Deadline Approaches for Filing Form 700s FPPC Resources Assist Public Officials to Comply With Disclosure Requirements and Explain New Rules Related to Gifts for 2012

March 2012

It is that time of year again, when public officials are required to file their Statements of Economic Interests (FPPC Form 700).  Form 700s must be postmarked no later than April 2, 2012.  This filing must disclose economic interests for the period covering January 1, 2011, through December 31, 2011. 

The Political Reform Act (Government Code section 81000 et seq.) prohibits public officials at any level of state or local government from making, participating in or in any way attempting to influence a governmental decision in which he/she knows or has reason to know he/she has a financial interest.  (Govt. Code §87100.)  The PRA requires most state and local government officials and certain employees to annually disclose investments, sources of income, real property and gifts, among other interests, from the prior year.  The goal is not to invade the privacy of public officials (although it can feel that way), but to disclose the financial interests of public officials and employees that may be materially affected by their actions.  Thus, filing of Form 700s serves the purpose of helping public officials – and the public –identify when a public official’s financial interests may be affected by a governmental decision, so that public officials can disqualify themselves from governmental decisions that would have a prohibited impact on them. 

Under the PRA, all local agencies, including public school districts and community colleges, are required to adopt a conflict of interest code.  The code must designate each position that is required to file a Form 700, and the disclosure categories applicable to each position.  These disclosure categories include investments; investments, income and assets of business entities/trusts; interests in real property; income, loans and business positions; income and gifts; and, travel payments, advances and reimbursements.  Of course, not all officials and employees are required to complete a schedule for every disclosure category.  The scope of disclosure is determined by the agency’s conflict of interest code.

Although the task of completing and filing the Form 700 may seem daunting, help is available.  FPPC staff will answer Form 700 questions via the FPPC hotline.  The toll-free telephone number is 1-866-ASK-FPPC (1-866-275-3772).  Consultants are available Monday – Thursday, 9:00 a.m. - 11:30 a.m. & 1:30 p.m. - 3:30 p.m.  Be sure to have your conflict of interest code available – or at a minimum – the disclosure categories applicable to your position.  FPPC advice is also available via email, however, all email messages are public records, disclosable upon request under the Public Records Act.  For those who like to puzzle out the rules on their own, the FPPC publishes a Reference Pamphlet that summarizes many of the filing requirements, and the Form 700 packet contains an instruction sheet for each page and schedule of Form 700.  Of course, if you have a complicated issue, you may be best served by consulting legal counsel before making any disclosures on Form 700 or providing any information to FPPC staff. 

There have been numerous news stories lately describing allegations that public officials have accepted unreported gifts from contractors and consultants seeking contracts with or work from their agencies.  A gift is defined as anything of value for which you have not provided equal or greater consideration to the donor.  Gifts may include tickets or passes to sporting or entertainment events, food, beverages and accommodations, and discounts not made in the regular course of business to the general public.  The gift limit for 2012 remains $420 from a single source during a calendar year.  However, a gift is reportable if its fair market value is $50 or more.  If the exact value of a gift is unknown, the public official must make a good faith estimate of the item’s fair market value.  Additional restrictions may be imposed by your agency’s conflict of interest code.

There are many exceptions and qualifications to the rules limiting and requiring disclosure of gifts.  Further, there have been many regulatory changes to those rules for 2012.  A summary of gift rule changes, and links to the new regulations, are available on the FPPC website, at: http://www.fppc.ca.gov/index.php?id=500.

Because the FPPC regulations can be confusing, and the consequences of a PRA violation can be dire, Fagen Friedman & Fulfrost encourages all public school districts and community colleges to consider providing conflict of interest and disclosure training to all board members and employees subject to the agency’s conflict of interest code.   

As part of the E-ducation Series, F3 is pleased to partner with ACSA to offer a webinar on Gifts and Donations: Staying Within the Lines.  The webinar will include practical advice and best practices for tracking gifts and donations, to ease the reporting burden and avoid compliance problems going forward.  This webinar will be held on April 10 at 10 a.m.  Register today at www.acsa.org/e-ducation.

If you have any questions pertaining to filing Form 700s, disclosure required under the PRA, gift limitations or any related topic, please contact one of our six offices.

F3 NewsFlash prepared by Chris Keeler and Dean Adams.
Chris is a partner in the F3 San Diego office.
Dean is a partner in the F3 San Diego office.

This F3 NewsFlash is a summary only and not legal advice.  We recommend that you consult with legal counsel to determine how this new law may apply to your specific facts and circumstances.  Information on a free NewsFlash subscription can be found at www.fagenfriedman.com.

As part of the E-ducation™ Professional Development Series hosted by ACSA and F3, we offer webinars on various topics.  You can find the information on the ACSA website at www.acsa.org/e-ducation.

Keep up to the minute on the latest updates, NewsFlashes, and legal news by following F3 on Twitter:@F3Law.

© 2012 Fagen Friedman & Fulfrost, LLP

All rights reserved, except that the Managing Partner of Fagen Friedman & Fulfrost, LLP hereby grants permission to any client of Fagen Friedman & Fulfrost, LLP to use, reproduce and distribute this NewsFlash intact and solely for the internal, noncommercial purposes of such client.

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