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Disclosing your economic interests

It's the Law

Posted: June 27, 2008 3:07 a.m.
Updated: August 28, 2008 5:01 a.m.
You are a civic-minded person. You live here, you work here and perhaps you own a business here. You want to help make Santa Clarita a better place to live.

So, when the opportunity to serve on a city commission, committee or advisory board comes along, you volunteer your talent and your precious time, all with the best of intentions.

This is as it should be. Local government could not function without the spirit of volunteerism. As soon as you are sworn in, however, you are asked to fill out a Statement of Economic Interests, also known as Form 700.

Form 700 is a filing required by the Political Reform Act (Gov. Code Sections 81000-91014). This act calls for the disclosure of a public official's personal economic interests, information that is then used to determine when the official may be required to disqualify himself from making, participating in making or influencing a governmental decision that affects those interests.

If a governmental decision will have a reasonably foreseeable financial effect on one or more of his economic interests, an official may be required to disqualify himself from the decision-making process.

The definitions of reportable economic interests are complex in many cases. In general, though, a public official must report most gifts and certain business investments, business positions, real property and sources of income that are located in, or are doing business in, or are planning to do business in, or have done business during the previous two years, within the jurisdiction of the official's agency. The official may also have to disclose other personal finances in some circumstances.

The reporting rules created by the Fair Political Practices Commission apply to the official, his spouse, or his registered domestic partner. Under these rules, reportable economic interests include the following interests within the agency's jurisdiction:

* A business investment worth more than $2,000. This may include a business within the agency's jurisdiction, a business trust, stocks and bonds or investments held in a retirement account.

* A business entity or trust, including a living trust, in which the official has a 10 percent or greater interest, worth $2,000 or more. This may include real property within the agency's jurisdiction that is held by the business or trust, if the official's share of the interest is $2,000 or more.

* Real property within the agency's jurisdiction, including a personal residence worth more than $2,000. This may include rental property depending on the official's share of any rental income.

* Sources of income exceeding $499 within the agency's jurisdiction, including salary, wages, commission income and certain expense reimbursements. In addition to occupational income, this may include income from the sale of a house or a car, a community property interest in the income of a spouse, or payments received on loans made to others.

* Gifts from any donor, regardless of location, worth $50 or more. These may include tickets to sports or entertainment events, parking passes, wedding gifts and in certain cases food, lodgings and transportation.

On its face, Form 700 is innocuous enough. The public statement of an official's economic interests is intended to encourage good government by making it easier to identify potential conflicts of interest.

However, it can present pitfalls to even the best intentioned public servant. Santa Clarita is fortunate to have among its citizens many people who are willing to forego their personal privacy to serve the greater good of our community.

John Grannis is a partner with the law firm of Poole & Shaffery, LLP. His column represents his own views, and not necessarily those of The Signal. "It's the Law" rotates between members of the Santa Clarita Valley Bar Association.


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