BILL ANALYSIS �
AB 2062
Page 1
Date of Hearing: April 17, 2012
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
AB 2062 (Davis) - As Introduced: February 23, 2012
SUBJECT : Political Reform Act of 1974: statements of economic
interests: electronic filing.
SUMMARY : Allows an agency to permit the electronic filing of a
statement of economic interests (SEI), in accordance with
regulations adopted by the Fair Political Practices Commission
(FPPC). Specifically, this bill :
1)Authorizes an agency to permit the electronic filing of an
SEI, including amendments, in accordance with regulations
adopted by the FPPC.
2)Requires the FPPC, in consultation with interested agencies,
to use common database integration features in developing
database design requirements for all electronic filings that
may be used.
3)Requires an agency which intends to permit electronic filing
of SEIs to submit a proposal, which includes a description of
the electronic filing system the agency proposes to use, to
the FPPC for approval and certification.
4)Requires the FPPC to review an agency's proposal for
compliance with the system requirement regulations adopted as
required by this bill. Requires the FPPC to approve and
certify the agency's filing system as soon as practicable
after receiving the agency's submitted proposal if the system
complies with the regulations.
5)Requires an agency's proposed electronic filing system to meet
the following requirements:
a) Requires an SEI filed electronically to include an
electronic transmission submitted under penalty of perjury
and conform to current electronic transaction law.
b) Requires the agency's filing officer to issue a
confirmation notifying the filer that his or her SEI or
amendment was received. Requires the confirmation to
AB 2062
Page 2
include the date and time that the SEI or amendment was
received by the filing officer and the method by which the
filer may view and print the data received by the filing
officer.
c) Provides that a copy of the confirmation retained by the
filer creates a rebuttable presumption that the filer
timely filed his or her SEI or amendment.
d) Requires the electronic system to include layered
security to ensure data integrity. Requires the system to
have the capability to uniquely identify a filer
electronically when he or she accesses the electronic
filing system. Requires the operational process of the
system to include industry best practices to ensure that
the security and integrity of the data and information
contained in the SEI or amendment is not jeopardized or
compromised.
e) Requires the agency to provide the public with a copy of
an SEI, upon request. Requires the copy of the
electronically filed SEI to be identical to the SEI
published by the FPPC and include the date the statement
was filed.
6)Permits the FPPC to adopt regulations to require an agency to
redact information on an SEI prior to posting it on the
Internet.
7)Permits the FPPC to conduct discretionary audits of an
agency's approved and certified electronic filing system to
evaluate its performance and compliance with the requirements
of this bill.
8)Permits a city or county, which developed an electronic filing
system pursuant to a specified pilot program established in
law, to continue to use that system for purposes of this bill,
including, but not limited to, the time during which the FPPC
is adopting regulations as required by this bill. Requires
the city or county, after the FPPC's regulations take effect,
to submit a description of its electronic filing system for
approval and certification within a reasonable time as
determined by the FPPC. Prohibits a city or county from
continuing to use an electronic filing system originally
developed pursuant to law if the FPPC does not approve and
AB 2062
Page 3
certify that electronic filing system as complying with the
requirements specified in this bill.
9)Provides that this bill is an urgency statute in order to
allow the FPPC time to develop regulations and procedures
critical to the implementation of a system for the electronic
filing of SEIs prior to the 2013 filing period.
EXISTING LAW :
1)Creates the FPPC, and makes it responsible for the impartial,
effective administration and implementation of the Political
Reform Act (PRA).
2)Requires that candidates for, and current holders of,
specified elected or appointed state and local offices and
designated employees of state and local agencies file SEIs
disclosing their financial interests, including investments,
real property interests, and income.
3)Establishes a pilot project which permits Los Angeles, Merced,
Orange, Santa Clara, Stanislaus, and Ventura counties and the
City of Long Beach to permit the electronic filing of an SEI
in accordance with regulations adopted by the FPPC.
4)Requires the pilot project to cover the reporting periods of
2008 through 2011.
5)Required a city or county participating in the pilot project
to submit a report to the FPPC not later than July 1, 2011.
Required the report to include a listing and estimate of
associated operational efficiencies; related savings and
associated costs from implementing and operating the pilot
program; a listing of the safety, security, or privacy issues
encountered and an explanation of how those issues were
addressed; available information related to feedback from
electronic filing participants; and any other relevant
information on the implementation of the pilot program.
6)Required the FPPC to transmit the city and county reports
received, as well as any comments on the reports, to the
Legislative Analyst's Office (LAO) no later than August 15,
2011, and required the LAO to provide a report to the
Legislature evaluating the pilot project not later than
February 1, 2012.
AB 2062
Page 4
7)Allowed the FPPC, in conjunction with the LAO, to develop
additional criteria for the report to be submitted to the FPPC
by participating cities and counties.
8)Provides that the pilot project began on January 1, 2009, and
will end on December 31, 2012.
FISCAL EFFECT : Unknown. State-mandated local program; contains
a crimes and infractions disclaimer.
COMMENTS :
1)Purpose of the Bill : According to the author:
The Electronic Form 700 program has been undeniable success
story. According to the Legislative Analyst's Office, the
program has resulted in decreases in staff hours, overtime
costs, and temporary employee costs. Furthermore, the
Electronic Form 700 program was found to be "more efficient
than the paper-based process" and garnered overwhelmingly
positive responses from participants in the pilot program.
This bill simply adopts the recommendation of the LAO that
all counties be permitted to adopt the Electronic Form 700
Program.
2)Statements of Economic Interests : As part of the PRA's
comprehensive scheme to prevent conflicts of interest by state
and local public officials, existing law identifies certain
elected and other high-level state and local officials who
must file SEIs. Similarly, candidates for those positions must
file SEIs. Other state and local public officials and
employees are required to file SEIs if the position they hold
is designated in an agency's conflict of interest code. A
position is designated in an agency's conflict of interest
code when the position entails the making or participation in
the making of governmental decisions that may foreseeably have
a material financial effect on the decision maker's financial
interests. While the exact number of people that are required
to file SEIs is unknown, the FPPC has estimated that the
number exceeds 200,000 officials and employees statewide.
The information that must be disclosed on an SEI, and the
location at which an SEI is filed, varies depending on the
position held by the individual who is required to file an
AB 2062
Page 5
SEI. Although there are some exceptions, individuals who are
required to file an SEI typically must file that document with
the agency of which they are an elected official or by which
they are employed.
3)Pilot Project : As noted above, existing law created a pilot
project that began in 2009 and is currently scheduled to end
in December 2012, to evaluate the efficiency and desirability
of allowing for SEIs to be filed electronically. Participants
in the pilot project were required to submit a report to the
FPPC in 2011, and in turn the FPPC was required to forward the
reports to the LAO along with comments that the FPPC had on
those reports or the pilot project. Based on that
information, the LAO was required to provide a report to the
Legislature evaluating the pilot project earlier this year.
4)LAO's Recommendations : As stated above, the LAO submitted a
report to the Legislature in January of this year. According
to the LAO report, the participating government entities
indicated that the paper-based filing process was
time-consuming and required significant amounts of staff time
to review the SEIs, work with the filers to correct errors and
maintain the paper file systems. However, after implementing
the electronic filing system, participating entities found
that that electronic filing resulted in operational
efficiencies through reduced personnel due to the significant
reduction in the number of errors in the filers' SEIs and
other operational costs. Additionally, it was reported to the
LAO that none of government entities reported any security
issues with the electronic filing systems and found that most
of the public officials and employees who filed using the
electronic filing system considered it to be a useful and an
easy process.
And as a result of these findings, the LAO made the following
recommendations: (1) that due to success of the electronic
filing systems generated savings and improved accuracy, the
Legislature should allow participating entities to continue
electronic filing on an ongoing basis; (2) that given the
potential savings and improved accuracy, the Legislature
should consider giving all governments the option to establish
an electronic filing system; and (3) due to the FPPC's role in
administering and overseeing the PRA, the Legislature should
authorize the FPPC to establish any guidelines and
specifications to be followed by the government entities when
AB 2062
Page 6
developing and using the electronic filing systems.
5)Urgency Clause : This bill contains an urgency clause.
According to the sponsor, the urgency clause is necessary to
allow the FPPC time to develop regulations and procedures
critical to the implementation of the systems to facilitate
the electronic filing of SEIs prior to the 2013 filing period.
6)Technical Amendment : The author has proposed a technical
amendment, which was suggested by the FPPC, to ensure that
electronic copies of filed SEIs that are received by the FPPC
will comply with existing statutory requirements. To
accomplish this purpose, the author has proposed the following
amendment. On page 4, between lines 23 and 24, insert the
following:
(h) The Commission shall accept electronic copies of
statements of economic interests forwarded to it by an
agency that has received an electronically filed statement
from a filer.
7)Arguments in Support : California Association of Clerks and
Election Officials, the sponsors of this bill, write:
Currently, five counties and one city are authorized to
administer an electronic filing pilot program to test the
efficiency and convenience of a paperless system for filing
the Form 700. The local agencies have completed the
program that resulted in very significant costs savings and
greater compliance with the economic disclosure requirement
of the act. The pilot agencies have also received
favorable review from the Legislative Analyst's Office and
the Fair Political Practices Commission (FPPC). Future
entities would be subject to the same program security
requirements as the existing entities and would be required
to utilize a system that would include layered security,
secure authentication and industry best practices to ensure
that the security and integrity of the data contained in
the statement is not jeopardized or compromised.
AB 2062 would allow any local entity to apply for
consideration from the FPPC to participate in the Form 700
electronic filing program. Participation would be
contingent upon approval of the computer system by the
Commission, and the requirement that the local entity bear
AB 2062
Page 7
all burden for the initial and ongoing cost of the program.
The long-term savings of investing in this program have
compelled existing pilot counties and city to seek
permanent status, while authorizing and encouraging others
to benefit from the program
8)Political Reform Act of 1974 : California voters passed an
initiative, Proposition 9, in 1974 that created the FPPC and
codified significant restrictions and prohibitions on
candidates, officeholders and lobbyists. That initiative is
commonly known as the PRA. Amendments to the PRA that are not
submitted to the voters, such as those contained in this bill,
must further the purposes of the initiative and require a
two-thirds vote of both houses of the Legislature.
9)Previous Legislation : AB 2607 (Davis), Chapter 498, Statutes
of 2008, established a pilot project which permits Los
Angeles, Merced, Orange, and Stanislaus Counties to permit the
electronic filing of an SEI in accordance with regulations
adopted by the FPPC. AB 1149 (Davis), Chapter 139, Statutes
of 2009, made two minor changes to that pilot project.
AB 1921(Davis), Chapter 58, Statutes of 2010, allowed Santa
Clara and Ventura Counties and the City of Long Beach to
participate in the pilot project that was created by AB 2607.
AB 182 (Davis), Chapter 96, Statutes of 2011, extended the
sunset of the pilot program that was created by AB 2607 to
December 2012.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Clerks and Election Officials
(sponsor)
Common Cause
Fair Political Practices Commission
Santa Clara County Board of Supervisors
Opposition
None on file.
Analysis Prepared by : Nichole Becker / E. & R. / (916)
AB 2062
Page 8
319-2094