California Amends Political Reform Act
During 2019 Legislative Session

Mario Dalessandro, J.D. 
Research Associate              

Gov. Gavin Newsom signed several bills passed by the Legislature to amend lobbying and campaign finance laws in the Political Reform Act of 1974. Unless noted otherwise, the bills are effective January 1, 2020.

Lobbying Laws

Assembly Bill 902 requires a lobbyist registration statement to be filed both electronically and physically until the Office of the Secretary of State certifies an online filing and disclosure system. Upon certification, the registration statement will only be filed electronically. The bill also requires audits and investigations of lobbying firms and lobbyist employers to be performed by the state Franchise Tax Board on a biennial basis and cover reports filed during a period of two years.

Campaign Finance Laws

Assembly Bill 571 imposes limits on contributions to candidates for elective county and city offices in jurisdictions that have not independently imposed contribution limits. Currently, a county or a city may, by ordinance or resolution, limit campaign contributions in local elections. However, many counties and cities have not imposed such limits. The bill establishes contribution limits of $4,700 per election to a candidate for elective office in a city or county in which the local government has not established a limit. Local governments will also be permitted to establish different limits more precisely tailored to the needs of the community. Assembly Bill 571 becomes effective January 1, 2021.

Assembly Bill 201 broadens the definition of mass mailing to include campaign-related mass texting. Mass text messages will be required to include the name or image of a candidate or refer to a ballot measure.

Assembly Bill 220 and Senate Bill 71 prohibit the expenditure of funds in a legal defense fund campaign account to pay or reimburse a candidate or elected officer for attorney's fees or other legal costs. The bills also prohibits the use of campaign funds to pay for fines, penalties, judgments, or settlements, except as specified.

Assembly Bill 903 clarifies general committees must file disclosures if, during a preelection reporting period, the committee makes contributions or independent expenditures totaling $500 or more to a general purpose committee, or to support or oppose a candidate or measure appearing on the ballot at the next primary or general election.

[The details for this article are updated on our website in the Gift Law and Definitions
sections of the Lobbying Compliance Laws and Political Contribution
Compliance Laws for California.]
 

Summary of Changes UPDATE
Note Recent Changes to Compliance Regulations 

Michael Beckett, Esq.,
Research Manager

BALTIMORE, MARYLAND: In 2018, the City Council enacted the Transparency in Lobbying Act requiring lobbyists to file reports twice a year and affirmatively identify their clients when approaching city government officials. The effective date of the act was contingent on a viable online reporting system being implemented. The City Ethics Board has now implemented the online lobbying reporting system, allowing lobbyist registrations and reports to be filed electronically. The next year-end report is due on or before January 31, 2020, covering all of the reporting period immediately preceding January 1 through December 31, 2019. The City Ethics Board has advised persons that previously filed paper registration statements to submit the year-end report on paper and not electronically.

MONTANA: Campaign contribution limits increased following an every other year adjustment required by state law to match inflation. The amount an individual or PAC may give to the campaign for governor rose from $680 to $710 per election. Additionally, the aggregate amount a PAC may give to a candidate for state Senate rose from $2,850 to $3,050 and rose from $1,750 to $1,850 for a candidate for state House. The Commissioner of Political Practices is in charge of calculating the increase by multiplying last cycle’s limits by an inflation factor provided by statute. The new contribution limits took effect September 21. Contributions made before that date are subject to the old limits. However, those who have already given money may contribute again up to the new limits.

NEW JERSEY: A U.S. District Court for the District of New Jersey issued an opinion and order issuing a preliminary injunction prohibiting the state of New Jersey from enforcing the changes in the law from a bill passed earlier this year concerning disclosure requirements by independent expenditure committees. Senate Bill 150, which was to take effect on October 15, requires the committees to disclose donors giving more than $10,000 and expenditures over $3,000. The parties filing the lawsuit, Americans for Prosperity v. Grewal, argue the disclosure requirements are unconstitutional and violate the First Amendment. The preliminary injunction will continue while the lawsuit proceeds.

OHIO: The House passed legislation on October 10 to reverse provisions in the state budget bill, restoring a business tax exemption for attorneys and lobbyists. Senate Bill 26 was originally introduced to allow educators to claim an income tax deduction for out-of-pocket classroom expenses. The House Finance Committee approved amendments to restore the deduction for attorneys and lobbyists excluded in the two-year state operating bill tax policy of House Bill 166. Since 2013, the state business income deduction (BID) has allowed those deriving income from any pass-through entity (e.g., LLCs, LLPs) to pay no tax on the first $250,000 of income and a flat 3% on any income above that threshold. House Bill 166 excluded otherwise eligible income from legal services provided by an attorney or income from legislative, executive agency, or retirement system lobbying activity beginning in 2020. Senate Bill 26 has been re-referred to the Senate for final approval.

PUERTO RICO: The Department of Justice released a lobbyist registry on its website, as required by Executive Order 2019-031, to establish a code of transparency for all agency heads in the executive branch. The lobbyist registry is part of an automatic slideshow on the main page of the Department of Justice. There are two separate links: one to conduct a search in the registry and the other for lobbyists to register. However, lobbyists have not yet been featured on the registry webpage. The Puerto Rico Innovation and Technology Service and the Department of Justice indicated they are working to publish the content.

Legislation We Are Tracking

At any given time, more than 1,000 legislative bills, which can affect how you do business as a government affairs professional, are being discussed in federal, state, and local jurisdictions. These bills are summarized in State and Federal Communications' digital encyclopedias for lobbying laws, political contributions, and procurement lobbying and can be found in the client portion of our website.

Summaries of major bills are also included in monthly email updates sent to all clients. The chart below shows the number of bills we are tracking in regard to lobbying laws, political contributions, and procurement lobbying.
 

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