BILL NUMBER: AB 1955	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 10, 2010
	AMENDED IN SENATE  JUNE 23, 2010
	AMENDED IN ASSEMBLY  APRIL 12, 2010
	AMENDED IN ASSEMBLY  MARCH 18, 2010

INTRODUCED BY   Assembly Member De La Torre

                        FEBRUARY 17, 2010

    An act to amend Section 1099 of the Government Code,
relating to public officers.   An act to amend Section
54957.6 of, and to add Sections 12531 and 54957.05 to, the Government
Code, to add Section 33138 to the Health and Safety Code, and to add
Section 17043.5 to the Revenue and Taxation Code, relating to public
officers, and declaring the urgency thereof, to take effect
immediately. 



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1955, as amended, De La Torre.  Public officers:
incompatible offices.   Local government: compensation.
 
   (1) Existing law charges the Attorney General with various duties,
including, among others, attending the Supreme Court and prosecuting
or defending all causes to which the state, or any state officer is
a party in his or her official capacity.  
   Existing law authorizes a city council to enact an ordinance
providing each member of the city council a salary based on the
population of the city, and to provide for other forms of
compensation, as specified.  
   This bill would require the Attorney General to determine whether
a city is an excess compensation city, as defined. The bill would
require the Attorney General to notify the Franchise Tax Board and
the redevelopment agency in the city of the city's status as an
excess compensation city.  
   (2) The Community Redevelopment Law authorizes the establishment
of redevelopment agencies in communities to address the effects of
blight, as defined, in blighted areas in those communities known as
project areas, and authorizes the agency to issue bonds.  
   This bill would prohibit the agency, once the agency has received
written notice from the Attorney General that the city is an excess
compensation city, from adopting a redevelopment plan for a new
project area or amending an existing redevelopment plan for existing
project areas; from issuing new bonds, notes, interim certificates,
debentures, or other obligations, as specified; and from encumbering
any funds or expending any moneys derived from any source except as
specified.  
   (3) The Personal Income Tax Law imposes taxes based upon taxable
income.  
   This bill would, for taxable years beginning on or after January
1, 2011, increase the tax rate applicable to 50% on that portion of
the gross income of a city council member of an excess compensation
city, as defined, that is in excess of the allowable amount. 

   (4) Existing law, the Ralph M. Brown Act, requires that all
meetings of a legislative body of a local agency be open and public
and all persons be permitted to attend unless a closed session is
authorized. The act authorizes a legislative body to hold a closed
session with the local agency's designated representatives regarding
various issues, including compensation, regarding its represented and
unrepresented employees, but the legislative body is prohibited from
taking final action on the proposed compensation of one or more
unrepresented employees.  
   Existing law also requires that all contracts of employment with a
local agency, as defined, for certain positions be ratified in an
open session of the governing body and be reflected in the governing
body's minutes.  
   This bill would require that any individual contract of employment
with an employee who is or will be employed by, and report directly
to, the legislative body of the local agency be ratified in an open
session of the legislative body after prescribed information
regarding the contract is made available on the local agency's
Internet Web site, if it maintains one, and in a location that is
freely accessible to the public, no later than 7 days prior to the
meeting to ratify the contract. By expanding the duties of local
officials, these provisions would impose a state-mandated local
program.  
   This bill would also specify that final action on the proposed
compensation of one or more unrepresented employees who are to be
employed by, and report directly to, the legislative body of the
local agency only be taken in open session, consistent with the
prescribed disclosure requirements. By expanding the duties of local
officials, these provisions would impose a state-mandated local
program.  
   (5) The bill would express a legislative finding and declaration
that, to ensure the statewide integrity of local government,
disclosure of compensation paid to officers and designated employees
is an issue of statewide concern and not a municipal affair and that,
therefore, all cities, including charter cities, would be subject to
the provisions of the bill.  
   (6) 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, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions. 
   (7) This bill would declare that it is to take effect immediately
as an urgency statute.  
   Existing law prohibits a public officer, including, but not
limited to, an appointed or elected member of a governmental board,
commission, committee, or other body, from simultaneously holding 2
incompatible public offices, as specified.  
   This bill would provide examples of situations when 2 public
offices are incompatible, and specify when a member holds an office
that may exercise powers over another office, as provided. 

   Vote:  majority   2/3  . Appropriation:
no. Fiscal committee:  no   yes  .
State-mandated local program:  no   yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 12531 is added to the 
 Government Code   , to read:  
   12531.  (a) If the Attorney General determines that a city is an
excess compensation city, as defined in subdivision (e), the Attorney
General shall notify the city council of that city in writing and
provide the city a hearing on the matter.
   (b) At the hearing, the city shall be provided opportunity to
demonstrate that the city is not an excess compensation city, by
showing, among other things, evidence of compliance with Section
36516, evidence of submission of a salary ordinance to voters, and
evidence of an increase in salary of city council members of no more
than 5 percent per year over the base amount specified in subdivision
(a) of Section 36516.
   (c) If, after notice and hearing, the Attorney General determines
that the city has failed to demonstrate that it is not an excess
compensation city, the Attorney General shall notify the city in
writing, and notify the Franchise Tax Board and the redevelopment
agency in that city, in writing, of the city's status as an excess
compensation city.
   (d) A city that has been found to be an excess compensation city
may bring itself into compliance with Section 36516. Once the city is
in compliance with Section 36516, the city council may submit a
written request to the Attorney General to be relieved of the status
as an excess compensation city. If the Attorney General determines
that the city is in compliance with Section 36516, the Attorney
General shall immediately notify the Franchise Tax Board and the city'
s redevelopment agency, in writing, of the change in status.
   (e) (1) For purposes of this section, "excess compensation city"
means any city, including a charter city, that compensates any member
of that city council in excess of the amounts specified in Section
36516. An "excess compensation city" does not include a charter city
that specifies in the charter that the city council members shall
devote their entire time to duties related to their office.
   (2) Notwithstanding paragraph (1), if the office of mayor is
independently elected, the city may demonstrate that additional
compensation paid to the mayor other than compensation for the mayor'
s position as a council member, has been provided by ordinance or in
the city's charter. 
   SEC. 2.    Section 54957.05 is added to the 
 Government Code   , to read:  
   54957.05.  Notwithstanding any other law, any individual contract
of employment with an employee who is or will be employed by, and
report directly to, the legislative body of the local agency shall be
ratified in an open session of the legislative body. Prior to
ratifying the contract, the legislative body shall disclose
information regarding the contract, including, but not limited to,
the employee's name, the position, and the total amount of salary,
benefits, retirement, and any other forms of compensation, on the
local agency's Internet Web site, if it maintains one, and in a
location that is freely accessible to members of the public, no later
than seven days prior to the meeting to ratify the contract. 
   SEC. 3.    Section 54957.6 of the  
Government Code   is amended to read: 
   54957.6.  (a) Notwithstanding any other provision of law, a
legislative body of a local agency may hold closed sessions with the
local agency's designated representatives regarding the salaries,
salary schedules, or compensation paid in the form of fringe benefits
of its represented and unrepresented employees, and, for represented
employees, any other matter within the statutorily provided scope of
representation.
   However, prior to the closed session, the legislative body of the
local agency shall hold an open and public session in which it
identifies its designated representatives.
   Closed sessions of a legislative body of a local agency, as
permitted in this section, shall be for the purpose of reviewing its
position and instructing the local agency's designated
representatives.
   Closed sessions, as permitted in this section, may take place
prior to and during consultations and discussions with
representatives of employee organizations and unrepresented
employees.
   Closed sessions with the local agency's designated representative
regarding the salaries, salary schedules, or compensation paid in the
form of fringe benefits may include discussion of an agency's
available funds and funding priorities, but only insofar as these
discussions relate to providing instructions to the local agency's
designated representative.
   Closed sessions held pursuant to this section shall not include
final action on the proposed compensation of one or more
unrepresented employees.  Final action on the proposed
compensation of one or more unrepresented employees who are or will
be employed by, and report directly to, the legislative body of the
local agency shall occur in open session, and consistent with the
disclosure requirements of Section   54957.05. 
   For the purposes enumerated in this section, a legislative body of
a local agency may also meet with a state conciliator who has
intervened in the proceedings.
   (b) For the purposes of this section, the term "employee" shall
include an officer or an independent contractor who functions as an
officer or an employee, but shall not include any elected official,
member of a legislative body, or other independent contractors.
   SEC. 4.    Section 33138 is added to the  
Health and Safety Code   , to read:  
   33138.  (a) Upon written notification by the Attorney General that
the city in which the agency is established is an excess
compensation city, pursuant to Section 12531 of the Government Code,
all of the following shall apply:
   (1) The agency shall not adopt redevelopment plans for a new
project area or amend an existing redevelopment plan for existing
project areas.
   (2) The agency shall not issue new bonds, notes, interim
certificates, debentures, or other obligations, whether funded,
refunded, assumed, or otherwise, pursuant to Article 5 (commencing
with Section 33360) of Chapter 4.
   (3) The agency shall not encumber any funds or expend any moneys
derived from any source, except that the agency may encumber funds
and expend funds to pay, if any, all of the following:
   (A) Bonds, notes, interim certificates, debentures, or other
obligations issued by an agency before the imposition of the
prohibition in paragraph (2), whether funded, refunded, assumed, or
otherwise, pursuant to Article 5 (commencing with Section 33360) of
Chapter 4.
   (B) Loans or moneys previously advanced to the agency, including,
but not limited to, loans from federal, state, or local agencies, or
a private entity.
   (C) Contractual obligations that, if breached, could subject the
agency to damages or other liabilities or remedies.
   (D) Obligations incurred pursuant to Section 33445.
   (E) Indebtedness incurred pursuant to Section 33334.2 or 33334.6.
   (F) Obligations incurred pursuant to Section 33401.
   (G) Payments required under subdivision (a) of Section 33690 or
subdivision (a) of Section 33690.5.
   (b) The prohibitions identified in subdivision (a) shall be lifted
after the Attorney General determines that the city is no longer an
excess compensation city pursuant to subdivision (d) of Section 12531
of the Government Code. 
   SEC. 5.    Section 17043.5 is added to the  
Revenue and Taxation Code   , to read:  
   17043.5.  (a) For each taxable year beginning on or after January
1, 2011, in addition to any other taxes imposed by this part, an
additional tax shall be imposed at the rate of 50 percent on that
portion of a qualified taxpayer's gross income that is derived from
the excess compensation city that is in excess of the amounts
specified in Section 36516 of the Government Code.
   (b) For purposes of this section:
   (1) "Qualified taxpayer" means a member of a city council of an
excess compensation city.
   (2) "Excess compensation city" means a city that has been
determined by the Attorney General to be an excess compensation city
pursuant to Section 12531 of the Government Code.
   (c) The following shall not apply to the tax imposed by this
section:
   (1) The provisions of Section 17039, relating to the allowance of
credits.
   (2) The provisions of Section 17041, relating to filing status and
recomputation of the income tax brackets.
   (3) The provisions of Section 17045, relating to joint returns.

   SEC. 6.    The Legislature finds and declares that
the fiscal integrity and stability of local governmental agencies in
this state, including charter cities, has a direct impact on the
long-term well-being of all the residents of this state. The
likelihood of businesses locating to or staying in the state is
affected by the perception of a functioning, transparent, and
practical governmental structure in the local governmental bodies in
California. Therefore, the Legislature finds and declares that to
ensure the statewide integrity of local government, the disclosure of
compensation paid to officers and designated employees is an issue
of statewide concern and not a municipal affair, as that term is used
in Section 5 of Article XI of the California Constitution.
Therefore, this act shall apply to all cities, including charter
cities. 
   SEC. 7.    If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code. 
   SEC. 8.    This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
 
   In order to preserve fiscal integrity and stability of local
government agencies in this state and the perception of a
functioning, transparent, and practical governmental structure in the
local government bodies in California at the earliest possible time,
it is necessary for this measure to take effect immediately. 

  SECTION 1.    Section 1099 of the Government Code
is amended to read:
   1099.  (a)  A public officer, including, but not limited to, an
appointed or elected member of a governmental board, commission,
committee, or other body, shall not simultaneously hold two public
offices that are incompatible. Offices are incompatible when any of
the following circumstances are present, unless simultaneous holding
of the particular offices is compelled or expressly authorized by
law:
   (1) Either of the offices may audit, overrule, remove members of,
dismiss employees of, or exercise supervisory powers over the other
office or body.
   (2)  Based on the powers and jurisdiction of the offices, there is
a possibility of a significant clash of duties or loyalties between
the offices.
   (3) Public policy considerations make it improper for one person
to hold both offices.
   (b) Examples of situations in which public offices are
incompatible under subdivision (a) include, but are not limited to,
the following:
   (1) An office has the power of eminent domain over property that
is under the geographic jurisdiction of the other office.
   (2) An office has the power to set a fee or a rate or to impose a
tax or a levy that may directly or indirectly affect the other
office.
   (c) When two public offices are incompatible, a public officer
shall be deemed to have forfeited the first office upon acceding to
the second. This provision is enforceable pursuant to Section 803 of
the Code of Civil Procedure.
   (d) This section does not apply to a position of employment,
including a civil service position.
   (e) This section shall not apply to a governmental body that has
only advisory powers.
   (f) For purposes of paragraph (1) of subdivision (a), a member of
a multimember body holds an office that may audit, overrule, remove
members of, dismiss employees of, or exercise supervisory powers over
another office when the body has any of these powers over the other
office or over a multimember body that includes that other office.
   (g) For purposes of subdivisions (a) and (b), a member of a
multimember body holds an office that may exercise powers over
another office when the body has power over the other office or over
a multimember body that includes the other office.
   (h) This section codifies the common law rule prohibiting an
individual from holding incompatible public offices.