BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 46 (Correa)
Hearing Date: 05/26/2011 Amended: 04/06/2011
Consultant: Mark McKenzie Policy Vote: G&F 7-0
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BILL SUMMARY: SB 46, an urgency measure, would require every
person who is required to file a statement of economic interests
and designated employees who file statements under a conflict of
interest code to also file a compensation disclosure form, and
require each agency to post compensation information on its
website. The bill would also require the State Controller's
Office (SCO) to adopt emergency regulations for the
implementation of these requirements by October 1, 2011,
including format of the compensation disclosure form, as
specified. Furthermore, the SCO would recommend methods for
compiling the compensation information on publicly accessible
databases to the Governor and Legislature by July 1, 2012. The
bill would authorize the Bureau of State Audits (BSA) to review
and report to the Governor and Legislature regarding the
implementation and effectiveness of the compensation disclosure
requirements. The provisions of the bill would sunset on
January 1, 2019.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
SCO: form development $43 General
SCO: IT & recommendations $335 General
FPPC staff review/processing $95
$189General
UC impact $800 $1,600 General
BOE impact $703 $515 General
State agency impacts unknown multi-million dollar costs to
other General/
state agencies to compile compensation
Various
information for affected employees and
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post
it on agency websites
BSA report future year cost pressures of $200-$250
General
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STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Existing law, the Political Reform Act of 1974 (PRA), requires
state and local elected officials, judges and court
commissioners, members of state boards and commissions, and
certain appointed officials to file annual statements of
economic interest, otherwise known as the Form 700, that
disclose their investments, property interests, and sources of
income. The PRA also requires state and local agencies to adopt
conflict of interest codes that list designated employees who
make decisions that may materially affect the agency's financial
interests. Designated employees are also required to file the
Form 700. Financial disclosure statements are generally filed
with each public agency. In most cases the statements are
retained by the agency, but the statements of state and local
elected officials, judicial officers, and legislative employees
are filed with the Fair Political Practices Commission (FPPC).
SB 46 would require public officials to file annual compensation
disclosure forms when filing their Form 700. This would apply
to state, county, and city elected officials and specified
appointed officials who are required to file a statement of
economic interests under the PRA. The bill also applies to
state and local persons identified as designated employees under
an agency's conflict of interest codes ("code filers").
Alternatively, each agency may compile the information and post
it on its website.
SB 46 would require the SCO to specify the format of the
compensation disclosure form as part of emergency regulations
adopted by March 1, 2013 to implement the bill's requirements.
The form would provide the disclosure of the following: (1)
costs of annual salary or stipend; (2) costs to provide
benefits; (3) reimbursement payments for expenses incurred in
the performance of official duties; (4) costs of any other
monetary or nonmonetary items; and (5) the completion date of
applicable ethics training. The SCO indicates that creating the
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new form would require at least .5 PY of staff time at a cost of
$43,000. The bill also requires the SCO to recommend methods
for compiling the compensation information on publicly
accessible databases to the Governor and Legislature by July 1,
2013. The SCO would incur Information Systems Development staff
costs of approximately $203,000 to develop the recommendations,
and Division of Accounting and Reporting staff costs of
approximately $132,000 to prepare and submit the recommendations
to the Governor and Legislature.
This bill would impose substantial requirements on public
agencies to provide specified compensation information to
employees and officials to include on their compensation
disclosure forms, and to collect and post the information on
public websites. Total state costs are unknown, but likely in
excess of $10 million annually for numerous state agencies to
comply with the bill's requirements. For example, the
University of California anticipates costs of $1.6 million to $2
million to annually compile and reports compensation information
on 8,000 to 10,000 individuals.
In addition to state agency costs, the FPPC would incur
additional costs to review and process the additional
information that is filed with Form 700s that it receives. FPPC
estimates a need for 2 additional full-time permanent staff to
review and process the additional forms, and one full-time
position for a year to coordinate the implementation of these
requirements with the SCO. FPPC costs would be approximately
$95,000 in 2012-13, $189,000 in 2013-14, and $113,000 ongoing.
The bill provides discretionary authority to the Bureau of State
Audits (BSA) to review the implementation and effectiveness of
these compensation disclosure requirements and report to the
Governor and Legislature by January 1, 2018, to the extent
resources are available. Since review of the program is
discretionary, rather than mandatory, the bill creates General
Fund cost pressures in the range of $200,000 to $250,000 in a
future year to provide resources in the future for the review
and report.
Proposed committee amendments would delay the operative date of
the bill to 1/1/13.
SB 46 (Correa)
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