BILL ANALYSIS Ó
AB 41
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Date of Hearing: March 15, 2011
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
AB 41 (Hill) - As Introduced: December 6, 2010
SUBJECT : Conflicts of interest: disqualification.
SUMMARY : Requires a member of the High-Speed Rail Authority
(HSRA) who has a financial interest in a governmental decision
before the HSRA to publicly identify the financial interest that
gives rise to the conflict of interest, to recuse himself or
herself from discussing or voting on the matter, and to leave
the room until after the discussion, vote, and any other
disposition of the matter is concluded. Expands the amount of
information that a member of the HSRA must disclose on a
statement of economic interests (SEI). Specifically, this bill
adds members of the HSRA to a statutorily-designated list of
high-ranking public officials who are subject to the most
expansive disclosure requirements under the Political Reform Act
(PRA).
EXISTING LAW :
1)Creates the Fair Political Practices Commission (FPPC), and
makes it responsible for the impartial, effective
administration and implementation of the PRA.
2)Establishes the HSRA and charges it with planning, designing,
constructing, operating, and maintaining a state-of-the-art
high-speed train system for California. Provides that the
HSRA is governed by a nine member board, including five
members appointed by the Governor, two members appointed by
the Senate Rules Committee, and two members appointed by the
Speaker of the Assembly. Provides that members of the HSRA
are subject to the PRA.
3)Lists certain high-ranking public officials (known as "87200
filers") who are subject to the most expansive disclosure
requirements under the PRA. Provides that these 87200 filers
include elected state officers, judges, members of the Public
Utilities Commission, members of the FPPC, members of the
California Coastal Commission, members of county boards of
supervisors, district attorneys, mayors, and members of city
councils, among others.
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4)Requires an 87200 filer to file periodic SEIs disclosing his
or her investments, interests in real property, and income
(including gifts).
5)Requires an 87200 filer who has a financial interest in a
governmental decision, with limited exceptions, to do all of
the following immediately prior to the consideration of a
matter in which the filer has a conflict of interest:
a) Publicly identify the financial interest that gives rise
to the conflict of interest in detail sufficient to be
understood by the public;
b) Recuse himself or herself from discussing and voting on
the matter; and,
c) Leave the room until after the discussion, vote, and any
other disposition of the matter is concluded, unless the
matter is placed on the portion of the agenda reserved for
uncontested matters.
6)Requires every state and local governmental agency to adopt
and promulgate a Conflict of Interest Code. Requires each
Conflict of Interest Code to include a specific enumeration of
the positions within the agency, with the exception of 87200
filers, that involve the making or participation in the making
of decisions which may foreseeably have a material effect on
any financial interest. Requires each person who holds such
an enumerated position to file periodic SEIs disclosing his or
her financial interests in accordance with the provisions of
the Conflict of Interest Code.
7)Prohibits a public official at any level of state or local
government from making, participating in the making, or in any
way attempting to use his or her official position to
influence a governmental decision in which the official knows
or has reason to know that he or she has a financial interest,
as defined.
FISCAL EFFECT : Unknown. State-mandated local program; contains
a crimes and infractions disclaimer.
COMMENTS :
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1)Purpose of the Bill : According to the author:
AB 41 adds the California High-Speed Rail Authority to
Section 87200 of the Political Reform Act which will close
a loophole that has allowed CHSRA members to receive
thousands of dollars from special interests while voting on
issues that impact those very interests. Potential
conflicts involving special interests would have to be
announced before CHSRA deliberations could begin and CHSRA
members would have to recuse themselves before a vote on
items involving conflicts.
An investigative report in the LA Times on October 31, 2010
revealed that members of the California High-Speed Rail
Authority were not required to abide by the same conflict
of interest requirements as other governmental bodies such
as the Public Utilities Commission, the Coastal Commission,
the state Energy Commission and other state and local
government panels which are required to announce the nature
of a disqualifying conflict before deliberations can begin.
Members of these government entities must leave the room
during debate and voting.
The LA Times report found that certain members of the
California High-Speed Rail Authority received more than
$10,000 - under state law, the threshold for disclosing
sources of outside income - from the special-interest
clients in recent years. However, potential conflicts
involving some of those clients have not always been
recognized or publicly disclosed during meetings by the
CHSRA board members.
AB 41 adds the California High-Speed Rail Authority to the
Political Reform Act which will increase transparency and
reduce conflicts of interest.
2)"87200 Filers" vs. "87300 Filers" : As noted above, existing
law designates certain high-ranking public officials who are
subject to the most expansive disclosure requirements under
the PRA. These officials are commonly referred to as "87200
filers" after the section of state law (Section 87200 of the
Government Code) in which the officials subject to those
requirements are designated.
However, 87200 filers are not the only public officials that are
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subject to the PRA's disclosure and conflict of interest
rules. Every public official who holds a position that is
enumerated in his or her agency's Conflict of Interest Code as
a position that involves the making or participation in the
making of decisions which may foreseeably have a material
effect on the financial interests of that official is required
to file periodic SEIs disclosing his or her financial
interests. These filers are commonly referred to as "87300
filers" after the section of state law (Section 87300 of the
Government Code) that requires governmental agencies to adopt
Conflict of Interest Codes. Additionally, existing state law
prohibits any public official, whether that official is an
87200 filer, an 87300 filer, or neither an 87200 nor an 87300
filer, from making or participating in the making of any
governmental decision in which he or she has a financial
interest.
This bill proposes to add members of the HSRA to the
statutorily-established list of 87200 filers. Currently,
members of the HSRA are enumerated in the HSRA's Conflict of
Interest Code, and thus are 87300 filers. This change would
have two primary effects on the members of the HSRA.
First, members of the HSRA board would be subject to somewhat
broader disclosure when they file their SEIs; currently board
members must disclose only those interests that fall within
one of the disclosure categories listed in the HSRA's Conflict
of Interest Code, but as 87200 filers, board members would be
required to disclose all investments, interests in real
property, and income, with certain limited exceptions.
Second, adding members of the HSRA board to the list of 87200
filers would mean that if a member of the board had a conflict
of interest in a matter before the board, that member would
have to publicly identify the financial interest and leave the
room until after the discussion of that matter had finished.
It should be noted, however, that members of the HSRA board
are already prohibited under existing law from participating
in the making of any governmental decision in which they have
a financial interest, and that this bill would not change that
prohibition.
3)Related Legislation : This bill is identical to SB 50
(Correa), which is pending in the Senate Committee on
Elections and Constitutional Amendments.
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4)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.
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REGISTERED SUPPORT / OPPOSITION :
Support
Fair Political Practices Commission
Professional Engineers in California Government
Opposition
None on file.
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094