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1 991 111& <br />BEST BEST & KRIEGER � <br />ATTORNEYS AT LAW <br />MEMORANDUM <br />To: PUBLIC AGENCY CLIENTS <br />From: BEST BEST & KRIEGER LLP <br />Date: SEPTEMBER 4, 2018 <br />Re: INTEREST IN A PARENT, SUBSIDIARY OR RELATED BUSINESS ENTITY; <br />AMENDED FPPC REGULATION (eff. 8/16/18) <br />Under the Political Reform Act whether an official has a financial interest in a <br />decision that might have a reasonably foreseeable material financial effect on an <br />official's economic interest requiring disqualification hinges on identifying what entity <br />might be affected by the decision and the official's relationship to that entity. <br />At least three different "economic interests" can relate to a business entity. (1) <br />One in which the official has an investment of $2,000 or more (Section 87103(a)); (2) a <br />source of income of $500 or more in the 12 months prior to a decision (Section <br />87103(c)); and, (3) a business entity in which the official is a director, officer, partner, <br />trustee, employee, or holds any position in management (Section 87103(d)). <br />Historically, the FPPC determined that an official with an interest in a business <br />entity also has an interest in a parent, subsidiary, or related business entity. This is <br />based on the fact that under Sections 82034 and 87209 of the Act, an "investment" is <br />any financial interest or security interest $2,000 or more in a business entity, and a <br />"business position" is any business entity in which the official is director, officer, partner, <br />trustee, employee, or manager, if the business entity, or any subsidiary, or otherwise <br />related business entity, has an interest in real property or does business or plans to do <br />This product provided under the Public Policy & Ethics Group Program <br />93939.00000\31417766.1 <br />