California Disclosure of Economic Interests

10/4/04

Form 700-U for Recipients of Non-governmental External Funds

What is a Statement of Economic Interests Form 700-U?

A Statement of Economic Interests, Form 700-U, is mandated by the State of California Fair Political Practices Commission, on which principal investigators disclose certain financial interests. A Statement of Economic Interests is also called a Disclosure of Economic Interests statement in University policy and related implementing guidelines. The list of organizations providing funding that are exempt from this policy are provided here .

Why Must a Statement of Economic Interests be Completed and What Must be Disclosed?

University policy on disclosure of financial Interest was reissued by President Maxson in May 1996, and State regulations mandated by the Fair Political Practices Commission under the Political Reform Act (2 Cal. Admin. Code Section 18705) require that a principal investigator must disclose whether or not he or she has a direct or indirect financial interest in the sponsor of research which is funded in whole or part:

through a contract or grant of $250 or more with a non-governmental entity; or
by a gift from a non-governmental entity which is earmarked by the donor for a specific research project or a specific principal investigator, provided the amount of the gift, or the aggregate over a 12 month period, from the same donor is $250 or more.

When an interest of a principal investigator in the sponsor is disclosed the Campus Independent Review Committee must review whether the contract, grant, or gift can be accepted.

When Must Statements of Economic Interests be Filed?

Disclosure statements must be filed:

before final acceptance of the above type of contract, grant, or gift;
each year thereafter; and
within 90 days after expiration in the case of a contract or grant, or after funds have been completely expended in the case of a gift.

The Office of University Research will store the initial Form 700-U with the contract, grant, or gift application. The CSULB Foundation will obtain the required additional updates of Form 700-U.

Will the Statements be Available to the Public?

Yes, by both University policy and State law, the completed statements will be open to public inspection, although unless sought under FOIA provisions, these Disclosures will be treated confidentially.

What to Disclose

When a principal investigator has a reportable financial interest in a sponsor of research, the required financial disclosure statement shall contain:

Disclosure of Income The name and address of the sponsor and a general description of the business activity, if any, of the sponsor; a statement whether the aggregate value of income from the sponsor, or in the case of a loan, the highest amount owed to the sponsor, was at least $250 but did not exceed $1,000, whether it was in excess of $1,000 but was not greater than $10,000, or whether it was greater than $10,000; in the case of a gift, a description of and the amount of the gift; and in the case of a loan, the annual interest rate and the security, if any, given for the loan.
Disclosure of Equity or Ownership Interest and Disclosure of Position in Sponsor When an investment or equity (ownership) interest is required to be disclosed, or when the principal investigator is a director, officer, partner, trustee, employee, or holds any position of management, the disclosure statement shall contain:
1. a general description of the business activity in which the sponsor is engaged;
2. a statement whether the fair market value of the investment or interest exceeds $1,000 but does not exceed $10,000, whether it exceeds $10,000 but does not exceed $100,000, or whether it exceeds $100,000; and
3. the position held in the entity by the principal investigator.

What is a "Financial Interest"?

A "financial interest" in the sponsor of research means:

a direct or indirect investment in the sponsor worth more than $1,000;
a position as director, officer, partner, trustee, employee of or any other position of management in the sponsor;
income from the sponsor, including consulting income aggregating $250 or more in value, or $25 if the income was a gift, received by or promised to the principal investigator within 12 months prior to the time the award is made. (For the purposes of this policy, "income" is further defined as in Gov. Code Section 82030.)

What is an "Indirect Investment" or "Indirect Financial Interest"?

A principal investigator has an "indirect financial interest" or "indirect investment" in a sponsor if:

his or her spouse or dependent child has a financial interest in the sponsor; or
his or her spouse or dependent children own directly, indirectly, or beneficially a 10 percent interest or greater in any business entity or trust which has a financial interest in the sponsor of the research.

What is an "Equity (Ownership) Interest"?

For the purposes of this policy, an "equity (ownership) interest" shall be an investment of more than $1,000 in the sponsor by the principal investigator, his or her spouse, or dependent children.

What is a Gift?

"Gift" means, except as provided below, any payment to the extent that consideration of equal or greater value is not received and includes a rebate or discount in the price of anything of value unless the rebate or discount is made in the regular course of business to members of the public without regard to official status. The term "gift" does not include:

informational material such as books, reports, pamphlets, calendars or periodicals. No payment for travel or reimbursement for any expenses shall be deemed "informational materials";
gifts which are not used and which, within 30 days after receipt, are returned to the donor or delivered to a charitable organization without being claimed as a charitable contribution for tax purposes;
gifts from an individual's spouse, child, parent, grandparent, grandchild, brother, sister, parent-in-law, brother-in-law, sister-in-law, nephew, aunt, uncle, or first cousin or the spouse of any such person; provided that a gift from any such person shall be considered a gift if the donor is acting as an agent or intermediary or any person not covered by this paragraph;
any devise or inheritance;
hospitality involving food, beverages, or lodging provided by an individual in his or her home to any public official filing a statement of economic interests; and
exchanges between a public official filing a statement of economic interests and an individual other than a lobbyist on holidays, birthdays, or similar occasions. This provision does not apply to the extent that the gifts received by the public official exceed in value the gifts that he or she has given.

"Income" means, except as provided below, a payment received, including but not limited to any salary, wage, advance, dividend, interest, rent, proceeds from any sale, gift, including any gift of food or beverage, loan, forgiveness or payment of indebtedness received by the filer, reimbursement for expenses, per diem, or contribution to an insurance or pension program paid by any person other than an employer, and including any community property interest in income of a spouse. Income also includes an outstanding loan. Income of an individual also includes a pro rata share of any income of any business entity or trust in which the individual or spouse owns, directly, indirectly, or beneficially, a 10% interest or greater.

Violations

Failure to file the required Statement of Economic Interests or failure to report a financial interest may subject a principal investigator to civil and criminal liability, including fines, as well as University discipline. (Government Code Sections 81000 - 91014)

Form

Please access the Form 700-U on California State FPPC website to make your Disclosure.