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San Francisco Expands Lobbying Ordinance; Developers, Company Employees, Attorneys, and Consultants Required to Register.
SAN FRANCISCO EXPANDS REACH OF LOBBYING ORDINANCE; MORE DEVELOPERS, COMPANY EMPLOYEES, ATTORNEYS, AND CONSULTANTS REQUIRED TO REGISTER
This summer, the San Francisco Board of Supervisors passed a long-planned ordinance amending local lobby disclosure requirements. The impact is becoming apparent with the first wave of reports submitted under the new ordinance on August 15 and September 15.
The ordinance includes new registration provisions concerning “permit consultants,” developers, and those lobbying for their employer. The lobbyist and developer registration provisions went into effect on July 26, 2014. A newly defined registration category of “permit consultants” will be required to register as of January 1, 2015, with disclosure beginning in April 2015.
KEY LOBBYIST PROVISIONS
Lower Registration Thresholds: Under the prior version of the law, a lobbyist was anyone who received $3,000 or more within three consecutive months for lobbyist services and who made a contact with an Officer of the City and County of San Francisco (“City Officer”) on behalf of the person providing payment. The law now differentiates between in-house employees engaged in lobbying and outside lobbyist consultants. For in-house employees, a lobbyist is an individual who makes five or more lobbying contacts with City Officers in a calendar month on behalf of the individual’s employer. For outside consultants, a lobbyist is someone who makes at least a single contact with a City Officer on behalf of anyone who pays the individual for lobbyist services.
Fewer Exemptions: Existing exemptions covering the contracting process (i.e. providing responses to an RFP, negotiating the terms of a contract after a competitive bidding process, and communicating in connection with the administration of an existing contract) are only applicable to the contractor’s officers, employees, or subcontractors and are not available to outside lobbyist consultants or independent contractors. Furthermore, the so-called “attorney exemption” is now limited to communications that would constitute the unauthorized practice of law if performed by a layperson instead of a licensed attorney, and is not based on whether the person engaging in the communication is a licensed attorney.
New Liability: The Ordinance retains the liabilities for lobbyist violations such as late filing fees and penalties for providing inaccurate or incomplete reports. However, it expands the liability so that a client or employer of a lobbyist is joint and severally liable for all lobbyist violations in connection with the acts or omissions undertaken on behalf of that client or employer.
New Regulations: In late July, after extensive comment from the regulated community, the Ethics Commission adopted regulations implementing and interpreting the amended lobby law and the new disclosure requirements for “permit consultants” and developers. The regulations will become effective in late September, sixty days after their adoption, unless two-thirds of the Board of Supervisors votes to reject a regulation.
The Ethics Commission provides a database of monthly lobbyist disclosure reports. The first filing deadline after the enactment of the law occurred on August 15, 2014 and reports are due monthly thereafter. A review of the August and September filings showed an additional fourteen lobbyists-ranging from prominent attorneys and consultants to corporate employees dealing with city agencies-had registered and filed reports. We anticipate additional registrations in the coming months.
DEVELOPER AND PERMIT CONSULTANT PROVISIONS
Developers: Developer reports will be required for real estate development projects located in the City with estimated construction costs exceeding $1,000,000 and for which the Planning Commission has certified an environmental impact report (“EIR”). The reports will be due within thirty days of the date the Planning Commission certifies the EIR. The report must disclose any nonprofit that has publicly commented on or contacted a City Officer with regard to the development project and has received cumulative donations of $5,000 or more from the developer. Following the initial developer disclosure report, the developer is required to file four additional quarterly reports.
Permit Consultants: Beginning in January 2015, “permit consultants” will need to register with the Ethics Commission. A “permit consultant” is anyone who is compensated to contact the Department of Building Inspection, the Entertainment Commission, the Planning Department, or the Department of Public Works to help a permit applicant obtain a permit on a “Major” or “Minor” project. “Major Projects” are projects with actual or estimated construction costs exceeding $1,000,000 and require a permit issued by the Department of Building Inspection or the Planning Department. A “Minor Project” is a project requiring a permit issued by the Entertainment Commission. The registration forms and manuals regarding permit consultants will be available in late 2014. An individual who qualifies both as a lobbyist and a permit consultant will be required to register as both a lobbyist and as a permit consultant. Beginning in April 2015, permit consultants will be required to file quarterly reports disclosing their permit consulting services.
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As always, please don’t hesitate to contact the political law attorneys at Nielsen Merksamer if you have any questions.