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<ns0:Id>20250SB__114199INT</ns0:Id>
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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-18</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Wahab</ns0:AuthorText>
<ns0:AuthorText authorType="COAUTHOR_ORIGINATING">(Coauthor: Senator Durazo)</ns0:AuthorText>
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<ns0:Legislator>
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<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>Durazo</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 Senior Management Group employees: 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, or an immediate family member of the 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 a California taxpayer or 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 10 years 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>
<ns0:BillSection id="id_75EF9634-A7D4-4ED5-AE89-AF4C71C31F39">
<ns0:Num>SECTION 1.</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.
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(2)
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“Compensation” means a thing of value or source of income aggregating five hundred dollars ($500) or more in value, and includes any cash, remuneration, loan, any type of ownership interest, return on investment, debt, lease, discount, retainer, fee, stipend, honoraria, equity, stock, stock option, dividend, distribution, subsidy, share of current or future profits, gift, donation, rebate, or kickback. “Compensation” does not include interest earned on personal savings or retirement funds or a loan provided by a
financial or commercial lending institution 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)
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“Executive” or “University of California
executive” means a University of California employee who serves as or reports to a Chancellor, Vice Chancellor, Chief Executive Officer, Chief Operating Officer, Chief Transformation Officer, Chief Human Resources Officer, or General Counsel of the University, or who holds any other position in the University’s Senior Management Group.
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<html:p>
(5)
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“Twelve months” means any 12-month period starting on or after January 1, 2027.
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<html:p>
(b)
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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 12 months, as a consultant, partner, director, governor, trustee, employee, manager, advisory board member, or member of any committee.
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<html:p>
(c)
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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 12 months after providing or promising any University of California executive, or an immediate family member of a University of California executive, compensation of any kind.
</html:p>
<html:p>
(d)
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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.
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<html:p>
(e)
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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 10 years from the date of the finding.
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(f)
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Any California taxpayer or 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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