California Assembly Bill AB10 Amended / Bill

 BILL NUMBER: AB 10AMENDED BILL TEXT AMENDED IN SENATE JULY 14, 2015 AMENDED IN ASSEMBLY APRIL 7, 2015 INTRODUCED BY Assembly Member Gatto DECEMBER 1, 2014 An act to amend Sections 82015, 82033, 82034, 87103, 87206, and 87207 of, and to add Sections 87206.5 and 87211 to, the Government Code, relating to the Political Reform Act of 1974. LEGISLATIVE COUNSEL'S DIGEST AB 10, as amended, Gatto. Political Reform Act of 1974: behested payments and economic interest disclosures. (1) The Political Reform Act of 1974 requires elected officers, candidates, and committees to file semiannual campaign statements that include, among other things, the total amount of contributions received during the period covered by the campaign statement and the total cumulative amount of contributions received. The act provides that contributions include a payment made at the behest of a candidate unless full and adequate consideration is received from the candidate or it is clear from the surrounding circumstances that the payment was made for purposes unrelated to his or her candidacy for elective office. The act provides that a payment made principally for legislative, governmental, or charitable purposes is presumed to be made for purposes unrelated to a candidate's candidacy for elective office and is neither a gift nor a contribution. The act requires a payment of this type made at the behest of a candidate who is an elected officer to be reported within 30 days following the date on which the payment or payments equal or exceed $5,000 in the aggregate from the same source in the same calendar year in which the payments are made. This bill would also require  candidates who are required to file campaign statements, and elected officers   a Member of the Legislature or a person elected to a statewide elective office,  for one year after  they leave   he or she leaves  elective office, to report within 30 days following the date on which a behested payment or payments are made for legislative, governmental, or charitable purposes that equal or exceed $5,000 in the aggregate from the same source in the same calendar year in which the payments are made. The bill would only require a Member of the Legislature or a person elected to a statewide elective office to report the behested payment or payments, as described above, if the behested payment or payments would financially benefit the former officerholder or his or her immediate family, the former officeholder's   employer or the employer of a member of his or her immediate family, or an entity with whom the former officeholder or a member of his or her immediate family is negotiating employment.  (2) The Political Reform Act of 1974 prohibits a public official at any level of state or local government from making, participating in making, or in any way attempting to use his or her official position to influence a governmental decision in which the public official knows or has reason to know that he or she has a financial interest. A public official has a financial interest in a governmental decision if it is reasonably foreseeable that the decision will have a material financial effect, distinguishable from its effect on the public generally, on a business entity in which the public official has a direct or indirect investment worth $2,000 or more, real property in which the public official has a direct or indirect interest worth $2,000 or more, and sources of income aggregating $500 or more in value within 12 months  prior to   before  the time when the decision is made. The Political Reform Act of 1974 requires persons holding specified public offices to file disclosures of investments, real property interests, and income within specified periods of assuming or leaving office, and annually while holding the office. The act requires the disclosures to include a statement indicating, within a specified value range, the fair market value of investments or interests in real property and the aggregate value of income received from a source. This bill would increase the thresholds at which a public official has a disqualifying financial interest in sources of income from $500 to $1,000, in investments in business entities from $2,000 to $5,000, and in interests in real property from $2,000 to $10,000.  The   This    bill would make conforming adjustments to the thresholds at which income, investments, and interests in real property must be disclosed on a public official's statement of economic interests. The bill would also revise the dollar amounts associated with the value ranges for reporting the value of economic interests. This bill would require certain public officials to disclose information on the official's statement of economic interests relating to governmental decisions for which the public official had a disqualifying financial interest, as specified. Existing law makes a knowing or willful violation of the act a misdemeanor and subjects offenders to criminal penalties. By creating additional crimes, this bill would impose a state-mandated local program. (3) 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. (4) 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 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. State-mandated local program: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 82015 of the Government Code is amended to read: 82015. (a) "Contribution" means a payment, a forgiveness of a loan, a payment of a loan by a third party, or an enforceable promise to make a payment except to the extent that full and adequate consideration is received, unless it is clear from the surrounding circumstances that it is not made for political purposes. (b) (1) A payment made at the behest of a committee, as defined in subdivision (a) of Section 82013, is a contribution to the committee unless full and adequate consideration is received from the committee for making the payment. (2) A payment made at the behest of a candidate is a contribution to the candidate unless the criteria in either subparagraph (A) or (B) are satisfied: (A) Full and adequate consideration is received from the candidate. (B) It is clear from the surrounding circumstances that the payment was made for purposes unrelated to his or her candidacy for elective office. The following types of payments are presumed to be for purposes unrelated to a candidate's candidacy for elective office: (i) A payment made principally for personal purposes, in which case it may be considered a gift under Section 82028. Payments that are otherwise subject to the limits of Section 86203 are presumed to be principally for personal purposes. (ii) A payment made by a state, local, or federal governmental agency or by a nonprofit organization that is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code. (iii)  (I)    A payment not covered by clause (i), made principally for legislative, governmental, or charitable purposes, in which case it is neither a gift nor a contribution. However, payments of this type that are made at the behest of a candidate  who is required to file a campaign statement, a candidate who is an elected officer, or an elected officer for one year after he or she leaves elective office,   who is an elected officer  shall be reported within 30 days following the date on which the payment or payments equal or exceed five thousand dollars ($5,000) in the aggregate from the same source in the same calendar year in which they are made. The report shall be  filed, for a candidate who is required to file a campaign statement, with the officials and agencies he or she is required to file his or her campaign statement, for an elected officer,   filed  with the elected officer's  agency, and for an elected officer for the one year after he or she has left elective office, with the agency the elected officer was required to file the statement when he or she was an elected officer.   agency.  The report shall be a public record subject to inspection and copying pursuant to Section 81008. The report shall contain the following information: name of payor, address of payor, amount of the payment, date or dates the payment or payments were made, the name and address of the payee, a brief description of the goods or services provided or purchased, if any, and a description of the specific purpose or event for which the payment or payments were made. Once the five-thousand-dollar ($5,000) aggregate threshold from a single source has been reached for a calendar year, all payments for the calendar year made by that source shall be disclosed within 30 days after the date the threshold was reached or the payment was made, whichever occurs later. Within 30 days after receipt of the report, state agencies shall forward a copy of these reports to the  Commission,   commission,  and local agencies shall forward a copy of these reports to the officer with whom  candidates for, and  elected officers  of,   of  that agency file their campaign statements.  (II) A Member of the Legislature or a person elected to a statewide elective office, as defined in Section 82053, shall report behested payments of the type described in subclause (I) for one year after he or she leaves the Legislature or the statewide elective office. The report shall be made in accordance with the requirements of subclause (I). A Member of the Legislature or a person elected to a statewide elective office shall only report a payment pursuant to this subclause if the payment would financially benefit the former officeholder or a member of his or her immediate family, the former officeholder's employer or the employer of a member of his or her immediate family, or an entity with whom the former officeholder or a member of his or her immediate family is negotiating employment.  (C) For purposes of subparagraph (B), a payment is made for purposes related to a candidate's candidacy for elective office if all or a portion of the payment is used for election-related activities. For purposes of this subparagraph, "election-related activities" shall include, but are not limited to, the following: (i) Communications that contain express advocacy of the nomination or election of the candidate or the defeat of his or her opponent. (ii) Communications that contain reference to the candidate's candidacy for elective office, the candidate's election campaign, or the candidate's or his or her opponent's qualifications for elective office. (iii) Solicitation of contributions to the candidate or to third persons for use in support of the candidate or in opposition to his or her opponent. (iv) Arranging, coordinating, developing, writing, distributing, preparing, or planning of any communication or activity described in clause (i), (ii), or (iii). (v) Recruiting or coordinating campaign activities of campaign volunteers on behalf of the candidate. (vi) Preparing campaign budgets. (vii) Preparing campaign finance disclosure statements. (viii) Communications directed to voters or potential voters as part of activities encouraging or assisting persons to vote if the communication contains express advocacy of the nomination or election of the candidate or the defeat of his or her opponent. (D) A contribution made at the behest of a candidate for a different candidate or to a committee not controlled by the behesting candidate is not a contribution to the behesting candidate. (3) A payment made at the behest of a member of the Public Utilities Commission, made principally for legislative, governmental, or charitable purposes, is not a contribution. However, payments of this type shall be reported within 30 days following the date on which the payment or payments equal or exceed five thousand dollars ($5,000) in the aggregate from the same source in the same calendar year in which they are made. The report shall be filed by the member with the Public Utilities Commission and shall be a public record subject to inspection and copying pursuant to Section 81008. The report shall contain the following information: name of payor, address of payor, amount of the payment, date or dates the payment or payments were made, the name and address of the payee, a brief description of the goods or services provided or purchased, if any, and a description of the specific purpose or event for which the payment or payments were made. Once the five-thousand-dollar ($5,000) aggregate threshold from a single source has been reached for a calendar year, all payments for the calendar year made by that source shall be disclosed within 30 days after the date the threshold was reached or the payment was made, whichever occurs later. Within 30 days after receipt of the report, the Public Utilities Commission shall forward a copy of these reports to the Fair Political Practices Commission. (c) "Contribution" includes the purchase of tickets for events such as dinners, luncheons, rallies, and similar fundraising events; the candidate's own money or property used on behalf of his or her candidacy, other than personal funds of the candidate used to pay either a filing fee for a declaration of candidacy or a candidate statement prepared pursuant to Section 13307 of the Elections Code; the granting of discounts or rebates not extended to the public generally or the granting of discounts or rebates by television and radio stations and newspapers not extended on an equal basis to all candidates for the same office; the payment of compensation by any person for the personal services or expenses of any other person if the services are rendered or expenses incurred on behalf of a candidate or committee without payment of full and adequate consideration. (d) "Contribution" further includes any transfer of anything of value received by a committee from another committee, unless full and adequate consideration is received. (e) "Contribution" does not include amounts received pursuant to an enforceable promise to the extent those amounts have been previously reported as a contribution. However, the fact that those amounts have been received shall be indicated in the appropriate campaign statement. (f) (1) Except as provided in paragraph (2) or (3), "contribution" does not include a payment made by an occupant of a home or office for costs related to any meeting or fundraising event held in the occupant's home or office if the costs for the meeting or fundraising event are five hundred dollars ($500) or less. (2) "Contribution" includes a payment made by a lobbyist or a cohabitant of a lobbyist for costs related to a fundraising event held at the home of the lobbyist, including the value of the use of the home as a fundraising event venue. A payment described in this paragraph shall be attributable to the lobbyist for purposes of Section 85702. (3) "Contribution" includes a payment made by a lobbying firm for costs related to a fundraising event held at the office of the lobbying firm, including the value of the use of the office as a fundraising event venue. (g) Notwithstanding the foregoing definition of "contribution," the term does not include volunteer personal services or payments made by  any   an  individual for his or her own travel expenses if the payments are made voluntarily without any understanding or agreement that they shall be, directly or indirectly, repaid to him or her. (h) "Contribution" further includes the payment of public moneys by a state or local governmental agency for a communication to the public that satisfies both of the following: (1) The communication expressly advocates the election or defeat of a clearly identified candidate or the qualification, passage, or defeat of a clearly identified measure, or, taken as a whole and in context, unambiguously urges a particular result in an election. (2) The communication is made at the behest of the affected candidate or committee. (i) "Contribution" further includes a payment made by a person to a multipurpose organization as defined and described in Section 84222. SEC. 2. Section 82033 of the Government Code is amended to read: 82033. "Interest in real property" includes any leasehold, beneficial or ownership interest or an option to acquire such an interest in real property located in the jurisdiction owned directly,  indirectly   indirectly,  or beneficially by the public official, or other filer, or his or her immediate family if the fair market value of the interest is ten thousand dollars ($10,000) or more. Interests in real property of an individual includes a pro rata share of interests in real property of any business entity or trust in which the individual or immediate family owns, directly,  indirectly   indirectly,  or beneficially, a 10-percent interest or greater. SEC. 3. Section 82034 of the Government Code is amended to read: 82034. "Investment" means any financial interest  in   in,  or security issued  by   by,  a business entity, including, but not limited to, common stock, preferred stock, rights, warrants, options, debt instruments, and any partnership or other ownership interest owned directly, indirectly, or beneficially by the public official, or other filer, or his or her immediate family, if the business entity or any parent, subsidiary, or otherwise related business entity has an interest in real property in the jurisdiction,  or  does business or plans to do business in the jurisdiction, or has done business within the jurisdiction at any time during the two years  prior to   before  the time any statement or other action is required under this title. An asset shall not be deemed an investment unless its fair market value equals or exceeds five thousand dollars ($5,000). The term "investment" does not include a time or demand deposit in a financial institution, shares in a credit union, any insurance policy, interest in a diversified mutual fund registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C.  Sec.  80a-1 et seq.) or in a common trust fund created pursuant to Section 1585 of the Financial Code, interest in a government defined-benefit pension plan, or any bond or other debt instrument issued by  any   a  government or government agency. Investments of an individual includes a pro rata share of investments of any business entity, mutual fund, or trust in which the individual or immediate family owns, directly, indirectly, or beneficially, a 10-percent interest or greater. The term "parent,  subsidiary   subsidiary,  or otherwise related business entity" shall be specifically defined by regulations of the  Commission.   commission.  SEC. 4. Section 87103 of the Government Code is amended to read: 87103. A public official has a financial interest in a decision within the meaning of Section 87100 if it is reasonably foreseeable that the decision will have a material financial effect, distinguishable from its effect on the public generally, on the official, a member of his or her immediate family, or on any of the following: (a) Any business entity in which the public official has a direct or indirect investment worth five thousand dollars ($5,000) or more. (b) Any real property in which the public official has a direct or indirect interest worth ten thousand dollars ($10,000) or more. (c) Any source of income, except gifts or loans by a commercial lending institution made in the regular course of business on terms available to the public without regard to official status, aggregating one thousand dollars ($1,000) or more in value provided  or   to,  promised to,  or  received  by,   by  the public official within 12 months before the time when the decision is made. (d) Any business entity in which the public official is a director, officer, partner, trustee, employee, or holds any position of management. (e) Any donor of, or any intermediary or agent for a donor of, a gift or gifts aggregating two hundred fifty dollars ($250) or more in value provided to, received by, or promised to the public official within 12 months before the time when the decision is made. The amount of the value of gifts specified by this subdivision shall be adjusted biennially by the commission to equal the same amount determined by the commission pursuant to subdivision (f) of Section 89503. For purposes of this section, indirect investment or interest means any investment or interest owned by the spouse or dependent child of a public official, by an agent on behalf of a public official, or by a business entity or trust in which the official, the official's agents, spouse, and dependent children own directly, indirectly, or beneficially a 10-percent interest or greater. SEC. 5. Section 87206 of the Government Code is amended to read: 87206. If an investment is required to be disclosed under this article, the statement shall contain all of the following: (a) A statement of the nature of the investment. (b)  (1)    The name of the business entity in which each investment is held, and a general description of the business activity in which the business entity is engaged. If a filer is required to report on his or her statement of economic interests a business entity investment in which the filer is a director, officer, partner, or trustee,  except as provided in paragraph (2),  the filer shall provide a thorough and detailed description of the business entity's activities and disclose the names of all business partners who share a financial interest in the business entity, based on criteria established by the  Commission.   commission.   (2) A filer is not required to provide a thorough and detailed description of the business entity's activities and is not required to disclose the names of all business partners who share a financial interest in the business entity if the business entity is publicly traded.  (c) A statement indicating which of the following represents the fair market value of the investment: (1) At least five thousand dollars ($5,000) but not greater than ten thousand dollars ($10,000). (2) Greater than ten thousand dollars ($10,000) but not greater than one hundred thousand dollars ($100,000). (3) Greater than one hundred thousand dollars ($100,000) but not greater than two hundred fifty thousand dollars ($250,000). (4) Greater than two hundred fifty thousand dollars ($250,000) but not greater than five hundred thousand dollars ($500,000). (5) Greater than five hundred thousand dollars ($500,000) but not greater than one million dollars ($1,000,000). (6) Greater than one million dollars ($1,000,000) but not greater than two million dollars ($2,000,000). (7) Greater than two million dollars ($2,000,000). (d) In the case of a statement filed under Section 87203 or 87204, if the investment was partially or wholly acquired or disposed of during the period covered by the statement, the date of acquisition or disposal. SEC. 6. Section 87206.5 is added to the Government Code, to read: 87206.5. (a) If an interest in real property is required to be disclosed under this article, the statement shall contain all of the following: (1) A statement of the nature of the interest. (2) The address or other precise location of the real property. (3) A statement indicating which of the following represents the fair market value of the interest in real property: (A) At least ten thousand dollars ($10,000) but not greater than two hundred fifty thousand dollars ($250,000). (B) Greater than two hundred fifty thousand dollars ($250,000) but not greater than five hundred thousand dollars ($500,000). (C) Greater than five hundred thousand dollars ($500,000) but not greater than seven hundred fifty thousand dollars ($750,000). (D) Greater than seven hundred fifty thousand dollars ($750,000) but not greater than one million dollars ($1,000,000). (E) Greater than one million dollars ($1,000,000) but not greater than two million dollars ($2,000,000). (F) Greater than two million dollars ($2,000,000). (4) In the case of a statement filed under Section 87203 or 87204, if the interest in real property was partially or wholly acquired or disposed of during the period covered by the statement, the date of acquisition or disposal. (b) For purposes of disclosure under this article, "interest in real property" does not include the principal residence of the filer or any other property that the filer uses exclusively as the personal residence of the filer. SEC. 7. Section 87207 of the Government Code is amended to read: 87207. (a) Except as provided in subdivision (b), if income is required to be reported under this article, the statement shall contain all of the following: (1) The name and address of each source of income aggregating one thousand dollars ($1,000) or more in value, or fifty dollars ($50) or more in value if the income was a gift, and a general description of the business activity, if any, of each source. (2) A statement indicating which of the following represents the aggregate value of income from each source, or in the case of a loan, the highest amount owed to each source: (A) At least one thousand dollars ($1,000) but not greater than ten thousand dollars ($10,000). (B) Greater than ten thousand dollars ($10,000) but not greater than one hundred thousand dollars ($100,000). (C) Greater than one hundred thousand dollars ($100,000) but not greater than two hundred fifty thousand dollars ($250,000). (D) Greater than two hundred fifty thousand dollars ($250,000) but not greater than five hundred thousand dollars ($500,000). (E) Greater than five hundred thousand dollars ($500,000). (3) A description of the consideration, if any, for which the income was received. (4) In the case of a gift, the amount and the date on which the gift was received. (5) In the case of a loan, the annual interest rate, the security, if any, given for the loan, and the term of the loan. (b) When the filer's pro rata share of income to a business entity, including income to a sole proprietorship, is required to be reported under this article, the statement shall contain the following: (1)  (A)    The name, address,  and   and, except as provided in subparagraph (B),  a thorough and detailed description of the business activity of the business entity based on criteria established by the  Commission.   commission.   (B) A filer is not required to provide a thorough and detailed description of the business activity of the business entity if the business entity is publicly traded.  (2) The name of every person from whom the business entity received payments if the filer's pro rata share of gross receipts from that person was equal to or greater than ten thousand dollars ($10,000) during a calendar year. (c) When a payment, including an advance or reimbursement, for travel is required to be reported pursuant to this section, it may be reported on a separate travel reimbursement schedule, which shall be included in the filer's statement of economic interest. A filer who chooses not to use the travel schedule shall disclose payments for travel as a gift, unless it is clear from all surrounding circumstances that the services provided were equal to or greater in value than the payments for the travel, in which case the travel may be reported as income. SEC. 8. Section 87211 is added to the Government Code, to read: 87211. (a) A public official who holds an office specified in Section 87200 shall disclose on his or her statement of economic interests each governmental decision for which a financial interest resulted in the public official's disqualification from making, participating in making, or in any way attempting to use his or her official position to influence that governmental decision pursuant to Section 87100 or, for a Member of the Legislature, Section 87102.5. The disclosure shall identify the governmental decision, the date that the governmental decision was made or considered, the financial interest that created the conflict of interests, and any other relevant information that the  Commission   commission  deems appropriate. (b) The disclosures required by this section are in addition to any other required disclosures, including, but not limited to, the requirements of Section 87105. SEC. 9. 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. 10. 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.