BILL ANALYSIS �
AB 2661
Page 1
GOVERNOR'S VETO
AB 2661 (Bradford)
As Amended April 30, 2014
2/3 vote
ELECTIONS 6-0 NATURAL RESOURCES 8-0
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|Ayes:|Fong, Donnelly, Bonta, |Ayes:|Chesbro, Dahle, Bigelow, |
| |Hall, Perea, Rodriguez | |Garcia, Muratsuchi, |
| | | |Patterson, Stone, |
| | | |Williams |
|-----+--------------------------+-----+--------------------------|
| | | | |
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APPROPRIATIONS 17-0
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|Ayes:|Gatto, Bigelow, | | |
| |Bocanegra, Bradford, Ian | | |
| |Calderon, Campos, | | |
| |Donnelly, Eggman, Gomez, | | |
| |Holden, Jones, Linder, | | |
| |Pan, Quirk, | | |
| |Ridley-Thomas, Wagner, | | |
| |Weber | | |
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|ASSEMBLY: |78-0 |(May 15, 2014) |SENATE: |34-0 |(August 25, |
| | | | | |2014) |
| | | | | | |
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SUMMARY : Limits the ability of a person to be appointed to the
California Energy Commission (CEC) if he or she received income
from a load serving entity in the two years prior to his or her
appointment. Moves conflict of interest provisions relative to
the CEC into the Political Reform Act (PRA). Specifically, this
bill :
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1)Moves the following conflict of interest provisions that are
applicable to the CEC from the Public Resources Code to the
PRA, and gives the Fair Political Practices Commission (FPPC),
instead of the Attorney General, the authority to waive these
provisions if the interest is not sufficiently substantial to
affect the integrity of services that the state may expect:
a) A prohibition on a person from being a member of the CEC
if, during the two years prior to appointment to the CEC,
the person received any substantial portion of his or her
income directly or indirectly from any electric utility or
engages in the sale or manufacture of any major component
of any facility.
b) A prohibition on members of the CEC (except for the
Secretary of the Resources Agency and the President of the
Public Utilities Commission, who are ex officio members of
the CEC) from holding any other elected or appointed public
office or position.
c) A prohibition on members or employees of the CEC
maintaining a relationship as a partner, employer,
employee, or consultant with a person who acts as an
attorney, agent, or employee for a person other than the
state in connection with a judicial or other proceeding,
hearing, application, request for ruling, or other
determination; contract; claim; controversy; study; plan;
or other particular matter in which the CEC is a party or
has a direct and substantial interest.
2)Expands the prohibition described in 1) a) above, by
prohibiting the appointment of an individual who received a
substantial portion of his or her income directly or
indirectly from any load serving entity, as defined, or from a
person if a substantial portion of that person's income is
received, directly or indirectly, from generating,
transmitting, or distributing electricity in the state.
3)Repeals various restrictions on members and employees of the
CEC that are similar to conflict of interest restrictions
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contained in the PRA.
4)Provides that the term "income," for the purposes of the
conflict of interest provisions that are specific to the CEC,
includes the following payments that are not otherwise
considered income for the purposes of the PRA: salary and
reimbursement for expenses or per diem, and social security,
disability, or other similar benefit payments received from a
state, local, or federal government agency, and reimbursement
for travel expenses and per diem received from a bona fide
nonprofit entity exempt from taxation under Section 501(c)(3)
of the Internal Revenue Code.
5)Makes technical and conforming changes.
FISCAL EFFECT : According to the Senate Appropriations
Committee, one-time costs of approximately $57,000 to the FPPC
(General Fund). The FPPC indicates the need for 1/2 Attorney I
position to promulgate regulations at a cost of $57,189.
COMMENTS : According to the author, "Public Resources Code (PRC)
Section 25205 specifies conflicts of interest and incompatible
activities only applicable to Commissioners of the California
Energy Commission (CEC). The section was adopted when the CEC
was established, in 1974, prior to statutes that created
competitive electricity markets.
"PRC Section 25205 is exceedingly vague and, therefore,
difficult to interpret. As a result, CEC Commissioners decline
to participate in matters that the language of the statute may
prohibit, but where no actual conflict exists.
"PRC Section 25205 may have made sense at the time of its
adoption, but the subsequent adoption and development of
generally-applicable conflicts law, shifts in the electricity
market structure, and the ambiguity of many of its terms render
it obsolete."
Legislation that created the CEC was signed into law two weeks
prior to the adoption of the PRA by the voters through the
passage of Proposition 9 at the June 1974 statewide primary
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election. As a result, at the time that the CEC was created,
and its specific conflict of interest rules were established,
the FPPC did not exist, and the state did not have the conflict
of interest rules that were enacted through the PRA and through
subsequent amendments to the PRA (although general conflict of
interest rules existed prior to the adoption of the PRA, the PRA
enacted more comprehensive rules, including a requirement for
governmental agencies to adopt a conflict of interest code).
Notwithstanding the fact that the CEC has its own set of
conflict of interest rules, the conflict of interest provisions
in the PRA apply generally to all public officials and public
agencies, including the CEC and its members and employees. As
noted above, this bill repeals certain provisions of the CEC's
conflict of interest rules that limit the ability of members and
employees of the CEC to participate in governmental decisions
that affect their financial interests. The PRA's conflicts of
interest rules, however, will continue to apply to those
governmental actions by the CEC and its members and employees.
This bill proposes transferring certain other conflict of
interest rules that are specific to the CEC from the Public
Resources Code into the PRA. This move, along with
corresponding changes made in this bill, has two primary
effects. First, by including these restrictions in the PRA, the
FPPC will be primarily responsible for the enforcement and
interpretation of the CEC's conflict rules. Second, violations
of the CEC's conflict of interest rules will no longer be
subject only to felony penalties. Instead, violations will be
subject to the same penalties that apply to other violations of
the PRA, namely misdemeanor criminal penalties, or civil or
administrative fines.
Generally, the conflict of interest rules in the PRA do not
treat income from governmental entities as a potential source
for a conflict of interest. This bill, by contrast, provides
that income from governmental entities can be a source of a
conflict that would prevent a person from being appointed to the
CEC. According to the author's office, the reason for making
income from governmental entities a potential source for a
conflict of interest is that municipal utilities, which are
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responsible for a sizeable share of electricity sales in the
state, are subject to CEC oversight with respect to their
procurement of renewable energy, energy efficiency program
progress, and implementation of incentive programs.
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.
Please see the policy committee analysis for a full discussion
of this bill.
GOVERNOR'S VETO MESSAGE :
"This bill would place undue restrictions on the appointment of
qualified commissioners with relevant, real-world experience.
It is also unnecessary in light of current law, which already
prohibits officials from having a conflict of interest."
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094
FN: 0005685