BILL ANALYSIS Ó
AB 1200
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ASSEMBLY THIRD READING
AB
1200 (Gordon)
As Amended May 19, 2015
2/3 vote
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+-----------------------+------------------|
|Elections |4-1 |Gatto, Gordon, Mullin, |Ridley-Thomas |
| | |Perea | |
| | | | |
|----------------+------+-----------------------+------------------|
|Appropriations |15-0 |Gomez, Bigelow, Bonta, | |
| | |Calderon, Chang, Daly, | |
| | |Eggman, Gallagher, | |
| | |Eduardo Garcia, | |
| | |Gordon, Holden, Quirk, | |
| | |Rendon, Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Provides that communicating with state governmental
officials in order to influence state governmental procurement, as
defined, can result in a person being considered a "lobbyist"
under the Political Reform Act (PRA). Specifically, this bill:
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1)Defines "governmental procurement," to mean any of the following
with respect to a state procurement contract for which the total
estimated cost exceeds $250,000:
a) Preparing the terms, specifications, bid documents,
request for proposals, or evaluation criteria for the
procurement contract;
b) Soliciting for, evaluating, awarding, approving, denying,
or disapproving the 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)Provides that "governmental procurement" does not include the
following:
a) Submitting a bid on a state procurement contract, or
testifying at a public hearing regarding a state procurement
contract;
b) Any activity undertaken by a "bona fide salesperson" of an
article of procurement. Provides that a person is a "bona
fide salesperson" if each of the following conditions is
satisfied:
i) The primary purpose of the person's employment is to
cause or promote the sale of, or to influence or induce
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another to make a purchase of, an article of procurement;
ii) The primary purpose of the persons' employment is not
to influence the actions of a public officer or state
agency in regards to selecting vendors to supply articles
of procurement under a state procurement contract; and,
iii) The person does not engage in any other activity that
would qualify him or her as a lobbyist.
3)Permits a lobbyist to be compensated on a commission basis only
with respect to lobbying activities related to influencing
administrative action for governmental procurement.
4)Provides that the term "administrative action," for the purposes
of the PRA, includes governmental procurement, as defined.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, 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: 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.
California voters enacted the [PRA], in part, to ensure that state
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and local government 'serve the needs and respond to the wishes of
all citizens equally' and 'perform their duties in an impartial
manner.' To serve these goals, the [PRA] requires lobbying firms
and parties employing lobbying firms to report their legislative
and regulatory activities. Lobbying of procurement contracts does
not fall under the purview of the [PRA]. 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."
Under existing 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 Secretary of State (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 action.
By adding governmental procurement to the definition of
"administrative action," this bill brings contracting within the
types of governmental decisions that are covered by the state's
lobbying rules. For individuals and entities that frequently
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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.
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.
Please see the policy committee analysis for a full discussion of
this bill.
Analysis Prepared by:
Ethan Jones / E. & R. / (916) 319-2094 FN:
0000642
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