New Legislation Expands Campaign Contribution Laws toInclude Local Elected Officials - Contributions May Now Require Elected Officials to Recuse Themselves from Voting on Projects

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On September 29, 2022, the Governor signed Senate Bill (SB) 1439, which expands the Political Reform Act of 1974 to restrict campaign contributions to local elected officials, such as members of city councils or county boards of supervisors.  It is critical to understand this legislation because it may bar a city councilmember, county supervisor, or other local decisionmaker from voting on a development project if the decisionmaker received a donation of more than $250 from the applicant or the applicant’s agent within the 12 months preceding the decision.

Prior to SB 1439, the Political Reform Act of 1974 prohibited non-elected officers of a state or local agency from accepting, soliciting, or directing a contribution of more than $250 from an applicant, or the applicant’s agent, or from any participant, or a participant’s agent, while a proceeding involving a license, permit, or other entitlement is pending before the agency and for three months following the date a final decision is rendered in the proceeding.

Codified as amendments to Section 84308 of the Government Code, SB 1439 expands the Political Reform Act by broadening these prohibitions and restrictions to include elected officers of local governmental agencies, which under SB 1439 will include members of city councils and county boards of supervisors, even while they were simply candidates for these positions.  

Under SB 1439, such local elected government officials are now prohibited from accepting a contribution of more than $250 from any party, participant, or their agents, while a proceeding involving an entitlement for use is pending before the agency, and for 12 months following the date a final decision is issued in the proceeding.  The prohibition also applies whether the officer accepts, solicits or directs the contribution on the officer’s own behalf or on behalf of any other officer or candidate. 

In addition, prior to rendering any decision in a proceeding involving an entitlement, any officer who received within the preceding 12 months a contribution of more than $250 must disclose that fact and may not participate in the decision on the entitlement.  An officer who has improperly accepted such a contribution may cure the violation by returning the contribution within 30 days from the time the officer knows, or should have known, about the contribution and the proceeding.  If the officer timely returns the contribution, the officer may participate in the proceeding.

SB 1439 also covers the contributions by the applicant’s “agent,” which is not defined in the legislation.  As a result, developers and other applicants for land use approvals will need to be vigilant in ensuring that campaign contributions by the applicant’s principals, employees, consultants, or other agents do not inadvertently trigger an officer’s disqualification and jeopardize the approval by losing the vote of a supportive officer.

Finally, SB 1439 also covers the contributions by the “participant,” which is defined in the legislation to mean a person other than the applicant who actively supports or opposes the entitlement decision and who has a financial interest in the decision.  SB 1439’s prohibition applies if the officer knows or has reason to know that the participant has a specified financial interest in the outcome of the agency’s action.  To define “financial interest,” Section 84308 cross-references other provisions in the Political Reform Act.  Under those provisions, determining whether a participant has a “financial interest” is fact-dependent and can be complicated.  In general, the Political Reform Act defines a financial interest as one in which the decision will have a material financial effect, distinguishable from its effect on the public generally, on the participant or on certain enumerated economic interests.

SB 1439 will go into effect on January 1, 2023.  Going forward, SB 1439 will impose new campaign contribution limitations in every city and county in California.  Developers and other applicants for local land use approvals will need to understand the implications of SB 1439 and establish internal policies and practices to ensure compliance with the new law.

SB 1439 and related campaign finance law is complicated and contain nuances that are beyond the scope of this summary.  If you would like to know more about the bill, please contact any of our experienced land use attorneys.

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