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<ns0:Id>20250AB__186299INT</ns0:Id>
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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-11</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Boerner</ns0:AuthorText>
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<ns0:Name>Boerner</ns0:Name>
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<ns0:Title> An act to add Chapter 8.5 (commencing with Section 4490) to Division 5 of Title 1 of the Government Code, relating to state government. </ns0:Title>
<ns0:RelatingClause>state government</ns0:RelatingClause>
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<ns0:Subject>Use of Taxpayer Funds Act.</ns0:Subject>
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<html:p>Existing law generally regulates public works and public purchases, including prohibiting a state agency, as defined, from entering into any contract for the purchase of supplies, equipment, or services from any person who is, among other things, in violation of any order or resolution not subject to review promulgated by the State Air Resources Board or an air pollution control district.</html:p>
<html:p>This bill would prohibit a public entity from entering into any contract, lease, grant agreement, joint venture, partnership, or other arrangement with a private party that, among other things, grants the private party the right to restrict or condition the use, allocation, or disbursement of taxpayer funds collected or received by the public entity. The bill would make any provision of a contract, lease, grant agreement, joint venture, partnership, or other
arrangement that takes effect or commences on or after January 1, 2027, that is in violation of that provision void and unenforceable.</html:p>
<html:p>The bill would specify that nothing in its provisions are to be construed to prohibit a public entity from entering into a contract, lease agreement, grant agreement, joint venture, partnership, or other arrangement with a private party that, among other things, grants the private party the right to determine, restrict, or condition the use, allocation, or disbursement of nontaxpayer funds, provided that the authority does not extend in any way to taxpayer funds collected or received by the public entity. The bill would define various terms for its purposes.</html:p>
<html:p>The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.</html:p>
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<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
<ns0:Appropriation>NO</ns0:Appropriation>
<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
<ns0:LocalProgram>NO</ns0:LocalProgram>
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<ns0:ImmediateEffect>NO</ns0:ImmediateEffect>
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<ns0:Urgency>NO</ns0:Urgency>
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<ns0:Election>NO</ns0:Election>
<ns0:UsualCurrentExpenses>NO</ns0:UsualCurrentExpenses>
<ns0:BudgetBill>NO</ns0:BudgetBill>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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Chapter 8.5 (commencing with Section 4490) is added to Division 5 of Title 1 of the
<ns0:DocName>Government Code</ns0:DocName>
, to read:
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<ns0:LawHeading id="id_A39DC0D8-8A8D-4670-8ED5-7A6C0312FBB5" type="CHAPTER">
<ns0:Num>8.5.</ns0:Num>
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<ns0:LawHeadingText>Use of Taxpayer Funds Act.</ns0:LawHeadingText>
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<ns0:Num>4490.</ns0:Num>
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(a)
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This section shall be known as the Use of Taxpayer Funds Act.
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(b)
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For purposes of this section, all of the following definitions shall apply:
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(1)
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“Nontaxpayer funds” means any revenue other than those described in paragraph (4), including, but not limited to, service charges, fees, rents, donations, and grants from any private source.
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(2)
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“Private party” means any natural person, corporation, partnership, limited liability company, or other entity other than a public entity.
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(3)
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“Public entity” has the same meaning as defined in Section 811.2.
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(4)
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“Taxpayer funds” means any revenue derived, collected, or otherwise received from any tax or assessment that a public entity is authorized by law to levy or impose.
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(c)
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(1)
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A public entity shall not enter into any contract, lease, grant agreement, joint venture, partnership, or other arrangement with a private party that either:
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(A)
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Grants the private party the right to restrict or condition the use, allocation, or disbursement of taxpayer funds collected or received by the public entity.
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(B)
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Restricts or prevents the public entity from using taxpayer funds collected or received by the public entity to award grants, make payments, or fund programs, including through the use of a noncompetition clause, exclusivity clause, or other
similar provisions that would limit the public entity’s ability to use, in any way, the taxpayer funds collected or received by the public entity.
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(2)
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Any provision of a contract, lease, grant agreement, joint venture, partnership, or other arrangement that takes effect or commences on or after January 1, 2027, that is in violation of paragraph (1) shall be void and unenforceable.
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(d)
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Nothing in this section shall be construed to prohibit a public entity from entering into a contract, lease agreement, grant agreement, joint venture, partnership, or other arrangement with a private party that does either of the following:
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<html:p>
(1)
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Grants the private party the right to determine, restrict, or condition the use, allocation, or disbursement of nontaxpayer funds, provided that the authority does not extend in any way to
taxpayer funds collected or received by the public entity.
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(2)
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Restrict or condition the public entity’s use of nontaxpayer funds, including the use of a noncompetition clause, exclusivity clause, or other similar provisions, provided that the restriction applies solely to nontaxpayer funds and does not limit the public entity’s ability to use taxpayer funds collected or received by the public entity for any lawful purpose.
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<ns0:Num>SEC. 2.</ns0:Num>
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<html:p>The Legislature finds and declares that Section 1 of this act adding Section 4490 to the Government Code address a matter of statewide concern rather than a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, Section 1 of this act applies to all cities, including charter cities.</html:p>
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