BILL ANALYSIS Ó
SENATE COMMITTEE ON
ELECTIONS AND CONSTITUTIONAL AMENDMENTS
Senator Ben Allen, Chair
2015 - 2016 Regular
Bill No: AB 1200 Hearing Date: 7/7/15
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|Author: |Gordon |
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|Version: |6/30/15 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Darren Chesin |
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Subject: Political Reform Act of 1974: lobbying: procurement
contracts
DIGEST
This bill 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).
ANALYSIS
Existing law :
1)Creates the Fair Political Practices Commission (FPPC), and
makes it responsible for the impartial, effective
administration and implementation of the PRA.
2)Defines a "lobbyist" as an individual who receives $2,000 or
more in a calendar month or whose principal duties as an
employee are to communicate directly or through his or her
agents with an elective state official, agency official, or
legislative official for the purpose of influencing
legislative or administrative action.
3)Defines a "lobbying firm" as any business entity, except as
specified, including an individual contract lobbyist, which
meets either of the following criteria:
a) The business entity receives or becomes entitled to
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receive any compensation, other than reimbursement for
reasonable travel expenses, for the purpose of influencing
legislative or administrative action on behalf of any other
person, and any partner, owner, officer, or employee of the
business entity is a lobbyist; or,
b) The business entity receives or becomes entitled to
receive any compensation, other than reimbursement for
reasonable travel expenses, to communicate directly with
any elective state official, agency official, or
legislative official for the purpose of influencing
legislative or administrative action on behalf of any other
person, if a substantial or regular portion of the
activities for which the business entity receives
compensation is for the purpose of influencing legislative
or administrative action.
4)Defines a "lobbyist employer" as any person, other than a
lobbying firm, who:
a) Employs one or more lobbyists for economic
consideration, other than reimbursement for reasonable
travel expenses, for the purpose of influencing legislative
or administrative action; or
b) Contracts for the services of a lobbying firm for
economic consideration, other than reimbursement for
reasonable travel expenses, for the purpose of influencing
legislative or administrative action.
5)Defines "legislative action," for the purposes of the PRA, as
either of the following:
a) The drafting, introduction, consideration, modification,
enactment or defeat of any bill, resolution, amendment,
report, nomination or other matter by the Legislature or by
either house or any committee, subcommittee, joint or
select committee thereof, or by a member or employee of the
Legislature acting in his official capacity; or,
b) The action of the Governor in approving or vetoing any
bill.
6)Defines "administrative action," for the purposes of the PRA,
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as either of the following:
a) The proposal, drafting, development, consideration,
amendment, enactment, or defeat by any state agency of any
rule, regulation, or other action in any ratemaking
proceeding or a quasi-legislative proceeding, as specified;
or,
b) With regard only to placement agents, as defined, the
decision by any state agency to enter into a contract to
invest state public retirement system assets on behalf of a
state public retirement system.
7)Defines "agency official," for the purposes of the PRA, as any
member, officer, employee or consultant of any state agency
who as part of his official responsibilities participates in
any administrative action in other than a purely clerical,
secretarial or ministerial capacity.
8)Requires an individual who is considered a lobbyist, as
defined, to register as a lobbyist and to comply with various
ethics and reporting rules.
9)Requires lobbyists to complete a biennial orientation course
on the relevant ethical issues and laws relating to lobbying.
10)Prohibits lobbyists from receiving any payment that is in
any way contingent upon defeat, enactment, or outcome of
any proposed legislative or administrative action.
11)Prohibits a lobbyist from making gifts aggregating more than
$10 in a calendar month to any state candidate, elected state
officer, legislative official, or an agency official of any
agency required to be listed on the registration statement of
the lobbying firm or the lobbyist employer of the lobbyist.
12)Prohibits a lobbyist from doing anything with the purpose of
placing any elected state officer, legislative official,
agency official, or state candidate under personal obligation
to the lobbyist or the lobbyist's employer.
13) Prohibits a lobbyist from deceiving or attempting to
deceive any elected state officer, legislative official,
agency official, or state candidate with regard to any
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material fact pertinent to any pending administrative
action.
14) Prohibits a lobbyist from making a contribution to an
elected state officer or candidate for elected state office
if the lobbyist is registered to lobby the governmental
agency for which the candidate is seeking election or the
governmental agency of the elected state officer.
15) Requires lobbying firms and lobbyist employers to register
with the Secretary of State (SOS) and to file periodic
disclosure reports that contain information about the firms'
and employers' lobbying interests and agencies lobbied.
16) Makes violations of the PRA subject to administrative,
civil, and criminal penalties.
This bill :
1)Provides that the term "administrative action," for the
purposes of the PRA, includes governmental procurement, as
defined, thereby making the above-described lobbying
requirements applicable to actions that attempt to influence
governmental procurement.
2)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, disapproving, or scoring criteria for the
procurement contract; or,
c) Approving or denying an assignment, amendment, other
than an amendment authorized and payable under the terms of
the procurement contract as the procurement contract was
finally awarded or approved, renewal, or extension of the
procurement contract, or any other material change in the
procurement contract resulting in financial benefit to the
offeror.
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3)Provides that "governmental procurement" does not include the
following:
a) Submitting a bid or fee proposal on a state procurement
contract that does not involve any of the above activity,
including attending a bidders' conference or responding to
requests for information; or responding to a competitive
selection process based on qualifications.
b) Testifying at a public hearing regarding a state
procurement contract;
c) 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 individual's
employment is the sale of an article of procurement.
ii. The primary purpose of the individual's
employment is not to influence the actions of a public
officer or state agency.
iii. The individual does not engage in any other
activity that would qualify him or her as a lobbyist.
a) Any activity undertaken by a placement agent, as
defined.
b) Any activity relating to a contract awarded by the state
through the California Multiple Award Schedule (CMAS) or a
contract awarded through government multi-jurisdiction
purchasing schedules.
1)Permits a lobbyist, other than a placement agent, to be
compensated on a commission basis only with respect to
lobbying activities related to influencing administrative
action for governmental procurement.
BACKGROUND
Lobbying Regulation & Contracts . Under existing law,
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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.
As detailed above, 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
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.
COMMENTS
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1)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 Political Reform Act, in part,
to ensure that state 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 Political Reform Act 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 Political Reform Act. 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.
RELATED/PRIOR LEGISLATION
AB 707 (Hancock) of 2005-06, would have required contractors and
their agents and consultants, as specified, who entered into
specified contracts with state agencies to publicly disclose to
the SOS certain communications with the state agency during the
oneyear period preceding the award of the contract. These
provisions of AB 707 were added to the bill in the Senate, and
were never considered by the Assembly. AB 707 subsequently was
gutted-and-amended and used for another purpose, and the version
of the bill dealing with state contracts was never heard by a
policy committee.
AB 13 (Florez) of 2001-02, would have required lobbyists,
lobbying firms, and lobbyist employers to disclose information
on services relating to the solicitation, proposal, negotiation,
drafting, amendment, awarding, or rescission of a nonrestrictive
contract for goods or services, as specified. These provisions
of AB 13 were added to the bill in the Senate, and were never
considered by the Assembly. AB 13 was never heard by a policy
committee.
PRIOR ACTION
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|Assembly Floor: |79 - 0 |
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|Assembly Appropriations Committee: |15 - 0 |
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|Assembly Elections and Redistricting | 4 - 1 |
|Committee: | |
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POSITIONS
Sponsor: Author
Support: California Common Cause
California Public Interest Research Group
Legislative and Public Policy Clinic of the University
of the Pacific,
McGeorge School of Law
Oppose: American Council of Engineering Companies
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