Political Reform Act of 1974: prediction market contracts.

The Political Reform Act of 1974 provides for the comprehensive regulation of political campaigns, lobbying, and other matters relating to governmental ethics and elections. The act prohibits a lobbyist or lobbying firm from, among other things, accepting or agreeing to accept a payment that is in any way contingent upon the defeat, enactment, or outcome of any proposed legislative or administrative action. The act also prohibits a public official at any level of state or local government from making, participating in making, or in any way attempting to use the public official's official position to influence a governmental decision in which the official knows or has reason to know the official has a financial interest, as defined. This bill would prohibit specified officials, employees, and lobbyists from engaging in transactions involving prediction market contracts, as defined, if before or at the time of the transaction, the specified individual possesses, or it is reasonably foreseeable the specified individual may obtain in the course of their official duties, material nonpublic information, as defined, relating to the transaction. A violation of the Political Reform Act of 1974 is punishable as a misdemeanor. By creating a new crime, this bill would 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 23 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.