BILL ANALYSIS Ó
AB 1200
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
1200 (Gordon)
As Amended February 10, 2016
2/3 vote. Urgency
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|ASSEMBLY: |79-0 |(June 3, 2015) |SENATE: |38-1 |(March 3, 2016) |
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Original Committee Reference: E. & R.
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:
1)Defines "governmental procurement," to mean any of the
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;
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b) Soliciting for, evaluating, scoring criteria for,
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 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
activity undertaken by a placement agent, as defined.
The Senate amendments:
1)Make the provisions of this bill applicable only to an
individual who receives $2,000 or more in economic
consideration in a calendar month, other than reimbursement
for reasonable travel expenses, to communicate directly or
through his or her agents on behalf of any person other than
his or her employer with state governmental officials for the
purpose of influencing governmental procurement.
2)Make related changes by repealing provisions that would have
specified certain conduct that was not considered
"governmental procurement" for the purposes of this bill,
including submitting bids on a contract, testifying at a
public hearing regarding a state procurement contract, and
activity undertaken by bona fide salespeople of articles of
procurement.
3)Delete a provision that would have permitted a lobbyist to be
compensated on a commission basis with respect to lobbying
activities related to governmental procurement.
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4)Provide that the penalties in the PRA are the exclusive remedy
for a violation of this bill with respect to governmental
procurement lobbying.
5)Add an urgency clause, but delay the operative date of this
bill to January 1, 2017. The urgency clause will ensure that
the Fair Political Practices Commission (FPPC) has the
authority and time to adopt regulations before this bill's
operative date.
FISCAL EFFECT: According to the Senate Appropriations
Committee, the FPPC could potentially incur costs in the
hundreds of thousands of dollars annually (General Fund). The
Secretary of State's Office (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.
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 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."
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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 and to file
periodic reports. This bill brings contracting within the types
of governmental decisions that are covered by the state's
lobbying rules.
Existing state lobbying rules contain different tests for
determining whether an individual is considered a lobbyist
depending on whether that individual is engaging in
communication with public officials on behalf of the
individual's employer (commonly referred to as an "in-house
lobbyist"), or on behalf of persons other than the individual's
employer (commonly referred to as a "contract lobbyist"). A
person is considered to be an in-house lobbyist if he or she
spends one-third or more of his or her compensated time in a
calendar month engaging in direct communication with qualifying
officials for the purposes of influencing legislative or
administrative action on behalf of that person's employer. A
person is considered to be a contract lobbyist if he or she
receives $2,000 or more in compensation in a calendar month for
engaging in direct communication with qualifying officials for
the purposes of influencing legislative or administrative action
on behalf of anyone other than that person's employer.
The Senate amendments to this bill exempt in-house employees
from the potential of being considered lobbyists by virtue of
communications made on behalf of their employers to influence
state governmental procurement. Only the "contract lobbyist"
test would apply when determining whether an individual would be
considered a "lobbyist" under this bill. The Senate amendments
additionally provide that the penalties in the PRA are the
exclusive remedy for a violation of this bill and make related
changes.
California voters passed an initiative, Proposition 9, in 1974
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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.
Analysis Prepared by:
Ethan Jones / E. & R. / (916) 319-2094 FN:
0002621