BILL ANALYSIS Ó
AB 10
Page 1
ASSEMBLY THIRD READING
AB
10 (Gatto)
As Amended April 7, 2015
2/3 vote
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+--------------------+----------------------|
|Elections |6-0 |Ridley-Thomas, | |
| | |Grove, Gatto, | |
| | |Gordon, Mullin, | |
| | |Perea | |
| | | | |
|----------------+------+--------------------+----------------------|
|Appropriations |17-0 |Gomez, Bigelow, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, | |
| | |Eggman, Gallagher, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Gordon, Holden, | |
| | |Jones, Quirk, | |
| | |Rendon, Wagner, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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AB 10
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SUMMARY: Makes several significant changes to the Political
Reform Act (PRA) of 1974. Specifically, this bill:
1)Increases the thresholds at which a public official's financial
interest can potentially create a conflict of interest under the
PRA, as follows:
a) From $2,000 to $10,000 for interests in real property;
b) From $2,000 to $5,000 for investments in a business
entity; and,
c) From $500 to $1,000, for sources of income, other than
gifts or specified loans.
2)Revises the monetary ranges that specified public officials or
candidates, when filing a statement of economic interests (SEI),
use to describe the value of their investments, interests in
real property, and income.
3)Requires a public official or candidate who is required to
disclose a business entity investment on his or her SEI because
the official or candidate is a director, officer, partner, or
trustee of the entity, to provide a thorough and detailed
description of the entity's activities and disclose the names of
all business partners who share a financial interest in the
entity on the official or candidate's SEI, based on criteria
established by the Fair Political Practices Commission (FPPC).
4)Requires a public official or candidate who is required to
disclose his or her pro rata share of income to a business
entity on an SEI to include a thorough and detailed description
of the business activity of the business entity, instead of a
general description of the entity's business activity.
5)Requires a public official who holds an office listed in
Government Code Section 87200 to disclose on his or her SEI, as
specified, each governmental decision for which a financial
AB 10
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interest resulted in the official's disqualification from
making, participating in making, or in any way attempting to use
his or her official position to influence a governmental
decision.
6)Requires candidates who are not elected officials, and elected
officials for a year after leaving office, to report any payment
that is made at the behest of that person for a legislative,
governmental, or charitable purpose within 30 days following the
date on which such payment or payments equal or exceed $5,000 in
the aggregate from the same source in the same calendar year in
which they are made. Requires the statement to be filed with
the following entity:
a) In the case of a candidate, with the officials and
agencies with which the candidate is required to file
campaign statements; and,
b) In the case of a former elected officer, with the agency
with which the officer was required to file such statements
when he or she was an elected officer.
FISCAL
EFFECT: According to the Assembly Appropriations Committee,
ongoing General Fund costs to the FPPC of about $250,000 for two
positions to draft implementing regulations, respond to increased
advice requests, drafting compliance materials, redesign the Form
700 and informational materials, work with a software vendor for
electronic filing changes, and provide education and outreach.
Costs should diminish in a few years following implementation.
COMMENTS: According to the author, "AB 10 has five main
components. 1) It will modernize the financial interest
thresholds that necessitate a public official excusing him or
herself from a governmental decision. These numbers have been
updated only once since 1974. 2) It will include additional
AB 10
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middle tiers and upper tiers in the financial disclosures on the
FPPC's Form 700, ensuring that the public has a more accurate view
of the financial holdings and potential conflicts of interest for
their public officials. 3) It will require a more detailed
disclosure of these holdings, specifically a more thorough
description of any businesses and the names of any business
partners. 4) It will add an additional disclosure to the Form 700
that requires public officials to specify any instances in the
previous year where a financial interest has been cause for a
recusal from being involved with or making a governmental
decision. 5) It will extend the behested payment reporting
requirements to include those candidates who are required to file
a campaign statement and elected officials for one year after
leaving elective office."
As part of the PRA'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 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.
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, must further the purposes of the initiative and require
a two-thirds vote of both houses of the Legislature.
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Please see the policy committee analysis for a full discussion of
this bill.
Analysis Prepared by:
Ethan Jones / E. & R. / (916) 319-2094 FN:
0000608