BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 409|
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THIRD READING
Bill No: AB 409
Author: Quirk-Silva (D), et al.
Amended: 8/29/13 in Senate
Vote: 27 - Urgency
SENATE ELECTIONS & CONST. AMEND. COMMITTEE : 5-0, 8/20/13
AYES: Torres, Anderson, Hancock, Padilla, Yee
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 66-7, 5/28/13 - See last page for vote
SUBJECT : Statements of Economic Interest: statement of
economic interests: online filing
SOURCE : Fair Political Practices Commission
DIGEST : This bill permits the Fair Political Practices
Commission (FPPC) to develop and operate its own online system
for filing Statements of Economic Interests (SEIs) which must
enable a filer to comply with all relevant requirements, as
specified.
Senate Floor Amendments of 8/29/13 clarify the duties of the
FPPC regarding filing of SEI from filers with specified
agencies.
ANALYSIS :
Existing law:
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1. Requires that candidates for, and current holders of,
specified elected or appointed state and local offices and
designated employees of state and local agencies file SEIs
disclosing their financial interests, including investments,
real property interests, and income.
2. Authorizes an agency to permit the electronic filing of a
SEI, including amendments, in accordance with regulations
adopted by the FPPC.
3. Permits the FPPC to adopt regulations to require an agency
to redact information on a SEI prior to posting it on the
Internet.
This bill:
1. Permits FPPC to develop and operate its own online system for
filing SEIs which must enable a filer to comply with all
relevant requirements and must include, but not be limited
to, both of the following: (1) means or method whereby a
filer may electronically file, free of charge, a SEI
submitted under penalty of perjury in conformity with
existing law; and (2) security safeguards that include
firewalls, data encryption, secure authentication, and all
necessary hardware and software and industry best practices
to ensure that the security and integrity of the data and
information contained in each SEI are not jeopardized or
compromised.
2. Provides that such a system must issue to a person who
electronically files his/her SEI, or an amendment thereto, an
electronic confirmation that notifies the filer that his/her
SEI or amendment was received. The confirmation must include
the date and the time that the SEI or amendment was received
and the method by which the filer may view and print the data
received. A paper copy retained by the filer of a SEI or
amendment that was electronically filed and the confirmation
issued shall create a rebuttable presumption that the filer
filed his/her SEI or amendment on time.
3. Provides that if the FPPC develops an online SEI filing
system it must provide for all of the following:
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A. Conduct public hearings to receive input on the
implementation of that system, maintain ongoing
coordination among affected state and local agencies as
necessary, and develop training and assistance programs
for state and local filing officers and filers regarding
use of the online system for filing.
B. Make all the data filed on the system available on the
FPPC's Internet Web site in an easily understood format
that provides the greatest public access, and provide
assistance to those seeking public access to the
information.
C. Redact private information, including, but not limited
to, the signatures of filers, from the data that is made
available on the Internet.
D. Develop and implement a policy regarding redaction of
private information for the purposes of this paragraph and
conduct one or more public hearings to receive input on
the development of that policy.
E. Specify which categories filers may file SEIs
electronically through the online system.
4. Specifies the duties of the FPPC when assuming the role of
filing officer when other specified agencies participate in
the online system.
Background
SEIs . As part of the Political Reform Act's comprehensive
scheme to prevent conflicts of interest by state and local
public officials, existing law identifies certain elected and
other high-level state and local officials who must file SEIs.
Similarly, candidates for those positions must also file SEIs.
Other state and local public officials and employees are
required to file SEIs if the position they hold is designated in
an agency's conflict of interest code. A position is designated
in an agency's conflict of interest code when the position
entails the making or participation in the making of
governmental decisions that may foreseeably have a material
financial effect on the decision maker's financial interests.
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The information that must be disclosed on an SEI, and the
location at which an SEI is filed, varies depending on the
position held by the individual who is required to file an SEI.
Although there are some exceptions, individuals who are required
to file an SEI typically must file that document with the agency
of which they are an elected official or by which they are
employed. In some cases, original SEIs or copies thereof are
filed with the FPPC.
The purpose of the SEI is two-fold:
It provides necessary information to the public about a
public official's personal financial interests so there is
assurance that officials are making decisions that do not
enhance their personal finances; and,
It serves as a reminder to the public official of potential
conflicts of interests so the official can recuse him/herself
from making or participating in governmental decisions that
are deemed conflicts. In short, the Form 700 provides
transparency and ensures accountability.
FPPC role . The FPPC is the agency charged with administration
and enforcement of the SEI reporting requirements for all state
and local agencies and filers. Currently, filers at various
levels of state and local government submit an estimated 500,000
forms annually, which are funneled through an array of local
agencies and certified private filers. No central repository of
SEI filings currently exists, and with just a fraction of the
forms filed electronically, a searchable tool to illuminate
activities on a statewide level is nearly impossible.
The FPPC is required to accept electronic copies of SEIs
forwarded by agencies that are operating FPPC approved
electronic filing systems. Because the FPPC has no system in
place to receive the statements, the electronically filed SEIs
have to be manually processed under their current paper filing
system.
Additionally, SEIs are posted on the FPPC's Web site for all
legislators, judges, FPPC Commissioners, county boards of
supervisors, mayors and city councilmembers. Prior to posting
on the FPPC Web site, the forms have to be manually scanned, and
certain information (such as addresses and signatures) has to be
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manually redacted from the forms. According to the FPPC, this
is a very labor intensive and costly program.
With interest in government transparency increasing rapidly, the
number of requests by the public to view SEI filings continues
to escalate each year. The FPPC is mandated to provide access
to SEIs no later than the second business day after receiving
the forms. When the FPPC receives a request for SEIs, staff
must manually retrieve the forms from their file room, make
copies and either provide hard copies or email the copies to the
requestor.
Prior legislation . AB 2062 (Davis, Chapter 500, Statutes of
2012) established the process whereby local agencies may
establish systems for the electronic filing of SEIs.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/30/13)
Fair Political Practices Commission (source)
ARGUMENTS IN SUPPORT : According to the author's office,
currently state law requires all state legislators, judges, FPPC
Commissioners, county boards of supervisors, mayors, and city
councilmembers to file a SEI which is filed with the FPPC by
filling out Form 700. The intent for this filing is to create
transparency of economic interest that public officials and
other filers may have to ensure decision making is not made to
enhance their own personal finances.
On May 30th, 2013, the FPPC released a Request for Information
(RFI) in regards to Form 700s electronic filing. The document
gives explicit details to the needs for the FPPC to advance with
current technology and how it would create effective and
sufficient transparency to the general public. According to the
document, the FPPC manually processes all Form 700s. That
requires approximately eight steps depending on the form that
the documents are received. In today's society many of these
steps are outdated and very time consuming.
In recent years the FPPC has moved towards an online approach of
the availability of Form 700s. One proactive approach that they
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have taken is scanning Form 700s and placing the forms on the
Internet for the public to access. In 2011, the FPPC changed
its policy for California judges to have the ability to file
electronically which now provides Form 700 information in a
digitized electronic user friendly form for this demographic of
filers. Another approach that they have taken is through the
pilot program which allows election filings for state
legislators to be done electronically which allow filings to be
submitted and certified. Such proactive steps to move to
electronic filing aligns with a goal of the FPPC to lessen the
amount of paper that is used for filings. Lastly, the FPPC has
stated on several occasions that electronic filing would
increase the amount of transparency available to the public as
it is the duty of the FPPC to provide transparency to the
general public.
It is suggested in the RFI report that moving from paper filing
to electronic filing will be cost saving to the FPPC and other
local agencies that file and store Form 700s. It is stated that
agencies will save on personnel cost due to an expected decrease
in Form 700 requests, manual processing, and paper cost. Other
potential cost savings may occur through tracking fines and
e-commerce.
The FPPC receives approximately 500,000 statements that are
filed throughout the year during filing periods that are
manually processed by staff. According to the recent FPPC RFI
there are multiple processing steps that are timely which result
in extra personnel cost. Moreover, extra steps in manual
processing are at times escalated due to filing deadlines that
are required by law.
Additionally, it is the obligation of the FPPC to provide all
requested reports within two business days of its requested date
by law which has a timely process as well due to filing and
storage of documents. Recently the amount of Form 700s has
increased over the years with 2012 having over 5,500 requests.
It has been found to be common that requesters will ask for
several copies of forms at a time including copies of several
years back. In 2013, request from state and local filing
officials increased as well from agencies that had forgotten to
retain Form 700s for the public to view which is existing law.
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ASSEMBLY FLOOR : 66-7, 5/28/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Chesbro, Conway, Cooley,
Daly, Dickinson, Eggman, Fong, Fox, Frazier, Beth Gaines,
Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray, Hall, Harkey,
Jones, Jones-Sawyer, Levine, Linder, Lowenthal, Maienschein,
Mansoor, Medina, Mitchell, Mullin, Muratsuchi, Nazarian,
Nestande, Olsen, Pan, Perea, V. Manuel Pérez, Quirk,
Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting, Wagner,
Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, John A.
Pérez
NOES: Bigelow, Chávez, Donnelly, Grove, Hagman, Logue, Morrell
NO VOTE RECORDED: Dahle, Gorell, Roger Hernández, Holden,
Melendez, Patterson, Vacancy
RM:k 8/30/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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