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