Governor Gavin Newsom recently signed SB 1439 (Glazer) into law which amends the Political Reform Act. In 1974, California voters passed Proposition 9, which created the Political Reform Act and imposed certain restrictions on political candidates, officeholders, and lobbyists. The Levine Act, which was passed by the Legislature in 1982, prohibited local appointed government officers or candidates from accepting, soliciting, or directing a contribution of $250 or more from any person who had an application for a license, permit, or other entitlement pending before the body and for three months after a decision was made. The term “license, permit, or other entitlement” includes any contract not competitively bid.
Since 1982, the restrictions of the Levine Act have applied only to local governing bodies whose members were appointed. Elected officials were not subject to the restrictions imposed by the Levine Act. The application of the law led to some confusing, counter-intuitive situations. For example, elected officials could accept campaign contributions from people seeking permits or licenses, but an appointed official could not.
SB 1439 aims to harmonize the Levine Act. Starting January 1, 2023, the Levine Act’s restrictions will also apply to local governing bodies whose members are elected. Now, elected officials such as city council members, special district board members, and school district board members will not be able to be part of decisions that involve persons that contributed more than $250 to their campaigns within the previous 12 months or accept a contribution of more than $250 from any person that the official knows or has reason to know was financially interested in a decision made by the official in the past 12 months.
Under the new version of the Levine Act, both elected and appointed officials of a local government agency will need to do the following when they are faced with an application for a license, permit, or other entitlement from a person they have solicited or received more than $250 in campaign contributions in the past 12 months:
- Before a decision is made on the application, the official must disclose on the record that they received more than $250 in the past 12 months from a party to the application or the party’s agent.
- If the official knows or has reason to know that the party who made the contribution has a financial interest in the application decision, the officer must recuse themselves from the decision.
- If an official receives a contribution that would otherwise disqualify them under the Levine Act, they can still participate in the decision if they can return the contribution within 30 days from the time the official knows or has reason to know of the contribution and the application for a license, permit, or other entitlement.
- For 12 months after a final decision on the application has been made, an official cannot accept, solicit, or direct a contribution of more than $250 from the party if the official knows or has reason to know the party has a financial interest in the decision. Before SB 1439, this bar lasted 3 months after a final decision. SB 1439 extended the prohibition to 12 months.
- If an official accepts, solicits, or directs a contribution of more than $250 from an interested party within the 12-month prohibition, the official can cure their violation by returning the contribution (or the amount that exceeds $250) within 14 days of accepting, soliciting, or directing the contribution. This ability to cure the violation is only available if the official did not knowingly and willfully accept, solicit, or direct the contribution. Records of curing the violation should be kept by the official.
The first year of implementation of SB 1439 will be 2023. There has been some concern that contributions made in 2022 of more than $250 would be affected by this new law. On November 17, 2022, the Fair Political Practices Commission (FPPC) provided direction to its staff on this issue. We anticipate that on December 22, 2022, the FPPC will release an opinion that clarifies that the FPPC does not interpret SB 1439 to apply to campaign contributions made in 2022. This Legal Alert will be updated to correspond to any further decision made by the Commission.
Questions
If you have any questions regarding this Legal Alert, please contact the following attorneys from our office or the attorney with whom you typically consult.
Jeffrey Mitchell
jmitchell@kmtg.com | 916.321.4591
Mona Ebrahimi
mebrahimi@kmtg.com | 916.321.4597
Andreas Booher
abooher@kmtg.com | 916.321.4372
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