BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1200|
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THIRD READING
Bill No: AB 1200
Author: Gordon (D)
Amended: 8/26/15 in Senate
Vote: 27
SENATE ELECTIONS & C.A. COMMITTEE: 4-0, 7/7/15
AYES: Allen, Hancock, Hertzberg, Liu
NO VOTE RECORDED: Anderson
SENATE APPROPRIATIONS COMMITTEE: 5-0, 8/27/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NO VOTE RECORDED: Bates, Nielsen
ASSEMBLY FLOOR: 79-0, 6/3/15 - See last page for vote
SUBJECT: Political Reform Act of 1974: lobbying: procurement
contracts
SOURCE: Author
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
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administration and implementation of the PRA.
2) Defines a "lobbyist" as either of the following:
a) Any 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 any elective state official, agency official, or
legislative official for the purpose of influencing
legislative or administrative action.
b) A placement agent, as defined.
1) 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
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.
2) 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
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economic consideration, other than reimbursement for
reasonable travel expenses, for the purpose of influencing
legislative or administrative action.
3) 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.
4) Defines "administrative action," for the purposes of the
PRA, 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.
5) 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.
6) Requires an individual who is considered a lobbyist, as
defined, to register as a lobbyist and to comply with various
ethics and reporting rules.
7) Requires lobbyists to complete a biennial orientation course
on the relevant ethical issues and laws relating to lobbying.
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8) Prohibits lobbyists from receiving any payment that is in
any way contingent upon defeat, enactment, or outcome of any
proposed legislative or administrative action.
9) 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.
10)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.
11)Prohibits a lobbyist from deceiving or attempting to deceive
any elected state officer, legislative official, agency
official, or state candidate with regard to any material fact
pertinent to any pending administrative action.
12)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.
13)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.
14)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
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following with respect to influencing 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.
3) Provides that "governmental procurement" does not include
any activity undertaken by a placement agent, as defined.
4) Includes within the definition of "lobbyist" any individual
who receives $2,000 or more in a calendar month to
communicate directly or through his or her agents on behalf
of any person other than his or her employer with any
elective state official, agency official, or legislative
official for the purpose of influencing administrative action
that is governmental procurement.
Background
Lobbying Regulation & Contracts. 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 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
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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
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 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
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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 imposes necessary reporting requirements
on procurement lobbying.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee:
The FPPC could potentially incur costs in the hundreds of
thousands of dollars annually (General Fund).
The SOS indicates that this bill would not impact its costs.
To the extent that contractors would have to file with SOS
pursuant to this 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.
SUPPORT: (Verified8/27/15)
California Common Cause
California Public Interest Research Group
Legislative and Public Policy Clinic of the University of the
Pacific,
McGeorge School of Law
OPPOSITION: (Verified8/31/15)
American Council of Engineering Companies
Department of Finance
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ASSEMBLY FLOOR: 79-0, 6/3/15
AYES: Achadjian, Alejo, Baker, Bigelow, Bloom, Bonilla, Bonta,
Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez,
Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd,
Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia,
Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray,
Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,
Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Travis Allen
Prepared by:Darren Chesin / E. & C.A. / (916) 651-4106
8/31/15 20:01:57
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