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    
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          |Author:    |Wolk                                                 |
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          |Version:   |2/26/15                                              |
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          |Urgency:   |No                     |Fiscal:    |Yes              |
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          |Consultant:|Darren Chesin                                        |
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           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.







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          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. 









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             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. 








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           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. 








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          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

                                          
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