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AB-1828 State Board of Equalization: members: conflicts of interest.(2015-2016)

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Date Published:
AB1828:v96#DOCUMENT

Amended  IN  Assembly  April 28, 2016
Amended  IN  Assembly  April 19, 2016
Amended  IN  Assembly  April 05, 2016

CALIFORNIA LEGISLATURE— 2015–2016 REGULAR SESSION

Assembly Bill No. 1828


Introduced by Assembly Member Dodd

February 09, 2016


An act to amend Section 15626 of the Government Code, relating to the State Board of Equalization.


LEGISLATIVE COUNSEL'S DIGEST


AB 1828, as amended, Dodd. State Board of Equalization: members: conflicts of interest.
The Quentin L. Kopp Conflict of Interest Act of 1990 requires a member of the State Board of Equalization who has received a contribution or contributions within the preceding 12 months in an aggregate amount of $250 or more from a party or his or her agent, or from any participant or his or her agent, to, prior to rendering any decision in any adjudicatory proceeding pending before board, disclose that fact on the record of the proceeding. A member is prohibited from making, participating in making, or in any way attempting to use his or her official position to influence, the decision in an adjudicatory proceeding pending before the board if the member knows or has reason to know that he or she received a contribution or contributions in an aggregate amount of $250 or more from a party to the proceeding, or from a participant in the proceeding the member knows or has reason to know has a financial interest in the decision. The act also requires a party to, or a participant in, an adjudicatory proceeding pending before the board to disclose on the record of the proceeding any contribution or contributions in an aggregate amount of $250 or more made within the preceding 12 months by the party or participant, or his or her agent, to any member of the board. A person who knowingly or willfully violates any provision of the act is guilty of a misdemeanor.
This bill would delete the $250 limitation and instead apply the above-described disclosure and disqualification provisions if a board member receives any contribution or has behested a payment that is reportable pursuant to the Political Reform Act from a party, participant, or agent, as provided. The bill would also prohibit a board member from requesting, suggesting, or accepting a contribution from a party, participant, or agent within the 12 3 months subsequent to a decision in the adjudicatory proceeding before the board in which the party or participant is involved, and in which the member made, participated in making, or in any way attempted to use his or her official position to influence the decision, except as provided. The bill would also require a party, participant, or agent that makes a contribution within 12 3 months subsequent to a decision in an adjudicatory proceeding in which the party or participant is involved, and in which the member made, participated in making, or in any way attempted to use his or her official position to influence the decision, to disclose to the board contributions to a member within 30 days. The bill would require the board to make all disclosures by a party, participant, or agent required by these provisions publicly available on its Internet Web site. The bill would also expand the definition of the term “contribution” to include certain payments that are at least $5,000 in aggregate made at the behest of a member of the board. The bill would make various findings and declarations.
By expanding the application of the criminal sanctions of the Quentin L. Kopp Conflict of Interest Act of 1990, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares all of the following:
(a) The State Board of Equalization (the board) is a constitutionally authorized quasi-judicial body consisting of five voting members, including the Controller and four members representing four equalization districts and elected to four-year terms at gubernatorial elections. The board is the only elected tax commission in the United States.
(b) The board is entrusted by statute to administer more than 30 tax and fee programs that generate state revenue. The board is also charged with public utility property tax assessments and overseeing the property tax assessment practices of the state’s 58 county assessors.
(c) Additionally, the board hears appeals from various business tax assessments and Franchise Tax Board actions.
(d) Board members are subject to the Political Reform Act of 1974 (Title 9 (commencing with Section 81000) of the Government Code) and rules of the Fair Political Practices Commission applicable to all other state elected officials.
(e) As a quasi-judicial body, the board is also subject to strict contribution limits conflict-of-interest provisions under the Quentin L. Kopp Conflict of Interest Act of 1990 (Section 15626 of the Government Code) (the Kopp Act). The Kopp Act recognizes the unique positions of board members as both elected officials and judges presiding over tax appeals. The Kopp Act is intended to prevent a board member from creating conflicts of interest by participating in making or influencing a decision of the board if the member has accepted a contribution in excess of two hundred fifty dollars ($250) from a party to an appeal or his or her agent, or a participant or his or her agent, within the 12 months preceding the appeal.
(f) The strict contribution limits of Despite its conflict-of-interest provisions, the Kopp Act do does not apply to payments made at the behest of a board candidate or committee when the payment is made for purposes unrelated to his or her candidacy for elected office. office, which can create a perceived conflict of interest.

(g)Despite passage of the Kopp Act in 1990, a loophole allowing parties before the board, as well as parties’ agents, to aggregate multiple contributions that individually fall below the two hundred fifty dollar ($250) limit but together exceed two hundred fifty dollars ($250) creates a perceived conflict of interest when the board hears the parties’ appeals. Similarly, payments made at the behest of a board member by parties with an approaching appeal before the board create a perceived conflict of interest.

(h)

(g) By enactment of this act, it is the intent of the Legislature to eliminate the perceived conflicts of interest associated with contributions and behested payments by parties, participants, and their agents related to appeals before the board.

SEC. 2.

 Section 15626 of the Government Code is amended to read:

15626.
 (a) This section shall be known, and may be cited, as the Quentin L. Kopp Conflict of Interest Act of 1990.
(b) Prior to rendering any decision in any adjudicatory proceeding pending before the State Board of Equalization, each member who knows or has reason to know that he or she received a contribution or contributions contributions, or has behested a payment of five thousand dollars ($5,000) or more that is reportable pursuant to clause (iii) of subparagraph (B) of paragraph (2) of subdivision (b) of Section 82015, within the preceding 12 months from a party or his or her agent, or from any participant or his or her agent, shall disclose that fact on the record of the proceeding.
(c) (1) A member shall not make, participate in making, or in any way attempt to use his or her official position to influence, the decision in any adjudicatory proceeding pending before the board if the member knows or has reason to know that he or she received a contribution or contributions contributions, or has behested a payment of five thousand dollars ($5,000) or more that is reportable pursuant to clause (iii) of subparagraph (B) of paragraph (2) of subdivision (b) of Section 82015, within the preceding 12 months from a party or his or her agent, or from any participant or his or her agent, and if the member knows or has reason to know that the participant has a financial interest in the decision, as that term is used in Article 1 (commencing with Section 87100) of Chapter 7 of Title 9.

(2)A member shall not request or suggest a contribution or contributions from a party or his or her agent, or from any participant or his or her agent, within the 12-month period subsequent to a decision in the adjudicatory proceeding before the board in which the party or participant is involved. For purposes of this paragraph, “suggest” means to mention or imply as a possibility or put forward for consideration. This paragraph shall apply to a member only with respect to an adjudicatory proceeding in which that member made, participated in making, or in any way attempted to use his or her official position to influence the decision.

(3)In addition to paragraph (2), a

(2) A member shall not accept a contribution or contributions from a party or his or her agent, or from any participant or his or her agent, within the 12-month three-month period subsequent to a decision in the adjudicatory proceeding before the board in which the party or participant party, participant, or agent is involved. This paragraph shall apply to a member only with respect to an adjudicatory proceeding in which that member made, participated in making, or in any way attempted to use his or her official position to influence the decision.
(d) (1) Notwithstanding paragraph (1) of subdivision (c), a contribution shall not be deemed received by a member for the purposes of disqualification under subdivision (c), if the member returns the contribution within 30 days from the time he or she knows, or has reason to know, about the contribution and the adjudicatory proceeding pending before the board.
(2) Notwithstanding paragraph (3) (2) of subdivision (c), if a member receives a contribution within the 12-month three-month period subsequent to a decision in the adjudicatory proceeding before the board from a party, participant, or agent and the member returns the contribution within 30 days from the time he or she knows, or has reason to know, about the contribution and the decision in the adjudicatory proceeding pending before the board, the member shall be deemed not to have accepted the contribution.
(e) (1) A party to, or a participant in, party, participant, or agent in an adjudicatory proceeding pending before the board shall disclose on the record of the proceeding any contribution or contributions and any behested payment of five thousand dollars ($5,000) or more that is reportable by a member pursuant to clause (iii) of subparagraph (B) of paragraph (2) of subdivision (b) of Section 82015, made within the preceding 12 months by the party or participant, or his or her agent, to any member of the board. The board shall make the disclosure publicly available on its Internet Web site.
(2) A party to, or a participant party, participant, and agent in, an adjudicatory proceeding before the board that makes a contribution to a member of the board within the 12 months three months subsequent to a decision in the adjudicatory proceeding in which the party or agent was involved, and in which the member made, participated in making, or in any way attempted to use his or her official position to influence the decision, shall disclose that contribution to the board within 30 days of making the contribution. The board shall make the disclosure publicly available on its Internet Web site as promptly as feasible.
(f) When a close corporation is a party to, or a participant in, an adjudicatory proceeding pending before the board, the majority shareholder is subject to the disclosure requirement specified in this section.
(g) For purposes of this section, if a deputy to the Controller sits at a meeting of the board and votes on behalf of the Controller, the deputy shall disclose contributions made to the Controller Controller, and any behested payment of five thousand dollars ($5,000) or more that is reportable by the Controller pursuant to clause (iii) of subparagraph (B) of paragraph (2) of subdivision (b) of Section 82015, and shall disqualify himself or herself from voting pursuant to the requirements of this section.
(h) For purposes of this section:
(1) “Contribution” has the same meaning as prescribed in Section 82015 and the regulations adopted pursuant to that section, except that “contribution” shall also include a payment or payments made at the behest of a member of the board principally for legislative, governmental, or charitable purposes when that payment is or those payments are at least five thousand dollars ($5,000) in the aggregate and is or are made by a party or his or her agent or a participant or his or her agent. section.

(2)“At the behest of a member of the board” means made under the control or at the direction of, in cooperation, consultation, coordination, or concert with, at the request or suggestion of, or with the express prior consent of a member of the board.

(3)

(2) “Party” means any person who is the subject of an adjudicatory proceeding pending before the board.

(4)

(3) “Participant” means any person who is not a party but who actively supports or opposes a particular decision in an adjudicatory proceeding pending before the board and who has a financial interest in the decision, as described in Article 1 (commencing with Section 87100) of Chapter 7 of Title 9. A person actively supports or opposes a particular decision if he or she lobbies in person the members or employees of the board, testifies in person before the board, or otherwise acts to influence the members of the board.

(5)

(4) “Agent” means any person who represents a party to or participant in an adjudicatory proceeding pending before the board. If a person acting as an agent is also acting as an employee or member of a law, accounting, consulting, or other firm, or a similar entity or corporation, both the entity or corporation and the person are agents.

(6)

(5) “Adjudicatory proceeding pending before the board” means a matter for adjudication that has been scheduled and appears as an item on a meeting notice of the board as required by Section 11125 as a contested matter for administrative hearing before the board members. A consent calendar matter is not included unless the matter has previously appeared on the calendar as a nonconsent item, or has been removed from the consent calendar for separate discussion and vote, or the item is one about which the member has previously contacted the staff or a party.

(7)

(6) A member knows or has reason to know about a contribution or a reportable behested payment if, after the adjudicatory proceeding first appears on a meeting notice of the board, facts have been brought to the member’s personal attention that he or she has received a contribution or reportable behested payment which would require disqualification under paragraph (1) of subdivision (c), or that the member received written notice from the board staff, before commencement of the hearing and before any subsequent decision on the matter, that a specific party, close corporation, or majority shareholder, or agent thereof, or any participant having a financial interest in the matter, or agent thereof, in a specific, named adjudicatory proceeding before the board, made a contribution or contributions or reportable behested payment within the preceding 12 months. Each member shall provide board staff with a copy of each of his or her campaign statements at the time each of those statements is filed.
The notice of contribution or reportable behested payment shall be on a form prescribed under rules adopted by the board to provide for staff inquiry of each party, participant, close corporation, and its majority shareholder, and any agent thereof, to determine whether any contribution has been made to a member, and if so, in what aggregate amount and on what date or dates within the 12 months preceding an adjudicatory proceeding or decision.
In addition, the staff shall inquire and report on the record as follows:
(A) Whether any party or participant is a close corporation, and if so, the name of its majority shareholder.
(B) Whether any agent is an employee or member of any law, accounting, consulting, or other firm, or similar entity or corporation, and if so, its name and address and whether a contribution has been made by any such person, firm, corporation, or entity.
(i) (1) Any person who knowingly or willfully violates any provision of this section is guilty of a misdemeanor.
(2) No person convicted of a misdemeanor under this section shall be a candidate for any elective office or act as a lobbyist for a period of four years following the time for filing a notice of appeal has expired, or all possibility of direct attack in the courts of this state has been finally exhausted, unless the court at the time of sentencing specifically determines that this provision shall not be applicable. A plea of nolo contendere shall be deemed a conviction for the purposes of this section.
(3) In addition to other penalties provided by law, a fine of up to the greater of ten thousand dollars ($10,000), or three times the amount the person failed to disclose or report properly, may be imposed upon conviction for each violation.
(4) Prosecution for violation of this section shall be commenced within four years after the date on which the violation occurred.
(5) This section shall not prevent any member of the board from making, or participating in making, a governmental decision to the extent that the member’s participation is legally required for the action or decision to be made. However, the fact that a member’s vote is needed to break a tie does not make the member’s participation legally required.

SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.