California Legislature—2015–16 Regular Session

Assembly BillNo. 1828


Introduced by Assembly Member Dodd

February 9, 2016


An act to amend Section 15626 of the Government Code, relating to the State Board of Equalization.

LEGISLATIVE COUNSEL’S DIGEST

AB 1828, as introduced, Dodd. State Board of Equalization: members: conflicts of interest.

The Quentin L. Kopp Conflict of Interest Act of 1990 requires a member of the State Board of Equalization who has received a contribution or contributions within the preceding 12 months in an aggregate amount of $250 or more from a party or his or her agent, or from any participant or his or her agent, to, prior to rendering any decision in any adjudicatory proceeding pending before board, disclose that fact on the record of the proceeding. A member is prohibited from making, participating in making, or in any way attempting to use his or her official position to influence, the decision in an adjudicatory proceeding pending before the board if the member knows or has reason to know that he or she received a contribution or contributions in an aggregate amount of $250 or more from a party to the proceeding, or from a participant in the proceeding the member knows or has reason to know has a financial interest in the decision. The act also requires a party to, or a participant in, an adjudicatory proceeding pending before the board to disclose on the record of the proceeding any contribution or contributions in an aggregate amount of $250 or more made within the preceding 12 months by the party or participant, or his or her agent, to any member of the board. A person who knowingly or willfully violates any provision of the act is guilty of a misdemeanor.

This bill would delete the $250 limitation and instead apply the above-described disclosure and disqualification provisions if a board member receives any contribution from a party, participant, or agent, as provided. The bill would also prohibit a board member from requesting, suggesting, or accepting a contribution from a party, participant, or agent within the 12 months subsequent to a decision in the adjudicatory proceeding before the board in which the party or participant is involved, except as provided. The bill would also require a party, participant, or agent that makes a contribution within 12 months subsequent to a decision in an adjudicatory proceeding in which the party or participant is involved to disclose to the board contributions to a member within 30 days. The bill would require the board to make all disclosures required by these provisions publicly available on its Internet Web site. The bill would also expand the definition of the term “contribution” to include certain payments made at the behest of a member of the board, as defined, and of the terms “party,” “participant,” and “agent” to include employees of those persons. The bill would make various findings and declaration.

By expanding the application of the criminal sanctions of the Quentin L. Kopp Conflict of Interest Act of 1990, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

The Legislature finds and declares all of the
2following:

3(a) The State Board of Equalization (the board) is a
4constitutionally authorized quasi-judicial body consisting of five
5voting members, including the Controller and four members
6representing four equalization districts and elected to four-year
P3    1terms at gubernatorial elections. The board is the only elected tax
2board in the United States.

3(b) The board is entrusted by statute to administer more than
430 tax and fee programs that generate state revenue. The board is
5also charged with public utility property tax assessments and
6overseeing the property tax assessment practices of the state’s 58
7county assessors.

8(c) Additionally, the board hears appeals from various business
9tax assessments and Franchise Tax Board actions.

10(d) Board members are subject to the Political Reform Act of
111974 (Title 9 (commencing with Section 81000) of the Government
12Code) and rules of the Fair Political Practices Commission
13applicable to all other state elected officials.

14(e) As a quasi-judicial body, the board is also subject to strict
15contribution limits under the Quentin L. Kopp Conflict of Interest
16Act of 1990 (Section 15626 of the Government Code) (the Kopp
17Act). The Kopp Act recognizes the unique positions of board
18members as both elected officials and judges presiding over tax
19appeals. The Kopp Act is intended to prevent a board member
20from creating conflicts of interest by participating in making or
21influencing a decision of the board if the member has accepted a
22contribution in excess of two hundred fifty dollars ($250) from a
23party to an appeal or his or her agent, or a participant or his or her
24agent, within the 12 months preceding the appeal.

25(f) The strict contribution limits of the Kopp Act do not apply
26to payments made at the behest of a board candidate or committee
27when the payment is made for purposes unrelated to his or her
28candidacy for elected office.

29(g) Despite passage of the Kopp Act in 1990, a loophole
30allowing parties before the board and their employees, as well as
31parties’ agents and their employees, to aggregate multiple
32contributions that individually fall below the two hundred fifty
33dollar ($250) limit but together exceed two hundred fifty dollars
34($250) creates a perceived conflict of interest when the board hears
35the parties’ appeals. Similarly, payments made at the behest of a
36board member by parties with an approaching appeal before the
37board create a perceived conflict of interest.

38(h) By enactment of this act, it is the intent of the Legislature
39to eliminate the perceived conflicts of interest associated with
P4    1contributions and behested payments by parties, participants, their
2agents, and employees related to appeals before the board.

3

SEC. 2.  

Section 15626 of the Government Code is amended
4to read:

5

15626.  

(a) This section shall be known, and may be cited, as
6the Quentin L. Kopp Conflict of Interest Act of 1990.

7(b) Prior to rendering any decision in any adjudicatory
8proceeding pending before the State Board of Equalization, each
9member who knows or has reason to know that he or she received
10a contribution or contributions within the preceding 12 monthsbegin delete in
11an aggregate amount of two hundred fifty dollars ($250) or moreend delete

12 from a party or his or her agent, or from any participant or his or
13her agent, shall disclose that fact on the record of the proceeding.

14(c) begin deleteNo end deletebegin insert(1)end insertbegin insertend insertbegin insertA end insertmember shallbegin insert notend insert make, participate in making, or
15in any way attempt to use his or her official position to influence,
16the decision in any adjudicatory proceeding pending before the
17board if the member knows or has reason to know that he or she
18received a contribution or contributionsbegin delete in an aggregate amount
19of two hundred fifty dollars ($250) or moreend delete
within the preceding
2012 months from a party or his or her agent, or from any participant
21or his or her agent, and if the member knows or has reason to know
22that the participant has a financial interest in the decision, as that
23term is used in Article 1 (commencing with Section 87100) of
24Chapter 7 of Title 9.

begin insert

25(2) A member shall not request or suggest a contribution or
26contributions from a party or his or her agent, or from any
27participant or his or her agent, within the 12-month period
28subsequent to a decision in the adjudicatory proceeding before
29the board in which the party or participant is involved.

end insert
begin insert

30(3) In addition to paragraph (2), a member shall not accept a
31contribution or contributions from a party or his or her agent, or
32from any participant or his or her agent, within the 12-month
33period subsequent to a decision in the adjudicatory proceeding
34before the board in which the party or participant is involved.

end insert

35(d) begin insert(1)end insertbegin insertend insert Notwithstanding subdivision (c), if a member receives
36a contribution which would otherwise require disqualification
37under subdivision (c), and he or she returns the contribution within
3830 days from the time he or she knows, or has reason to know,
39about the contribution and the adjudicatory proceeding pending
P5    1before the board, his or her participation in the proceeding shall
2be deemed lawful.

begin insert

3(2) Notwithstanding paragraph (3) of subdivision (c), if a
4member receives a contribution within the 12-month period
5subsequent to a decision in the adjudicatory proceeding before
6the board from a party, participant, or agent and he or she returns
7the contribution within 30 days from the time he or she knows, or
8has reason to know, about the contribution and the decision in the
9adjudicatory proceeding pending before the board, his or her
10acceptance of the contribution shall be deemed lawful.

end insert

11(e) begin insert(1)end insertbegin insertend insert A party to, or a participant in, an adjudicatory
12proceeding pending before the board shall disclose on the record
13of the proceeding any contribution or contributionsbegin delete in an aggregate
14amount of two hundred fifty dollars ($250) or moreend delete
made within
15the preceding 12 months by the party or participant, or his or her
16agent, to any member of the board.begin insert The board shall make the
17disclosure publicly available on its Internet Web site.end insert

begin insert

18(2) A party to, or a participant in, an adjudicatory proceeding
19before the board that makes a contribution to a member of the
20board within the 12 months subsequent to a decision in the
21adjudicatory proceeding in which the party or agent was involved
22shall disclose that contribution to the board within 30 days of
23making the contribution. The board shall make the disclosure
24publicly available on its Internet Web site as promptly as feasible.

end insert

25(f) When a close corporation is a party to, or a participant in,
26an adjudicatory proceeding pending before the board, the majority
27shareholder is subject to the disclosure requirement specified in
28this section.

29(g) For purposes of this section, if a deputy to the Controller
30sits at a meeting of the board and votes on behalf of the Controller,
31the deputy shall disclose contributions made to the Controller and
32shall disqualify himself or herself from voting pursuant to the
33requirements of this section.

34(h) For purposes of this section:

35(1) “Contribution” has the same meaningbegin insert asend insert prescribed in
36Section 82015 and the regulations adoptedbegin delete thereto.end deletebegin insert pursuant to
37that section, except that “contribution” shall also include a
38payment made at the behest of a member of the board principally
39for legislative, governmental, or charitable purposes when that
P6    1payment is made by a party or his or her agentend insert
begin insert or a participant
2or his or her agent.end insert

begin insert

3(2) “At the behest of a member of the board” means made under
4the control or at the direction of, in cooperation, consultation,
5coordination, or concert with, at the request or suggestion of, or
6with the express prior consent of a member of the board.

end insert
begin delete

7(2)

end delete

8begin insert(3)end insert “Party” means anybegin delete personend deletebegin insert person, or his or her employees,end insert
9 who is the subject of an adjudicatory proceeding pending before
10the board.

begin delete

11(3)

end delete

12begin insert(4)end insert “Participant” means anybegin delete personend deletebegin insert person, or his or her
13employees,end insert
who is not a party but who actively supports or opposes
14a particular decision in an adjudicatory proceeding pending before
15the board and who has a financial interest in the decision, as
16described in Article 1 (commencing with Section 87100) of Chapter
177 of Title 9. A person actively supports or opposes a particular
18decision if he or she lobbies in person the members or employees
19of the board, testifies in person before the board, or otherwise acts
20to influence the members of the board.

begin delete

21(4)

end delete

22begin insert(5)end insert “Agent” means anybegin delete personend deletebegin insert person, or his or her employees,end insert
23 who represents a party to or participant in an adjudicatory
24proceeding pending before the board. If a person acting as an agent
25is also acting as an employee or member of a law, accounting,
26consulting, or other firm, or a similar entity or corporation, both
27the entity or corporation and the person are agents.

begin delete

28(5)

end delete

29begin insert(6)end insert “Adjudicatory proceeding pending before the board” means
30a matter for adjudication that has been scheduled and appears as
31an item on a meeting notice of the board as required by Section
3211125 as a contested matter for administrative hearing before the
33board members. A consent calendar matter is not included unless
34the matter has previously appeared on the calendar as a nonconsent
35item, or has been removed from the consent calendar for separate
36discussion and vote, or the item is one about which the member
37has previously contacted the staff or a party.

begin delete

38(6)

end delete

39begin insert(7)end insert A member knows or has reason to know about a contribution
40if, after the adjudicatory proceeding first appears on a meeting
P7    1notice of the board, facts have been brought to the member’s
2personal attention that he or she has received a contribution which
3would require disqualification under subdivision (c), or that the
4member received written notice from the board staff, before
5commencement of the hearing and before any subsequent decision
6on the matter, that a specific party, close corporation, or majority
7shareholder, or agent thereof, or any participant having a financial
8interest in the matter, or agent thereof, in a specific, named
9adjudicatory proceeding before the board, made a contribution or
10contributions within the preceding 12begin delete months in an aggregate
11amount of two hundred fifty dollars ($250) or more.end delete
begin insert months.end insert Each
12member shall provide board staff with a copy of each of his or her
13campaign statements at the time each of those statements is filed.

14The notice of contribution shall be on a form prescribed under
15rules adopted by the board to provide for staff inquiry of each
16party, participant, close corporation, and its majority shareholder,
17and any agent thereof, to determine whether any contribution has
18been made to a member, and if so, in what aggregate amount and
19on what date or dates within the 12 months preceding an
20adjudicatory proceeding or decision.

21In addition, the staff shall inquire and report on the record as
22follows:

23(A) Whether any party or participant is a close corporation, and
24if so, the name of its majority shareholder.

25(B) Whether any agent is an employee or member of any law,
26accounting, consulting or other firm, or similar entity or
27corporation, and if so, its name and address and whether a
28contribution has been made by any such person, firm, corporation,
29or entity.

30(i) (1) Any person who knowingly or willfully violates any
31provision of this section is guilty of a misdemeanor.

32(2) No person convicted of a misdemeanor under this section
33shall be a candidate for any elective office or act as a lobbyist for
34a period for four years following the time for filing a notice of
35appeal has expired, or all possibility of direct attack in the courts
36of this state has been finally exhausted, unless the court at the time
37of sentencing specifically determines that this provision shall not
38be applicable. A plea of nolo contendere shall be deemed a
39conviction for the purposes of this section.

P8    1(3) In addition to other penalties provided by law, a fine of up
2to the greater of ten thousand dollars ($10,000), or three times the
3amount the person failed to disclose or report properly, may be
4imposed upon conviction for each violation.

5(4) Prosecution for violation of this section shall be commenced
6within four years after the date on which the violation occurred.

7(5) This section shall not prevent any member of the board from
8making, or participating in making, a governmental decision to
9the extent that the member’s participation is legally required for
10the action or decision to be made. However, the fact that a
11member’s vote is needed to break a tie does not make the member’s
12participation legally required.

13

SEC. 3.  

No reimbursement is required by this act pursuant to
14Section 6 of Article XIII B of the California Constitution because
15the only costs that may be incurred by a local agency or school
16district will be incurred because this act creates a new crime or
17infraction, eliminates a crime or infraction, or changes the penalty
18for a crime or infraction, within the meaning of Section 17556 of
19the Government Code, or changes the definition of a crime within
20the meaning of Section 6 of Article XIII B of the California
21Constitution.



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