BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 704|
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UNFINISHED BUSINESS
Bill No: SB 704
Author: Gaines (R)
Amended: 7/8/15
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 6-0, 4/29/15
AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Pavley
NO VOTE RECORDED: Moorlach
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SENATE FLOOR: 38-0, 5/22/15
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Gaines, Galgiani, Hall, Hancock, Hernandez,
Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu,
McGuire, Mendoza, Mitchell, Monning, Moorlach, Morrell,
Nguyen, Nielsen, Pan, Pavley, Roth, Runner, Stone, Vidak,
Wieckowski, Wolk
NO VOTE RECORDED: Fuller
ASSEMBLY FLOOR: 78-0, 8/27/15 (Consent) - See last page for
vote
SUBJECT: Public officers and employees: conflict of interest:
contracts
SOURCE: Author
DIGEST: This bill adds a new exception to the list of remote
interests that are exempt from statutory conflict of interest
prohibitions.
Assembly Amendments include planners in the list of
professionals included under the definition of "remote
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interest," clarify that advisory board or commission refers to
an unelected board or commission, and narrow the scope of the
remote interest prohibition as it relates to owners or partners
of certain firms who serve on an unelected board or commission.
ANALYSIS:
Existing law:
1)Prohibits state and local officials from making, influencing,
or voting on public contracts in which they have a prohibited
financial interest, as defined under Government Code Section
1090.
2)Lists 16 interests in a public contract that qualify only as
"remote interests," such as the interest of an engineer,
geologist, or architect employed by an engineering or
architectural consulting firm.
3)Requires an official with a remote interest to:
a) disclose his or her interest to the contracting
government body;
b) note the interest in the government body's official
records; and
c) abstain from participating in making the contract.
4)Lists 14 types of financial "non-interests" that the
Legislature has determined should not be subject to Section
1090 at all, including: ownership interest of less than 3% of
a corporation; interest in a spouse's employment, if the
spouse has held the same job for at least one year before the
official took office; or that of a public official being
reimbursed for his or her actual expenses related to the
performance of official government duties.
This bill:
1)Adds the interest of an owner or partner of a firm who serves
on an unelected board or commission to a contracting agency to
the list of "remote interest" exceptions to Government Code
Section 1090.
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2)Requires the owner or partner of a firm to recuse himself or
herself from providing any advice to a contracting agency
regarding the contract between the firm and the contracting
agency, and from all participation in reviewing a project that
results from that contract.
3)Includes in the definition of "remote interest" the interest
of a planner employed by a consulting engineering,
architectural, or planning firm.
Background
Architects and engineers often serve on various local government
advisory bodies-including architectural review boards, art
commissions and design review boards-for the purpose of
providing technical advice to local elected officials. These
boards advise city councils and other officials on matters such
as:
1)Promoting orderly development;
2)Encouraging desirable land use and improvements; and
3)Aesthetic, health, and safety factors of relevance to the
community.
Under existing law, a partner or owner of an architectural or
engineering firm may not serve on such a review board and
simultaneously enter into a contract with the government entity
which the board advises. Attorney General's opinions have
indicated that the interest of a partner or owner of an
architectural or engineering firm in a public contract is a
prohibited financial interest under Section 1090, and not a
"remote interest." Therefore, the owner or partner of an
architectural or engineering firm cannot avoid liability under
Section 1090 by abstaining from voting or recusing him or
herself.
Some California architects now seek to establish an additional
"remote interest" exception to Section 1090, so that owners or
partners of architectural or engineering firms who serve on
review boards to contracting agencies can recuse themselves in
the event of a conflict of interest, instead of resigning.
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Comments
1)Purpose of this bill. Section 1090 of the Government Code
prohibits a government body from approving a public contract
with an owner or partner of a firm who serves on a board or
commission that advises the government body. These boards and
commissions and the communities they serve, benefit when
architects and other professionals volunteer their time and
expertise. SB 704 would allow and encourage more architects,
engineers and other professionals to serve their communities
as volunteers on appointed boards and commissions, such as
design review boards and planning commissions.
2)Let's be clear. SB 704 does not define what constitutes an
"advisory board or commission." Cities around the state may
have commissions and boards with varying degrees of power and
responsibility. Some bodies offer only nonbinding
suggestions, while the recommendations of some boards and
commissions are treated as final. According to Attorney
General's opinions, courts have construed the "making" of a
contract broadly, to include contract-related negotiations,
discussions, reasoning, and planning. The Committee may wish
to consider amending SB 704 to clarify the definition of
"advisory board or commission" and to clarify that elected
officials and anyone with the ability to make, influence, or
vote on public contracts are not exempt from Section 1090.
3)Remotely close. SB 704 amends 1091.5 of the Government Code,
which relates to so-called "non-interests" under Section 1090.
However, the bill proposes creating another situation in
which an interested party could overcome the 1090 prohibition,
by recusing himself or herself from all participation in a
public contract. State law classifies such scenarios as
"remote interests." Therefore, the Committee may wish to
consider amending SB 704 to place its language in the statute
that deals with "remote interests."
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
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SUPPORT: (Verified8/28/15)
American Institute of Architects, California Council
OPPOSITION: (Verified8/28/15)
None received
ASSEMBLY FLOOR: 78-0, 8/27/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Beth Gaines, Gallagher, Cristina Garcia,
Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray,
Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,
Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Wood, Atkins
NO VOTE RECORDED: Frazier, Williams
Prepared by:Toren Lewis / GOV. & F. / (916) 651-4119
8/28/15 14:11:10
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