BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                       SB 1349|
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                                UNFINISHED BUSINESS 


          Bill No:  SB 1349
          Author:   Hertzberg (D), et al.
          Amended:  8/15/16  
          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

           SENATE FLOOR:  38-0, 5/31/16
           AYES:  Allen, Anderson, Bates, Beall, Berryhill, Block,  
            Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,  
            Hancock, Hernandez, Hertzberg, Hill, Huff, Jackson, Lara,  
            Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning,  
            Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Stone,  
            Vidak, Wieckowski, Wolk
           NO VOTE RECORDED:  Hueso, Runner

           ASSEMBLY FLOOR:  80-0, 8/29/16 - See last page for vote

           SUBJECT:   Political Reform Act of 1974:  Secretary of State:   
                     online filing and disclosure system


          SOURCE:    California Business Roundtable
                     California Common Cause
          
          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  
          provides public disclosure of campaign finance and lobbying  








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          information in a user-friendly, easily understandable format, as  
          specified.


          Assembly Amendments (1) add coauthors; (2) require that all  
          filed data is maintained online for at least 20 years after the  
          date it is filed; and (3) require the SOS to submit to the  
          chairs of the Joint Legislative Budget Committee and the fiscal  
          committees of the Legislature a quarterly report on the progress  
          of the Cal-Access Project. 


          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  
            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.








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










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              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  
            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.   











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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 website 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 SOS'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)Funding.  SB 1001 (Yee, Chapter 506, Statutes of 2012) 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.  SB 1001 also stipulated that revenues  
            from these fees would be deposited into a newly-created PDATA  








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            Fund to update or replace Cal-Access.  PDATA Fund revenues are  
            projected to total about $500,000 in 2016-17, and the fund  
            will have a balance of $2.2 million as of June 30, 2017.


            The Governor's May revision to the 2016-17 budget proposed  
            $757,000 from the PDATA Fund for Cal-Access.  Additionally,  
            the Budget Conference Committee and the Legislature adopted a  
            proposal to provide for an additional $1 million for  
            Cal-Access system replacement.  According to the SOS, these  
            augmentations will allow the office to complete a  
            request-for-proposal for a new system.


           3) Technology Oversight Exemption Déjŕ 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  








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          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 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.


          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.




          SUPPORT:   (Verified  8/30/16)


          California Business Roundtable (co-source)
          California Common Cause (co-source)
          Insurance Commissioner Dave Jones
          Secretary of State Alex Padilla
          American Association of Retired Persons
          American Sustainable Business Council
          California Chamber of Commerce








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          California Church IMPACT 
          California Clean Money Campaign 
          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 Teachers Association
          California Voices for Progress
          CALPIRG 
          Campaign Legal Center 
          Courage Campaign 
          Fair Political Practices Commission
          First Amendment Coalition
          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 
          Voices For Progress


          OPPOSITION:   (Verified  8/30/16)


          None received

           ASSEMBLY FLOOR:  80-0, 8/29/16
           AYES:  Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,  
            Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,  
            Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,  
            Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth  
            Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,  
            Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper,  








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            Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim,  
            Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,  
            Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,  
            O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,  
            Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,  
            Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

          Prepared by:Darren Chesin / E. & C.A. / (916) 651-4106
          8/30/16 14:09:17
                                   ****  END  ****