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: 8/16/12 in Senate
Vote: 27 - Urgency
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:
disqualification
SOURCE : Author
DIGEST : This bill adds members of the High-Speed Rail
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Authority (HSRA) to those specified offices who must
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.
Senate Floor Amendments of 8/16/12 amend the 4/30/12 Floor
amendment by clarifying that each individual who is
selected by the HSRA to serve in a peer review capacity
must file rather than those who serve, and double-joint the
bill to AB 2609 (Huber).
Senate Floor Amendments of 4/30/12 require each employee of
a contractor or subcontractor of the HSRA who serves in a
peer review capacity to the HSRA to be deemed a designated
employee of the HSRA and the HSRA will be deemed the
appointing power. The amendments also require these
individuals to file their statements of economic interest
with the HSRA.
Senate Floor Amendments of 3/29/12 delete the ex parte
communications language from the bill.
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,
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and income (including gifts).
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.
The April 30, 2012 amendments require each employee of a
contractor or subcontractor of the HSRA who serves in a
peer review capacity to the HSRA to be deemed a designated
employee of the HSRA which requires them to file statements
of economic interest with the HSRA.
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.
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.
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,
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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."
Related Legislation
AB 952 (Jones), which was vetoed last year, would have
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 8/20/12)
California High Speed Rail Authority
Fair Political Practices Commission
Professional Engineers in California Government
OPPOSITION : (Verified 8/20/12)
American Council of Engineering Companies, California
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ARGUMENTS IN SUPPORT : The League of California Cities
writes, "Public trust and confidence in government is
essential to the vitality of a democratic system and is the
reason ethics laws hold officials to high standards. The
High Speed Rail Authority (HSRA) oversees a significant and
costly program that has the potential of changing the
future of California. Such a significant project does not
come without controversy. Decisions made by the HSRA are
exactly the type of decisions that should be covered by
California laws that promote and ensure transparency."
ARGUMENTS IN OPPOSITION : The American Council of
Engineering Companies believe this bill attempts to convert
private firm employees to public employees because it
requires each employee of the engineering firm to be a
designated employee of the public and file disclosure
forms.
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,
Feuer, Galgiani, Garrick, Gorell, Grove, Harkey, Jones,
Knight, Logue, Mansoor, Mendoza, Morrell, Olsen, Wagner,
Williams, Vacancy
DLW:m 8/21/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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