BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 2040 (Garcia) - Public official compensation.
Amended: June 25, 2014 Policy Vote: G&F 7-0
Urgency: No Mandate: Yes
Hearing Date: August 4, 2014
Consultant: Mark McKenzie
This bill may meet the criteria for referral to the Suspense
File.
Bill Summary: AB 2040 would require local agencies to report
information on public official compensation in annual financial
transactions reports submitted to the State Controller (SCO),
and either post the information on its website, or post a link
to that information on the SCO's website.
Fiscal Impact:
Unknown, likely minor reimbursable mandate costs. Local
agencies could seek reimbursement for any costs incurred for
compiling compensation data and including it in the annual
financial report, and for posting that information on their
respective websites. (General Fund)
No new costs to the SCO to compile the information from
annual financial reports and post it on its website because
the bill codifies current SCO practice. However, placing
those requirements in statute could create cost pressures
because it creates a legal compulsion to collect and publish
information on public compensation; the SCO currently
performs this function at his discretion.
Background: Existing law requires the Controller to compile and
publish reports of the financial transactions of each county,
city, and special district within the state, together with any
other matter he or she deems of public interest. Existing law
also requires the local agency official who has charge of the
financial records of the agency to submit a report to the SCO
that includes all of the local agency's financial transactions
in the preceding fiscal year, as specified.
In the wake of the scandals over local official compensation in
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the City of Bell, and in an effort to promote government
transparency, the SCO worked with local agencies to compile
information regarding compensation paid to local officials and
launched a website to make that information available to the
public. The Government Compensation in California website
includes information about all local agency employees with wages
reportable on a Federal W-2 form. Data is self-reported by
local governments and is not verified by the SCO.
Proposed Law: AB 2040 would require local agencies that submit
an annual financial transactions report to the SCO each year to
also report the annual compensation of the agency's public
officials in accordance with instructions developed by the SCO
in consultation with affected local agencies. The SCO would be
required to compile, publish, and make available on its website,
in a format that may be printed and downloaded, information on
public official compensation that is reported by local agencies.
The bill would also require local agencies to either post the
compensation information on their respective websites or post a
link to the SCO's Government Compensation in California website.
Staff Comments: There is no explicit requirement in current law
for local agencies to report public official compensation to the
SCO, or for the SCO to compile that information and make it
available to the public. The SCO indicates that the bill would
not impose new costs because it would codify that current
practice. However, placing those requirements in statute could
create cost pressures by creating a legal compulsion to collect
and publish information on public compensation; the SCO
currently performs this function at his discretion.
Government Code section 17565 states that "if a local agency or
a school district, at its option, has been incurring costs which
are subsequently mandated by the state, the state shall
reimburse the local agency or school district for those costs
incurred after the operative date of the mandate." This is
consistent with the constitutional requirement to reimburse for
state-mandated costs, since the costs in this case, though not
new, were not mandated by the state prior to the new law. To
the extent that local agencies are not legally compelled under
current law to report annual compensation of public officials to
the SCO, this bill would create a state mandate. Any costs
incurred by local agencies to compile and report that
information following the operative date of this bill would be
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subject to reimbursement by the state, if a successful claim is
filed with the Commission on State Mandates. Staff estimates
that costs to compile compensation information would be minor
since local agencies are currently providing that data to the
SCO, and have presumably already established any necessary
procedures for compiling and reporting the information. It is
unlikely that affected agencies would expend the time and
resources necessary to file a claim with the Commission for
reimbursement of these costs. It should be noted, however, that
the bill's requirements would apply to over 4,000 local agencies
that currently submit an annual financial report to the SCO.
In addition, the bill requires local agencies to report
compensation in accordance with instructions developed by the
SCO in consultation with affected local agencies. It is unclear
whether any future changes to those instructions that would
increase requirements related to the report, and potentially
impose additional costs on local agencies, would be subject to
reimbursement.
Recommended Amendments: Staff recommends an amendment to delete
the specific citation of the SCO website. Staff notes that the
bill was amended in the Assembly Appropriations Committee to
remove the specific link, among other changes.
Page 5, delete line 19, and insert: Web site.