BILL ANALYSIS                                                                                                                                                                                                    ”

                                                                    AB 2823

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          2823 (Gatto)

          As Amended  May 16, 2016

          2/3 vote

          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |Elections       |7-0  |Weber, Harper, Travis |                    |
          |                |     |Allen, Gordon, Low,   |                    |
          |                |     |Mullin, Nazarian      |                    |
          |                |     |                      |                    |
          |Appropriations  |20-0 |Gonzalez, Bigelow,    |                    |
          |                |     |Bloom, Bonilla,       |                    |
          |                |     |Bonta, Calderon,      |                    |
          |                |     |Chang, Daly, Eggman,  |                    |
          |                |     |Gallagher, Eduardo    |                    |
          |                |     |Garcia, Roger         |                    |
          |                |     |HernŠndez, Holden,    |                    |
          |                |     |Jones, Obernolte,     |                    |
          |                |     |Quirk, Santiago,      |                    |
          |                |     |Wagner, Weber, Wood   |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |


                                                                    AB 2823

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          SUMMARY:  Increases various conflict of interest thresholds in  
          the Political Reform Act (PRA), and generally requires greater  
          detail on public officials' Statements of Economic Interests  
          (SEIs) about the values of those officials' investments, real  
          property interests, and income, effective January 1, 2018.   
          Specifically, this bill:  

          1)Increases the threshold at which a public official's financial  
            interest can potentially create a conflict of interest under  
            the PRA, effective January 1, 2018, as follows:

             a)   Raises the conflict of interest threshold for interests  
               in real property from $2,000 to $10,000; 

             b)   Raises the conflict of interest threshold for  
               investments in a business entity from $2,000 to $5,000;  

             c)   Raises the conflict of interest threshold for sources of  
               income, other than gifts or specified loans, from $500 to  

          2)Revises the monetary ranges that specified public officials or  
            candidates, when filing an SEI, used to describe the value of  
            their investments, interests in real property, and income,  
            effective January 1, 2018. 

          3)Makes technical and corresponding changes

          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, the Fair Political Practices Commission (FPPC) will  
          incur General Fund costs of about $200,000 annually for two  


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          positions:  an attorney for regulation and compliance materials  
          drafting and responding to advice requests, and a program  
          specialist to redesign the SEI and accompanying informational  
          material, work with the software vendor for e-filing issues, and  
          respond to increased requests for phone advice, education, and  

          COMMENTS:  According to the author, "Transparency and disclosure  
          are essential to protecting public resources, preventing  
          corruption, and restoring public trust.  This legislation will  
          finally bring disclosure requirements into the 21st century.  AB  
          2823 will ensure that California's public officials are more  
          transparent in their business, investment, and income  
          disclosures, which will further confirm that our trusted elected  
          officials are using their positions to serve all citizens  

          AB 10 (Gatto) of 2015, was similar to this bill, but it  
          contained additional provisions that would have required the  
          disclosure of additional information on public officials' SEIs.   
          AB 10 was vetoed by Governor Brown.  In his veto message, the  
          Governor wrote "The Political Reform Act already requires public  
          officials to disclose their income, investments and business  
          activities with enough particularity so that conflicts of  
          interest can be identified.  This bill adds yet more complexity  
          to existing reporting requirements without commensurate benefit,  
          and I am not convinced that this bill will provide more useful  
          information to the public."  AB 2162 (Portantino) of 2012, would  
          have revised the dollar thresholds that are used to report the  
          value of investments, real property interests, and income, when  
          a public official files a SEI, thereby providing greater  
          specificity about the value of those investments, property  
          interests, and income. AB 2162 was also vetoed by Governor  

          Given the fact that the Governor has vetoed legislation that is  


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          similar to this bill twice in the last four years, it is unclear  
          whether there is reason to believe that this bill will receive  
          more favorable consideration from the Governor. 

          Under existing law, when a public official or a candidate for  
          public office is required to disclose a financial interest on  
          his or her SEI, the filer is not required to disclose the exact  
          value of the interest, but instead must select a monetary range  
          that describes the value of the interest.  This bill revises the  
          monetary ranges that public officials use to describe the values  
          of their financial interests on SEIs.  In general, the revised  
          disclosure categories in this bill would provide greater  
          specificity about the values of financial interests held by  
          public officials.

          California voters passed an initiative, Proposition 9, in 1974  
          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.

          Please see the policy committee analysis for a full discussion  
          of this bill.

          Analysis Prepared by:                                             
                          Ethan Jones / E. & R. / (916) 319-2094  FN:  


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