BILL ANALYSIS SENATE COMMITTEE ON ELECTIONS, REAPPORTIONMENT AND CONSTITUTIONAL AMENDMENTS Senator Loni Hancock, Chair BILL NO: SB 1271 HEARING DATE: 4/20/10 AUTHOR: ROMERO ANALYSIS BY: Darren Chesin AMENDED: 4/5/10 FISCAL: YES SUBJECT Political Reform Act: conflict of interest codes DESCRIPTION Existing law , pursuant to the Political Reform Act, requires each state and local government agency to adopt and promulgate a conflict of interest code. A conflict of interest code must establish conflict of interest standards for designated employees of the agency and requires those employees to file periodic statements of economic interest (SEIs) disclosing specified personal financial information. Existing law further requires specified public officials, including officials who manage public investments, to also file SEIs, but does not require those officials to be specifically enumerated in the agency's conflict of interest code. This bill would require a public retirement board, commission, or agency to attach to its conflict of interest code an appendix that lists each position for which an individual occupying that position is required to file a SEI as a public official who manages public investments. The bill would further require the board, commission, or agency to post the appendix on its Internet Web site. This bill provides that for this purpose "public official who manages public investments" includes a salaried or unsalaried member of a committee, board, commission, or other entity that exists as, or within, a governmental agency and that possesses decision making authority. This bill provides that a committee, board, commission, or other entity possesses decision making authority if any of the following apply: The entity may make a final governmental decision. The entity may compel a governmental decision or prevent a governmental decision, either by virtue of possessing exclusive power to initiate the decision or by having veto authority that may not be overridden. The entity makes substantive recommendations that are, and over an extended period of time have been, regularly approved, without significant amendment or modification, by another public official or governmental agency. However, this bill provides that a committee, board, commission, or other entity does not possess decision making authority if it is formed for the sole purpose of researching a subject and preparing a report or recommendation for submission to another governmental entity that has final decision making authority. BACKGROUND More than just PERS and STRS ? The following public retirement agencies, among others, would fall under the purview of this bill: Alameda-Contra Costa Transit District Retirement Plan Alameda County Employees' Retirement Association Bart Investment Plans Committee City Of Concord Retirement System Contra Costa Employees' Retirement Association East Bay Municipal Utility District Retirement System Fresno City Employees' Retirement System Fresno City Fire & Police Retirement System Fresno County Employees' Retirement Association Imperial County Employees' Retirement System Kern County Employees' Retirement Association Los Angeles City Employees' Retirement System Los Angeles County Employees' Retirement Association Los Angeles County MTA Retirement Plan Los Angeles Fire & Police Pension System Los Angeles Water and Power Employees' Retirement Plan SB 1271 (ROMERO) Page 2 Marin County Employees' Retirement Association Mendocino County Employees' Retirement Association Merced County Employees' Retirement Association Oakland Municipal Employees' Retirement System Oakland Police & Fire Retirement System Orange County Employees' Retirement System Pasadena Fire & Police Retirement System Public Employees' Retirement System (CalPERS) Sacramento County Employees' Retirement System Sacramento Regional Transit District Retirement Plan San Bernardino County Employees' Retirement Association San Diego City Employees' Retirement System San Diego County Employees' Retirement Association San Francisco City & County Employees' Retirement System San Joaquin County Employees' Retirement Association San Jose Federated City Employees' Retirement System San Jose Police & Fire Department Retirement Plan San Luis Obispo County Pension Trust San Mateo County Employees' Retirement Association Santa Barbara County Employees' Retirement System Santa Clara Valley Transportation Authority/Amalgamated Transit Union Pension Plan Sonoma County Employees' Retirement Association Stanislaus County Employees' Retirement Association State of California Savings Plus Program State Teachers' Retirement System (CalSTRS) Tulare County Employees' Retirement Association University Of California Retirement System Ventura County Employees' Retirement Association COMMENTS 1.According to the author , California's public retirement systems (PRS) each have a governing body whose responsibility is to administer the pension in a manner that protects the interests of the pension members for whom they have a fiduciary responsibility. The Political Reform Act requires state and local government agencies to adopt and promulgate a Conflict of Interest Code. The purpose of this Conflict of Interest Code, with respect to public employee retirement systems is to facilitate SB 1271 (ROMERO) Page 3 the disclosure of the economic interests of public officials serving Public Retirement Systems (PRS) that may be materially affected by PRS's actions in which they participate. However, the Conflict of Interest code promulgated by some PRS are extremely lax and/or do not encompass all those persons who may be materially affected by the PRS actions in which they actively participate in the decision-making process, but do not vote. Since these persons do not file SEIs there is no way to determine if they have been materially affected. This bill would encompass those persons who participate in the decision making process, but do not vote, requiring them to file SEIs. POSITIONS Sponsor: American Federation of State, County and Municipal Employees Support: None received Oppose: None received SB 1271 (ROMERO) Page 4