BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 2040
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          CONCURRENCE IN SENATE AMENDMENTS
          AB 2040 (Garcia)
          As Amended  August 12, 2014
          Majority vote
           
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          |ASSEMBLY:  |78-0 |(May 28, 2014)  |SENATE: |36-0 |(August 13,    |
          |           |     |                |        |     |2014)          |
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           Original Committee Reference:    L. GOV.  

           SUMMARY  :  Requires local agency financial transaction reports to  
          include information about the annual compensation of the local  
          agency's elected officials, officers, and employees, requires  
          local agencies to post this information on their Internet Web  
          sites (websites), and requires the State Controller (Controller)  
          to compile, publish, and make this information publicly  
          available on the Controller's website.  

           The Senate amendments  :  

          1)Specify that this bill's requirements apply to a local  
            agency's elected officials, officers, and employees, and do  
            not apply to a federal officer or employee serving in an  
            official federal capacity in a local agency.

          2)Require the Controller to compile, publish, and make publicly  
            available on the Controller's website, in a format that may be  
            printed and downloaded, information on annual compensation,  
            consistent with this bill's requirement that the contents of  
            local agency financial transaction reports include the annual  
            compensation of a local agency's elected officials, officers,  
            and employees, as specified.

          3)Allow a local agency to comply with this bill's website  
            posting requirements by posting, in a conspicuous location on  
            its website, a link to the Controller's Government  
            Compensation in California (GCC) website.

          4)Make technical, clarifying and conforming changes.

           EXISTING LAW  :

          1)Requires the Controller to compile and publish reports of the  








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            financial transactions of each county, city, and special  
            district within this state, together with any other matter he  
            or she deems of public interest.

          2)Requires the officer of each local agency who has charge of  
            the financial records to furnish to the Controller a report of  
            all the financial transactions of the local agency during the  
            next preceding fiscal year.

          3)Defines local agency to mean "any city, county, any district,  
            and any community redevelopment agency required to furnish  
            financial reports" pursuant to specified sections of existing  
            law.

          4)Requires the report to be furnished within 90 days after the  
            close of each fiscal year and to be in the form required by  
            the Controller.
          5)Requires the report to contain specified contents, including  
            "other information that the Controller requires."

          6)Allows the Controller to establish the GCC website, pursuant  
            to his or her responsibility and authority to publish local  
            agency financial transaction reports. 

           AS PASSED BY THE ASSEMBLY  , this bill:  

          1)Required local agencies to include in the information they  
            report annually to the Controller the annual compensation of a  
            local agency's public officials in accordance with reporting  
            instructions developed by the Controller pursuant to existing  
            law, as specified, in consultation with affected local  
            agencies.

          2)Provided that, if a local agency that is required to report to  
            the Controller pursuant to existing law, as specified,  
            maintains a website, the agency shall post in a conspicuous  
            location on its website the annual compensation of its public  
            officials that is posted on the Controller's GCC website.

          3)Provided that, if the Commission on State Mandates determines  
            that this bill contains costs mandated by the state,  
            reimbursement to local agencies and school districts for those  
            costs shall be made pursuant to current law governing state  
            mandated local costs.









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           FISCAL EFFECT :  According to the Senate Appropriations  
          Committee:

          1)Unknown, likely minor reimbursable mandate costs.  Local  
            agencies could seek reimbursement for any costs incurred for  
            compiling compensation data and including it in the annual  
            financial report, and for posting that information on their  
            respective websites.  (General Fund)

          2)No new costs to the Controller's Office to compile the  
            information from annual financial reports and post it on its  
            website because the bill codifies current practice.  However,  
            placing those requirements in statute could create cost  
            pressures because it creates a legal compulsion to collect and  
            publish information on public compensation; the Controller  
            currently performs this function at his discretion.    
           
          COMMENTS  :   

          1)Purpose of this bill.  This bill requires local agency  
            financial transaction reports to include information about the  
            annual compensation of the local agency's elected officials,  
            officers, and employees, requires local agencies to post this  
            information on their websites, and requires the Controller to  
            compile, publish, and make this information publicly available  
            on the Controller's website.  This bill is author-sponsored.

          2)Financial transaction reports and the GCC website.  Existing  
            law, pursuant to Government Code Section 12463, requires the  
            Controller to compile and publish reports of the financial  
            transactions of each county, city, and special district within  
            the state, "together with any other matter he or she deems of  
            public interest."

            Existing law also requires the officer of each local agency,  
            who has charge of the financial records of the agency, to  
            furnish to the Controller a report of all the financial  
            transactions of the local agency during the next preceding  
            fiscal year.  Pursuant to Government Code Section 53892, the  
            report must include specified information, including "other  
            information that the Controller requires."

            The Controller launched his GCC website in response to the  
            2010 scandal in the City of Bell to promote government  
            transparency and help prevent such problems from reoccurring.   








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            The website includes information about all employees with  
            wages reportable on a Federal W-2 form.  Data is self-reported  
            by governments and is not verified by the Controller's Office.

            The GCC report is a supplement to the Controller's annual  
            financial transactions report.  The authority to collect this  
            information is granted under Government Code Sections 12463  
            and 53892.  These reports are due to the Controller within 90  
            or 110 days after their fiscal year end.  

            Other entities participate voluntarily in the GCC program,  
            including state agencies, k-12 school districts, courts, the  
            University of California system, the California State  
            University system, community colleges, First Five, and fairs  
            and expos.

          3)Related legislation.  AB 2676 (Rendon) of the current  
            legislative session, would have expanded the Controller's  
            authority to perform audits or investigations of counties,  
            cities, and special districts if the Controller makes  
            specified findings that any of these local government entities  
            is violating financial requirements in state law, state grant  
            agreements, local charters, or local ordinances, and would  
            have increased forfeiture amounts local agencies must pay for  
            failing to file their financial reports with the Controller.   
            AB 2676 was held in the Assembly Appropriations Committee.

          4)Previous legislation.  AB 941 (Rendon) of 2013, was  
            substantially similar to AB 2676.  
          AB 941 passed the Assembly Local Government Committee with a 9-0  
            vote on May 1, 2013.  AB 941 was held in the Assembly  
            Appropriations Committee.

            AB 1035 (John A. Pérez) of 2013, changed the forfeiture  
            amounts local agencies must pay for failing to file their  
            financial reports with the Controller.  AB 1035 passed the  
            Assembly Local Government Committee with an 8-0 vote on April  
            10, 2013.  This bill was substantially amended.

            SB 186 (Kehoe) of 2012, was substantially similar to AB 2676.   
            SB 186 passed the Assembly Local Government Committee with a  
            9-0 vote on June 27, 2012.  SB 186 was held in the Assembly  
            Appropriations Committee.

          5)State mandate.  This bill is keyed a state mandate, which  








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            means the state could be required to reimburse local agencies  
            and school districts for implementing this bill's provisions  
            if the Commission on State Mandates determines that this bill  
            contains costs mandated by the state.

          6)Support arguments:  California Common Cause, in support,  
            states, "We believe that having adequate transparency of  
            public officials' salaries is an important tool for  
            maintaining an honest, open, and accountable government.  AB  
            2040 would improve transparency by requiring local agencies  
            themselves to make compensation information available publicly  
            on their websites."

          7)Opposition arguments:  None on file.
           

          Analysis Prepared by  :    Angela Mapp / L. GOV. / (916) 319-3958 


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