Existing law prohibits members of the Legislature and 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. The Fair Political Practices Commission is authorized to commence an administrative or civil action against persons who violate this prohibition and includes provisions for the collection of penalties after the time for judicial review of a commission order or decision has lapsed, or if all means of judicial review of the order or decision have been exhausted. Existing law identifies certain remote interests in contracts that are not subject to this prohibition and other situations in which an official is not deemed to be financially interested in a contract. Any officer or person who willfully violates these provisions is punishable by a fine or imprisonment in the state prison, and is forever disqualified from holding any office in this state.
AB 334 establishes that an independent contractor engaged by the public entity to perform one phase of a project is not an officer that is prohibited from being financially interested in any contract if certain criteria are met. The public agency may enter into a subsequent contract with that independent contractor for a later phase of the same project if the independent contractor’s duties and services related to the initial contract did not include engaging in or advising on public contracting, as defined in the code, on behalf of the public entity.
AB 334 authorizes a public agency to enter into a contract with an independent contractor who is an officer for a later phase of the same project if the independent contractor did not engage in or advise on the making of the subsequent contract. Engaging in or advising on the subsequent contract does not include participating in the planning, discussions, or drawing of plans or specifications during an initial stage of a project if that participation is limited to conceptual, preliminary, or initial plans or specifications and all bidders or proposers for the subsequent contract have access to the same information, including all conceptual, preliminary, or initial plans or specifications.
Under AB 334, a person who acts in good faith reliance on these provisions is not in violation of the above-described conflict-of-interest prohibitions and prohibits those that act in good faith from being subject to criminal, civil, or administrative enforcement under those prohibitions if the initial contract with the independent contractor includes the language specified in the statute and the independent contractor is not in breach of those terms.
Under AB 334, if a person acts in good faith reliance on these provisions but fails to include the required language in the contract, it is a complete defense in any criminal, civil, or administrative proceeding if the person is not an officer as defined in the code or is an officer, but the independent contractor did not engage in or advise on the making of the subsequent contract.
(AB 334 adds Section 1097.6 to the Government Code.)