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Effective January 1, 2023, SB 1439 (Glazer) extended the application of California’s pay-to-play provisions, Government Code Section 84308, to local elected officials (e.g., city council members).  The pay-to-play provisions continue to apply to certain state and local public officials who sit on boards and commissions, serve as heads of agencies, or are candidates for elective office in a local agency; state elected officials remain exempt.

Prohibition Against Campaign Contributions

Public officials subject to the pay-to-play provisions, now including local elected officials (hereinafter referred to as “covered officials”), are prohibited from accepting campaign contributions of more than $250 from certain contributors if the official makes, or will make, a decision regarding the contributor, which involves a “license, permit, or other entitlement for use.”  This prohibition also applies for 12 months (previously 3 months) following the date a final decision is rendered in such a proceeding.  

Disqualification Requirement

Covered officials, now including local elected officials, are generally required to disqualify themselves from participating in any proceeding involving a license, permit or other entitlement for use by certain contributors who have contributed more than $250 to the official’s campaign in the preceding 12 months. 

Question of Retroactive Application

On December 22, 2022, the Fair Political Practices Commission (FPPC) adopted an opinion concluding that local elected officials will not be required to disqualify themselves from proceedings based on the receipt of any contributions made prior to January 1, 2023, the effective date of SB 1439.  However, the author of SB 1439 subsequently requested an Attorney General opinion that the new pay-to-play laws do apply to contributions made prior to January 1, 2023.  Pending an opinion from the Attorney General, the FPPC is moving forward with their plans to adopt regulations that are in line with their December 22^nd opinion.  

Proposed Regulations 

The FPPC has held several meetings to discuss the implementation of SB 1439 and plans to hold a public hearing on May 18, 2023, at 10:00 a.m. to consider regulatory proposals for adoption.  The FPPC is currently accepting written comments and public input until close of business on May 16, 2023.  

Other Related Developments

Our team of attorneys and experts continue to engage with state authorities to clarify the law, and we are also tracking related legal developments, such as litigation challenging SB 1439 or the FPPC’s plans for enforcement.  For example, on April 27, 2023, FPPC Chair Richard Miadich sent a letter to all city and county attorneys to remind them that, despite a pending lawsuit challenging its validity, SB 1439 remains in effect, and the FPPC will continue to work to implement and enforce the new provisions of the law.  The FPPC is also expected to receive additional funding in the upcoming state budget and will be looking to fill several new positions when the state fiscal year begins on July 1, including in their Enforcement Division. 

Questions

Please do not hesitate to contact your Nielsen Merksamer attorney or professional if you have any questions on the potential impact of California’s new pay-to-play laws or proposed regulations.