122. (a) There is hereby appropriated from the General
4 Fund of the state to the Fair Political Practices Cormnission the
5 sum of five hundred thousand dollars ($500,000) during the
6 fiscal year of 1974-1975, and the sum of one million dollars
7 ($1,000,000), adjusted for cost -of -living changes, during each
8 fiscal year thereafter, for expenditure to support the operations of
9 the commission pursuant to this title. The expenditure of funds
10 under this appropriation shall be subject to the nonnal
11 administrative review given to other state appropriations. The
12 Legislature shall appropriate such additional amounts to the
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coininission and other agencies as may be necessary to carry out
the provisions of this title.
The Department of Finance, in preparing the state budget and
the Budget Bill submitted to the Legislature, shall include an
item for the support of the Political Reform Act of 1974, which
item shall indicate all of the following: (1) the amounts to be
appropriated to other agencies to carry out their duties under this
title, which amounts shall be in augmentation of the support
items of such agencies; (2) the additional amounts required to be
appropriated by the Legislature to the commission to carry out
the purposes of this title, as provided for in this section; and (3)
in parentheses, for informational purposes, the continuing
appropriation during each fiscal year of one million dollars
($1,000,000) adjusted for cost -of -living changes made to the
commission by this section.
(b) The amounts appropriated pursuant to this section shall be
in addition to those continuously appropriated pursuant to
Article 8 (commencing with Section 85901) of Chapter 5.
(c) The definition of "expenditure" in Section 82025 is not
applicable to this section.
SEC. 2. Section 84102 of the Government Code is amended
to read:
84102. The statement of organization required by Section
84101 shall include:
(a) The name, street address, and telephone number, if any, of
the committee. In the case of a sponsored cormmittee, the name of
the committee shall include the name of its sponsor. Whenever a
committee has more than one sponsor, and the sponsors are
members of an industry or other identifiable group, a tenn
identifying that industry or group shall be included in the naive
of the committee.
(b) In the case of a sponsored committee, the name, street
address, and telephone number of each sponsor.
(c) The full name, street address, and telephone number, if
any, of the treasurer and other principal officers.
(d) The full naive and office sought by any candidate and the
title and ballot number, if any, of any measure, which the
committee supports or opposes as its primary activity. A
committee-whiek that does not support or oppose one or more
candidates or ballot measures as its primary activity shall provide
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a brief description of its political activities, including whether it
supports or opposes candidates or measures and whether -sum
those candidates or measures have common characteristics such
as a political party affiliation.
(e) A statement whether the committee is independent or
controlled, and if it is controlled, the name of each candidate, or
state measure proponent by which it is controlled, or the name of
any controlled committee with which it acts jointly. If a
committee is controlled by a candidate for partisan office, the
controlled committee shall indicate the political party, if any,
with which the candidate is affiliated.
(f) For a committee controlled by a candidate for his or her
election, or any other committee required by this act to establish
an account, the naive and address of4ke each financial institution
where the committee has established an account and the account
number or numbers.
(g) Such other infonnation as shall be required by the rules or
regulations of the commission consistent with the purposes and
provisions of this chapter.
SEC. 3. Section 84211 of the Government Code is amended
to read:
84211. Each campaign statement required by this article shall
contain all of the following information:
(a) The total amount of contributions received during the
period covered by the campaign statement and the total
cumulative amount of contributions received.
(b) The total amount of expenditures made during the period
covered by the campaign statement and the total cumulative
amount of expenditures made.
(c) The total amount of contributions received during the
period covered by the campaign statement from persons who
have given a cumulative amount of one hundred dollars ($100) or
more.
(d) The total amount of contributions received during the
period covered by the campaign statement from persons who
have given a cumulative amount of less than one hundred dollars
($100).
(e) The balance of cash and cash equivalents on hand at the
beginning and the end of the period covered by the campaign
statement, as well as the name and address of each financial
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1 institution where the filer has established one or more campaign
2 accounts pursuant' to Section 85201 or 85705, the account
3 number or numbers, and the balances in each such account at
4 the beginning and the end of the period covered by the campaign
5 statement.
6 (f) If the cumulative amount of contributions (including loans)
7 received from a person is one hundred dollars ($100) or more and
8 a contribution or loan has been received from that person during
9 the period covered by the campaign statement, all of the
10 following:
11 (1) His or her full name.
12 (2) His or her street address.
13 (3) His or her occupation.
14 (4) The naive of his or her employer, or if self-employed, the
15 name of the business.
16 (5) The date and amount received for each contribution
17 received during the period covered by the campaign statement
18 and if the contribution is a loan, the interest rate for the loan.
19 (6) The cumulative amount of contributions.
20 (g) If the cumulative amount of loans received from or made
21 to a person is one hundred dollars ($100) or more, and a loan has
22 been received from or made to a person during the period
23 covered by the campaign statement, or is outstanding during the
24 period covered by the campaign statement, all of the following:
25 (1) His or her full name.
26 (2) His or her street address.
27 (3) His or her occupation.
28 (4) The name of his or her employer, or if self-employed, the
29 name of the business.
30 (5) The original date and amount of each loan.
31 (6) The due date and interest rate of the loan.
32 (7) The cumulative payment made or received to date at the
33 end of the reporting period.
34 (8) The balance outstanding at the end of the reporting period.
35 (9) The cumulative amount of contributions.
36 (h) For each person, other than the filer, who is directly,
37 indirectly, or contingently liable for repayment of a loan received
38 or outstanding during the period covered by the campaign
39 statement, all of the following:
40 (1) His or her full name.
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(2) His or her street address.
(3) His or her occupation.
(4) The naive of his or her employer, or if self-employed, the
name of the business.
(5) The amount of his or her maximum liability outstanding.
(1) The total amount of expenditures made during the period
covered by the campaign statement to persons who have received
one hundred dollars ($100) or more.
0) The total amount of expenditures made during the period
covered by the campaign statement to persons who have received
less than one hundred dollars ($100).
(k) For each person to whom an expenditure of one hundred
dollars ($100) or more has been made during the period covered
by the campaign statement, all of the following:
(1) His or her full name.
(2) His or her street address.
(3) The amount of each expenditure.
(4) A brief description of the consideration for which each
expenditure was made.
(5) In the case of an expenditure -e that is a contribution to
a candidate, elected officer, or committee or an independent
expenditure to support or oppose a candidate or measure, in
addition to the information required in paragraphs (1) to (4)
above, inclusive, the date of the contribution or independent
expenditure, the cumulative amount of contributions made to a
candidate, elected officer, or committee, or the cumulative
amount of independent expenditures made relative to a candidate
or measure; the full name of the candidate, and the office and
district for which he or she seeks nomination or election, or the
number or letter of the measure; and the jurisdiction in which the
measure or candidate is voted upon.
(6) The information required in paragraphs (1) to (4),
inclusive, for each person, if different from the payee, who has
provided consideration for an expenditure of five hundred dollars
($500) or more during the period covered by the campaign
statement.
For purposes of subdivisions (i), 0), and (k) only, the terms
"expenditure" or "expenditures" mean any individual payment or
accrued expense, unless it is clear from surrounding
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circumstances that a series of payments or accrued expenses are
for a single service or product.
(0 In the case of a controlled coininittee, an official committee
of a political party, or an organization formed or existing
primarily for political purposes, the amount and source of any
miscellaneous receipt.
(in) If a committee is listed pursuant to subdivision (f), (g),
(h), (k), (0, or (q), the number assigned to the committee by the
Secretary of State shall be listed, or if no number has been
assigned, the full name and street address of the treasurer of the
committee.
(n) In a campaign statement filed by a candidate who is a
candidate in both a state primary and general election, his or her
controlled committee, or a committee primarily formed to
support or oppose such a candidate, the total amount of
contributions received and the total amount of expenditures made
for the period January 1 through June 30 and the total amount of
contributions received and expenditures made for the period July
1 through December 31.
(o) The full name, residential or business address, and
telephone number of the filer, or in the case of a campaign
statement filed by a commmittee defined by subdivision (a) of
Section 82013, the name, street address, and telephone number of
the committee and of the committee treasurer. In the case of a
committee defined by subdivision (b) or (c) of Section 82013, the
name that the filer uses on campaign statements shall be the
name by which the filer is identified for other legal purposes or
any naive by which the filer is commonly known to the public.
(p) If the campaign statement is filed by a candidate, the naive,
street address, and treasurer of any committee of which he or she
has knowledge which has received contributions or made
expenditures on behalf of his or her candidacy and whether the
committee is controlled by the candidate.
(q) A contribution need not be reported nor shall it be deemed
accepted if it is not cashed, negotiated, or deposited and is
returned to the contributor before the closing date of the
campaign statement on which the contribution would otherwise
be reported.
(r) If a committee primarily formed for the qualification or
support of, or opposition to, an initiative or ballot measure is
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required to report an expenditure to a business entity pursuant to
subdivision (k) and 50 percent or more of the business entity is
owned by a candidate or person controlling the carmnittee, by an
officer or employee of the committee, or by a spouse of any of
these individuals, the committee's campaign statement shall also
contain, in addition to the inforamation required by subdivision
(k), that person's naive, the relationship of that person to the
committee, and a description of that person's ownership interest
or position with the business entity.
(s) If a committee primarily formed for the qualification or
support of, or opposition to, an initiative or ballot measure is
required to report an expenditure to a business entity pursuant to
subdivision (k), and a candidate or person controlling the
conunittee, an officer or employee of the committee, or a spouse
of any of these individuals is an officer, partner, consultant, or
employee of the business entity, the committee's campaign
statement shall also contain, in addition to the information
required by subdivision (k), that person's name, the relationship
of that person to the committee, and a description of that person's
ownership interest or position with the business entity.
(t) If the campaign statement is filed by a committee, as
defined in subdivision (b) or (c) of Section 82013, information
sufficient to identify the nature and interests of the filer,
including:
(1) If the filer is an individual, the name and address of the
filer's employer, if any, or his or her principal place of business
if the filer is self-employed, and a description of the business
activity in which the filer or his or her employer is engaged.
(2) If the filer is a business entity, a description of the business
activity in which it is engaged.
(3) If the filer is an industry, trade, or professional association,
a description of the industry, trade, or profession-wrieh that it
represents, including a specific description of any portion or
faction of the industry, trade, or profession- whieh that the
association exclusively or primarily represents.
(4) If the filer is not an individual, business entity, or industry,
trade, or professional association, a statement of the person's
nature and purposes, including a description of any industry,
trade, profession, or other group with a common economic
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interest which the person principally represents or from which its
membership or financial support is principally derived.
SEC. 4. Section 85705 is added to the Government Code, to
read:
85705. (a) This section shall apply only to a committee that
is not covered by Section 85201.
(b) Each committee pursuant to Section 82013 that is not
subject to Section 85201 shall establish one or more campaign
contribution accounts at an office of a financial institution
located in the state. All contributions or loans made to one of
these committees, or to a person on behalf of one of these
committees, shall be deposited into such an account, and these
accounts shall be subject to Article 8 (commencing with Section
85901). Not more than one account shall be established for any
single candidate or ballot proposition supported or opposed by a
committee.
(c) Any personal funds of an individual who controls a
committee that are intended for use for or against the election of
a candidate or the passage of a ballot proposition within the
committee's interest shall be deposited in one of these accounts
prior to expenditure, and all campaign expenditures and
contributions of these committees shall be made from these
accounts.
(d) As required by subdivision (f) of Section 84102, a
committee shall set forth the name and address of the financial
institution where it has established a campaign account and the
account number on any committee statement of organization
filed pursuant to Sections 84101 and 84103.
(e) As required by subdivision (e) of Section 84211, a
committee shall set forth the naive and address of the financial
institution where it has established one or more campaign
accounts, the account number or numbers, and the balances in
each such account at the beginning and end of the period covered
by the campaign statement.
SEC. 5. Article 8 (cormmencing with Section 85901) is added
to Chapter 5 of Title 9 of the Government Code, to read:
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1 Article 8. Interest on Campaign Accounts of Controlled
2 Committees
3
4 85901. The Legislature finds that existing provisions of this
5 title that are subject to enforcement by the Fair Political Practices
6 Commission that address the filing of periodic disclosure
7 statements, contribution limitations, and conflicts of interest, and
8 other provisions that discourage electoral fraud and enhance
9 democratic values, are not fully succeeding in protecting against
10 abuses engendered by larger and larger inflows of money from
11 contributors and independent expenditure committees. It is the
12 purpose of this article to ensure that the Fair Political Practices
13 Commission is able to fully exercise its authority in order to
14 discourage the various types of fraud and the abuses of power
15 that tend to occur due to lack of adequate regulation of moneys
16 flowing into the hands of candidates and committees. The
17 Legislature finds that, in the absence of sufficient regulatory
18 oversight, the accumulation by committees of sums sufficiently
19 large to earn significant interest encourages unlawful campaign
20 practices, and permits improper influences upon public policy
21 decisions. It further finds that the dollar value of such amounts as
22 may be generated for the commission pursuant to this article will
23 be far exceeded by the value of the enhanced security against
24 election fraud, campaign misconduct, and undue influence on
25 governmental decisions that will derive from the commission's
26 enhanced regulatory capacities.
27 85902. A committee that establishes an account pursuant to
28 Section 85201 or 85705 shall comply with all of the following
29 provisions:
30 (a) The account shall be established with a bank or such other
31 financial institutions as are authorized by the Fair Political
32 Practices Commission.
33 (b) The rate of interest payable the account shall not be less
34 than the rate paid by the depository institution to regular,
35 noncommittee depositors. Higher rates offered by the institution
36 to customers whose deposits exceed certain time or quantity
37 qualifications, such as those offered in the fonn of certificates of
38 deposit, may be obtained.
39 (c) The depository institution shall be directed to do all of the
40 following:
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(1) To remit interest on the average daily balance in each such
account, less reasonable service charges, to the State Treasury, at
least quarterly.
(2) To transmit to the State Controller and to the commission
at the time of each remittance a statement showing the number of
the account for which the remittance is sent, the amount of the
remittance, the rate of interest applied, and the amount of service
charges deducted, if any.
(3) To transmit to the cominittee at the same time a report
showing the amount paid to the commission for that period, the
rate of interest applied, the amount of service charges deducted,
if any, and the average daily account balance for each month of
the period for which the report is made.
85903. Remittances pursuant to Section 85902 of interest
earned by a campaign contribution account established and
maintained as specified in Section 85201 or 85705 shall be
deposited into the Interest for Fair Political Practices Account,
which is hereby created in the State Treasury. Of these, all such
remittances deriving from those depository accounts that include
only funds intended for expenditure or contribution for or against
the passage of ballot propositions shall be deposited in the Fair
Election Practices Subaccount, which is hereby created within
the Interest for Fair Political Practices Account. The commission
shall provide the account numbers for these ballot proposition
accounts to the Controller to facilitate the proper deposit of these
funds. Notwithstanding Section 13340, funds in the Interest for
Fair Political Practices Account are continuously appropriated to
the commission for carrying out the provisions of this title that
relate to the impact on elections and govermnent operations of
political contributions, gifts, and expenditures, except that those
funds in the subaccount shall be spent only on carrying out those
parts of this title that regulate electoral and campaign processes
relating to ballot propositions.
SEC. 6. The Legislature finds and declares that the provisions
of this act further the purposes of the Political Reform Act of
1974 within the meaning of subdivision (a) of Section 81012 of
the Government Code.
SEC. 7. 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
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1 district will be incurred because this act creates a new crime or
2 infraction, eliminates a crime or infraction, or changes the
3 penalty for a crime or infraction, within the meaning of Section
4 17556 of the Govermnent Code, or changes the definition of a
5 crime within the meaning of Section 6 of Article XIII B of the
6 California Constitution.
C
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