BILL ANALYSIS                                                                                                                                                                                                    



                                                                    SB 1349


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          SENATE THIRD READING


          SB  
          1349 (Hertzberg)


          As Amended  August 15, 2016


          2/3 vote


          SENATE VOTE:  38-0


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Elections       |7-0  |Weber, Harper, Travis |                    |
          |                |     |Allen, Gordon, Low,   |                    |
          |                |     |Mullin, Nazarian      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Appropriations  |20-0 |Gonzalez, Bigelow,    |                    |
          |                |     |Bloom, Bonilla,       |                    |
          |                |     |Bonta, Calderon,      |                    |
          |                |     |Chang, Daly, Eggman,  |                    |
          |                |     |Gallagher, Eduardo    |                    |
          |                |     |Garcia, Holden,       |                    |
          |                |     |Jones, Obernolte,     |                    |
          |                |     |Quirk, Santiago,      |                    |
          |                |     |Wagner, Weber, Wood,  |                    |
          |                |     |McCarty               |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |








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          SUMMARY:  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 provides public  
          disclosure of campaign finance and lobbying information in a  
          user-friendly, easily understandable format, as specified.   
          Specifically, this bill:  


          1)Requires the SOS, in consultation with the FPPC, to develop an  
            online filing and disclosure system for use by persons and  
            entities that are required to file statements and reports with  
            the SOS in accordance with Political Reform Act (PRA).  


          2)Requires the system to enable a user to comply with all the  
            disclosure requirements of the PRA and 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, as specified.


          3)Requires the SOS to do all of the following with respect to  
            developing the online filing and disclosure system and record  
            format pursuant to this bill:


             a)   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;


             b)   Hold at least one public hearing, in consultation with  
               the FPPC, no later than July 31, 2017, to receive input  








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               about developing the online filing and disclosure system  
               and record format; and, 


             c)   Submit a report, no later than December 31, 2017, to the  
               Assembly Committee on Elections and Redistricting and the  
               Senate Committee on Elections and Constitutional  
               Amendments, as specified.


          4)Requires the SOS to make the online filing and disclosure  
            system available for use no later than February 1, 2019.   
            Permits the SOS to extend this date to a date no later than  
            December 31, 2019, as specified. 


          5)Exempts the SOS from various information technology  
            requirements, and from project and funding approvals, for the  
            purposes of implementing this bill as expeditiously as  
            possible.  


          6)Requires the SOS, in consultation with the FPPC, before making  
            the system available for public use, to test the system to  
            ensure its functionality and then certify that the system  
            meets all the requirements of this bill.  


          7)Provides that after the system developed pursuant to this bill  
            is certified, the previous system developed pursuant to  
            existing law shall no longer accept reports and filings,  
            unless otherwise directed by the SOS and the FPPC.  Requires  
            the previous system to continue to allow public access to past  
            disclosures unless the SOS migrates that data into the new  
            system.  


          8)Requires the SOS to submit to the chairs of the Joint  
            Legislative Budget Committee and the fiscal committees of the  








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            Legislature a quarterly report on the progress of the  
            Cal-Access Project on or before December 31, 2017, and on or  
            before every April 15, July 15, October 15, and January 15  
            thereafter, as specified.   


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee:


          1)The SOS will incur one-time costs of $11.6 million to develop,  
            test, and implement the new system and ongoing costs of $2.8  
            million related to operate and maintain the system, which will  
            be offset to some extent by savings from discontinued use of  
            the existing system and of paper filings.  [General Fund and  
            Political Disclosure, Accountability, Transparency, and Access  
            Fund (PDATA Fund)]


          2)The FPPC will incur ongoing General Fund costs of $130,000 to  
            interface with the new system, and likely minor costs to  
            update forms, and modify regulations to reflect the new  
            system.


          COMMENTS:  According to the author, "In the 2014 election cycle,  
          major donor and independent expenditure committees spent over  
          $80 million in California, an amount that increases each cycle.   
          The [PRA] requires campaign contributors who reach specified  
          contribution thresholds to file regular reports with the [SOS]  
          of their contributions and expenditures.  In addition to  
          candidates for office, 'major donors' and 'independent  
          expenditure committees' are required to file reports.   
          Converting filed reports into a user-friendly database has  
          proved to be an ongoing challenge.  The [SOS's] current campaign  
          finance database, Cal-Access, does not allow the public to  
          easily access records for contributions made by major donors and  
          independent expenditure committees.  For example, one committee  
          may use variations in the spelling of its name each year, making  








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          it almost impossible to track contributions over time.   
          Secretary of State Alex Padilla has called Cal-Access '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."


          In 2012, the Legislature passed and the Governor signed SB 1001  
          (Yee), Chapter 506, Statutes of 2012, which imposed a $50 annual  
          fee on specified 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.  Additionally, SB 1001 required the revenue generated  
          to be deposited into a newly-created PDATA Fund in the State  
          Treasury and be used to update or replace Cal-Access.  It is  
          estimated that these fees will result in approximately $490,000  
          of new revenue yearly for the PDATA Fund.


          The Governor's May revision to the 2016-2017 budget proposed  
          $757,000 for the procurement of contracted services for the  
          improvement of Cal-Access.  Additionally, the Assembly proposed  
          an augmentation to the Governor's Cal-Access proposal with an  
          additional $1 million.  The budget conference committee adopted  
          the Assembly's proposal to provide additional funding for the  
          replacement of the Cal-Access system.


          California voters passed an initiative, Proposition 9, in 1974  
          that created the FPPC and codified significant restrictions and  
          prohibitions on candidates, officeholders and lobbyists.  That  
          initiative is commonly known as the PRA.  Amendments to the PRA  
          that are not submitted to the voters, such as those contained in  
          this bill, must further the purposes of the initiative and  
          require a two-thirds vote of both houses of the Legislature.


          Please see the policy committee analysis for a full discussion  
          of this bill. 








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          Analysis Prepared by:                                             
                          Nichole Becker / E. & R. / (916) 319-2094  FN:  
          0004028