AMENDMENTS TO FPPC CONFLICT OF INTREST MATERIALITY STANDARDS FOR SOURCE OF INCOME, SOURCE OF GIFT, AND PERSONAL FINANCES

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I.1:k BEST BEST & KRiEGER ATTORNEYS AT LAW • . • IJ To: PUBLIC AGENCY CLIENTS From: PUBLIC POLICY & ETHICS COMPLIANCE GROUP OF BEST BEST & KRIEGER LLP CITY OF' [ r Date: MARCH 10, 2015 Re: AMENDMENTS TO FPPC CONFLICT OF INTEREST MATERIALITY STANDARDS FOR SOURCE OF INCOME, SOURCE OF GIFT, AND PERSONAL FINANCES. The Fair Political Practices Commission (FPPC) has recently amended and renumbered the materiality standards used to determine when a governmental decision has a material financial effect on an official's source of income, source of gift, or his or her personal or family finances. These new regulations follow revisions earlier this year establishing new materiality standards for decisions affecting real property and business entity interests. The changes complete the FPPC's undertaking to "revise and streamline" the Political Reform Act's conflict of interest regulations. (Regs. 18700- 18706.) As they did with materiality standards for real property and business entity interests, the FPPC has abolished the two -pronged "directly involved/indirectly involved" test for source of income and source of gifts, and has instead created one materiality standard for each type of financial interest. (Regs. 18702.3 and 18702.4.) The FPPC adopted the language at its February 2015 meeting, and the revisions took effect March 4, 2015. In addition, the FPPC has made regulatory changes which consolidated the conflict of interest analysis from an 8-step to a 4-step process (Reg. 18700) and revised the meaning of "reasonably foreseeable" to provide better guidance (Reg 18701). This product provided under the Public Policy & Ethics Group Program 93939.00001\9613114.1