BILL ANALYSIS                                                                                                                                                                                                    






                           SENATE JUDICIARY COMMITTEE
                        Senator Ellen M. Corbett, Chair
                           2007-2008 Regular Session


          AB 1135                                                A
          Assemblymember Strickland                              B
          As Amended July 3, 2007
          Hearing Date: July 10, 2007                            1
          Government Code                                        1
          KB:rm                                                  3
                                                                 5

                                     SUBJECT
                                         
                    State government: reports: declarations

                                  DESCRIPTION  

          This bill would require that written reports submitted to  
          the Legislature or executive body include a signed  
          statement by the head of an agency or department that the  
          factual contents of the report are true, accurate, and  
          complete, to the best of his/her knowledge.  This bill also  
          would provide that any person who declares as true any  
          material matter that he/she knows to be false shall be  
          liable for a civil penalty not to exceed $20,000, which  
          shall be exclusively assessed and recovered in a civil  
          action by the Attorney General.

                                    BACKGROUND  

          This bill represents the third consecutive year that a bill  
          has been introduced in response to a series of hearings in  
          which it was found that CalTrans had provided inaccurate  
          information to the State Legislature and withheld  
          information concerning the retrofit of the eastern span of  
          the Bay Bridge project.  

          In 2005, AB 1625 (Klehs) would have required written  
          reports that are required to be submitted by any state  
          agency, board, or commission to include a signed statement  
          by the head of the agency or chair of the board or  
          commission, declaring, under the penalty of perjury, that  
          the contents of the report are true, accurate, and complete  
                                                                 
          (more)



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          to the best of his/her knowledge.  AB 1625 was vetoed by  
          the Governor, who stated: 

          "I absolutely believe that the Legislature, indeed all  
          elected officials, must base their decisions on information  
          that is true, accurate, and complete.  This bill, requiring  
          legislative reports be submitted under penalty of perjury,  
          only applies to individuals appointed by the Governor and  
          confirmed by the Senate, and to the executive officer of  
          the Franchise Tax Board and the executive director of the  
          Board of Equalization.

          The law already protects against falsified reports to the  
          Legislature.  Department heads must take oaths of office,  
          and various Government and Penal Code provisions set forth  
          duties, obligations, and penalties for the accurate and  
          truthful execution of the operation of state government.   
          Further, the Legislature may already require individuals  
          appearing before it to testify under oath, and false  
          testimony is a felony.

          I will consider similar legislation that applies to all  
          written materials used in the course of legislative  
          deliberations that applies to any official of the State,  
          elected or appointed by the Governor, the Legislature or  
          any other constitutional officer."

          In 2006, AB 2404 (Klehs) was introduced containing similar  
          provisions as AB 1625, but with several differences.  AB  
          1625 contained language that explicitly stated that the  
          bill did not apply to any elected official of the state, or  
          any official whose duties are prescribed by the California  
          Constitutions.  AB 2404 removed those exemptions.  AB 2404  
          also added provisions that required mandatory reports to be  
          submitted to the State Controller by local agencies to also  
          include a statement signed under penalty of perjury.  AB  
          2404 was also vetoed by the Governor, who stated:

          "Although I agree that the Legislature should base their  
          decisions on sound information that is true, accurate and  
          complete, I believe that this bill is the wrong approach.   
          By requiring that only mandatory reports submitted to the  
          Legislature and [the] State Controller contain signed  
          statements attesting to their accuracy, this bill would  
          create an inconsistent system in which some of the  
                                                                       




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          information considered in the legislative process is  
          subject to declarations of truth, while the majority of the  
          written material used in the legislative process is  
          accepted as truth without such verification.

          The Legislature already has the authority to question the  
          accuracy of a report by requiring those responsible for  
          submitting the report to attest to the accuracy of the  
          report under oath.   Given this legislative oversight and  
          the fact that state law already makes it a misdemeanor for  
          a state or local official to submit a written report  
          containing false information to the State Controller, this  
          measure is unnecessary."
                                         
                            CHANGES TO EXISTING LAW
           
           Existing law  provides that every willful omission to  
          perform any duty enjoined by law upon any public officer,  
          or person holding any public trust or employment, where no  
          special provision is made for the punishment of such  
          delinquency, is punishable as a misdemeanor.  (Government  
          Code Section 1222.)

           Existing law  provides that every person who exercises any  
          function of a public office without taking the oath of  
          office, or without giving the required bond, is guilty of a  
          misdemeanor.   (Government Code Section 1303.)

           Existing law  provides that, unless otherwise provided,  
          before any officer enters on the duties of his office, he  
          shall take and subscribe the oath or affirmation set forth  
          in Section 3 of Article XX of the California Constitution.   
          (Government Code Section 1360.)

           Existing law  provides that every person who, while taking  
          and subscribing the oath or affirmation, states as true any  
          material matter which he knows to be false, is guilty of  
          perjury, and is punishable by imprisonment in the state  
          prison not less than one nor more than fourteen years.   
          (Government Code Section 1368.)

           Existing law  provides that every officer authorized by law  
          to make or give any certificate or other writing is guilty  
          of a misdemeanor if he makes and delivers as true any  
          certificate or writing containing statements which he knows  
                                                                       




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          to be false.  (Government Code Section 6203.)

           Existing law  provides that any person who testifies under  
          oath before any competent tribunal, including any  
          legislative committee, and willfully makes a knowingly  
          false statement is guilty of the crime of perjury.  (Penal  
          Code Section 118.)

           This bill  would provide that every written report required  
          to be submitted to the Legislature, a Member of the  
          Legislature, or any state legislature or executive body by  
          any state agency or department must include a signed  
          statement by the head of that agency or department  
          declaring that the factual contents of the report are true,  
          accurate, and complete to the best of his/her knowledge.

           This bill  would declare that the provisions of this bill  
          apply to the head of every state agency or department,  
          including but not limited to, elected state officials, and  
          any state official whose duties are prescribed by the  
          California Constitution.

           This bill  would provide that with respect to the Franchise  
          Tax Board, the signed statement shall be made by the  
          board's executive officer, and with respect to the State  
          Board of Equalization the signed statement shall be made by  
          the executive director.

           This bill  would provide that any person who declares as  
          true any material matter that he/she knows to be false  
          shall be liable for a civil penalty not to exceed $20,000.   
           This bill  would provide that the civil penalty shall be  
          exclusively assessed and recovered in a civil action by the  
          Attorney General.

           This bill  would provide that the declaration in the signed  
          statement as to the truth, accuracy, and completeness of  
          the contents of the written report shall not apply to any  
          predictions, forecasts, recommendations, or opinions  
          contained in the report.
                                     COMMENT
           
              1.   Stated need for the bill
           
            The author states:
                                                                       




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            "Recently, during California's Joint Legislative Audit  
            Committee hearings reviewing the Bay Bridge project, it  
            was found that CalTrans and other agency heads withheld  
            information or misrepresented vital facts in their  
            reports to the Legislature.  Under California law, the  
            officials had no liability for their actions.  Other  
            types of public reports, including the Annual Road Report  
            and the Annual Street Report, are already filed under  
            certification and penalty of perjury.  It does not make  
            sense to require certification from some agencies and not  
            others."

            "This bill would ensure that all state agencies or  
            departments and the officials in charge of them are held  
            accountable to the same standards.  In addition, the bill  
            would bring state agency certification in line with what  
            public companies are already required to do by federal  
            law- remain accountable to their shareholders in  
            providing accurate financial information.  California  
            taxpayers are the shareholders in the state and local  
            entities.  They deserve the same accountability from the  
            officials appointed to manage public funds."

           2.This bill would only require a declaration as the truth,  
            accuracy, and completeness of the factual contents of a  
            written report

             This bill differs from AB 1625 and AB 2404 in that it  
            only requires a signed declaration to attest to the  
            truth, accuracy, and completeness of the factual  
            contents, and not the entire contents of a written  
            report.  In fact, this bill specifically states that the  
            declaration shall not apply to any predictions,  
            forecasts, recommendations, or opinions contained in the  
            written report.  Narrowing the scope of the declaration  
            to only apply to factual contents is appropriate, as any  
            predictions, recommendations, or opinions made in written  
            reports are normally based on their factual content.   
            However, nothing in this bill would require persons  
            signing the declaration to verify the accuracy of the  
            factual contents of the report.  A person would only need  
            to declare that the factual content is accurate and  
            complete to the best of his/her knowledge.  
            If the executive officer or department head has no  
                                                                       




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            independent knowledge or specific expertise on the  
            subject, then he/she could arguably rely on the actual  
            written report and briefing from his/her staff to  
            determine that the factual content is accurate and  
            complete.  In this sense, it is unclear that this bill  
            would require persons signing the declaration to do  
            anything beyond what they may already do now, and thus  
            whether it will be an effective mechanism for increasing  
            truth and accuracy in written reports.

           3.This bill would impose a civil penalty for material  
            misrepresentations

             Prior versions of this bill required declarations to be  
            filed under penalty of perjury and imposed criminal  
            penalties for material misrepresentations.  This bill  
            would impose of maximum civil penalty of $20,000 on any  
            person who declares as true any material matter that he  
            or she knows to be false.  The civil penalty would be  
            exclusively assessed and recovered in a civil action  
            brought by the Attorney General on behalf of the people  
            in the State of California.

            Under this bill, a person would only be liable if he/she  
            intentionally misrepresented material matter.  However,  
            as noted above, nothing in this bill requires a person  
            signing the declaration to verify the accuracy of a  
            report's factual content.  Thus, a person could still  
            declare that the factual contents of a report are  
            complete and accurate, even if the report contains  
            misrepresentations of which he/she is unaware.  In this  
            instance, a person would arguably not be liable because  
            the declaration was honest and made to the best of  
            his/her knowledge.  Further, the employee or staff member  
            who was actually responsible for including the material  
            misrepresentation in the written report would not be  
            liable for the civil penalty under this bill.  Again,  
            this type of scenario makes it questionable as to whether  
            this bill will effectively increase truth and accuracy in  
            written reports.

         4.Opposition
           
            The Department of Consumer Affairs and the Department of  
            Mental Health have expressed opposition to this measure  
                                                                       




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            on the basis that it is unnecessary given the extensive  
            protections already in place to ensure accurate reporting  
            and communications in state government.  For example,  
            requirements for executing an oath of office or oath of  
            allegiance for state employees, appointees, elected  
            officials, and Constitutional officers found in the  
            Government Code require faithful discharge of all  
            assigned duties, and impose misdemeanor penalties for  
            delinquency in the performance of those duties.   
            Additionally, penalties for committing perjury and  
            willfully signing false statements are found in the  
            Government and Penal Codes.  The opponents assert that  
            "the civil penalty provision contained in this measure  
            would not obviate any criminal charges that may be filed  
            and is not considered a necessary deterrent given the  
            range of punishments already found in law."

          Support: None Known

          Opposition: Department of Mental Health; Department of  
          Consumer Affairs

                                     HISTORY
           
          Source: Author

          Related Pending Legislation: None Known

           Prior Legislation: AB 2404 (Klehs) of the 2005-06 session  
                        would have required written reports that are  
                        required to be submitted by any state agency,  
                        board, or commission to include a signed  
                        statement by the head of the agency or chair  
                        of the board or commission, declaring, under  
                        the penalty of perjury, that the contents of  
                        the report are true, accurate, and complete  
                        to the best of his/her knowledge.  This bill  
                        was vetoed by the Governor.

                        AB 1625 (Klehs) of the 2005-06 session would  
                        have required written reports that are  
                        required to be submitted to the Legislature  
                        by any state agency, board, or commission to  
                        include a signed statement by the head of the  
                        agency, chair of the board or commission, or  
                                                                       




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                        executive director, declaring, under the  
                        penalty of perjury that the contents of the  
                        report are true, accurate, and complete to  
                        the best of his/her knowledge.  This bill was  
                        vetoed by the Governor.

          Prior Vote:  Asm. Business & Professions Committee (Ayes 8,  
          Noes 1)
                    Asm. Appropriations Committee (Ayes 12, Noes 4)
                    Asm. Floor (Ayes 72, Noes 0)
                    Senate Governmental Organization Committee (Ayes  
          8, Noes 0)                                             
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