BILL ANALYSIS
AB 1993
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Date of Hearing: April 13, 2010
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 1993 (Strickland) - As Amended: April 6, 2010
SUBJECT : State government: reports: declarations.
SUMMARY : Requires written reports submitted to the
Legislature, a member of the Legislature, or any state
legislative or executive body to include a signed statement by
the head of the entity declaring that the factual contents of
the report are true. Specifically, this bill :
1)Requires every written report submitted to the Legislature, a
member of the Legislature, or any state legislative or
executive body to include a signed statement by the head of
the entity declaring that the factual contents are true,
accurate, and complete to the best of his or her knowledge.
2)States that the provisions of this bill apply to the head of
every entity submitting a written report, including, but not
limited to, elected state officials, and any official whose
duties are prescribed by the California Constitution, and the
executive officers of the Franchise Tax Board and Board of
Equalization.
3)States that the declaration in the signed statement as to the
truth, accuracy, and completeness of the factual contents of
the written report shall not apply to any predictions,
forecasts, recommendations, or opinions contained in the
report.
4)Subjects any person who knowingly declares a false statement
to be true to a civil penalty of up to $20,000, enforceable by
the Attorney General.
5)Defines "written report" to be either:
a) A document required by statute to be prepared and
submitted to the Legislature, a member of the Legislature,
or a committee of the Legislature; or,
b) A document, summary, or statement requested by a member
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of the Legislature.
EXISTING LAW establishes numerous requirements for state and
local government agencies to prepare and submit to the
Legislature, the Governor, and other governmental entities,
written reports on various subject matters of interest to
policymakers and regulatory entities.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, "The
purpose of this bill is to ensure that the Legislature, the
Governor, and the State Controller's Office receive accurate and
trustworthy information, so that they can be effective in their
decision-making.
"This bill will bring state agency certification in line with
what private 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 state and local entities, and they deserve the
same accountability from the officials appointed to manage
public funds."
Background . This bill is similar to sections of the
Sarbanes-Oxley Act of 2002, which requires Chief Executive
Officers to certify financial reports to company shareholders
under penalty of perjury. According to the author, "Congress
passed the Sarbanes-Oxley Act in response to financial scandals of
the early 2000's (e.g. Enron, WorldCom, etc.).
"Several years ago, during California's Joint Legislative Audit
Committee hearings that reviewed 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. There should be consistency
in the certification requirement for all state agencies."
Previous legislation . This bill contains provisions similar to
those in AB 1625 (Klehs) of 2005, AB 2404 (Klehs) of 2006, and
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AB 1135 (Strickland) of 2007, all of which were vetoed by
Governor Schwarzenegger.
AB 1625 (Klehs) of 2005 only applied to individuals appointed by
the Governor and confirmed by the Senate, and imposed a criminal
penalty for its violation. In his veto message for AB 1625, the
Governor stated that he would "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."
AB 2404 (Klehs) of 2006 replaced the criminal penalty with a
civil penalty. The Governor again vetoed this bill, stating the
following:
"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 State Controller contain signed statements
attesting to their accuracy, this bill would create and
inconsistent system in which some of the 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."
AB 1135 (Strickland) of 2007 applied to all elected officials at
the state government level, seemingly addressing some of the
Governor's issues with AB 1625 and AB 2404. However, the
Governor vetoed it, again noting that "this bill would create an
inconsistent system in which some of the information submitted
by the Administration is subject to declarations of truth while
all other information used in the legislature's deliberative
process is not." As amended, AB 1993 appears to address the
governor's concerns by expanding the certification requirement
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to all entities submitting a written report to the Legislature,
member of the Legislature, or a legislative committee.
Double-referred . This bill is double-referred to the Assembly
Judiciary Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Marina Wiant / B.,P. & C.P. / (916)
319-3301