California Legislature—2013–14 Regular Session

Assembly Bill No. 1090

Introduced by Assembly Member Fong

February 22, 2013

An act to amend Section 1097 of, and to add Sections 1097.1, 1097.2, 1097.3, and 1097.4 to, the Government Code, relating to public officers.

LEGISLATIVE COUNSEL’S DIGEST

AB 1090, as introduced, Fong. Public officers: conflicts of interest: contracts.

The Political Reform Act of 1974 establishes the Fair Political Practices Commission as the agency responsible for enforcing the act. The act authorizes the Commission to seek and impose administrative and civil penalties against persons who violate the act, as prescribed.

Existing law prohibits Members of the Legislature, state, county, district, judicial district, and city officers or employees from being financially interested in any contract made by them in their official capacity, or by any body or board of which they are members. Existing law makes a willful violation of this prohibition a crime.

This bill would also make a person who violates the prohibition against being financially interested in a contract, or who causes another person to violate or who aids and abets another person in violating the prohibition, subject to administrative and civil fines, as specified. The bill would authorize the Commission to enforce these violations by bringing an administrative or civil action against a person who is subject to the prohibition, as specified.

The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the act’s purposes upon a 2⁄3 vote of each house and compliance with specified procedural requirements.

This bill would declare that it furthers the purposes of the act.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 1097 of the Government Code is amended
to read:

1097.  

begin delete Every end delete begin insert (a) end insert begin insert   end insert begin insert An end insert officer or person prohibited by the laws
of this state from making or being interested in contracts, or from
becoming a vendor or purchaser at sales, or from purchasing begin delete script end delete
begin insert scrip end insert , or other evidences of indebtedness, including any member
of the governing board of a school district, who willfully violates
any begin delete of the provisions of such end delete begin insert provision of those end insert laws begin delete , end delete is punishable
by a fine of not more than one thousand dollars ($1,000), or by
imprisonment in the state prison, and is forever disqualified from
holding any office in this state.

begin insert

(b) An officer or person prohibited by the laws of this state from
making or being interested in contracts, or from becoming a vendor
or purchaser at sales, or from purchasing scrip, or other evidences
of indebtedness, including any member of the governing board of
a school district, who violates any provision of those laws, who
causes any other person to violate any provision of those laws, or
who aids and abets any other person in the violation of any
provision of those laws shall be liable in an administrative action
commenced by the Commission as provided in Section 1097.1 or
a civil action commenced by the Commission as provided in Section
1097.2.

end insert begin insert

(c) The Commission shall not commence an administrative or
civil action pursuant to subdivision (b) against a person if a
criminal prosecution is being pursued against that person pursuant
to subdivision (a).

end insert begin insert

(d) If two or more persons are responsible for a violation of
this section, they shall be jointly and severally liable.

end insert begin insert

(e) For purposes of this section and Sections 1097.1, 1097.2,
1097.3, and 1097.4, “Commission” means the Fair Political
Practices Commission.

end insert

SEC. 2.  

Section 1097.1 is added to the Government Code, to
read:

1097.1.  

(a) Upon the sworn complaint of a person or on its
own initiative, the Commission may investigate possible violations
of Section 1090 relating to any officer or person subject to that
section. Within 14 days after receipt of a complaint, the
Commission shall notify in writing the person who made the
complaint of the action, if any, the Commission has taken or plans
to take on the complaint, together with the reasons for such action
or nonaction. If no decision has been made within 14 days, the
person who made the complaint shall be notified of the reasons
for the delay and shall subsequently receive notification as provided
above.

(b) The Commission shall not make a finding of probable cause
to believe Section 1090 has been violated unless, at least 21 days
prior to the Commission’s consideration of the alleged violation,
the person alleged to have violated Section 1090 is notified of the
alleged violation by service of process or registered mail with
return receipt requested, provided with a summary of the evidence,
and informed of his or her right to be present in person and
represented by counsel at any proceeding of the Commission held
for the purpose of considering whether probable cause exists for
believing the person violated Section 1090. Notice to the alleged
violator shall be deemed made on the date of service, the date the
registered mail receipt is signed, or if the registered mail receipt
is not signed, the date returned by the post office. A proceeding
held for the purpose of considering probable cause shall be private
unless the alleged violator files with the Commission a written
request that the proceeding be public.

(c) If the Commission determines there is probable cause to
believe Section 1090 has been violated, it may hold a hearing to
determine if a violation has occurred. Notice shall be given and
the hearing conducted in accordance with the Administrative
Procedure Act (Chapter 5 (commencing with Section 11500) of
Part 1 of Division 3 of Title 2). The Commission shall have all the
powers granted by that chapter. If the Commission determines that
no violation has occurred, it shall issue a letter so stating. If the
Commission determines on the basis of a hearing that a violation
has occurred, it shall issue an order requiring the violator to cease
and desist violation of Section 1090, pay a monetary penalty of
up to five thousand dollars ($5,000) per violation to the
Commission for deposit in the General Fund of the state, or both.

(d) If the Commission rejects the decision of an administrative
law judge made pursuant to Section 11517, the Commission shall
state the reasons in writing for rejecting the decision.

(e) The Commission may subpoena witnesses, compel their
attendance and testimony, administer oaths and affirmations, take
evidence and require by subpoena the production of books, papers,
records, or other items material to the performance of the
Commission’s duties or exercise of its powers under this section.

(f) The Commission may refuse to excuse a person from
testifying, or from producing books, records, correspondence,
documents, or other evidence in obedience to a subpoena of the
Commission notwithstanding an objection that the testimony or
evidence required of him or her may tend to incriminate that
person. An individual shall not be prosecuted in any manner or
subjected to any penalty or forfeiture for or on account of any
transaction, act, matter, or thing concerning which he or she is
compelled, after having claimed his or her privilege against
self-incrimination, to testify or produce evidence, except that the
individual so testifying shall not be exempt from prosecution and
punishment for perjury committed in so testifying. Immunity shall
not be granted to a witness under this section unless the
Commission has notified the Attorney General of its intention to
grant immunity to the witness at least 30 days in advance or unless
the Attorney General waives this requirement.

(g) An interested person may seek judicial review of any action
of the Commission under this section.

(h) The Commission shall not commence an administrative
action pursuant to this section against a person who is subject to
Section 1090 alleging a violation of that section if the Commission
has commenced a civil action pursuant to Section 1097.2 against
that person for the same violation.

(i) An administrative action shall be brought pursuant to this
section no later than five years after the date on which the violation
occurred.

(1) For purposes of this subdivision, the commencement of the
administrative action shall be the date of the service of the probable
cause hearing notice, as required by subdivision (b), upon the
person alleged to have violated Section 1090.

(2) If the person alleged to have violated Section 1090 engages
in the fraudulent concealment of his or her acts or identity, the
five-year period shall be tolled for the period of concealment. For
purposes of this subdivision, “fraudulent concealment” means the
person knows of material facts related to his or her duties under
Section 1090 and knowingly conceals them in performing or failing
to perform those duties, for the purpose of defrauding the public
of information to which it is entitled.

(3) If, upon being ordered by a superior court to produce any
documents sought by a subpoena in any administrative action under
this section, the person alleged to have violated Section 1090 fails
to produce documents in response to the order by the date ordered
to comply therewith, the five-year period shall be tolled for the
period of the delay from the date of filing of the motion to compel
until the date the documents are produced.

SEC. 3.  

Section 1097.2 is added to the Government Code, to
read:

1097.2.  

(a) The Commission may file a civil action against a
person subject to the prohibitions identified in Section 1090. A
person held liable for a violation of Section 1090 shall be subject
to a civil fine payable to the Commission for deposit in the General
Fund of the state in an amount not to exceed three times the value
of the financial benefit received by the person, as determined by
the trier of fact.

(b) The Commission shall not commence a civil action pursuant
to this section alleging a violation of Section 1090 if the
Commission has commenced an administrative action pursuant to
Section 1097.1 against the person for the same violation.

(c) A civil action brought by the Commission pursuant to this
section shall be filed not more than four years after the date the
violation occurred.

SEC. 4.  

Section 1097.3 is added to the Government Code, to
read:

1097.3.  

(a) In addition to any other remedies available, the
Commission may obtain a judgment in superior court for the
purpose of collecting any unpaid monetary penalties, fees, or civil
penalties imposed pursuant to Section 1097.1 or 1097.2. The action
may be filed as a small claims, limited civil, or unlimited civil
case, depending on the jurisdictional amount. The venue for this
action shall be in the county where the monetary penalties, fees,
or civil penalties were imposed. In order to obtain a judgment in
an action under this section, the Commission shall show, following
the procedures and rules of evidence as applied in ordinary civil
actions, all of the following:

(1) The monetary penalties, fees, or civil penalties were imposed
following the procedures set forth in Section 1097.1 or 1097.2.

(2) The defendant or defendants in the action were notified, by
actual or constructive notice, of the imposition of the monetary
penalties, fees, or civil penalties.

(3) A demand for payment has been made by the Commission
and full payment has not been received.

(b) A civil action brought pursuant to subdivision (a) shall be
commenced within four years after the date on which the monetary
penalty, fee, or civil penalty was imposed.

SEC. 5.  

Section 1097.4 is added to the Government Code, to
read:

1097.4.  

(a) If the time for judicial review of a final
Commission order or decision issued pursuant to Section 1097.1
has lapsed, or if all means of judicial review of the order or decision
have been exhausted, the Commission may apply to the clerk of
the superior court for a judgment to collect the penalties imposed
by the order or decision, or the order as modified in accordance
with a decision on judicial review.

(1) The application, which shall include a certified copy of the
order or decision, or the order as modified in accordance with a
decision on judicial review, and proof of service of the order or
decision, constitutes a sufficient showing to warrant issuance of
the judgment to collect the penalties. The clerk of the court shall
enter the judgment immediately in conformity with the application.

(2) An application made pursuant to this section shall be made
to the clerk of the superior court in the county where the monetary
penalties, fees, or civil penalties were imposed by the Commission.

(3) A judgment entered in accordance with this section has the
same force and effect as, and is subject to all the provisions of law
relating to, a judgment in a civil action and may be enforced in the
same manner as any other judgment of the court in which it is
entered.

(4) The Commission may bring an application pursuant to this
section only within four years after the date on which the monetary
penalty, fee, or civil penalty was imposed.

(b) The remedy available under this section is in addition to
those available under Section 1097.3 or any other law.

SEC. 6.  

The Legislature finds and declares that this bill furthers
the purposes of the Political Reform Act of 1974 within the
meaning of subdivision (a) of Section 81012 of the Government
Code.