California Infrastructure SIP 

Conflict of Interest 

Technical Support Document 

Evaluation of California Infrastructure SIPs for CAA section 110(a)(2)(E)(ii)/conflict of 

interest

U.S. EPA, Region 9 

September 2014 
1 

Table of Contents

Table of Contents......................................................................................................................... 1

CAA Section 128 Requirements.................................................................................................. 1

California’s Infrastructure SIP Submittal..................................................................................... 3

Applicability of Section 128 ........................................................................................................ 4

Evaluation of Provisions Governing Board Membership for CAA Section 128(a)(1)................ 4

Evaluation of Provisions Governing Disclosure for CAA Section 128(a)(2).............................. 6

Conclusions.................................................................................................................................. 7

CAA Section 128 Requirements

Clean Air Act (CAA) section 110(a)(2)(E)(ii) refers to the requirements of CAA section 128, which 

addresses potential conflicts of interest with respect to boards, bodies, and heads of executive agencies 

that approve permits and enforcement orders issued under the CAA. In 1978, the U.S. Environmental 

Protection Agency (EPA) issued a guidance memorandum recommending ways States could meet the 

requirements of section 128 (“1978 Conflict of Interest Guidance”), including suggested interpretations 

of certain terms in section 128.1 EPA has not issued further guidance or regulations of general 

applicability on the subject since that time. However, as part of our proposals on other recent 

infrastructure actions, EPA has proposed certain interpretations of section 128 and invited comment on 

these interpretations. See, e.g., EPA’s proposed rules on infrastructure SIP requirements for Hawaii (77 

FR 21913, April 12, 2012), Arizona (77 FR 44555, July 30, 2012), and Nevada (77 FR 46361, August 3, 

2012). We are now proposing these same interpretations in relation to the California SIP.2

Congress added section 128 of the CAA in the 1977 amendments as the result of a conference 

agreement. Titled “State boards,” section 128 provides in relevant part: 

(a) Not later than the date one year after August 7, 1977, each applicable implementation plan 

shall contain requirements that— 

(1) any board or body which approves permits or enforcement orders under [this Act] shall 

have at least a majority of members who represent the public interest and do not derive any 

significant portion of their income from persons subject to permits or enforcement orders 

under [this Act], and 

(2) any potential conflicts of interest by members of such board or body or the head of an 

executive agency with similar powers be adequately disclosed. 

We first note that, in the conference report, the committee stated: “It is the responsibility of each State to 

determine the specific requirements to meet the general requirements of [section 128].”3 This legislative 

history indicates that Congress intended states to have some latitude in the specifics of implementing 

section 128, so long as the implementation is consistent with the plain text of the section. We also note 

that Congress explicitly provided in section 128 that States could adopt more stringent requirements. As 

a result, we propose four important considerations for implementing section 128. 

 

1

 Memorandum from David O. Bickart to Regional Air Directors, “Guidance to States for Meeting Conflict of Interest 

Requirements of Section 128,” Suggested Definitions, March 2, 1978. 

2

 If EPA finalizes this action, the proposed interpretations will supersede (to the extent that they are inconsistent with) 

interpretations suggested in the 1978 Conflict of Interest Guidance, at least for California’s SIP.

3 A Legislative History of the Clean Air Act Amendments of 1977, 95th Congress 2d Session, Volume 3 at 526-527 (August 

1978). 
2 

First, section 128 must be implemented through SIP-approved, federally enforceable provisions. Section 

128 explicitly mandates that each SIP “shall contain requirements” that satisfy subsections 128(a)(1) and 

128(a)(2). A mere narrative description of state statutes or rules, or of a state’s current or past practice in 

constituting a board or body and in disclosing potential conflicts of interest, is not a requirement 

contained in the SIP and therefore does not satisfy the plain text of section 128. 

Second, subsection 128(a)(1) applies only to states that have a board or body that is composed of 

multiple individuals and that, among its duties, approves permits or enforcement orders under the CAA. 

It does not apply in states that have no such multi-member board or body, and where instead a single 

head of an agency approves permits or enforcement orders under the CAA. This flows from the text of 

section 128 itself, for two reasons. First, as section 128(a)(1) refers to a majority of members in the 

plural, we think it reasonable to read section 128(a)(1) as not creating any requirements for an individual 

with sole authority for approving a permit or enforcement order under the CAA. Second, subsection 

128(a)(2) explicitly applies to the head of an executive agency with “similar powers” to a board or body 

that approves permits or enforcement orders under the CAA, while subsection 128(a)(1) omits any 

reference to heads of executive agencies. We infer that subsection 128(a)(1) should not apply to heads of 

executive agencies who approve permits or enforcement orders. 

Third, subsection 128(a)(2) applies to all states, regardless of whether the state has a multi-member 

board or body that approves permits or enforcement orders under the CAA. Although the title of section 

128 is “State boards,” the language of section 128(a)(2) explicitly applies where the head of an 

executive agency, rather than a board or body, approves permits or enforcement orders. In instances 

where the head of an executive agency delegates his or her power to approve permits or enforcement 

orders, or where statutory authority to approve permits or enforcement orders is nominally vested in 

another state official, the requirement to adequately disclose potential conflicts of interest still applies. In 

other words, EPA thinks that SIPs for all states, regardless of whether a state board or body approves 

permits or enforcement orders under the CAA, must contain adequate provisions for disclosure of 

potential conflicts of interest. We note that many states have general disclosure provisions, applicable to 

all state employees, that may be adequate to satisfy the requirements of subsection 128(a)(2), if 

submitted for adoption into the SIP. 

Finally, a state may satisfy the requirements of section 128 by submitting for adoption into the SIP a 

provision of state law that closely tracks or mirrors the language of the applicable provisions of section 

128. A state may do so in two ways. First, the state may adopt the language of subsections 128(a)(1) and 

128(a)(2) verbatim. Under this approach, the state will be able to meet the continuing requirements of 

section 128 without any additional, future SIP revisions, even if the state adds or removes authority, 

either at the state level or local level, to individuals or to boards or bodies to approve permits or 

enforcement orders under the CAA. Second, the state may modify the language of subsections 128(a)(1) 

(if applicable) and 128(a)(2) to name the particular board, body, or individual official with approval 

authority. In this case, if the state subsequently modifies that authority, the state may have to submit a 

corresponding SIP revision to meet the continuing requirements of section 128. While either approach 

would meet the minimum requirements of section 128, we note that the statute explicitly permits states 

to adopt more stringent requirements, for example through providing more detailed definitions of the 

terms in subsections 128(a)(1) and 128(a)(2), such as those suggested in the 1978 Conflict of Interest 

Guidance. This approach gives states flexibility in implementing section 128, while still ensuring 

consistency with the statute. 
3 

Although they are not binding, both the 1978 Conflict of Interest Guidance and the interpretations we 

are currently proposing have informed our evaluation of the California SIP in relation to the 

requirements of section 128. 

California’s Infrastructure SIP Submittal

On March 6, 2014, ARB submitted a revision to the California’s State Implementation Plan (California’s 

2014 Submittal) addressing multiple NAAQS, including the 1997, 2006, and 2012 fine particulate 

matter (PM2.5)standards; 1997 and 2008 ozone standards; 2008 lead (Pb) standard; 2010 nitrogen oxides 

(NOx) standard; and 2010 sulfur dioxide (SO2) standard. Enclosure 1 of this submittal stated the 

following with respect to section 110(a)(2)(E)(ii): 

Under Government Code Section 82048, a “public official” is “every member, officer, employee, 

or consultant of a state or local government” (Government Code Section 82048(a)). CCR 

[California Code of Regulations], Title 2, section 18701 explains that “member,” within the 

meaning of Government Code Section 82048, includes “salaried or unsalaried members of 

committees, boards, or commissions with decision making authority” who make “governmental 

decisions” (CCR, Title 2, section 18701(a)(1)(A)). Under this broad definition, those who 

approve permits or enforcement orders within California (e.g. hearing board members, local 

district board members, or air pollution control officers) are “public officials” under California 

law. 

Under CCR, Title 2, section 18700, “public officials” may not “make, participate in making, or 

in any way use or attempt to use his/her official position to influence a governmental decision in 

which he/she knows or has reason to know he/she has a disqualifying conflict of interest” (CCR, 

Title 2, section 18700(a)). A conflict of interest exists if “the decision will have a reasonably 

foreseeable material financial effect on one or more of his/her economic interests...” (Ibid.). 

Section 18700’s limitations on a public official’s actions are on-going, and a public official must 

abide by them throughout his or her time as a public official. 

Government Code Section 87103 defines a public official’s “financial interest in a decision” as 

a situation where it is “reasonably foreseeable that the decision will have a material financial 

effect, distinguishable from its effect on the public generally, on the official, [or] a member of his 

or her immediate family.” Section 87103 also provides that a public official has a financial 

interest in a decision if it involves: a business or property in which they have $2,000 or more 

invested; any source of income amounting to $500 or more within a year; any business where 

they are a director, officer, trustee, employee, or manager; or any donor who has given them 

$250 or more within a year (Government Code Section 87103(a) through (e)). 

A board member’s obligation to disclose potential conflicts of interest flows from Government 

Code Section 87302. Such disclosure is accomplished by the regular filing of a “Form 700” 

statement (CCR, Title 8, section 16430) of their economic interests. These statements are made 

public by the California Fair Political Practices Commission 

Together, these five statutes and regulations function to satisfy both the board composition and 

conflict of interest disclosure requirements of CAA Section 128(a). 
4 

Applicability of Section 128

The first step in our analysis consists of identifying boards, bodies, and persons responsible for 

approving permits and enforcement orders and determining the applicability of the section 128 

requirements to these persons and entities. In California, there are numerous individuals and entities that 

approve permits and enforcement orders, either in the first instance or on appeal. 

For example, at the state level, the California Air Resources Board has the authority to enforce all 

district authorities for non-vehicular sources of air pollution via Health and Safety Code (HSC), 

Division 26 (“Air Resources”), section 41505. Additionally, the Executive Director and Enforcement 

Division Chief of ARB have the authority to issue enforcement orders, while administrative law judges 

hear enforcement order appeals. See, e.g., California Code of Regulations (CCR), Title 17 (“Public 

Health Division”), section 60065 (“Administrative Hearing Procedures for Review of Complaints”), 

which addresses alleged violations of vehicular air pollution control regulations and fuel requirements 

and standards. 

At the district level, the Air Pollution Control Officer (APCO) of a District has the authority to issue 

orders to prevent and/or mitigate the release of air contaminants when it is “reasonably necessary to take 

immediate action to prevent, reduce, or mitigate” injury at or near a school. See HSC section 42301.7. 

Each district is required to form a governing board (“district board”) and a district hearing board 

pursuant to the compositional requirements of state law. See HSC, Division 26, Part 3 (“Air Pollution 

Control Districts”). District boards may issue abatement orders pursuant to HSC section 42450. A 

district hearing board may also, on its own motion or pursuant to the motion of the district board or 

APCO, issue abatement orders pursuant to HSC section 42451, and hear and take action on permit 

appeals pursuant to HSC sections 42302, 42306, 42307, and 42309. 

While these examples of boards, bodies, and individuals responsible for approving permits and 

enforcement orders in California are not exhaustive, they help frame the context in which section 128 

applies. California state provisions ensure that any individual or entity who approves permits and 

enforcement orders must comply with conflict of interest requirements, as discussed below. 

Evaluation of Provisions Governing Board Membership for CAA Section

128(a)(1)

Section 128(a)(1) contains two separate requirements applicable to any board or body which approves 

permits or enforcement orders under the CAA. First, a majority of members of the board or body must 

“represent the public interest” (“public interest” requirement). Second, a majority of members must “not 

derive any significant portion of their income from persons subject to permits or enforcement orders 

under [the CAA]” (“significant income” requirement). In this section, we assess whether California’s 

conflict of interest provisions, applicable to each of the relevant boards and bodies in California, meet 

these two requirements. 

As described in the section above, districts in California may take different approaches in determining 

who approves permits and enforcement orders. To the extent that each air district is required to appoint a 

district board and a hearing board to approve permits and/or enforcement orders, either in the first 

instance or on appeal, those boards are subject to the board membership requirements of CAA section 

128(a)(1). Our analysis of the state’s provisions appears below. 
5 

Representing the Public Interest 

As stated in California’ 2014 submittal, California’s broad definition of “public official” in Government 

Code (GC), Title 9 (“Political Reform”), section 82048 includes “every member, officer, employee, or 

consultant of a state or local government.” GC section 82048(a). CCR, Title 2 (“Administration”), 

section 18701 explains that “member,” within the meaning of GC section 82048, includes “salaried or 

unsalaried members of committees, boards, or commissions with decision making authority” who make 

“governmental decisions.” CCR, Title 2, section 18701(a)(1)(A). California has submitted both of these 

provisions as revisions to the California SIP. As explained in the California’s 2014 Submittal, the state 

interprets these two provisions to cover anyone who approves permits or enforcement orders under 

California law.4 This includes the Air Resources Board members, the ARB Executive Officer and 

Enforcement Division Chief, district board members, district hearing board members, and air pollution 

control officers discussed in the applicability section above. EPA finds this to be reasonable and concurs 

with the state’s interpretation of GC section 82048 and CCR section 18701. 

CCR, Title 2, section 18700, which is the core of California’s conflict of interest requirements, states 

that “public officials” may not “make, participate in making, or in any way use or attempt to use his/her 

official position to influence a governmental decision in which he/she knows or has reason to know 

he/she has a disqualifying conflict of interest.” CCR section 18700(a). California has submitted this 

provision as a revision to the California SIP. EPA concurs with California’s interpretation that “those 

who approve permits or enforcement orders within California... are ‘public officials’” and, by 

extension, that permits and enforcement orders fall within the meaning of “governmental decision.”5 A 

conflict of interest exists if “the decision will have a reasonably foreseeable material financial effect on 

one or more of his/her economic interests....” CCR section 18700(a). California’s 2014 submittal notes 

that these limitations on a public official’s actions “are on-going, and a public official must abide by 

them throughout his or her time as a public official.”6 Thus, the requirements of CCR section 18700 

apply at the time an individual member is appointed to a board and throughout his or her membership on 

the board such that a board that acts on permits and/or enforcement orders may never have a majority of 

persons that have a conflict of interest, as outlined in the regulation. 

Under GC, Title 9, section 87103, which California has submitted as a revision to the SIP, a public 

official has a financial interest in a decision where it is “reasonably foreseeable that the decision will 

have a material financial effect, distinguishable from its effect on the public generally, on the official, 

[or] a member of his or her immediate family....” Additionally, GC section 87103 provides that a public 

official has a financial interest in a decision if it involves: a business or property in which the public 

official has a direct or indirect investment worth $2000 or more; or any business where the public 

official is a director, officer, partner, trustee, employee, or manager. GC section 87103, subsections (a), 

(b), and (d). 

While these categories of “financial interest” in GC section 87103 do not match word-for-word the 

suggested definition of “represent the public interest” in our 1978 Conflict of Interest Guidance, the 

California statute does bar a number of interests other than derivation of significant income from a party 

before the board, including managerial and investment interests in business entities and property, and 

thus serves the same purpose as the suggested definition in the 1978 Conflict of Interest Guidance. In 

addition, they apply to all board members, which exceeds the CAA requirement that a majority of board 

members represent the public interest. Therefore, we propose to find that GC section 82048, CCR 

 

4 California’s 2014 Submittal, p. 21. 

5

Ibid. 

6

Ibid.
6 

section 18700, and GC section 87103, taken together, satisfy the CAA section 128(a)(1) requirement 

that boards who approve permits or enforcement orders shall have “a majority of members who 

represent the public interest.” 

Significant Income 

With respect to the CAA section 128(a)(1) requirement that such boards have “a majority of members 

who... do not derive any significant portion of their income from persons subject to permits or 

enforcement orders under [this Act]”, GC section 87103 is also relevant. In addition to the bar on any 

financial interest in a permit or enforcement order decision that will have a material financial effect on 

the public official or his or her immediate family, GC section 87103(c) provides that a public official has 

a financial interest in a decision if it involves “any source of income, except gifts or loans by a 

commercial lending institution made in the regular course of business on terms available to the public” 

of $500 within the last 12 months. Additionally, GC section 87103(e) provides that a public official has 

a financial interest in a permit or enforcement order decision if it involves any donor of a gift or gifts 

aggregating $250 or more in value within the last 12 months. We believe the income prohibitions 

embodied in GC section 87103 are consistent with our definition of “significant income” in our 1978 

Conflict of Interest Guidance and a satisfactory means of meeting the requirements of CAA section 

128(a)(1). 

In conclusion, CCR section 18700, in conjunction with the definition of financial interest in GC section 

87103 and the definition of “public official” in GC section 82048, which we propose to approve into the 

California SIP, satisfy the “public interest” and “significant income” requirements of CAA section 

128(a)(1). As with the “public interest” requirement of section 128(a)(1), these provisions addressing the 

“significant income” requirement apply to all board members, which exceeds the CAA requirement that 

a majority of board members do not derive any significant portion of their income from persons subject 

to permits or enforcement orders. 

Evaluation of Provisions Governing Disclosure for CAA Section 128(a)(2)

California’s statute governing disclosure of interests is found in GC, Title 9, section 87302, which the 

state submitted as a revision to the California SIP. We agree with California’s assertion that the 

provisions of GC section 87302 satisfy the disclosure requirements of CAA section 128(a)(2), as 

explained below. 

As stated in California’s 2014 I-SIP Submittal: 

“A board member’s obligation to disclose potential conflicts of interest flows from Government 

Code Section 87302. Such disclosure is accomplished by the regular filing of a “Form 700” 

statement (CCR, Title 8, section 16430) of their economic interests. These statements are made 

public by the California Fair Political Practices Commission.” 

GC section 87302 specifies the disclosure requirements that all conflict of interest codes must contain. 

These include the requirement to enumerate each position in the agency that is involved in “the making 

or participation in the making of decisions which may foreseeably have a material effect on any 

financial interest” and “the specific types of investments, business positions, interests in real property, 

and sources of income” for each type of position. Thus, any individual or member of a board that acts on 

permits and/or enforcement orders must be subject to a conflict of interest code, as defined in GC 

section 87302, and must be identified in the code and subject to its requirements. GC section 87302(a) 

further specifies that: 
7 

“An investment, business position, interest in real property, or source of income shall be made 

reportable by the Conflict of Interest Code if the business entity in which the investment or 

business position is held, the interest in real property, or the income or source of income may 

foreseeably be affected materially by any decision made or participated in by the designated 

employee by virtue of his or her position.” 

Thus, any conflict of interest code that applies to an individual or member of a board that acts on permits 

or enforcement orders must require that the individual or member of a board disclose any monetary 

interest that he/she has that may foreseeably be affected by any action on a permit or enforcement order. 

GC section 87302(b) requires that decision-makers identified in a conflict of interest code file statements 

“disclosing reportable investments, business positions, interests in real property and income.” GC 

section 87302(b) further requires that: 

The first statement filed under a Conflict of Interest Code by a designated employee shall 

disclose any reportable investments, business positions, interests in real property, and income. 

An initial statement shall be filed by each designated employee within 30 days after the effective 

date of the Conflict of Interest Code, disclosing investments, business positions, and interests in 

real property held on the effective date of the Conflict of Interest Code and income received 

during the 12 months before the effective date of the Conflict of Interest Code. Thereafter, each 

new designated employee shall file a statement within 30 days after assuming office, or if subject 

to State Senate confirmation, 30 days after being appointed or nominated, disclosing 

investments, business positions, and interests in real property held on, and income received 

during the 12 months before, the date of assuming office or the date of being appointed or 

nominated, respectively. Each designated employee shall file an annual statement, at the time 

specified in the Conflict of Interest Code, disclosing reportable investments, business positions, 

interest in real property and income held or received at any time during the previous calendar 

year or since the date the designated employee took office if during the calendar year. Every 

designated employee who leaves office shall file, within 30 days of leaving office, a statement 

disclosing reportable investments, business positions, interests in real property, and income held 

or received at any time during the period between the closing date of the last statement required 

to be filed and the date of leaving office.” 

Thus, designated employees, including all those individuals and/or members of a board that approve 

permits and enforcement orders in the first instance or on appeal, must publicly disclose, at least 

annually, any investments, business positions, interests in real property and income. As noted in 

California’s 2014 Submittal, such disclosure is achieved by the regular filing of a “Form 700” statement 

via CCR, Title 8 (“Industrial Relations”), section 16430. Such a filing is made public by the California 

Fair Political Practices Commission.7

We propose to determine that the provisions of GC section 87302 meet the disclosure requirement of 

section 128(a)(2) with respect to all entities in California that approve permits and enforcement orders. 

Conclusions

We are proposing approval of the following provisions from California’s 2014 Infrastructure Submittal 

into the California SIP as they strengthen the SIP and address the requirements of CAA Section 128: 

 

7 California’s 2014 Submittal, Enclosure 1, p. 21. 
8 

· Government Code, Title 9, section 82048. 

· Government Code, Title 9, section 87103. 

· Government Code, Title 9, section 87302. 

· California Code of Regulations, Title 2, section 18700. 

· California Code of Regulations, Title 2, section 18701. 

On the basis of these provisions being incorporated into the SIP, the California SIP will meet the board 

membership requirements of CAA section 128(a)(1) with respect to interests in persons subject to 

permits and enforcement orders, and the disclosure requirements of CAA section 128(a)(2), for the 

reasons discussed in the analysis above.