Changes to the Political Reform Act

12.28.2022

In addition to various other conflict of interest prohibitions, the Political Reform Act prohibited appointed officers of an agency from accepting, soliciting, or directing contributions, including campaign contributions, from any party or participant while a proceeding involving a license, permit, or other entitlement for use is pending before the agency. (Gov. Code § 84308.) During the 2022 legislative session, changes were made to section 84308 to now apply the provisions to local elected officers and to increase the duration of the prohibition.

Senate Bill 1439 (Glazer) – Campaign Contributions: Agency Officers.

Senate Bill 1439 amends section 84308, subjecting local elected officials, including city council and county board members, to the “pay-to-play” campaign restrictions in section 84308. Previously, such officials were exempted from these requirements because the definition of “agency” in section 84308(a)(3) excluded “local government agencies whose members are directly elected by the voters.” The new language of section 84308 removes this exclusion thereby subjecting the requirements of the section to officials, including candidates for office, of local government agencies, i.e., city council and county board members, whether elected or appointed.

SB 1439 also expands the prohibition on contributions from 3 months to 12 months following the date a final decision is rendered in the proceedings. The “pay-to-play” campaign restrictions are applicable to “all business, professional, trade and land use licenses and permits and all other entitlements for use, including all entitlements for land use, all contracts (other than those competitively bid, labor or personal employment contracts) and all franchises.”

Beginning January 1, 2023, the Political Reform Act (“PRA”) will require that:

While a proceeding is pending and for 12 months following the date of final decision, a local official may not accept, solicit, or direct a contribution of more than $250 from a party or participant if the local official knows or has reason to know the participant has a financial interest in that decision. The prohibition applies regardless of whether the official accepts, solicits, or directs the contribution on the party’s behalf.
Any local official who received a contribution of more than $250 during the preceding 12 months from a party to a contract or its agents, or from a participant who is involved with the contract, must disclose that fact prior to rending any decision in that proceeding. A local official shall not make, participate in making, or attempt to influence a decision if the officer knowingly or willfully received a contribution of more than $250 in the preceding 12 months.
If a local official receives a disqualifying contribution and returns the contribution within 30 days from the time the official knows, or should have known, of the contribution, the official will be permitted to participate in the proceeding.
If a local official accepts, solicits, or directs a contribution of more than $250 in the 12 months following the conclusion of a proceeding, the official may cure the violation by returning the contribution within 14 days of accepting, soliciting, or directing the contribution, so long as the official did not knowingly and willfully accept, solicit, or direct the prohibited contribution.
A party to a proceeding before an agency shall disclose on the record of the proceeding any contribution greater than $250 made within the preceding 12 months by the party or the party’s agent.
A party to a contract pending before an agency shall not make a contribution of more than $250 to a local official during the proceeding and for 12 months following the final decision of the proceeding.

The Fair Political Practices Commission (“FPPC”), the agency tasked with enforcement of the PRA, has voted to enforce the new provisions of SB 1439 prospectively, not retroactively, thereby applying the new law to contributions made or received after the bill’s enactment on January 1, 2023. This interpretation is consistent with the FPPC’s previous position declining to retroactively apply the original contribution limitation in section 84308 when it was passed in 1982.

For locally elected officers such as city council members, the changes in the law brought by SB 1439 represent a significant departure from the former legal standards. For decades, the California courts had refused to deem duly-reported campaign contributions a conflict of interest based on the rationale that political contributions were an exercise of fundamental constitutional freedoms, subject to strict scrutiny by the courts. (See Woodland Hills Residents Assn., Inc. v. City Council (1980) 26 Cal.3d 938.) SB 1439 represents an effort to protect public interest by addressing what the Legislature determined was a “longstanding, well-documented, and real” problem of pay-to-play political practices.

A violation of Government Code § 84308 is punishable as a misdemeanor or by a fine. If you have any questions about this new law, please contact your assigned AALRR attorney or any of the authors of this Alert.