BILL ANALYSIS Ó
AB 1200
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Date of Hearing: May 27, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
1200 (Gordon) - As Amended May 19, 2015
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill amends the Political Reform Act (PRA) such that
communicating with state governmental officials in order to
influence state governmental procurement contracts exceeding
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$250,000 can result in a person being considered a "lobbyist"
under the PRA. Specifically, this bill:
1)Defines "government procurement" as:
a) Preparing the terms, specifications, bid documents,
request for proposals, or evaluation criteria for a
procurement contract; or
b) Soliciting for, evaluating, approving, or denying or
disapproving a procurement contract; or
c) Approving or denying an assignment, amendment, other
than an amendment authorized and payable under the terms of
a procurement contract as the procurement contract was
finally awarded or approved, renewal, or extension of a
procurement contract, or any other material change in a
procurement contract resulting in financial benefit to the
offeror.
2)Stipulates that "government procurement" does not include:
a) Submitting a bid on a procurement contract or testifying
at a hearing regarding a contract.
b) Any activity undertaken by a "bona fide salesperson," as
defined, who does not engage in any other activity that
would qualify him or her as a lobbyist.
3)Stipulates that a lobbyist may be compensated on a commission
basis only with respect to lobbying activities related to
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influencing administrative action for government procurement.
FISCAL EFFECT:
The Fair Political Practices Commission (FPPC) will incur
one-time costs to conduct a major new rulemaking, prepare
compliance materials, and modify lobbying manuals and forms; and
ongoing costs to receive and respond to a large increase in
requests for advice, and to conduct additional investigations.
One-time costs would be around $500,000. Ongoing costs would be
somewhat larger and would be determined, based on workload
demands, through the budget process.
COMMENTS:
1)Background. Under current law, individuals and entities that
make or receive specified levels of payments for the purpose
of influencing legislative or administrative actions may be
required to comply with the state's lobbying rules, including
requirements to register with the SOS and to file periodic
reports. The term "administrative action" is defined
primarily to include rule- and rate-making, the adoption of
regulations, and quasi-legislative proceedings. Contracting
decisions by state agencies are not included within the
definition of the term "administrative action," so individuals
and entities that attempt to influence state contracting
decisions are not required to comply with lobbying rules as a
result of their efforts with respect to contracting decisions.
For example, in its Lobbying Information Disclosure Manual,
the FPPC states that an entity bidding on a contract with the
Department of Housing and Community Development (Department)
to provide low and moderate-income housing units would not be
engaged in lobbying as a result of submitting a bid, because
although the Department is an administrative agency, the
awarding of a contract is not considered an administrative
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action.
2)Purpose. According to the author, "The State of California
authorized over $11 billion in procurement contracts in 2014.
In light of this substantial spending, the public should have
the ability to see who, if anyone is attempting to influence
the procurement process and expenditure of taxpayer
dollars?For the same reasons that the state currently imposes
registration and reporting requirements on legislative and
regulatory lobbying, and in light of the amount of taxpayer
money spent on procurement, this bill would impose necessary
reporting requirements on procurement lobbying.
By adding procurement to the definition of "administrative
action," this bill brings contracting within the types of
state governmental decisions that are covered by the state's
lobbying rules. For individuals and entities that frequently
attempt to influence state agency contracting decisions, but
that do not regularly attempt to influence other actions by
state agencies, this bill could require those individuals and
entities to comply with the state's lobbying rules, including
registering with the SOS and filing periodic disclosure
reports.
Many individuals and entities that attempt to influence
contracting decisions, however, may already be registered as
lobbyists, lobbying firms, or lobbyist employers because those
individuals and entities are involved in attempting to
influence other actions by the Legislature or state agencies.
For those entities and individuals, this bill will require
them to disclose details about their procurement lobbying on
the periodic disclosure reports that they already file.
Analysis Prepared by:Chuck Nicol / APPR. / (916)
319-2081
AB 1200
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