Amended in Assembly April 28, 2016

Amended in Assembly April 19, 2016

Amended in Assembly April 5, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 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 amended, 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 begin insert or has behested a payment that is reportable pursuant to the Political Reform Act end insert from a party, participant, or agent, as provided. The bill would also prohibit a board member from begin delete requesting, suggesting, or end delete accepting a contribution from a party, participant, or agent within the begin delete 12 end delete begin insert 3 end insert months subsequent to a decision in the adjudicatory proceeding before the board in which the party or participant is involved, and in which the member made, participated in making, or in any way attempted to use his or her official position to influence the decision, except as provided. The bill would also require a party, participant, or agent that makes a contribution within begin delete 12 end delete begin insert 3 end insert months subsequent to a decision in an adjudicatory proceeding in which the party or participant is involved, and in which the member made, participated in making, or in any way attempted to use his or her official position to influence the decision, to disclose to the board contributions to a member within 30 days. The bill would require the board to make all disclosures begin insert by a party, participant, or agent end insert required by these provisions publicly available on its Internet Web site. begin delete The bill would also expand the definition of the term “contribution” to include certain payments that are at least $5,000 in aggregate made at the behest of a member of the board. The bill would make various findings and declarations. end delete

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:

SECTION 1.  

The Legislature finds and declares all of the
following:

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

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

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

(d) Board members are subject to the Political Reform Act of
1974 (Title 9 (commencing with Section 81000) of the Government
Code) and rules of the Fair Political Practices Commission
applicable to all other state elected officials.

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

(f)  begin delete The strict contribution limits of end delete begin insert Despite its conflict-of-interest
provisions, end insert the Kopp Act begin delete do end delete begin insert does end insert not apply to payments made at
the behest of a board candidate or committee when the payment
is made for purposes unrelated to his or her candidacy for elected

begin delete office. end delete begin insert office, which can create a perceived conflict of interest. end insert

begin delete

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

(h)

end delete

begin insert (g) end insert  By enactment of this act, it is the intent of the Legislature
to eliminate the perceived conflicts of interest associated with
contributions and behested payments by parties, participants, and
their agents related to appeals before the board.

SEC. 2.  

Section 15626 of the Government Code is amended
to read:

15626.  

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

(b) Prior to rendering any decision in any adjudicatory
proceeding pending before the State Board of Equalization, each
member who knows or has reason to know that he or she received
a contribution or begin delete contributions end delete begin insert contributions, or has behested a
payment of five thousand dollars ($5,000) or more that is
reportable pursuant to clause (iii) of subparagraph (B) of
paragraph (2) of subdivision (b) of Section 82015, end insert within the
preceding 12 months from a party or his or her agent, or from any
participant or his or her agent, shall disclose that fact on the record
of the proceeding.

(c) (1) A member shall not make, participate in making, or in
any way attempt to use his or her official position to influence, the
decision in any adjudicatory proceeding pending before the board
if the member knows or has reason to know that he or she received
a contribution or begin delete contributions end delete begin insert contributions, or has behested a
payment of five thousand dollars ($5,000) or more that is
reportable pursuant to clause (iii) of subparagraph (B) of
paragraph (2) of subdivision (b) of Section 82015, end insert within the
preceding 12 months from a party or his or her agent, or from any
participant or his or her agent, and if the member knows or has
reason to know that the participant has a financial interest in the
decision, as that term is used in Article 1 (commencing with
Section 87100) of Chapter 7 of Title 9.

begin delete

(2) A member shall not request or suggest a contribution or
contributions from a party or his or her agent, or from any
participant or his or her agent, within the 12-month period
subsequent to a decision in the adjudicatory proceeding before the
board in which the party or participant is involved. For purposes
of this paragraph, “suggest” means to mention or imply as a
possibility or put forward for consideration. This paragraph shall
apply to a member only with respect to an adjudicatory proceeding
in which that member made, participated in making, or in any way
attempted to use his or her official position to influence the
decision.

(3) In addition to paragraph (2), a

end delete

begin insert (2) end insert begin insert   end insert begin insert A end insert member shall not accept a contribution or contributions
from a party or his or her agent, or from any participant or his or
her agent, within the begin delete 12-month end delete begin insert three-month end insert period subsequent to
a decision in the adjudicatory proceeding before the board in which
the begin delete party or participant end delete begin insert party, participant, or agent end insert is involved.
This paragraph shall apply to a member only with respect to an
adjudicatory proceeding in which that member made, participated
in making, or in any way attempted to use his or her official
position to influence the decision.

(d) (1) Notwithstanding paragraph (1) of subdivision (c), a
contribution shall not be deemed received by a member for the
purposes of disqualification under subdivision (c), if the member
returns the contribution within 30 days from the time he or she
knows, or has reason to know, about the contribution and the
adjudicatory proceeding pending before the board.

(2) Notwithstanding paragraph begin delete (3) end delete begin insert (2) end insert of subdivision (c), if a
member receives a contribution within the begin delete 12-month end delete begin insert three-month end insert
period subsequent to a decision in the adjudicatory proceeding
before the board from a party, participant, or agent and the member
returns the contribution within 30 days from the time he or she
knows, or has reason to know, about the contribution and the
decision in the adjudicatory proceeding pending before the board,
the member shall be deemed not to have accepted the contribution.

(e) (1) A begin delete party to, or a participant in, end delete begin insert party, participant, or
agent in end insert an adjudicatory proceeding pending before the board shall
disclose on the record of the proceeding any contribution or
contributions begin insert and any behested payment of five thousand dollars
($5,000) or more that is reportable by a member pursuant to clause
(iii) of subparagraph (B) of paragraph (2) of subdivision (b) of
Section 82015, end insert made within the preceding 12 months by the party
or participant, or his or her agent, to any member of the board. The
board shall make the disclosure publicly available on its Internet
Web site.

(2) A begin delete party to, or a participant end delete begin insert party, participant, and agent end insert in,
an adjudicatory proceeding before the board that makes a
contribution to a member of the board within the begin delete 12 months end delete begin insert three
months end insert subsequent to a decision in the adjudicatory proceeding in
which the party or agent was involved, and in which the member
made, participated in making, or in any way attempted to use his
or her official position to influence the decision, shall disclose that
contribution to the board within 30 days of making the contribution.
The board shall make the disclosure publicly available on its
Internet Web site as promptly as feasible.

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

(g) For purposes of this section, if a deputy to the Controller
sits at a meeting of the board and votes on behalf of the Controller,
the deputy shall disclose contributions made to the begin delete Controller end delete
begin insert Controller, and any behested payment of five thousand dollars
($5,000) or more that is reportable by the Controller pursuant to
clause (iii) of subparagraph (B) of paragraph (2) of subdivision
(b) of Section 82015, end insert and shall disqualify himself or herself from
voting pursuant to the requirements of this section.

(h) For purposes of this section:

(1) “Contribution” has the same meaning as prescribed in
Section 82015 and the regulations adopted pursuant to that begin delete section,
except that “contribution” shall also include a payment or payments
made at the behest of a member of the board principally for
legislative, governmental, or charitable purposes when that
payment is or those payments are at least five thousand dollars
($5,000) in the aggregate and is or are made by a party or his or
her agent or a participant or his or her agent. end delete begin insert section. end insert

begin delete

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

(3)

end delete

begin insert (2) end insert  “Party” means any person who is the subject of an
adjudicatory proceeding pending before the board.

begin delete

(4)

end delete

begin insert (3) end insert  “Participant” means any person who is not a party but who
actively supports or opposes a particular decision in an adjudicatory
proceeding pending before the board and who has a financial
interest in the decision, as described in Article 1 (commencing
with Section 87100) of Chapter 7 of Title 9. A person actively
supports or opposes a particular decision if he or she lobbies in
person the members or employees of the board, testifies in person
before the board, or otherwise acts to influence the members of
the board.

begin delete

(5)

end delete

begin insert (4) end insert  “Agent” means any person who represents a party to or
participant in an adjudicatory proceeding pending before the board.
If a person acting as an agent is also acting as an employee or
member of a law, accounting, consulting, or other firm, or a similar
entity or corporation, both the entity or corporation and the person
are agents.

begin delete

(6)

end delete

begin insert (5) end insert  “Adjudicatory proceeding pending before the board” means
a matter for adjudication that has been scheduled and appears as
an item on a meeting notice of the board as required by Section
11125 as a contested matter for administrative hearing before the
board members. A consent calendar matter is not included unless
the matter has previously appeared on the calendar as a nonconsent
item, or has been removed from the consent calendar for separate
discussion and vote, or the item is one about which the member
has previously contacted the staff or a party.

begin delete

(7)

end delete

begin insert (6) end insert  A member knows or has reason to know about a contribution
begin insert or a reportable behested payment end insert if, after the adjudicatory
proceeding first appears on a meeting notice of the board, facts
have been brought to the member’s personal attention that he or
she has received a contribution begin insert or reportable behested payment end insert
which would require disqualification under begin insert paragraph (1) of end insert
subdivision (c), or that the member received written notice from
the board staff, before commencement of the hearing and before
any subsequent decision on the matter, that a specific party, close
corporation, or majority shareholder, or agent thereof, or any
participant having a financial interest in the matter, or agent thereof,
in a specific, named adjudicatory proceeding before the board,
made a contribution or contributions begin insert or reportable behested
payment end insert within the preceding 12 months. Each member shall
provide board staff with a copy of each of his or her campaign
statements at the time each of those statements is filed.

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

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

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

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

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

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

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

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

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

SEC. 3.  

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