BILL ANALYSIS �
AB 952
Page 1
Date of Hearing: April 11, 2011
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
AB 952 (Jones) - As Amended: April 25, 2011
SUBJECT : High-Speed Rail Authority
SUMMARY : Imposes specific conflict of interest requirements and
limitations on the California High-Speed Rail Authority
(Authority), its employees, businesses, and consultants that are
doing, or want to do, business with the Authority.
Specifically, this bill :
1)Prohibits a member, employee, or consultant of the Authority
from receiving any gift, as defined by reference, unless the
gift was originally given to the Authority and the Authority,
in turn, transferred the gift to the member or employee;
however, such a transfer may be made only upon approval of the
Senate by resolution.
2)Prohibits any construction company, engineering firm,
consultant, legal firm, or any other company, vendor, or
business entity that is under contract, or seeking a contract,
with the Authority, or subcontractor of any of the above, or
owner, employee, or any member of their immediate families of
any of these companies, firms, vendors, entities or
subcontracts from making gifts to any member, employee, or
contractor of the Authority or to any member of their
immediate families.
3)Prohibits a member, employee, or consultant of the Authority
from appearing before the Authority, for compensation, on
behalf of any individual or private or public entity for a
period of three years after termination of the person's
relationship with the Authority.
EXISTING LAW:
1)The Political Reform Act (Act), requires most state and local
government officials and employees to publicly disclose their
personal assets and income and to disqualify themselves from
participating in decisions that may affect their personal
economic interests; assigns to the Fair Political Practices
Commission (FPPC) the responsibility for interpreting the
AB 952
Page 2
Act's provisions.
2)Generally limits gifts to a public official from a third party
to a specified amount (currently $420) per year per donor;
gifts received over $50 from a single source must be reported
on the recipient's yearly statement of economic interests.
3)Defines "gift" to mean any payment that confers a personal
benefit on the recipient, to the extent that consideration of
equal or greater value is not received.
4)Excludes from the definition of "gift" any informational
material such as books, reports, pamphlets, calendars, or
periodicals; provides that payment for travel or reimbursement
for any expenses is specifically not "informational material."
5)Under the Act, places two types of restrictions on
post-governmental activity (a.k.a. "revolving door ban"):
a) A one-year ban prohibits certain officials, for one year
after leaving state 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, and any individual who manages 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.
AB 952
Page 3
6)Provides a three-year revolving door ban for any member of the
California Gambling Control Commission, the executive
director, the chief, and any employee of the commission.
FISCAL EFFECT : Unknown
COMMENTS : Last fall, the FPPC investigated several Authority
board members and the former executive director to ascertain if
they had violated rules regarding the receipt of gifts. The
investigations centered on officials having taken a number of
overseas trips paid for by foreign governments that are hoping
to participate in the development of the high-speed rail project
in California.
The investigation was officially closed earlier this year and
the FPPC reported that there was no evidence of any violations
having occurred. As it turns out, individual recipients of the
trips were not required to disclose the trips as gifts on annual
conflict of interested reports because the trips were given to
the Authority, not the individuals.
Under FPPC regulations, certain payments may be considered a
gift to a state agency and not an individual official if the
following four requirements are met:
1)The agency receives and controls the gifts or payments;
2)The gift or payment is used for official agency business;
3)The agency, not the donor, determines the officials who will
use the gift or payment; and,
4)The agency memorializes the payment in written record.
Within 30 days after use of the payment, a state agency must
fully disclose receipt of the gift, file the disclosure report
with the FPPC, and post the disclosure report on the agency's
website.
The author has introduced this bill "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 of
public monies involved, high standards of conduct must be
AB 952
Page 4
observed as even the perception of corruption is harmful."
The sponsors of this bill, the Cities of Palo Alto, Atherton,
Menlo Park, and Pico Rivera argue that the bill would hold
members of the Authority to the same three-year "revolving door"
ban that members of the California Gambling Control Commission
are held. The sponsors argue that this higher level of scrutiny
is appropriate given the Authority's heavy reliance on outside
contractors and the billions of dollars involved in the project.
Provisions of this bill that impose a three-year revolving door
ban on the Authority seem appropriate, given the size and dollar
value of the project, the unusually heavy reliance on outside
contractors, and the precedent already set as it relates to the
California Gambling Control Commission.
Double-referred: This bill has also been referred to the
Assembly Committee on Elections and Redistricting.
REGISTERED SUPPORT / OPPOSITION :
Support
City of Palo Alto
Californians Advocating Responsible Rail Design
City of Burlingame
City of Menlo Park
City of Pico Rivera
Professional Engineers in California Government
Opposition
None on file
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093