Political Reform Act of 1974: state employees: financial interests.

Senator Hurtado's proposal to expand California's conflict of interest regulations would prohibit state agency employees from holding financial interests in businesses that their agencies regulate or conduct business with, while creating a formal waiver process for certain exceptions.

The legislation builds upon existing Political Reform Act provisions by establishing new restrictions on state employee financial holdings. Under the proposed rules, agency heads could grant waivers to employees only after determining that their financial interests comply with current law and that employees would not participate in governmental decisions affecting those interests. All waiver decisions would become public records subject to disclosure under the California Public Records Act.

The bill tasks the state commission with developing implementing regulations and providing advisory opinions to clarify the new requirements. While the changes expand the scope of current misdemeanor violations under the Political Reform Act, the legislation specifies that no state reimbursement would be required for local agencies, as the modifications only affect criminal classifications and penalties.