SB 1141 (2025) — Public contracts: University of California executives: conflicts of interest: prohibition.

AMENDED IN SENATE APRIL 27, 2026

AMENDED IN SENATE APRIL 7, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

SENATE BILLNo. 1141

Introduced by Senator Wahab

(Coauthors: Senators Archuleta, Durazo, and Gonzalez)

February 18, 2026

An act to add Section 10516.1 to the Public Contract Code, relating to public contracts.

Vote: majority Appropriation: no Fiscal committee: yes Local program: no

LEGISLATIVE COUNSEL’S DIGEST

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.

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.

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 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. require a University of California executive, within 60 days of accepting a board of director position with a business entity, to post on a University of California internet website a written recusal from involvement with any future university contract decisions where the business entity is a party, as provided. The bill would prohibit a University of California executive from making, participating in making, or in any way attempting to influence a contractual decision where the executive is on the board of directors of a business entity that is a party to the contract or receives compensation for consulting or advisory services from a business entity that is a party to the contract. The bill would authorize 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~~ an executive 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 one year from the date of the finding. void the affected contract. The bill would define “business entity,” ~~“compensation,”~~ “contract,” and “University of California executive” for its purposes.

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

SECTION 1.

(a) The Legislature finds and declares ~~all~~ both of the following:

(a) Due to the University of California’s constitutional autonomy, the courts have found conflict of interest statutes of general application do not apply to the University of the California.

(b) The California Court of Appeals decision of People v. Lofchie (2014) 229 Cal.App.4th 240 found Section 1090 of the Government Code to be inapplicable to the University of California.

(c) The United States District Court of the Southern District of California held in Regents of the University of California v Aisen (2016 WL 4097072) that Sections 87100 and 87407 of the Government Code, conflict-of-interest provisions of the Political Reform Act of 1974 (Title 9 (commencing with Section 81000) of the Government Code), do not apply to University of California faculty employees for the same reasons.

(1) The University of California, as a public institution, is charged with responsible stewardship of public funds and it is appropriate that its leaders are held to the same high standards of integrity and transparency as state public officials. Avoiding conflicts of interest in public procurement and public service, and transparency of public decisionmaking, are important to build and maintain the public trust.

(2) Article IX, Section 9 of the California Constitution provides that the Regents of the University of California are subject to such legislative control as may be necessary to ensure compliance with such competitive bidding procedures as may be made applicable to the university by statute for the letting of construction contracts, sales of real property, and purchasing of materials, goods, and services.

(b) It is the intent of the Legislature that conflicts of interest from outside professional activities for senior University of California executives are handled appropriately through recusals, disclosures, and transparency, avoiding even the perception of undue influence.

SEC. 2.

Section 10516.1 is added to the Public Contract Code, to read:

10516.1.

(a) For purposes of this section, the following definitions apply:

(1) “Business entity” means any private sector organization, regardless of its corporate form, other than a nonprofit organization organized pursuant to Section 501(c)(3) of the United States Internal Revenue Code.

(2) “Compensation” means a thing of value or source of income aggregating one hundred thousand dollars ($100,000) or more in any twelve month period, or aggregating two hundred and fifty thousand dollars ($250,000) or more while the recipient is employed by the University of California, and includes any cash, remuneration, loan, any type of ownership interest, debt, lease, discount, retainer, fee, stipend, honoraria, equity, stock, stock option, subsidy, incentive pay, share of current or future profits, gift, donation, rebate, or kickback. “Compensation” does not include interest, dividends, distributions, or a return on the investment of personal savings or retirement funds, including those held in a mutual fund or index fund, or a loan provided by a financial or commercial lending institution provided that such types of income are generated in the regular course of business on terms available to the public without regard to the executive’s official status.

(3)

(2) “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~~ or laboratory and is for the sale or lease of real property, the sale or lease of materials, ~~and~~ or the provision of personal or professional services. ~~“Contract” includes an evergreen contract, or an agreement that automatically renews from time to time.~~

~~(4)~~

(3) “Executive” or “University of California executive” means a University of California employee who serves as a Chancellor of a University of California campus, a Chief Executive Officer of a University of California hospital or hospital system, or a President of a University of California health system.

(5) “Twelve months” means any 12-month period starting on or after January 1, 2028.

(b) 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 twelve months, as a compensated consultant, partner, director, governor, trustee, employee, or manager. This subdivision does not prevent a business entity from receiving uncompensated volunteer services from a University of California executive.

(c) 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 twelve months after providing or promising any University of California executive compensation of any kind.

(d) 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.

(b) (1) A University of California executive shall, within 60 days of accepting a board of director position with a business entity, post on a university internet website a written recusal from involvement with any future university contract decisions where the business entity is a party.

(2) A recusal notification posted pursuant to this subdivision shall contain all of the following requirements:

(A) The executive’s name, address of employment, and date they accepted a board of director position.

(B) The name of the business entity for which the executive serves as a member of the board of directors.

(C) A declaration that the executive recuses themself from and will avoid any participation of any kind in a university contract decision in which the business identified under subparagraph (B) is a party, that the executive will avoid communicating with any university officers or employees about a contract decision, and will not review any privileged or confidential documents that may relate to the contract decision.

(D) The type and amount of compensation, if any, provided or promised to the executive by the business entity.

(E) The name, address, and contact information of the office where a member of the public can request copies of any contracts with the business entity under subparagraph (B) that are disclosable pursuant to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) or other existing law. A contract with the business entity shall be provided to the requester as soon as practicable, but no later than 30 days after the request is made.

(c) A University of California executive shall not make, participate in making, or in any way attempt to influence a contractual decision where the executive is on the board of directors of a business entity that is a party to the contract or receives compensation for consulting or advisory services from a business entity that is a party to the contract.

~~(e)~~

(d) If a court finds, in a civil action brought pursuant to subdivision ~~(f),~~ (e), that ~~a business entity~~ an executive 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 twelve months from the date of the finding. void the affected contract.

~~(f)~~

(e) The Attorney General may bring a civil action to enforce this section and, upon prevailing, shall recover attorney’s fees and costs.