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SB 594 Substantially Amended to Remove Troublesome Provisions; Next Step is Assembly Floor

August 30, 2013
As a result of overwhelming opposition from the League, the California State Association of Counties (CSAC), other statewide associations representing schools, public safety, and a growing coalition of local chambers of commerce and other groups, today the Assembly Appropriations Committee approved a substantially amended version of SB 594 (Hill).
These amendments enhance campaign finance disclosure and accountability in a positive way while allowing groups such as the League to continue to be involved in statewide ballot measure campaigns with their clearly nonpublic funds. The League has reviewed the amendments and expects to remove its opposition once the bill is in print next week.

“These amendments reflect the League’s commitment to transparency and disclosure and also retain our ability to be active in state ballot measure campaigns to protect local funds and services. We appreciate the good faith negotiations that led to the amendments being adopted,” said Bill Bogaard, League president and Pasadena mayor.
The League wishes to thank the city officials, CSAC and the many other members of the No on SB 594 coalition who helped secure changes that serve the public interest in disclosure while respecting the right of all groups to participate in ballot measure elections with nonpublic funds.
Below are the highlights of how the bill has changed in its current version:
  1. The bill no longer redefines “public funds” in a broad way that captures currently nonpublic revenues that many associations use for ballot campaign advocacy, consistent with the League’s conservative practices and use of funds. The amendment included in committee on Aug. 21 to include schools in the definition of “public agency” was removed. Nonprofits can continue to have political action committees and to support ballot measures or candidates with funds from those committees.
  2. Nonprofit organizations like the League that receive 20 percent or more of their annual operating budgets from public resources and that participate in campaign activities, must file reports detailing sources of fund for such campaign activities with the Franchise Tax Board (not the Attorney General as originally proposed) under the following circumstances:
  • Expenditures on state measures/candidates exceed $50,000 in a quarter (quarterly report) or $100,000 in a calendar year (biennial reports).
  • Expenditures on local measures/candidates that exceed $2,500 in a quarter (quarterly report) or $10,000 in a calendar year quarter (biennial reports).
FTB may conduct discretionary audits. Mandatory audits occur after an annual expenditure in excess of $500,000. Violations are subject to civil fines of $10,000/violation.
Note: The League does not participate in candidate campaigns but it does participate in ballot measure campaigns.

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