BILL ANALYSIS Ó SENATE COMMITTEE ON ELECTIONS AND CONSTITUTIONAL AMENDMENTS Senator Ben Allen, Chair 2015 - 2016 Regular Bill No: SB 554 Hearing Date: 4/21/15 ----------------------------------------------------------------- |Author: |Wolk | |-----------+-----------------------------------------------------| |Version: |2/26/15 | ----------------------------------------------------------------- ----------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ----------------------------------------------------------------- ----------------------------------------------------------------- |Consultant:|Darren Chesin | | | | ----------------------------------------------------------------- Subject: California Water Commission: disqualifying financial interest: removal from office DIGEST This bill provides that a member of the California Water Commission is removed from office if after trial a court finds that the commission member has knowingly participated in any commission decision in which the member has a disqualifying financial interest in the decision. ANALYSIS Existing law: 1.Creates the Fair Political Practices Commission (FPPC), and makes it responsible for the impartial, effective administration and implementation of the Political Reform Act (PRA). 2.Prohibits members of the Legislature and state, county, district, judicial district, and city officers or employees, pursuant to Section 1090 of the Government Code, from being financially interested in any contract made by them in their official capacity, or by any body or board of which they are members. Prohibits state, county, district, judicial district, and city officers or employees from being purchasers at any sale made by them in their official capacity, or from being vendors at any purchase made by them in their official capacity. SB 554 (Wolk) Page 2 of ? 3.Provides that a person who willfully violates Section 1090 is subject to a fine of not more than $1,000 or by imprisonment in the state prison, and is forever disqualified from holding any office in the state. 4.Alternatively permits the FPPC to bring a civil or administrative action against any person for a violation of Section 1090 but prohibits the FPPC from commencing an action absent a written authorization from the district attorney of the county in which the violation occurred, or if the Attorney General (AG) or a district attorney is pursuing a criminal action against that person for the same alleged violation. 5.Provides that a civil violation of Section 1090 shall be punishable by a fine in an amount not to exceed the greater of $10,000 or three times the value of the financial benefit received by the person. Provides that a violation of Section 1090 is punishable through an administrative action by a monetary penalty of up to $5,000. 6.Prohibits a public official, pursuant to the PRA, from making, participating in making, or in any way attempting to use his or her official position to influence a governmental decision in which the official knows or has reason to know that he or she has a financial interest. Provides that designated employees and specified public officials that realize an economic benefit as a result of a violation of this provision are liable in a civil action brought by the civil prosecutor for an amount of up to three times the value of the benefit. 7.Provides that a public official has a financial interest in a decision within the meaning of the PRA if it is reasonably foreseeable that the decision will have a material financial effect, distinguishable from its effect on the public generally, on the official, a member of his or her immediate family, or on any of the following: A. Any business entity in which the public official has a direct or indirect investment worth $2,000 or more. B. Any real property in which the public official has a direct or indirect interest worth $2,000 or more. SB 554 (Wolk) Page 3 of ? C. Any source of income, as specified, aggregating $500 or more in value provided or promised to, received by, the public official within 12 months prior to the time when the decision is made. D. Any business entity in which the public official is a director, officer, partner, trustee, employee, or holds any position of management. E. Any donor of, or any intermediary or agent for a donor of, a gift, as specified, provided to, received by, or promised to the public official within 12 months prior to the time when the decision is made. 1.Provides that violations of the PRA are subject to specified criminal, civil, and administrative penalties. 2.Makes the AG responsible for enforcing the criminal provisions of the PRA with respect to state agencies, lobbyists, and state elections. Provides that the district attorney of any county in which a violation occurs has concurrent powers and responsibilities with the AG. 3.Provides that the FPPC is the civil prosecutor for violations of the PRA with respect to the state or any state agency, except itself. This bill: 1.Prohibits members of the California Water Commission from participating in any commission decision in which they have a disqualifying financial interest in the decision as defined in the PRA. 2.Provides that upon the request of any person, or on the AG's own initiative, the AG may file a complaint in the Superior Court for the County of Sacramento alleging that a commission member has knowingly violated this provision and the facts upon which the allegation is based and asking that the member be removed from office. 3.Requires that the court shall pronounce judgment that the member be removed from office after trial if it finds that the commission member has knowingly violated this provision. SB 554 (Wolk) Page 4 of ? BACKGROUND The California Water Commission . According to information provided on its website, the California Water Commission consists of nine members appointed by the Governor and confirmed by the State Senate. Seven members are chosen for their general expertise related to the control, storage, and beneficial use of water and two are chosen for their knowledge of the environment. The Commission provides a public forum for discussing water issues, advises the Department of Water Resources (DWR), and takes appropriate statutory actions to further the development of policies that support integrated and sustainable water resource management and a healthy environment. Statutory duties include advising the Director of DWR, approving rules and regulations, and monitoring and reporting on the construction and operation of the State Water Project. Proposition 1, which was approved by the voters in 2014, authorizes a $2.7 billion continuous appropriation without regard to fiscal year to the Commission for water storage projects that improve the operation of the state water system, are cost effective, and provide a net improvement in ecosystem and water quality conditions. These projects are required to be selected by the Commission through a competitive public process that ranks potential projects based on the expected return for public investment as measured by the magnitude of the public benefits provided, pursuant to specified criteria. COMMENTS 1.According to the author : The California Water Commission has been given a new and important charge in Proposition 1. The Commission has been given the task of granting $2.7 billion in continuously appropriated bond dollars for the public benefits of water storage. In implementing this new charge, which will not include legislative oversight, it is important to ensure that the commissioners will not have financial conflicts of interest. SB 554 (Wolk) Page 5 of ? SB 554 simply prohibits Commissioners from participating in decisions in which there is a financial conflict of interest, and specifies that a commissioner can be removed if such an action is taken. SB 554 ensures that conflict of interest provisions apply specifically to the California Water Commission. 2.Are existing penalties sufficient ? As described above, existing law provides for criminal, civil, and administrative penalties for violations of various conflict of interest prohibitions including, in some instances, disqualification from holding office. Since all of these existing provisions already apply to members of the California Water Commission is the additional penalty provided in this bill necessary? POSITIONS Sponsor: Author Support: Sierra Club California Oppose: None received -- END --