BILL ANALYSIS �
SENATE COMMITTEE ON ELECTIONS
AND CONSTITUTIONAL AMENDMENTS
Senator Lou Correa, Chair
BILL NO: AB 2162 HEARING DATE: 6/19/12
AUTHOR: PORTANTINO ANALYSIS BY: D. CHESIN
AMENDED: AS INTRODUCED
FISCAL: YES
SUBJECT
Political Reform Act of 1974: economic interest disclosure
DESCRIPTION
Existing law 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 statements of economic interest (SEIs)
disclosing their financial interests, including
investments, real property interests, and income. Filers
must file the SEIs annually and at other periods of time,
including when they assume or leave office.
Existing law requires these filers, 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:
Equals or exceeds $2,000 but does not exceed $10,000;
Exceeds $10,000 but does not exceed $100,000;
Exceeds $100,000 but does not exceed $1,000,000; or
Exceeds $1,000,000.
Existing law requires these filers, 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:
At least $500 but not greater than $1,000;
More than $1,000 but not greater than $10,000;
More than $10,000 but not greater than $100,000; or,
More than $100,000.
This bill revises the dollar thresholds that are used to
report the value of investments, real property interests,
and income, when a public official files a SEI. This bill
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:
At least $2,000 but not greater than $25,000;
More than $25,000 but not greater than $100,000;
More than $100,000 but not greater than $250,000;
More than $250,000 but not greater than $500,000;
More than $500,000 but not greater than $1,000,000;
More than $1,000,000 but not greater than $5,000,000;
More than $5,000,000 but not greater than
$10,000,000; or,
More than $10,000,000.
This bill 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:
At least $500 but not greater than $1,000;
More than $1,000 but not greater than $10,000;
More than $10,000 but not greater than $25,000;
More than $25,000 but not greater than $100,000;
More than $100,000 but not greater than $250,000;
More than $250,000 but not greater than $500,000;
More than $500,000 but not greater than $1,000,000;
More than $1,000,000 but not greater than $5,000,000;
More than $5,000,000 but not greater than
$10,000,000; or,
More than $10,000,000.
BACKGROUND
Statements of Economic Interests . As part of the Political
Reform Act's (PRA) comprehensive scheme to prevent
conflicts of interest by state and local public officials,
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existing law identifies certain elected and other
high-level state and local officials who must file SEIs.
Similarly, candidates for those positions must also 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. In some cases,
original SEIs or copies thereof are filed with the FPPC.
So, How Much Money Do You Make ? SEIs contain reporting
thresholds that are detailed for lesser amounts of income
but give little specificity for large amounts of income -
the top current threshold is "over $100,000." It is common
for wealthy individuals to seek state elected office,
thereby rendering the current income reporting thresholds
somewhat dated. While those categorizations may have made
sense in the 1970s when they were originally implemented,
million-dollar salaries for corporate executives and others
are not uncommon, especially in California.
COMMENTS
1. 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 disclosures to include
a statement indicating, within a specified value range,
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the fair market value of investments or interests in
real property and the aggregate value of income received
from a source.
Currently there are only 4 total ranges of fair market
value of investments and real property interests and 4
total ranges of aggregate value of income. These values
have not been changed since the inception of the
Political Reform Act in 1974. These ranges, due to
inflation and economic changes, are not adequately
serving the purposes for which the Political Reform Act
was passed.
AB 2162 was introduced to make changes that more
accurately reflect the needs of the public to understand
where potential conflicts of interest might arise for
public officials and required reporting public
employees. AB 2162 will revise the dollar amounts
associated with these ranges to provide for eight total
ranges of fair market value of investments and real
property interests and 10 total ranges of aggregate
value of income.
2. Previous Legislation . AB 1391 (Leno) of 2006, which
died on the Senate inactive file, 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.
PRIOR ACTION
Assembly Elections and Redistricting Committee: 7-0
Assembly Appropriations Committee: 16-0
Assembly Floor: 72-0
POSITIONS
Sponsor: Author
Support: None received
Oppose: None received
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