BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 2040 HEARING: 6/18/14
AUTHOR: Garcia FISCAL: Yes
VERSION: 5/23/14 TAX LEVY: No
CONSULTANT: Ewing
PUBLIC OFFICIALS' COMPENSATION
Requires local agencies to report the annual compensation
of public officials to the State Controller and to post
that information on the local agency's website.
Background and Existing Law
Since the 1940s, local agencies have been required to file
annual financial transaction reports with the State
Controller's Office. These reports document local
agencies' revenues, expenditures, long-term indebtedness,
appropriation limits, and total annual appropriations
subject to those limits. The Controller is required to
prepare and publish annual reports on the financial
transactions of cities, counties and special districts,
along with any other information deemed to be of public
interest (SB 1138 Fletcher, Chapter 111, 1945).
Consistent with the State Controller's authority to publish
financial data, the Controller maintains a website listing
government compensation in California. The site allows the
public to review compensation information from state
agencies, local agencies, some public colleges and
universities, as well as the earnings of state elected
officials.
Some proponents of greater transparency want enhanced
requirements for local agencies to make public the
compensation they provide to their public officials.
Proposed Law
Assembly Bill 2040 directs local agencies to submit
information to the State Controller on the annual
compensation they provide to their public officials. AB
AB 2040 -- 5/23/14 -- Page 2
2040 also requires local agencies to post that information
in a conspicuous place on the local agency's website, if
the agency maintains a website.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . AB 2040 will help the public to
find and review compensation information for local agency
public officials. By requiring local agencies to transmit
this information to the State Controller, and requiring the
information to be posted on local agency websites, the
public will have improved access to information that is
already in the public domain, but which is often difficult
to find. AB 2040 is an important step in improving
government transparency and accountability.
2. What necessity ? The State Controller already receives
compensation information from local agencies, and posts
that information on the Controller's website. In addition,
local agencies have the authority to post compensation
information on their own websites. Deciding how best to
provide information to the public, along with their other
duties, is what city council members, county supervisors
and special district directors are elected to do. AB 2040
erodes the authority of local officials' to manage local
affairs without substantially increasing public access to
compensation information. If the public is concerned that
their local agencies are not sufficiently transparent, they
should hold their elected representatives accountable. The
Committee may wish to consider whether AB 2040 imposes
unnecessary new requirements on local agencies without
increasing public transparency.
3. What is required ? State law directs local agencies to
submit specified information to the State Controller, along
with other information deemed to be of public interest by
the Controller. The State Controller has required local
agencies to provide compensation information. The law does
not require the Controller to request or post that
information. Should a future State Controller choose not
AB 2040 -- 5/23/14 -- Page 3
to post that information, AB 2040 would mandate local
agencies to submit compensation information, but there
would be no requirement for that information to be posted
on the Controller's website. The Committee may wish to
consider amending AB 2040 to require the Controller to
report and release on the agency's website the compensation
information covered by the bill.
4. Once is enough ? AB 2040 directs each local agency to
submit compensation information to the State Controller for
posting on the Controller's website and to post that
information on the local agency's website. Local agencies
are not required under the law to maintain a website. It
is unclear if this posting requirement creates a fiscal
disincentive for smaller local agencies to maintain a
website. Further, it is not clear if the double posting
will result in greater transparency. The Committee may
wish to consider amending the bill to require local
agencies to post their compensation on their website or
create a link to the Controller's website.
5. Let's be clear . AB 2040 directs local agencies to
submit information on annual compensation to the State
Controller for their public officials. A prior version of
the bill defined public officials based on an existing
statutory definition. The current version leaves the term
"public official" undefined. The Committee may wish to
consider amending the bill to clarify which public
officials are covered by this reporting requirement.
6. Technical clarification . AB 2040 requires local
agencies to post on their websites the compensation
information posted on the Controller's website. The
Controller can face delays in posting updated information,
as it reconciles data from many local agencies. Under the
terms of the bill, a local agency that elects to post
updated information on its website, also would be required
to post whatever information is posted on the Controller's
website, which could result in duplicate, inconsistent
posts. The Committee may wish to consider amending the
bill to clarify that local agencies are required to post
the information they submit to the Controller.
7. Related Legislation. AB 2040 is not the only bill that
deals with local agencies' financial information:
AB 2040 -- 5/23/14 -- Page 4
AB 941 (Rendon, 2013) expands the State
Controller's authority to address local government
financial or administrative issues through audits,
investigations and technical assistance. AB 941 was
held in Assembly Appropriations.
AB 1035 (Muratsuchi, 2013) increases financial
penalties for local agencies that fail to submit
annual financial reports to the State Controller's
Office. The bill was amended into a new topic
unrelated to local agency compensation or financial
reporting.
SB 186 (Kehoe, 2012) expands the State Controller's
authority to perform audits or investigations of
counties, cities, special districts and joint powers
authorities if the Controller has reason to believe
that a local government is violating specified
financial requirements. SB 186 was held in Assembly
Appropriations.
Assembly Actions
Assembly Local Government Committee 7-0
Assembly Appropriations Committee17-0
Assembly Floor 78-0
Support and Opposition (6/12/14)
Support : Common Cause.
Opposition : Association of California Healthcare
Districts; California League of Cities; California Special
Districts Association.