Recent Changes to the Political Reform Act

Below are summaries of the significant legislative and regulatory changes made to the Political Reform Act in 2019. The legislative provisions of the following bills take effect on January 1, 2020:

  • AB 201 (Campaign disclosure text messages; Cervantes)
  • AB 220 (Use of campaign funds for childcare expenses; Bonta)
  • AB 864 (DISCLOSE Act; Mullin)
  • AB 902 (Commission regulations; Levine)
  • AB 903 (Political Reform Act amendments; Levine)
  • AB 946 (Omnibus non-substantive; Assembly Elections Committee)
  • AB 1043 (Use of campaign funds for cybersecurity; Irwin)
  • SB 71 (Campaign expenditure limitations for sexual assault, abuse and harassment claims; Leyva)
  • SB 84 (Cal-Access implementation delay; Senate Budget and Fiscal Review Committee)

The operative date for the following new laws passed in 2019 are delayed as instructed by each bill:

  • AB 571 (Local contribution limits; Mullin) is delayed until January 1, 2021.
  • AB 909 (Treasurer acknowledgement; Gallagher) is delayed until the certification of the new Cal-Access system (expected February 2021).

The operative date for the following delayed 2018 bill is taking effect January 1, 2020:

  • AB 2188 (DISCLOSE Act; Mullin)
To view the full text of the bills, visit: http://leginfo.legislature.ca.gov/. Visit the FPPC's Regulations page for full text of the regulations. A printable summary of all 2019 legislative and regulatory changes can be found here.

Campaign Changes

Text Message Disclose Act (AB 201 (Cervantes) - Chapter 555, Statutes of 2019)

Requires a candidate or committee to disclose the name of the candidate or committee in certain text message ads sent using mass distribution technology either directly in the text message or via a hyperlink in the text message. The bill sets forth standards for color and size of the text in the text message and disclosures on the linked website. The disclosure requirements depend on the type of committee paying for the advertisement. Disclosure requirements are also dependent on the sender of the text: paid staff, volunteer, or mass distribution technology. There are additional exceptions in the legislation. This bill is operative January 1, 2020.

Use of Campaign Funds: Childcare Costs (AB 220 (Bonta) – Chapter 384, Statutes of 2019)
Authorizes the use of campaign funds to pay or reimburse for childcare expenses directly resulting from a candidate engaging in campaign activities. The bill also permits the use of campaign funds for childcare expenses resulting from an officeholder engaging in activities that are both political and legislative or governmental. “Childcare expenses” are defined as reasonable costs of professional daycare services, babysitting, and nannying services among other expenses. Prohibited expenses include private school tuition, medical expenses, tutoring services, or payments to a relative for childcare services unless the relative’s activities meet an exception in the bill text. This bill is operative January 1, 2020.

Local Contribution Limits (AB 571 (Mullin) – Chapter 556, Statutes of 2019)
Establishes a contribution limit for city and county elections, equal to state legislative limits, to be regulated and enforced by the FPPC. Jurisdictions with existing limits or that adopt their own limits are not subject to the state legislative limit. The Commission will not enforce a contribution limit adopted by local jurisdictions. Does not apply to special districts. This bill is operative January 1, 2021.

Amendments to the DISCLOSE ACT (AB 864 (Mullin) – Chapter 558, Statutes of 2019)
Makes various changes to the DISCLOSE Act, including:

  • Exempts from the definition of “mass electronic mailing” communications that are solicited by the recipients
  • Exempts from the definition of “advertisement” communications that are received as a result of a customer expressly opting in to receive political communications from a provider of goods or services
  • Clarifies disclosure requirements for print advertisements larger than those designed to be individually distributed
  • Further defines “online platform” and “online platform disclosed advertisement”
  • Corrects conflict from AB 249 related to electronic media ads and applicable disclosures for political party committees and candidate-controlled committees who pay for independent expenditure ads supporting or opposing a ballot measure.
This bill is operative January 1, 2020.
 
Codification of Certain Commission Regulations (AB 902 (Levine) – Chapter 312, Statutes of 2019)
Enters certain FPPC regulations or portions of such into the Political Reform Act. These regulations have been identified by commission staff as being longstanding and non-controversial. These amendments include:
  • Extensions for filing deadlines that fall on a weekend or holiday
  • Duties of filing officers
  • Definition of “candidate”
  • Definition of “aggregated contributions”
  • Definition of “lobbying coalition” and other conforming changes
  • Definition of “spouse”
  • Designation of an “assistant treasurer”
  • When to update Top 10 Contributors list under Section 84223
  • How a public official discloses leasehold interests
  • When a gift is received and accepted
  • The scope of audits and investigations
This bill is operative January 1, 2020.
 
Minor and Clarifying Amendments to the Political Reform Act (AB 903 (Levine) – Chapter 102, Statutes of 2019)
Clarifies various sections of the Political Reform Act. In addition to non-substantive changes, clarifies preelection reporting requirements and clarifies that under certain conditions communications paid for with public moneys by state or local government agencies are considered expenditures. This bill is operative on January 1, 2020. 
 
Treasurer Acknowledgement Signature (AB 909 (Gallagher) – Chapter 313, Statutes of 2019
Requires an additional acknowledgement of duties and liabilities by a treasurer or assistant treasurer recognized on the Form 410, or Statement of Organization. This additional acknowledgement is a separate statement required to be filed with the Secretary of State. The statement is filed at the same time as the Statement of Organization or an amendment identifying a new treasurer or assistant treasurer. This bill is operative upon the certification of the Secretary of State’s new Cal-Access System, date pending.
 
Use of Campaign Funds: Cybersecurity (AB 1043 (Irwin) – Chapter 46, Statutes of 2019)
Allows the use of campaign funds to pay or reimburse for cybersecurity protections including hardware, software, and services related to the electronic devices of a candidate, elected officer, or campaign worker. The bill requires the disclosure and reporting of any cybersecurity expenditures using campaign funds to the FPPC in the candidate or elected officer’s campaign statements. This bill is operative January 1, 2020.
 
Campaign Expenditure Limitations: Sexual Assault, Abuse and Harassment Claims  (SB 71 (Leyva) – Chapter 564, Statutes of 2019)
Allows the expenditure of funds in a campaign committee or legal defense fund to pay for a candidate or elected official’s legal costs and expenses related to claims of sexual assault, sexual harassment, or sexual abuse. However, if the candidate is “held liable for such a violation,” the candidate or elected official would be required to reimburse the committee account for all funds used in connection with those legal costs and expenses. Funds from  candidate’s committee or legal defense fund may not be used to pay or reimburse for a penalty, judgement, or settlement related to these claims. This bill is operative January 1, 2020.
 
Cal-Access Implementation Delay (SB 84 (Senate Budget and Fiscal Review Committee) – Chapter 30, Statutes of 2019
Extends the launch date of the Secretary of State’s new Cal-Access filing and disclosure system to February 2021. There is no provision allowing for an extension.

Regulation 18422 – Multipurpose Organization Political Activity Transparency and Regulation 18422.1 – Required Recordkeeping for Multipurpose Organizations: Amendments to Regulation 18422 and adoption of Regulation 18422.1 provide greater detail and clarity regarding the recordkeeping requirements for multipurpose organizations subject to Section 84222.

Disclose Act Regulations 18435, 18450.2, 18450.3, and 18450.4: Amendments to Regulation 18435 clarify the disclosure requirements for mass mailings. New Regulations 18450.2, 18450.3 and 18450.4 define the phrase “authorized and paid for” as used in the statutory definition of “advertisement;” clarify the top contributor disclosure for major donor committees that qualify as top contributors by virtue of affiliated entities; and address the required length of a disclosure for a video or television advertisement lasting less than four or five seconds.

 

Other Changes

Omnibus Non-substantive (AB 946 (Assembly Elections Committee) – Chapter 315, Statues of 2019)
Repeals expired provisions of the Act that are no longer applicable or that are antiquated. The bill will become operative on January 1, 2020.

Conflicts of Interest

Regulation 18702.1 – Materiality Standard: Financial Interest in Business Entity: Amendments establish a bright-line materiality standard for evaluating whether it is reasonably foreseeable that a government decision will have a material financial effect on an official’s interest in a business entity.

Regulation 18702.2 – Materiality Standard: Financial Interest in Real Property: Amendments establish a bright-line materiality standard for evaluating whether it's reasonably foreseeable that a government decision will have a material financial effect on an official’s interest in real property.

Regulation 18702.3 – Materiality Standard: Financial Interest in a Source of Income: Amendments establish a bright-line materiality standard for evaluating whether it is reasonably foreseeable that a government decision will have a material financial effect on a source of income to an official.

Regulation 18702.4 – Materiality Standard: Financial Interest in Source of Gift: Amendments establish a bright-line materiality standard for evaluating whether it's reasonably foreseeable that a government decision will have a material financial effect on a non-profit organization that provides gifts to a public official. 

Regulation 18702.5 – Materiality Standard: Financial Interest in an Official’s Personal Finances: Amendments establish a bright-line materiality standard for evaluating whether it is reasonably foreseeable that a government decision will have a material financial effect on an official’s personal finances.

Gifts

Regulation 18944.1 – Gifts: Agency Provided Tickets or Passes: Amendments clarify the requirements for agency-provided tickets or passes to be exempt from qualification as gifts under the Act.

Regulation 18946 – Valuation of Gifts and Regulation 18946.1 – Exception- Valuation of Gifts: Passes and Tickets: In conjunction with amendments to Regulation 18944.1, amendments change the term “face value” to “fair value” and add language to clarify the definition of “fair value” specifying that, where the price indicated on the ticket does not reflect the actual cost for a ticket in a luxury box or suite, the value is determined by dividing the total cost of the box or suite by the number of tickets available for that box or suite.

Enforcement

Regulation 18360.1 – Eligibility Requirements and Considerations - Streamline and Warning Letters and Regulation 18360.2 – Penalties in Streamline Cases: New regulations codify and expand the Commission’s Streamline Settlement Program.

Regulation 18998 – Commission Audits and Investigations: New regulation clarifies the auditing guidelines and standards applied by Commission staff in conducting mandatory and discretionary audits and investigations.

Other

Regulations 18308, 18308.1, 18308.2 & 18308.3 – Commission Governance: These regulations were repealed. The Commission adopted new governance principles to be placed in an internal policy rather than in regulation.

Regulation 18329 – Formal Written Advice and Informal Assistance: Amendments update and re-organize the prior version of the regulation to reflect current formal advice and informal assistance practices, detail the process for Commission actions in responding to written requests, and provide clarity for requestors as to their rights and duties in requesting and receiving advice.

Regulation 18756 – Statements of Economic Interests: Certification of Electronic Filing Systems: Amendments codify the requirement that an agency’s electronic filing system meet the data exchange requirements necessary for the agency’s system to properly function with the FPPC’s electronic filing system in order to obtain certification of the agency’s system from the FPPC.