2026-09-14_item_4.4_2026_conflict_of_interest_code_biennial_amendment

ITEM 4.4

CITY MANAGER'S REPORT
SEPTEMBER 14, 2026 CITY COUNCIL REGULAR MEETING
ITEM: 2026 CONFLICT OF INTEREST CODE BIENNIAL

AMENDMENT
RECOMMENDATION: Adopt Resolution Approving the Amended City of Lathrop Conflict of Interest Code
SUMMARY:

The Political Reform Act prohibits public officials from making, participating in making, or using their official positions to influence governmental decisions in which they have a financial interest. Such an interest may exist when it is reasonably foreseeable that a decision will have a material financial effect on one or more of the official's economic interests. The Political Reform Act addresses potential conflicts through public disclosure and disqualification from participating in affected decisions.

California Government Code Section 87300 requires every government agency to adopt a Conflict of Interest Code identifying positions that make or participate in making governmental decisions and the economic interests those individuals must disclose on their Statements of Economic Interests (Form 700). Government Code section 87306.5 further requires local agencies to review their codes biennially in each even-numbered year and amend them when necessary.

The City's Conflict of Interest Code was last amended September 9, 2024. Since then, the City has created new classifications, reorganized or retitled existing positions, and modified certain duties and responsibilities. Following a comprehensive review, staff determined that amendments are necessary to add newly created positions, update position titles, remove abolished or no longer applicable positions, and revise disclosure categories based on each position's duties and decision-making responsibilities.

Certain positions are also proposed for removal because their current duties are limited to ministerial, secretarial, or clerical functions and they do not make or participate in making governmental decisions under the Political Reform Act and applicable Fair Political Practices Commission (FPPC) regulations.

Adoption of the proposed resolution and amended Conflict of Interest Code will complete the City's 2026 biennial review and ensure the Code accurately reflects the City's current organizational structure and decision-making responsibilities.

Lastly, California Senate Bill 1156 (SB 1156), known as the Economic Disclosure for Water Agencies Act, was officially enacted into law on September 22, 2024, when it was chaptered by the Secretary of State (Chapter 458, Statutes of 2024). This Conflict of Interest Code Amendment incorporates the positions that now file with the FPPC directly representing the City of Lathrop Groundwater Authority in the Tracy Subbasin.

CITY MANAGER'S REPORT PAGE 2
SEPTEMBER 14, 2026 CITY COUNCIL REGULAR MEETING
2026 CONFLICT OF INTEREST CODE BIENNIAL AMENDMENT
BACKGROUND:

The Political Reform Act of 1974 requires every local government agency to adopt a Conflict of Interest Code. The City of Lathrop's Code identifies employees, consultants, and members of boards and commissions who make or participate in making governmental decisions and specifies the financial interests they must disclose on their Statements of Economic Interests (Form 700).

All public officials are subject to the Political Reform Act's disqualification requirements, regardless of whether their positions are designated in the City's Conflict of Interest Code. Officials may not participate in governmental decisions that could foreseeably and materially affect their financial interests. Designated officials are also required to disclose specified financial interests to help identify potential conflicts.

Government Code section 87306.5 requires local agencies to review their Conflict of Interest Codes biennially in each even-numbered year. For 2026, the biennial review must be filed with the appropriate code-reviewing body by October 1. When changes are necessary, the Amended Code must be submitted to the City Council (as the code-reviewing body) for approval.

The proposed amendments do not change the conflict-of-interest and disqualification requirements established by state law. They update the City's designated-position list and disclosure categories to reflect changes in position titles, organizational structure, and assigned responsibilities.

Conflict of Interest Codes
The Political Reform Act has two requirements for avoiding conflicts of interest:

Disclosure of certain personal assets and income that could affect decision-making to the public; and Disqualification of an official from governmental decision who has a conflict of interest.

How a Conflict of Interest Code Works:
• A position is designated in the Conflict of Interest Code when its assigned duties involve making or participating in making governmental decisions. • Each designated position is assigned to disclosure categories tailored to the types of financial interests that could be affected by those decisions. • Individuals holding designated positions file Statements of Economic Interests (Form 700) disclosing the interests required by their assigned categories. • The disclosure helps the filer, the City, and the public identify potential conflicts and determine when disqualification may be required.
• Form 700 filings are public records available for inspection and reproduction.

CITY MANAGER'S REPORT i PAGE 3
SEPTEMBER 14, 2026 CITY COUNCIL REGULAR MEETING
2026 CONFLICT OF INTEREST CODE BIENNIAL AMENDMENT
Types of Form 700 Filers:

Code Filers - A "code filer" is an official, employee, board or commission member, or consultant whose position is designated in the City's Conflict of Interest Code.

Code filers must file a Statement of Economic Interests (Form 700) and disclose the tinancial interests specified by the disclosure categories assigned to their positions. 87200 Filers - Section 87200 filers include officials specifically identified in Government Code section 87200 and other public officials who manage public investments as defined by FPPC Regulation 18700.3.
87200.5 Filers - (a) Members of the board of directors and the executive of a groundwater sustainability agency shall file statements of economic interests ir accordance with this article with the Commission using the Commission's online system for filing statements of economic interests. (b) For purposes of this section, "executive" means the executive director, general manager, or other equivalent position of the groundwater sustainability agency.

City positions expressly identified in Section 87200.5 include the City Manager and the Public Works Senior Civil Engineer.

City positions expressly identified in Section 87200 include the Mayor, City Councilmembers, Planning Commissioners, City Manager, City Attorney, and City Treasurer. Positions such as the Deputy City Manager and Finance Director, or other official may also qualify as a Section 87200 filer if the official exercises primary responsibility for managing public investments, such as:
• Directing the investment of public funds;
• Formulating or approving investment policies;
• Approving or establishing asset-allocation guidelines; or • Approving investment transactions.

Employees who work under the supervision of the City's chief investment officer or chief financial manager are not Section 87200 filers solely because they assist with investment related functions.

What Does It Mean to Make or Participate in a Governmental Decision? When reviewing the City's Conflict of Interest Code, it is important to evaluate whether each position's assigned duties involve making or participating in making governmental decisions. Under the Political Reform Act, an official makes governmental decisions when the official:
• Authorizes or directs an agency action;
• Votes on a matter
• Adopts or approves the budget
• Adopts policy
CITY MANAGER'S REPORT PAGE 4
SEPTEMBER 14, 2026 CITY COUNCIL REGULAR MEETING
2026 CONFLICT OF INTEREST CODE BIENNIAL AMENDMENT
•. Makes purchasing decisions
• Obligates or commits the City to a course of action; or • Enters into a contractual agreement on behalf of the City.

An official participates in making a governmental decision when the official provides information, an opinion, or a recommendation intended to affect the decision without significant intervening substantive review.
-
Examples may include:
• Negotiating substantive contract terms;
• Developing bid specifications or evaluation criteria that influence a procurement decision;
• Evaluating proposals and recommending a vendor;
• Conducting substantive research or analysis and presenting conclusions intended to affect the decision; or
• Advising or making recommendations to a decision-maker or governing body.

Actions that are solely ministerial, secretarial, or clerical do not constitute making or participating in making a governmental decision. A position's title alone is not determinative; the analysis must be based on the position's actual authority and assigned duties.

Disqualifying Financial Interest
A public official has a disqualifying financial interest when a governmental decision will have a reasonably foreseeable and material financial effect on the official's personal finances or another financial interest, and that effect is distinguishable from the decision's effect on the public generally. Unless an exception applies, the official may not make, participate in making, or use their official position to influence the decision.

If a decision may have a financial impact or effect on any of the foregoing interests, an official is disqualified from governmental decision if the following two conditions are met:
• The financial impact or effect is foreseeable, and
• The financial impact or effect is significant enough to be considered material.

Generally, a financial impact or effect is presumed to be both foreseeable and material if the financial interest is "explicitly" or directly involved in the decision. A financial interest is explicitly involved in the decision whenever the interest is a named party in, or the subject of, a governmental decision before the official or the official's agency. If the interest is "not explicitly involved" in the decision, a financial impact or effect is reasonably foreseeable if the effect can be recognized as a realistic possibility and more than hypothetical or theoretical. A financial effect need not be likely to occur to be considered reasonably foreseeable.

CITY MANAGER'S REPORT PAGE 5
SEPTEMBER 14, 2026 CITY COUNCIL REGULAR MEETING
2026 CONFLICT OF INTEREST CODE BIENNIAL AMENDMENT
However, for interests "not explicitly, involved" in the decision, different standards apply to determine whether a foreseeable effect on an interest will be material depending on the nature of the interest. The FPPC has adopted rules for deciding what kinds of financial effects are important enough to trigger a conflict of interest.

These rules are called "materiality standards, " that is, they are the standards that should be used for judging what kind of financial impacts resulting from governmental decisions are considered material or important.

There are too many materiality standards to adequately review all of them. To determine the applicable materiality standard, or to obtain more detailed information on contlicts, an official may seek assistance from agency counsel or the FPPC anytime the official has reason to believe a decision may have a financial impact or effect on their personal finances or other financial interests.

The Political Reform Act allows five (5) types of interests that may result in disqualification, which are expanded into seven (7) detailed Disclosure Categories, which specify the interests that individuals holding designated positions in the City of Lathrop must report. The City's disclosure categories are set forth in Exhibit B of the Resolution.

These following disqualifying financial interests apply to the City's 2026 Biennial Review:
• Business Entity. A business entity in which the official has an investment of $2,000 or more in which the official is a director, officer, partner, trustee, employee, or manager.
• Real Property. Real property in which the official has an interest of $2,000 or more, including leaseholds. (However, month-to-month leases are not . considered real property interests.)
• Income. An individual or an entity from whom the official has received income or promised income aggregating to $500 or more in the previous 12 months, including the official's community property interest in the income of his or her spouse or registered domestic partner.
• Gifts. An individual or an entity from whom the official has received gifts aggregating to $630 or more in the previous 12 months.
• Personal Finances. The official's personal finances including their expenses, income, assets, or liabilities, as well as those of his or her immediate family.

Exceptions
Not all conflicts of interest prevent a public official from lawfully taking part in a governmental decision. There are two (2) limited exceptions to the conflict of interest rules:

CITY MANAGER'S REPORT • PAGE 6
SEPTEMBER 14, 2026 CITY COUNCIL REGULAR MEETING
2026 CONFLICT OF INTEREST CODE BIENNIAL AMENDMENT
• The Public Generally Exception. A public official is not disqualified from a decision if the effect on the official's interests is indistinguishable from the effect on the public.
• Legally Required to Participate. In certain rare circumstances, a public official may be randomly selected to take part in a decision if a quorum cannot be reached because too many officials are disqualified under the Act.

Exceptions must be considered with caution. A public official should contact the City Attorney or the FPPC to determine if an exception applies.

Recusal Requirements
An official with a disqualifying conflict of interest may not make, participate in making, or use their position to influence a governmental decision. When appearing before their own agency or an agency subject to the authority or budgetary control of their agency, an official is making, participating in making, or using their position to influence a decision any time the official takes any action to influence the decision including directing a decision, voting, providing information or a recommendation, or contacting or appearing before any other agency official. When appearing before any other agency, the official must not act or purport to act in their official capacity or on behalf of their agency.

Certain officials (including city council members, planning commissioners, and members of the boards of supervisors) have a mandated manner in which they must disqualify from decisions made at a public meeting (including closed session decisions) and must publicly identify a conflict of interest and leave the room before the item is discussed.

While there are limited exceptions that allow a public official to participate as a member of the public and speak to the press, the exceptions are interpreted narrowiy and may require advice from your agency's counsel or the FPPC.

List of Designated Positions
The City's Conflict of Interest Code identifies the officers, employees, board and commission members, and consultants required to file Statements of Economic Interests (Form 700). Each designated position is assigned one or more disclosure categories based on the types of financial interests that could foreseeably be affected by the position's duties.

The proposed amendments update the designated-position list to reflect the City's current classitications and assigned responsibilities. They add newly created positions, revise position titles, remove certain positions, and modify disclosure categories where appropriate. The complete proposed list is attached to the Resolution as Exhibit. A.

CITY MANAGER'S REPORT PAGE 7
SEPTEMBER 14, 2026 CITY COUNCIL REGULAR MEETING
2026 CONFLICT OF INTEREST CODE BIENNIAL AMENDMENT
Most designated positions are currently filled. Positions that are vacant or temporarily untunded will remain in the Code because the classifications continue to exist and may be filled in the future. A position will be removed when the classification is formally abolished or removed from the City's Grade Step Table by City Council action.

Certain positions are also proposed for removal because their current duties are limited to ministerial, secretarial, or clerical functions and do not involve making or participating in making governmental decisions under the Political Reform Act and applicable Fair Political Practices Commission regulations.

Summary of Changes
Action Department Position/Title Explanation
Add Finance Utility & New title; position evaluated and Department Revenue recommended to add to COl Code.

Services Position created by Reso No. 25-5840.

Manager
Add Information Cyber Security New title; position evaluated and Systems • Officer recommended to add to COI Code.

Department Position created by Reso No. 25-5840.

Add Public Works Public Works New title; position evaluated and Department Director/City recommended to add to COI Code.

Engineer Position created by Reso No. 26-5980.

Add Public Works Utility Title to be removed from COI Code by Department. Maintenance Reso No. 25-5887
Supervisor
Add Public Works Water New title; position evaluated and Department Operations recommended to add to COI Code.

Superintendent Position created by Reso No. 26-6064.

Add Public Works Wastewater, New title; position evaluated and Department. Recycled recommended to add to COI Code.

Water & Position created by Reso No. 26-6064.

Environmental
Operations
Superintendent
Change Government Management Existing title in COI Code; position Services/ Analyst I/II reporting to department by Reso No.

City Clerk 26-5980.

Dept.

Change Building Senior Building Previously unfunded position added to Department Inspector Department July 2025, Reso No. 25- 5840
CITY MANAGER'S REPORT PAGE 8
SEPTEMBER 14, 2026 CITY COUNCIL REGULAR MEETING
2026 CONFLICT OF INTEREST CODE BIENNIAL AMENDMENT
Update Public Works Streets and Title correction; administrative Department Maintenance correction; title updated to add the Operations word "Operations"
Manager
Update Government Animal Center Existing title in COI Code; Division and Services/ Manager position transferred from the Police
City Clerk Dept to the Government Services
Dept. Dept, Reso No. 26-5980.

Delete Community Assistant Title to be removed from COI Code; Development Planner position evaluated - current duties are Dept limited to ministerial, secretarial, or
clerical functions and position does not
make or participate in making
governmental decisions under the
Political Reform Act and applicable
FPPC regulations.

Delete Finance Accountant I/II Title to be removed from COI Code; Department position evaluated - current duties are
limited to ministerial, secretarial, or
clerical functions and position does not
make or participate in making
governmental decisions under the
Political Reform Act and applicable
FPPC regulations.

Delete Parks and Recreation Title to be removed from COI Code; Recreation Supervisors position evaluated - current duties do Department not require position to make or
participate in making governmental
decisions under the Political Reform
Act and applicable FPPC regulations.

Delete Police Police Title to be removed from COI Code; Department Sergeant position evaluated - current duties do not require position to make or
participate in making governmental
decisions under the Political Reform
Act and applicable FPPC regulations.

Higher chain of command positions
allocated to this department hold the
responsibility of making and
participating in governmental
decisions.

Delete Public Works Assistant Title to be removed from COI Code; Department Engineer position evaluated - current duties are limited to ministerial, secretarial, or
clerical functions and position does not
make or participate in making
governmental decisions under the
CITY MANAGER'S REPORT PAGE 9
SEPTEMBER 14, 2026 CITY COUNCIL REGULAR MEETING
2026 CONFLICT OF INTEREST CODE BIENNIAL AMENDMENT
Political Reform Act and applicable
FPPC regulations.

Delete Public Works Senior Vacant and unfunded position; title to Department Construction be removed from COI Code by Reso Inspector No. 20-4814
Delete Public Works Utility Title to be removed from COI Code by Department Operations Reso No. 26-6064
Superintendent
Disclosure Categories:

The disclosure categories establish the types of financial disclosure that must be made by each designated employee. A copy of the list of disclosure categories is attached to the Resolution as Exhibit B.

REASON FOR RECOMMENDATION:

The Political Reform Act requires every local government agency to review its Conflict of Interest Code biennially to determine its accuracy no later than October 1 of even- numbered years, or the first business day in October. This year, the biennial review of the City's Conflict of Interest Code is due by October 1, 2026. Organizational changes have resulted in a need to amend the Code.

FISCAL IMPACT:

None.

ATTACHMENTS:

A. Resolution adopting an amended Conflict of Interest Code a. Exhibit A - Designated Positions
b. Exhibit B - Disclosure Categories
B. FPPC Regulation
C. Informational Pamphlet: Overview of Conflicts of Interest under the Political Reform Act, published May 2022
CITY MANAGER'S REPORT PAGE 10
SEPTEMBER 14, 2026 CITY COUNCIL REGULAR MEETING
2026 CONFLICT OF INTEREST CODE BIENNIAL AMENDMENT
APPROVALS:

Arrestero 09/2/04
eresa Varga
Government Services Director
City Clerk
134 9/3/2076
Thomas Hedegard Date
Deputy City Manager

9.3.2026
Salvador Navarrete Date
City Attorney

9.3. 24e
Stephen J. Salvatore Date
City Manager
RESOLUTION NO. 26-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LATHROP ADOPTING

AN AMENDED CONFLICT OF INTEREST CODE
WHEREAS, the City of Lathrop adopted and promulgated a Conflict of Interest.

Code pursuant to the terms of Title 2, Division 6 of the California Code of Regulations, Section 18730, and within the meaning of the Political Reform Act of 1974, Government Code Section 87300, et seq.; and
WHEREAS, under the Political Reform Act, Government Code Section 87306 permits the amendment of the City's Conflict of Interest Code; and WHEREAS, the City Council previously adopted Resolutions 24-5621 adopting an amended Conflict of Interest Code; and
WHEREAS, the Political Reform Act, Government Code section 87306.5, requires every local government agency every even-numbered year, to review its Conflict of Interest Code biennially to determine if it is accurate, no later than October 1 of the same year; and
• WHEREAS, in the biennial review of designated positions, it was determined the list of designated positions needed to be added, amended, and or deleted to reflect current staffing and organizational structure.

NOW, THEREFORE, BE IT RESOLVED that the amended Conflict of Interest Code, including the revised list of Designated Positions (Exhibit A) and the Disclosure Category explanations (Exhibit B), is hereby approved; and NOW, THEREFORE, BE IT FURTHER RESOLVED, that Resolution No. 24- 5621 be repealed and replaced by the adoption of this resolution PASSED AND ADOPTED this 14t day of September 2026, by the following vote:

AYES:

NOES:

ABSENT:
• ABSTAIN:

Paul Akinjo, Mayor
ATTEST: APPROVED AS TO_FORM:

Teresa Vargas, City Clerk Salvador Navarrete, City Attorney Resolution No. 26-

EXHIBIT A

CITY OF LATHROP CONFLICT OF INTEREST CODE
The Political Reform Act (Government Code Section 81000, et seq.) requires state and local government agencies to adopt and promulgate Conflict of Interest Codes.

The Fair Political Practices Commission has adopted a regulation (2 Cal. Code of Regs.

Section 18730) which contains the terms of a standard Conflict of Interest Code, which may be incorporated by reference in an agency's code. After public notice and hearing, it may be amended by the Fair Political Practices Commission to conform to amendments in the Political Reform Act. Therefore, the terms of 2 California Code of Regulations Section 18730 and any amendments to it duly adopted by the Fair Political Practices Commission are hereby incorporated by reference. This regulation designating officials and employees and establishing disclosure categories shall constitute the Conflict of Interest Code of the City of Lathrop.

DESIGNATED POSITIONS
Individuals holding designated positions shall file Statements of Economic Interest with the City Clerk who will make the statements available for public inspection and reproduction (Government Code Section 81008).

SECTION 87200 AND 87200.5 FILERS

OFFICIALS WHO MANAGE PUBLIC INVESTMENTS
Officials who manage public investments, as defined by 2 Cal. Code of Regs. §18700.3 (b), are NOT subject to the City's code, but are subject to the disclosure requirements of the Act (Government Code Section 87200 et seq.). [Regs. §18730(b)(3)]. These positions are listed here for informational purposes only. It has been determined that the positions listed below are City of Lathrop officials who manage public investments:

City Manager / Treasurer Mayor
City Attorney City Councilmembers
Deputy City Manager Planning Commission Members
Finance Director

GROUNDWATER SUSTAINABILITY AGENCIES
Members of the board of directors, executive director, general manager, or other equivalent positions of a groundwater sustainability agency must file electronically with the FPPC. For purposes of this section, "executive" means the executive director, general manager, or other equivalent position of the groundwater sustainability agençy. It has been determined that the positions listed below are City of Lathrop officials who participate in the Tracy Subbasin representing the Lathrop Ground Water Authority:

City Manager / Treasurer Senior Civil Engineer
Adopted by Resolution 26- Page 1 of 4
Officials who manage public investments and represent positions in Groundwater Sustainability Agencies must file electronically with the Fair Political Practices Commission.

The disclosure categories and requirements for these positions are set forth in Article 2 of Chapter 7 of the Political Reform Act, Government Code Section 87200 et seq.

They generally require the disclosure of interests in real property in the agency's jurisdiction, as well as investments, business positions and sources of income (including gifts, loans, and travel payments).

DESIGNATED POSITIONS
DEPARTMENTS/Positions Disclosure Categories

BUILDING
Chief Building Official 1, 2, 3, 5, 7
Assistant Chief Building Official 1,2, 3, 5, 7
Permit and Plan Check Supervisor 1, 2, 3, 5, 7
Senior Building Inspector 1, 2, 3, 5, 7
Building Inspector I/II/III 1, 2, 3, 5, 7
Management Analyst I/II - Confidential 1, 3, 4, 5, 7

CITY ATTORNEY
City Attorney *

CITY CLERK / GOVERNMENT SERVICES
City Clerk / Government Services Director 1,2, 3, 5, 7
Deputy City Clerk 1,2, 6
Management Analyst I/II - Confidential 1, 3, 4, 5, 7
Animal Center Manager 1,6,7

CITY MANAGER
City Manager / Treasurer *
Assistant City Manager 1, 2, 3, 4, 5, 7
Deputy City Manager
Economic Development Administrator 1, 2, 3, 5, 7

COMMUNITY DEVELOPMENT
Community Development Director 1, 2, 3, 5, 7
Assistant Community Development Director 1, 2, 3, 5, 7
Principal Planner 1, 2, 3, 5, 7
Senior Planner 1, 2, 3, 5, 7
Associate Planner 1, 2, 3, 5, 7

FINANCE
Finance Director *
Deputy Finance Director 1, 2, 3, 4, 5, 7
Finance Manager 1, 2, 3, 4, , 5, 7
Accounting Manager 1, 2, 3, 4, 5, 7
Budget Manager 1, 2, 3, 4, 5, 7
Adopted by Resolution 26- Page 2 of 4
Senior Management Analyst 1, 2, 3, 4, 5, 7
Senior Accountant 1, 2, 3, 4, 5, 7
Utility & Revenue Services Manager 1, 2, 3, 4, 5, 7
Customer Service Supervisor 1, 3, 4, 5, 7
Management Analyst I/II - Confidential 1, 3, 4, 5, 7

HUMAN RESOURCES
Human Resources Director 1,4,5
Human Resource Manager 1,4,5
Human Resources Analyst I/II - Confidential 1,4,5

INFORMATION SYSTEMS / TECHNOLOGY
Information Systems Director 1, 2, 3, 5, 7
Information Technology Engineer I/II/III 1, 3, 5, 7
Cyber Security Officer 1, 3, 5, 7
Management Analyst I/II - Confidential 1, 3, 4, 5, 7

PARKS & RECREATION
Parks & Recreation Director 1, 2, 3, 5, 7
Parks & Recreation Deputy Director 1, 2, 3, 5, 7
Parks and Recreation Superintendent 1, 3, 5, 7
Parks & Recreation Manager 1, 3, 5, 7
Management Analyst I/II - Confidential 1, 3, 4, 5, 7
POLICE
Chief of Police 1, 2, 3, 5, 7
Police Captain 1, 2, 3, 5, 7
Police Lieutenant 1, 2, 3, 5, 7
Police Services Manager 1, 2, 3, 6, 7
Property & Evidence Manager 1, 2, 3, 6, 7
Police Records Supervisor 1, 2, 3, 6, 7
Community Services Supervisor 1,2, 3, 6, 7
Management Analyst I/II - Confidential 1, 3, 4, 5, 7

PUBLIC WORKS
Public Works Director / City Engineer 1, 2, 3, 5, 7
Public Works Director 1, 2, 3, 5, 7
City Engineer 1, 2, 3, 5, 7
Assistant Public Works Director 1,2, 3, 5, 7
Land Development Manager 1, 2, 3, 5, 7
Project Manager 1, 2, 3, 5, 7
Principal Engineer 1, 2, 3, 5, 7
Senior Civil Engineer (GSA Representative)
Senior Civil Engineer 1, 2, 3, 6, 7
Compliance Engineer 1, 2, 3, 6, 7
Associate Engineer 1, 2, 3, 6, 7
Senior Construction Manager 1, 2, 3, 5, 7
Streets and Maintenance Operations Manager 1, 2, 3, 5, 7 Construction Superintendent 1, 2, 3, 5,
Construction Inspector I/II/III 1, 2, 3, 7
Water Operations Superintendent 1, 2, 3, 6, 7
Adopted by Resolution 26- Page 3 of 4
WW, RW & Environmental Ops Superintendent 1, 2, 3, 6, 7 Utility Maintenance Supervisor 1, 2, 3, 6, 7
Utility Plant Supervisor 1, 2, 3, 6, 7
Senior Management Analyst 1, 2, 3, 4, 5, 7
Management Analyst I/II - Confidential 1, 3, 4, 5, 7
MAYOR AND CITY COUNCILMEMBERS *
PLANNING COMMISSION MEMBERS *
PARKS AND RECREATION COMMISSION MEMBERS 1,2,3

CITY CONSULTANTS
Consultants shall be included in the list of designated employees and shall disclose pursuant to the broadest disclosure category (1, 2, 3, 7) in the code subject to the following limitation:

The City Manager may determine in writing that a particular consultant, although a "designated position," is hired to perform a range of duties that is limited in scope and thus is not required to fully comply with the disclosure requirements described in this section. Such written determination shall include a description of the consultant's duties and, based upon that description, a statement of the extent of disclosure requirements. The City Manager's determination is a public record and shall be retained for public inspection in the same manner and location as others under this code.
* NOTE: Members of the City Council, Planning Commission, the City Manager, City Attorney, Treasurer, Deputy City Manager, Finance Director, and the City's GSA Representatives have full disclosure filing requirements imposed by State Law rather than by local enactment.

Adopted by Resolution 26- Page 4 of 4

EXHIBIT B

SUMMARY
The Fair Political Practices Commission allows five (5) general types of interests that may result in disqualification, which are broaden into seven (7) detailed Disclosure Categories listed below for the City of Lathrop. These are the disqualifications applicable in 2026 Biennial Review:
• Business Entity. A business entity in which the official has an investment of $2,000 or more in which the official is a director, officer, partner, trustee, employee, or manager.
• Real Property. Real property in which the official has an interest of $2,000 or more, including leaseholds. (However, month-to-month leases are not considered real property interests.)
• Income. An individual or an entity from whom the official has received income or promised income aggregating to $500 or more in the previous 12 months, including the official's community property interest in the income of his or her spouse or registered domestic partner.
• Gifts. An individual or an entity from whom the official has received gifts aggregating to $630 or more in the previous 12 months.
• Personal Finances. The official's personal finances including their expenses, income, assets, or liabilities, as well as those of his or her immediate family.

DISCLOSURE CATEGORIES
The disclosure categories listed below identify the types of investments, business entities, sources of income, or real property, that the Designated Employee must disclose for each disclosure category to which he/she is assigned.

Category 1: All investments and business positions in, and sources of income from, business entities that do business or own real property within jurisdiction of the City, plan to do business or own real property within the jurisdiction of the City within the next year, or have done business or owned real property within the jurisdiction of the City within the past two years.

Category 2: All interests in real property, which is located in whole or in part within, or not more than two miles outside, the jurisdiction of the City. 2026 COI Code Amendment Page 1 of 2

EXHIBIT B
Category 3: All investments and business positions in, and sources of income from, business entities that are engaged in land development, construction, or the acquisition or sale of real property within the jurisdiction of the City, plan to engage in such activities within the jurisdiction of the City within the next year, or have engaged in such activities within the jurisdiction of the City within the past two years.

Category 4: All investments and business positions in, and sources of income from, business entities that are banking, savings and loan, or other financial institutions.

Category 5: All investments and business positions in, and sources of income from, business entities that provide services, supplies, materials, machinery, vehicles or equipment of a type purchased or leased by the City.

Category 6: All investments and business positions in, and sources of income from, business entities that provide services, supplies, materials, machinery, vehicles or equipment of a type purchased or leased by the Designated Employee's Department.

Category Z: All investments and business positions in, and sources of income from, business entities subject to the regulatory, permit, or licensing authority of the Designated Employee's Department, will be subject to such authority within the next year, or have been subject to such authority within the past two years. 2026 COI Code Amendment Page 2 of 2

ATTACHMENT B
(Regulations of the Fair Political Practices Commission, Title 2, Division 6, California Code of Regulations)
§ 18730. Provisions of Conflict of Interest Codes.
(a) Incorporation by reference of the terms of this regulation along with the designation of employees and the formulation of disclosure categories in the Appendix referred to below constitute the adoption and promulgation of a conflict of interest code within the meaning of Section 87300 or the amendment of a conflict of interest code within the meaning of Section 87306 if the terms of this regulation are substituted for terms of a conflict of interest code already in effect. A code so amended or adopted and promulgated requires the reporting of reportable items in a manner substantially equivalent to the requirements of article 2 of chapter 7 of the Political Reform Act, Sections 81000, et seq. The requirements of a conflict of interest code are in addition to other requirements of the Political Reform Act, such as the general prohibition against conflicts of interest contained in Section 87100, and to other state or local laws pertaining to conflicts of interest.
(b) The terms of a conflict of interest code amended or adopted and promulgated pursuant to this regulation are as follows:
(1) Section 1. Definitions.

The definitions contained in the Political Reform Act of 1974, regulations of the Fair Political Practices Commission (Regulations 18110, et seq.), and any amendments to the Act or regulations, are incorporated by reference into this conflict of interest code. (2) Section 2. Designated Employees.
1 The persons holding positions listed in the Appendix are designated employees. It has been determined that these persons make or participate in the making of decisions which may foreseeably have a material effect on economic interests. (3) Section 3. Disclosure Categories.

This code does not establish any disclosure obligation for those designated employees who are also specified in Section 87200 if they are designated in this code in that same capacity or if the geographical jurisdiction of this. agency is the same as or is wholly included within the jurisdiction in which those persons must report their economic interests pursuant to article 2 of chapter 7 of the Political Reform Act, Sections 87200, et seq.

In addition, this code does not establish any disclosure obligation for any designated employees who are designated in a conflict of interest code for another agency, if all of the following apply:
(A) The geographical jurisdiction of this agency is the same as or is wholly included within the jurisdiction of the other agency;
(B) The disclosure assigned in the code of the other agency is the same as that required under article 2 of chapter 7 of the Political Reform Act, Section 87200; and (C) The filing officer is the same for both agencies. [FN1] Such persons are covered by this code for disqualification purposes only. With respect to all other designated employees, the disclosure categories set forth in the Appendix specify which kinds of economic interests are reportable. Such a designated employee shall disclose in the employee's statement of economic interests those economic interests the employee has which are of the kind described in the disclosure categories to which the employee is assigned in the Appendix. It has been determined that the economic interests set forth in a designated employee's disclosure categories are the kinds of economic interests which the employee foreseeably can affect materially through the conduct of the employee's office. (4) Section 4. Statements of Economic Interests: Place of Filing.

The code reviewing body shall instruct all designated employees within its code to file statements of economic interests with the agency or with the code reviewing body, as provided by the code reviewing body in the agency's conflict of interest code or with the Fair Political Practices Commission using the Commission's electronic filing system as required under Section 87500. [FN2]
(5) Section 5. Statements of Economic Interests: Time of Filing. (A) Initial Statements. All designated employees employed by the agency on the effective date of this code, as originally adopted, promulgated and approved by the code reviewing body, shall file statements within 30 days after the effective date of this code. Thereafter, each person already in a position when it is designated by an amendment to this code shall file an initial statement within 30 days after the effective date of the amendment. (B) Assuming Office Statements: All persons assuming designated positions after the effective date of this code shall file statements within 30 days after assuming the designated positions, or if subject to State Senate confirmation, 30 days after being nominated or appointed. (C) Annual Statements. All designated employees shall file statements no later than April

1. If a person reports for military service as defined in the Servicemember's Civil Relief Act, the deadline for the annual statement of economic interests is 30 days following the person's return to office, provided the person, or someone authorized to represent the person's interests, notifies the filing officer in writing prior to the applicable filing deadline that the person is subject to that з
federal statute and is unable to meet the applicable deadline, and provides the filing officer verification of the person's military status.
(D) Leaving Office Statements. All persons who leave designated positions shall file statements within 30 days after leaving office.
(5.5) Section 5.5. Statements for Persons Who Resign Prior to Assuming Office.

Any person who resigns within 12 months of initial appointment, or within 30 days of the date of notice provided by the filing officer to file an assuming office statement, is not deemed to have assumed office or left office, provided the person did not make or participate in the making of, or use the person's position to influence any decision and did not receive or become entitled to receive any form of payment as a result of the person's appointment. Such persons shall not file either an assuming or leaving office statement.
(A) Any person who resigns a position within 30 days of the date of a notice from the filing officer shall do both of the following:
(1) File a written resignation with the appointing power; and (2) File a written statement with the filing officer declaring under penalty of perjury that during the period between appointment and resignation the person did not make, participate in the making, or use the position to influence any decision of the agency or receive, or become entitled to receive, any form of payment by virtue of being appointed to the position. (6) Section 6. Contents of and Period Covered by Statements of Economic Interests. (A) Contents of Initial Statements.

Initial statements shall disclose any reportable investments, interests in real property and business positions held on the effective date of the code and income received during the 12 months prior to the effective date of the code.
4 (B) Contents of Assuming Office Statements.

Assuming office statements shall disclose any reportable investments, interests in real property and business positions held on the date of assuming office or, if subject to State Senate confirmation or appointment, on the date of nomination, and income received during the 12 months prior to the date. of assuming office or the date of being appointed or nominated, respectively.
(C) Contents of Annual Statements. Annual statements shall disclose any reportable investments, interests in real property, income and business positions held or received during the previous calendar year provided, however, that the period covered by an employee's first annual statement shall begin on the effective date of the code or the date of assuming office whichever is later, or for a board or commission member subject to Section 87302.6, the day after the closing date of the most recent statement filed by the member pursuant to Regulation 18754. (D) Contents of Leaving Office Statements.

Leaving office statements shall disclose reportable investments, interests in real property, income and business positions held or received during the period between the closing date of the last statement filed and the date of leaving office.
(7) Section 7. Manner of Reporting
Statements of economic interests shall be made on forms prescribed by the Fair Political Practices Commission and supplied by the agency, and shall contain the following information:
(A) Investment and Real Property Disclosure.

When an investment or an interest in real property [FN3] is required to be reported, [EN4] the statement shall contain the following:

1. A statement of the nature of the investment or interest; 5 2. The name of the business entity in which each investment is held, and a general description of the business activity in which the business entity is engaged;

3. The address or other precise location of the real property;

4. A statement whether the fair market value of the investment or interest in real property equals or exceeds $2,000, exceeds $10,000, exceeds $100,000, or exceeds $1,000,000. (B). Personal Income Disclosure. When personal income is required to be reported, [FN5] the statement shall contain:

1. The name and address of each source of income aggregating $500 or more in value, or $50.or more in value if the income was a gift, and a general description of the business activity, if any, of each source;

2. A statement whether the aggregate value of income from each source, or in the case of a loan, the highest amount owed to each source, was $1,000 or less, greater than $1,000, greater than $10,000, or greater than $100,000;

3. A description of the consideration, if any, for which the income was received;

4. In the case of a gift, the name, address and business activity of the donor and any intermediary through which the gift was made; a description of the gift; the amount or value of the gift; and the date on which the gift was received;

5. In the case of a loan, the annual interest rate and the security, if any, given for the loan and the term of the loan.
(C) Business Entity Income Disclosure. When income of a business entity, including income of a sole proprietorship, is required to be reported, [FN6] the statement shall contain:

1. The name, address, and a general description of the business activity of the business entity;
6 2. The name of every person from whom the business entity received payments if the filer's pro rata share of gross receipts from such person was equal to or greater than $10,000. (D) Business Position Disclosure. When business positions are required to be reported, a designated employee shall list the name and address of each business entity in which the employee is a director, officer, partner, trustee, employee, or in which the employee holds any position of management, a description of the business activity in which the business entity is engaged, and the designated employee's position with the business entity. (E) Acquisition or Disposal During Reporting Period. In the case of an annual or leaving office statement, if an investment or an interest in real property was partially or wholly acquired or disposed of during the period covered by the statement, the statement shall contain the date of acquisition or disposal.
• (8) Section 8. Prohibition on Receipt of Honoraria.
(A) No member of a state board or commission, and no designated employee of a state or local government agency, shall accept any honorarium from any source, if the member or employee would be required to report the receipt of income or gifts from that source on the member's or employee's statement of economic interests. (B) This section shall not apply to any part-time member of the governing board of any public institution of higher education, unless the member is also an elected official. (C) Subdivisions (a), (b), and (c) of Section 89501 shall apply to the prohibitions in this section.
(D) This section shall not limit or prohibit payments, advances, or reimbursements for travel and related lodging and subsistence authorized by Section 89506. (8.1) Section 8.1. Prohibition on Receipt of Gifts in Excess of $630. 7 (A) No member of a state board or commission, and no designated employee of a state or local government agency, shall accept gifts with a total value of more than $630 in a calendar year from any single source, if the member or employee would be required to report the receipt of income or gifts from that source on the member's or employee's statement of economic interests.
(B) This section shall not apply to any part-time member of the governing board of any public institution of higher education, unless the member is also an elected official. (C) Subdivisions (e), (f), and (g) of Section 89503 shall apply to the prohibitions in this section.
(8.2) Section 8.2. Loans to Public Officials.
(A) No elected officer of a state or local government agency shall, from the date of the election to office through the date that the officer vacates office, receive a personal loan from any officer, employee, member, or consultant of the state or local government agency in which the elected officer holds office or over which the elected officer's agency has direction and control. (B) No public official who is exempt from the state civil service system pursuant to subdivisions (c), (d), (e), (f), and (g) of Section 4 of Article VII of the Constitution shall, while he or she holds office, receive a personal loan from any officer, employee, member, or consultant of the state or local government agency in which the public official holds office or over which the public official's agency has direction and control. This subdivision shall not apply to loans made to a public official whose duties are solely secretarial, clerical, or manual. (C) No elected officer of a state or local government agency shall, from the date of the election to office through the date that the officer vacates office, receive a personal loan from any person who has a contract with the state or local government agency to which that elected officer has been elected or over which that elected officer's agency has direction and control. This subdivision shall not apply to loans made by banks or other financial institutions or to any indebtedness created as part of a retail installment or credit card transaction, if the loan is made or the indebtedness created in the lender's regular course of business on terms available to members of the public without regard to the elected officer's official status. • (D) No public official who is exempt from the state civil service system pursuant to subdivisions (c), (d), (e), (f), and (g) of Section 4 of Article VII of the Constitution shall, while the official holds office, receive a personal loan from any person who has a contract with the state or local government agency to which that elected officer has been elected or over which that elected officer's agency has direction and control. This subdivision shall not apply to loans made by banks or other financial institutions or to any indebtedness created as part of a retail installment or credit card transaction, if the loan is made or the indebtedness created in the lender's regular course of business on terms available to members of the public without regard to the elected officer's official status. This subdivision shall not apply to loans made to a public official whose duties are solely secretarial, clerical, or manual. (E) This section shall not apply to the following:

1. Loans made to the campaign committee of an elected officer or candidate for elective office.

2. Loans made by a public official's spouse, child, parent, grandparent, grandchild, brother, sister, parent-in-law, brother-in-law, sister-in-law, nephew, niece, aunt, uncle, or first cousin, or the spouse of any such persons, provided that the person making the loan is not acting as an agent or intermediary for any person not otherwise exempted under this section.

3. Loans from a person which, in the aggregate, do not exceed $500 at any given time.

4. Loans made, or offered in writing, before January 1, 1998. (8.3) Section 8.3. Loan Terms.
(A) Except as set forth in subdivision (B), no elected officer of a state or local government agency shall, from the date of the officer's election to office through the date the officer vacates office, receive a personal loan of $500 or more, except when the loan is in writing and clearly states the terms of the loan, including the parties to the loan agreement, date of the loan, amount of the loan, term of the loan, date or dates when payments shall be due on the loan and the amount of the payments, and the rate of interest paid on the loan. (B) This section shall not apply to the following types of loans:

1. Loans made to the campaign committee of the elected officer.

2.. Loans made to the elected officer by his or her spouse, child, parent, grandparent, grandchild, brother, sister, parent-in-law, brother-in-law, sister-in-law, nephew, niece, aunt, uncle, or first cousin, or the spouse of any such person, provided that the person making the loan is not acting as an agent or intermediary for any person not otherwise exempted under this section.

3. Loans made, or offered in writing, before January 1, 1998. (C) Nothing in this section shall exempt any person from any other provision of Title 9 of the Government Code.
(8.4) Section 8.4. Personal Loans.
(A) Except as set forth in subdivision (B), a personal loan received by any designated employee shall become a gift to the designated employee for the purposes of this section in the following circumstances:

1. If the loan has a defined date or dates for repayment, when the statute of limitations for filing an action for default has expired
10 2. If the loan has no defined date or dates for repayment, when one year has elapsed from the later of the following:
a. The date the loan was made.
b. The date the last payment of $100 or more was made on the loan. c. The date upon which the debtor has made payments on the loan aggregating to less than $250 during the previous 12 months.
(B) This section shall not apply to the following types of loans:

1. A loan made to the campaign committee of an elected officer or a candidate for elective office.

2. A loan that would otherwise not be a gift as defined in this title.

3. A loan that would otherwise be a gift as set forth under subdivision (A), but on which the creditor has taken reasonable action to collect the balance due.

4. A loan that would otherwise be a gift as set forth under subdivision (A), but on which the creditor, based on reasonable business considerations, has not undertaken collection action.

Except in a criminal action, a creditor who claims that a loan is not a gift on the basis of this paragraph has the burden of proving that the decision for not taking collection action was based on reasonable business considerations.

5. A loan made to a debtor who has filed for bankruptcy and the loan is ultimately discharged in bankruptcy.
(C) Nothing in this section shall exempt any person from any other provisions of Title 9 of the Government Code.
(9) Section 9. Disqualification.
11 No designated employee shall make, participate in making, or in any way attempt to use the employee's official position to influence the making of any governmental decision which the employee knows or has reason to know will have a reasonably foreseeable material financial effect, distinguishable from its effect on the public generally, on the official or a member of the official's immediate family or on:
(A) Any business entity in which the designated employee has a direct or indirect investment worth $2,000 or more;
(B) Any real property in which the designated employee has a direct or indirect interest worth $2,000 or more;
(C) Any source of income, other than gifts and other than loans by a commercial lending institution in the regular course of business on terms available to the public without regard to official status, aggregating $500 or more in value provided to, received by or promised to the designated employee within 12 months prior to the time when the decision is made; (D) Any business entity in which the designated employee is a director, officer, partner, trustee, employee, or holds any position of management; or (E) Any donor of, or any intermediary or agent for a donor of, a gift or gifts aggregating $630 or more provided to, received by, or promised to the designated employee within 12 months prior to the time when the decision is made.
(9.3) Section 9.3. Legally Required Participation.

No designated employee shall be prevented from making or participating in the making of any decision to the extent the employee's participation is legally required for the decision to be made. The fact that the vote of a designated employee who is on a voting body is needed to break a tie does not make the employees' participation legally required for purposes of this section. 12 (9.5) Section 9.5. Disqualification of State Officers and Employees.

In addition to the general disqualification provisions of section 9, no state administrative official shall make, participate in making, or use the official's position to influence any governmental decision directly relating to any contract where the state administrative official knows or has reason to know that any party to the contract is a person with whom the state administrative official, or any member of the official's immediate family has, within 12 months prior to the time when the official action is to be taken:
(A) Engaged in a business transaction or transactions on terms not available to members of the public, regarding any investment or interest in real property; or (B) Engaged in a business transaction or transactions on terms not available to members of the public regarding the rendering of goods or services totaling in value $1,000 or more. (10) Section 10. Disclosure of Disqualifying Interest.

When a designated employee determines that the employee should not make a governmental decision because the employee has a disqualifying interest in it, the determination not to act may be accompanied by disclosure of the disqualifying interest. (11) Section 11. Assistance of the Commission and Counsel.

Any designated employee who is unsure of the duties under this code may request assistance from the Fair Political Practices Commission pursuant to Section 83114 and Regulations 18329 and 18329.5 or from the attorney for the employee's agency, provided that nothing in this section requires the attorney for the agency to issue any formal or informal opinion. (12) Section 12. Violations.

This code has the force and effect of law. Designated employees violating any provision of this code are subject to the administrative, criminal and civil sanctions provided in the 13 Political Reform Act, Sections 81000-91014. In addition, a decision in relation to which a violation of the disqualification provisions of this code or of Section 87100 or 87450 has occurred may be set aside as void pursuant to Section 91003. [ENI]
Designated employees who are required to file statements of economic interests under any other agency's conflict of interest code, or under article 2 for a different jurisdiction, may expand their statement of economic interests to cover reportable interests in both jurisdictions, and file copies of this expanded statement with both entities in lieu of filing separate and distinct statements, provided that each copy of such expanded statement filed in place of an original is signed and verified by. the designated employee as if it were an original. See Section 81004. [FN2]
See Section 81010 and Regulation 18115 for the duties of filing officers and persons in agencies who make and retain copies of statements and forward the originals to the filing officer. [FN3]
For the purpose of disclosure only (not disqualification), an interest in real property does not include the principal residence of the filer.
[FN4]
Investments and interests in real property which have a fair market value of less than $2,000 are not investments and interests in real property within the meaning of the Political Reform Act.

However, investments or interests in real property of an individual include those held by the individual's spouse and dependent children as well as a pro rata share of any investment or interest in real property of any business entity or trust in which the individual, spouse and 14 •
dependent children own, in the aggregate, a direct, indirect or beneficial interest of 10 percent or greater.
[FN5]
A designated employee's income includes the employee's community property interest in the income of the employee's spouse but does not include salary or reimbursement for expenses received from a state, local or federal government agency. [FN6]]
Income of a business entity is reportable if the direct, indirect or beneficial interest of the filer and the filer's spouse in the business entity aggregates a 10 percent or greater interest. In addition, the disclosure of persons who are clients or customers of a business entity is required only if the clients or customers are within one of the disclosure categories of the filer.

Note: Authority cited: Section 83112, Government Code. Reference: Sections 87103(e), 87300- 87302, 89501, 89502 and 89503, Government Code.

History

1. New section filed 4-2-80 as an emergency; effective upon filing (Register 80, No. 14).

Certificate of Compliance included.

2. Editorial correction (Register 80, No. 29).

3. Amendment of subsection (b) filed 1-9-81; effective thirtieth day thereafter (Register 81, No. 2).

4. Amendment of subsection (b)(7)(B)1. filed 1-26-83; effective thirtieth day thereafter (Register 83, No. 5).

5. Amendment of subsection (b)(7)(A) filed 11-10-83; effective thirtieth day thereafter (Register 83, No. 46).
15 6. Amendment filed 4-13-87; operative 5-13-87 (Register 87, No. 16).

7. Amendment of subsection (b) filed 10-21-88; operative 11-20-88 (Register 88, No. 46).

8. Amendment of subsections (b)(8)(A) and (b)(8)(B) and numerous editorial changes filed 8-28- 90; operative 9-27-90 (Reg. 90, No. 42).

9. Amendment of subsections (b)(3), (b)(8) and renumbering of following subsections and amendment of Note filed 8-7-92; operative 9-7-92 (Register 92, No. 32).

10. Amendment of subsection (b)(5.5) and new subsections (b)(5.5)(A)-(A)(2) filed 2-4-93; operative 2-4-93 (Register 93, No. 6).

11. Change without regulatory effect adopting Conflict of Interest Code for California Mental Health Planning Council filed 11-22-93 pursuant to title 1, section 100, California Code of Regulations (Register 93, No. 48). Approved by Fair Political Practices Commission 9-21-93.

12. Change without regulatory effect redesignating Conflict of Interest Code for California Mental Health Planning Council as chapter 62, section 55100 filed 1-4-94 pursuant to title 1, section 100, California Code of Regulations (Register 94, No. 1).

13. Editorial correction adding History 11 and 12 and deleting duplicate section number i (Register 94, No. 17).

14. Amendment of subsection (b) (8), designation of subsection (b)(8)(A), new subsection (b)(8)(B), and amendment of subsections (b) (8.1)-(b) (8.1)(B), (b)(9)(E) and Note filed 3-14-95; operative 3-14-95 pursuant to Government Code section 11343.4(d) (Register 95, No. 11).

15. Editorial correction inserting inadvertently omitted language in footnote 4 (Register 96, No. 13).
16 16. Amendment of subsections (b)(8)(A)-(B) and (b)(8.1)(A), repealer of subsection (b)(8.1)(B), and amendment of subsection (b)(12) filed 10-23-96; operative 10-23-96 pursuant to Government Code section 11343.4(d) (Register 96, No. 43).

17. Amendment of subsections (b)(8.1) and (9)(E) filed 4-9-97; operative 4-9-97 pursuant to Government Code section 11343.4(d) (Register 97, No. 15).

18. Amendment of subsections (b)(7)(B)5., new subsections (b)(8.2)-(b)(8.4)(C) and amendment of Note filed 8-24-98; operative 8-24-98 pursuant to Government Code section 11343.4(d) (Register 98, No. 35).

19. Editorial correction of subsection (a) (Register 98, No. 47).

20. Amendment of subsections (b) (8.1), (b)(81)(A) and (b)(9)(E) filed 5-11-99; operative 5-11- 99 pursuant to Government Code section 11343.4(d) (Register 99, No. 20).

21. Amendment of subsections (b)(8.1)-(b)(8.1)(A) and (b)(9)(E) filed 12-6-2000; operative 1-1- 2001 pursuant to the 1974 version of Government Code section 11380.2 and Title 2, California Code of Regulations, section 18312(d) and (e) (Register 2000, No. 49).

22. Amendment of subsections (b)(3) and (b)(10) filed 1-10-2001; operative 2-1-2001. Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil C010924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements) (Register 2001, No. 2).

23. Amendment of subsections (b)(7)(A)4., (b)(7)(B)1.-2., (b)(8.2)(E)3., (b) (9)(A) -(C) and footnote 4. filed 2-13-2001. Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil CO10924, California Court of Appeal, Third 17 Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements) (Register 2001, No. 7).

24. Amendment of subsections (b)(8.1)-(b)(8.1)(A) filed 1-16-2003; operative 1-1-2003.

Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil CO10924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements) (Register 2003, No. 3).

25. Editorial correction of History 24 (Register 2003, No. 12).

26. Editorial correction removing extraneous phrase in subsection (b)(9.5)(B) (Register 2004, No. 33).

27. Amendment of subsections (b)(2)-(3), (b)(3)(C), (b)(6)(C), (b)(8.1)-(b)(8.1)(A), (b)(9)(E) and (b)(11)-(12) filed 1-4-2005; operative 1-1-2005 pursuant to Government Code section 11343.4 (Register 2005, No. 1).

28. Amendment of subsection (b)(7)(A)4. filed 10-11-2005; operative 11-10-2005 (Register 2005, No. 41).

29. Amendment of subsections (a), (b)(1), (b)(3), (b)(8.1), (b)(8.1)(A) and (b)(9)(E) filed 12-18- 2006; operative 1-1-2007. Submitted to OAL pursuant to Fair Political Practices Commission v.

Office of Administrative Law, 3 Civil CO10924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 "Administrative Procedure Act rulemaking requirements) (Register 2006, No. 51).

30. Amendment of subsections (b)(8.1)-(b)(8.1)(A) and (b)(9)(E) filed 10-31-2008; operative 11- 30-2008. Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil C010924, California Court of Appeal, Third Appellate District, 18 nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements and not subject to procedural or substantive review by OAL) (Register 2008, No. 44).

31. Amendment of section heading and section filed 11-15-2010; operative 12-15-2010.

Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil C010924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements and not subject to procedural or substantive review by OAL) (Register 2010, No. 47).

32. Amendment of section heading and subsections (a)-(b)(1), (b)(3)-(4), (b)(5)(C), (b)(8.1)- (b)(8.1)(A) and (b)(9)(E) and amendment of footnote 1 filed 1-8-2013; operative 2-7-2013.

33. Amendment of subsections (b)(8.1)-(b)(8.1)(A), (b)(8.2)(E)3. and (b)(9)(E) filed 12-15-2014; operative 1-1-2015 pursuant to section 18312(e)(1)(A), title 2, California Code of Regulations.

Submitted to OAL for filing and printing pursuant to Fair Political Practices Commission v.

Office of Administrative Law, 3 Civil C010924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements) (Register 2014, No. 51). 19 34. Redesignation of portions of subsection (b)(8)(A) as new subsections (b)(8)(B)-(D), amendment of subsections (b)(8.1)-(b)(8.1)(A), redesignation of portions of subsection (b) (8.1)(A) as new subsections (b)(8.1)(B)-(C) and amendment of subsection (b)(9)(E) filed 12- 1-2016; operative 12-31-2016 pursuant to Cal. Code Regs. tit. 2, section 18312(e). Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil C010924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements and not subject to procedural or substantive review by OAL) (Register 2016, No. 49).

35. Amendment of subsections (b) (8.1)-(b)(8.1)(A) and (b)(9)(E) filed 12-12-2018; operative 1- 11-2019 pursuant to Cal. Code Regs., tit. 2, section 18312(e). Submitted to OAL for filing and printing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil C010924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements and not subject to procedural or substantive review by OAL) (Register 2018, No. 50).

36. Amendment of subsections (b)(8.1)-(8.1)(A) filed 12-23-2020; operative 1-1-2021 pursuant to Cal. Code Regs., tit. 2, section 18312(e). Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil CO10924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements and not subject to procedural or substantive review by OAL) (Register 2020, No. 52). 20 37. Amendment of subsections (b)(3)(C), (b)(5)(C), (b)(5.5), (b)(5.5) (A)(2), (b)(7)D), (b)(8)(A), (b) (8.1)(A), (b)(8.2)(A), (b)(8.2)(C)-(D), (b) (8.3)(A), (b)(9), (b)(9.3), (b)(9.5), (b)(10) and (b)(11) and footnote 5 filed 5-12-2021; operative 6-11-2021 pursuant to Cal. Code Regs., tit. 2, section 18312(e). Submitted to OAL for filing pursuant to Fair Political Practices Commission v.

Office of Administrative Law, 3 Civil C010924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements and not subject to procedural or substantive review by OAL) (Register 2021, No. 20).

38. Amendment of subsections (b)(8.1)-(b)(8.1)(A) and (b)(9)(E) filed 12-20-2022; operative 1- 19-2023 pursuant to Cal. Code Regs., tit. 2, section 18312(e). Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil CO10924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements and not subject to procedural or substantive review by OAL) (Register 2022, No. 51).

39. Amendment of subsections (b)(8.1)-(b)(8.1)(A) and (b)(9)(E) filed 2-18-2025; operative 3- 20-2025 pursuant to Cal. Code Regs., tit. 2, section 18312(e). Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil CO10924, California Court of Appeal, Third Appellate District, nonpublished decision, April 21, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements and not subject to procedural or substantive review by OAL) (Register 2025, No. 8).
21 40. Amendment of subsection (b)(4) filed 5-8-2025; operative 6-7-2025 pursuant to Cal. Code Regs., tit. 2, section 18312(e). Submitted to OAL for filing pursuant to Fair Political Practices Commission v. Office of Administrative Law, 3 Civil CO10924, California Court of Appeal, Third Appellate District, nonpublished decision, April 27, 1992 (FPPC regulations only subject to 1974 Administrative Procedure Act rulemaking requirements and not subject to procedural or substantive review by OAL) (Register 2025, No. 19).
22 ATTACHMENT C

PRACTICES
POLITICAL COM An Overview of Conflicts of Interest
FPPC Under the Political Reform Act
EST. 1974

A TATE OF CUTORA
May 2022
Contents
I. The Basic Prohibition 2
Il. Making, Participating in Making, or Attempting to Influence a Decision. 2 A. General Definitions. ...2
B. Exceptions :3
III. Financial Interests . ...4
IV. Foreseeability of Financial Effect.

A. Explicitly Involved ...5
฿. Not Explicitly Involved ..5
V. Materiality Standards: ..6
A. Business Entity Interests. ... 6
B. Real Property Interests. ..7
• C. Source of Income Interests. .:9
D. Source of Gift Interests.. ... 11
E. Interest in Personal Finances.. 12
VI. The Püblic Generally Exception 13
VIl. Legally Required Participation:, 16
VIl!. Segmentation.. 17
IX. Disqualification Requirements. 18
Fair Political Practices Commission Conflicts Overview
May 2022

1. The Basic Prohibition
Government Code Section 87100 of the Political Reform Act (the "Act")! prohibits a public official at any level of state or local government from making, participating in making; or attempting to use the official's position to influence a governmental decision in which the official knows or has reason to know the official has a financial interest.

Government Code Section 87103 provides that an official has a "financial interest" within the meaning of Section 87100 if it is reasonably foreseeable that the decision will have a material financial effect on one or more of the official's interests as identified and distinguishable from the decision's effect on the public generally Taken together, these provisions of the Act prohibit an official from taking part in a decision if it is reasonably foreseeable that the decision would have a material financial effect on one or more of the official's financial interests identified in Section 87103 distinguishable from the decision's effect on the public generally:
||. Making, Participating in Making, or
Attempting to Influence a Decision
Regulation 18704 defines "making a decision,' '" "participating in a decision," and "using official position to attempt to influence a decision" for purposes of the Act's conflict of interest provisions. If an official has a disqualifying conflict of interest under Section 87100, the official is prohibited from making, participating in making, or attempting in any way to use the official's official position to influence the decision:

A. General Definitions
Making a Decision: An official makes a decision if the official authorizes or directs any action, votes; appoints a person; obligates or commits the official's agency to any course of action, or enters into any contractual agreement on behalf of the agency. (Regulation 18704(a).)
Participating in a Decision: An official participates in a decision if the official provides information, an opinion, or a recommendation for the purpose of affecting the decision without significant intervening substantive review. (Regulation 18704(b).) Using Official Position to Attempt to Influence a Decision: An official uses an official position to influence a decision if the official contacts or appears before: (1) any official in the official's agency, or in an agency subject to the authority or budgetary control of the official's agency, for the purpose of affecting a decision; or (2) any official in any other government agency for the purpose of affecting a decision, and the official purports to act within the official's authority or on behalf of the official's agency in making the contact. (Regulation 18704(c).).

Fair Political Practices Commission Conflicts Overview
May 2022
B: Exceptions
Regulation 18704(d) provides that "making, participating in, or using official position to influence a decision" do not include any of the following:

Ministerial: Actions that are solely ministerial, secretarial, or clerical. (Regulation 18704(d) (1).)
Appearances aș a Member of the General Public: An appearance by an official as a member of the general public before an agency in the course of its prescribed governmental function if the official is appearing on matters related solely to the official's personal interests, including interests in:
• Real property owned entirely by the official, members of the official's immediate family; or the official and members of the official's immediate family; • A business owned entirely by the official, members of the official's immediate family; or the official and members of the official's immediate family; or A business over which the official, members of the official's immediate family, or the official and members of the official's immediate family solely or jointly exercise full direction and control. (Regulation 18704(d)(2):) Terms of Employment: Actions by an official relating to the official's compensation or the terms or conditions of the official's employment or consulting contract. However, an official may not make a decision to appoint, hire, fire, promote; demote, or suspend without pay or take disciplinary action with financial sanction against the official or the official's immediate family, or set a salary for the official or the official's immediate family different from salaries. paid to other employees of the agency in the same job classification or position. (Regulation 18704(d)(3):)
Public Speaking: Communications by an official to the general public or media. (Regulation 187.04(d)(4).)
Academic Decisions: Teaching decisions, including an instructor's selection of books or other educational materials at the official's own school or institution, or other similar decisions incidental to teaching; or decisions by an official who has teaching or research responsibilities at an institution of higher education relating to the official's professional responsibilities, including applying for funds, allocating resources, and all decisions relating to the manner or methodology with which the official's academic study or research will be conducted. (Regulation 18704(d)(5):) However, this exception does not apply to an official who has institution-wide administrative responsibilities as to the approval or review of academic study or research at the institution unrelated to the official's own work. (Ibid.)
Architectural and Engineering Documents: Drawings or submissions of an architectural, engineering, or similar nature prepared by an official for a client to submit in a proceeding before the official's agency if: (i) the work is performed pursuant to the official's profession; and (i) the official does not make any contact wịth the agency other Fair Political Practices Commission Conflicts Overview
May 2022
than contact with agency staff concerning the process or evaluation of the documents prepared by the official. (Regulation 18704(d)(6)(A).)
Also, an official's appearance before a design or architectural review committee or similar body of which the official is a member to present drawings or submissions of an architectural, engineering, or similar nature prepared for a client if: (i) the committee's sole function is to review architectural designs or engineering plans and to make recommendations to a planning commission or other agency; (i) the committee is required by law to include architects, engineers, or persons in related professions, and the official was appointed to the body to fulfill this requirement; and (iii) the official is a sole practitioner. (Regulation 18704(d)(6)(B).)
Additional Consulting Services: Recommendations by a consultant regarding additional services for which the consultant or consultant's employer would receive additional income if the agency has already contracted with the consultant, for an agreed upon price, to make recommendations concerning services of the type offered by the consultant or the consultant's employer, and the consultant does not have any other economic interest, other than in the firm, that would be foreseeably and materially affected by the decision. (Regulation 18704(d)(7).)
IlI. Financial Interests
The first step in determining whether an official has a disqualifying conflict of interest under the Act is identifying the official's financial interests with respect to the decision at issue. Section 87103 identifies the following financial interests which may give rise to an official's disqualifying conflict of interest under the Act:

A business entity in which the official has a direct or indirect investment worth $2,000 or more (Section 87103(a)); or in which the official is a director, officer, partner, trustee, employee, or holds any position of management (Section 87103(d)):
• Real property in which the official has an interest worth $2,000 or more. (Section 87103(b).)
• A source of income totaling $500 or more in value provided or promised to, or received by, the official within the 12 months prior to the time when the decision is made. (Section 87103(c):)
• A giver of a gift or gifts totaling $500? or more in value provided or promised to, or received by, the official within the 12 months prior to the time when the decision is made: (Section 87103(e).)
The official's personal finances and those of "immediate family," defined in Section 82029 as the spouse and dependent children. (Section 87103.) Fair Political Practices Commission Conflicts Overview
May. 2022
IV. Foreseeability of Financial Effect
A. Explicitly Involved
A financial effect on a financial interest is presumed to be reasonably foreseeable if the financial interest is explicitly involved in the decision. (Regulation (18701(a).) An official's financial interest is "explicitly involved" in a decision if the interest is a "named party in, or the subject of," the decision, and an interest is the "subject of a proceeding" if the decision involves the issuance, renewal, denial, or revocation of any license, permit, other entitlement to, or contract with, the interest. Additionally, an official's real property interest is explicitly involved in any decision affecting the real property as described in Regulation 18702 2(a)(1) through (6), discussed further below. (Ibid.) B. Not Explicitly Involved
When an official's financial interest is not explicitly involved in a decision, the financial effect of the decision is reasonably foreseeable if the effect can be recognized as a realistic possibility and more than hypothetical or theoretical. The effect need not be likely to be reasonably foreseeable. (Regulation 18701(b).) Factors to be considered when determining if a decision's effect on an official's not explicitly involved interest is reasonably foreseeable include, but are not limited to, the following
•• The extent to which the occurrence of the effect is contingent upon intervening events (other than future governmental decisions by the official's agency or an agency subject to the budgetary control of the official's agency): (Regulation 18701(b)(1).)
Whether the official should anticipate a financial effect on the financial interests at issue as a potential outcome under normal circumstances when using appropriate due diligence and care. (Regulation 18701(b)(2):) • Whether the official has an interest of the type that would typically be affected by the terms of the decision: (Regulation 18701(b)(3).)
• Whether the decision is of the type that would be expected to have a financial effect on businesses and individuals similarly situated to those businesses and individuals in which the official has a financial interest: (Ibid.) • Whether a reasonable inference can be made that the financial effects of the decision on the official's financial interest might compromise an official's ability to fulfill their duty to act in the best interests of the public. (Regulation 18701(b)(4).) • Whether the decision will provide or deny an opportunity, or create an advantage for one of the official's financial interests. (Regulation 18701(b)(5).) Fair Political Practices Commission 5 Conflicts Overview May 2022
• Whether the official has the type of financial interest that would cause a similarly situated person to weigh the advantages and disadvantages of the decision on the official's financial interest in formulating a position. (Regulation 18701(b)(6).) V. Materiality Standards
Regulation 18702(a) provides that the next step in the analysis is to determine if the decision's reasonably foreseeable financial effect on the official's financial interest is material. If the official's interest is in:
• A business entity; then apply the materiality standards of Regulation 18702.1. (Regulation 18702(a)(1):)
• A real property, then apply the materiality standards of Regulation 18702:2. (Regulation 18702(a)(2).)
• A source of income, then apply the materiality standards of Regulation 18702.3. (Regulation 18702(a) (3):)
• A source of a gift or gifts, then apply the materiality standards of 18702.4:
(Regulation 18702(a) (4):)
• Their personal finances or those of immediate family, then apply materiality standard of 18702.5: (Regulation 18702(a)(5).)
A. Business Entity Interests
Regulation 18702:1 sets forth the materiality standards applicable to a decision's reasonably foreseeable financial effect on a business in which an official has an interest, and provides that the effect is material if any of the following standards is met:

The business is explicitly involved in the decision, meaning that the business is "a named party in; or the subject of, the decision, including any decision in which the business:
• Initiates the proceeding by filing an application, claim, appeal, or other request for action concerning the business with the official's agency. (Regulation 18702.1(a)(1)(A).)
• Offers to sell a product or service to the official's agency. (Regulation 18702. 1(a)(1)(B).)
• Bids on, or enters into, a contract with the official's agency, or is identified as a subcontractor on a bid or contract with the agency. (Regulation 18702,1(a) (1)(C).)
• Is the named or intended manufacturer or vendor of any products to be purchased by the official's agency with an aggregate cost of $1,000 in any 12- month period. (Regulation 18702. 1(a) (1)(D):)
Fair Political Practices Commission 6 Conflicts Overview May 2022
• Applies for a permit, license, grant, tax credit, exception, variance, or other entitlement from the official's agency. (Regulation 18702.1(a)(1)(E).) • Is the subject of any inspection, action, or proceeding under the regulatory authority of the official's agency: (Regulation 18702 1(a)(1)(F).). • Is subject to an action taken by the official's agency that is directed at the entity. (Regulation 18702: 1(a)(1)(G).)
• The decision may result in an increase or decrease of the business's annual gross revenues, or the value of its assets and liabilities; in an amount equal to or more than:
• $1,000,000; or
› Five percent of the business's annual gross revenues, and the increase or decrease is $10,000 or more: (Regulation 18702.1(a)(2).) • The decision may cause the business to incur or avoid additional expenses or to reduce or eliminate expenses in amount equal to or more than:
• $250,000; or
» One percent of the business's annual gross revenues, and the increase or decrease is at least $2,500: (Regulation 18702 1(a)(3).) • The official knows or has reason to know that business has an interest in real property and:
» The property is a named party in, or the subject of, the decision under Regulations 18701(a) and 18702.2(a)(1) through (6); or
» There is clear and convincing evidence the decision would have a substantial effect on the property. (Regulation 18702.1(a)(4).)
Thus; if the decision's reasonably foreseeable financial effect on an official's business interest meets any of the four standards above, that effect is material, and the official is disqualified from taking part in the decision.

The official's only financial interest in the business is an "investment interest" under Section 87103(a) valued at $25,000 or less; and
• The official's interest in the business is less than one percent of the business's shares.

If the Small Shareholder Exception applies, the official is not disqualified B. Real Property Interests
Fair Political Practices Commission Conflicts Overview
May 2022
Regulation 18702.2 provides the materiality standards applicable to a decision's reasonably foreseeable financial effect on real property in which an official has an interest as either an owner or lessee.

Explicitly Involved Real Property Interest: It is reasonably foreseeable a decision will have a material financial effect on an official's interest in real property any time the interest is explicitly involved in the decision. Therefore, the decision's reasonably foreseeable effect is material in any of the types of decisions described in Regulation 18702.2(a)(1) to (6), including a decision thạt:
• Involves the adoption of or amendment to a development plan or criteria applying to the property: (Regulation 187.02:2(a)(1):)
• Determines the property's zoning or reżoning, other than a zoning decision applicable to all properties designated in that category; annexation or de- annexation; inclusion in or exclusion from any city, county, district, or local government subdivision ör other boundaries, other than elective district boundaries: (Regulation 18702.2(a)(2):)
• Would impose, repeal, or modify any taxes; fees, or assessments that apply to the property: (Regulation 18702.2(a)(3).)
• Authorizes the sale, purchase, or lease of the property. (Regulation 18702.2(a)(4).)
Involves the issuance, denial or revocation of a license, permit or other land use ențitlement authorizing a specific use of or improvement to the property or any variance that changes the permitted use of, or restrictions. placed on, the property. (Regulation 18702.2(a)(5).)
Involves construction of, or improvements to, streets, water, sewer, storm drainage or similar facilities, and the property will receive new or improved services that provide a benefit or detriment disproportionate to other properties receiving the services. (Regulation 18702 2(a)(6).)
Not Explicitly Involved Real Property Interest: A decision's reasonably foreseeable financial effect on an official's interest in real property is material if it is of a type described in Regulation 18702.2(a)(7) through (8), (b) or (c), including a decision that:
• Involves property located 500 feet or less from the official's property unless there iș clear and convincing evidence that the decision will not have any measurable impact on the official's property: (Regulation 18702.2(a)(7).) Involves property located more than 500 feet but less than 1,000 feet from the official's property, and the decision would change the official's property's:
development potential; income producing potential; highest and best use; character by substantially altering traffic levels, intensity of use, parking, view, privacy, noise levels, or air quality; or market value (Regulation 18702:2(a)(8)(A) through (E):)
Fair Political Practices Commission 8 Conflicts Overview May. 2022
Involves property located 1,000 feet or more from the property line of the official's property if there is clear and convincing evidence the decision would have a substantial effect on the official's property. (Regulation 18702.2(b).) • Involves property leased by the official and the decision will:
• Change the termination date of the lease;
• Increase or decrease the potential rental value of the property; • Change the official's actual or legally allowable use of the property; or › Change the official's use and enjoyment of the property. (Regulation 18702.2(c)(1) through (4):) :

Real Property Interest 1,000 Feet or More from Property Involved in Decision: As mentioned above, Regulation 18702.2(b) sets forth a presumption that the financial effect of a decision involving property located 1,000 feet or more from the property line of the official's property is not material. That presumption, however, may be rebutted with clear and convincing evidence the decision would have a substantial effect on the official's real property interest.

Exceptions for Planning Objectives or Policy: A decision's reasonably foreseeable financial effect on an official's real property interest is not material, and therefore the official is not disqualified from the decision, if the decision solely concerns:
• Repairs, replacement or maintenance of existing streets, water, sewer, storm drainage or similar facilities: (Regulation 18702.2(d)(1).) • Adoption or amendment of a general plan, as defined in Regulation 18702.2(e)(2); if certain specified conditions are met. (See Regulation 18702.2(d)(2):)
Common Area Exception to the Definition of Interest in Real Property: Regulation 18702.2(e)(4) provides that an "interest in real property," as defined in Section 82033 does not include "any common area as part of the official's ownership interest in a common interest development as defined in the Davis-Stirling Common Interest Development Act (Civil Code Sections 4000 et seq.)"
C. Source of Income Interests
Regulation 18702:3 sets forth the materiality standards applicable to a decision's reasonably foreseeable financial effect on a source of income to an official, and provides that the effect is material if any of the following criteria, is met:

The source is explicitly involved in the decision because it is "a named party in; or the subject of, the decision," including a claimant, applicant, respondent, or contracting party. (Regulation 18702.3(a)(1).)
• The source is an individual and any of the following applies:

Fair Political Practices Commission Conflicts Overview
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» The decision may affect the individual's income, investments; or other assets or liabilities by $1;000 or more (excluding an interest in a business entity or real property): (Regulation 18702.3(a) (2)(A).)
• The official knows or has reason to know that the individual has an interest in a business entity that will be financially affected under the materiality standards applicable to a business set forth in Regulation 18702.1. (Regulation 18702.3(a)(2)(B).)
• The official knows or has reason to know that the individual: (i) has a real property interest and the property is explicitly involved in the decision; or (ii) there is clear and convincing evidence the decision would have a substantial effect on the property: (Regulation 18702.3(a)(2)(C).)
• The source is a nonprofit organization and any of the following applies:
• The decision may result in an increase or decrease of the organization's annual gross receipts, or the value of the organization's assets or liabilities, in an amount equal to or more than: (i) $1,000,000; or (i) five percent of the organization's annual gross receipts and the increase or decrease is equal to or greater than $10,000: (Regulation 18702.3(a) (3)(A).) > The decision may cause the organization to incur or avoid additional expenses or to reduce or eliminate expenses in an amount equal to or more than: (i) $250,000; or (i) one percent of the organization's annual gross receipts and the change in expenses is equal to or greater than $2,500. (Regulation 18702.3(a)(3)(B).)
» The official knows or has reason to know that the organization has a real property interest and: (i) the property is explicitly involved in the decision; (i) there is clear and convincing evidence the decision would have a substantial effect on the property. (Regulation 18702.3(a)(3)(C).)
• The source is a business that will be financially affected under the materiality standärds applicable to a business set forth in Regulation 18702.1 (Regulation 18702.3(a)(4).)
• If there is a nexus between the decision and income received by the official or official's spouse. Otherwise referred to as the nexus test, any reasonably foreseeable financial effect on an official's source of income interest iș material if the decision "will achieve, defeat, aid, or hinder a purpose or goal of the source and the official or the official's spouse receive or is promised the income for achieving the purpose or goal. (Regulation 18702.3(b).).

Exception for Retail Sales: Section 87103.5(a) provides that a retail customer of a business engaged in retail sales of good or services to the public generally is not a source of income to an official who owns a 10-percent or greater interest in the business if: the retail customers of the business constitute a significant segment of the public generally; and the amount of income received from an individual customer is not distinguishable from the amount of income received from its other customers.

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Section 87103.5(b) sets forth a similar retail sales exception for a jurisdiction with a population of 10,000 or less that is located within a county with 350 or fewer retail businesses.

For purposes of applying Section 87103.5, Regulation 18702.3(c) provides that the retail customers of a business entity constitute a significant segment of the public generally if the business is open to the public and provides goods or services to customers that comprise a broad base of persons representative of the jurisdiction:
(Regulation 18702.3(c)(1).)
Income from an individual customer is not distinguishable from the amount of income received from other customers when the official is unable to recognize a significant monetary difference between the business provided by the individual customer and the other customers of the business. (Regulation 18702.3(c)(2).) An official is unable to recognize a significant monetary difference when the business:
is of the type that sales to any one customer will not have a significant impact on the business's annual net sales; or
• Has no records that distinguish customers by amount of sales, and the official has no other information that the customer provides significantly more income to the business than an average customer. (Ibid.)
Income from a Government Entity: The materiality standards of Regulation 18702.3 do not apply where a government entity qualifies as a source of income as defined in Section 82030, including where an official is paid by the entity as a consultant or contractor: (Regulation 18702.3(d):) Under Regulation 18703(e)(7), an official with an intereșt in such an entity is disqualified from taking part in a decision only if there is a unique effect on the official: (Ibid.)
D. Source of Gift Interests
Regulation 18702.4 provides the materiality standards applicable to a decision's reasonably foreseeable financial effect on the source of a gift to an official, and provides that the decision's effect is material if:
• The source is explicitly involved in the decision because the source "is named or otherwise identified as the subject of the proceeding," including a claimant, applicant, respondent, or contracting party. (Regulation 18702.4(a).) The source is an individual that will be financially affected under the materiality standard applicable to a decision's reasonably foreseeable financial effect on an official's personal finances set forth in Regulation 18702.5 or the official knows or has reason to know that the individual has an interest in a business or real property that will be financially affected under the materiality standards provided in Regulation 18702.1 or 18702.2, respectively: (Regulation 18702 4(b)) Fair Political Practices Commission Conflicts Overview
May 2022
The source is a nonprofit organization that will receive a measurable financial benefit or loss as a result of the decision or the official knows or has reason to know that the nonprofit has an interest in real property that will be financially affected under the materiality standards in Regulation 18702.2. (Regulation 18702.4(c).)
The source is a business that will be financially affected under the materiality standards in Regulation 18702.1. (Regulation 18702.4(d):) E.:. Interest in Personal Finances
Regulation 18702.5(a) provides the materiality standard applicable to a decision's reasonably foreseeable financial effect on an official's personal finances, including those of immediate family. Also known as the personal financial effect rule, a reasonably foreseeable effect on the official' personal finances is material if the decision may result in the official or the official's immediate family receiving a financial benefit or loss of $500 or more in any 12-month period due to the decision.

Exceptions: Under Regulation 18702 5(b), however, a decision's effect on an official's personal finances and those of immediate family is not material if the decision would:
• Affect only the salary, per diem, or reimbursement for expenses the official or their immediate family member receives from a federal, state, or local government agency, unless the decision is:
› To appoint (except as specified), hire, fire, promote, demote, suspend without pay or otherwise take disciplinary action with financial sanction against the official or their immediate family; or
• To set a salary for the official or a member of their immediate family which is different from salaries paid to other employees of the government agency in the same job classification or position, or when the member of the official's immediate family is the only person in the job classification or position. (Regulation 18702.5(b)(1).)
• Appoint the official to be a member of any group or body created by law or formed by the official's agency for a special purpose. However, if the official will receive a stipend for attending meeting of the group or body aggregating $500 or more in any 12-month period, the effect is material unless the appointing body posts all of the following on its website:
» A list of each appointed position and its term. (Regulation 18702.5(b)(2)(A):) The amount of the stipend for each appointed position. (Regulation 18702.5(b)(2)(B).)
› The name of the official who has been appointed to the position: (Regulation : 18702.5(b)(2)(C).)
Fair Political Practices Commission 12 Conflicts Overview May 2022
• The name of any official who has been appointed to be an alternate for the position. (Regulation 18702.5(b)(2)(D):)
• Appoint the official to be an officer of the governing body of which the official is already a member (such as a decision to appoint a city councilmember to be the city's. mayor.). (Regulation 18702.5(b) (3).)
• Establish or change the benefits or retirement plan of the official or the official's immediate family member, and the decision applies equally to all employees or retirees in the same bargaining unit or other representative group: (Regulation 18702.5(b)(4):)
• Result in the payment of any travel expenses incurred by the official or their immediate family while attending a meeting as an authorized representative of an agency. (Regulation 18702.5(b)(5).).

Permit the official's use of any government property, including automobiles or other modes of transportation, mobile communication devices, or other agency- provided equipment for carrying out the official's duties, including any nominal, incidental, negligible, or inconsequential personal use while on duty: (Regulation 18702.5(b)(6).)
Result in the official's receipt of any personal reward from their use of a personal charge card or participation in any other membership rewards program, so long as the reward is associated with the official's approved travel expenses and is no different from the reward offered to the public. (Regulation 18702.5(b)(7).) Effect on Personal Finances and a Business or Real Property Interest: If a decision would have a reasonably foreseeable financial effect on a business or real property interest of an official, any related effect on the official's personal finances is not considered separately, and the effect is only analyzed under the respective materiality standards for business and real property interests, ie Regulations 18702 1 and 18702:2. (Regulation 18702.5(c).).

VI. The Public Generally Exception
Under Section 87103, if a deçision's financial effect on an official's financial interest is indistinguishable from the decision's effect on the public generally, the official is not disqualified from taking part in the decision. Regulation 18703 sets forth the "Public Generally Exception."
The General Rule: A decision's financial effect on an official's financial interest is indistinguishable from its effect on the public generally if the official establishes that a "significant segment" of the public is affected and the "effect on the official's interest is not unique" compared to the effect on the significant segment. (Regulation 18703(a).) A "significant segment" of the public is defined as:

Fair Political Practices Commission 13 Conflicts Overview May 2022
• At least 25 percent of:
• All businesses or nonprofit entities within the official's jurisdiction; •. All real property, commercial real property, or residential real property within the official's jurisdiction; or
• All individuals within the official's jurisdiction: (Regulation 18703(b)(1):) • At least 15 percent of residential real property within the official's jurisdiction if the only interest the official has in the decision is the official's primary residence. (Regulation 18703(b)(2).)*
A unique effect on an official's financial interest includes a disproportionate effect on:
• The development potential or use of the official's real property, or the income producing potential of the official's real property or business; • An official's business or real property resulting from the proximity of a project that is the subject of a decision;
• An official's interests in business entities or real properties resulting from the cumulative effect of the official's multiple interests in similar entities or properties that is substantially greater than the effect on a single interest; • An official's interest in a business or real property resulting from the official's substantially greater business volume or larger real property size when a decision affects all interests by the same or similar rate or percentage; • A person's income, investments, assets or liabilities, or real property if the person is a source of income or gifts to the official; and
• An official's personal finances or those of immediate family. (Regulation 18703(c)(1) -(6).)
"Jurisdiction" means:
• The jurisdiction of the state or local government agency as defined in Section 82035;
The designated geographical area the official was elected to represent; or • The area to which the official's authority and duties are limited if not elected. (Regulation 18703(d).)
Specific Rules for Special Circumstances: Regulation 18703(e) also provides seven Specific Rules for Special Circumstances which govern the Public Generally Exception's applicability in those special circumstances. Under these rules, a decision's financial effect iș deemed indistinguishable from its effect on the public generally if there is no unique effect on the official's interest and the official establishes:

Fair Political Practices Commission 14 Conflicts Overview - May 2022
• Public Services and Utilities: The decision sets or adjusts the amount of an assessment, tax, fee, or rate for water, utility, or other similar public services that is applied equally; proportionally, or by the same percentage to the official's interest and other businesses, properties, or individuals subject to the assessment, tax, fee, or rate. However, an official is not permitted to take part in a decision that would impose the assessment, tax, or fee, or determine the boundaries of a property or who is subject to the assessment, tax, or fee. An official is only permitted to take part in setting or adjusting the assessment, tax, or fee amount, once other related decisions have already been made. (Regulation 18703(e) (1).)
General Use or Licensing Fees: The decision affects the official's personal finances as a result of an increase or decrease to a general fee or charge, such as parking rates, permits, license fees, application fees, or any general fee that applies to the entire jurisdiction. (Regulation 18703(e)(2).) Limited Neighborhood Effects: The decision affects residential real property limited to a specific location; encompassing more than 50, or five percent, of the residential real properties in the official's jurisdiction, and the decision establishes, amends; or eliminates ordinances that restrict on-street parking, impose traffic controls; deter vagrancy, reduce nuisance or improve public safety, provided the body making the decision gathers sufficient evidence to support the need for the action at a specific location. (Regulation 18703(e)(3).) Rental Properties: The decision is limited to establishing, eliminating, amending; or otherwise affecting the respective rights or liabilities of tenants and owners of residential rental property, including a decision regarding a rent control ordinance or tenant protection measures, provided all of the following criteria are met:
› The decision applies to all residential rental properties within the official's jurisdiction other than those excepted by the Costa-Hawkins Rental Housing Act (Civil Code Sections 1954.50, et seq.). (Regulation 18703(e)(4)(A).) • The official owns three or fewer residential rental units. (Regulation 18703(e)(4)(B).)
> Only interests resulting from the official's leasehold interest as a lessor of residential real property and the lessee or owner of the official's primary residence are affected by the decision: (Regulation 18703(e)(4)(C).).

Required Representative Interest: The decision is made by a board or commission and the law that establishes the board or commission requires certain appointees have a representative interest in a particular industry, trade, or profession or other identified interest, and the public official is an appointed member representing that interest. This provision applies only if the effect is on the industry, trade, or profession or other identified interest represented (Regulation 18703(e)(5):)
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State of Emergency: The decision is made pursuant to an official proclamation of a state of emergency when required to mitigate against the effects directly arising out of the emergency. (Regulation 18703(e)(6):) Governmental Entities: The decision affects a federal, state, or local government entity in which the official has an interest. (Regulation 18703(e)(?).) VIl. Legally Required Participation
Section 87101 provides that the prohibition of Section 87100 does not prevent an official from making or participating in the making of a decision to the extent the official's participation is legally required for the action or decision to be made. However, the existence of a tied vote does not make the disqualified official's participation legally required
No Alternative Source of Decision: Regulation 18705(a) provides that an official who is financially interested in a decision may establish that the official is legally required to make or to participate in the making of a decision within the meaning of Section 87101 only if there exists no alternative source of decision consistent with the purposes and terms of the statute authorizing the decision.
"Quorum" Defined: Regulation 18705(d) provides that a "quorum" is the minimum number of members required to conduct business. When the vote of a supermajority is required to adopt an item, a "quorum" is the minimum number of members needed to adopt the item
Narrowly Construed: Regulation 18705(c) requires the regulation be narrowly construed, and specifically provides that the regulation shall not to be construed:
• To permit an official who is otherwise disqualified under Section 87100 to vote to break a tie. (Regulation 18705(c)(1).)
• To allow a member of any agency who is otherwise disqualified under Section 87100 to vote if a quorum can be convened of other members of the agency who are not disqualified, whether or not those other members are actually present at the time of the disqualification. (Regulation 18705(c)(2).) Random Means of Selection: Regulation 18705(c)(3) requires participation by the smallest number of officials with a conflict that are "legally required" for the decision to be made under Section 87101 and permits a "random means of selection" (eg. drawing straws) to be used to select only the number of officials necessary to make the decision.

When an official is selected, that official is selected for the duration of the proceedings in all related matters until their participation is no longer legally required, or the need for invoking the exception no longer exists. (Regulation 18705(c)(3)) Fair Political Practices Commission 16 Conflicts Overview May 2022
Public Identification of an Otherwise Disqualified Official's Financial Interests in a Decision: Regulation 18705(b) provides thạt when an official who has a financial interest in a decision is legally required to make or participate in making that decision; the official must state the existence of the potential conflict as follows:

The official must disclose the existence of the conflict of interest and describe with particularity the nature of the official's disqualifying financial interest or interests. This requirement is satisfied if the official discloses:
› The type of financial interest or interests involved in the decision, and; » Other specified information identifying the interest depending on the type of interest at issue.
• The official or another officer or employee of the agency must summarize the circumstances under which the conflict may arise:
• The official or another officer or employee of the agency must disclose the legal basis for the determination that there is no alternative source of decision.

Manner of Disclosure: The disclosures required by Regulation 18705(b) must be disclosed as follows
If the decision is made during an open session of a public meeting, the disclosures must be made orally before the decision is made; • If the decision is made during a closed session of a public meeting, the disclosures must be made orally during open session either before the body goes into closed session or immediately thereafter;
• If the decision takes place outside of a public meeting, the disclosures. must be made in writing; and
• in all three circumstances immediately above, the disclosures must be made part of the public record, as specified. (Regulation 18705(b)(4).) VIII. Segmentation
Under the Act's conflict of interest provisions, each governmental decision must be analyzed independently to determine if the decision will have a disqualifying effect on an official's financial interest. (In re Owen (1976) 2 FPPC Ops. 77.) Accordingly, an agency may segment a decision in which an official has a disqualifying conflict of interest to allow the official to participate in associated decisions which would not have a disqualifying effect on the official's interests under Regulation 18706.

Required Conditions for Segmentation: Regulation 18706(a) provides that an agency may segment a decision in which an official is financially interested, to allow the official Fair Political Practices Commission 17 Conflicts Overview May. 2022
to participate in associated decisions in which the official is not financially interested, provided all the following conditions are met:
• The decision in which the official is financially interested can be broken down into separate decisions that are not inextricably interrelated to the decision in which the official has a disqualifying financial interest;
• The decision in which the official is financially interested is segmented from the other decisions;
• The decision in which the official is financially interested is considered first and a final decision is reached by the agency without the disqualified official's participation in any way; and
• Once the decision in which the official is financially interested has been made, the official's participation in associated decisions does not result in a reopening of, or otherwise financially affect, the decision from which the official was disqualified
"Inextricably Interrelated": Regulation 18706(b) provides that decisions are "inextricably interrelated" when the result of one decision will effectively determine; affirm; nullify, or alter the result of another decision.

Budget and General Plan Decisions Affecting Entire Jurisdiction: Regulation 18706(c) provides that once all separate decisions related to a budget or general plan affecting the entire jurisdiction have been finalized, the official may participate in the final vote to adopt or reject the agency's budget or general plan.

IX. Disqualification Requirements
Section 87105 governs the recusal of a public official specified in Section 87200 from a decision from which the official has been disqualified: Subdivisions (a)(1)-(3) of that section require the disqualified official to: identify the potential conflict of interest to publicly identify the official's financial interest or interests at issue; recuse from voting, discussing or attempting to influence the matter, and leave the room until after the matter is concluded. Subdivision (a)(4) excludes members of the Legislature from these recusal requirements
Regulation 18707 provides further direction and guidance on the recusal requirements applicable to a public official specified in Section 87200 who is disqualified from a decision relating to an agenda item noticed for consideration at a public meeting subject to open meeting laws (ie. the Bagley Keene Act (Section 11120 et seq.) or the Brown Act (Section 54950 et seq.)).

For a business interest: the name of the business, a general description of its activities, and any position held by the official. (Regulation 18707(a)(1)(A)(i).) • For a real property interest: the property's address, assessor's number, or identification that the property is the official's personal residence. (Regulation 18707(a)(1) (A)(ii).)
• For. a source of income interest the name of the source of income: (Regulation 18707(a) (1)(A)(iii).)
• For a source of gift interest the name of the source of gift: (Regulation 18707(a) (1)(A)(iv).)
• For all interests: the nature of the expense, liability, asset, or income affected (Regulation 18707(a)(1)(A)(v).):

Timing: The public identification required by Regulation 18707(a)(1) must be made immediately prior to consideration of the agenda item. (Regulation 18707(a)(2).) Partial absence from a meeting does not excuse the disqualified official's public identification requirement. (Ibid.)
• If the official leaves a meeting in advance of an agenda item from which the official is disqualified, the official must provide the public identification required by Regulation 18707(a)(1) prior to leaving the meeting. (Regulation 18707(a)(2).) • If the official first joins a meeting after consideration of the agenda item, the official must provide the public identification immediately upon joining the meeting. (Ibid.)
Recusal and Leaving the Room: The disqualified official must recuse, leave the room after the public identification required by Regulation 18707(a)(1), and refrain from participation in the decision. (Regulation 18707(a)(3).) The disqualified official does not count toward achieving a quorum while the item is discussed. (Ibid.) For an agenda item on a consent calendar (uncontested items), the official may remain in the room during the consent calendar: (Regulation 18707(a)(3)(A).) If the official has a "personal interest" in the agenda item, as defined in Regulation 18704(d)(2) and wishes to speak or appear as a member of the general public, the official may leave the dais and speak or observe from the area reserved for members of the public after making the public identification required by Regulation 18707(a)(1) and recusing. (Regulation 18707(a)(3)(B).) Special Rules for Closed Session: The public identification required by Regulation 18707(a)(1) must be made orally during the open session before the body goes into Fair Political Practices Commission 19 Conflicts Overview May 2022
closed session and may be limited to a declaration that the official's recusal is because of a conflict of interest under Section 87100. (Regulation 18707(a)(4).) The declaration must be made part of the official public record: (Ibid.) The official must not be present when the decision is considered in closed session or knowingly obtain or review a recording or any other non-public information regarding the decision. (Ibid.) Other Decisions: For a decision other than an agenda item involving a public official specified in Section 87200 (governed by Regulation 18707(a)), Regulation 18707(b) provides the following:
• If the official determines not to act because of a financial interest, the official's determination may be accompanied by an oral or written disclosure of the interest.
• The official's presence will not be counted toward achieving a quorum • During a closed meeting of the agency, a disqualified official must not be present when the decision is considered, or knowingly obtain or review a recording or any other nonpublic information regarding the decision.
• An agency may adopt a local rule requiring the official to step down from the dais or leave the chambers.

Confidential Information: Regulation 18707(c) expressly provides that nothing in Regulation 18707 is intended to cause any disclosure that would reveal the confidences of. a closed session or any other privileged information contemplated by law, including privileged information under Regulation 18740
' The Political Reform Act is contained in Government Code Sections 81000 through 91014 All statutory references are to the Government Code, unless otherwise indicated. The regulations of the Fair Political Practices Commission (the "Commission") are contained in Sections 18110 through 18997 of Title 2 of the California Code of Regulations. All regulatory references are to Title 2; Division 6 of the California Code of Regulations, unless otherwise indicated
2 We note that the annual gift limit is adjusted biennially. The current gift limit is prescribed in Regulation 18940.2. The adjusted annual gift limit amount in effect for the period January 1, 2021, to December 31, 2022, is $520.
3 For an official's interest in a business entity or real property, Regulation 18702:1(a) and Regulation 18702.2(a)(1)-(6), provide additional guidance for determining if the interest is explicitly involved Fair Political Practices Commission 20 Conflicts Overview May 2022

PRAC LICES
POLITICAL An Overview of Conflicts of Interest
FPPC > Under the Political Reform Act
EST. 1974
May 2022
Contents

1. The Basic Prohibition 2
Il. Making, Participating in Making, or Attempting to Influence a Decision. ..2 A. General Definitions... ...2
B. Exceptions. 3
I!: Financial Interests 4
IV. ' Foreseeability of Financial Effect 5
A. Explicitly Involved 5
B. Not Explicitly Involved 5
V. Materiality Standards 6
A: Business Entity Interests 6
B. Real Property Interests. ... 7
C. Source of Income Interests.. ..9
D. Source of Gift Interests. 11
•E. Interest in Personal Finances .. 12
VI. The Public Generally Exception. 13
VII. Legally Required Participation.... . 16
VIl!. Segmentation. 17
IX. Disqualification Requirements... 18
Fair Political Practices Commission Conflicts Overview
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I. The Basic Prohibition
Government Code Section 87100 of the Political Reform Act (the "Act")! prohibits a public official at any level of state or local government from making, participating in making, or attempting to use the official's position to influence a governmental decision in which the official knows or has reason to know the official has a financial interest.

Taken together, these provisions of the Act prohibit an official from taking part in a decision if it is reasonably foreseeable that the decision would have a material financial effect on one or more of the official's financial interests identified in Section 87103 distinguishable from the decision's effect on the public generally.

II. Making, Participating in Making, or
Attempting to Influence a Decision
Regulation 18704 defines "making a decision," "participating in a decision," and "using official position to attempt to influence a decision" for purposes of the Act's conflict of interest provisions: If an official has a disqualifying conflict of interest under Section 87100, the official is prohibited from making, participating in making, or attempting in any way to use the official's official position to influence the decision:

A. General Definitions
Making a Decision: An official makes a decision if the official authorizes or directs any action, votes, appoints a person; obligates or commits the official's agency to any course of action, or enters into any contractual agreement on behalf of the agency. (Regulation 18704(a).)
Participating in a Decision: An official participates in a decision if the official provides information, an opinion, or a recommendation for the purpose of affecting the decision without significant intervening substantive review. (Regulation 18704(b).) Using Official Position to Attempt to Influence a Decision: An official uses an official position to influence a decision if the official contacts or appears before: (1) any official in the official's agency, or in an agency subject to the authority or budgetary control of the official's agency, for the purpose of affecting a decision; or (2) any official in any other government agency for the purpose of affecting a decision, and the official purports to act within the official's authority or on behalf of the official's agency in making the contact. (Regulation 18704(c).)
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B. Exceptions
Regulation 18704(d) provides that "making, participating in, or using official position to influence a decision" do not include any of the following:

Ministerial: Actions that are solely ministerial; secretarial; or clerical. (Regulation 18704(d) (1).)
Appearances as a Member of the General Public: An appearance by an official as a member of the general public before an agency in the course of its prescribed governmental function if the official is appearing on matters related solely to the official's personal interests, including interests in:

Real property owned entirely by the official, members of the official's immediate family, or the official and members of the official's immediate family; • A business owned entirely by the official, members of the official's immediate family; or the official and members of the official's immediate family; or • A business over which the official, members of the official's immediate family, or the official and members of the official's immediate family solely or jointly exercise full direction and control. (Regulation 18704(d)(2):) Terms of Employment: Actions by an official relating to the official's compensation or the terms or conditions of the official's employment or consulting contract. However, an official may not make a decision to appoint, hire, fire, promote, demote, or suspend without pay or take disciplinary action with financial sanction against the official or the official's immediate family, or set a salary for the official or the official's immediate family different from salaries paid to other employees of the agency in the same job classification or position. (Regulation 18704(d) (3).).

Public Speaking: Communications by an official to the general public or media. (Regulation 18704(d) (4):)
Academic Decisions: Teaching decisions, including an instructor's selection of books or other educational materials at the official's own school or institution, or other similar decisions incidental to teaching; or decisions by an official who has teaching or research responsibilities at an institution of higher education relating to the official's professional responsibilities, including applying for funds, allocating resources, and all decisions relating to the manner or methodology with which the official's academic. study or research will be conducted. (Regulation 18704(d)(5):) However, this exception does not apply to an official who has institution-wide administrative responsibilities as to the approval or review of academic study or research at the institution unrelated to the official's own work. (Ibid.)
Architectural and Engineering Documents: Drawings or submissions of an architectural, engineering, or similar nature prepared by an official for a client to submit in a proceeding before the official's agency if: (i) the work is performed pursuant to the official's profession; and (ii) the official does not make any contact with the agency other Fair Political Practices Commission 3 Conflicts Overview May 2022
than contact with agency staff concerning the process or evaluation of the documents prepared by the official. (Regulation .18704(d)(6)(A).) Also, an official's appearance before a design or architectural review committee or similar body of which the official is a member to present drawings or submissions of an architectural, engineering, or similar nature prepared for a client if: (i) the committee's sole function is to review architectural designs or engineering plans and to make recommendations to a planning commission or other agency; (i) the committee is required by law to include architects, engineers, or persons in related professions, and the official was appointed to the body to fulfill this requirement; and (iii) the official is a sole practitioner. (Regulation 18704(d)(6)(B).)
Additional Consulting Services: Recommendations by a consultant regarding additional services for which the consultant or consultant's employer would receive additional income if the agency has already contracted with the consultant, for an agreed upon price, to make recommendations concerning services of the type offered by the consultant or the consultants employer, and the consultant does not have any other economic interest, other than in the firm, that would be foreseeably and materially affected by the decision. (Regulation 18704(d)(7.).)
III. Financial Interests
The first step in determining whether an official has a disqualifying conflict of interest under the Act is identifying the official's financial interests with respect to the decision at issue. Section 87103 identifies the following financial interests which may give rise to an official's disqualifying conflict of interest under the Act:
• A business entity in which the official has a direct or indirect investment worth $2,000 or more (Section 87103(a)); or in which the official is a director, officer, partner, trustee, employee, or holds any position of management (Section 87103(d)).
• Real property in which the official has an interest worth $2,000 or more. (Section 87103(b).)
• A source of income totaling $500 or more in value provided or promised to, or received by, the official within the 12 months prior to the time when the decision is made. (Section 87103(c).)
• A giver of a gift or gifts totaling $500? or more in value provided or promised to, or received by, the official within the 12 months prior to the time when the decision is made: (Section 87103(e).)
• The official's personal finances and those of "immediate family," defined in Section 82029 as the spouse and dependent children. (Section 87103.) Fair Political Practices Commission Conflicts Overview
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IV. Foreseeability of Financial Effect
A.: Explicitly Involved
A financial effect on a financial interest is presumed to be reasonably foreseeable if the financial interest is explicitly involved in the decision. (Regulation (18701(a).). An official's financial interest is "explicitly involved" in a decision if the interest is a "named party in, or the subject of," the decision, and an interest is the "subject of a proceeding" if the decision involves the issuance, renewal, denial, or revocation of any license, permit, other entitlement to, or contract with, the interest? Additionally, an official's real property interest is explicitly involved in any decision affecting the real property as described in Regulation 18702.2(a)(1) through (6), discussed further below. (Ibid.) B. Not Explicitly Involved
When an official's financial interest is not explicitly involved in a decision, the financial effect of the decision is reasonably foreseeable if the effect can be recognized as a realistic possibility and more than hypothetical or theoretical. The effect need not be likely to be reasonably foreseeable. (Regulation 18701(b).) Factors to be considered when determining if a decision's effect on an official's not explicitly involved interest is reasonably foreseeable include, but are not limited to, the following:

The extent to which the occurrence of the effect is contingent upon intervening events (other than future governmental decisions by the official's agency or an agency subject to the budgetary control of the official's agency): (Regulation 18701(b)(1).)
• Whether the official should anticipate a financial effect on the financial interests at issue as a potential outcome under normal circumstances when using appropriate dúe diligence and care. (Regulation 18701(b)(2):) • Whether the official has an interest of the type that would typically be affected by the terms of the decision: (Regulation 18701(b)(3).)
• Whether the decision is of the type that would be expected to have a financial effect on businesses and individuals similarly situated to those businesses and individuals in which the official has a financial interest. (Ibid:) Whether a reasonable inference can be made that the financial effects of the decision on the official's financial interest might compromise an official's ability to fulfill their duty to act in the best interests of the public. (Regulation 18701(b)(4).) Whether the decision will provide or deny an opportunity, or create an advantage for one of the official's financial interests. (Regulation 18701(b)(5).) Fair Political Practices Commission 5 Conflicts Overview May 2022
Whether the official has the type of financial interest that would cause a similarly situated person to weigh the advantages and disadvantages of the decision on the official's financial interest in formulating a position. (Regulation 18701(b)(6).) V. Materiality Standards
Regulation 18702(a) provides that the next step in the analysis is to determine if the decision's reasonably foreseeable financial effect on the official's financial interest is material. If the official's interest is in:
• A business entity, then apply the materiality standards of Regulation 18702.1 (Regulation 18702(a) (1).)
• A real property, then apply the materiality standards of Regulation 18702.2. (Regulation 18702(a)(2).)
• A source of income, then apply the materiality standards of Regulation 18702.3. (Regulation 18702(a) (3).)
• Aisource of a gift or gifts, then apply the materiality standards of 18702.4. (Regulation 18702(a) (4).)
• Their personal finances or those of immediate family, then apply materiality standard of 18702.5. (Regulation 18702(a)(5):)
A. Business Entity Interests
Regulation 18702:1 sets forth the materiality standards applicable to a decision's reasonably foreseeable financial effect on a business in which an official has an interest, and provides that the effect is material if any of the following standards is met:

The business is explicitly involved in the decision, meaning that the business is "a named party in, or the subject of, the decision, including any decision in which the business:
› Initiates the proceeding by filing an application, claim, appeal, or other request for action concerning the business with the official's agency. (Regulation 18702.1(a)(1)(A).)
• Offers to sell a product or service to the official's agency. (Regulation

18.702.1(a) (1)(B):)
» Bids on, or enters into, a contract with the official's agency, or is identified as a subcontractor on a bid or contract with the agency: (Regulation 18702.1(a) (1)(C).)
• Is the named or intended manufacturer or vendor of any products to be purchased by the official's agency with an aggregate cost of $1,000 in any 12- month period. (Regulation 18702. 1(a)(1)D).)
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» Applies for a permit, license, grant, tax credit, exception, variance, or other entitlement from the official's agency. (Regulation 18702 1(a)(1)(E).) • Is the subject of any inspection, action, or proceeding under the regulatory authority of the official's agency: (Regulation 18702 1(a)(1)(F).) › Is subject to an action taken by the official's agency that is directed at the entity: (Regulation 18702:1(a)(1)(G).)
• The decision may result in an increase or decrease of the business's annual •gross revenues, or the value of its assets and liabilities, in an amount equal to or more than:
> $1,000,000; or
› Five percent of the business's annual gross revenues, and the increase or decrease is $10,000 or more. (Regulation 18702.1(a)(2).) • The decision may cause the business to incur or avoid additional expenses or to reduce or eliminate expenses in amount equal to or more than > $250,000; or
• One percent of the business's annual gross revenues, and the increase or decrease is at least $2,500. (Regulation 18702.1(a)(3):) • The official knows or has reason to know that business has an interest in real property and:
• The property is a named party in, or the subject of, the decision under Regulations 18701(a) and 18702.2(a)(1) through (6); or
• There is clear and convincing evidence the decision would have a substantial effect on the property. (Regulation 18702. 1(a)(4).)
Thus, if the decision's reasonably foreseeable financial effect on an official's business interest meets any of the four standards above, that effect is material, and the official is disqualified from taking part in the decision.

Small Shareholder Exception: Regulation 18702. 1(b) sets forth the "Small Shareholder Exception," which provides that a decision's reasonably foreseeable financial effect on an official's financial interest in a business is not material under Regulation 18702 1(a)(1) or (a)(4)(A) if both:
• The official's only financial interest in the business is an "investment interest" under Section 87103(a) valued at $25,000 or less; and
The official's interest in the business is less than one percent of the business's shares.

If the Small Shareholder Exception applies, the official is not disqualified.

B. Real Property Interests
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Regulation 18702:2 provides the materiality standards applicable to a decision's reasonably foreseeable financial effect on real property in which an official has an interest as either an owner or lessee.

Involves property located 500 feet or less from the official's property unless there is clear and convincing evidence that the decision will not have any measurable impact on the official's property: (Regulation 18702:2(a)(7).) Involves property located more than 500 feet but less than 1,000 feet from the official's property, and the decision would change the official's property's:
development potential; income producing potential; highest and best use; character by substantially altering traffic levels, intensity of use, parking, view, privacy, noise levels, or air quality; or market value (Regulation 18702:2(a)(8)(A) through (E).)
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• Involves property located 1,000 feet or more from the property line of the official's property if there is clear and convincing evidence the decision would have a substantial effect on the official's property. (Regulation 18702.2(b).) • Involves property leased by the official and the decision will:
• Change the termination date of the lease;
› Increase or decrease the potential rental value of the property; ' • Change the official's actual or legally allowable use of the property; or • Change the official's use and enjoyment of the property. (Regulation 18702.2(c)(1) through (4):).

Exceptions for Planning Objectives or Policy: A decision's reasonably foreseeable financial effect on an official's real property interest is not material, and therefore the official is not disqualified from the decision, if the decision solely concerns:
• Repairs, replacement or maintenance of existing streets, water, sewer, storm drainage or similar facilities: (Regulation 18702.2(d)(1).) • Adoption or amendment of a general plan, as defined in Regulation 18702.2(e)(2), if certain specified conditions are met. (See Regulation 18702.2(d)(2):)
Common Area Exception to the Definition of Interest in Real Property: Regulation 18702.2(e)(4) provides that an "interest in real property," as defined in Section 82033, does not include "any common area aș part of the official's ownership interest in a common interest development as defined in the Davis-Stirling Common Interest Development Act (Civil Code Sections 4000 et seq.)"
C. • Source of Income Interests
Regulation 18702.3 sets forth the materiality standards applicable to a decision's reasonably foreseeable financial effect on a source of income to an official, and provides that the effect is material if any of the following criteria is met:
• The source is explicitly involved in the decision because it is "a named party in, or the subject of, the decision," including a claimant, applicant, respondent, or contracting party. (Regulation 18702.3(a)(1).)
• The source is an individual and any of the following applies:

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» The decision may affect the individual's income, investments; or other assets or liabilities by $1,000 or more (excluding an interest in a business entity or real property): (Regulation 18702.3(a)(2)(A).)
• The official knows or has reason to know thạt the individual has an interest in a business entity that will be financially affected under the materiality standards applicable to a business set forth in Regulation 187021. (Regulation 18702.3(a)(2)(B).)
• The official knows or has reason to know that the individual: (i) has a real property interest and the property is explicitly involved in the decision; or (i) there is clear and convincing evidence the decision would have a substantial effect on the property: (Regulation 18702.3(a)(2)(C).)
• The source is a nonprofit organization and any of the following applies:
› The decision may result in an increase or decrease of the organization's annual gross receipts, or the value of the organization's assets or liabilities, in an amount equal to or more than: (i) $1,000,000; or (i) five percent of the organization's annual gross receipts and the increase or decrease is equal to or greater than $10,000 (Regulation 18702:3(a)(3)(A).). • The decision may cause the organization to incur or avoid additional expenses or to reduce or eliminate expenses in an amount equal to or more than: (i) $250,000; or (ii) one percent of the organization's annual gross receipts and the change in expenses is equal to or greater than $2,500 (Regulation 18702:3(a) (3)(B).)
» The official knows or has reason to know that the organization has a real property interest and: (i) the property is explicitly involved in the decision; (i) there is clear and convincing evidence the decision would have a substantial effect on the property: (Regulation 18702:3(a)(3)(C).)
• The source is a business that will be financially affected under the materiality standärds applicable to a business set forth in Regulation 18702.1 (Regulation 18702.3(a)(4).)
• If there is a nexus between the decision and income received by the official or official's spouse: Otherwise referred to as the nexus test, any reasonably foreseeable financial effect on an official's source of income interest is material if the decision "will achieve, defeat, aid, or hinder a purpose or goal of the source and the official or the official's spouse receive or is promised the income for achieving the purpose or goal. (Regulation 18702.3(b).) Exception for Retail Sales: Section 87103.5(a) provides that a retail customer of a business engaged in retail sales of good or services to the public generally is not a source of income to an official who owns a 10-percent or greater interest in the business if: the retail customers of the business constitute a significant segment of the public generally, and the amount of income received from an individual customer is not distinguishable from the amount of income received from its other customers.

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Section 87.103.5(b) sets forth a similar retail sales exception for a jurisdiction with a population of 10,000 or less that is located within a county with 350 or fewer retail businesses
For purposes of applying Section 87103.5, Regulation 18702.3(c) provides that the retail customers of a business entity constitute a significant segment of the public generally if the business is open to the public and provides goods or services to customers that comprise a broad base of persons representative of the jurisdiction. (Regulation 18702.3(c)(1).):

Income from an individual customer is not distinguishable from the amount of income received from other customers when the official is unable to recognize a significant monetary difference between the business provided by the individual customer and the other customers of the business. (Regulation 18702.3(c)(2).) An official is unable to recognize a significant monetary difference when the business:

Is of the type that sales to any one customer will not have a significant impact on the business's annual net sales; or
_ Has no records hattion at he cuttoms proves sor scan a ore nor the business than an average customer. (Ibid.)
Income from a Government Entity: The materiality standards of Regulation 18702.3 do not apply where a government entity qualifies as a source of income as defined in Section 82030, including where an official is paid by the entity as a consultant or contractor: (Regulation 18702 3(d):) Under Regulation 18703(e)(7), an official with an interest in such an entity is disqualified from taking part in a decision only if there is a • unique effect on the official: (Ibid.)
D. Source of Gift Interests
Regulation 18702.4 provides the materiality standards applicable to a decision's reasonably foreseeable financial effect on the source of a gift to an official, and provides that the decision's effect is material if:

The source is explicitly involved in the decision because the source "is named or otherwise identified as the subject of the proceeding," including a claimant, applicant, respondent, or contracting party. (Regulation 18702.4(a).) The source is an individual that will be financially affected under the materiality standard applicable to a decision's reasonably foreseeable financial effect on an official's personal finances set forth in Regulation 18702.5 or the official knows or has reason to know that the individual has an interest in a business or real property that will be financially affected under the materiality standards provided in Regulation: 18702 1 or 18702.2, respectively. (Regulation 18702.4(b)) Fair Political Practices Commission Conflicts Overview
May 2022
• The source is a nonprofit organization that will receive a measurable financial benefit or loss as a result of the decision or the official knows or has reason to know that the nonprofit has an interest in real property that will be financially affected under the materiality standards in Regulation 18702.2. (Regulation 18702.4(c).)
• The source is a business that will be financially affected under the materiality standards in Regulation 18702.1. (Regulation 18702.4(d).) E. Interest in Personal Finances
Regulation 18702:5(a) provides the materiality standard applicable to a decision's reasonably foreseeable financial effect on an official's personal finances, including those of immediate family. Also known as the personal financial effect rule, a reasonably foreseeable effect on the official' personal finances is material if the decision may result in the official or the official's immediate family receiving a financial benefit or loss of $500 or more in any 12-month period due to the decision.

Exceptions: Under Regülation 18702.5(b), however, a decision's effect on an official's personal finances and those of immediate family is not material if the decision would:
• Affect only the salary, per diem, or reimbursement for expenses the official or their immediate family member receives from a federal, state, or local government agency, unless the decision is:
• To appoint (except as specified), hire, fire, promote, demote, suspend without pay or otherwise take disciplinary action with financial sanction against the officia! or their immediate family; or
• To set a salary for the official or a member of their immediate family which is different from salaries paid to other employees of the government agency in the same job classification or position, or when the member of the official's immediate family is the only person in the job classification or position (Regulation 18702.5(b)(1).)
• Appoint the official to bẹ a member of any group or body created by law or formed by the official's agency for a special purpose. However, if the official will receive a stipend for attending meeting of the group or body aggregating $500 or more in any 12-month period, the effect is material unless the appointing body posts all of the following on its website:
• A list of each appointed position and its term. (Regulation 18702.5(b)(2)(A).) » The amount of the stipend for each appointed position. (Regulation 18702.5(b)(2)(B).)
• The name of the official who has been appointed to the position: (Regulation 18702.5(b)(2)(C).)
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› The name of any official who has been appointed to be an alternate for the position. (Regulation 18702.5(b)(2)(D):)
• Appoint the official to be an officer of the governing body of which the official is already a member (such as a decision to appoint a city councilmember to be the city's mayor.): (Regulation 18702.5(b)(3).)
Establish or change the benefits or retirement plan of the official or the official's immediate family member, and the decision applies équally to all employees or retirees in the same bargaining unit or other representative group: (Regulation 18702.5(b) (4).)
Result in the payment of any travel expenses incurred by the official or their immediate family while attending a meeting as an authorized representative of an agency. (Regulation 18702.5(b)(5).)
Permit the official's use of any government property, including automobiles or other modes of transportation, mobile communication devices, or other agency- provided equipment for carrying out the official's duties, including any nominal; incidental, negligible, or inconsequential personal use while on duty (Regulation 18702.5(b)(6):)
• Result in the official's receipt of any personal reward trom their use of a personal charge card or participation in any other membership rewards program, so long as the reward is associated with the official's approved travel expenses and is no different from the reward offered to the public. (Regulation 18702.5(b)(7):) Effect on Personal Finances and a Business or Real Property Interest: If a decision would have a reasonably foreseeable financial effect on a business or real property interest of an official, any related effect on the official's personal finances is not considered separately, and the effect is only analyzed under the respective materiality standards for business and real property interests, ie. Regulations 18702 1 and 18702.2. (Regulation 18702:5(c).).

VI. The Public Generally Exception
Under Section 87103, if a decision's financial effect on an official's financial interest is indistinguishable from the decision's effect on the public generally, the official is not disqualified from taking part in the decision. Regulation 18703 sets forth the "Public Generally Exception."
The General Rule: A decision's financial effect on an official's financial interest is indistinguishable from its effect on the public generally if the official establishes that a "significant segment" of the public is affected and the "effect on the official's interest is not unique" compared to the effect on the significant segment: (Regulation 18703(a).) A "significant segment" of the public iș defined as:

Fair Political Practices Commission 13 Conflicts Overview May 2022
• At least 25 percent of:
• All businesses or nonprofit entities within the official's jurisdiction; • All real property, commercial real property, or residential real property within the official's jurisdiction; or
• All individuals within the official's jurisdiction: (Regulation 18703(b)(1).) • At least 15 percent of residential real property within the official's jurisdiction if the only interest the official has in the decision is the official's primary residence. (Regulation 18703(b)(2).)
A unique effect on an official's financial interest includes a disproportionate effect on:
• The development potential or use of the official's real property, or the income producing potential of the official's real property or business; • An official's business or real property resulting from the proximity of a project that is the subject of a decision;
• An official's interests in business entities or real properties resulting from the cumulative effect of the official's multiple interests in similar entities or properties thạt is substantially greater than the effect on a single interest; • An official's interest in a business or real property resulting from the official's substantially greater business volume or larger real property size when a decision affects all interests by the same or similar rate or percentage; • A person's income, investments, assets or liabilities, or real property if the person is a source of income or gifts to the official; and
• An official's personal finances or those of immediate family: (Regulation 18703(c)(1)-(6).)
"Jurisdiction" means:
• The jurisdiction of the state or local government agency as defined in Section 82035;
• The designated geographical area the official was elected to represent; or •: The area to whịch the official's authority and duties are limited if not elected. (Regulation 18703(d):)
Specific Rules for Special Circumstances: Regulation 18703(e) also provides seven Specific Rules for Special Circumstances which govern the Public Generally Exception's applicability in those special circumstances. Under these rules, a decision's financial effect is deemed indistinguishable from its effect on the public generally if there is no unique effect on the official's interest and the official establishes:

Fair Political Practices Commission 14 Conflicts Overview May 2022
•• Public Services and Utilities: The decision sets or adjusts the amount of an assessment, tax, fee, or rate for water, utility, or other similar public services that is applied equally, proportionally, or by the same percentage to the official's interest and other businesses, properties, or individuals subject to the assessment, tax, fee, or rate. However, an official is not permitted to take part in a decision that would impose the assessment, tax, or fee, or determine the boundaries of a property or who is subject to the assessment, tax, or fee. An official is only permitted to take part in setting or adjusting the assessment, tax, or fee amount, once other related decisions have already been made:
(Regulation 18703(e)(1).)
General Use or Licensing Fees: The decision affects the official's personal finances as a result of an increase or decrease to a general fee or charge, such as parking rates, permits, license fees, application fees, or any general fee that applies to the entire jurisdiction. (Regulation 18703(e)(2).) Limited Neighborhood Effects: The decision affects residential real property limited to a specific location, encompassing more than 50, or five percent, of the residential real properties in the official's jurisdiction, and the decision establishes, amends; or eliminates ordinances that restrict on street parking, impose traffic controls, deter vagrancy, reduce nuisance or improve public safety, provided the body making the decision gathers sufficient evidence to support the need for the action at a specific location. (Regulation 18703(e) (3):) •. Rental Properties: The decision is limited to establishing, eliminating, amending; or otherwise affecting the respective rights or liabilities of tenants and owners of residential rental property, including a decision regarding a rent control ordinance or tenant protection measures, provided all of the following criteria are met:
• The decision applies to all residential rental properties within the official's jurisdiction other than those excepted by the Costa-Hawkins Rental Housing Act (Civil Code Sections 1,954.50, et seq.). (Regulation 18703(e)(4)(A).) • The official owns three or fewer residential rental units: (Regulation 18703(e)(4)(B).)
• Only interests resulting from the official's leasehold interest as a lessor of residential real property and the lessee or owner of the official's primary residence are affected by the decision. (Regulation 18703(e)(4)(C).) •• Required Representative Interest: The decision is made by a board or commission and the law that establishes the board or commission requires certain appointees have a representative interest in a particular industry, trade, or profession or other identified interest, and the public official is an appointed member representing that interest. This provision applies only if the effect is on the industry, trade, or profession or other identified interest represented. (Regulațion 18703(e)(5).)
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State of Emergency: The decision is made pursuant to an official proclamation of a state of emergency when required to mitigate against the effects directly arising out of the emergency. (Regulation 18703(e)(6):) Governmental Entities: The decision affects a federal, state, or local government entity in which the official has an interest. (Regulation 18703(e)(7).) VIl. Legally Required Participation
Section 87101 provides that the prohibition of Section 87100 does not prevent an official from making or participating in the making of a decision to the extent the official's participation is legally required for the action or decision to be made. However, the existence of a tied vote does not make the disqualified official's participation legally required
No Alternative Source of Decision: Regulation 18705(a) provides that an official who is financially interested in a decision may establish that the official is legally required to make or to participate in the making of a decision within the meaning of Section 87101 only if there exists no alternative source of decision consistent with the purposes and terms of the statute authorizing the decision.
"Quorum" Defined: Regulation 18705(d) provides that a "quorum" is the minimum number of members required to conduct business. When the vote of a supermajority is required to adopt an item, a "quorum" is the minimum number of members needed to adopt the item.

Narrowly Construed: Regulation 18705(c) requires the regulation be narrowly construed, and specifically provides that the regulation shall not to be construed:
• To permit an official who is otherwise disqualified under Section 87100 to vote to break a tie. (Regulation 18705(c)(1):)
• To allow a member of any agency who is otherwise disqualified under Section

87.100 to vote if a quorum can be convened of other members of the agency who are not disqualified, whether or not those other members are actually present at the time of the disqualification. (Regulation 18705(c)(2).) Random Means of Selection: Regulation 18705(c)(3) requires participation by the smallest number of officials with a conflict that are "legally required" for the decision to be made under Section 87101 and permits a "random means of selection" (e.g. drawing straws) to be used to select only the number of officials necessary to make the decision:

When an official is selected, that official is selected for the duration of the proceedings in all reläted matters until their participation is no longer legally required, or the need for invoking the exception no longer exists. (Regulation 18705(c)(3).) Fair Political Practices Commission 16 Conflicts Overview May 2022
Public Identification of an Otherwise Disqualified Official's Financial Interests in a Decision: Regulation 18705(b) provides that when an official who has a financial interest in a decision is legally required to make or participate in making that decision, the official must state the existence of the potential conflict as follows • The official must disclose the existence of the conflict of interest and describe with particularity the nature of the official's disqualifying financial interest or interests. This requirement is satisfied if the official discloses › The type of financial interest or interests involved in the decision, and; • Other specified information identifying the interest depending on the type, of interest at issue.
• The official or another officer or employee of the agency must summarize the circumstances under which the conflict may arise:
• The official or another officer or employee of the agency must disclose the legal basis for the determination that there is no alternative source of decision.

Manner of Disclosure: The disclosures required by Regulation 18705(b) must be disclosed as follows
• If the decision is made during an open session of a public meeting, the disclosures must be made orally before the decision is made; If the decision is made during a closed session of a public meeting, the disclosures must be made orally during open session either before the body goes into closed session or immediately thereafter;
• If the decision takes place outside of a public meeting, the disclosures must be made in writing; and
In all three circumstances immediately above, the disclosures must be made part of the public record, as specified. (Regulation 18705(b)(4).) VIll. Segmentation
Under the Act's conflict of interest provisions, each governmental decision must be analyzed independently to determine if the decision will have a disqualifying effect on an official's financial interest. (In re Owen (1976) 2 FPPC Ops. 77) Accordingly, an agency may segment a decision in which an official has a disqualifying conflict of interest to allow the official to participate in associated decisions which would not have a disqualifying effect on the official's interests under Regulation 18706.

Required Conditions for Segmentation: Regulation 18706(a) provides that an agency may segment a decision in which an official is financially interested, to allow the official Fair Political Practices Commission 17 Conflicts Overview May 2022
to participate in associated decisions in which the official is not financially interested, provided all the following conditions are met:
• The decision in which the official iș financially interested can be broken down into separate decisions that are not inextricably interrelated to the decision in which the official has a disqualifying financial interest;
• The decision in which the official is financially interested is segmented from the other decisions;
• The decision in which the official is financially interested is considered first and a final decision is reached by the agency without the disqualified official's participation in any way; and
• Once the decision in which the official is financially interested has been made, the official's participation in associated decisions does not result in a reopening of, or otherwise financially affect, the decision from which the official was disqualified
"Inextricably Interrelated": Regulation 18706(b) provides that decisions are "inextricably interrelated" when the result of one decision will effectively determine; affirm, nullify, or alter the result of another decision Budget and General Plan Decisions Affecting Entire Jurisdiction: Regulation 18706(c) provides that once all separate decisions related to a budget or general plan affecting the entire jurisdiction have been finalized, the official may participate in the final vote to adopt or reject the agency's budget or general plan.

Regulation 18707 provides further direction and guidance on the recusal requirements applicable to a public official specified in Section 87200 who is disqualified from a decision relating to an agenda item noticed for consideration at a public meeting subject to open meeting laws (i.e. the Bagley-Keene Act (Section 11120 et seq.) or the Brown Act (Section 54950 et seq.)):

Form and Content of Public Identification: The disqualified official must publicly identify each type of financial interest, identified in Section 87103, held by the official Fair Political Practices Commission 18 Conflicts Overview May. 2022
that gives rise to the disqualifying conflict of interest. (Regulation 18707(a)(1).) The identificațion must be oral and part of the public record (Regulation 18707(a)(1)(B)), and provide the following information, as applicable:
• For a business interest: the name of the business, a general description of its activities, and any position held by the official. (Regulation 18707(a)(1)(A)(i).). • For a real property interest: the property's address, assessor's number; or identification that the property is the official's personal residence. (Regulation 18707(a) (1)(A)(il).)
• For a source of income interest: the name of the source of income. (Regulation 18707(a)(1)(A)(iii).)
• For a source of gift interest: the name of the source of gift. (Regulation 18707(a) (1)(A)(iv).)
• For all interests: the nature of the expense, liability, asset, or income affected. (Regulation 18707(a)(1)(A)(v).):

Timing: The public identification required by Regulation 18707(a)(1) must be made immediately prior to consideration of the agenda item. (Regulation 18707(a)(2).) Partial absence from a meeting does not excuse the disqualified official's public identification requirement. (Ibid.)
• If the official leaves a meeting in advance of an agenda item from which the official is disqualified, the official must provide the public identification required by Regulation 18707(a)(1) prior to leaving the meeting. (Regulation 18707(a)(2).) • If the official first joins a meeting after consideration of the agenda item, the official must provide the public identification immediately upon joining the meeting. (Ibid.)
Recusal and Leaving the Room: The disqualified official must recuse, leave the room after the public identification required by Regulation 18707(a)(1), and refrain from participation in the decision. (Regulation 18707(a)(3):) The disqualified official does not count toward achieving a quorum while the item is discussed. (Ibid.) For an agenda item on a consent calendar (uncontested items), the official may remain in the room during the consent calendar. (Regulation 18707(a)(3)(A).) • If the official has a "personal interest" in the agenda item, as defined in Regulation 18704(d)(2) and wishes to speak or appear as a member of the general public, the official may leave the dais and speak or observe from the area reserved for members of the public after making the public identification required by Regulation 18707(a)(1) and recusing. (Regulation 18707(a)(3)(B).) Special Rules for Closed Session: The public identificațion required by Regulation 18707(a)(1) must be made orally during the open session before the body goes into Fair Political Practices Commission 19 Conflicts Overview May 2022
closed session and may be limited to a declaration that the official's recusal is because of a conflict of interest under Section 87100. (Regulation 18707(a)(4).) The declaration must be made part of the official public record: (Ibid.) The official must not be present when the decision is considered in closed session or knowingly obtain or review a recording or any other non-public information regarding the decision. (Ibid.) Other Decisions: For a decision other than an agenda item involving a public official specified in Section 87200 (governed by Regulation 18707(a)), Regulation 18707(b) provides the following:
• If the official determines not to act because of a financial interest, the official's determination may be accompanied by an oral or written disclosure of the interest.
• The official's presence will not be counted toward achieving a quorum. • During a closed meeting of the agency, a disqualified official must not be present when the decision is considered, or knowingly obtain or review a recording or any other nonpublic information regarding the decision:
• An agency may adopt a local rule requiring the official to step down from the dais or leave the chambers.

Confidential Information: Regulation 18707(c) expressly provides that nothing in Regulation 18707 is intended to cause any disclosure that would reveal the confidences of a closed session or any other privileged information contemplated by law, including privileged information under Regulation 18740.
' The Political Reform Act is contained in Government Code Sections 81000 through 91014. All statutory references are to the Government Code, unless otherwise indicated. The regulations of the Fair Political Practices Commission (the "Commission") are contained in Sections 18110 through 18997 of Title 2 of the California Code of Regulations. All regulatory references are to Title 2, Division 6 of the California Code of Regulations, unless otherwise indicated.
2 We note that the annual gift limit is adjusted biennially. The current gift limit is prescribed in Regulation 18940.2. The adjusted annüal gift limit amount in effect for the period January 1, 2021, to December 31, 2022, is $520.
3 For an official's interest in a business entity or real property, Regulation 18702.1(a) and Regulation 18702.2(a)(1)-(6), provide additional guidance for determining if the interest is explicitly involved Fair Political Practices Commission 20 Conflicts Overview May 2022

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Lathrop City CouncilSeptember 14, 2026

Lathrop City Council
September 14, 2026