BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON
          ELECTIONS AND CONSTITUTIONAL AMENDMENTS
                              Senator Ben Allen, Chair
                                2015 - 2016  Regular 

          Bill No:             SB 1349        Hearing Date:    4/5/16    
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          |Author:    |Hertzberg                                            |
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          |Version:   |3/28/16                                              |
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          |Urgency:   |No                     |Fiscal:    |Yes              |
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          |Consultant:|Darren Chesin                                        |
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            Subject:  Political Reform Act of 1974:  Secretary of State:   
                                online filing system

           DIGEST
           
          This bill requires the Secretary of State (SOS), in consultation  
          with the Fair Political Practices Commission (FPPC), to develop  
          and certify for public use a new online filing system for  
          statements and reports that provide public disclosure of  
          campaign finance and lobbying information in a user-friendly,  
          easily understandable format.

           ANALYSIS
           
          Existing law:  

          1)Requires the SOS, in consultation with the FPPC, to provide  
            online and electronic filing processes for use by specified  
            political committees, lobbyists, lobbying firms, and lobbyist  
            employers pursuant to the Political Reform Act (PRA).  This  
            online reporting and disclosure system is commonly referred to  
            as the Cal-Access system.

          2)Requires the SOS to make all the data filed using the online  
            and electronic filing process available on the Internet for  
            public viewing in an easily understood format.

          3)Requires the SOS to provide a means or method whereby entities  
            that are required to file statements or reports online or  
            electronically with the SOS can submit those required filings  







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            free of charge.

          4)Requires all state candidates and state political committees  
            that are required to file campaign reports to file those  
            reports online or electronically if the cumulative amount of  
            contributions received, expenditures made, loans made, or  
            loans received is $25,000 or more.

          5)Provides that the Department of Technology and the Department  
            of General Services maintain specified oversight  
            responsibilities regarding state informational technology  
            procurements.

          This bill:

          1)Requires the SOS, in consultation with the FPPC, to develop  
            and certify for public use a new online filing system for  
            statements and reports that provide public disclosure of  
            campaign finance and lobbying information in a user-friendly,  
            easily understandable format.

          2)Provides that the new system shall enable a user to comply  
            with all of the disclosure requirements within the PRA.

          3)Requires the new system to include a data-driven means or  
            method that allows filers to submit required filings free of  
            charge and does all of the following:

             a)   Enables a filer to comply with all of the disclosure  
               requirements of this title, including by entering or  
               uploading requisite data or by indicating that the filer  
               had no reportable activity during a particular reporting  
               period.

             b)   Retains previously-submitted data so that a filer can  
               access that data to amend disclosures or prepare future  
               disclosures.

             c)   Ensures the security of data entered and stored in the  
               system.

             d)   To the extent feasible, is compatible with potential  
               future capability to accept statements from filers who are  
               candidates for and holders of specified local offices,  








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               elected members of the Board of Administration of the  
               Public Employees' Retirement System, elected members of the  
               Teachers' Retirement Board, as well as their controlled  
               committees, and committees formed or existing primarily to  
               support or oppose these candidates or elected officials.   
               No later than December 31, 2017, the SOS must provide a  
               report to the Assembly Committee on Elections and  
               Redistricting and the Senate Committee on Elections and  
               Constitutional Amendments that includes a plan for  
               accepting these filings.

          1)Requires the new system to include the definition of a  
            nonproprietary standardized record format or formats using  
            industry standards for the transmission of the data that is  
            required of those persons and entities required to file online  
            and that conforms with the disclosure requirements of the PRA.

          2)Provides that the SOS accept test files from software vendors  
            and others wishing to file reports electronically for the  
            purpose of determining whether the file format is in  
            compliance with the standardized record format developed  
            pursuant to this bill and is compatible with the SOS's new  
            system for receiving the data.  The SOS shall publish and make  
            available to the public a list of the software and service  
            providers who have submitted acceptable test files.  A filer  
            shall submit acceptably formatted files in order to meet the  
            requirements of this chapter.

          3)Requires the SOS to make the data filed available on the  
            Internet as follows: 

             a)   In a user-friendly, easily understandable format that  
               provides the greatest public access, including online  
               searches and machine-readable downloads.

             b)   Free of charge and as soon as possible after receipt,  
               or, in the case of late contribution and late independent  
               expenditure reports, as defined, within 24 hours of  
               receipt.

             c)   Not contain the street name or building number of the  
               persons or entity representatives listed on the  
               electronically filed forms or any bank account number  
               required to be disclosed pursuant to the PRA.








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             d)   In a manner that allows the public to track and  
               aggregate contributions from the same contributor across  
               filers using a permanent unique identifier assigned by the  
               SOS for this purpose to, at minimum, each contributor who  
               makes contributions totaling $10,000 or more in a calendar  
               year to, or at the behest of, candidates or committees that  
               file electronically with the SOS. 

          1)Requires the SOS to do all of the following: 

             a)   Develop a procedure for filers to comply electronically  
               with the requirement to sign their submissions under  
               penalty of perjury.  The electronic signature procedure  
               shall allow the filer to file with the SOS and shall not  
               require an original signature to be filed.

             b)   Maintain all filed data online for at least 10 years  
               after the date it is filed, and then archive the  
               information in a secure format.

             c)   Provide assistance to those seeking public access to the  
               information.

             d)   Implement sufficient technology to seek to prevent  
               unauthorized alteration or manipulation of the data.

             e)   Provide the FPPC with necessary information to enable it  
               to assist agencies, public officials, and others in  
               complying with and administering this title.

          1)Provides that, in consultation with the FPPC, the SOS shall,  
            no later than July 31, 2017, hold at least one public hearing  
            to receive input on development of the online filing system  
            and record format.

          2)Requires that the SOS shall make the new online filing system  
            available for use no later than February 1, 2019.  The SOS may  
            extend this date to a date no later than December 31, 2019  
            after consulting with the Assembly Committee on Elections and  
            Redistricting and the Senate Committee on Elections and  
            Constitutional Amendments and providing to those committees a  
            report that explains the need for the extension and includes a  
            plan for completion.








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          3) Provides that the SOS may accept any funds, services,  
            equipment or grants to further the goals of this bill. 

          4) Provides that because the provisions of this chapter need to  
            be implemented as expeditiously as possible, existing  
            information technology procurement requirements do not apply  
            to development of the new online filing system.

          Provides that before making the new system available for public  
          use, the SOS shall test it to ensure its functionality and then  
          certify that the system accurately tracks and aggregates  
          contributions from the same contributor across filers.  The SOS  
          may consult with the Department of Technology as needed to  
          fulfill these testing requirements.

           BACKGROUND
           
           Cal-Access Issues and MapLight Partnership  .  Created in 1999,  
          Cal-Access is the database and filing system the SOS has used to  
          make much of the lobbying and campaign finance information  
          available online at no cost to users.  On November 30, 2011, the  
          Cal-Access system went down, and the system was unavailable for  
          most of the month of December.  Although the system has remained  
          online since the cause of the failure was addressed, frequent  
          concerns have been expressed by users and other observers  
          regarding the current state and usefulness of Cal-Access.  

          The Legislature later enacted SB 1001 (Yee, Ch. 506 of 2012),  
          which imposed a $50 annual fee on political committees that are  
          required to file disclosure reports pursuant to the PRA and  
          increased the fee on lobbying firms and lobbyist employers from  
          $25 to $50 per year per lobbyist.  The revenue generated by the  
          bill is deposited into the Political Disclosure, Accountability,  
          Transparency, and Access Fund (PDATA Fund), and is available to  
          be used to update or replace Cal-Access.  It is estimated that  
          these fees result in approximately $450,000 of new revenue  
          yearly for the PDATA Fund.  Subsequent legislative efforts to  
          upgrade or replace the system since passage of SB 1001 have so  
          far proved unsuccessful.

          On September 3, 2015, the SOS announced the launching of Power  
          Search, a new open source campaign finance search engine  
          available on the SOS's website described as "the first step in  








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          modernizing and upgrading Cal-Access."  Power Search was  
          developed in conjunction with MapLight, a nonprofit, nonpartisan  
          research organization that tracks money's influence on politics  
          and funded with a grant from the James Irvine Foundation.

          According to the SOS, "The new Power Search tool provides an  
          easy-to-use interface to search campaign finance data that is  
          refreshed daily from the state's existing Cal-Access system."  

           COMMENTS
           
           1)According to the author  :  Senate Bill 1349 modernizes  
            California's online database of campaign and lobbying  
            information to make it user friendly and easy for the public  
            to access in a timely fashion.  The present Cal-Access system  
            is outdated, disorganized and difficult to use.  Secretary of  
            State Alex Padilla has called it "a Frankenstein's monster of  
            code" that is in need of "a complete rebuild."  It undermines  
            democracy when the public cannot easily access information  
            about campaign and lobbying disclosures - or easily search for  
            it.  

          SB 1349 directs the state to overhaul the Secretary of State's  
            antiquated Cal-Access system.  It establishes important  
            guidelines for the project, including creating a system that  
            is data driven, rather than form-based, and adhering to  
            prevailing standards for search and open data.  The bill  
            prescribes using cost-effective, streamlined and innovative  
            information technology development processes to deliver an  
            improved system faster.  It calls for a system that permits  
            future compatibility with local campaign finance data. 

          Governor Brown has written "There is no doubt the current system  
            - widely viewed as outdated and cumbersome - needs upgrading."  
             SB 1349 is supported by Secretary of State Padilla, Common  
            Cause, the League of Women Voters, the California Business  
            Roundtable, and numerous other labor, business and reform  
            groups.

            2) Show Me the Money  .  In a letter dated March 11, 2016,  
             Senator Hertzberg, the author of this bill, requested a  
             budget augmentation to allow the SOS to modernize the  
             Cal-Access system.  In that letter, Senator Hertzberg stated  
             that the SOS estimated the cost of replacing the system at  








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             $13.5 million.  While the letter does not address existing  
             and anticipated moneys from the PDATA Fund, it is safe to  
             assume that the PDATA Fund will take too long to provide  
             enough money to replace Cal-Access within a reasonable time  
             frame.
            
           3) Technology Oversight Exemption Dj Vu  .  The provision of  
             this bill that exempts the SOS from various information  
             technology requirements and from project is similar to a  
             provision of SB 397 (Yee, Ch. 561 of 2011), which permitted  
             online voter registration to begin prior to the completion of  
             a new statewide voter registration database.  
                                           
                               RELATED/PRIOR LEGISLATION

           SB 3 (Yee & Lieu of 2013), would have required, among other  
          things, the SOS to develop a feasibility study report to outline  
          the technology requirements and the costs of a new statewide  
          electronic campaign filing and disclosure system.  SB 3 was  
          vetoed by Governor Brown.  In his veto message, the Governor  
          stated that other provisions of the bill were "costly and  
          unnecessary," but also acknowledged that the current campaign  
          filing and disclosure system needed to be upgraded and he  
          directed the Government Operations Agency (GOA) to consult the  
          FPPC and the SOS and make recommendations on the best way to  
          improve campaign disclosure.  One of the options presented in  
          the GOA report was to replace Cal-Access.

          SB 1442 (Lara of 2013), would have required, among other things,  
          the SOS, in consultation with the FPPC, to develop a new  
          statewide Internet-based system for the electronic filing and  
          public display of all records filed pursuant to the PRA with  
          search capabilities that are data-driven and user-friendly for  
          members of the public.  SB 1442 was also vetoed by Governor  
          Brown.  In his veto message, the Governor stated that before an  
          additional information technology project is authorized, the SOS  
          should complete the two other projects that were underway at the  
          time.
           
          POSITIONS
           
           Sponsor: Political Reform Act Modernization (PRAM) Coalition

           Support: Dave Jones, Insurance Commissioner 








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                   American Sustainable Business Council
                   CalChamber
                   California Business Roundtable 
                   California Church IMPACT 
                   California Clean Money Campaign 
                   California Common Cause 
                   California Forward 
                   California Labor Federation 
                   California League of Conservation Voters 
                   California Newspaper Publishers Association
                   California Political Treasurers Association
                   California Professional Firefighters 
                   California School Employees Association 
                   California State Council of the Service Employees  
                   International Union 
                   California Voices for Progress
                   CALPIRG 
                   Campaign Legal Center 
                   Courage Campaign 
                   First Amendment Coalition
                   Howard Jarvis Taxpayers Association 
                   League of Women Voters of California 
                   MapLight 
                   National Federation of Independent Business 
                   National Institute on Money in State Politics 
                   Public Citizen 
                   Small Business Majority 
                   UFCW Western States Council 
                   Voices For Progress

           Oppose:  None received   

                                          
                                      -- END --