CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Assembly Bill
No. 1029

Introduced by Assembly Member Valencia
(Coauthor: Senator McNerney)

February 20, 2025

An act to amend, repeal, and add Section 82034 of the Government Code, relating to the Political Reform Act of 1974.


LEGISLATIVE COUNSEL'S DIGEST


AB 1029, as introduced, Valencia. Statements of financial interest: digital financial assets.
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.
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.
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 California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
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.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 82034 of the Government Code is amended to read:

82034.
 (a) “Investment” means any financial interest in or security issued by a business entity, including, but not limited to, common stock, preferred stock, rights, warrants, options, debt instruments, and any partnership or other ownership interest owned directly, indirectly, or beneficially by the public official, or other filer, or that person’s immediate family, if the business entity or any parent, subsidiary, or otherwise related business entity has an interest in real property in the jurisdiction, or does business or plans to do business in the jurisdiction, or has done business within the jurisdiction at any time during the two years prior to the time any statement or other action is required under this title. An
(b) An asset shall not be deemed an investment unless its fair market value equals or exceeds two thousand dollars ($2,000). The
(c) The term “investment” does not include a time or demand deposit in a financial institution, shares in a credit union, any insurance policy, interest in a diversified mutual fund registered with the Securities and Exchange Commission under the Investment Company Act of 1940 or in a common trust fund created pursuant to Section 1564 of the Financial Code, interest in a government defined-benefit pension plan, or any bond or other debt instrument issued by any government or government agency. Investments
(d) Investments of an individual includes a pro rata share of investments of any business entity, mutual fund, or trust in which the individual or immediate family owns, directly, indirectly, or beneficially, a 10-percent interest or greater. The
(e) The term “parent, subsidiary or otherwise related business entity” shall be specifically defined by regulations of the commission.
(f) This section shall remain in effect only until January 1, 2027, and as of that date is repealed.

SEC. 2.

 Section 82034 is added to the Government Code, to read:

82034.
 (a) (1) “Investment” means any financial interest in or security issued by a business entity, including, but not limited to, common stock, preferred stock, rights, warrants, options, debt instruments, and any partnership or other ownership interest owned directly, indirectly, or beneficially by the public official, or other filer, or that person’s immediate family, if the business entity or any parent, subsidiary, or otherwise related business entity has an interest in real property in the jurisdiction, or does business or plans to do business in the jurisdiction, or has done business within the jurisdiction at any time during the two years prior to the time any statement or other action is required under this title.
(2) “Investment” includes a digital financial asset, as defined in Section 3102 of the Financial Code.
(b) An asset shall not be deemed an investment unless its fair market value equals or exceeds two thousand dollars ($2,000).
(c) The term “investment” does not include a time or demand deposit in a financial institution, shares in a credit union, any insurance policy, interest in a diversified mutual fund registered with the Securities and Exchange Commission under the Investment Company Act of 1940 or in a common trust fund created pursuant to Section 1564 of the Financial Code, interest in a government defined-benefit pension plan, or any bond or other debt instrument issued by any government or government agency.
(d) Investments of an individual includes a pro rata share of investments of any business entity, mutual fund, or trust in which the individual or immediate family owns, directly, indirectly, or beneficially, a 10-percent interest or greater.
(e) The term “parent, subsidiary or otherwise related business entity” shall be specifically defined by regulations of the commission.
(f) This section shall become operative January 1, 2027.

SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

SEC. 4.

 The Legislature finds and declares that this bill furthers the purposes of the Political Reform Act of 1974 within the meaning of subdivision (a) of Section 81012 of the Government Code.