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<ns0:Id>20250SB__114198AMD</ns0:Id>
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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-18</ns0:ActionDate>
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<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
<ns0:ActionDate>2026-04-07</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:MeasureNum>1141</ns0:MeasureNum>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Wahab</ns0:AuthorText>
<ns0:AuthorText authorType="COAUTHOR_ORIGINATING">(Coauthors: Senators Archuleta, Durazo, and Gonzalez)</ns0:AuthorText>
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<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Wahab</ns0:Name>
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<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Archuleta</ns0:Name>
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<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Durazo</ns0:Name>
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<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Gonzalez</ns0:Name>
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<ns0:Title> An act to add Section 10516.1 to the Public Contract Code, relating to public contracts. </ns0:Title>
<ns0:RelatingClause>public contracts</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Public contracts: University of California executives: conflicts of interest: prohibition.</ns0:Subject>
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<html:p>The California Constitution provides that the University of California constitutes a public trust administered by the Regents of the University of California, a corporation in the form of a board, with full powers of organization and government, subject to legislative control only for specified purposes, including, among others, as may be necessary to ensure the security of its funds.</html:p>
<html:p>Existing law prohibits officers or employees of the University of California from engaging in any employment, activity, or enterprise from which the officer or employee receives compensation or has a financial interest if that employment, activity, or enterprise is sponsored or funded by a university department or contract, except as provided.</html:p>
<html:p>This bill would prohibit a business entity from bidding on, entering into,
renewing, automatically renewing, extending, or expanding the scope of any contract with the University of California if a University of California executive serves or has served the business entity within the previous year, as specified. The bill would also prohibit a business entity from bidding on, entering into, renewing, automatically renewing, extending, or expanding the scope of any contract with the University of California for at least one year after providing or promising any University of California executive compensation. The bill would declare a contract entered into, renewed, automatically renewed, extended, expanded in scope, or maintained in violation of these prohibitions to be void, a risk to the security of the University of California’s
funds, and contrary to public policy. The bill would authorize the Attorney General to bring a civil action to enforce these provisions and to recover attorney’s fees if the civil action prevails. If a court finds in such a civil action that a business entity has violated these provisions, the bill would require the court to enjoin the business entity from bidding on, entering into, renewing, automatically renewing, extending, or expanding the scope of a contract with the University of California for a period of one year from the date of the finding. The bill would define “business entity,” “compensation,” “contract,” and “University of California executive” for its purposes.</html:p>
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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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<html:p>The Legislature finds and declares all of the following:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
Due to the University of California’s constitutional autonomy, the courts have found conflict of interest statutes of general application do not apply to the University of the California.
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<html:p>
(b)
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The California Court of Appeals decision of People v. Lofchie (2014) 229 Cal.App.4th 240 found Section 1090 of the Government
Code to be inapplicable to the University of California.
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<html:p>
(c)
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The United States District Court of the Southern District of California held in Regents of the University of California v Aisen (2016 WL 4097072) that Sections 87100 and 87407 of the Government Code, conflict-of-interest provisions of the Political Reform Act of 1974 (Title 9 (commencing with Section 81000) of the Government Code), do not apply to University of California faculty employees for the same reasons.
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<ns0:BillSection id="id_75EF9634-A7D4-4ED5-AE89-AF4C71C31F39">
<ns0:Num>SEC. 2.</ns0:Num>
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Section 10516.1 is added to the
<ns0:DocName>Public Contract Code</ns0:DocName>
, to read:
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<ns0:Num>10516.1.</ns0:Num>
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(a)
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For purposes of this section, the following definitions apply:
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<html:p>
(1)
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“Business entity” means any private sector organization, regardless of its corporate form, other than a nonprofit organization organized pursuant to Section 501(c)(3) of the United States Internal Revenue Code.
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<html:p>
(2)
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“Compensation” means a thing of value or source of income aggregating
one hundred thousand dollars ($100,000) or more in any twelve month period, or aggregating two hundred and fifty thousand dollars ($250,000) or more while the recipient is employed by the University of California, and includes any cash, remuneration, loan, any type of ownership interest, debt, lease, discount, retainer, fee, stipend, honoraria, equity, stock, stock option, subsidy, incentive pay, share of current or future profits, gift, donation, rebate, or kickback. “Compensation” does not include interest, dividends, distributions, or a return on the investment of personal savings or retirement funds, including those held in a mutual fund or index fund, or a loan provided by a financial or commercial lending institution provided that such types of income are generated in the regular course of business on terms available to the public without regard to the executive’s official status.
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<html:p>
(3)
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“Contract” means any legally enforceable agreement that establishes the rights and
obligations of two or more parties, one of which is the Regents of the University of California, any University of California campus, medical center, health system, hospital, clinic, laboratory, or facility or organization affiliated with the University, or any person acting on the University’s behalf. “Contract” includes, but is not limited to, any agreement for the sale or lease of real property, the sale or lease of materials, and the provision of personal or professional services. “Contract” includes an evergreen contract, or an agreement that automatically renews from time to time.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
“Executive” or “University of California executive” means a University of California employee who serves as
a Chancellor of a University of California campus, a Chief Executive Officer of a University of California hospital or hospital system, or a President of a University of California health system.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
“Twelve months” means any 12-month period starting on or after January 1,
2028.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
A business entity may not bid on, enter into, renew, automatically renew, extend, or expand the scope of any contract with the Regents of the University of California if a University of California executive serves the business entity, or has served the business entity at any time within the previous twelve months, as a compensated consultant, partner, director, governor, trustee, employee,
or manager. This subdivision does not prevent a business entity from receiving uncompensated volunteer services from a University of California executive.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
A business entity may not bid on, enter into, renew, automatically renew, extend, or expand the scope of any contract with the University of California for at least twelve months after providing or promising any University of California executive
compensation of any kind.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
A contract entered into, renewed, automatically renewed, extended, expanded in scope, or maintained in violation of this section shall be declared void, a risk to the security of the University of California’s funds, and contrary to public policy.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
If a court finds, in a civil action brought pursuant to subdivision (f), that a business entity has violated this section, the court shall enjoin the business entity from bidding on, entering into, renewing, automatically renewing, extending, or expanding the scope of any contract with the University of California for a period of
twelve months
from the date of the finding.
</html:p>
<html:p>
(f)
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The Attorney General may bring a civil action to enforce this section and, upon prevailing, shall recover attorney’s fees and costs.
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