BILL ANALYSIS �
AB 2162
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Date of Hearing: April 17, 2012
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
AB 2162 (Portantino) - As Introduced: February 23, 2012
SUBJECT : Political Reform Act of 1974: economic interest
disclosure.
SUMMARY : Revises the dollar thresholds that are used to report
the value of investments, real property interests, and income,
when a public official files a Statement of Economic Interest
(SEI). Specifically, this bill :
1)Requires specified public officials or candidates, when
required to report an investment or interest in real property
on an SEI, to disclose the fair market value of the investment
or interest in real property by selecting one of the following
thresholds:
a) At least two thousand dollars ($2,000) but not greater
than twenty-five thousand dollars ($25,000);
b) More than twenty-five thousand dollars ($25,000) but not
greater than one hundred thousand dollars ($100,000);
c) More than one hundred thousand dollars ($100,000) but
not greater than two hundred fifty thousand dollars
($250,000);
d) More than two hundred fifty thousand dollars ($250,000)
but not greater than five hundred thousand dollars
($500,000);
e) More than five hundred thousand dollars ($500,000) but
not greater than one million dollars ($1,000,000);
f) More than one million dollars ($1,000,000) but not
greater than five million dollars ($5,000,000);
g) More than five million dollars ($5,000,000) but not
greater than ten million dollars ($10,000,000); or,
h) More than ten million dollars ($10,000,000).
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2)Requires specified public officials or candidates, when
required to report a source of income or loan on an SEI, to
disclose the aggregate value of income from the source, or in
the case of a loan, the highest amount owed to the source, by
selecting one of the following thresholds:
a) At least five hundred dollars ($500) but not greater
than one thousand dollars ($1,000);
b) More than one thousand dollars ($1,000) but not greater
than ten thousand dollars ($10,000);
c) More than ten thousand dollars ($10,000) but not greater
than twenty-five thousand dollars ($25,000);
d) More than twenty-five thousand dollars ($25,000) but not
greater than one hundred thousand dollars ($100,000);
e) More than one hundred thousand dollars ($100,000) but
not greater than two hundred fifty thousand dollars
($250,000);
f) More than two hundred fifty thousand dollars ($250,000)
but not greater than five hundred thousand dollars
($500,000);
g) More than five hundred thousand dollars ($500,000) but
not greater than one million dollars ($1,000,000);
h) More than one million dollars ($1,000,000) but not
greater than five million dollars ($5,000,000);
i) More than five million dollars ($5,000,000) but not
greater than ten million dollars ($10,000,000); or,
j) More than ten million dollars ($10,000,000).
EXISTING LAW :
1)Creates the Fair Political Practices Commission (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,
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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. Requires filers to file
the SEIs annually and at other periods of time, such as when
assuming or leaving office.
3)Requires the filers stated above, when required to report an
investment or interest in real property on an SEI, to disclose
the fair market value of the investment or real property
interest by selecting one of the following thresholds:
a) Equals or exceeds two thousand dollars ($2,000) but does
not exceed ten thousand dollars ($10,000);
b) Exceeds ten thousand dollars ($10,000) but does not
exceed one hundred thousand dollars ($100,000);
c) Exceeds one hundred thousand dollars ($100,000) but does
not exceed one million dollars ($1,000,000); or
d) Exceeds one million dollars ($1,000,000).
4)Requires the filers stated above, when required to report a
source of income or a loan on an SEI, to disclose the
aggregate value of income from the source, or in the case of a
loan, the highest amount owed to the source, by selecting one
of the following thresholds:
a) At least five hundred dollars ($500) but not greater
than one thousand dollars ($1,000);
b) More than one thousand dollars ($1,000) but not greater
than ten thousand dollars ($10,000);
c) More than ten thousand dollars ($10,000) but not greater
than one hundred thousand dollars ($100,000); or,
d) More than one hundred thousand dollars ($100,000).
FISCAL EFFECT : Unknown. State-mandated local program; contains
a crimes and infractions disclaimer.
COMMENTS :
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1)Purpose of the Bill : According to the author:
The Political Reform Act of 1974 requires persons holding
specified public offices to file disclosures of
investments, real property interests, and income within
specified periods of assuming or leaving office, and
annually while holding the office. The Act requires the
disclosure to include a statement indicating, within a
specified value range, the fair market value of investments
or interests in real property and the aggregate value of
income received from a source.
AB 2162 will revise the dollar amounts associated with
these ranges to provide for 8 total ranges of fair market
value of investments and real property interest and 10
total ranges of aggregate value of income.
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
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)Does This Bill Provide Transparency ? One of the original
purposes of the PRA was to ensure that public officials
disclose income and assets that could be affected by official
actions and disqualify themselves from participating in
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decisions when they have conflicts of interest. In the
background material provided by the author's office, the
author argues that, due to inflation and economic changes, the
current thresholds are not adequately serving the purposes for
which the PRA was passed and therefore need to be changed. If
a public official or a candidate reports that he or she
receives income of over $1,000,000 from one source, isn't that
sufficient information to determine whether there could be a
possible conflict of interest regarding related public policy
issues? If this bill becomes law, would increasing the
threshold to illustrate income of more than $5,000,000 help to
illustrate whether there is a potential conflict of interest
or rather simply illustrate the person's wealth? On the other
hand, if a public official or candidate's net worth exceeds
tens or hundreds of millions of dollars, disclosure of that
information may seem reasonable. The committee may wish to
consider whether the increased specificity proposed by this
bill will succeed in identifying potential conflicts of
interest or will the bill simply result in more burdensome
reporting.
4)Previous Legislation : AB 1391 (Leno) of 2006, would have
revised the dollar thresholds for the aggregate value of
income from each source that filers would be required to
report on their SEIs, among other provisions. AB 1391 died on
the Senate inactive file.
AB 2432 (Montanez) of 2006, which was substantially similar,
would have revised the dollar thresholds for the aggregate
value of income from each source that filers would be required
to report on their SEIs. AB 2432 was not heard in this
committee.
5)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.
REGISTERED SUPPORT / OPPOSITION :
Support
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None on file.
Opposition
None on file.
Analysis Prepared by : Nichole Becker / E. & R. / (916)
319-2094