BILL ANALYSIS �
AB 952
Page 1
Date of Hearing: May 3, 2011
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
AB 952 (Jones) - As Amended: April 25, 2011
AS PROPOSED TO BE AMENDED
SUBJECT : High-speed rail.
SUMMARY : Prohibits members, employees, and consultants of the
High-Speed Rail Authority (HSRA) from receiving gifts, and
imposes a three-year revolving door ban on members, employees,
and consultants of the HSRA. Prohibits the HSRA from receiving
gifts or transferring any gifts it receives without the approval
of the Department of Finance (DOF). Specifically, this bill :
1)Prohibits a member, employee, or consultant of the HSRA from
receiving any gift, as defined by the Political Reform Act of
1974 (PRA).
2)Prohibits a construction company, engineering firm,
consultant, legal firm, or any other company, vendor, or
business entity with a contract or seeking a contract with the
HSRA, or a subcontractor of any of the foregoing, or owner,
employee, or any member of their immediate families of any of
these companies, firms, vendors, entities, or subcontractors,
from making any gift to a member, employee, or consultant of
the HSRA, or to any member of their immediate families.
3)Prohibits the HSRA from receiving gifts unless it receives the
written approval of the DOF. Permits the HSRA to transfer any
gifts it receives to another person only with the written
approval of the DOF.
4)Prohibits a member, employee, or consultant of the HSRA from
receiving compensation to appear before the HSRA on behalf of,
or to in any way represent before the HSRA, any individual or
private or public entity for a period of three years after
termination of the person's relationship with the HSRA.
5)Provides that the provisions of this bill shall be enforced by
the Attorney General, District Attorney, or City Attorney with
jurisdiction, pursuant to the rules and penalties set forth in
the PRA.
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EXISTING LAW :
1)Creates the Fair Political Practices Commission (FPPC), and
makes it responsible for the impartial, effective
administration and implementation of the PRA.
2)Restricts the post-governmental activities of specified former
public officials, commonly known as a "revolving door ban," as
follows:
a) A one-year ban prohibits certain officials, for one year
after leaving public service, from representing any other
person by appearing before or communicating with, for
compensation, their former agency in an attempt to
influence agency decisions that involve the making of
general rules (such as regulations or legislation), or to
influence certain proceedings involving a permit, license,
contract, or transaction involving the sale or purchase of
property or goods. Members of the Legislature, members of
state boards and commissions with decision-making
authority, local elected officials, and individuals who
manage public investments are examples of people who are
subject to the one-year ban.
b) A permanent ban prohibits former state officials from
working on proceedings that they participated in while
working for the state. The ban prohibits appearances and
communications to represent any other person, as well as
aiding, advising, counseling, consulting or assisting in
representing any other person, for compensation, before any
state administrative agency in a proceeding involving
specific parties (such as a lawsuit, a hearing before an
administrative law judge, or a state contract) if the
official previously participated in the proceeding.
3)Prohibits a member of the California Gambling Control
Commission (CGCC), the executive director, the chief, and any
employee of the CGCC designated by regulation, for a period of
three years after leaving office or employment, from receiving
compensation for acting as agent or attorney for, or otherwise
representing, any other person by making any formal or
informal appearance, or by making any oral or written
communication, before the CGCC, or any officer or employee
thereof, if the appearance or communication is for the purpose
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of influencing administrative action, or any action or
proceeding involving permits, licenses, or approvals.
4)Prohibits board members and specified employees of the Public
Employees' Retirement System and the State Teachers'
Retirement System from receiving compensation, for a period of
two years after leaving the office or position, for acting as
an agent or attorney for, or otherwise representing, any other
person except the state, by making a formal or informal
appearance before, or an oral or written communication to, the
retirement system, or an officer or employee thereof, if the
appearance or communication is made for the purpose of
influencing administrative or legislative action, or
influencing an action or proceeding involving a permit,
license, grant, or contract, or the sale or purchase of goods
or property.
5)Prohibits an elected state and local government official or a
candidate for such a position from accepting gifts from any
single source in a calendar year with a total value of more
than $420, with certain limited exceptions. Prohibits a
member of a state board or commission, or a designated
employee of a state or local government agency, from accepting
gifts from any single source in a calendar year with a total
value of more than $420 if the member or employee would be
required to report the receipt of income or gifts from that
source on his or her statement of economic interests.
Requires the FPPC to adjust these gift limits on January 1 of
each odd-numbered year to reflect changes in the Consumer
Price Index, rounded to the nearest $10.
FISCAL EFFECT : Keyed non-fiscal by the Legislative Counsel.
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COMMENTS :
1)Author's Amendments : In a prior committee (see below), this
bill was amended to remove a portion of the bill that would
have required the Senate to approve the receipt of any gifts
by the HSRA, and to approve the transfer of any gifts received
by the HSRA to any other person. Those provisions were
removed to address concerns raised by committee staff.
Subsequent to the bill passing out of that committee with
amendments, the author and supporters of this bill worked with
the committee staff to develop amendments that addressed those
concerns. As a result, the author is proposing author's
amendments in committee today that would (1) require the DOF
to approve the receipt of any gifts by the HSRA, and require
the DOF to approve the transfer of any gifts received by the
HSRA to another person, and (2) provide that the provisions of
this bill will be enforced by the Attorney General, District
Attorney, or City Attorney with jurisdiction, pursuant to the
rules and penalties set forth in the PRA. This analysis
reflects those proposed author's amendments.
2)Purpose of the Bill : According to the author:
The HSRA has been the focus of inquiries regarding �HSRA]
officials receiving gifts, which have included European
trips sponsored by foreign government entities. The trips,
some of which were worth thousands of dollars, were donated
to the �HSRA] and then allotted to board members and
executives, according to rail agency officials. This, in
effect, circumvents the disclosure on annual reports of
gifts, income and personal investments.
Further, in an investigation conducted by the Los Angeles
Times, it was reported that the HSRA was unable to account
for the donated trips, as generally required by state
ethics regulations, and the agency failed to post details
on the sources, costs and itineraries of the trips on its
website, as required by FPPC rules.
In order to ensure the integrity of the process and instill
public confidence, it is imperative that members, staff and
consultants not be permitted to accept gifts from any
individual who conducts business or intends to conduct
business with the �HSRA]. Given the extraordinary amount
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of public monies involved, high standards of conduct must
be observed as even the perception of corruption is
harmful.
AB 952 will be �a] direct step towards preventing even the
perception of impropriety.
With respect to the three year revolving door ban, this is
consistent with other commissions' term of service, such as
the California Gambling Control Commission.
3)Revolving Door Ban, Public Entities, and Potential Amendments :
The three-year revolving door ban proposed by this bill would
prohibit former members and employees of the HSRA from
appearing before the HSRA on behalf of public employees as
well as private employees. This is a notable departure from
existing revolving door bans, which typically permit a person
to appear before an agency or other governmental body on
behalf of another agency or governmental body. For instance,
the revolving door bans that apply to elected state officers
(including members of the Legislature) and designated
employees of state administrative agencies explicitly do not
apply to a person who is an officer or employee of another
state agency, board, or commission if the appearance or
communication is for the purpose of influencing governmental
action on behalf of the agency, board, or commission, nor do
the bans apply to an official holding an elective office of a
local government agency if the appearance or communication is
for the purpose of influencing governmental action on behalf
of the local government agency.
The committee may wish to consider whether this bill should be
amended to similarly exempt appearances before the HSRA from
the revolving door ban created by this bill when those
appearances are made by a state employee or officer or an
elected local official on behalf of the public entity that
they represent or with which they are employed.
4)Gifts to an Agency : The author's amendments that are proposed
to this bill (see above) would prohibit the HSRA, as an
agency, from receiving any gifts unless the receipt of those
gifts was approved of in writing by the DOF. To the
committee's knowledge, no other state or local agency is
prohibited by statute from receiving gifts without the prior
written approval from another independent, public entity.
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Supporters of this bill argue that such a restriction is
appropriate for the HSRA due to the fact that the HSRA has
limited oversight by other governmental entities, and due to
the fact that the HSRA has received numerous gifts, including
travel abroad, hotel rooms, and expensive meals, from
consultants and companies interested in doing business with
the HSRA. Supporters further note that the HSRA has the
inherent ability to award billions of dollars in contracts.
5)Conflict of Interest Code : In background material submitted
to the committee, the author argues that it is appropriate to
prohibit members, employees, and consultants of the HSRA from
receiving gifts in order to ensure the integrity of and
instill public confidence in the HSRA.
The PRA requires every state and local government agency,
including the HSRA, to adopt and promulgate a Conflict of
Interest Code, which has the full force of law. Pursuant to
the Conflict of Interest Code adopted by the HSRA, members,
consultants, and employees of the HSRA are already prohibited
from soliciting or accepting any gift from a person,
corporation, or group that provides or is desirous of
providing goods or services to the HSRA. In light of this
fact, the need for establishing a statutory ban on gifts to
members, employees, and consultants of the HSRA is unclear.
6)Related Legislation : AB 41 (Hill) would add members of the
HSRA to a statutorily-designated list of high-ranking public
officials who are subject to the most expansive disclosure
requirements under the PRA. AB 41 was approved by this
committee on a 7-0 vote and by the Assembly on a 60-0 vote,
and is awaiting referral to a policy committee in the Senate.
SB 50 (Correa), which is identical to AB 41, is pending in the
Senate Appropriations Committee.
7)Double-Referral : On April 11, 2011, this bill was approved by
the Assembly Transportation Committee on an 11-0 vote.
REGISTERED SUPPORT / OPPOSITION :
Support
AB 952
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Californians Advocating Responsible Rail Design
City of Palo Alto
City of Pico Rivera
Professional Engineers in California Government
Town of Atherton
One individual
Opposition
None on file.
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094