BILL NUMBER: SB 1467	CHAPTERED
	BILL TEXT

	CHAPTER  1122
	FILED WITH SECRETARY OF STATE  SEPTEMBER 30, 2002
	APPROVED BY GOVERNOR  SEPTEMBER 30, 2002
	PASSED THE SENATE  AUGUST 31, 2002
	PASSED THE ASSEMBLY  AUGUST 29, 2002
	AMENDED IN ASSEMBLY  AUGUST 28, 2002
	AMENDED IN ASSEMBLY  JULY 25, 2002
	AMENDED IN ASSEMBLY  JULY 3, 2002
	AMENDED IN ASSEMBLY  JUNE 13, 2002

INTRODUCED BY   Senator Bowen
   (Coauthor:  Senator Machado)
   (Coauthor:  Assembly Member Alquist)

                        FEBRUARY 19, 2002

   An act to amend Section 10430 of, and to add Article 4 (commencing
with Section 10515) and Article 5 (commencing with Section 10520) to
Chapter 2.1 of Part 2 of Division 2 of, the Public Contract Code,
relating to public contracts.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1467, Bowen.  Public contracts:  conflict of interest.
   Existing law, with specified exemptions, including the acquisition
of information technology goods and services, regulates the
procurement of materials, supplies, equipment, and services by state
agencies.  These provisions do not apply to the Regents of the
University of California or to the Trustees of the California State
University.
   This bill would apply certain of these procurement provisions to
the Trustees of the California State University.
   Existing law includes various prohibitions with respect to
conflicts of interest of persons who are awarded state contracts or
officers or employees of the state who are contracting with the state
either directly or through other entities, as well as remedies for
violation of any of the provisions.
   This bill would apply specified conflict-of-interest provisions to
transactions, except as provided, under those provisions regulating
the acquisition of information technology goods and services.
   This bill would also add similar conflict-of-interest and remedies
provisions with regard to contracting with the University of
California.
   By making violations of these provisions a felony, or in some
cases a misdemeanor, thereby creating a new crime, this bill would
impose a state-mandated local program.
   This bill would require the Department of Finance to report to the
Legislature regarding the effect of this bill on the state's
contracting costs.
   Certain provisions of the bill would become operative on July 1,
2003.
  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 PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 10430 of the Public Contract Code is amended to
read:
   10430.  This chapter does not apply to any of the following:
   (a) The Regents of the University of California and the Trustees
of the California State University, except that Section 10365.5,
Article 8 (commencing with Section 10410), and Article 9 (commencing
with Section 10420) shall apply to the Trustees of the California
State University.
   (b) (1) Transactions covered under Chapter 3 (commencing with
Section 12100), except that Sections 10365.5, 10410, and 10411 shall
apply to all transactions under that chapter.
   (2) Notwithstanding paragraph (1), Section 10365.5 shall not apply
to incidental advice or suggestions made outside of the scope of a
consulting services contract.
   (c) Except as otherwise provided in this chapter, any entity
exempted from Section 10295.  However, the Board of Governors of the
California Community Colleges shall be governed by this chapter,
except as provided in Sections 10295, 10335, and 10389.
   (d) Transactions covered under Chapter 10 (commencing with Section
4525) of Division 5 of Title 1 of the Government Code.
   (e) Except as provided for in subdivision (c), members of boards
or commissions who receive no payment other than payment for each
meeting of the board or commission, payment for preparatory time, and
payment for per diem.
   (f) The emergency purchase of protective vests for correctional
peace officers whose duties require routine contact with state prison
inmates.  This subdivision shall remain operative only until January
1, 1987.
   (g) Spouses of state officers or employees and individuals and
entities that employ spouses of state officers and employees, that
are vendored to provide services to regional center clients pursuant
to Section 4648 of the Welfare and Institutions Code if the vendor of
services, in that capacity, does not receive any material financial
benefit, distinguishable from the benefit to the public generally,
from any governmental decision made by the state officer or employee.

  SEC. 2.  Article 4 (commencing with Section 10515) is added to
Chapter 2.1 of Part 2 of Division 2 of the Public Contract Code, to
read:

      Article 4.  Conflict of Interest

   10515.  (a) No person, firm, or subsidiary thereof who has been
awarded a consulting services contract may submit a bid for, nor be
awarded a contract on or after January 1, 2003, for, the provision of
services, procurement of goods or supplies, or any other related
action that is required, suggested, or otherwise deemed appropriate
in the end product of the consulting services contract.
   (b) Subdivision (a) does not apply to any person, firm, or
subsidiary thereof who is awarded a subcontract of a consulting
services contract that amounts to no more than 10 percent of the
total monetary value of the consulting services contract.
   10516.  No officer or employee of the University of California
shall engage in any employment, activity, or enterprise from which
the officer or employee receives compensation or in which the officer
or employee has a financial interest if that employment, activity,
or enterprise is sponsored or funded, or sponsored and funded, by any
university department through or by a university contract unless the
employment, activity, or enterprise is within the course and scope
of the officer's or employee's regular university employment.  No
officer or employee in the university shall contract on his or her
own individual behalf as an independent contractor with any
university department to provide services or goods.  This section
shall not apply to officers or employees of the university with
teaching or research responsibilities.
   10517.  (a) No retired, dismissed, separated, or formerly employed
person of the University of California employed with the university
or otherwise appointed to serve in the university may enter into a
contract in which he or she engaged in any of the negotiations,
transactions, planning, arrangements, or any part of the
decisionmaking process relevant to the contract while employed in any
capacity by any university department.  The prohibition of this
subdivision shall apply to a person only during the two-year period
beginning on the date the person left university employment.
   (b) For a period of 12 months following the date of his or her
retirement, dismissal, or separation from the University of
California, no person employed in the university or otherwise
appointed to serve in the university may enter into a contract with
any university department, if he or she was employed by that
department in a policymaking position in the same general subject
area as the proposed contract within the 12-month period prior to his
or her retirement, dismissal, or separation.  The prohibition of
this subdivision shall not apply to a contract requiring the person's
services as an expert witness in a civil case or to a contract for
the continuation of an attorney's services on a matter he or she was
involved with prior to leaving the university.
   (c) This section does not prohibit the rehire or reappointment of
University of California employees after retirement, consistent with
university administrative policies, nor does it apply to inventors
and authors of intellectual property licensed under technology
transfer agreements.
   10518.  Each contractor who enters into a contract with the
University of California for ten thousand dollars ($10,000) or more,
shall be assigned an identification number by the university.  Each
contractor who has been assigned a number shall list it on each
contract he or she enters into with the university, regardless of the
amount of the contract.  In the case of a corporation or firm, the
president's assigned number shall be used exclusively on each
contract.  The assigned number shall remain unchanged regardless of
future name changes.
  SEC. 3.  Article 5 (commencing with Section 10520) is added to
Chapter 2.1 of Part 2 of Division 2 of the Public Contract Code, to
read:

      Article 5.  Remedies and Penalties

   10520.  Every contract or other transaction entered in violation
of any provision of this chapter is void, unless the violation is
technical or nonsubstantive.
   10521.  The University of California, or any person acting on
behalf of the university, may bring a civil action seeking a
determination by the superior court that a contract or other
transaction has been entered in violation of any provision of this
chapter.  If the court finds substantial evidence of a violation, it
may issue a temporary injunction to prevent any further dealings upon
the contract or other transaction, pending a final determination on
the merits of the case.  If the action results in a final
determination that the contract or other transaction has been entered
in violation of this chapter, it shall be void, and the state or
person bringing the action shall be awarded costs and attorney's
fees.  This section shall not be construed to permit an award of
costs and attorney fees to the person or entity contracting or
otherwise transacting with the university.
   10522.  Any officer or employee of the University of California
who corruptly performs any official act under this chapter to the
injury of the university is guilty of a felony.
   10523.  Any person contracting with the University of California
by oral or written contract who corruptly permits the violation of
any contract made under this chapter is guilty of a felony.
   10524.  Persons convicted under Section 10522 or 10523 are also
liable to the University of California for double the amount the
university may have lost, or be liable to lose by reason of the acts
made crimes by this article.
   10525.  Willful violation of any other provision of this chapter
shall constitute a misdemeanor.
  SEC. 4.  On or before April 1, 2003, the Department of Finance
shall report to the Legislature regarding the effect this act will
have on the state's contracting costs.
  SEC. 5.  Sections 1 to 3, inclusive, of this act shall become
operative on July 1, 2003.
  SEC. 6.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.