BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 41|
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THIRD READING
Bill No: AB 41
Author: Hill (D)
Amended: 2/15/12 in Senate
Vote: 27
SENATE ELECTIONS & CONST. AMEND. COMM. : 5-0, 6/21/11
AYES: Correa, La Malfa, De León, Gaines, Lieu
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 37-0, 9/7/11
AYES: Alquist, Anderson, Berryhill, Blakeslee, Calderon,
Cannella, Corbett, Correa, De León, DeSaulnier, Dutton,
Emmerson, Evans, Fuller, Gaines, Hancock, Harman,
Hernandez, Huff, Kehoe, La Malfa, Lieu, Liu, Lowenthal,
Negrete McLeod, Padilla, Pavley, Price, Rubio, Runner,
Simitian, Steinberg, Strickland, Vargas, Wolk, Wyland,
Yee
NO VOTE RECORDED: Leno, Walters, Wright
ASSEMBLY FLOOR : 60-0, 4/14/11 (Consent) - See last page
for vote
SUBJECT : High-Speed Rail Authority: conflicts of
interest
SOURCE : Author
DIGEST : This bill (1) adds members of the High-Speed
Rail Authority (HSRA) to those specified offices who must
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publicly identify a financial interest giving rise to a
conflict of interest or potential conflict of interest, and
recuse themselves accordingly, under the Political Reform
Act, (2) prohibits a member of the HSRA board and any
interested person, as defined, conducting an ex parte
communication, unless the board member discloses and makes
public the communication, and (3) requires the agency
overseeing the HSRA to enforce these provisions under
certain conditions.
Senate Floor Amendments of 2/15/12 (1) exempt from the
definition of "ex parte communication" any communication
between a member of the HSRA and an interested person
regarding a matter restricted to an existing contract
between the HSRA and the interested person, and (2) narrow
the definition of "interested person" for these purposes to
only a bidder, potential bidder, vendor, or contractor
(i.e., groups who do not have direct financial interests
such as labor groups, business groups, and community groups
would not have to be reported).
ANALYSIS : Existing law establishes the HSRA and charges
it with planning, designing, constructing, operating, and
maintaining a high-speed train system for California. 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. Members of the HSRA are
subject to applicable provisions of the Political Reform
Act (PRA).
Existing law lists certain high-ranking public officials
(known as 87200 filers) who are subject to specified
disclosure requirements under the PRA. These 87200 filers
include elected state officers, judges, members of the
Public Utilities Commission, members of the Fair Political
Practices Commission (FPPC), members of the California
Coastal Commission, members of county boards of
supervisors, district attorneys, mayors, and members of
city councils, among others. Existing law requires 87200
filers to file periodic statements of economic interest
(SEIs) disclosing investments, interests in real property,
and income (including gifts).
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Existing law, pursuant to the Bagley-Keene Open Meeting
Act, requires all state boards and commissions to publicly
notice their meetings, prepare agendas, accept public
testimony and conduct their meetings in public unless
specifically authorized to meet in closed session.
Individual contacts or conversations (ex parte
communications) between a member of a state body and any
other person are permissible unless otherwise prohibited or
regulated.
This bill adds members of the HSRA to the list of 87200
filers thereby requiring them to publicly identify the
financial interest that gives rise to a potential conflict
of interest, to recuse himself/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. It also expands the amount of information
that a member of the HSRA must disclose on an 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 PRA.
This bill prohibits members of the HSRA board and any
interested person, as defined, from conducting an ex parte
communication, as defined, unless the board member
discloses and makes public the communication by providing a
full report of the communication to the executive director
within seven days after the communication or, if the
communication occurs within seven days of the next HSRA
meeting, to the HSRA on the record of the proceeding at
that meeting.
Requires the HSRA to adopt standard disclosure forms for
reporting ex parte communications which shall include, but
not be limited to, all of the following information:
1. The date, time, and location of the communication.
2. The identity of the person or persons initiating and the
person or persons receiving the communication.
3. A complete description of the content of the
communication, including the complete text of any
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written material that was a part of the communication.
4. The executive director shall place in the public record
any report of an ex parte communication.
Communications will cease to be ex parte communications
when fully disclosed and placed in the authority's official
record.
This bill defines "ex parte communication" as any oral or
written communication between a member of the HSRA and an
interested person about a matter within the HSRA's
jurisdiction that does not occur in a public hearing,
workshop, or other official proceeding, or on the official
record of the proceeding on the matter.
The following communications are not ex parte
communications under this bill:
Any communication between a staff member acting in
his/her official capacity and any HSRA member or
interested person.
Any communication limited entirely to procedural issues,
including, but not limited to, a meeting schedule,
location, or format of a presentation.
Any communication that takes place on the record during
an official proceeding of a state, regional, or local
agency that involves a member of the HSRA who also serves
as an official of that agency.
Any communication between a member of the HSRA, with
regard to any action of another state agency or of a
regional or local agency of which the member is an
official, and any other official or employee of that
agency.
Any communication between a member of the HSRA and an
interested person regarding a matter restricted to a
current contract between the HSRA and the interested
person.
This bill defines "interested person" as a firm or person
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with a financial interest in a matter before the HSRA,
including, but not limited to:
A bidder, potential bidder, or contractor.
An agent or employee of a bidder, potential bidder,
vendor, or contractor.
A person receiving consideration for representing a
bidder, potential bidder, or contractor.
This bill also provides that no HSRA member or alternate
shall make, participate in making, or in any other way
attempt to use his/her official position to influence an
authority decision about which the member or alternate has
knowingly had an ex parte communication that has not been
publicly reported.
This bill requires the agency overseeing the HSRA to
enforce provisions of the bill. (NOTE: SB 517 (Lowenthal)
will place the HSRA in the Business, Transportation, and
Housing Agency.)
Comments
According to the author's office, this bill adds the HSRA
to Section 87200 of the PRA, which will close a loophole
that has allowed HSRA Board members to receive thousands of
dollars from special interests while voting on issues that
impact those very interests. This bill also outlines
commonsense rules for ex parte communications between
Authority board members and representatives of entities
with business before the board.
An investigative report in the Los Angeles Times on October
31, 2010, revealed that HSRA board members 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.
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The Los Angeles Times report found that certain HSRA board
members 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 HSRA board members.
This bill reduces potential conflicts by adding them to the
list of Section 87200 filers. This move requires board
members to announce when they have a financial interest in
a proceeding and require them to leave the room during
Authority deliberations and recuse themselves before a vote
on items in which they have a conflict of interest. Even
the Authority praised this provision in its support letter,
stating that "avoiding any conflict of interest is an
important step toward ensuring the full confidence of the
voters as this historic project moves forward."
Additionally, given that the board will be making strategic
decisions and handing out contracts, this bill introduces
rules for ex parte communication. In response to the April
2010 Bureau of State Audits report, the Authority adopted
policies with regard to how board members interact with
contractors and staff, but still the Authority has no
written policy for how board members should interact with
the representatives of entities which may have business
before the board.
Ex parte communications are those which occur between a
decision-maker and an interested party regarding a decision
that will be made in a public proceeding. Rules governing
such proceedings exist in law for the institutions such as
the Public Utilities Commission, the Coastal Commission,
and the Integrated Waste Management Board, and other
entities have adopted their own rules.
This bill proposes commonsense rules for ex parte
communication - not banning it, but ensuring that any ex
parte communication is noted and submitted to public
record. This reform, along with the addition of HSRA to
PRA Section 87200, will reduce conflicts of interest,
increase transparency, and help restore confidence in the
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process by which the Authority conducts its challenging
task.
Related Legislation
AB 952 (Jones), which was vetoed last year, prohibited HSRA
members, employees, consultants, and their immediate
families from accepting gifts from entities with or seeking
business before the HSRA and prohibited HSRA members,
employees, and consultants from representing entities with
business before the HSRA for three years after they leave
the HSRA.
SB 517 (Lowenthal), which is pending in the Assembly
Appropriations Committee, places the HSRA under the
Business, Transportation and Housing Agency, restructures
the governing board, and enacts specified conflict of
interest provisions.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 2/16/12)
California High Speed Rail Authority (as introduced)
Fair Political Practices Commission (as introduced)
Professional Engineers in California Government (as
introduced)
ASSEMBLY FLOOR : 60-0, 4/14/11 (Consent)
AYES: Achadjian, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Campos, Carter, Cedillo, Chesbro,
Cook, Davis, Dickinson, Donnelly, Eng, Fletcher, Fong,
Fuentes, Furutani, Gatto, Gordon, Hagman, Halderman,
Hall, Hayashi, Roger Hernández, Hill, Huber, Hueso,
Huffman, Jeffries, Lara, Bonnie Lowenthal, Ma, Miller,
Mitchell, Monning, Nestande, Nielsen, Norby, Pan, Perea,
V. Manuel Pérez, Portantino, Silva, Skinner, Smyth,
Solorio, Swanson, Torres, Valadao, Wieckowski, Yamada,
John A. Pérez
NO VOTE RECORDED: Alejo, Butler, Charles Calderon, Conway,
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Feuer, Galgiani, Garrick, Gorell, Grove, Harkey, Jones,
Knight, Logue, Mansoor, Mendoza, Morrell, Olsen, Wagner,
Williams, Vacancy
DLW:mw 2/16/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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