BILL ANALYSIS                                                                                                                                                                                                    



                                                                    AB 1200


                                                                    Page  1





          Date of Hearing:  May 27, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          1200 (Gordon) - As Amended May 19, 2015


           ----------------------------------------------------------------- 
          |Policy       |Elections and Redistricting    |Vote:|4 - 1        |
          |Committee:   |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |-------------+-------------------------------+-----+-------------|
          |             |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |-------------+-------------------------------+-----+-------------|
          |             |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
           ----------------------------------------------------------------- 


          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  








                                                                    AB 1200


                                                                    Page  2





          $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  








                                                                    AB 1200


                                                                    Page  3





            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  








                                                                    AB 1200


                                                                    Page  4





            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


                                                                    Page  5