BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



           ------------------------------------------------------------ 
          |SENATE RULES COMMITTEE            |                   AB 706|
          |Office of Senate Floor Analyses   |                         |
          |1020 N Street, Suite 524          |                         |
          |(916) 651-1520         Fax: (916) |                         |
          |327-4478                          |                         |
           ------------------------------------------------------------ 
           
                                         
                                 THIRD READING


          Bill No:  AB 706
          Author:   Torres (D), et al.
          Amended:  9/1/11 in Senate
          Vote:     27 - Urgency

           
           SENATE TRANSPORTATION & HOUSING COMM.  :  8-0, 8/30/11
          AYES:  DeSaulnier, Gaines, Huff, Kehoe, Lowenthal, Pavley, 
            Rubio, Simitian
          NO VOTE RECORDED:  Harman

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           ASSEMBLY FLOOR  :  Not Relevant


           SUBJECT  :    Metro Gold Line Foothill Extension

           SOURCE  :     Metro Gold Line Foothill Extension Construction 
          Authority


           DIGEST  :    This bill exempts the Metro Gold Line Foothill 
          Construction Authority board members from the incompatible 
          office statute.

           ANALYSIS  :    Legislation in 1998 created the Pasadena Metro 
          Blue Line Construction Authority (Construction Authority) 
          to oversee the planning, design, and construction of a 
          light rail line, referred to as the Gold Line (previously 
          the Blue Line), between downtown Los Angeles and Pasadena.  
          At that time, the Los Angeles County Metropolitan 
          Transportation Authority (METRO) was encountering 
                                                           CONTINUED





                                                                AB 706
                                                                Page 
          2

          substantial financial difficulties with the construction of 
          its first subway segment, the Red Line, and was in the 
          early stages of planning and engineering for the Blue Line. 
           The purpose of the Construction Authority was to isolate 
          METRO's Red Line project from the Blue Line project and 
          ensure that the Red Line will not be delayed as METRO 
          addressed its own financial problems.

          The Construction Authority is currently constructing an 
          eleven-mile extension of the Gold Line east from Pasadena 
          to Azusa that will open for service in 2015.  The 
          Construction Authority will eventually extend the Gold Line 
          from Azusa to Montclair via Claremont. 

           Existing law  :

          1. Creates the Pasadena METRO Blue Line Construction 
             Authority governed by a six member board of whom five 
             are voting members and one is non-voting member 
             appointed as follows:

             A.    Three members, one each appointed by the city 
                councils of the cities of Los Angeles, Pasadena, 
                and South Pasadena.

             B.    One member appointed by the San Gabriel Valley 
                Council of Governments.

             C.    One member appointed by the Los Angeles County 
                Metropolitan Transportation Authority.

             D.    One non-voting member appointed by the Governor.

          2. Authorizes the Construction Authority to do all things 
             necessary to plan and construct a rail transit system to 
             Claremont, including acquiring property through purchase 
             or eminent domain and entering into joint agreements 
             with local agencies and private firms for projects 
             "adjacent to, or physically or functionally related to, 
             the project."

          3. Requires the Construction Authority to adopt a code of 
             conduct for board members and employees that governs the 
             receipt of gifts, disclosure of political contributions, 

                                                           CONTINUED





                                                                AB 706
                                                                Page 
          3

             and the conditions for board members to recuse 
             themselves from participating in policy decision-making. 


          4. Prohibits a public officer, including, but not limited 
             to, an appointed or elected member of a governmental 
             board, commission, committee, or other body, from 
             simultaneously holding two public offices that are 
             incompatible. 

          5. Specifies that offices are incompatible when any of the 
             following circumstances are present: 

             A.    Either of the offices may audit, overrule, 
                remove members of, dismiss employees of, or 
                exercise supervisory powers over the other office 
                or body. 

             B.    Based on the powers and jurisdiction of the 
                offices, there is a possibility of a significant 
                clash of duties or loyalties between the offices. 

             C.    Public policy considerations make it improper 
                for one person to hold both offices. 

          6. States that if compelled or expressly authorized by law, 
             a public officer may simultaneously hold two public 
             offices that are incompatible. 

          7. Specifies that when two public offices are incompatible, 
             a public officer will be deemed to have forfeited the 
             first office upon acceding to the second. 

          8. Exempts incompatible office doctrine from applying to a 
             position of employment, including a civil service 
             position.

          This bill: 

          1. Changes the name of the Pasadena Metro Blue Line 
             Construction Authority to Metro Gold Line Foothill 
             Extension Construction Authority.

          2. Authorizes the cities of South Pasadena and Pasadena to 

                                                           CONTINUED





                                                                AB 706
                                                                Page 
          4

             each appoint one nonvoting member.

          3. Requires each appointing authority to appoint an 
             alternative member to serve in the absence of the 
             primary appointee. 

          4. Names the cities of Arcadia, Monrovia, Duarte, 
             Irwindale, Azuza, Glendora, San Dimas, La Verne, Pomona, 
             and Claremont as "extension cities."

          5. Provides Construction Authority board members and 
             alternative members are not considered financially 
             interested, pursuant to existing law, by virtue of their 
             holding office with the Construction Authority and 
             simultaneously holding office with an appointing member 
             of the Construction Authority, or holding a similar 
             position with an extension city.  Provides any member 
             who holds such a position is permitted to participate in 
             decisions and agreements regarding the development of 
             the Gold Line Extension without such participation 
             constituting a financial conflict of interest, and are 
             exempt from existing law governing incompatible 
             employment activity.

          6. Provides the provisions of this bill are declaratory of 
             existing law as they pertain to conflicts of interest, 
             incompatible offices, or incompatible activities, and 
             the ability of board members, alternate members, 
             officers, and employees to participate in decisions and 
             agreements regarding the Pasadena Metro Blue Line 
             Construction Authority, any of the appointing entities, 
             and any of the cities adjoining the project 
             right-of-way.

           Comments
           
          A private party is unhappy with the Construction Authority 
          over its acquisition of property.  The aggrieved party has 
          filed a quo warrant request with the Attorney General, 
          seeking authorization from her to sue an office holder to 
          determine if that individual is simultaneously holding two 
          offices that are incompatible and should be removed from 
          office.  Statute requires a request to the Attorney General 
          to sue on these grounds to prevent frivolous suits from 

                                                           CONTINUED





                                                                AB 706
                                                                Page 
          5

          being filed.  Should the private party obtain permission to 
          sue, the action is brought in the name of the 'People of 
          the State of California'.  It is not a private action.  
          Moreover, the Attorney General remains in control of the 
          action and may dismiss it over the objection of the private 
          party.

          The Attorney General in an opinion issued last year on the 
          subject of incompatible offices wrote:

              Unless "expressly authorized by law," public 
              offices are incompatible where there is a 
              possibility of significant clash of duties or 
              loyalties between the offices," or when "public 
              policy considerations make it improper for one 
              person to hold both offices."  In the event that 
              one person holds two incompatible offices, the 
              person is deemed to have forfeited the first office 
              upon acceding to the second.

          The Attorney General also wrote in this opinion that 
          holding two offices does not necessarily constitute an 
          incompatibility. 

          The incompatible office statute is a common law rule that 
          SB 274 (Romero), Statutes of 2005, codified. 

           Why is this bill needed  ?  The Construction Authority is an 
          interagency public authority comprised of thirteen cities 
          located in the corridor.  The cities are Los Angeles, South 
          Pasadena, Pasadena, Arcata, Monorvia, Durate, Irwinndale, 
          Azusa, Glendora, San Dimas, La Verne, Pomona, and 
          Claremont.  The governing board is made up of 
          representatives from the cities that are essentially 
          responsible for ensuring the overall integrity of the 
          project and that it is developed with the best interest of 
          the communities in mind.  Metro Gold Line Foothill 
          Extension Construction Authority, the sponsor believe that 
          these activities are not incompatible with the offices held 
          simultaneously by the board members and do not constitute a 
          conflict of interest for the board members of the local 
          corridor agencies. 

          To this end, this bill exempts city elected officials and 

                                                           CONTINUED





                                                                AB 706
                                                                Page 
          6

          the governing board members of the Construction Authority 
          from the incompatible office provisions. 

          A related concern is the statutory provisions governing 
          conflicts of interest associated with contracts between the 
          Construction Authority and member agencies approved by 
          elected officials who may sit on the Authority and a city 
          council as well as the involvement of city management in 
          decisions related to the extension of the Gold Line.  The 
          Construction Authority is concerned that board members 
          voting on contracts that may benefit the cities they 
          represent may be a conflict of interest.  Existing law 
          prohibits local elected officials from having a financial 
          interest in any contracts they may vote on.  Similarly, 
          existing law establishes conditions limiting the activities 
          of public employees related the outside activities of 
          employee that may be incompatible, inconsistent, or in 
          conflict with their duties as local agency employees.  This 
          bill exempts members of the governing board from provisions 
          of law that precludes voting on contracts that they have a 
          financial interest in when voting on contracts of the 
          Construction Authority within the corridor.  

          According to the bill's sponsor, there are several 
          agreements, memoranda of understanding, and other similar 
          documents regarding the construction of the rail in each 
          city that are negotiated between the staff of the 
          Construction Authority and the management of the cities and 
          then approved by the Construction Authority governing board 
          and the city councils.  The sponsor of this bill wants to 
          ensure that these activities will not be misconstrued as 
          being inconsistent with existing law. 

          It is important to recognize that through joint exercise of 
          powers agreements, memoranda of understanding, and other 
          collaborative processes, California local governments 
          interact with each other to pursue shared goals on a 
          variety of programs and projects.  In regard to light rail 
          transit, it should also be noted that the agency that 
          planned and built California's first light rail transit 
          project, the San Diego Metropolitan Transit Board, had a 
          governing board whose membership was made up of mayors or 
          council members from cities though which the service 
          operates.  This was never viewed as a conflict or 

                                                           CONTINUED





                                                                AB 706
                                                                Page 
          7

          inappropriate.  The fact that the Construction Authority 
          believes its must seek an exemption to the codes that 
          govern conflicts is the exception rather than the rule in 
          California.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  Yes

           SUPPORT  :   (Verified  9/1/1)

          Metro Gold Line Foothill Extension Construction Authority 
          (source)
          Cities of Arcadia, Azuza, Duarte, Glendora, Irwindale, La 
            Verne,
             Los Angeles, Monrovia, Montclair, Ontario, Pasadena, San 
               Dimas, 
             South Pasadena
          Los Angeles County Metropolitan Transportation Authority


          JJA:do  9/1/11   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

                                ****  END  ****




















                                                           CONTINUED