SB 1404: Political Reform Act of 1974: audits.

The Political Reform Act of 1974 requires the Franchise Tax Board to conduct audits and field investigations regarding the reports filed by lobbyists. Existing law requires 25% of lobbyist employers and lobbying firms to be subject to a random audit and investigation every 2 years.

This bill would revise the provisions above relating to audits and field investigations. Until January 1, 2033, this bill would transfer the responsibility for conducting audits and field investigations of lobbying reports to the Fair Political Practices Commission. The During this period, the bill would require the Secretary of State to impose an additional fee, to be established by the commission, not to exceed $500 per year, to lobbying firms and lobbyist employers subject to audit to offset costs associated with conducting audits and field investigations. This fee would be deposited in a new fund that the bill would establish, the Field Audits and Investigations Fund, which would be continuously appropriated to the commission for these purposes. The From January 1, 2027 through January 1, 2033, the bill would require 60 lobbying firms and lobbyist employers who employ one or more lobbyists to be selected for audit, as specified. Additionally, this bill would require the commission to adopt regulations or policies that would ensure the operational independence of the commissions audit personnel from the commissions enforcement operations. Audits conducted by the commission would be required to be posted on the commissions internet website for 10 years following the conclusion of the audit and the commission would be required to annually report to the Legislature on the number and types of audits completed by the commission.

By creating the Field Audits and Investigations Fund, which would be continuously appropriated to the commission to offset costs associated with the above audits and investigations, the bill would make an appropriation.

Existing law makes a knowing or willful violation of the Political Reform Act of 1974 a misdemeanor and subjects offenders to criminal penalties. By expanding the scope of an existing crime, this bill would impose a state-mandated local program.

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.

The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the acts purposes upon a ²/₃ vote of each house of the Legislature and compliance with specified procedural requirements.

This bill would declare that it furthers the purposes of the act.