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AB-1367 Political Reform Act of 1974: committee accounts and campaign funds.(2021-2022)

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Date Published: 03/25/2021 09:00 PM
AB1367:v97#DOCUMENT

Amended  IN  Assembly  March 25, 2021
Amended  IN  Assembly  March 11, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1367


Introduced by Assembly Member Low

February 19, 2021


An act to amend Sections 84101, 85303, and 89521 of, and to add Section 84109 to, the Government Code, relating to the Political Reform Act of 1974.


LEGISLATIVE COUNSEL'S DIGEST


AB 1367, as amended, Low. Political Reform Act of 1974: committee accounts and campaign funds.
(1) The Political Reform Act of 1974 provides for the comprehensive regulation of campaign financing, including requiring the reporting of campaign contributions and expenditures and imposing other reporting and recordkeeping requirements on campaign committees. The act requires a candidate committee to establish one campaign contribution bank account and generally requires all candidate contributions to be made to the account and all candidate expenditures to be made from the account.
This bill would impose similar requirements on noncandidate committees that qualify as a committee under the act by receiving contributions totaling $2,000 or more in a calendar year.
(2) The act requires certain types of committees to file a statement of organization. The act requires a statement of organization to include the name and address of the financial institution in which the committee has established an account and the account number.
This bill would authorize a committee to redact the account number on a copy of a statement of organization filed with a local filing officer, and would require the Secretary of State to redact the account number on a statement of organization filed with the Secretary of State before making the statement available to the public.
(3) The act establishes specified annual contribution limits for persons who make contributions to committees for the purpose of making contributions to candidates for elective state office or for the support or defeat of candidates for elective state office.
This bill would require a committee that receives contributions subject to those contribution limits to make all direct or indirect contributions to candidates for elective state office from a bank account that is maintained and designated as an all-purpose account, as specified.
(4) The act prohibits the use of campaign funds for certain purposes, including expenditures that confer a substantial personal benefit that is not directly related to a political, legislative, or governmental purpose. The act makes any person who makes or receives an honorarium, gift, or expenditure in violation of the provisions relating to campaign funds liable in a civil action brought by the Fair Political Practices Commission for an amount of up to 3 times the amount of the unlawful honorarium, gift, or expenditure.
This bill would make a person who uses campaign funds in a manner that violates these provisions and results in an egregious personal benefit liable in an administrative or civil action brought by the commission for an amount of up to 3 times the amount of the unlawful expenditure. The bill would define “egregious personal benefit” to mean a direct personal benefit with a total value of $10,000 or more to a candidate, elected officer, or any individual or individuals with authority to approve the expenditure of campaign funds held by a committee.
(5) Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
This bill would make legislative findings to that effect.
(6) A violation of the Political Reform Act of 1974 is punishable as a misdemeanor. By expanding the scope of a 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.
(7) 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 of the Legislature 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   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 84101 of the Government Code, as amended by Section 4 of Chapter 364 of the Statutes of 2015, is amended to read:

84101.
 (a) A committee that is a committee by virtue of subdivision (a) of Section 82013 shall file a statement of organization. The committee shall file the original statement of organization with the Secretary of State and shall also file a copy of the statement of organization with the local filing officer, if any, with whom the committee is required to file an original campaign statement pursuant to Section 84215. The original and copy of the statement of organization shall be filed within 10 days after the committee has qualified as a committee. The Secretary of State shall assign a number to each committee that files a statement of organization and shall notify the committee of the number. The Secretary of State shall send a copy of statements filed pursuant to this section to the county elections official of each county that the Secretary of State deems appropriate. A county elections official who receives a copy of a statement of organization from the Secretary of State pursuant to this section shall send a copy of the statement to the clerk of each city in the county that the county elections official deems appropriate.
(b) In addition to filing the statement of organization as required by subdivision (a), if a committee qualifies as a committee under subdivision (a) of Section 82013 before the date of an election in connection with which the committee is required to file preelection statements, but after the closing date of the last campaign statement required to be filed before the election pursuant to Section 84200.8 or 84200.9, the committee shall file, by facsimile transmission, online transmission, guaranteed overnight delivery, or personal delivery within 24 hours of qualifying as a committee, the information required to be reported in the statement of organization. The information required by this subdivision shall be filed with the filing officer with whom the committee is required to file an original campaign statement pursuant to Section 84215.
(c) If an independent expenditure committee qualifies as a committee pursuant to subdivision (a) of Section 82013 during the time period described in Section 82036.5 and makes independent expenditures of one thousand dollars ($1,000) or more to support or oppose a candidate or candidates for office, the committee shall file, by facsimile transmission, online transmission, guaranteed overnight delivery, or personal delivery within 24 hours of qualifying as a committee, the information required to be reported in the statement of organization. The information required by this section shall be filed with the filing officer with whom the committee is required to file an original campaign statement pursuant to Section 84215, and shall be filed at all locations required for the candidate or candidates supported or opposed by the independent expenditures. The filings required by this section are in addition to filings that may be required by Section 84204.
(d) For purposes of this section, in calculating whether two thousand dollars ($2,000) in contributions has been received, payments for a filing fee or for a statement of qualifications to appear in a sample ballot shall not be included if these payments have been made from the candidate’s personal funds.
(e) (1) A committee may redact a bank account number included on the copy of the statement of organization filed with the local filing officer pursuant to subdivision (a). A local filing officer shall not require a committee to disclose a bank account number on the copy of the statement of organization filed with the local filing officer as a condition of accepting that filing.
(2) Notwithstanding Section 81008 or the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1), the Secretary of State shall redact the account number on a statement of organization filed with the Secretary of State before making the statement available to the public in any form.

SEC. 2.

 Section 84101 of the Government Code, as amended by Section 8 of Chapter 662 of the Statutes of 2018, is amended to read:

84101.
 (a) A committee that is a committee by virtue of subdivision (a) of Section 82013 shall file a statement of organization. The committee shall file the original statement of organization online or electronically with the Secretary of State and shall also file a copy of the statement of organization with the local filing officer, if any, with whom the committee is required to file an original campaign statement pursuant to Section 84215. The original and copy of the statement of organization shall be filed within 10 days after the committee has qualified as a committee. The Secretary of State shall assign a number to each committee that files a statement of organization and shall notify the committee of the number. The Secretary of State shall email or send a copy of statements filed pursuant to this section to the county elections official of each county that the Secretary of State deems appropriate. A county elections official who receives a copy of a statement of organization from the Secretary of State pursuant to this section shall email or send a copy of the statement to the clerk of each city in the county that the county elections official deems appropriate.
(b) In addition to filing the statement of organization as required by subdivision (a), if a committee qualifies as a committee under subdivision (a) of Section 82013 within 16 days before the date of an election in connection with which the committee is required to file preelection statements, the committee shall file, within 24 hours of qualifying as a committee, an original statement of organization online or electronically with the Secretary of State, and a copy of the statement of organization with the local filing officer, if any, with whom the committee is required to file an original campaign statement pursuant to Section 84215 by email, fax, online transmission, guaranteed overnight delivery, or personal delivery.
(c) If an independent expenditure committee qualifies as a committee pursuant to subdivision (a) of Section 82013 during the time period described in Section 82036.5 and makes independent expenditures of one thousand dollars ($1,000) or more to support or oppose a candidate or candidates for office, the committee shall file, within 24 hours of qualifying as a committee, an original statement of organization online or electronically with the Secretary of State. The committee shall also file a copy of the statement of organization with the local filing officer with whom the committee is required to file an original campaign statement pursuant to Section 84215, and at all locations required for the candidate or candidates supported or opposed by the independent expenditures, by email, facsimile transmission, guaranteed overnight delivery, or personal delivery. The filings required by this section are in addition to filings that may be required by Section 84204.
(d) For purposes of this section, in calculating whether two thousand dollars ($2,000) in contributions has been received, payments for a filing fee or for a statement of qualifications to appear in a sample ballot shall not be included if these payments have been made from the candidate’s personal funds.
(e) (1) A committee may redact a bank account number included on the copy of the statement of organization filed with the local filing officer pursuant to subdivision (a). A local filing officer shall not require a committee to disclose a bank account number on the copy of the statement of organization filed with the local filing officer as a condition of accepting that filing.
(2) Notwithstanding Section 81008 or the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1), the Secretary of State shall redact the account number on a statement of organization filed with the Secretary of State before making the statement available to the public in any form.

SEC. 3.

 Section 84109 is added to the Government Code, to read:

84109.
 (a) Except as provided in subdivision (g), a committee shall establish a campaign contribution account within 30 days of qualifying as a committee under subdivision (a) of Section 82013, or before the committee receives any additional contributions or makes expenditures after qualifying as a committee, committee under subdivision (a) of Section 82013, whichever is earlier. The campaign contribution account shall be established at an office of a financial institution located in the state.
(b) As required by subdivision (g) of Section 84102, the committee shall set forth the name and address of the financial institution where the committee has established a campaign contribution account and the account number on the committee statement of organization filed pursuant to Sections 84101 and 84103.
(c) A contribution or loan made to the committee or to a person on behalf of the committee shall be deposited in the campaign contribution account established pursuant to subdivision (a).
(d) A campaign expenditure made by the committee shall be made from the campaign contribution account established pursuant to subdivision (a).
(e) A committee subject to subdivision (a) may maintain additional bank accounts only if contributions are not deposited into and expenditures are not made from those accounts.
(f) Notwithstanding subdivision (c), (d), or (e), a committee subject to the contribution limits in Section 85303 may deposit contributions into, and make expenditures from, additional bank accounts, consistent with the requirements of Section 85303.
(g) This section does not apply to a committee that is subject to Section 85201.

SEC. 4.

 Section 85303 of the Government Code is amended to read:

85303.
 (a) A person shall not make to any committee, other than a political party committee, and a committee other than a political party committee shall not accept, a contribution totaling more than five thousand dollars ($5,000) per calendar year for the purpose of making contributions to candidates for elective state office.
(b) A person shall not make to any political party committee, and a political party committee shall not accept, a contribution totaling more than twenty-five thousand dollars ($25,000) per calendar year for the purpose of making contributions for the support or defeat of candidates for elective state office. Notwithstanding Section 85312, this limit applies to contributions made to a political party used for the purpose of making expenditures at the behest of a candidate for elective state office for communications to party members related to the candidate’s candidacy for elective state office.
(c) Except as provided in Section 85310, nothing in this chapter limits a person’s contributions to a committee or political party committee provided the contributions are used for purposes other than making contributions to candidates for elective state office.
(d) Nothing in this chapter limits a candidate for elected elective state office from transferring contributions received by the candidate in excess of any amount necessary to defray the candidate’s expenses for election related election-related activities or holding office to a political party committee, provided those transferred contributions are used for purposes consistent with paragraph (4) of subdivision (b) of Section 89519.
(e) (1) A committee that receives contributions subject to the limitations in subdivision (a) or (b) shall make all contributions to candidates for elective state office, and contributions to other committees for the purpose of making contributions to candidates for elective state office, from a bank account maintained and designated as an all-purpose committee account.
(2) A check drawn on the account shall include the words “all purpose” in the title of the account appearing on the check or shall in another manner provide reasonable notice to a committee receiving a contribution that the check is from an all-purpose account.
(f) (1) A committee that receives contributions subject to the limitations in subdivision (a) or (b) shall do one of the following with a contribution that exceeds the applicable aggregate limit described in subdivision (a) or (b):
(A) Return the contribution to the contributor.
(B) Deposit the contribution into a committee bank account maintained and designated as a restricted-use account.
(C) Split the contribution between a committee’s all-purpose account described in subdivision (e) and a restricted-use account described in subparagraph (B). The amount deposited in the all-purpose account pursuant to this subparagraph shall not exceed the contributor’s limit pursuant to subdivision (a) or (b), as applicable.
(2) (A) Within 14 calendar days after receipt of a contribution that was deposited into a restricted-use account, a committee may transfer any portion of that deposited contribution to the committee’s all-purpose account, provided that the total amount transferred into the all-purpose account does not exceed the contributor’s limit pursuant to subdivision (a) or (b), as applicable.
(B) For each contribution transferred pursuant to subparagraph (A), the committee shall maintain records that are sufficient to establish that the transfer was made within 14 days after receipt of the contribution.
(3) A check drawn on a restricted-use account shall include the words “restricted use” in the title of the account appearing on the check or shall in another manner provide reasonable notice to a committee receiving a contribution that the check is from a restricted-use account.
(g) Except for a transfer described in paragraph (2) of subdivision (f), funds from a restricted-use account shall not be used to make contributions to candidates for elective state office, or to make contributions to other committees for the purpose of making contributions to candidates for elective state office.
(h) (1) A committee may transfer funds from its all-purpose account to any other account. Funds transferred as authorized in this paragraph may be excluded from the total amount of contributions made by a person for purposes of determining whether the annual contribution limits described in subdivisions (a) and (b).
(2) Except as provided in paragraph (2) of subdivision (f), a committee shall not transfer funds to an all-purpose account from a restricted-use account or any other committee account.
(i) A committee that makes a contribution to any other committee shall notify the committee receiving the contribution whether the contribution is from the contributor committee’s all-purpose or restricted-use account, or from some other account. A check that designates on its face the type of account from which the check is drawn is presumed to be adequate notification of the nature of the funds to the committee receiving the contribution.

SEC. 5.

 Section 89521 of the Government Code is amended to read:

89521.
  (a)  Any person who makes or receives an honorarium, gift, or expenditure in violation of this chapter is liable in a civil action brought by the commission for an amount of up to three times the amount of the unlawful honorarium, gift, or expenditure.
(b) (1) Any person who uses campaign funds in a manner that violates this article and results in an egregious personal benefit is liable in an administrative or civil action brought by the commission for an amount of up to three times the amount of the unlawful expenditure.
(2) For purposes of this subdivision, “egregious personal benefit” means a direct personal benefit with a total value of ten thousand dollars ($10,000) or more to a candidate, elected officer, or any individual or individuals with authority to approve the expenditure of campaign funds held by a committee.

SEC. 6.

 The Legislature finds and declares that Sections 1 and 2 of this act, which amend Section 84101 of the Government Code, impose a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:
In order to protect filers’ privacy and to prevent financial fraud, the limitations on the public’s right of access imposed by Sections 1 and 2 of this act are necessary.

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 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. 8.

  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.