The issue has raised concerns because politicians across the nation have been increasingly announcing their candidacies and campaign policies online through Twitter, YouTube, Facebook and other websites, said the Commission Chairman Dan Schnur.
California's 36-year-old Political Reform Act has to be rewritten to keep up with technological advances, said Schnur.
"Our goal here is to meet the new challenges of 21st Century technology. There's no way that the authors of the act could have anticipated that these types of communicating a campaign message would ever exist."
The commission's report looks at possible problems with regulating online content like how to include full disclosure of who is behind the message, in a Tweet or a text.
If the agency orders its staff to propose new rules or legal changes, it could be months before they take effect and they can possibly bypass the upcoming November elections.
Campaigns would still have to follow the current disclosure rules but for the first time, they would have to apply to online communications.
The recommendations do distinguish between paid political ads and unpaid, grassroots volunteer work.
They also require that Tweets and texts be linked to full disclosures. However, some people think the disclosure should be in the text itself, said Barbara O'Connor, professor emeritus of communications and the former director of the Institute for the Study of Politics and Media at California State University, Sacramento.
But requiring even one character be used for disclosure would be a burden on free speech, said California Republican Party Vice Chairman Jon Fleischman, in the report.
The report does not suggest that bloggers be regulated for now, but it urges them to voluntarily disclose on their websites if they are being paid.
The full commission will consider the report at its meeting on Aug. 12.
AP contributed to this report.