BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 330 (Mendoza) - Public officers:  contracts:  financial  
          interest
          
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          |Version: February 23, 2015      |Policy Vote: GOV. & F. 7 - 0    |
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          |Urgency: No                     |Mandate: Yes                    |
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          |Hearing Date: April 27, 2015    |Consultant: Mark McKenzie       |
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          This bill meets the criteria for referral to the Suspense File.







          Bill  
          Summary:  SB 330 would specify that an elected state or local  
          official is deemed to have a prohibited financial interest in a  
          public contract if the public official's spouse, child, parent,  
          sibling, or spouse of the child, parent, or sibling has a  
          financial interest in that contract, as specified. 


          Fiscal  
          Impact:  Fair Political Practices Commission (FPPC) costs of  
          approximately $211,000 (General Fund) annually for 1/2 PY of  
          legal staff to handle increased requests for written advice in  
          conflict-of-interest cases, and 1 PY of staff for increased  
          enforcement caseload (1/2 PY of legal staff and 1/2 PY of  







          SB 330 (Mendoza)                                       Page 1 of  
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          investigative staff).


          Background:  Existing law prohibits members of the Legislature and state,  
          county, district, judicial district, and city officers or  
          employees from having a financial interest in any contract made  
          in their official capacity, or by any body or board of which  
          they are members. (Government Code Section 1090)  Existing law  
          also specifies circumstances under which an officer or employee  
          is exempt from the prohibitions against having a financial  
          interest in public contracts.
          Existing law authorizes the FPPC to enforce Section 1090  
          violations by bringing an administrative or civil action against  
          a person subject to public contract conflict-of-interest  
          provisions, as specified.  Existing law also authorizes public  
          officials who are subject to Section 1090 to request an opinion  
          or advice from the FPPC regarding prohibitions against having a  
          financial interest in public contracts.




          Proposed Law:  
            SB 330 would, on or after January 1, 2017, expand the  
          circumstances that give rise to a prohibited financial interest  
          in a public contract.  Specifically, this bill would deem an  
          elected state or local officer to have a prohibited financial  
          interest in a contract if the official's spouse, child, parent,  
          sibling, or the spouse of the child, parent, or sibling has a  
          financial interest in a contract made by the officer in his or  
          her official capacity, or by any body, board, or commission of  
          which that officer is a member.
          This bill requires that the same standards used to determine a  
          public officer's financial interest under current law must be  
          used to determine a financial interest with respect to any of  
          the specified family relations.  An individual lobbying on  
          behalf of a contracting party would be considered an agent of  
          that party for purposes of determining a prohibited financial  
          interest.




          Related  








          SB 330 (Mendoza)                                       Page 2 of  
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          Legislation:  AB 1090 (Fong), Chap 650/2013, expanded FPPC  
          authority regarding enforcement of violations of Government Code  
          Section 1090, dealing with elected officials'  
          conflicts-of-interest in public agency contracts, and required  
          FPPC to provide opinions and advice with respect to Section  
          1090.


          Staff  
          Comments:  This bill would strengthen conflict-of-interest laws  
          by prohibiting lobbying efforts or financial interests of  
          certain family members from unduly influencing state and local  
          officials' public contracting decisions.
          The FPPC anticipates that this bill will result in a significant  
          increase in requests from public officials for Section 1090  
          legal opinions and advice to determine whether they may have a  
          financial interest in a contract as a result of a family  
          relationship.  The expanded conflict-of-interest provisions are  
          also expected to result in additional FPPC enforcement action.   
          The FPPC indicates it would incur additional costs of $210,934  
          annually for 1-1/2 PY of staff time within the legal and  
          enforcement divisions, as specified above.  There could be some  
          offsetting penalty and fine revenues, but they are  
          unquantifiable at this time.


          By expanding the prohibitions against public officials'  
          financial interests in contracts, the bill creates a new crime,  
          thereby imposing a state-mandated local program.  Any local  
          costs related to the enforcement of the new crimes are not  
          reimbursable from the state, pursuant to the California  
          Constitution and existing statute. 




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