BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 10|
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THIRD READING
Bill No: AB 10
Author: Gatto (D)
Amended: 8/27/15 in Senate
Vote: 27
SENATE ELECTIONS & C.A. COMMITTEE: 4-0, 7/7/15
AYES: Allen, Hancock, Hertzberg, Liu
NO VOTE RECORDED: Anderson
SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/27/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
ASSEMBLY FLOOR: 79-0, 6/2/15 - See last page for vote
SUBJECT: Political Reform Act of 1974: behested payments and
economic interest disclosures
SOURCE: Author
DIGEST: This bill makes several significant changes to the
Political Reform Act (PRA) of 1974 including changes to
reporting requirements on statements of economic interests
(SEI).
ANALYSIS:
Existing law:
1)Prohibits a public official from making, participating in
making, or in any way attempting to use his official position
to influence a governmental decision in which the official
knows or has reason to know he or she has a financial
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interest, as specified. Provides that an official has a
financial interest in a decision, for these purposes, if it is
reasonably foreseeable that the decision will have a material
financial effect, distinguishable from its effect on the
public generally, on the official, a member of his or her
immediate family, or on any of the following:
a) Any business entity in which the public official has a
direct or indirect investment worth $2,000 or more;
b) Any business entity in which the public official is a
director, officer, partner, trustee, employee, or holds any
position of management; or,
c) Any real property in which the public official has a
direct or indirect interest worth $2,000 or more;
d) Any source of income (except gifts or loans by a
commercial lending institution made in the regular course
of business on terms available to the public without regard
to official status) aggregating $500 or more in value
provided or promised to, received by, the public official
within 12 months prior to the time when the decision is
made;
e) Any donor of, or any intermediary or agent for a donor
of, a gift or gifts aggregating an amount that equals or
exceeds the gift limit (currently $460 in a year) that is
provided to, received by, or promised to the public
official within 12 months prior to the time when the
decision is made.
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2)Requires candidates for, and current holders of, specified
elected or appointed state and local offices and designated
employees of state and local agencies to file SEIs disclosing
their financial interests, including investments, real
property interests, and income. Requires filers to file the
SEIs annually and at other periods of time, such as when
assuming or leaving office.
3)Delineates certain high-ranking public officials in Government
Code Section 87200 (these officials are known, and are
hereinafter referred to, as "87200 filers") who are subject to
the most expansive disclosure requirements under the PRA.
Provides that these 87200 filers include all of the following:
a) Elected state officers;
b) Judges and commissioners of courts of the judicial
branch of government;
c) Members of the Public Utilities Commission;
d) Members of the State Energy Resources Conservation and
Development Commission;
e) Members of the Fair Political Practices Commission
(FPPC);
f) Members of the California Coastal Commission;
g) Members of the High-Speed Rail Authority;
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h) Members of planning commissions;
i) Any of the following county offices: Members of the
board of supervisors; district attorneys; county counsels;
county treasurers; and county chief administrative
officers;
j) Any of the following city offices: Mayors; members of
the city council; city managers; city attorneys; city
treasurers; city chief administrative officers;
aa) Other public officials who manage public investments;
and,
bb) Candidates for any of the offices listed above.
4)Requires an 87200 filer who is disqualified from participating
in a governmental action because of a financial conflict of
interest, except for members of the Legislature, to do the
following upon identifying the conflict of interest or
potential conflict of interest and immediately prior to the
consideration of the matter:
a) Publicly identify the financial interest that gives rise
to the conflict of interest or potential conflict of
interest in detail sufficient to be understood by the
public, except that disclosure of the exact street address
of a residence is not required (If the governmental
decision is to be made during an open session of a public
meeting, the public identification shall be made orally and
shall be made part of the official public record.);
b) Recuse himself or herself from discussing and voting on
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the matter, or otherwise acting on the matter in violation
of existing law; and,
c) Leave the room until after the discussion, vote, and any
other disposition of the matter is concluded, unless the
matter has been placed on the portion of the agenda
reserved for uncontested matters. Provides that
notwithstanding this restriction, a public official who has
a conflict of interest may speak on the issue during the
time that the general public speaks on the issue.
This bill:
1) Increases the threshold at which a public official's
financial interest can potentially create a conflict of
interest under the PRA, as follows:
a) Raises the conflict of interest threshold for interests
in real property from $2,000 to $10,000;
b) Raises the conflict of interest threshold for
investments in a business entity from $2,000 to $5,000;
and,
c) Raises the conflict of interest threshold for sources of
income, other than gifts or specified loans, from $500 to
$1,000.
2)Revises the monetary ranges that specified public officials or
candidates use to describe the value of their investments,
interests in real property, and income when filing a SEI.
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 business entity, to provide a
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thorough and detailed description of the business entity's
activities and disclose the names of all business partners who
share a financial interest in the business entity on the SEI,
based on criteria established by the FPPC. Provides, however,
that a filer is not required to provide a thorough and
detailed description of the business entity's activities and
is not required to disclose the names of all business partners
who share a financial interest in the business entity if the
business entity is publicly traded.
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. Provides, however, that a filer is not required to
provide a thorough and detailed description of the business
activity of the business entity if the business entity is
publicly traded.
5)Requires a public official who holds an office listed in
Section 87200 of the Government Code (a complete list of these
offices are detailed under "existing law" above) to disclose
on his or her SEI each governmental decision for which a
financial 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. Requires the disclosure to identify
the governmental decision, the date that the decision was made
or considered, the financial interest that created the
conflict of interest, and any other relevant information that
the FPPC determines appropriate.
6)Makes technical and corresponding changes and contains
language to prevent a chaptering conflict with SB 21 (Hill).
Background
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Statements of Economic Interests. 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.
While the exact number of people that are required to file SEIs
is unknown, the FPPC has estimated that the number exceeds
200,000 officials and employees statewide.
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.
Comments
1)According to the author, transparency and disclosure are
essential to protecting public resources, preventing
corruption, and restoring public trust. This bill will
finally bring disclosure requirements into the 21st
century. AB 10 will ensure that California's public
officials are more transparent in their business,
investment, and income disclosures, which will further
confirm that our trusted elected officials are using
their positions to serve all citizens equally.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee, the FPPC
indicates that this bill will result in a one-time General Fund
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cost of $260,000. Ongoing costs would total about $130,000 per
year.
SUPPORT: (Verified8/26/15)
Association of California Water Agencies
California Clean Money Campaign
California Common Cause
California Newspaper Publishers Association
OPPOSITION: (Verified8/26/15)
None received
ASSEMBLY FLOOR: 79-0, 6/2/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd,
Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia,
Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray,
Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,
Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Chávez
Prepared by:Darren Chesin / E. & C.A. / (916) 651-4106
8/28/15 15:32:39
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