BILL ANALYSIS Ó
AB 785
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Date of Hearing: January 9, 2012
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
AB 785 (Mendoza) - As Amended: January 4, 2012
SUBJECT : Political Reform Act of 1974: public officers:
financial interest.
SUMMARY : Provides that a public official has a financial
interest in a governmental contracting decision if an immediate
family member of the public official, as defined, lobbies the
agency of the official on that decision or is a high ranking
official in a business entity on which it is reasonably
foreseeable that the decision will have a material financial
effect. Specifically, this bill :
1)Provides that a public official who is an elected or appointed
member of a state or local government agency has a financial
interest in a decision, for the purposes of the Political
Reform Act (PRA), if the decision involves a vote by the
public official relating to the approval, modification, or
cancellation of a contract and if an immediate family member
of the public official is either of the following:
a) A person acting as an agent for, or otherwise
representing, any other person by making a formal or
informal appearance before, or by making an oral or written
communication to, the state or local government agency, or
an officer or employee thereof, for the purpose of
influencing the contracting decision; or,
b) A person who is a director, officer, or partner of a
business entity on which it is reasonably foreseeable that
the contracting decision will have a material financial
impact.
2)Defines "immediate family member," for the purposes of this
bill, to mean a spouse or domestic partner, child, parent,
sibling, or the spouse or domestic partner of a child, parent,
or sibling.
EXISTING LAW :
1)Creates the Fair Political Practices Commission (FPPC), and
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makes it responsible for the impartial, effective
administration and implementation of the PRA.
2)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 he or she knows or
has reason to know that he or she has a financial interest.
Provides that a public official can be deemed to have a
financial interest in a decision on the basis of the
decision's financial effect on the official's spouse or
dependent child.
FISCAL EFFECT : Unknown. State-mandated local program; contains
a crimes and infractions disclaimer.
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COMMENTS :
1)Purpose of the Bill : According to the author:
AB 785 states that any elected member of any state or local
body, board, or commission shall be deemed to have a
financial interest in a contract if the elected member's
spouse, domestic partner, child, parent, or sibling, or the
spouse of the child, parent or sibling, has a financial
interest in that contract. On the occasion of financial
interest as defined by this bill, the elected official
would recuse him or herself from voting on the contract.
2)Additional Background : In background information provided to
the committee in support of this bill, the author's office
references several recent news reports of immediate family
members of prominent government officials who work as
lobbyists, and who lobby on behalf of clients that potentially
stand to benefit from governmental decisions made by those
officials. The author argues that such arrangements create an
ethical gray area for elected officials, and that it is
appropriate to clarify state laws governing the interaction
between elected officials and their immediate family members
when those immediate family members stand to benefit from a
contract under review in the official's elected capacity.
3)Breaking New Ground : California's existing conflict of
interest laws are designed to prevent public officials from
using their governmental positions to enrich themselves
financially. As a result, those laws regulate situations
where a public official's actions may have a direct financial
impact on the public official. Because actions that affect
the financial interests of a public official's spouse or
dependent child may have a corresponding impact on the
official, existing conflict of interest laws recognize that
the financial interests of an official's spouse or dependent
child can create a conflict of interest for the official.
This bill, however, would break new ground by extending the
conflict of interest provisions of the PRA to situations where
a governmental decision does not have the potential for having
a financial impact on an elected official. Under the
provisions of this bill, for instance, a public official could
be deemed to be financially interested in a governmental
contracting decision if the estranged sibling of that public
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official was an officer in a company that was materially
impacted by the decision.
By extending the state's conflict of interest rules to decisions
which cannot reasonably be expected to financially impact the
public officials making those decisions, this bill would
significantly broaden the situations in which elected
officials would have to recuse themselves from participating
in governmental decisions. The committee may wish to consider
whether this broadening of the state's conflict of interest
laws is appropriate.
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,
generally must further the purposes of the initiative and
require a two-thirds vote of both houses of the Legislature.
5)Double-Referral : This bill has been double-referred to the
Assembly Committee on Local Government. Due to impending
committee deadlines, if this bill is approved in this
committee today, it is scheduled to be heard in the Assembly
Committee on Local Government on Wednesday. However, this
bill cannot be amended in committee today and still be heard
in the Assembly Committee on Local Government before this
week's deadline for policy committees to hear and report
fiscal bills to the Appropriations Committee. As a result, if
this committee reports this bill out with amendments at
today's hearing, the bill would need a Joint Rule waiver to be
heard in subsequent committees this year.
REGISTERED SUPPORT / OPPOSITION :
Support
California Teachers Association (prior version)
Opposition
League of California Cities
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094
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