BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 330|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
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THIRD READING
Bill No: SB 330
Author: Mendoza (D)
Amended: 6/1/15
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 4/15/15
AYES: Hertzberg, Nguyen, Bates, Beall, Hernandez, Lara, Pavley
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/28/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
SUBJECT: Public officers: contracts: financial interest
SOURCE: Author
DIGEST: This bill specifies 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.
ANALYSIS:
Existing law:
1)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
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members. (Government Code Section 1090)
2)Specifies circumstances under which an officer or employee is
exempt from the prohibitions against having a financial
interest in public contracts.
This bill:
1)Expands the list of family relationships that give rise to a
prohibited financial interest in a public contract under
Section 1090 of the Government Code to include a public
official's:
Spouse
Child
Parent
Sibling
Spouse of an official's child, parent, or sibling.
1)Requires that the same standards used to determine a public
officer's financial interest under existing law must be used
to determine a financial interest with respect to any person
listed above.
2)Directs that an individual lobbying on behalf of a contracting
party must be construed to be an agent of that contracting
party for purposes of determining a financial interest
pursuant to this bill's provisions.
3)Provides that this bill is subject to existing provisions of
Government Code Section 1090.
4)Limits the conflicts-of-interest to individual members of the
governing entity, rather than the entire governing body.
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Comments
1)Purpose of the bill. Existing law does not expressly forbid
state and local officials from awarding public contracts to
their adult children, parents, siblings, in-laws, or other
relatives. This bill is motivated by concerns that the
lobbying efforts or financial interests of family members
beyond an official's household may be unduly influencing
official decisions in public contracting, thereby undermining
public confidence in government. The author's office points
out that several other states' conflict of interest laws are
more expansive than California's. For example, Arizona and
Indiana prohibit a public official from making or voting on a
contract that would benefit the official's spouse, parent,
sibling, child, stepchild, grandparent, grandchild, in-law,
and even unrelated persons who rely on the public official for
significant financial support. Meanwhile, some states, like
Maine and West Virginia, even consider an official
"interested" in a contract if the contract would benefit the
official's "close business associate." SB 330 brings state
and local agencies' conflict of interest restrictions into
line with policies adopted by other states, California's
public universities, and many private corporations.
2)Raising the stakes. While SB 330 clearly prohibits public
officials from making or voting on public contracts that would
benefit certain close family members, California judges can
already use the common law doctrine against conflicts of
interest to invalidate agreements tainted by this kind of
self-dealing. However, officials who violate the common law
doctrine are not subject to criminal prosecution. SB 330
significantly strengthens these common law prohibitions by
making it a crime, punishable by fines or jail time, for a
public official to make or vote on a public contract
benefitting his or her adult child, sibling, parent, or
in-law. SB 330 raises questions about whether state law
should distinguish between imposing criminal penalties for
willful Government Code Section 1090 violations in which a
public official directly enriches him or herself, and
violations involving more remote financial interests, such as
those of an official's stepparents and in-laws.
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3)Mandate. Because a willful violation of Government Code
Section 1090's prohibitions is a crime, the Legislative
Counsel's Office says that SB 330's expansion of those
prohibitions creates a new crime. By creating a new crime, SB
330 also creates a new state-mandated program. But this bill
disclaims the state's responsibility for reimbursing local
governments for enforcing these new crimes. That's consistent
with the California Constitution, which says that the state
does not have to reimburse local governments for the costs of
new crimes (Article XIIIB, 6[a] [2]).
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee, Fair Political
Practices Commission costs of up to $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 investigative staff).
SUPPORT: (Verified 5/29/15)
None received
OPPOSITION: (Verified5/29/15)
None received
Prepared by:Toren Lewis / GOV. & F. / (916) 651-4119
SB 330
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