BILL ANALYSIS                                                                                                                                                                                                    




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          |SENATE RULES COMMITTEE            |                       SB 1349|
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                                   THIRD READING 


          Bill No:  SB 1349
          Author:   Hertzberg (D), et al.
          Amended:  4/18/16  
          Vote:     27 

           SENATE ELECTIONS & C.A. COMMITTEE:  4-0, 4/5/16
           AYES:  Allen, Anderson, Hertzberg, Liu
           NO VOTE RECORDED:  Hancock

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 5/27/16
           AYES:  Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
           
           SUBJECT:   Political Reform Act of 1974:  Secretary of State:   
                     online filing and disclosure system


          SOURCE:    California Secretary of State Alex Padilla
                     Political Reform Act Modernization Coalition
          
          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 and disclosure 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  








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             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 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 and disclosure  
             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.








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           3) Requires the new system to include a data-driven means or  
             method that allows filers to submit required filings free of  
             charge in a manner that facilitates public searches of the  
             data 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,  
                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.  


           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.









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           2) Provides that the SOS shall 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, late in-kind  
                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.


              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. The SOS shall assign this identifier  
                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 or who is registered with the  








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                SOS as a major donor committee.


           4) 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. 


              f)    Consult with the Assembly Committee on Elections and  
                Redistricting, the Senate Committee on Elections and  
                Constitutional Amendments, the FPPC, users, filers, and  
                other stakeholders, as appropriate, about functions of the  
                online filing and disclosure system and record format.


              g)    No later than December 31, 2017, submit a report to  
                the Assembly Committee on Elections and Redistricting and  
                the Senate Committee on Elections and Constitutional  








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                Amendments that includes a plan for the online filing and  
                disclosure system, describes how members of the public  
                will be able to query and retrieve data from the system,  
                and includes a plan for integrating statements.


           5) 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 and  
             disclosure system and record format.


           6) Requires that the SOS shall make the new online filing and  
             disclosure 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.


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


           8) 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 but does  
             require the SOS to consult with the Department of Technology,  
             as appropriate, in developing the online filing and  
             disclosure system.


           9) 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 meets all specified  
             requirements.  The SOS may consult with the Department of  
             Technology as needed to fulfill these testing requirements.









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          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, Chapter 506,  
          Statutes 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 Web site described as "the first step in  
          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."  









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          Comments


          1)According to the author, SB 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 Alex Padilla,  
            California 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 $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.  









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           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, Chapter 561, Statutes 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 and Lieu, 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, 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.


          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          According to the Senate Appropriations Committee:








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           The Office of the SOS indicates that it would incur one-time  
            costs of $11.6 million and ongoing annual costs of $2.8  
            million related to information technology (General Fund).

           Costs to FPPC would increase by $131,000 in the first year,  
            and $124,000 ongoing (General Fund) to allow it to interface  
            with the new system developed by SOS. Additionally, FPPC would  
            experience unknown, but probably minor, costs to update forms,  
            and modify regulations to reflect the new information  
            technology system. 


          SUPPORT:   (Verified5/27/16)


           California Secretary of State Alex Padilla (co-source)
           Political Reform Act Modernization Coalition (co-source)
           California Insurance Commissioner Dave Jones
          American Sustainable Business Council
          American Association of Retired Persons 
          California Business Roundtable 
          California Chamber of Commerce
          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 
          Fair Political Practices Commission
          First Amendment Coalition








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          Howard Jarvis Taxpayers Association 
          Innovate Your State
          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 


          OPPOSITION:   (Verified5/27/16)


          None received


          Prepared by:Darren Chesin / E. & C.A. / (916) 651-4106
          5/28/16 17:09:50


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