Under SB 1243, attorneys, architects, engineers, planners, political consultants, and other “agents” are absolutely barred from making political contributions to elected and appointed officials while a decision is pending and for one year after a final decision has been made.
The venerable Levine Act (Government Code Section 84308), which has been part of the Political Reform Act since 1982, imposes restrictions to prevent public officials from being influenced by campaign contributions made by parties who must appear before them for licenses, permits and entitlements for use. In 2022, the legislature made material changes to the act by applying it for the first time to elected officials.
On Sept. 30, 2024, Gov. Gavin Newsom signed SB 1243, which further modifies to the Levine Act and took effect on Jan. 1, 2025.
Wait, what’s the Levine Act and what happened in 2022?
The so-called “Pay to Play” restrictions in the act long applied only to appointed public officials (e.g., planning commissioners, etc.), which are referred to as “officers.” The act prohibited officers from accepting, soliciting or directing a contribution of more than $250 from any “party,” “participant” or “agent” (as defined in the statute) while a proceeding involving a license, permit or other entitlement for use was pending before the agency and for three months following the date a final decision is rendered, provided the officer knew or had reason to know that the party or participant had a financial interest in the proceeding.
In 2022, however, SB 1439 amended the Levine Act to make it equally applicable to elected officers (e.g., city council members, county board supervisors, special and school district board members, etc.). Effective Jan. 1, 2023, SB 1439 also lengthened the prohibition against giving to 12 months after the decision and outlined a process to cure a violation—should one occur—provided certain conditions are met.
What does SB 1243 do since it took effect on Jan. 1, 2025?
Here are eight key takeaways about SB 1243:
1. Donation limit increase: The Levine Act is now triggered by contributions over $500 (increased from over $250).
2. “Pending” defined: The contribution limit applies as soon as an action is “pending” and ceases 12 months after the final decision. For officers, SB 1243 defines “pending” to mean either: (1) the item involving the entitlement has been placed on the agenda of the officer’s body for a public meeting, or (2) the officer knows that the action is within the agency’s jurisdiction, and it is reasonably foreseeable that it will come before the officer as a decisionmaker. For parties or a party’s agent, however, “pending” means when an application is filed with the agency or, if the proceeding does not require submitting an application, when the proceeding is before the agency for its decision or other action.
3. Stricter rules for agents: “Agents” of a party or participant are individuals or entities that represent them for compensation and appear before or otherwise communicate with an agency for purposes of influencing the proceeding on behalf of a party or participant. Think attorneys, architects, engineers, planners, political consultants and other “agents.” “Agents” can no longer makeany contribution, in any amount, while a proceeding is pending and for 12 months after a final decision is rendered in the matter. The contributions of agents are no longer aggregated with those of parties.
4. “Agents” include the firm that employs them: If an agent also acts as an employee or member of a law, architectural, engineering or consulting firm, or a similar entity, both the individual and the entity are deemed “agents” under the Levine Act and are subject to contribution restrictions.
5. Application to elected officers: The act’s restrictions only apply to elected officers when the body of which they are a member has the authority to make a decision or recommendation in the proceeding.Those restrictions do not apply to elected officers when they are participating as part of a body that has no authority over the matter at hand. The act still applies to appointed officers.
6. Additional cure time: Formerly, if an officer received a contribution that would otherwise require disqualification, the officer could cure the violation by returning the money within 14 days from the time they knew or should have known about the contribution and the proceeding involving the entitlement. SB 1243 now provides that officers must return such contributions within 30 days from when “the officer makes any decision, or knows, or should have known, about the contribution and proceeding involving a license, permit, or other entitlement for use, whichever comes last.” Additionally, if the officer accepts, solicits or directs a contribution of more than $500 during the 12 months after the date a final decision is rendered in the proceeding, they may cure the violation by returning the contribution or the portion of the contribution in excess of $500 within 30 days of accepting, soliciting or directing the contribution, whichever comes latest.
7. Public agency counsel do not qualify as an “officer”: City attorneys and county counsel providing legal advice to the agency who do not have the authority over final decision-making are now excluded from the definition of “officer.”
8. Exemptions from the act: A “license, permit, or other entitlement for use” does not include any of the following:
- Competitively bid contracts that must be awarded “pursuant to a competitive process;”
- Contracts valued under $50,000;
- Contracts where no party receives financial compensation;
- Contracts between two or more public agencies; and
- The periodic review or renewal of development agreements unless there is a material modification proposed to the agreement.
On Jan. 16, 2025, the Fair Political Practices Commission discussed proposed amendments to the FPPC regulations that will implement SB 1243, with potential adoption at the commission’s March meeting. It is anticipated that the commission will need to provide guidance related to campaign contributions received in 2024 for decision-making in 2025.
Let’s test your knowledge . . .
For those weary of making political contributions in the wake of the electoral cycle, SB 1243 may come as welcome news because agents are completely barred from making political contributions related to matters for which they are working. Some may decide to stop giving entirely.
For those who would like to keep giving, here are a few hypotheticals to test your knowledge:
Example 1: A civil engineer working on a multifamily housing project that requires a conditional use permit from the city discovers that several members of his firm’s leadership team have recently contributed to a city council member’s reelection campaign. The project goes before the city council next month. Is this a problem?
Example 2: A member of the county board of supervisors receives a campaign contribution from a local affordable housing developer six months after the board of supervisors voted to approve the affordable housing developer as the preferred bidder on a surplus lands site. Should the supervisor return the donation?
Example 3: A local union representative advocates for the approval of a major new hotel project by the city council. A few months later, the union representative donates $750 to a city councilmember’s reelection campaign in her own name. Does the city council member need to return the donation?
The answer: Call your attorney.
Got a scenario not covered above? For specific guidance, please contact your Brownstein counsel to discuss how the Levine Act may impact your particular circumstances.
This document is intended to provide you with general information regarding SB 1243 in California. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.