BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1200 (Gordon) - Political Reform Act of 1974: lobbying:
procurement contracts.
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|Version: June 30, 2015 |Policy Vote: E. & C.A. 4 - 0 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: August 17, 2015 |Consultant: Robert Ingenito |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 1200 would provide 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).
Fiscal
Impact:
The Fair Political Practices Commission (FPPC) would
incur costs of $1.3 million in each of the first two years,
and $1.1 million ongoing (General Fund).
The Secretary of State's Office (SOS) indicates that the
AB 1200 (Gordon) Page 1 of
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bill would not impact its costs.
To the extent that contractors would have to file with
SOS pursuant to the bill, there would be an increase in fee
revenue, which would be split evenly between the General
Fund and the Political Disclosure, Accountability,
Transparency and Access Fund. The amount is unknown, but
would likely range in the low hundreds of thousands of
dollars annually.
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. Current law describes "administrative action," for the
purposes of the PRA, as either of the following:
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,
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.
Thus, 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 currently 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.
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Proposed Law:
This bill would do all of the following:
Provide that the term "administrative action," for the
purposes of the PRA, includes governmental procurement, as
defined, thus making the above-described lobbying
requirements applicable to actions that attempt to
influence governmental procurement.
Define "governmental procurement," to mean any of the
following with respect to a state procurement contract for
which the total estimated cost exceeds $250,000:
o Preparing the terms, specifications, bid
documents, request for proposals, or evaluation
criteria for the procurement contract.
o Soliciting for, evaluating, awarding,
approving, denying, disapproving, or scoring criteria
for the procurement contract.
o 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.
Provide that "governmental procurement" does not include
the following:
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o 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.
o Testifying at a public hearing regarding a
state procurement contract;
o 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:
§ The primary purpose of the
individual's employment is the sale of an article
of procurement.
§ The primary purpose of the
individual's employment is not to influence the
actions of a public officer or state agency.
§ The individual does not engage in
any other activity that would qualify him or her
as a lobbyist.
o Any activity undertaken by a placement agent,
as defined.
o 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.
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Permit 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.
Staff
Comments: By bringing governmental procurement within the
definition of "administrative action," this bill would bring
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.
FPPC workload associated with the bill includes major
rulemaking, increased legal advice, preparing compliance
materials, enforcement, modifying forms and manuals and
outreach. FPPC indicates that the increased workload would
require 11 new positions, nine of which would be permanent.
The Department of General Services indicates that about 6,000
state contracts have a value that exceeds the bill's threshold
of $250,000. The number of related contractors that would be
required to file with SOS pursuant to the bill is not known.
Filing with SOS includes paying a fee of $50 per year, which is
deposited evenly between the General Fund and the Political
Disclosure, Accountability, Transparency and Access Fund. Thus,
the bill would likely result in increase in fee in the low
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hundreds of thousands of dollars annually. The precise amount
would depend on (1) the actual number of contracts that exceed
$250,000 in value, and (2) the number of contractors not already
registering with SOS for other reasons.
Any local government costs resulting from the mandate in this
measure are not state-reimbursable because the mandate only
involves the definition of a crime or the penalty for conviction
of a crime.
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