(1)Existing law, the Political Reform Act of 1974, provides for the comprehensive regulation of campaign financing and activities. The act requires a committee that supports or opposes ballot measures to name and identify itself using a name or phrase the that clearly identifies the economic or other special interests of its major donors of $50,000 or more. The act also requires that if the major donors share a common employer, the identity of the employer be disclosed.

This bill would repeal these provisions.

(3)The act prohibits a candidate, committee, or slate mailer organization from expending campaign funds to pay for specified telephone calls that advocate support of, or opposition to, a candidate, ballot measure, or both, unless the name of the organization that authorized or paid for the call is disclosed to the recipient of the call during the course of each call.

This bill would instead make these requirements applicable to a candidate, a candidate controlled committee, committee established for an elective office for the controlling candidate, a political party committee, and a slate mailer organization that expends campaign funds to pay for such telephone calls.

(4)The act also requires advertisements, as defined, to include prescribed disclosure statements, including, among others, a requirement that the disclosure statements include the names of the persons who made the 2 highest cumulative contributions, as defined, to the committee paying for the advertisement.

This bill would repeal and recast provisions of the act relating to advertisement disclosure statements. Among those changes, this bill would revise the definition of advertisement to exclude a number of communications, including communications paid for by a political party committee or person who is not a committee, committee and communications that involve wearing apparel, sky writing, and certain electronic media communications, as specified. The bill would prohibit specified entities from sending a mass electronic mailing, as defined, unless the name of the candidate or committee are shown in the electronic mailing preceded by the words Paid for by in at least the same size font as a majority of the text in the mass electronic mailing. The bill would also replace existing advertisement disclosure statements with newly prescribed disclosure statements that identify the name of the committee paying for the advertisement and the top contributors to the committee paying for the advertisement. The bill would define top contributors for purposes of these provisions as the persons from whom the committee paying for the advertisement received its 3 highest cumulative contributions, as specified. The bill would exempt certain committees, including committees that make independent expenditures totaling $1,000 or more in a calendar year, from the requirement to disclose the top contributors in advertisement disclosure statements. The bill would also prescribe location and format criteria for the disclosure statements that are specific to radio and telephone, television and video, print, and electronic media advertisements.

(5)The act prohibits a person from making a contribution as an intermediary on behalf of another person without disclosing to the recipient of the contribution specified information about both the intermediary and the source of the contribution. The act also prohibits a person from making a contribution to a committee on the condition or with the agreement that it will be contributed to a particular candidate unless the contribution is disclosed in compliance with those requirements for contributions made by an intermediary.

This bill would revise the latter provision to prohibit a person from making a contribution to a committee or candidate that is earmarked for a contribution to another committee, ballot measure, or candidate, unless the contribution is disclosed in compliance with the requirements for contributions made by an intermediary. The bill would also describe circumstances in which a contribution is deemed to be earmarked.

(6)Because a violation of the act is punishable as a misdemeanor, 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.

(7)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 and compliance with specified procedural requirements.

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

(1)Existing law, the Political Reform Act of 1974, provides for the comprehensive regulation of campaign financing and activities. The act requires a committee that supports or opposes ballot measures to name and identify itself using a name or phrase the clearly identifies the economic or other special interests of its major donors of $50,000 or more. The act also requires that if the major donors share a common employer, the identity of the employer be disclosed.

This bill would repeal these provisions.

(2)The act prohibits a candidate, committee, or slate mailer organization from expending campaign funds to pay for specified telephone calls that advocate support of, or opposition to, a candidate, ballot measure, or both, unless the name of the organization that authorized or paid for the call is disclosed to the recipient of the call during the course of each call.

This bill would instead make these requirements applicable to a candidate, a candidate controlled committee, a political party committee, and a slate mailer organization that expends campaign funds to pay for such telephone calls.

(3)The act also requires advertisements, as defined, to include prescribed disclosure statements, including, among others, a requirement that the disclosure statement statements include the names of the persons who made the 2 highest cumulative contributions, as defined, to the committee paying for the advertisement.

This bill would repeal and recast provisions of the act relating to advertisement disclosure statements. Among those changes, this bill would revise the definition of advertisement to exclude a number of communications, including communications paid for by a political party committee or person who is not a committee, and communications that involve wearing apparel, sky writing, and certain electronic media communications, as specified. The bill would also replace existing advertisement disclosure statements with newly prescribed disclosure statements that identify the name of the committee paying for the advertisement and the top contributors of to the committee paying for the advertisement. The bill would define top contributors for purposes of these provisions as the persons from whom the committee paying for the advertisement received its 3 highest cumulative contributions, as specified. The bill would exempt certain committees, including committees that make independent expenditures totaling $1,000 or more in a calendar year, from the requirement to disclose the top contributors in advertisement disclosure statements. The bill would also prescribe location and format criteria for the disclosure statements that is are specific to radio and telephone, television and video, print, and electronic media advertisements.

(4)The act prohibits a person from making a contribution as an intermediary on behalf of another person without disclosing to the recipient of the contribution specified information about both the intermediary and the source of the contribution. The act also prohibits a person from making a contribution to a committee on the condition or with the agreement that it will be contributed to a particular candidate unless the contribution is disclosed in compliance with those requirements for contributions made by an intermediary.

This bill would revise the latter provision to prohibit a person from making a contribution to a committee or candidate that is earmarked for a contribution to another committee or candidate, unless the contribution is disclosed in compliance with the requirements for contributions made by an intermediary. The bill would also describe circumstances in which a contribution is deemed to be earmarked.

(5)Because a violation of the act is punishable as a misdemeanor, 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.

(6)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 and compliance with specified procedural requirements.

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

(1)Existing law, the Political Reform Act of 1974, provides for the comprehensive regulation of campaign financing and activities. The act requires a committee that supports or opposes ballot measures to name and identify itself using a name or phrase the clearly identifies the economic or other special interests of its major donors of $50,000 or more. The act also requires that if the major donors share a common employer, the identity of the employer be disclosed.

This bill would repeal these provisions.

(3)The act also requires advertisements, as defined, to include prescribed disclosure statements, including, among others, a requirement that the disclosure statement include the names of the persons who made the 2 highest cumulative contributions, as defined, to the committee paying for the advertisement.

This bill would repeal and recast provisions of the act relating to advertisement disclosure statements. Among those changes, this bill would revise the definition of advertisement to exclude a number of communications, including communications paid for by a political party committee or person who is not a committee, and communications that involve wearing apparel, sky writing, and certain electronic media communications, as specified. The bill would also replace existing advertisement disclosure statements with newly prescribed disclosure statements that identify the name of the committee paying for the advertisement and the top contributors of the committee paying for the advertisement. The bill would define top contributors for purposes of these provisions as the persons from whom the committee paying for the advertisement received its 3 highest cumulative contributions, as specified. The bill would exempt certain committees, including committees that make independent expenditures totaling $1,000 or more in a calendar year, from the requirement to disclose the top contributors in advertisement disclosure statements. The bill would also prescribe location and format criteria for the disclosure statements that is specific to radio and telephone, television and video, print, and electronic media advertisements.

(5)Because a violation of the act is punishable as a misdemeanor, 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.

(6)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 and compliance with specified procedural requirements.

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

(1)Existing law, the Political Reform Act of 1974, provides for the comprehensive regulation of campaign financing and activities. The act requires a committee that supports or opposes ballot measures to name and identify itself using a name or phrase the clearly identifies the economic or other special interests of its major donors of $50,000 or more. The act also requires that if the major donors share a common employer, the identity of the employer be disclosed.

This bill would repeal these provisions.

(2)The act also requires advertisements, as defined, to include prescribed disclosure statements, including, among others, a requirement that the disclosure statement include the names of the persons who made the 2 highest cumulative contributions, as defined, to the committee paying for the advertisement.

This bill would repeal and recast provisions of the act relating to advertisement disclosure statements. Among those changes, this bill would revise the definition of advertisement to exclude a number of communications, including communications paid for by a political party committee or person who is not a committee, and communications that involve wearing apparel, sky writing, and certain electronic media communications, as specified. The bill would also replace existing advertisement disclosure statements with newly prescribed disclosure statements that identify the name of the committee paying for the advertisement and the top contributors of the committee paying for the advertisement. The bill would define top contributors for purposes of these provisions as the persons from whom the committee paying for the advertisement received its 3 highest cumulative contributions, as specified. The bill would exempt certain committees, including committees that make independent expenditures totaling $1,000 or more in a calendar year, from the requirement to disclose the top contributors in advertisement disclosure statements. The bill would also prescribe location and format criteria for the disclosure statements that is specific to radio and telephone, television and video, print, and electronic media advertisements.

(3)Because a violation of the act is punishable as a misdemeanor, 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.

(4)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 and compliance with specified procedural requirements.

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

(1)Existing law, the Political Reform Act of 1974, provides for the comprehensive regulation of campaign financing and activities. The act requires a committee that supports or opposes ballot measures to name and identify itself using a name or phrase the clearly identifies the economic or other special interests of its major donors of $50,000 or more. The act also requires that if the major donors share a common employer, the identity of the employer be disclosed.

This bill would repeal these provisions.

(4)The act also requires advertisements, as defined, to include prescribed disclosure statements, including, among others, a requirement that the disclosure statement include the names of the persons who made the 2 highest cumulative contributions, as defined, to the committee paying for the advertisement.

This bill would repeal and recast provisions of the act relating to advertisement disclosure statements. Among those changes, this bill would revise the definition of advertisement to exclude a number of communications, including communications paid for by a political party committee or person who is not a committee, and communications that involve wearing apparel, sky writing, and certain electronic media communications, as specified. The bill would also replace existing advertisement disclosure statements with newly prescribed disclosure statements that identify the name of the committee paying for the advertisement and the top contributors of the committee paying for the advertisement. The bill would define top contributors for purposes of these provisions as the persons from whom the committee paying for the advertisement received its 3 highest cumulative contributions, as specified. The bill would exempt certain committees, including committees that make independent expenditures totaling $1,000 or more in a calendar year, from the requirement to disclose the top contributors in advertisement disclosure statements. The bill would also prescribe location and format criteria for the disclosure statements that is specific to radio and telephone, television and video, print, and electronic media advertisements.

(6)Because a violation of the act is punishable as a misdemeanor, 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.

(7)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 and compliance with specified procedural requirements.

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

Existing law, the Political Reform Act of 1974, provides for the comprehensive regulation of campaign financing, including requiring the reporting of campaign contributions and expenditures and imposing other reporting and recordkeeping requirements on campaign committees. Existing law additionally imposes a disclosure statement requirement with respect to advertisements supporting or opposing a candidate or ballot measure paid for by a committee that makes an expenditure of $5,000 or more.

This bill would require that if the advertisement is a television or video advertisement, the disclosure statement shall be shown continuously.

This bill would also state the intent of the Legislature to enact legislation that would implement a California Disclose Act.

Because a violation of the act is punishable as a misdemeanor, 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 and compliance with specified procedural requirements.

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

Existing law, the Political Reform Act of 1974, provides for the comprehensive regulation of campaign financing, including requiring the reporting of campaign contributions and expenditures and imposing other reporting and recordkeeping requirements on campaign committees. Existing law additionally imposes a disclosure statement requirements requirement with respect to advertisements supporting or opposing a candidate or ballot measure paid for by donors making contributions of specified amounts or by independent expenditures and defines several terms and phrases for these purposes a committee that makes an expenditure of $5,000 or more.

This bill would impose new disclosure statement requirements for political advertisements regarding a ballot measure paid for by specified committees that are radio advertisements, prerecorded telephonic messages, or television or video advertisements that would require the identification of identifiable contributors, as defined require that if the advertisement is a television or video advertisement, the disclosure statement shall be shown continuously.

This bill would also state the intent of the Legislature to enact legislation that would implement a California Disclose Act, with provisions similar to a specified bill from the 201314 Regular Session of the Legislature.

Because a violation of the act is punishable as a misdemeanor, 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 and compliance with specified procedural requirements.

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

Existing law, the Political Reform Act of 1974, provides for the comprehensive regulation of campaign financing, including requiring the reporting of campaign contributions and expenditures and imposing other reporting and recordkeeping requirements on campaign committees. Existing law additionally imposes disclosure statement requirements with respect to advertisements supporting or opposing a candidate or ballot measure paid for by donors making contributions of specified amounts or by independent expenditures and defines several terms and phrases for these purposes.

This bill would impose new disclosure statement requirements for political advertisements regarding a ballot measure paid for by specified committees that are radio advertisements, prerecorded telephonic messages, or television or video advertisements that would require the identification of identifiable contributors, as defined.

This bill would also state the intent of the Legislature to enact legislation that would implement a California Disclose Act, with provisions similar to a specified bill from the 201314 Regular Session of the Legislature.

Because a violation of the act is punishable as a misdemeanor, 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 and compliance with specified procedural requirements.

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

 THIRD READING  

Bill No: AB 700

Author:

:

Vote:

SENATE ELECTIONS & C.A. COMMITTEE: 4-1, 6/21/16

AYES: Allen, Hancock, Hertzberg, Liu

NOES: Anderson

SENATE FLOOR: 26-12, 8/30/16 (FAIL)

AYES: Allen, Beall, Block, De León, Galgiani, Glazer, Hall, Hancock, Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Pan, Pavley, Roth, Wieckowski, Wolk

NOES: Anderson, Bates, Berryhill, Cannella, Fuller, Gaines, Huff, Morrell, Nguyen, Nielsen, Stone, Vidak

NO VOTE RECORDED: Moorlach

ASSEMBLY FLOOR: 60-15, 1/27/16 - See last page for vote

SUBJECT:

SOURCE: California Clean Money Campaign

DIGEST: This bill changes the content and format of disclosure statements required on specified campaign advertisements in a manner that generally requires such disclosures to be more prominent and implements new requirements for the disclosure of earmarked contributions.

ANALYSIS:

Existing law:

1. Creates the Fair Political Practices Commission (FPPC), and makes it responsible for the impartial, effective administration and implementation of the Political Reform Act (PRA).
2. Defines “expenditure,” for purposes of the PRA, as a payment, a forgiveness of a loan, a payment of a loan by a third party, or an enforceable promise to make a payment, unless it is clear from the surrounding circumstances that it is not made for political purposes.
3. Requires an advertisement for or against any ballot measure to include a disclosure statement identifying any person whose cumulative contributions are $50,000 or more. Provides that if there are more than two donors of $50,000 or more, the disclosure only needs to include the highest and second highest donors in that order.
4. Requires a committee that supports or opposes one or more ballot measures to name itself using a name or phrase that identifies the economic or other special interest of its major donors of $50,000 or more. Provides that if the major donors of $50,000 or more share a common employer, the identity of the employer must also be disclosed.
5. Requires a broadcast or mass mailing advertisement supporting or opposing a candidate or ballot measure that is paid for by an independent expenditure to include a disclosure statement identifying the name of the committee making the expenditure and the names of the persons from whom the committee making the IE received its two highest cumulative contributions of $50,000 or more during the 12-month period prior to the expenditure.
6. Provides that when a disclosure of the top two donors is required on an advertisement pursuant to either of the above provisions, only the largest donor needs to be disclosed on an advertisement that is an electronic broadcast of 15 seconds or less or a print advertisement of 20 square inches or less.
7. Provides that no candidate or committee shall send a mass mailing unless the name, street address, and city of the candidate or committee are shown on the outside of each piece of mail in the mass mailing and on at least one of the inserts included within each piece of mail of the mailing in no less than 6-point type which shall be in a color or print which contrasts with the background so as to be easily legible. If the sender of the mass mailing is a single candidate or committee, the name, street address, and city of the candidate or committee need only be shown on the outside of each piece of mail. If the sender of a mass mailing is a controlled committee, the name of the person controlling the committee shall also be included.
8. Requires an advertisement supporting or opposing a candidate that is paid for by an independent expenditure to include the following statement in no less than 14-point, bold, sans serif type: “This advertisement was not authorized or paid for by a candidate for this office or a committee controlled by a candidate for this office.” When included in a mailed advertisement paid for by an independent expenditure, this statement must be located within one quarter of an inch of the recipient’s name and address as printed on the advertisement and further requires that text of the statement must be contained in a box with an outline that has a line weight of at least 3.25 pt. The text, the interior of the box, the outline of the box, and the background of the advertisement must be in contrasting colors.
9. Provides that a candidate, committee, or slate mailer organization may not expend campaign funds to pay for telephone calls that are similar in nature and aggregate 500 or more in number, made by an individual, or individuals, or by electronic means and that advocate support of, or opposition to, a candidate, ballot measure, or both, unless during the course of each call the name of the entity that authorized or paid for the call is disclosed to the recipient of the call, as specified. This requirement does not apply to telephone calls made by the candidate, the campaign manager, or individuals who are volunteers.
10. Provides that a committee primarily formed to support or oppose a state ballot measure or state candidate that raises $1 million or more for an election shall maintain an accurate list of the committee’s top 10 contributors, as specified. A current list of the top 10 contributors shall be provided to the FPPC for disclosure on their Internet Web site.
11. Provides that a person may not make any contribution to a committee on the condition or with the agreement that it will be contributed to any particular candidate unless the contribution is fully disclosed, as specified.

This bill:

1. Defines the following terms, for the purposes of this bill:
   1. "Advertisement" means any general or public communication which is authorized and paid for by a committee for the purpose of supporting or opposing a candidate or candidates for elective office or a ballot measure or measures. "Advertisement" does not include any of the following:
      1. A communication paid for by a political party committee or a candidate controlled committee established for elective office for the controlling candidate;
      2. A communication from an organization, other than a political party, to its members;
      3. Various specified types of communications where the inclusion of disclosures is impractical due to the size or medium of the communication (such as a pen, or sky writing); or,
      4. Any other advertisement as determined by regulations of the FPPC.
   2. "Cumulative contributions" means the cumulative amount of contributions received by a committee beginning 12 months prior to the date of the expenditure and ending seven days before the time the advertisement is sent to the printer or broadcaster.
   3. "Top contributors" means the persons from whom the committee paying for an advertisement has received its three highest cumulative contributions of $50,000 or more, as specified. If a contributor appears to qualify as a top contributor but received earmarked funds to make the contribution, the person or committee that earmarked the funds and gave those funds to the contributor shall instead be disclosed as the top contributor. The person or committee transferring earmarked funds shall disclose the true source of the funds to the committee receiving the earmarked funds at the time the funds are transferred, and the committee receiving those funds may reasonably rely upon that disclosure for purposes of compliance.
   4. Funds are “earmarked” in the following circumstances:
      1. The contributor solicited and received the funds from donors for the express purpose of making a contribution to the committee paying for the advertisement.
      2. The funds were given to the contributor subject to an express condition or agreement with the donor that all or a portion would be used to make a contribution to the committee paying for the advertisement.
      3. The contributor had existing funds from a donor and a subsequent agreement was reached with the donor that all or a portion of the funds would be used to contribute to the committee paying for the advertisement.
2. Delineates the circumstances in which a payment would be made for political purposes within the meaning of the definition of “expenditure” that conforms to existing FPPC regulations.
3. Provides that a candidate, candidate controlled committee established for an elective office for the controlling candidate, or political party committee shall not send a mass mailing unless the name, street address, and city of the candidate or committee are shown, as specified.
4. Provides that a candidate, candidate controlled committee established for an elective office for the controlling candidate, or political party committee shall not send a mass electronic mailing unless the name of the candidate or committee are shown in the electronic mailing preceded by the words “Paid for by” in at least the same size font as a majority of the text in the electronic mailing. A “mass electronic mailing” has been made when more than two hundred substantially similar pieces of electronic mail have been sent within a calendar month. The “sender” is the candidate, candidate controlled committee established for an elective office for the controlling candidate, or political party committee who pays for the largest portion of expenditures attributable to the designing, printing, and posting of the mailing which is reportable as specified.
5. Requires any advertisement paid for by a committee to include the words “Paid for by” followed by the name of the committee as specified.
6. Requires that any advertisement paid for by a committee that receives contributions to include the words “This committee has major funding from” followed by the names of the top three contributors to the committee paying for the advertisement, unless otherwise specified. If fewer than three contributors qualify as top contributors, only those contributors that qualify shall be disclosed pursuant to this section. If there are no contributors that qualify as top contributors, this disclosure is not required.
7. Requires that an advertisement that is disseminated over the radio or by telephonic means shall include the required disclosures at the beginning or end of the advertisement, read in a clearly spoken manner and in a pitch and tone substantially similar to the rest of the advertisement, and shall last no less than three seconds. Radio and prerecorded telephonic advertisements shall be required to disclose only the top two contributors of $50,000 or more unless the advertisement lasts 15 seconds or less or the disclosure statement would last more than eight seconds, in which case only the single top contributor of $50,000 or more shall be disclosed.
8. Requires an advertisement that is disseminated as a video, including advertisements on television and videos disseminated over the Internet, shall include the required disclosures at the beginning or end of the advertisement as follows:
9. The disclosure shall be written and displayed for at least five seconds of a broadcast of thirty seconds or less or for at least ten seconds of a broadcast that lasts longer than thirty seconds.
10. The written disclosure shall appear on a solid black background on the entire bottom one-third of the television or video display screen, or bottom one-fourth of the screen if the committee does not have or is otherwise not required to list top contributors, and shall be in a contrasting color in Arial equivalent type, and the type size for the smallest letters in the written disclosure shall be 4 percent of the height of the television or video display screen.
11. The top contributors, if any, shall each be disclosed on a separate horizontal line, in descending order, beginning with the top contributor who made the largest cumulative contributions on the first line. The name of each of the top contributors shall be centered horizontally. The written disclosures shall be underlined, except for the names of the top contributors, if any.
12. A committee not making independent expenditures supporting or opposing a candidate but is required to provide their top ten contributor list as described above, shall include the text “Funding Details At [insert FPPC Internet Web site].” The text shall be below all other text in contrasting color to the background color in Arial equivalent type and the type size shall be equivalent to at least 2.5 percent of the height of the television or video display screen.
13. An advertisement that is an independent expenditure supporting or opposing a candidate shall include the required statement that it was not authorized by a candidate or a committee controlled by a candidate in the aforementioned solid black background below all other text required to appear in that area in a contrasting color and in Arial equivalent type no less than 2.5 percent of the height of the television or video display screen.
14. If using a type size of 4 percent of the height of the television or video display screen causes the name of any of the top contributors to exceed the width of the screen or causes the disclosures to exceed one-third of the television or video display screen, the type size of the name of the top contributor shall be reduced until the top contributor’s name fits on the width of the screen or the entire disclosure fits within one-third of the television or video display screen, but in no case shall the type size be smaller than 2.5 percent of the height of the screen.
15. A print advertisement shall include the required disclosures as follows:
16. The disclosure area shall have a solid white background and shall be in a printed or drawn box on the bottom of at least one page that is set apart from any other printed matter. All text in the disclosure area shall be in contrasting color.
17. The text shall be in an Arial equivalent type with a type size of at least 10-point for printed advertisements designed to be individually distributed, including, but not limited to, mailers, flyers, and door hangers.
18. The top contributors, if any, shall each be disclosed on a separate horizontal line, in descending order, beginning with the top contributor who made the largest cumulative contributions on the first line. The name of each of the top contributors shall be centered horizontally in the disclosure area. Immediately below this text, committees required to provide their top ten contributor list shall include the text “Funding Details At [insert FPPC Internet Web site].”
19. Required disclosures on a printed advertisement that is larger than those designed to be individually distributed, including, but not limited to, yard signs or billboards, shall be in Arial equivalent type with a type size of at least 5 percent of the height of the advertisement, and printed on a solid background with sufficient contrast that is easily readable by the average viewer. The text may be adjusted so it does not appear on separate horizontal lines, with the top contributors separated by a comma.
20. Newspaper, magazine, or other public print advertisements that are 20 square inches or less shall be required to disclose only the single top contributor of $50,000 or more.
21. An electronic media advertisement, other than an Internet Web site (such as a banner advertisement on a website) shall include the text “Who funded this ad?” in a contrasting color and a font size that is easily readable to the average viewer. This text shall be a hyperlink to an Internet Web site containing the required disclosures. Only the hyperlink is required where the aforementioned text would be impracticable. An Internet Web site that is hyperlinked shall remain online and available to the public until 30 days after the date of the election in which the candidate or ballot measure supported or opposed by the advertisement was voted upon.
22. An Internet Web site shall include the required disclosures in a contrasting color and in no less than 8 point font.
23. An advertisement made via a form of electronic media that is audio only and therefore cannot include written disclaimers shall comply with the same disclaimer requirements for radio advertisements.
24. An advertisement made via a form of electronic media that allows users to engage in discourse and post content, or any other type of social media, shall only be required to include the disclosures in a contrasting color and in no less than 8 point font on the committee’s profile, landing page, or similar location and shall not be required to include a disclaimer on each individual post, comment, or other similar communication.
25. These disclaimers do not apply to advertisements made via social media where the only expense or cost of the communication is compensated staff time unless the social media account where the content is posted was created only for the purpose of advertisements governed by the PRA.
26. Provides that an advertisement supporting or opposing a candidate that is paid for by an independent expenditure must include a statement that it was not authorized by a candidate or a committee controlled by a candidate. If the advertisement was authorized or paid for by a candidate for another office, the expenditure shall instead include a statement that “This advertisement was not authorized or paid for by a candidate for this office or a committee controlled by a candidate for this office.”
27. Repeals the requirement that the existing statement regarding independent expenditures on a mailed advertisement be located within one quarter of an inch of the recipient’s name and address as printed on the advertisement. Instead, they would be required to appear with the top three disclosure statements.
28. If the order of top contributors required to be disclosed changes or a new contributor qualifies as a top contributor, the disclosure in the advertisement shall be updated as follows:
    1. A television, radio, telephone, electronic billboard, or other electronic media advertisement shall be updated to reflect the new top contributors within five business days. A committee shall be deemed to have complied if the amended advertisement is delivered, containing a request that the advertisement immediately be replaced, to all affected broadcast stations or other location where the advertisement is placed no later than the fifth business day.
    2. A print media advertisement, including non-electronic billboards, shall be updated to reflect the new top contributors before placing a new or modified order for additional printing of the advertisement.
29. Provides that a person shall not make any contribution to any committee or candidate that is earmarked for a contribution to any other particular committee, ballot measure, or candidate unless the contribution is fully disclosed, as specified. For this purpose a contribution is earmarked if the contribution is made under any of the following circumstances:
30. The committee or candidate receiving the contribution solicited the contribution for the purpose of making a contribution to another specifically identified committee, ballot measure, or candidate, requested the contributor to expressly consent to such use, and the contributor consents to such use.
31. The contribution was made subject to a condition or agreement with the contributor that all or a portion of the contribution would be used to make a contribution to another specifically identified committee, ballot measure, or candidate.
32. After the contribution was made, the contributor and the committee or candidate receiving the contribution reached a subsequent agreement that all or a portion of the contribution would be used to make a contribution to another specifically identified committee, ballot measure, or candidate.
33. Makes the following findings and declarations:
34. For voters to make an informed choice in the political marketplace, political advertisements should not intentionally deceive voters about the identity of who or what interest is trying to persuade them how to vote.
    Disclosing who or what interest paid for a political advertisement will help voters be able to better evaluate the arguments to which they are being subjected during political campaigns and therefore make more informed voting decisions.
35. Makes other technical and conforming changes.

Background

Existing Political Advertising Disclaimers. Under the PRA, committees must put "paid for by" disclaimers on campaign advertising, including campaign mailers, radio and television ads, telephone robocalls, and electronic media ads.

Comments

1. According to the author, AB 700 will dramatically improve disclosure of the top funders on ads for ballot measures and independent expenditures for and against candidates. Knowing the true source of funds for ads will prevent voters from being deceived about who is truly paying for them, help voters better evaluate the credibility and content of ads, and promote greater confidence in the electoral process.
2. Constitutional Issues. This measure could be interpreted as a violation of the United States and California Constitutions' guarantees to free speech. While the right to freedom of speech is not absolute, when a law burdens core political speech, the restrictions on speech generally must be "narrowly tailored to serve an overriding state interest," McIntyre v. Ohio Elections Commission (1995), 514 US 334.

Related/Prior Legislation

SB 52 (Leno of 2013-14) similarly proposed to change the content and format of disclosure statements on specified campaign advertisements to make those statements more prominent, among other provisions. SB 52 died on the Assembly's Inactive file.

AB 1148 (Brownley) and AB 1648 (Brownley, of 2011-12) also proposed increasing the prominence of disclosure statements on campaign advertisements, among other provisions. AB 1148 failed passage on the Assembly Floor, while AB 1648 was approved by the Assembly, but was not heard in the Senate.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee: The Fair Political Practices Commission (FPPC) indicates that it would incur annual costs of $350,000 (General Fund) to implement the provisions of the bill.

SUPPORT: (Verified 8/19/16)

Insurance Commissioner Dave Jones

California Alliance of Retired Americans

California Church IMPACT

California Clean Money Campaign

California Common Cause

California League of Conservation Voters

California Public Interest Research Group

Consumer Federation of California

CounterPAC

Courage Campaign

DailyKos

Democracy for America

Endangered Habitats League

Friends Committee on Legislation of California

Friends of the Earth

GMO Free USA

JERICHO: A Voice for Justice

Label GMOs

Lutheran Office of Public Policy - California

Maplight

Money Out Voters In

New Progressive Alliance

People Demanding Action

Public Citizen

Represent.Us

Roostaction.org

Bob Stern, Principal co-author of the Political Reform Act of 1974

In addition, the California Clean Money Campaign submitted copies of petitions signed by a little more than 20,000 individuals in support of AB 700.

OPPOSITION: (Verified 8/19/16)

Fair Political Practices Commission

Howard Jarvis Taxpayers Association

ASSEMBLY FLOOR: 60-15, 1/27/16

AYES: Achadjian, Alejo, Baker, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Hadley, Roger Hernández, Holden, Irwin, Jones-Sawyer, Lackey, Levine, Linder, Lopez, Low, McCarty, Medina, Mullin, Nazarian, O'Donnell, Olsen, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Weber, Wilk, Williams, Wood, Atkins

NOES: Travis Allen, Brough, Chávez, Dahle, Beth Gaines, Gallagher, Grove, Harper, Jones, Kim, Maienschein, Mayes, Melendez, Obernolte, Wagner

NO VOTE RECORDED: Bigelow, Mathis, Patterson, Waldron

Prepared by:

8/31/16 9:40:16

**** END ****

SENATE COMMITTEE ON

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 700 (Gomez) - Political Reform Act of 1974: campaign disclosures

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 11, 2016

Bill Summary:

AB 700 would change the content and format of disclosure statements required on specified campaign advertisements.

Fiscal Impact:

The Fair Political Practices Commission (FPPC) would incur costs in the low hundreds of thousands of dollars annually (General Fund) to implement the provisions of the bill.

Committee Amendments:

Add intent language, clarify definitions, codify FPPC regulation on definition of an expenditure, simplify disclosures, and make technical and clarifying changes.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 700 (Gomez) - Political Reform Act of 1974: campaign disclosures

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

AB 700 would change the content and format of disclosure statements required on specified campaign advertisements.

Fiscal Impact:

The Fair Political Practices Commission (FPPC) indicates that it would incur annual costs of $350,000 (General Fund) to implement the provisions of the bill.

Background:

Under the Political Reform Act (PRA), committees must put "paid for by" disclaimers on campaign advertising, including campaign mailers, radio and television ads, telephone robocalls, and electronic media ads. FPPC instructional literature indicates the following disclaimer requirements for committees that purchase advertisements or circulate material supporting or opposing a state or local candidate or ballot measure in California:

• Mass mailings, including blast campaign emails, must include identification of the sender.
• Paid telephone calls must identify the candidate or committee who paid for or authorized the call.
• Radio and television ads must include a "paid for by" disclaimer under Federal Communications Commission (FCC) law.
• Ballot measure ads and independent expenditure ads must include "paid for by committee name" and such ads by primarily formed committees must also list top two donors of $50,000 or more. This applies to television, radio, and electronic media advertisements, robocalls, mass mailings, and print ads such as newspaper ads, billboards and yard signs.

Proposed Law:

This bill would, among other things, do the following:

• Provide that if a contributor appears to qualify as a top contributor, as defined, but received earmarked funds (as specified) to make the contribution, the person or committee that earmarked the funds shall be disclosed as the top contributor instead. Requires a person or committee that is transferring earmarked funds, as specified, to disclose the true source of the funds at the time of the transfer.
• Impose the following requirements on the disclosure statements required by this bill:
  • In the case of an advertisement disseminated by radio or telephone, the statement must be at the beginning or end of the advertisement, read in a clearly spoken manner and in a pitch and tone substantially similar to the rest of the advertisement, and last no less than three seconds. Provides that radio and prerecorded telephonic advertisements are only required to disclose the single top contributor of $50,000 or more.
  • In the case of a television or video advertisement, the statement must comply with the following:
    • Appear at the beginning or end of the advertisement for a minimum of five seconds in the case of an advertisement lasting 30 seconds or less, or for a minimum of 10 seconds in the case of an advertisement lasting longer than 30 seconds;
    • Appear on a solid black background on the entire bottom one-third of the screen; and,
    • Include a link to the FPPC's Internet Web site containing a list of the top donors to the committee paying for the advertisement, in the case of advertisements that are paid for by committees that are required to file a list of their top 10 contributors with the FPPC pursuant to existing law.
  • In the case of a print advertisement, the statement must appear in a printed or drawn box with a solid white background on the bottom of at least one page, and must include a link to the FPPC's Internet Web site containing a list of the top donors to the committee paying for the advertisement, when applicable per existing law. Newspaper, magazine, or other public print advertisements that are 20 square inches or less are only required to disclose the single top contributor of $50,000 or more.
  • In the case of an electronic media advertisement, the statement must comply with the following:
    • Be visible for a period of at least four seconds in a type size and font that is clear and conspicuous and contrasts with the background so as to be easily readable by the average person, unless impractical or would severely interfere with the committee’s ability to convey the intended message because of the nature of the technology used to make the communication. The FPPC may prescribe by regulation minimal disclaimer requirements if inclusion of the full disclaimer is deemed impractical.
    • Include a hyperlink to an Internet Web site containing the text of the disclosure statement. The Internet Web site is required to remain online for at least 30 days after the election where the candidate or ballot measure was voted upon.
    • If made by a form of electronic media that is audio only, comply with the requirements for radio advertisements.
    • If made by a form of electronic media that allows users to engage in discourse and post content, or any other social media, the statement is only required to be included on the home page, landing page, or similar location.
    • The statement is not required on advertisements made via social media where the only expense or cost of the communication is compensated staff time unless the social media account where the content is posted was created only for the purpose of advertisements governed by the PRA.
• Specify requirements for the font type, size, color, and placement of the text of disclosure statements required by this bill.
• Provide that the disclosure of a top contributor under this bill does not need to include legal terms such as "incorporated," "committee," "political action committee," or "corporation" or their abbreviations, unless the term is part of the contributor's name in common usage.
• Require disclosure statements to be updated to reflect any changes in the order of top contributors, as specified.
• Repeal existing, conflicting requirements governing disclaimers and disclosure statements that must appear on specified campaign advertisements.
• Provide that candidate and committee mass mailing sender identification requirements also apply to candidate controlled committees and political party committees. Provides for these requirements that the “sender” is the candidate or committee who pays for the largest portion of expenditures attributable to the designing, printing, and posting of the mailing which are reportable under existing law.
• Provide that the existing campaign telephone call disclosure requirements also apply to candidate controlled committees and political party committees.
• Provide that a person shall not make any contribution to any committee or candidate that is earmarked, as specified, for a contribution to any other committee or candidate that is earmarked for a contribution to any other committee or candidate unless the contribution is fully disclosed pursuant to section 84302.

Related Legislation:

SB 52 (Leno, 2013) similarly proposed to change the content and format of disclosure statements on specified campaign advertisements to make those statements more prominent, among other provisions. The bill died on the Assembly's Inactive file.

Staff Comments:

As noted above, FPPC would incur General Fund costs of $350,000 for three positions to promulgate regulations, update educational materials, process increased requests for advice, provide additional enforcement, and for potential litigation over the bill's provisions or the resulting regulations.

-- END --

SENATE COMMITTEE ON

ELECTIONS AND CONSTITUTIONAL AMENDMENTS

Senator Ben Allen, Chair

2015 - 2016 Regular

Bill No: AB Hearing Date: 6/21/16

Subject: Political Reform Act of 1974: advertisement disclosures

DIGEST

This bill changes the content and format of disclosure statements required on specified campaign advertisements in a manner that generally requires such disclosures to be more prominent.

ANALYSIS

Existing law:

1. Creates the Fair Political Practices Commission (FPPC), and makes it responsible for the impartial, effective administration and implementation of the Political Reform Act (PRA).
2. Requires an advertisement for or against any ballot measure to include a disclosure statement identifying any person whose cumulative contributions are $50,000 or more. Provides that if there are more than two donors of $50,000 or more, the disclosure only needs to include the highest and second highest donors in that order.
3. Requires a committee that supports or opposes one or more ballot measures to name itself using a name or phrase that identifies the economic or other special interest of its major donors of $50,000 or more. Provides that if the major donors of $50,000 or more share a common employer, the identity of the employer must also be disclosed.
4. Requires a broadcast or mass mailing advertisement supporting or opposing a candidate or ballot measure that is paid for by an Independent Expenditure (IE) to include a disclosure statement identifying the name of the committee making the expenditure and the names of the persons from whom the committee making the IE received its two highest cumulative contributions of $50,000 or more during the 12-month period prior to the expenditure.
5. Provides that when a disclosure of the top two donors is required on an advertisement pursuant to either of the above provisions, only the largest donor needs to be disclosed on an advertisement that is an electronic broadcast of 15 seconds or less or a print advertisement of 20 square inches or less.
   
6. Provides that no candidate or committee shall send a mass mailing unless the

name, street address, and city of the candidate or committee are shown on the outside of each piece of mail in the mass mailing and on at least one of the inserts included within each piece of mail of the mailing in no less than 6-point type which shall be in a color or print which contrasts with the background so as to be easily legible. If the sender of the mass mailing is a single candidate or committee, the name, street address, and city of the candidate or committee need only be shown on the outside of each piece of mail. If the sender of a mass mailing is a controlled committee, the name of the person controlling the committee shall also be included.

1. Provides that a candidate, committee, or slate mailer organization may not expend campaign funds to pay for telephone calls that are similar in nature and aggregate 500 or more in number, made by an individual, or individuals, or by electronic means and that advocate support of, or opposition to, a candidate, ballot measure, or both, unless during the course of each call the name of the entity that authorized or paid for the call is disclosed to the recipient of the call, as specified. This requirement does not apply to telephone calls made by the candidate, the campaign manager, or individuals who are volunteers.
   
2. Provides that a person may not make any contribution to a committee on the condition or with the agreement that it will be contributed to any particular candidate unless the contribution is fully disclosed pursuant to Section 84302.

This bill:

1. Defines the following terms, for the purposes of this bill:
   1. "Advertisement" means any general or public communication which is authorized and paid for by a committee for the purpose of supporting or opposing a candidate or candidates for elective office or a ballot measure or measures. "Advertisement" does not include any of the following:
2. A communication paid for by a political party committee or a candidate controlled committee established for elective office for the controlling candidate;
3. A communication from an organization, other than a political party, to its members;
4. Various specified types of communications where the inclusion of disclosures is impractical due to the size or medium of the communication (such as a pen, or sky writing); or,
5. Any other advertisement as determined by regulations of the FPPC.
   1. "Cumulative contributions" means the cumulative amount of contributions received by a committee beginning 12 months prior to the date of the expenditure and ending seven days before the time the advertisement is sent to the printer or broadcaster.
   2. "Top contributors" means the persons from whom the committee paying for an advertisement has received its three highest cumulative contributions of $50,000 or more, as specified.
6. Provides that if a contributor appears to qualify as a top contributor but received earmarked funds to make the contribution, the person or committee that earmarked the funds shall be disclosed as the top contributor instead. Requires a person or committee that is transferring earmarked funds to disclose the true source of the funds at the time of the transfer. Provides that funds are "earmarked," for these purposes in the following circumstances:
7. The contributor solicited and received the funds for the purpose of making a contribution to the committee paying for the advertisements;
8. The funds were given subject to a condition, agreement, or understanding that the funds would be used to make a contribution to the committee paying for the advertisement, as specified; or,
9. The contributor had existing funds from a donor and a subsequent agreement or understanding was reached that all or a portion of the funds would be used to contribute to the committee paying for the advertisement, as specified.
10. Requires an advertisement, as defined, to include a disclosure statement in accordance with the following:
11. In the case of an advertisement paid for by a committee that has not received contributions of $2,000 or more in a calendar year:
    
    "Paid for by [name of the committee as required to appear on campaign statements]."
    
12. In the case of an advertisement that is paid for by a committee that has received contributions of $2,000 or more in a calendar year:
    
    "Paid for by [name of the committee as required to appear on campaign statements]. This committee has major funding from [names of the top contributors to the committee that is paying for the advertisement]."
    
    Provides that if the content of the radio advertisement or electronic message names each of the top contributors as major funding sources, the disclosure statement in the advertisement is not required to include the portion that identifies the sources of the committee's major funding.
13. Imposes the following requirements on the disclosure statements required by this bill:
14. In the case of an advertisement disseminated by radio or telephone, the statement must be at the beginning or end of the advertisement, read in a clearly spoken manner and in a pitch and tone substantially similar to the rest of the advertisement, and last no less than three seconds. Provides that radio and prerecorded telephonic advertisements are only required to disclose the single top contributor of $50,000 or more.
15. In the case of a television or video advertisement, the statement must comply with the following:
16. Appear at the beginning or end of the advertisement for a minimum of five seconds in the case of an advertisement lasting 30 seconds or less, or for a minimum of 10 seconds in the case of an advertisement lasting longer than 30 seconds;
    
17. Appear on a solid black background on the entire bottom one-third of the screen; and,
    
18. Include a link to the FPPC's Internet Web site containing a list of the top donors to the committee paying for the advertisement, in the case of advertisements that are paid for by committees that are required to file a list of their top 10 contributors with the FPPC pursuant to existing law.
19. In the case of a print advertisement, the statement must appear in a printed or drawn box with a solid white background on the bottom of at least one page, and must include a link to the FPPC's Internet Web site containing a list of the top donors to the committee paying for the advertisement, when applicable per existing law. Newspaper, magazine, or other public print advertisements that are 20 square inches or less are only required to disclose the single top contributor of $50,000 or more.
20. In the case of an electronic media advertisement, the statement must comply with the following:
21. Be visible for a period of at least four seconds in a type size and font that is clear and conspicuous and contrasts with the background so as to be easily readable by the average person, unless impractical or would severely interfere with the committee’s ability to convey the intended message because of the nature of the technology used to make the communication. The FPPC may prescribe by regulation minimal disclaimer requirements if inclusion of the full disclaimer is deemed impractical.
    
22. Include a hyperlink to an Internet Web site containing the text of the disclosure statement. The Internet Web site is required to remain online for at least 30 days after the election where the candidate or ballot measure was voted upon.
    
23. If made by a form of electronic media that is audio only, comply with the requirements for radio advertisements.
24. If made by a form of electronic media that allows users to engage in discourse and post content, or any other social media, the statement is only required to be included on the home page, landing page, or similar location.
    
25. The statement is not required on advertisements made via social media where the only expense or cost of the communication is compensated staff time unless the social media account where the content is posted was created only for the purpose of advertisements governed by the PRA.
26. Specifies requirements for the font type, size, color, and placement of the text of disclosure statements required by this bill.
27. Provides that the disclosure of a top contributor under this bill does not need to include legal terms such as "incorporated," "committee," "political action committee," or "corporation" or their abbreviations, unless the term is part of the contributor's name in common usage.
28. Requires disclosure statements to be updated to reflect any changes in the order of top contributors as follows:
29. In the case of television, radio, telephone, or other electronic media advertisements, within seven business days, or within five business days if the change in top contributors occurs within 30 days of an election; and,
30. In the case of a print advertisement, including non-electronic billboards, prior to placing a new or modified order for additional printing of the advertisement.
31. Repeals existing, conflicting requirements governing disclaimers and disclosure statements that must appear on specified campaign advertisements, including all of the following:
32. A requirement that an advertisement for or against a ballot measure include a disclosure statement identifying the two highest cumulative contributors of $50,000 or more to the committee funding the advertisement;
33. A requirement that a committee that supports or opposes one or more ballot measures must name and identify itself using a name or phrase that clearly identifies the economic or other special interest of its major donors of $50,000 or more in any reference to the committee required by law; and,
34. A requirement that an advertisement that is paid for by an IE must include a disclosure statement identifying the name of the committee making the expenditure and the names of the persons from whom the committee making the IE received its two highest cumulative contributions of $50,000 or more during the 12-month period prior to the expenditure.
35. Provides that candidate and committee mass mailing sender identification requirements also apply to candidate controlled committees and political party committees. Provides for these requirements that the “sender” is the candidate or committee who pays for the largest portion of expenditures attributable to the designing, printing, and posting of the mailing which are reportable under existing law.
36. Provides that the existing campaign telephone call disclosure requirements also apply to candidate controlled committees and political party committees.
    
37. Provides that a person shall not make any contribution to any committee or candidate that is earmarked for a contribution to any other committee or candidate that is earmarked for a contribution to any other committee or candidate unless the contribution is fully disclosed pursuant to section 84302. For purposes of this section a contribution is earmarked if the contribution is made under the following circumstances:
38. The committee or candidate receiving the contribution solicited the contribution for the purpose of making a contribution to another committee or candidate, and requested the contributor to consent to such use.
39. The contribution was made subject to a condition, agreement, or understanding with the contributor that all or a portion of the contribution would be used to make a contribution to another committee or candidate, including any circumstance in which the contributor identifies the committee or candidate as a potential recipient of the contribution and the committee or candidate in fact receives all or a portion of the contributor's contribution.
40. After the contribution was made, the contributor and the committee or candidate receiving the contribution reaching a subsequent agreement or understanding that all or a portion of the contribution would be used to make a contribution to another committee or candidate, including any circumstance where the contributor identifies the committee or candidate as a potential recipient of the contribution and the committee or candidate in fact receives all or a portion of the contributor’s contribution.
41. Makes technical and conforming changes.

BACKGROUND

Existing Political Advertising Disclaimers. Under the PRA, committees must put "paid for by" disclaimers on campaign advertising, including campaign mailers, radio and television ads, telephone robocalls, and electronic media ads. The following, which is based on a publication produced by the FPPC, discusses disclaimer requirements for committees that purchase advertisements or circulate material supporting or opposing a state or local candidate or ballot measure in California.

When is a disclaimer required on political ads or materials?

Political committees must include the following disclaimers:

1. Mass mailings, including blast campaign emails, must include identification of the sender.
   
2. Paid telephone calls must identify the candidate or committee who paid for or authorized the call.
   
3. Radio and television ads must include a "paid for by" disclaimer under Federal Communications Commission (FCC) law.
   
4. Ballot measure ads and IE ads must include "paid for by committee name" and such ads by primarily formed committees must also list top two donors of $50,000 or more. This applies to television, radio, and electronic media advertisements, robocalls, mass mailings, and print ads such as newspaper ads, billboards and yard signs.

Are the PRA's disclaimer rules the same for all committees and all ads?

No. Basic disclaimer rules apply to campaign materials disseminated by a candidate for their own election campaign because it is generally clear to the public that the candidate is sending the communication. Stricter disclaimer rules apply to ballot measure advertisements and IE advertisements on candidates and ballot measures, because it is less clear to the public who is responsible for these ads.

What does the disclaimer have to state?

The basic disclaimer must state "Paid for by committee name." Ballot measure and IE ads paid for by primarily formed committees must also list top two donors of $50,000 or more and special committee name rules apply. All IE ads for or against a candidate must state that the ad was "Not authorized by a candidate or a committee controlled by a candidate."

How must the disclaimer appear?

Disclaimers on political ads and literature must be clear and conspicuous so as to be understood by the intended public. Written disclaimers must be printed clearly and legibly. Spoken disclaimers must be clearly audible and intelligible.

Updating a disclaimer.

When a committee's name changes because of new top donors or otherwise, advertisement disclaimers must be revised. Television, radio, electronic media, or robocalls must be amended within five calendar days. Print media, mass mailings, or other tangible items must be amended every time an order to reproduce is placed.

Advertisements in Languages Other than English.

Disclaimers on political advertisements should be written or spoken in the same language used in the advertisement.

Does a disclaimer have to appear on ALL printed materials or campaign items?

No. A disclaimer is not required on regular-size campaign buttons, pins, bumper stickers, or magnets. It is not required on pens, pencils, rulers, mugs, potholders, key tags, golf balls and similar small campaign promotional items where a disclaimer cannot be conveniently printed. The disclaimer is also not required on t-shirts, caps, hats, and other articles of clothing; skywriting and airplane banners; or committee checks and receipts.

COMMENTS

1. According to the author: AB 700 (Gomez and Levine), the California Disclose Act, will dramatically improve disclosure of the top funders on ads for ballot measures and independent expenditures for and against candidates. Knowing the true source of funds for ads will prevent voters from being deceived about who is truly paying for them, help voters better evaluate the credibility and content of ads, and promote greater confidence in the electoral process.
   
   

Campaign spending has reached unprecedented levels in recent years. In 2012-2014, more than $770 million was spent in California on ballot measure ads and independent expenditure ads for and against candidates. Furthermore, many primarily-formed and general purpose committees that contribute to them are purposely established to disguise who exactly is funding the campaign messages that voters see and hear, hiding behind vague names such as "Californians for Progress." Money is often purposefully channeled through multiple layers of committees or organizations to make it harder to trace and disclose. As a result, the March 2013 PPIC Poll found that 84% of all likely voters, across political ideology, want increased public disclosure of funding sources for signature gathering and initiative campaigns.

While it is essential for individuals and organizations in a democracy to be able to communicate effectively and efficiently with voters, it is equally important that voters are not intentionally deceived and elections are not decided upon misinformation.

AB 700 will increase transparency of campaign spending in elections by requiring state and local ballot measure ads and independent expenditure ads about candidates to clearly and prominently list their top three true contributors of $50,000 or more (one for radio ads and robocalls).

To limit potential for abuse of broad regulations we see in current code and to maximize clarity and ensure consistency of disclosures, AB 700 proscribes specific rules for the format of disclosures. For example, for video and television ads, AB 700 replaces current fine print disclosures with a clear listing of the top three contributors on the bottom 1/3 of the screen on a solid black background for five seconds (ten seconds for ads longer than 30 seconds), plus the name of the committee paying. To ensure readability of funder names, they must each be listed on a separate line, can't appear in all capital letters, and must be in a contrasting Arial font that is 4% of the height of the screen.

Perhaps most importantly, AB 700 uses new earmarking rules originated in the previously-circulating Voters' Right to Know Act initiative to ensure that contributions that are meant for ballot measures or candidates must be disclosed if they're among the top three even if they were passed through multiple layers of committees or other organizations.

It is now often impossible for voters to determine the true top funders of ballot measure ads and IE ads for and against candidates. The disclosures required by current law are usually extremely difficult to read, buried in fine print with distracting backgrounds. Disclosures contain significant additional verbiage that makes it harder for viewers to see the major funders that is the most important part of the disclosures.

Worst of all is that top contributors are able to avoid being disclosed on ads simply by funneling their contributions through committees with deceptive names, oftentimes purposefully misleading viewers about who really paid for the ads.

1. Constitutional Issues. This measure could be interpreted as a violation of the United States and California Constitutions' guarantees to free speech. While the right to freedom of speech is not absolute, when a law burdens core political speech, the restrictions on speech generally must be "narrowly tailored to serve an overriding state interest," McIntyre v. Ohio Elections Commission (1995), 514 US 334.
   
   In ACLU v. Heller (2004), 378 F.3d 979, the Ninth Circuit Court of Appeals struck down a Nevada law that required any published material concerning a campaign to identify the person paying for the publication. In that case, the state of Nevada argued that its law served three state interests, including helping voters evaluate the usefulness of information in a campaign communication, preventing fraud and libel, and furthering enforcement of disclosure and contribution election laws. The court concluded that Nevada failed to demonstrate that its statute was "narrowly tailored to serve an overriding state interest" in accordance with the test established in McIntyre. The court did note in its ruling, however, that "[a]n on-publication identification requirement carefully tailored to further a state's campaign finance laws, or to prevent the corruption of public officials, could well pass constitutional muster."
   
   Additionally, supporters of this bill have argued that, notwithstanding the decision in the Heller case, the provisions of this bill nonetheless are constitutional in light of disclosure requirements that were upheld by the United States Supreme Court in Citizens United v. Federal Election Commission (2010), 130 S.Ct. 876. While the Citizens United case is probably best known as the case in which the United States Supreme Court struck down a 63 year old law that prohibited corporations and unions from using their general treasury funds to make IEs in federal elections, in the same case, the Court also upheld certain disclaimer and disclosure provisions of the federal Bipartisan Campaign Reform Act (BCRA) of 2002, also sometimes called "McCain-Feingold" for its Senate authors.
   
   The Citizens United case involved a nonprofit corporation (Citizens United) that sought to run television commercials promoting a film it produced that was critical of then-Senator and presidential candidate Hillary Clinton. Because federal law prohibited corporations and unions from using their general treasury funds to make expenditures for "electioneering communications" or for communications that expressly advocated the election or defeat of a candidate, Citizens United was concerned that the television commercials promoting its film could subject the corporation to criminal and civil penalties.
   
   Under BCRA, the film produced by Citizens United and the television commercials promoting that movie were subject to certain disclaimer and disclosure requirements -- specifically, a requirement that televised electioneering communications must include a disclaimer indicating the name of the person or organization that was "responsible for the content" of the advertising. Additionally, each communication was required to include a statement that the communication was "not authorized by any candidate or candidate's committee," and was required to display the name and address of the person or group that funded the advertisement. Finally, under a different provision of BCRA, any person who spent more than $10,000 in a calendar year is required to file a disclosure statement with the Federal Elections Commission

(FEC) identifying the person making the expenditure, the amount of the expenditure, the election to which the communication was directed, and the names of contributors in certain circumstances.

Citizens United (the corporation) challenged these disclaimer and disclosure requirements as applied to the film and the television advertisements promoting that film. Specifically, Citizens United argued that the disclaimer and disclosure requirements were unconstitutional on the grounds the governmental interest in providing information to the electorate did not justify requiring disclaimers for commercial advertisements. The court disagreed, finding that the disclaimers provided the electorate with important information, helping to ensure that voters were informed, and "avoid[ed] confusion by making clear that the ads are not funded by a candidate or political party."

While some of the requirements of this bill are comparable to provisions of federal law that were at issue in Citizens United (for instance, certain disclaimer requirements included in this bill are similar to those required under federal law that were upheld by the court in Citizens United), other requirements in this bill go beyond what is required by federal law, and beyond what was considered by the court in Citizens United. Specifically, the provisions of this bill that require the identities of certain campaign contributors -- entities that were not individually responsible for the content or the production of the advertising -- to be included in campaign advertising go beyond what is required by federal law. In light of that fact, while the court in Citizens United did uphold certain federal disclaimer requirements, it is unclear whether the broader requirements in this bill would similarly be upheld against a constitutional challenge on the grounds that those requirements violate the First Amendment.

1. Anticipated Author’s Amendments. The author’s office indicates that some additional amendments were inadvertently omitted from the current version of the bill and he wishes to offer those as author’s amendments in committee. These new amendments include some technical and clarifying changes as well as some language that would ensure that disclosure requirements intended for television and video display screens do not exceed one-third of the screen as already provided in the bill.
   
2. Additional Suggested Amendment. Disclosure statements required by this bill could result in taking up an excessive amount of space on printed advertisements that are larger than those designed to be individually distributed, such as yard signs and billboards. Therefore, staff recommends that the type size specified in new Section 84504.2(b) be decreased from 10 percent of the height of the advertisement to 5 percent of the height of the advertisement, as in current FPPC regulation 18450.4(b)(3)(D).

RELATED/PRIOR LEGISLATION

SB 52 (Leno of 2013-14) similarly proposed to change the content and format of disclosure statements on specified campaign advertisements to make those statements more prominent, among other provisions. SB 52 died on the Assembly's Inactive file.

AB 1148 (Brownley) and AB 1648 (Brownley, from 2011-12) also proposed increasing the prominence of disclosure statements on campaign advertisements, among other provisions. AB 1148 failed passage on the Assembly Floor, while AB 1648 was approved by the Assembly, but was not heard in the Senate.

PRIOR ACTION

POSITIONS

Sponsor: California Clean Money Campaign

Support: Insurance Commissioner Dave Jones

California Alliance of Retired Americans

California Church IMPACT

California Clean Money Campaign

California League of Conservation Voters

California Public Interest Research Group (CALPIRG)

Consumer Federation of California

CounterPAC

Courage Campaign

Democracy for America

Endangered Habitats League

Friends Committee on Legislation of California

JERICHO: A Voice for Justice

Lutheran Office of Public Policy - California

Maplight

Money Out Voters In

New Progressive Alliance

People Demanding Action

Public Citizen

Represent.Us

In addition, the California Clean Money Campaign submitted copies of petitions signed by a little more than 20,000 individuals in support of AB 700.

Oppose: Fair Political Practices Commission

Howard Jarvis Taxpayers Association

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 700

Author:(Gomez and Levine)

As Amended Ver:January 14, 2016

2/3 vote

SUMMARY: Changes the content and format of disclosure statements required on specified campaign advertisements in a manner that generally requires such disclosures to be more prominent. Specifically, this bill:

1. Defines the following terms, for the purposes of this bill:
   1. "Advertisement" to mean any general or public communication which is authorized and paid for by a committee for the purpose of supporting or opposing a candidate or candidates for elective office or a ballot measure or measures.
      1. Provides that the term "advertisement" does not include any of the following:
         1. A communication paid for by a political party committee or a candidate controlled committee established for elective office for the controlling candidate;
         2. A communication from an organization, other than a political party, to its members;
         3. Various specified types of communications where the inclusion of disclosures is impractical due to the size or medium of the communication (such as a pen, or sky writing); or,
         4. Any other advertisement as determined by regulations of the Fair Political Practices Commission (FPPC).
   2. "Cumulative contributions" to mean the cumulative amount of contributions received by a committee beginning 12 months prior to the date of the expenditure and ending seven days before the time the advertisement is sent to the printer or broadcaster.
   3. "Top contributors" to mean the persons from whom the committee paying for an advertisement has received its three highest cumulative contributions of $50,000 or more, as specified.
      1. Provides that if a contributor appears to qualify as a top contributor but received earmarked funds to make the contribution, the person or committee that earmarked the funds shall be disclosed as the top contributor instead. Requires a person or committee that is transferring earmarked funds to disclose the true source of the funds at the time of the transfer. Provides that funds are "earmarked," for these purposes in the following circumstances:
         1. The contributor solicited and received the funds for the purpose of making a contribution to the committee paying for the advertisements;
         2. The funds were given subject to a condition, agreement, or understanding that the funds would be used to make a contribution to the committee paying for the advertisement, as specified; or,
         3. The contributor had existing funds from a donor and a subsequent agreement or understanding was reached that all or a portion of the funds would be used to contribute to the committee paying for the advertisement, as specified.
2. Requires an advertisement, as defined, to include a disclosure statement in accordance with the following:
   1. In the case of an advertisement paid for by a committee that has not received contributions of $2,000 or more in a calendar year:

"Paid for by [name of the committee as required to appear on campaign statements]."

• 1. In the case of an advertisement that is paid for by a committee that has received contributions of $2,000 or more in a calendar year:

"Paid for by [name of the committee as required to appear on campaign statements]. This committee has major funding from [names of the top contributors to the committee that is paying for the advertisement]."

Provides that if the content of the advertisement names each of the top contributors as major funding sources, the disclosure statement in the advertisement is not required to include the portion that identifies the sources of the committee's major funding.

1. Imposes the following requirements on the disclosure statements required by this bill:
   1. In the case of an advertisement disseminated by radio or telephone, the statement must be at the beginning or end of the advertisement, read in a clearly spoken manner and in a pitch and tone substantially similar to the rest of the advertisement, and last no less than three seconds. Provides that radio and prerecorded telephonic advertisements are only required to disclose the single top contributor of $50,000 or more.
   2. In the case of a television or video advertisement, the statement must comply with the following:
      1. Appear at the beginning or end of the advertisement for a minimum of five seconds in the case of an advertisement lasting 30 seconds or less, or for a minimum of 10 seconds in the case of an advertisement lasting longer than 30 seconds;
      2. Appear on a solid black background on the entire bottom one-third of the screen; and,
      3. Include a link to the FPPC's Internet Web site containing a list of the top donors to the committee paying for the advertisement, in the case of advertisements that are paid for by committees that are required to file a list of their top 10 contributors with the FPPC pursuant to existing law.
   3. In the case of a print advertisement, the statement must appear in a printed or drawn box with a solid white background on the bottom of at least one page, and must include a link to the FPPC's Internet Web site containing a list of the top donors to the committee paying for the advertisement, in the case of advertisements that are paid for by committees that are required to file a list of their top 10 contributors with the FPPC pursuant to existing law. Provides that newspaper, magazine, or other public print advertisements that are 20 square inches or less are only required to disclose the single top contributor of $50,000 or more.
   4. In the case of an electronic media advertisement, the statement must comply with the following:
      1. Be visible for a period of at least four seconds;
      2. Include a hyperlink to an Internet Web site containing the text of the disclosure statement. The Internet Web site is required to remain online for at least 30 days after the election where the candidate or measure was voted upon;
      3. If made by a form of electronic media that is audio only, comply with the requirements for radio advertisements;
      4. If made by a form of electronic media that allows users to engage in discourse and post content, or any other social media, the statement is only required to be included on the home page, landing page, or similar location; and,
      5. Is not required on advertisements made via social media where the only expense or cost of the communication is compensated staff time unless the social media account where the content is posted was created only for the purpose of advertisements governed by the Political Reform Act (PRA).
2. Specifies requirements for the font type, size, color, and placement of the text of disclosure statements required by this bill.
3. Provides that the disclosure of a top contributor under this bill does not need to include legal terms such as "incorporated," "committee," "political action committee," or "corporation" or their abbreviations, unless the term is part of the contributor's name in common usage.
4. Requires disclosure statements to be updated to reflect any changes in the order of top contributors as follows:
   1. In the case of television, radio, telephone, or other electronic media advertisements, within seven business days, or within five business days if the change in top contributors occurs within 30 days of an election; and,
   2. In the case of a print advertisement, including non-electronic billboards, prior to placing a new or modified order for additional printing of the advertisement.
5. Repeals existing, conflicting requirements governing disclaimers and disclosure statements that must appear on specified campaign advertisements, including all of the following:
   1. A requirement that an advertisement for or against a ballot measure include a disclosure statement identifying the two highest cumulative contributors of $50,000 or more to the committee funding the advertisement;
   2. A requirement that a committee that supports or opposes one or more ballot measures must name and identify itself using a name or phrase that clearly identifies the economic or other special interest of its major donors of $50,000 or more in any reference to the committee required by law; and,
   3. A requirement that an advertisement that is paid for by an independent expenditure (IE) must include a disclosure statement identifying the name of the committee making the expenditure and the names of the persons from whom the committee making the IE received its two highest cumulative contributions of $50,000 or more during the 12-month period prior to the expenditure.
6. Makes technical and conforming changes.

FISCAL EFFECT: According to the Assembly Appropriations Committee, the FPPC will incur annual General Fund costs of around $350,000 for three positions to promulgate regulations, update educational materials, process increased requests for advice, provide additional enforcement, and for potential litigation over the bill's provisions or the resulting regulations.

COMMENTS: According to the author, "AB 700 (Gomez and Levine), the California DISCLOSE Act, will dramatically improve disclosure on ballot measure ads and ads about candidates about who has paid for the ad. Knowing… the true source of funds for ads will prevent voters from being deceived about who is truly paying for it, help voters better evaluate the credibility and content of ads, and promote greater confidence in the electoral process. The bill codifies verbatim the on-ad disclosure portions of the currently-circulating Voters' Right to Know Act… Ads paid for by candidate committees and political parties do not have to comply with the new rules."

Under the PRA, committees must include "paid for by" disclaimers on certain campaign advertising, including campaign mailers, radio and television ads, telephone robocalls, and electronic ads. According to a publication produced by the FPPC, "Basic disclaimer rules apply to campaign materials disseminated by a candidate for their own election campaign because it is generally clear to the public that the candidate is sending the communication. Stricter disclaimer rules apply to 1) ballot measure advertisements and 2) [IE] advertisements on candidates and ballot measures, because it is less clear to the public who is responsible for these ads."

In certain situations, advertisements related to ballot measures or that are paid for by IEs are required to include a disclaimer that identifies the two top contributors of $50,000 or more to the committee that is funding the advertisement, but this requirement does not apply to all committees. Primarily formed committees generally must include the disclaimer identifying top contributors in their advertisements, while general purpose committees (including political party committees) do not. (A primarily formed committee makes a significant majority of its contributions and expenditures to support or oppose a single candidate or a group of specific local candidates on the same ballot, or to support or oppose a single measure or two or more measures being voted on in the same election. By contrast, a general purpose committee is usually ongoing in nature and supports or opposes a variety of candidates and ballot measures over the course of several years.)

Even though state statute does not make a distinction between advertisements paid for by primarily formed committees and those paid for by general purpose committees, the FPPC has specified by regulation that general purpose committees are not required to identify their top contributors on advertisements they fund. This regulation was adopted in response to two court cases in which courts struck down requirements for committees to identify certain contributors in political advertisements funded by those committees. In one of those cases, the FPPC was enjoined from enforcing the PRA's on-advertisement contributor disclaimer requirements against general purpose committees.

While this bill does not change the rules for disclaimers on campaign materials disseminated by a candidate for his or her own election campaign, it significantly overhauls the content and format of disclosure statements required on certain other campaign advertisements in a way that generally requires such disclosures to be more prominent. Additionally, this bill requires many advertisements to include an identification of the three top contributors to the committee funding the advertisement, instead of the two top contributors that are required to be identified under existing law. Certain types of advertisements, however, may contain less information about the contributors to committees funding the advertisements under this bill. (For example, under existing state law, a 30-second radio advertisement supporting or opposing a ballot measure that is paid for by a primarily formed committee would be required to include the two top contributors of $50,000 or more to the committee funding the advertisement. Under this bill, only the single top contributor of $50,000 or more would be disclosed.)

This bill exempts political party committees from the requirement to disclose their top contributors on advertisements that they fund, but does not similarly exclude other general purpose committees from those requirements. However, in light of the FPPC's regulation that exempts general purpose committees from the PRA's on-advertisement contributor disclaimer requirements, and in light of the court cases that led the FPPC to adopt that regulation, it is unclear whether the on-advertisement contributor disclaimer requirements of this bill can be made applicable to general purpose committees.

In ACLU v. Heller (2004), 378 F.3d 979, the Ninth Circuit Court of Appeals struck down a Nevada law that required any published material concerning a campaign to identify the person paying for the publication. In that case, the state of Nevada argued that its law served three state interests, including helping voters evaluate the usefulness of information in a campaign communication, preventing fraud and libel, and furthering enforcement of disclosure and contribution election laws. The court concluded that Nevada failed to demonstrate that its statute was "narrowly tailored to serve an overriding state interest." The court did note in its ruling, however, that "[a]n on-publication identification requirement carefully tailored to further a state's campaign finance laws, or to prevent the corruption of public officials, could well pass constitutional muster." The Heller case is one of the two cases that prompted the FPPC to adopt its regulation that exempted general purpose committees from the requirement to identify their top contributors on advertisements they fund.

Supporters of this bill have argued that, notwithstanding the decision in the Heller case, the provisions of this bill are constitutional in light of disclosure requirements that were upheld by the United States Supreme Court in Citizens United v. Federal Election Commission (2010), 558 US 310. While the Citizens United case is probably best known as the case in which the United States Supreme Court struck down a 63-year-old law that prohibited corporations and unions from using their general treasury funds to make IEs in federal elections, in the same case, the Court also upheld certain disclaimer and disclosure provisions of the federal Bipartisan Campaign Reform Act (BCRA) of 2002, also sometimes called "McCain-Feingold" for its Senate authors.

The Citizens United case involved a nonprofit corporation (Citizens United) that sought to run television commercials promoting a film it produced that was critical of then-Senator and presidential candidate Hillary Clinton. Under BCRA, the film produced by Citizens United and the television commercials promoting that movie were subject to certain disclaimer and disclosure requirements — specifically, a requirement that televised electioneering communications must include a disclaimer indicating the name of the person or organization that was "responsible for the content" of the advertising. Additionally, each communication was required to include a statement that the communication was "not authorized by any candidate or candidate's committee," and was required to display the name and address of the person or group that funded the advertisement. Finally, under a different provision of BCRA, any person who spent more than $10,000 in a calendar year is required to file a disclosure statement with the Federal Elections Commission identifying the person making the expenditure, the amount of the expenditure, the election to which the communication was directed, and the names of contributors in certain circumstances.

Citizens United (the corporation) challenged these disclaimer and disclosure requirements as applied to the film and the television advertisements promoting that film. Specifically, Citizens United argued that the disclaimer and disclosure requirements were unconstitutional on the grounds the governmental interest in providing information to the electorate did not justify requiring disclaimers for commercial advertisements. The court disagreed, finding that the disclaimers provided the electorate with important information, helping to ensure that voters were informed, and "avoid[ed] confusion by making clear that the ads are not funded by a candidate or political party."

While some of the requirements of this bill are comparable to provisions of federal law that were at issue in Citizens United (for instance, certain disclaimer requirements included in this bill are similar to those required under federal law that were upheld by the court in Citizens United), other requirements in this bill go beyond what is required by federal law, and beyond what was considered by the court in Citizens United. Specifically, the provisions of this bill that require the identities of certain campaign contributors — entities that were not individually responsible for the content or the production of the advertising — to be included in campaign advertising go beyond what is required by federal law.

SB 52 (Leno) of the 2013-14 Legislative Session similarly proposed to change the content and format of disclosure statements on specified campaign advertisements to make those statements more prominent, among other provisions. SB 52 died on the Assembly's Inactive file.

AB 1148 (Brownley) and AB 1648 (Brownley) from the 2011-12 Legislative Session also proposed increasing the prominence of disclosure statements on campaign advertisements, among other provisions. AB 1148 failed passage on the Assembly Floor, while AB 1648 was approved by the Assembly, but was not heard in the Senate.

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.

Analysis Prepared by: Ethan Jones / E. & R. / (916) 319-2094 FN: 0002582

Date of Hearing: January 21, 2015

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Jimmy Gomez, Chair

ABPCA Bill Id:AB 700

Author:(Gomez) – As Amended Ver:January 14, 2016

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill amends the Political Reform Act (PRA) to enhance disclosure requirements for campaign advertisements supporting or opposing state or local ballot measures or candidates. Specifically, this bill:

1. Requires campaign advertisements supporting or opposing a candidate or ballot measure via radio, telephone (robocall), video (including television), print, or electronic media, to identify the committee paying for the advertisement and the committee's top three contributors (top single funder only for radio and telephone) of $50,000 or more. The specific means of disclosure are detailed in the bill for each respective medium.
2. Stipulates that the (1) does not apply to an advertisement paid for by a political party committee or a candidate controlled committee established for elective office of the controlling candidate.
3. Repeals existing, conflicting disclosure requirements for campaign advertisements.

FISCAL EFFECT:

The Fair Political Practices Commission will incur annual General Fund costs of around $350,000 for three positions to promulgate regulations, update educational materials, process increased requests for advice, provide additional enforcement, and for potential litigation over the bill's provisions or the resulting regulations.

COMMENTS:

1. Purpose. According to the author, AB 700 will dramatically improve disclosure on who has paid for ballot measure ads and ads about candidates. Knowing the source of funds for ads will prevent voters from being deceived about who is truly paying for it, help voters better evaluate the credibility and content of ads, and promote greater confidence in the electoral process.
   
2. Prior Legislation. SB 52 (Leno) of 2014, which enhanced disclosure requirements for advertisements supporting or opposing ballot measures, was referred to the Assembly Inactive File.

AB 1148 (Brownely) and AB 1648 (Brownley) of 2012 both placed new disclosure requirements on advertisement supporting or opposing ballot measures or candidates. AB 1148 failed passage in the Assembly and AB 1648 was approved by the Assembly, but was not heard by the Senate.

Analysis Prepared by: Chuck Nicol / APPR / (916) 319 - 2081

Date of Hearing: April 29, 2015

ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING

Sebastian Ridley-Thomas, Chair

ABPCA Bill Id:AB 700

Author:(Gomez and Levine) – As Amended Ver:April 14, 2015

SUBJECT: Political Reform Act of 1974: advertisement disclosures.

SUMMARY: Provides that a specified disclaimer, if it is required to appear in a video advertisement concerning a ballot measure, must appear continuously during the advertisement. Specifically, this bill:

1. Requires a disclaimer that "(spokesperson's name) is being paid by this campaign or its donors," when it is required to appear in an advertisement concerning a ballot measure, to be shown continuously if the advertisement is a video advertisement.

2. Declares the intent of the Legislature to enact legislation that would implement a California Disclose Act to ensure that advertisements that seek to persuade voters to cast a vote in favor or against ballot measures do not mislead voters as to who is funding the campaign that paid for the advertisement.

EXISTING LAW:

1. Creates the Fair Political Practices Commission (FPPC), and makes it responsible for the impartial, effective administration and implementation of the Political Reform Act (PRA).
   
   

2. Requires a committee that makes an expenditure of $5,000 or more to an individual for his or her appearance in an advertisement to support or oppose the qualification, passage, or defeat of a ballot measure, to do both of the following:
   
   

   1. File a report within 10 days of the expenditure identifying the measure, date of the expenditure, name of the recipient, and amount expended; and,
      
      

   2. Include the following statement in the advertisement in highly visible roman font shown continuously if the advertisement consists of printed or televised material, or spoken in a clearly audible format if the advertisement is a radio broadcast or telephone message:
      
      "[Spokesperson's name] is being paid by this campaign or its donors."
      
      

FISCAL EFFECT: Unknown. State-mandated local program; contains a crimes and infractions disclaimer.

COMMENTS:

1. Purpose of the Bill: According to the author:

The amendments to AB 700 reflect the changing methods in the ways Californians communicate with one another and receive their information relevant to their lives. The internet continues to grow in its use as an information and news medium. Campaigns have taken note of the changes in the media used by voters and have taken to the net with ever increasing financial resources.

AB 700 addresses the growing use of videos for purposes of campaign messaging on the internet, and extends the same disclosure requirements for those messages as those campaign messages on television.

2. "Paid Spokesperson" Requirements: In 2000, the Legislature passed and the Governor signed SB 1223 (Burton), Chapter 102, Statutes of 2000, which became Proposition 34 on the November 2000 general election ballot. The proposition, which passed with 60 percent of the vote, made numerous substantive changes to the PRA, including enacting new campaign disclosure requirements and establishing new campaign contribution limits.
   
   One of the provisions of Proposition 34 established new reporting and disclaimer requirements for ballot measure advertisements that featured paid spokespeople. Under those provisions, if a committee makes an expenditure of $5,000 or more to an individual appearing in the advertisement, the advertisement is required to include a disclosure statement that the spokesperson is being paid by the campaign or its donors. The committee is also required to file a specified report in connection with any such advertisement.
   
   It appears, however, that these requirements have only rarely been triggered for ballot measure advertisements. While these "paid spokesperson" requirements have been in place for more than 14 years, no report has ever been filed with the Secretary of State in accordance with those requirements, though committee staff is aware of at least one instance in which a "paid spokesperson" report was filed in connection with a local election. The lack of reports filed pursuant to those provisions could indicate that it is relatively rare for ballot measure campaigns to pay individuals for their appearances in advertisements.

3. "Disclose Act": As detailed above, the first section of this bill declares the intent of the Legislature to implement a "California Disclose Act." The provisions of this bill as it was most recently amended, however, do not contain any of the major provisions that have been included in previous legislation that has been referred to as the California Disclose Act. Furthermore, the bill declares the intent of the Legislature to enact legislation that is wholly unrelated to the current substantive contents of this bill. In light of those facts, and given the letters that have been submitted in support of and in opposition to this bill, it appears likely that the current provisions of this bill are nothing more than placeholder language, and are unrelated to the bill's ultimate objective.
   
   Specifically, the Legislature has considered three measures in the last two legislative sessions that were titled or otherwise commonly referred to as the California Disclose Act. AB 1148 (Brownley) and AB 1648 (Brownley) of the 2011-2012 legislative session were both commonly referred to as the California Disclose Act, while SB 52 (Leno) of the 2013-2014 legislative session was titled the California Disclose Act. All three measures broadly sought to change the content and format of disclosure statements that are required to appear on political advertisements in a manner that would require the largest contributors to the committee funding the advertisement to be more prominently displayed. Additionally, all three measures sought to establish extensive new rules for determining which contributors would be required to be disclosed as contributors on a campaign advertisement. Moreover, the language that appeared in the introduced version of this bill was similar to language that has appeared in prior bills that were referred to as the California Disclose Act, and in fact, the introduced version of this bill declared the intention of the Legislature to enact legislation to implement a California Disclose Act that is "consistent with the provisions of [SB] 52 of the 2013–14" legislative session.
   
   Because this bill does not currently contain substantive provisions similar to those in SB 52 or other prior attempts to enact a "California Disclose Act," this analysis does not examine the policy questions or considerations presented by such proposals. Nonetheless, both the supporters and opponents of this bill (as detailed below) seem to believe that this bill subsequently will be amended to include provisions similar to those in previous versions of the California Disclose Act. In fact, a letter in support of this bill from the sponsor of the bill acknowledges that the current version of the bill makes only "technical changes relative to disclosure under the Political Reform Act," but also notes that if the bill's "intent is implemented, it will significantly strengthen disclosure requirements for ballot measure ads." If it is the author's intent to amend this bill at some point in the future to more closely resemble previous legislation that has been referred to as the California Disclose Act, those amendments would be considerably broader than, and inconsistent with, the substantive provisions of the current version of this bill.

4. Television vs. Video and Technical Amendments: As noted above, existing law already requires the "paid spokesperson" disclosure statement, when it is required to be included in an advertisement, to be shown continuously if the advertisement consists of televised material. This bill further provides that "[i]f the advertisement is a television or video advertisement, the statement shall be shown continuously." While existing law does not explicitly address the duration for which the disclosure statement is required to appear in a video advertisement that is not televised (for example, a video advertisement on the Internet), televised advertisements are already covered by existing law. As a result, the language added by this bill relating to television advertisements seems to be duplicative. If it is the committee's desire to approve this bill, committee staff recommends a technical amendment to eliminate that duplication.

5. Arguments in Support: The sponsor of this bill, the California Clean Money Campaign, writes in support:

The California Clean Money Campaign is pleased to sponsor AB 700, the California DISCLOSE Act. If its intent is implemented, it will significantly strengthen disclosure requirements for ballot measure ads. Just as a lobbyist looking for your vote on a bill would never mislead you as to who his client is, neither should the voters be misled as to who is asking for our votes when we cast them on ballot measures.

Campaign spending on ballot measures has reached unprecedented levels. More than $640 million was spent in California on ballot measures in 2012 and 2014, almost all of it by donors obscured by misleading names and buried in fine print. Although it is essential for individuals and organizations to be able to communicate effectively with voters, it’s equally important that voters not be deceived about who paid for the ads they see.

AB 700 currently makes technical changes relative to disclosure under the Political Reform Act, but also provides the following:

It is the intent of the Legislature to enact legislation that would implement a California Disclose Act to ensure that advertisements that seek to persuade voters to cast a vote in favor or against ballot measures do not mislead voters as to who is funding the campaign that paid for the advertisement.

Achieving this goal is essential to everything we care about in the era of Citizens United in which billionaires and other special interests can pass or kill ballot measures by drowning the electorate in deceptive advertisements while hiding who really paid for them. Even duly passed and signed laws are subject to referenda that can be put on the ballot and passed by Dark Money groups whose misleading ads fool voters into voting against their best interests.

6. Arguments in Opposition: In opposition to this bill, the Service Employees International Union (SEIU), California State Council, writes:

The original and contemplated premise of [this] bill was to enact language consistent with Senate Bill 52 (Leno), also called the Disclose Act, which failed during the 2013-14 Regular Session of the legislature. That proposal sought to increase reporting requirements for political advertising disclaimers while adding devastating accounting requirements that would severely hinder the ability to engage in fundraising and the political process….

During the 2013-14 Regular Session of the legislature, the Governor enacted Chapter 16, Statutes of 2014 (SB 27/Correa) and Chapter 9, Statutes of 2014 (AB 800/Gordon), that created new requirements to prevent individuals, organizations, or other[s], from hiding behind a veil of secrecy when engaging in political activity in California, and allows detailed audits of campaign committees during an election cycle, respectively. Each of these statutes have worked as intended…

AB 700 would propose to impose new and untenable restrictions that are so one-sided on their effect among specific groups engaged in political activity that they might be deemed unconstitutional, as noted in the Committee's analysis of SB 52. In addition, AB 700 would significantly interfere, or upend the success of the new statutory requirements imposed by SB 27 and AB 800, that have remedied the lack of disclosure in political advertisements.

Although AB 700 has recently been amended, the underlying intent of the bill remains the same as to a likely continuous, successive, and unending reporting scheme that would have a devastating effect on political committees wanting to engage in political activity.

7. Previous Legislation: SB 27 (Correa), Chapter 16, Statutes of 2014, established conditions under which a multipurpose organization that makes campaign contributions or expenditures is required to disclose names of its donors.
   
   AB 800 (Gordon), Chapter 9, Statutes of 2014, made numerous significant changes to the PRA, including permitting the FPPC to audit any record required to be maintained under the PRA to ensure compliance with the PRA prior to an election, even if the record or statement has not yet been filed.
   
   AB 510 (Ammiano), Chapter 868, Statutes of 2014, requires an advertisement relating to a ballot measure to include a specified disclaimer if it includes an appearance by an individual who is paid to appear in the advertisement and it communicates that the individual is a member of an occupation that requires licensure or specialized training.

8. Political Reform Act of 1974: 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.

REGISTERED SUPPORT / OPPOSITION:

Support

California Clean Money Campaign (sponsor)

In addition, the California Clean Money Campaign submitted copies of petitions signed by approximately 2,000 individuals in support of AB 700. However, those petitions urge support for a bill that "mandates clear and prominent disclosure of the true funders behind ballot measure…ads," which the current version of this bill does not do. As a result, it is unclear whether those signatures reflect support for the current version of the bill.

California Church Impact
California Common Cause
LabelGMOs.org
Lutheran Office of Public Policy – California
MapLight
Money Out Voters In
National Council of Jewish Women California
Public Citizen
Redwood Empire Business Association

Opposition

California School Employees Association, AFL-CIO

Howard Jarvis Taxpayers Association (prior version)

Service Employees International Union, California State Council

Analysis Prepared by: Ethan Jones / E. & R. / (916) 319-2094