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F I S C A L I M P A C T R E P O R T

SPONSOR Lopez

ORIGINAL DATE

LAST UPDATED

2/1/08

HB

SHORT TITLE Ethical Conduct Of Political Subdivisions

SB 320

ANALYST Wilson

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY08

FY09

FY10 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

$0.1

$0.1

Recurring General

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to other ethics bills

SOURCES OF INFORMATION

LFC Files

Responses Received From

Administrative Office of the Courts (AOC)

Attorney General’s Office (AGO)

Department of Finance & Administration (DFA)

Public Education Department (PED)

State Personnel Office (SPO)

SUMMARY

Synopsis of Bill

Senate Bill 320 amends the Governmental Conduct Act to include public officers and employees

of all political subdivisions of the state. The bill broadens the definition of “public officer or

employee" to include “any elected or appointed official or employee of a state agency or local

government agency" and adds a definition for “local government agency," which includes “any

branch, agency, instrumentality, institution or other entity of any political subdivision of the

state." The bill will make the current prohibitions now applicable to those individuals added by

these changes to the definitions.

The bill also adds language duplicating existing provisions regarding contracts with state

agencies but substituting “local government agency" where the original provisions say “state

agency," thus making it explicit that these prohibitions apply with equal force to local

government agencies.

Senate Bill 320 – Page

2

The bill adds language specifying that the Attorney General, as well as the Secretary of State,

shall be responsible for advising and educating persons covered by the Act.

Finally, the bill adds a new section providing that nothing in the Act shall be construed to

preclude a local government agency from adopting laws, ordinances, rules or standards that are

more stringent than those required by the Act.

FISCAL IMPLICATIONS

DFA states the fiscal impact of this legislation is minimal. There may be some small fiscal

impact to the Secretary of State and the Attorney General, which are charged with education

and referrals for enforcement.

There will be a minimal administrative cost for statewide update, distribution and documentation

of statutory changes. Any additional fiscal impact on the judiciary will be proportional to the

enforcement of this law and commenced prosecutions and civil actions. New laws, amendments

to existing laws and new hearings have the potential to increase caseloads in the courts, thus

requiring additional resources to handle the increase.

SPO notes there will be an added burden on all local agencies in order to comply with the

provisions of this bill, but they should be able to handle the requirements with existing resources.

SIGNIFICANT ISSUES

DFA provided the following:

This bill will impose several new ethics requirements on local governments, which have not

previously been covered by the Governmental Conduct Act. First, it will prohibit local

government officers and employees from coercing other officers or employees to perform

political activities, contribute to political parties, or vote a certain way. While also protected by

the U.S. Constitution, this statute amendment will help protect local government employees

from intimidation in the workplace.

Second, the bill will require all local government officers and employees to disclose all outside

employment to their supervisor or, if there is no supervisor, to the Secretary of State. This was

a new statutory requirement for state officers and employees in 2007, and may prevent conflicts

of interest between officers'/employees' public and private duties. As it requires disclosure of

all outside employment, including that which is not in conflict with stated job duties, there may

be some invasion of privacy.

Third, the bill prevents local government agencies from entering into contracts with officers or

employees of that local government, their family members, or with a business in which an

officer, employee, or family member has a substantial ownership interest, unless the contract is

awarded under a bid or request for proposal process pursuant to the Procurement Code; the

potential contractor is not eligible under a sole source or small purchase contract. This is likely

to prevent any unfair contract awards and ensure a fair process for all local government

contracts.

Senate Bill 320 – Page

3

Fourth, the bill limits business involvement by local government officers and employees after

their departure from the local government post. It prohibits local governments from entering

into contracts with a person or business represented by a former officer or employee within one

year if the contract is a result of an action by the officer or employee and has a value of more

than $1,000, and it prohibits local governments from entering into such contracts at all if the

contract is a direct result of the former officer's or employee's action while employed. It also

prohibits the former officer or employee from pursuing such action. This will prevent conflicts

of interest and unethical behavior by officers/employees with an eye toward business dealings

after their government service. Similarly, it prevents sales by officers, employees, their

families, and their businesses to the local government agency employer, to any employees

under their supervision, and to any person under their regulatory authority. Some local

governments, particularly very small communities, may find it difficult to avoid such conflicts,

however, there are exceptions for sales to the agency or employees if the sale is in good faith

and the officer/employee is unaware of the conflict.

The AGO provided the following:

This bill erases the patchwork of ethics laws that currently apply to government, and in

its place, the bill creates a uniform body of ethics laws that apply systematically to all

public bodies, officials, and employees.

Currently, the Governmental Conduct Act places ethics requirements only on state

government, with one exception: Section 10-16-13 prohibits local governments from

awarding bids to an employee who prepared the bid.

The Governmental Conduct Act prohibits state officers and employees from taking

official acts for the primary purpose of directly enhancing their financial interest. There

is no rationale for placing this ethical standard only on state government, and this bill will

correct this. Similarly, the Governmental Conduct Act prohibits state officers and

employees from using confidential information for anyone’s personal gain. Again, there

is no rationale for placing this ethical standard only on state government, and this bill will

correct this.

ADMINISTRATIVE IMPLICATIONS

The bill imposes a duty on the Secretary of State and Attorney General to advise those persons

required to perform duties under the Governmental Conduct Act of those duties at least

annually. With the inclusion in the act of local government agencies, there may also be

additional enforcement duties imposed on the Secretary of State, Attorney General, and local

District Attorneys.

RELATIONSHIP

SB 320 relates to:

HB 160, Amend Gift Act Allowable Amounts

HB 309, State Ethics Commission Act

HB 344, State Ethics Commission Act

HJM 24, Study Bipartisan State Elections Commission

Senate Bill 320 – Page

4

SB 132, Whistleblower Protection Act

SB 376, State Ethics Commission Act

SB 437, State Ethics Commission Act

SJR 6, Create State Ethics Commission, CA

DW/bb