Bill Text: CA AB1090 | 2013-2014 | Regular Session | Chaptered
Bill Title: Public officers: conflicts of interest: contracts.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2013-10-08 - Chaptered by Secretary of State - Chapter 650, Statutes of 2013. [AB1090 Detail]
Download: California-2013-AB1090-Chaptered.html
BILL NUMBER: AB 1090 CHAPTERED
BILL TEXT
CHAPTER 650
FILED WITH SECRETARY OF STATE OCTOBER 8, 2013
APPROVED BY GOVERNOR OCTOBER 8, 2013
PASSED THE SENATE SEPTEMBER 11, 2013
PASSED THE ASSEMBLY SEPTEMBER 12, 2013
AMENDED IN SENATE AUGUST 29, 2013
AMENDED IN ASSEMBLY APRIL 10, 2013
INTRODUCED BY Assembly Member Fong
FEBRUARY 22, 2013
An act to amend Section 1091.5 of, and to add Sections 1097.1,
1097.2, 1097.3, 1097.4, and 1097.5 to, the Government Code, relating
to public officers.
LEGISLATIVE COUNSEL'S DIGEST
AB 1090, Fong. Public officers: conflicts of interest: contracts.
The Political Reform Act of 1974 establishes the Fair Political
Practices Commission as the agency responsible for enforcing the act.
The act authorizes the Commission to issue an opinion or advice to a
person with respect to that person's duties under the act, as
specified. The act authorizes the Commission to seek and impose
administrative and civil penalties against persons who violate the
act, as prescribed.
Existing law prohibits Members of the Legislature, state, county,
district, judicial district, and city officers or employees from
being financially interested in any contract made by them in their
official capacity, or by any body or board of which they are members.
Existing law identifies certain remote interests that are not
subject to this prohibition and other situations in which an official
is not deemed to be financially interested in a contract. Existing
law makes a willful violation of this prohibition a crime.
This bill would establish an additional situation in which an
official is not financially interested in a contract as applied to
specified public services contracts entered into by certain special
districts.
This bill would also make a person who violates the prohibition
against being financially interested in a contract, or who causes
another person to violate the prohibition, subject to administrative
and civil fines, as specified. The bill would authorize the
Commission to enforce these violations by bringing an administrative
or civil action against a person who is subject to the prohibition,
as specified, upon written authorization from the district attorney
of the county in which the alleged violation occurred.
This bill would authorize a person who is subject to those
prohibitions to request an opinion or advice from the Commission with
respect to those prohibitions, as specified.
The Political Reform Act of 1974, an initiative measure, provides
that the Legislature may amend the act to further the act's purposes
upon a 2/3 vote of each house and compliance with specified
procedural requirements.
This bill would declare that it furthers the purposes of the act.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1091.5 of the Government Code is amended to
read:
1091.5. (a) An officer or employee shall not be deemed to be
interested in a contract if his or her interest is any of the
following:
(1) The ownership of less than 3 percent of the shares of a
corporation for profit, provided that the total annual income to him
or her from dividends, including the value of stock dividends, from
the corporation does not exceed 5 percent of his or her total annual
income, and any other payments made to him or her by the corporation
do not exceed 5 percent of his or her total annual income.
(2) That of an officer in being reimbursed for his or her actual
and necessary expenses incurred in the performance of official
duties.
(3) That of a recipient of public services generally provided by
the public body or board of which he or she is a member, on the same
terms and conditions as if he or she were not a member of the body or
board.
(4) That of a landlord or tenant of the contracting party if the
contracting party is the federal government or any federal department
or agency, this state or an adjoining state, any department or
agency of this state or an adjoining state, any county or city of
this state or an adjoining state, or any public corporation or
special, judicial, or other public district of this state or an
adjoining state unless the subject matter of the contract is the
property in which the officer or employee has the interest as
landlord or tenant in which event his or her interest shall be deemed
a remote interest within the meaning of, and subject to, the
provisions of Section 1091.
(5) That of a tenant in a public housing authority created
pursuant to Part 2 (commencing with Section 34200) of Division 24 of
the Health and Safety Code in which he or she serves as a member of
the board of commissioners of the authority or of a community
development commission created pursuant to Part 1.7 (commencing with
Section 34100) of Division 24 of the Health and Safety Code.
(6) That of a spouse of an officer or employee of a public agency
in his or her spouse's employment or officeholding if his or her
spouse's employment or officeholding has existed for at least one
year prior to his or her election or appointment.
(7) That of a nonsalaried member of a nonprofit corporation,
provided that this interest is disclosed to the body or board at the
time of the first consideration of the contract, and provided further
that this interest is noted in its official records.
(8) That of a noncompensated officer of a nonprofit, tax-exempt
corporation, which, as one of its primary purposes, supports the
functions of the body or board or to which the body or board has a
legal obligation to give particular consideration, and provided
further that this interest is noted in its official records.
For purposes of this paragraph, an officer is "noncompensated"
even though he or she receives reimbursement from the nonprofit,
tax-exempt corporation for necessary travel and other actual expenses
incurred in performing the duties of his or her office.
(9) That of a person receiving salary, per diem, or reimbursement
for expenses from a government entity, unless the contract directly
involves the department of the government entity that employs the
officer or employee, provided that the interest is disclosed to the
body or board at the time of consideration of the contract, and
provided further that the interest is noted in its official record.
(10) That of an attorney of the contracting party or that of an
owner, officer, employee, or agent of a firm which renders, or has
rendered, service to the contracting party in the capacity of
stockbroker, insurance agent, insurance broker, real estate agent, or
real estate broker, if these individuals have not received and will
not receive remuneration, consideration, or a commission as a result
of the contract and if these individuals have an ownership interest
of less than 10 percent in the law practice or firm, stock brokerage
firm, insurance firm, or real estate firm.
(11) Except as provided in subdivision (b), that of an officer or
employee of, or a person having less than a 10-percent ownership
interest in, a bank, bank holding company, or savings and loan
association with which a party to the contract has a relationship of
borrower, depositor, debtor, or creditor.
(12) That of (A) a bona fide nonprofit, tax-exempt corporation
having among its primary purposes the conservation, preservation, or
restoration of park and natural lands or historical resources for
public benefit, which corporation enters into an agreement with a
public agency to provide services related to park and natural lands
or historical resources and which services are found by the public
agency, prior to entering into the agreement or as part of the
agreement, to be necessary to the public interest to plan for,
acquire, protect, conserve, improve, or restore park and natural
lands or historical resources for public purposes and (B) any
officer, director, or employee acting pursuant to the agreement on
behalf of the nonprofit corporation. For purposes of this paragraph,
"agreement" includes contracts and grants, and "park," "natural
lands," and "historical resources" shall have the meanings set forth
in subdivisions (d), (g), and (i) of Section 5902 of the Public
Resources Code. Services to be provided to the public agency may
include those studies and related services, acquisitions of property
and property interests, and any activities related to those studies
and acquisitions necessary for the conservation, preservation,
improvement, or restoration of park and natural lands or historical
resources.
(13) That of an officer, employee, or member of the Board of
Directors of the California Housing Finance Agency with respect to a
loan product or programs if the officer, employee, or member
participated in the planning, discussions, development, or approval
of the loan product or program and both of the following two
conditions exist:
(A) The loan product or program is or may be originated by any
lender approved by the agency.
(B) The loan product or program is generally available to
qualifying borrowers on terms and conditions that are substantially
the same for all qualifying borrowers at the time the loan is made.
(14) That of a party to a contract for public services entered
into by a special district that requires a person to be a landowner
or a representative of a landowner to serve on the board of which the
officer or employee is a member, on the same terms and conditions as
if he or she were not a member of the body or board. For purposes of
this paragraph, "public services" includes the powers and purposes
generally provided pursuant to provisions of the Water Code relating
to irrigation districts, California water districts, water storage
districts, or reclamation districts.
(b) An officer or employee shall not be deemed to be interested in
a contract made pursuant to competitive bidding under a procedure
established by law if his or her sole interest is that of an officer,
director, or employee of a bank or savings and loan association with
which a party to the contract has the relationship of borrower or
depositor, debtor or creditor.
SEC. 2. Section 1097.1 is added to the Government Code, to read:
1097.1. (a) The Commission shall have the jurisdiction to
commence an administrative action, or a civil action, as set forth
within the limitations of this section and Sections 1097.2, 1097.3,
1097.4, and 1097.5, against an officer or person prohibited by
Section 1090 from making or being interested in contracts, or from
becoming a vendor or purchaser at sales, or from purchasing scrip, or
other evidences of indebtedness, including any member of the
governing board of a school district, who violates any provision of
those laws or who causes any other person to violate any provision of
those laws.
(b) The Commission shall not have jurisdiction to commence an
administrative or civil action or an investigation that might lead to
an administrative or civil action pursuant to subdivision (a)
against a person except upon written authorization from the district
attorney of the county in which the alleged violation occurred. A
civil action alleging a violation of Section 1090 shall not be filed
against a person pursuant to this section if the Attorney General or
a district attorney is pursuing a criminal prosecution of that person
pursuant to Section 1097.
(c) (1) The Commission's duties and authority under the Political
Reform Act of 1974 (Title 9 (commencing with Section 81000)) to issue
opinions or advice shall not be applicable to Sections 1090, 1091,
1091.1, 1091.2, 1091.3, 1091.4, 1091.5, 1091.6, or 1097, except as
provided in this subdivision.
(2) A person subject to Section 1090 may request the Commission to
issue an opinion or advice with respect to his or her duties under
Section 1090, 1091, 1091.1, 1091.2, 1091.3, 1091.4, 1091.5, and
1091.6. The Commission shall decline to issue an opinion or advice
relating to past conduct.
(3) The Commission shall forward a copy of the request for an
opinion or advice to the Attorney General's office and the local
district attorney prior to proceeding with the advice or opinion.
(4) When issuing the advice or opinion, the Commission shall
either provide to the person who made the request a copy of any
written communications submitted by the Attorney General or a local
district attorney regarding the opinion or advice, or shall advise
the person that no written communications were submitted. The failure
of the Attorney General or a local district attorney to submit a
written communication pursuant to this paragraph shall not give rise
to an inference that the Attorney General or local district attorney
agrees with the opinion or advice.
(5) The opinion or advice, when issued, may be offered as evidence
of good faith conduct by the requester in an enforcement proceeding,
if the requester truthfully disclosed all material facts and
committed the acts complained of in reliance on the opinion or
advice. Any opinion or advice of the Commission issued pursuant to
this subdivision shall not be admissible by any person other than the
requester in any proceeding other than a proceeding brought by the
Commission pursuant to this section. The Commission shall include in
any opinion or advice that it issues pursuant to this subdivision a
statement that the opinion or advice is not admissible in a criminal
proceeding against any individual other than the requester.
(d) Any decision issued by the Commission pursuant to an
administrative action commenced pursuant to the jurisdiction
established in subdivision (a) shall not be admissible in any
proceeding other than a proceeding brought by the Commission pursuant
to this section. The Commission shall include in any decision it
issues pursuant to an administrative action commenced pursuant to the
jurisdiction established in subdivision (a) a statement that the
decision applies only to proceedings brought by the Commission.
(e) The Commission may adopt, amend, and rescind regulations to
govern the procedures of the Commission consistent with the
requirements of this section and Sections 1097.2, 1097.3, 1097.4 and
1097.5. These regulations shall be adopted in accordance with the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2).
(f) For purposes of this section and Sections 1097.2, 1097.3,
1097.4, and 1097.5, "Commission" means the Fair Political Practices
Commission.
SEC. 3. Section 1097.2 is added to the Government Code, to read:
1097.2. (a) Upon the sworn complaint of a person or on its own
initiative, the Commission shall investigate possible violations of
Section 1090, as provided in Section 1097.1. After complying with
subdivision (b) of Section 1097.1, the Commission shall provide a
written notification to the person filing a complaint in the manner
described in Section 83115.
(b) The Commission shall not make a finding of probable cause to
believe Section 1090 has been violated unless the Commission has
notified the person who is alleged to have violated Section 1090 in
the manner described in Section 83115.5.
(c) If the Commission determines there is probable cause to
believe Section 1090 has been violated, it may hold a hearing to
determine if a violation has occurred, subject to the requirements of
subdivision (b) of Section 1097.1 and in the manner described in
Section 83116.
(d) If the Commission rejects the decision of an administrative
law judge made pursuant to Section 11517, the Commission shall state
the reasons in writing for rejecting the decision, as required by
Section 83116.3.
(e) The Commission shall have all of the subpoena powers provided
in Section 83118 to assist in the performance of the Commission's
duties under this section.
(f) The Commission may refuse to excuse any person from
testifying, or from producing books, records, correspondence,
documents, or other evidence in obedience to the subpoena of the
Commission notwithstanding an objection that the testimony or
evidence required of the person may tend to incriminate the person. A
person who is compelled, after having claimed the privilege against
self-incrimination, to testify or produce testimonial evidence, shall
not have that testimony or the testimonial evidence the person
produced used against that person in a separate and subsequent
prosecution. However, the individual so testifying shall not be
exempt from prosecution and punishment for perjury committed in so
testifying. The Commission shall not compel any person to testify or
produce testimonial evidence after the person has claimed the
privilege against self-incrimination unless the Commission has
obtained written authorization from the Attorney General and the
district attorney of the county in which the alleged violation
occurred.
(g) The Commission shall not commence an administrative action
pursuant to this section against a person who is subject to Section
1090 alleging a violation of that section if the Commission has
commenced a civil action pursuant to Section 1097.3 against that
person for the same violation. For purposes of this subdivision, the
commencement of the administrative action shall be the date of the
service of the probable cause hearing notice, as required by
subdivision (b), upon the person alleged to have violated Section
1090.
(h) An administrative action brought pursuant to this section
shall be subject to the requirements of Section 91000.5.
SEC. 4. Section 1097.3 is added to the Government Code, to read:
1097.3. (a) Subject to the requirements of Section 1097.1, the
Commission may file a civil action for an alleged violation of
Section 1090. A person held liable for such a violation shall be
subject to a civil fine payable to the Commission for deposit in the
General Fund of the state in an amount not to exceed the greater of
ten thousand dollars ($10,000) or three times the value of the
financial benefit received by the defendant for each violation.
(b) The Commission shall not commence a civil action pursuant to
this section alleging a violation of Section 1090 if the Commission
has commenced an administrative action pursuant to Section 1097.1
against the person for the same violation.
(c) A civil action brought by the Commission pursuant to this
section shall not be filed more than four years after the date the
violation occurred.
SEC. 5. Section 1097.4 is added to the Government Code, to read:
1097.4. In addition to any other remedies available, the
Commission may obtain a judgment in superior court for the purpose of
collecting any unpaid monetary penalties, fees, or civil penalties
imposed pursuant to Section 1097.1, 1097.2, or 1097.3. Penalties
shall be collected in accordance with Section 91013.5.
SEC. 6. Section 1097.5 is added to the Government Code, to read:
1097.5. (a) If the time for judicial review of a final Commission
order or decision issued pursuant to Section 1097.2 has lapsed, or
if all means of judicial review of the order or decision have been
exhausted, the Commission may apply to the clerk of the superior
court for a judgment to collect the penalties imposed by the order or
decision, or the order as modified in accordance with a decision on
judicial review.
(1) The application, which shall include a certified copy of the
order or decision, or the order as modified in accordance with a
decision on judicial review, and proof of service of the order or
decision, constitutes a sufficient showing to warrant issuance of the
judgment to collect the penalties. The clerk of the court shall
enter the judgment immediately in conformity with the application.
(2) An application made pursuant to this section shall be made to
the clerk of the superior court in the county where the monetary
penalties, fees, or civil penalties were imposed by the Commission.
(3) A judgment entered in accordance with this section has the
same force and effect as, and is subject to all the provisions of law
relating to, a judgment in a civil action and may be enforced in the
same manner as any other judgment of the court in which it is
entered.
(4) The Commission may bring an application pursuant to this
section only within four years after the date on which the monetary
penalty, fee, or civil penalty was imposed.
(b) The remedy available under this section is in addition to
those available under Section 1097.4 or any other law.
SEC. 7. The Legislature finds and declares that this bill furthers
the purposes of the Political Reform Act of 1974 within the meaning
of subdivision (a) of Section 81012 of the Government Code.
