The Political Reform Act of 1974 requires public officials to periodically file a statement of economic interest disclosing the person's investments, interests in real property, and income. The act defines “investment” to mean any financial interest in or security issued by a business entity, including, among other things, stocks and any partnership or other ownership interest owned by the public official or that person's immediate family, as specified. The act specifies that an asset is an investment only if its fair market value equals or exceeds $2,000. The act requires each public agency to adopt a conflict of interest code for designated employees of the agency.

Existing law defines digital financial asset to mean a digital representation of value that is used as a medium of exchange, unit of account, or store of value, and that is not legal tender, whether or not denominated in legal tender, subject to specified exceptions.

This bill, beginning January 1, 2027, would expand the definition of “investment” for purposes of the Political Reform Act of 1974 to include a digital financial asset, and would specifically require public officials to disclose interests in their digital financial assets, as specified. The bill would also require an agency’s conflict of interest code to require designated employees to disclose interests in digital financial assets, as specified.

Existing law makes a knowing or willful violation of the Political Reform Act of 1974 a misdemeanor and subjects offenders to criminal penalties. By including additional assets that must be disclosed by public officials on statements of economic interest, the bill would expand the scope of a crime and impose a state-mandated local program.

The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the act’s purposes upon a 2 3 vote of each house of the Legislature and compliance with specified procedural requirements.

This bill would declare that it furthers the purposes of the act.