BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 1271
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          Date of Hearing:  June 22, 2010

                  ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
                                  Paul Fong, Chair
                    SB 1271 (Romero) - As Amended:  April 5, 2010

           SENATE VOTE  :   30-0
           
          SUBJECT  :   Political Reform Act of 1974: conflict of interest  
          codes.

           SUMMARY  :  Requires a public retirement board to attach an  
          appendix to its conflict of interest code that lists each  
          position with the board for which an individual occupying the  
          position is required to file a Statement of Economic Interests  
          (SEI) as a public official who manages public investments.   
          Specifically,  this bill  :   

          1)Requires a public retirement board, commission, or agency to  
            attach to its conflict of interest code an appendix entitled  
            "Agency Positions that Manage Public Investments for Purposes  
            of Section 87200 of the Government Code."  Requires the  
            appendix to list each position with the board, commission, or  
            agency for which an individual occupying the position is  
            required to file a SEI as a public official who manages public  
            investments within the meaning of existing state law.   
            Requires the board, commission, or agency to post this  
            appendix on its Internet Web site in a manner that makes it  
            easily identifiable and accessible by persons who view the Web  
            site. 

          2)Provides that, for the purposes of this bill, "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.

          3)Provides that a committee, board, commission, or other entity  
            possesses decision making authority for the purposes of this  
            bill if any of the following apply:

             a)   The entity may make a final governmental decision;

             b)   The entity may compel a governmental decision or prevent  
               a governmental decision, either by virtue of possessing  








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               exclusive power to initiate the decision or by having veto  
               authority that may not be overridden; or, 

             c)   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.

          4)Provides that a committee, board, commission, or other entity  
            does not possess decision making authority for the purposes of  
            this bill 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.







































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           EXISTING LAW  : 

          1)Requires each state and local government agency to adopt and  
            promulgate a conflict of interest code.

          2)Requires each conflict of interest code to enumerate the  
            positions within the agency which involve the making or  
            participation in the making of decisions which may foreseeably  
            have a material effect on any financial interest and for each  
            such enumerated position, the specific types of investments,  
            business positions, interests in real property, or sources of  
            income which are reportable, except as specified.  Requires  
            any person holding a position that is enumerated in an  
            agency's conflict of interest code to file periodic SEIs.

          3)Requires specified public officials, including officials who  
            manage public investments, to file SEIs, but does not require  
            such officials to be enumerated in the agency's conflict of  
            interest code.

          4)Creates the Fair Political Practices Commission (FPPC), and  
            makes it responsible for the impartial, effective  
            administration and implementation of the Political Reform Act  
            (PRA).

           FISCAL EFFECT  :   According to the Senate Appropriations  
          Committee, the California State Teachers' Retirement System and  
          the California Public Employees' Retirement System indicate  
          minor, absorbable costs as does the FPPC.  Although the bill  
          constitutes a state-reimbursable mandated program, it is not  
          likely that costs to local pension systems will exceed $50,000.

           COMMENTS  :   

           1)Purpose of the Bill  :  According to the author:

               There are some public employee pension systems that have  
               persons who join with the governing bodies and participate  
               in the decision making process during meetings.  These  
               persons may be employees or non-employees.  Although these  
               persons do not vote, they still have influence in the  
               decision making process.  However, these  
               non-employees/employees do not file Statements of Economic  
               Interest; thus, there is a lack of transparency.









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               This bill would encompass those persons who participate in  
               the decision making process, but do not vote, requiring  
               them to file Statements of Economic Interests.

           2)Arguments in Support  :  The sponsor of this bill, the American  
            Federation of State, County and Municipal Employees (AFSCME),  
            AFL-CIO, writes:

               AFSCME believes in full transparency and disclosure for a  
               public retirement board, commission, or agency.  It is  
               vitally important during this time of economic hardship  
               that all public funds are handled responsibly and invested  
               with the best interest of the state in mind.  SB 1271 would  
               require an appendix be attached to the public retirement  
               board conflict of interest code that lists all individuals  
               on the board, commission, or agency that are required to  
               file a statement of economic interests, regarding public  
               investments.  It is always sound practices to understand,  
               and make public, each possible financial interest of any  
               public retirement board member.  
                
           3)Political Reform Act of 1974  :  California voters passed an  
            initiative, Proposition 9, in 1974 that created the FPPC and  
            codified significant restrictions and prohibitions on  
            candidates, officeholders and lobbyists. That initiative is  
            commonly known as the PRA.  Amendments to the PRA that are not  
            submitted to the voters, such as those contained in this bill,  
            must further the purposes of the initiative and require a  
            two-thirds vote of both houses of the Legislature.

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          American Federation of State, County and Municipal Employees,  
          AFL-CIO (sponsor)
          Association of California Water Agencies
          California State Teachers' Retirement System
          Fair Political Practices Commission 
           
           Opposition 
           
          Department of Finance

           Analysis Prepared by  :    Ethan Jones / E. & R. / (916) 319-2094 








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