BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 1235 (Gordon) - Local agencies: financial management
training.
Amended: July 1, 2013 Policy Vote: G&F 4-2
Urgency: No Mandate: Yes
Hearing Date: August 12, 2013
Consultant: Mark McKenzie
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 1235 would require specified local agency
officials to receive training in financial management by January
1, 2015, and at least once per term of office thereafter. The
bill would require the State Treasurer (STO) and the State
Controller (SCO) to review the training curricula for
sufficiency and accuracy, and would require a local agency to
maintain records that demonstrate satisfaction of the training
requirement for its officials.
Fiscal Impact:
Unknown reimbursable state-mandated costs, potentially
exceeding $50,000, related to certain administrative
requirements specified in the bill (General Fund). The
mandate is not expected to apply to the provision of
financial management training, but certain other eligible
expenses incurred by local entities would be subject to
state-reimbursement. Reimbursement would be available for
44 general law counties and 610 special districts that are
subject to the tax and spend provisions of the California
Constitution and are required by state law to provide
compensation. See staff comments below.
Minor costs to the STO and SCO to review financial
management training curricula developed by local agencies
(General Fund). Since courses are currently available, it
is unlikely that many local agencies would develop their own
curricula.
Background: Existing law, AB 1234 (Salinas), Chap 700/2005,
requires specified local officials to receive two hours of
ethics training every two years, if a local agency provides any
AB 1235 (Gordon)
Page 1
type of compensation or reimbursement to members of its
legislative body, as specified. If a local agency develops its
own ethics training curricula, it must be reviewed for
sufficiency and accuracy by the Fair Political Practices
Commission and the Attorney General. Existing law specified
that a local agency that requires its officials to complete
ethics training shall maintain records for five years that
indicates the dates of course completion and the entity
providing the training for each official.
Proposed Law: AB 1235 would require all local officials to
receive training in financial management by January 1, 2015 and
at least once per term of office thereafter, if a local agency
provides any type of compensation or reimbursement to a member
of its legislative body, as specified. The bill prescribes the
minimum contents of the training, authorizes training by a local
agency or an association of local agencies, and requires the STO
and SCO to review training curricula developed by a local agency
for sufficiency and accuracy of content. The bill would specify
that a local agency that requires its officials to complete
training must maintain records for at least five years that
indicate the dates of completion and the entity providing the
training for each official.
Staff Comments: This bill is structured very similarly to the
requirements in existing law for the provision of ethics
training by local agencies. The Commission on State Mandates
(COSM) adopted a statement of decision on May 25, 2012 related
to the requirements of AB 1234 (Salinas), finding that the
statute imposes a partially reimbursable state-mandated program
on general law counties and those special districts subject to
the tax and spend provisions of articles XIIIA and XIIIB of the
California Constitution, that are required by their enabling
statutes to provide compensation or reimbursement of expenses to
perform the reimbursable activities to its members. Notably,
the COSM found that the ethics training itself was not a
reimbursable activity. The parameters and guidelines only
authorized reimbursement to eligible claimants for the
following:
Adopting a written policy in a public meeting specifying
that specify the types of occurrences that qualify a member
of a legislative body for reimbursement of expenses.
Providing expense report forms to members of the
legislative body.
AB 1235 (Gordon)
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Providing information on training courses that meet the
ethics training requirements to local officials at least
once annually.
Maintenance of training records for five years.
On July 26, 2013, the COSM released a statewide cost estimate of
$0 for costs incurred in complying with the Local Agency Ethics
(AB 1234) program. This estimate was based upon the fact that
no eligible claims for reimbursement have been filed to date,
but claims may be filed for the period from 2006-07 through
2011-12 fiscal years until May 3, 2014. The COSM further
indicated that the estimate may not be accurate in predicting
future costs, due to the dearth of data available from
claimants. This may be due to eligible claimants not having
supporting documentation to file a claim, or because eligible
claimants may not reach the minimum $1,000 threshold for
submitting a claim since the COSM only approved reimbursement
for minor administrative activities related to the program.
Staff notes that the requirements of AB 1235 are very similar to
those imposed by AB 1234 (Salinas). As such, it is assumed that
the COSM would only find the administrative requirements of this
bill to be eligible for state-reimbursement, and would determine
that the financial management training requirement would not be
a reimbursable activity. If a successful mandate claim is
filed, however, over 650 entities would be eligible for
reimbursement. If only ten percent of eligible local agencies
filed a claim exceeding $1,000, state General Fund costs would
be over $65,000.