The Political Reform Act of 1974 prohibits an officer of an agency from accepting, soliciting, or directing a contribution of more than $250 from any party, participant, or a party or participants agent, while a proceeding involving a license, permit, or other entitlement for use is pending before the agency and for 12 months following the date a final decision is rendered in the proceeding, if the officer knows or has reason to know that the participant has a financial interest, as defined. Existing law permits an officer who violates this prohibition to cure the violation by returning the contribution, or portion of the contribution in excess of $250, within 14 days of accepting, soliciting, or directing the contribution, as specified. Existing law also prohibits a party or partys agent from making a contribution of more than $250 to any officer of an agency while a proceeding involving a license, permit, or other entitlement for use is pending before the agency and for 12 months following the date a final decision is rendered by the agency in that proceeding.

This bill would shorten the prohibition on contributions from 12 to 3 months following the date a final decision is rendered in the proceeding. The bill would revise the definition of agency for the purposes of these prohibitions to exclude a local governmental agency whose members are directly elected by the voters. The bill would additionally eliminate the ability of an officer to cure a violation of the prohibition by returning the contribution, or portion of the contribution in excess of $250, within 14 days of accepting, soliciting, or directing the contribution. raise the threshold for contributions regulated by these provisions to $1,500, as specified.

The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the acts purposes upon a ²/₃ vote of each house of the Legislature and compliance with specified procedural requirements.

This bill would declare that it furthers the purposes of the act.

The Political Reform Act of 1974 prohibits an officer of an agency from accepting, soliciting, or directing a contribution of more than $250 from any party, participant, or a party or participants agent, while a proceeding involving a license, permit, or other entitlement for use is pending before the agency and for 12 months following the date a final decision is rendered in the proceeding, if the officer knows or has reason to know that the participant has a financial interest, as defined. Existing law permits an officer who violates this prohibition to cure the violation by returning the contribution, or portion of the contribution in excess of $250, within 14 days of accepting, soliciting, or directing the contribution, as specified. Existing law also prohibits a party or partys agent from making a contribution of more than $250 to any officer of an agency while a proceeding involving a license, permit, or other entitlement for use is pending before the agency and for 12 months following the date a final decision is rendered by the agency in that proceeding.

This bill would make a nonsubstantive change to the above provision. shorten the prohibition on contributions from 12 to 3 months following the date a final decision is rendered in the proceeding. The bill would revise the definition of agency for the purposes of these prohibitions to exclude a local governmental agency whose members are directly elected by the voters. The bill would additionally eliminate the ability of an officer to cure a violation of the prohibition by returning the contribution, or portion of the contribution in excess of $250, within 14 days of accepting, soliciting, or directing the contribution.

The Political Reform Act of 1974 prohibits an officer of an agency from accepting, soliciting, or directing a contribution of more than $250 from any party, participant, or a party or participants agent, while a proceeding involving a license, permit, or other entitlement for use is pending before the agency and for 12 months following the date a final decision is rendered in the proceeding, if the officer knows or has reason to know that the participant has a financial interest, as defined.

This bill would make a nonsubstantive change to the above provision.

SENATE COMMITTEE ON

ELECTIONS AND CONSTITUTIONAL AMENDMENTS

Senator Catherine Blakespear, Chair

2023 - 2024 Regular

Bill No: AB Hearing Date: 7/2/24

Subject: Campaign contributions: agency officers

DIGEST

This bill increases, from $250 to $1,500, the threshold at which campaign contributions received by specified public officials can cause those officials to be disqualified from participating in or influencing decisions related to licensing, permitting, and similar entitlements for use.

ANALYSIS

Existing law:

1. Creates the Fair Political Practices Commission (FPPC) and makes it responsible for implementing the Political Reform Act of 1974 (PRA).
2. Prohibits contributions of more than $250 from being given or accepted while a proceeding involving a license, permit, or other entitlement for use is pending, and for 12 months following the date a final decision is rendered.
3. Requires each officer of the agency who received a contribution of more than $250 within the preceding 12 months from a person with business before the agency to disclose that fact. Prohibits an officer of an agency who accepted such a contribution from participating in the decision affecting the person who made the contribution.
4. Permits an officer to participate in the proceeding if they return any prohibited contribution within 30 days.
5. Permits an officer to cure a violation by returning the contribution, or the portion of the contribution in excess of $250, within 14 days in cases where a contribution was accepted during the 12 months after the date a final decision is rendered in the proceeding.
6. Requires a party to a proceeding to disclose any contribution in an amount of more than $250 made within the preceding 12 months by the party or the party’s agent.
7. Prohibits a party, or agent to a party, to a proceeding from making a contribution of more than $250 to any officer of that agency during the proceeding and for 12 months following the date a final decision is rendered.

This bill:

Increases, from $250 to $1,500, the threshold at which campaign contributions received by specified public officials can cause those officials to be disqualified from participating in or influencing decisions related to licensing, permitting, and similar entitlements for use if the contributions were received from an entity with a financial interest in that decision.

BACKGROUND

The Levine Act. In 1982, the Legislature passed and Governor Brown signed AB 1040 (Levine), Chapter 1049, Statutes of 1982. AB 1040, also known as the Levine Act, prohibits an elected or appointed officer, alternate, or candidate for office who serves on a specific quasi-judicial board or commission from accepting, soliciting, or directing a contribution of $250 from any person or their agent who has an application for a license, permit, or other entitlement for use pending before the body. The prohibition also extended for three months following the date a decision is rendered on the application or until the end of the officer’s term, whichever is longer. Constitutional officers and members of legislative bodies, such as city councils, county boards of supervisors, and the Legislature were excluded from these provisions unless the officer served on a specific board or commission.

SB 1439 (Glazer). In 2022, the Legislature passed and Governor Newsom signed SB 1439 (Glazer), Chapter 848, Statutes of 2022. SB 1439 modified and added to the Levine Act. First, the legislation removed an exemption for local government agencies whose members are directly elected by the voters, meaning it now applies to all locally-elected officials. Second, SB 1439 extended, from 3 months to 12 months, the period of time following the date that an agency renders a final decision in a matter during which an officer is subject to the Levine Act. Finally, SB 1439 provided a process to cure a violation should it occur and if certain conditions are met. Officers who accept a contribution over $250 during the 12 months after the date a final decision is rendered can cure the violation by returning the contribution or the portion exceeding $250 within 14 days.

COMMENTS

1. According to the Author: “Campaign finance transparency is a pillar of a strong democracy. State and local campaign finance laws have evolved over the years to make campaign finance information easier to understand, reflect technological innovations and to increase basic transparency about who contributes to candidate and independent expenditure campaigns. The 2022 amendments to the Levine Act claimed to address a perceived problem with local campaign finance laws, but has ended up increasing the amount of dark money used in state and local elections. The 2022 law’s arbitrarily low contribution limit has made it difficult for state and local candidates to communicate directly with voters and has resulted in an increased use of non-candidate controlled independent expenditures financed with dark money. AB 2911 will encourage campaign donors to contribute directly to a candidate, increase the transparency of those donations and discourage the use of dark money in state and local elections. AB 2911 will also save local governments millions of dollars in compliance, allowing limited local resources to be better spent on essential services for residents.”
2. Furthering the Purposes of the PRA? AB 2911 amends the Levine Act by raising the contribution threshold by 500%. Given this vast increase, it is not illogical to wonder if this truly furthers the purpose of the PRA, a requirement that must be met for the Legislature to amend the PRA. As such, the Committee may wish to consider whether the provisions of the bill further the purposes of the PRA.
3. Contribution Threshold. AB 2911 raises the monetary threshold established in the Levine Act from $250 to $1,500. According to an inflation calculator operated by the federal Bureau of Labor Statistics, when adjusted for inflation, $250 in 1982 has approximately the same purchasing power as about $800 today. The Committee may wish to consider whether the $1,500 threshold is appropriate or if the threshold should be a different amount.
4. One Size Fits All or Tiered Approach. Jurisdictions vary in size, so what may seem like a lot of money in a small jurisdiction may not be viewed in the same light in a large jurisdiction, such as Los Angeles County. As such, the Committee may wish to consider, instead of adopting a blanket increase to $1,500 in all jurisdictions, whether a tiered approach that establishes a monetary threshold based on the population of each jurisdiction is more appropriate. For example, one approach would keep the $250 monetary threshold for jurisdictions under a population of 50,000 and raise the monetary threshold to $500 in jurisdictions with a population of 50,000.

Local jurisdictions will need to be informed about the new monetary thresholds and how best to comply with them. As a result, if a tiered approach is inserted into the bill, the FPPC should be required to calculate the tier each jurisdiction would fall into and inform them of the new Levine Act thresholds permitted by this bill.

RELATED/PRIOR LEGISLATION

SB 1181 (Glazer) of 2024 clarifies when a proceeding is pending and when a person is considered an agent pursuant to the Levine Act. SB 1181 also requires a notice on agendas to include disclosure requirements and contribution limitations pursuant to the Levine Act. This bill is pending in the Assembly Committee on Appropriations.

SB 1243 (Dodd) of 2024 makes a number of changes to the Levine Act, including increasing the size of the maximum contribution amount to $1,000 and adjusting certain definitions and deadlines in the Levine Act. This bill is pending on the Assembly Floor.

PRIOR ACTION

POSITIONS

Sponsor: Author

Support: California Builders Alliance

California Building Industry Association

California Contract Cities Association

City of Norwalk

County of Los Angeles Board of Supervisors

Fresno County Board of Supervisors

League of California Cities

Orange County Board of Supervisors

Sacramento Regional Builders Exchange

Oppose: Ban SUP

California Church Impact

California Clean Money Campaign

California Climate Voters

California Common Cause

Californians for Disability Rights

Clean Earth for Kids

Consumer Watchdog

Contra Costa Moveon

Courage California

Endangered Habitats League

Extinction Rebellion San Francisco

Foothills Community Democrats

Glendale Environmental Coalition

Indivisible Alta Pasadena

Indivisible CA: StateStrong

Indivisible Marin

Indivisible Media City Burbank

Indivisible Sacramento

Indivisible Santa Barbara

Indivisible South Bay LA

Indivisible Ventura

Indivisible Yolo

League of Women Voters of California

Los Angeles for Democracy Vouchers

Money Out People In

Money Out Voters In

Pink Panthers

Progressive Democrats of the Santa Monica Mountains

Recolte Energy

Represent Us, Los-Angeles-San Gabriel Valley Chapter

Rooted in Resistance

RootsAction.org

San Joaquin Valley Democratic Club

Sonoma County Transportation & Land-Use Coalition

Unrig LA

Venice Resistance

350 Conejo

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2911

Author:(McKinnor)

As Amended Ver:April 16, 2024

2/3 vote

SUMMARY

Increases, from $250 to $1,500, the threshold at which campaign contributions received by specified public officials can cause those officials to be disqualified from participating in or influencing decisions related to licensing, permitting, and similar entitlements for use if the contributions were received from an entity with a financial interest in that decision, as specified.

Major Provisions

Increases, from $250 to $1,500, the campaign contribution threshold that triggers the applicability of the following provisions of the Levine Act of 1982 (Levine Act), as amended in 2022:

1. A prohibition on an officer of the agency accepting, soliciting, or directing a campaign contribution of more than the threshold from a party, party's agent, participant, or participant's agent with a matter pending before the agency involving a license, permit, or other entitlement for use during the time the matter is pending before the agency and for 12 months following the date a final decision is rendered in the matter.
2. A requirement for an officer of the agency to disclose on the record of a proceeding the receipt of any campaign contribution of more than the threshold from a party to or participant in the proceeding in the preceding 12 months if the proceeding involves a license, permit, or other entitlement for use.
3. A prohibition on an officer of the agency making, participating in making, or attempting to influence the decision in a proceeding involving a license, permit, or other entitlement for use if the officer willfully or knowingly received a contribution of more than the threshold from a party, party's agent, participant, or participant’s agent in the proceeding in the 12 months before the proceeding and the officer did not return that contribution within 30 days of knowing, or the time the officer should have known, of the contribution and the proceeding.
4. A requirement for a party to a proceeding before an agency involving a license, permit, or other entitlement for use to disclose on the record of the proceeding any contribution of more than the threshold made within the preceding 12 months by the party, or the party's agent, to any officer of the agency.
5. A prohibition on a party to or participant in a proceeding involving a license, permit, or other entitlement for use pending before an agency from making a contribution of more than the threshold to an officer of that agency during the proceeding and for 12 months following the date a final decision is rendered by the agency in the proceeding.

COMMENTS

The Levine Act, named after its author Assemblymember Mel Levine, restricts campaign contributions made to officers of public agencies by parties to a proceeding pending before those agencies. Enacted in 1982, the Levine Act was a response to reports that members of a state agency sought to raise money from entities that had permit requests pending before the agency. The Levine Act is unique among the provisions of the Political Reform Act (PRA) as the only area in which a campaign contribution can be the basis for a disqualifying conflict of interest.

The Levine Act is narrowly drafted to apply only to proceedings involving licenses, permits, or other entitlements for use. Additionally, until recently, the Levine Act only applied to decisions made by agencies with membership that was not directly elected by voters.

In 2022, the Legislature passed and Governor Newsom signed SB 1439 (Glazer), Chapter 848, Statutes of 2022, which made substantial changes to the Levine Act. Perhaps most notably, SB 1439 significantly broadened the reach of the Levine Act by making it applicable to local agencies whose members are directly elected by the voters. As a result, the restrictions of the Levine Act now apply to every county board of supervisors, city council, and school board.

Although there was no opposition submitted to the Legislature during its consideration of SB 1439, affected entities raised considerable questions and concerns about its implementation after the bill was signed into law. In February 2023, various trade and industry business associations and two local elected officials challenged the provisions of SB 1439 in the Sacramento Superior Court, arguing that the bill was unconstitutional. The court rejected that challenge, and the Superior Court’s decision was not appealed.

Separately, the Fair Political Practices Commission (FPPC) has grappled with a number of issues in connection with the implementation of SB 1439, including adopting a formal legal opinion about the effect of the law, enacting extensive regulations implementing SB 1439, and issuing a dozen advice letters concerning the provisions of the Levine Act. The FPPC additionally has conducted multiple trainings and webinars related to SB 1439 and its requirements.

The campaign contribution threshold that can trigger disqualification under the Levine Act has been mostly unchanged in the 40 years since its enactment. According to an inflation calculator operated by the federal Bureau of Labor Statistics, when adjusted for inflation, $250 in 1982 has approximately the same purchasing power as about $800 today.

The restrictions imposed by the Levine Act, as amended in 2022, operate independently of any local contribution limits that apply in a jurisdiction. Many local jurisdictions have campaign contribution limits that are higher than $250, but lower than $1,500. In those jurisdictions, the local campaign contribution limits would continue to apply even if this bill is enacted in its current form. For example, if a local jurisdiction had a $1,000 campaign contribution limit, contributions to candidates for local office would continue to be limited to $1,000 even if the Levine Act threshold is raised to $1,500 as proposed by this bill.

California voters passed an initiative, Proposition 9, in 1974 that created the FPPC and codified significant restrictions and prohibitions on candidates, officeholders, and lobbyists. That initiative is commonly known as the PRA. Amendments to the PRA that are not submitted to the voters, such as those contained in this bill, must further the purposes of the initiative and require a two-thirds vote of both houses of the Legislature.

Please see the policy committee analysis for a full discussion of this bill.

According to the Author

"Campaign finance transparency is a pillar of a strong democracy. State and local campaign finance laws have evolved over the years to make campaign finance information easier to understand, reflect technological innovations and to increase basic transparency about who contributes to candidate and independent expenditure campaigns. 2022 amendments to the Levine Act claimed to address a perceived problem with local campaign finance laws, but has ended up increasing the amount of dark money used in state and local elections. The 2022 law's arbitrarily low contribution limit has made it difficult for state and local candidates to communicate directly with voters and has resulted in an increased use of non-candidate controlled independent expenditures financed with dark money. AB 2911 will encourage campaign donors to contribute directly to a candidate, increase the transparency of those donations and discourage the use of dark money in state and local elections. AB 2911 will also save local governments millions of dollars in compliance, allowing limited local resources to be better spent on essential services for residents."

Arguments in Support

In support of this bill, the County of Los Angeles writes, "[T]he County has faced implementation challenges related to the provisions of SB 1439. For example, due to the $250 limit coupled with the enormous volume and diversity of proceedings that come before the Los Angeles County Board of Supervisors on a bi-weekly basis, County staff have spent many hundreds of hours and other public resources to ensure compliance. It is common for County board meetings to hear 100 agenda items, at least half of which are subject to the Levine Act… AB 2911 (McKinnor)…significantly reduces the enormous level of resources and staff time spent combing through background information on items and entities that come before the Los Angeles County Board of Supervisors."

Arguments in Opposition

In opposition to this bill, California Common Cause writes, "AB 2911 would increase the contribution threshold in the Levine Act from $250 to $1500, far above what the threshold would be even if it had adjusted for inflation over time…This proposed increase would also negate the Levine Act's protections in many California cities…The City of Los Angeles, for instance, has a contribution limit of $800 per election for city council offices. This would mean that in most of these cities who have chosen to enact their own contribution limitations, AB 2911 would make the protections of the Levine Act moot despite a maximum contribution still being significant in those jurisdictions."

FISCAL COMMENTS

None. This bill is keyed non-fiscal by the Legislative Counsel.

VOTES

ASM ELECTIONS: 7-0-1

YES: Pellerin, Lackey, Berman, Cervantes, Alanis, Low, Jones-Sawyer

ABS, ABST OR NV: Bennett

UPDATED

VERSION: April 16, 2024

CONSULTANT: Ethan Jones / ELECTIONS / (916) 319-2094 FN: 0002788

Date of Hearing: April 24, 2024

ASSEMBLY COMMITTEE ON ELECTIONS

Gail Pellerin, Chair

ABPCA Bill Id:AB 2911 (

Author:McKinnor) – As Amended Ver:April 16, 2024

SUBJECT: Campaign contributions: agency officers.

SUMMARY: Increases, from $250 to $1,500, the threshold at which campaign contributions received by specified public officials can cause those officials to be disqualified from participating in or influencing decisions related to licensing, permitting, and similar entitlements for use if the contributions were received from an entity with a financial interest in that decision, as specified. Specifically, this bill:

1. Increases, from $250 to $1,500, the campaign contribution threshold that triggers the applicability of the following provisions of the Levine Act of 1982 (Levine Act), as amended in 2022:
   
   1. A prohibition on an officer of the agency accepting, soliciting, or directing a campaign contribution of more than the threshold from a party, party’s agent, participant, or participant’s agent with a matter pending before the agency involving a license, permit, or other entitlement for use during the time the matter is pending before the agency and for 12 months following the date a final decision is rendered in the matter.
      
   2. A requirement for an officer of the agency to disclose on the record of a proceeding the receipt of any campaign contribution of more than the threshold from a party to or participant in the proceeding in the preceding 12 months if the proceeding involves a license, permit, or other entitlement for use.
      
   3. A prohibition on an officer of the agency making, participating in making, or attempting to influence the decision in any proceeding involving a license, permit, or other entitlement for use if the officer willfully or knowingly received a contribution of more than the threshold from a party, party’s agent, participant, or participant’s agent in the proceeding in the 12 months before the proceeding and the officer did not return that contribution within 30 days of knowing, or the time the officer should have known, of the contribution and the proceeding.
   4. A requirement for a party to a proceeding before an agency involving a license, permit, or other entitlement for use to disclose on the record of the proceeding any contribution of more than the threshold made within the preceding 12 months by the party, or the party’s agent, to any officer of the agency.
   5. A prohibition on a party to or participant in a proceeding involving a license, permit, or other entitlement for use pending before an agency from making a contribution of more than the threshold to an officer of that agency during the proceeding and for 12 months following the date a final decision is rendered by the agency in the proceeding.
2. Makes conforming changes.

EXISTING LAW:

1. Creates the Fair Political Practices Commission (FPPC), and makes it responsible for the impartial, effective administration and implementation of the Political Reform Act (PRA). (Government Code §§83100, 83111)
   
2. Does all the following pursuant to the Levine Act:
   
   1. Defines the following terms, for the purposes of the Levine Act:
      
      1. “Party” to mean any person who files an application for, or is the subject of, a proceeding involving a license, permit, or other entitlement for use.
         
      2. “Participant” to mean any person who is not a party but who actively supports or opposes a particular decision in a proceeding involving a license, permit, or other entitlement for use and who has a financial interest in the decision, as specified.
         
      3. “Agency” to mean a state or local government agency, except that it does not include the courts or any agency in the judicial branch of government, the Legislature, the Board of Equalization (BOE), or constitutional officers. (Government Code §84308(a))
         
   2. Prohibits an officer of an agency from accepting, soliciting, or directing a contribution of more than $250 from a party or agent of a party with a license, permit, or other entitlement for use pending before the agency, or from a participant in that matter or an agent of the participant if the officer knows or has reason to know that the participant has a financial interest in the matter, during the time the matter is pending before the agency and for 12 months following the date a final decision is rendered in the matter. (Government Code §84308(b))
      
   3. Requires any officer of an agency, as defined, who received a contribution of more than $250 from a party with a matter pending before the agency involving a license, permit, or other entitlement for use, or a participant in that matter, in the 12 months before the proceeding, to disclose the contribution on the record of the proceeding. (Government Code §84308(c))
      
   4. Prohibits any officer of an agency, as defined, who willfully or knowingly received a contribution of more than $250 from a party or agent of the party with a matter pending before the agency involving a license, permit, or other entitlement for use, or a participant or agent of the participant in that matter if the officer knows or has reason to know that the participant has a financial interest in the decision, in the 12 months before the proceeding from making, participating in making, or attempting to influence the decision in the proceeding, as specified. (Government Code §84308(c)) Allows an officer to participate in the proceeding if the officer returns the contribution within 30 days of knowing, or the time the officer should have known, of the contribution and the proceeding. (Government Code §84308(d)(1))
      
   5. Permits an officer who accepts, solicits, or directs a contribution of more than $250 during the 12 months after the date a final decision is rendered in a proceeding involving a license, permit, or other entitlement for use from a party, party’s agent, participant, or participant’s agent, to cure the violation by returning the contribution or the portion exceeding $250 within 14 days of accepting, soliciting, or directing the contribution, whichever comes latest. Provides that an officer is permitted to cure such a violation only if the officer did not knowingly and willfully accept, solicit, or direct the prohibited contribution, and requires the officer or the officer’s controlled committee to maintain records of curing the violation. (Government Code §84308(d)(2))
   6. Requires a party to a proceeding before an agency involving a license, permit, or other entitlement for use to disclose on the record of the proceeding any contribution of more than $250 made within the preceding 12 months by the party, or the party’s agent, to any officer of the agency. Prohibits a party to or participant in a proceeding involving a license, permit, or other entitlement for use pending before an agency from making a contribution of more than $250 to an officer of that agency during the proceeding and for 12 months following the date a final decision is rendered by the agency in the proceeding. (Government Code §84308(e))

FISCAL EFFECT: None. This bill is keyed non-fiscal by the Legislative Counsel.

COMMENTS:

1. Purpose of the Bill: According to the author:

Campaign finance transparency is a pillar of a strong democracy. State and local campaign finance laws have evolved over the years to make campaign finance information easier to understand, reflect technological innovations and to increase basic transparency about who contributes to candidate and independent expenditure campaigns. 2022 amendments to the Levine Act claimed to address a perceived problem with local campaign finance laws, but has ended up increasing the amount of dark money used in state and local elections. The 2022 law’s arbitrarily low contribution limit has made it difficult for state and local candidates to communicate directly with voters and has resulted in an increased use of non-candidate controlled independent expenditures financed with dark money. AB 2911 will encourage campaign donors to contribute directly to a candidate, increase the transparency of those donations and discourage the use of dark money in state and local elections. AB 2911 will also save local governments millions of dollars in compliance, allowing limited local resources to be better spent on essential services for residents.

1. Levine Act of 1982 and SB 1439 (Glazer) of 2022: The Levine Act, named after its author Assemblymember Mel Levine, restricts campaign contributions made to officers of state and local agencies by parties to a proceeding pending before those agencies. Enacted in 1982, the Levine Act was a response to reports that members of a state agency sought to raise money from individuals and entities that had permit requests pending before the agency. The Levine Act is unique among the provisions of the PRA in that it is the only area in which a campaign contribution can be the basis for a disqualifying conflict of interest. The PRA otherwise does not treat campaign contributions as a potential basis for conflicts of interest.
   
   The Levine Act is narrowly drafted to apply only to proceedings involving licenses, permits, or other entitlements for use. Proceedings of a more general nature and with broader applicability are not covered by the Levine Act. Additionally, until recently, the Levine Act only applied to decisions made by agencies with membership that was not directly elected by voters. It did not apply to the judicial branch, local governmental bodies whose members were elected directly by the voters, members of the Legislature and the BOE, or constitutional officers. Aside from clean-up legislation in 1984 (AB 2992 (M. Waters), Chapter 1681, Statutes of 1984) that made various clarifying and other changes to facilitate enforcement, the Levine Act was largely unchanged for the first 40 years that it was in effect.
   
   In 2022, the Legislature passed and Governor Newsom signed SB 1439 (Glazer), Chapter 848, Statutes of 2022, which made substantial changes to the Levine Act. Perhaps most notably, SB 1439 significantly broadened the reach of the Levine Act by making it applicable to local agencies whose members are directly elected by the voters. As a result, since January 1, 2023, the restrictions of the Levine Act have applied to every county board of supervisors, city council, and school board in the state, along with special districts that were not previously subject to the law.
   
   SB 1439 also made various other changes to the Levine Act, including increasing the period of time following a covered agency action, from three months to 12 months, during which an officer subject to the Levine Act is prohibited from accepting, soliciting or directing a contribution of more than $250 from a party or participant in the matter, and during which a party or participant in the matter is prohibited from making such a contribution. SB 1439 also created a “cure” process to allow an officer to avoid liability if the officer returned a prohibited contribution that the officer received in the 12 months following a covered action within 14 days, as specified.
   
   Supporters of SB 1439 argued that the changes made by that bill were important for protecting against quid pro quo corruption and its appearance in the types of governmental decisions – licensing, permitting, and contracting – that pose a high risk of pay-to-play exchanges because the impacts of those decisions are disproportionately felt by the parties that are seeking the award of those licenses, permits, and contracts. SB 1439 was approved by this committee by a 5-0 vote and was approved by the Assembly by a 66-0 vote.
2. Implementation of SB 1439: Although there were no letters of opposition or concerns submitted to this committee during its consideration of SB 1439, affected entities have raised considerable questions and concerns about its implementation after the bill was signed into law. In February 2023, the Family Business Association of California, a number of other trade and industry business associations, and two local elected officials challenged the provisions of SB 1439 in the Sacramento Superior Court, arguing that the bill was an unconstitutional amendment of the PRA and an unconstitutional restriction on the rights of campaign contributors and elected officials to free speech and the freedom of association. The court rejected that challenge, finding that SB 1439 furthers the purposes of the PRA as enacted by the voters. The court additionally found that there was sufficient evidence that SB 1439 sought to address quid pro quo corruption or its appearance, and was “closely drawn to avoid abridgment of associational rights.” The Superior Court’s decision was not appealed.
   
   Separately, the FPPC has grappled with a number of issues in connection with the implementation of SB 1439. In response to a request from the League of California Cities, the FPPC issued a legal opinion (Kendrick Opinion, No. O-22-002) less than three months after SB 1439 was signed by the Governor, and just nine days before it took effect, in which the FPPC concluded that SB 1439 did not prohibit a local elected official from taking part in a proceeding involving a license, permit, or other entitlement for use based on contributions received before the January 1, 2023, effective date of the bill.
   
   The FPPC also adopted extensive regulations implementing SB 1439 in June 2023, including regulations that codified the Kendrick Opinion and clarified the application and definitions of various terms in SB 1439. The FPPC has issued a dozen advice letters concerning the provisions of the Levine Act since the passage of SB 1439, and has conducted multiple trainings and webinars related to SB 1439 and its requirements.
3. Levine Act’s $250 Disqualification Threshold: The campaign contribution threshold that can trigger disqualification under the Levine Act has been changed only once in the 40 years since its enactment. Specifically, SB 491 (Marks), Chapter 764, Statutes of 1989, changed the threshold from contributions of $250 or more to contributions of more than $250, effectively an increase of $0.01.
   
   According to an inflation calculator operated by the federal Bureau of Labor Statistics, when adjusted for inflation, $250 in 1982 has approximately the same purchasing power as about $800 today.
4. Local Contribution Limits: Under existing law, local governments generally have the authority to adopt campaign contribution limits for elections to local offices in their jurisdictions. The restrictions imposed by the Levine Act, as amended in 2022, operate independently of any local contribution limits that apply in a jurisdiction. That is, a contribution made to a candidate for local office is subject to any relevant local campaign contribution limit even if that contribution would not trigger the provisions of the Levine Act. Similarly, a contribution made to a candidate for local office may trigger the restrictions of the Levine Act even if that contribution is below the local campaign contribution limit.
   
   This bill proposes to increase the disqualification threshold under the Levine Act from $250 to $1,500. Many local jurisdictions have campaign contribution limits that are higher than $250, but lower than $1,500. In those jurisdictions, the local campaign contribution limits would continue to apply even if this bill is enacted in its current form. For example, if a local jurisdiction had a $1,000 campaign contribution limit, contributions to candidates for local office would continue to be limited to $1,000 even if the Levine Act threshold is raised to $1,500 as proposed by this bill.
5. Arguments in Support: In support of this bill, the California Building Industry Association writes:

Recent changes to Government Code Section 84308 have resulted in a de facto prohibition on contributions to candidates for local elected officials. Housing project applicants are not willing to risk recusal of a local official in determining the outcome of much needed housing, particularly given the track record that contributions are not having an impact on decision-making. Moreover, the requirement to aggregate contributions from the applicant and the applicant’s agents who are needed to produce all the environmental and economic studies, design, planning and legal documents necessary to get a project approval, adds more risk and uncertainty, particularly because it is difficult or impossible to know whether and how much each of these independent entities have contributed…

Most importantly, we are concerned that, because of this de facto prohibition on contributions to candidates for local office, only very wealthy people who can finance their own campaigns will run for local office. That will not yield elected officials who are balanced in their views, nor will they be representative of the people.

1. Arguments in Opposition: In opposition to this bill, California Common Cause writes:

The “Levine Act” was enacted in 1983 in response to coastal commissioners who explicitly solicited and received large campaign contributions from people who had business pending before them…Elected officials were left out of this reform, likely due to the Legislature’s focus on the controversy at the time. However, elected local government officers routinely grant permits, licenses, and contracts – it is a key function of local government. In 2022, to rectify this and address numerous related scandals, the Legislature passed SB 1439 (Glazer) to expand the existing conflict of interest restrictions from appointed boards and commissions to local elected officials…

AB 2911 would increase the contribution threshold in the Levine Act from $250 to $1500, far above what the threshold would be even if it had adjusted for inflation over time…This proposed increase would also negate the Levine Act’s protections in many California cities…The City of Los Angeles, for instance, has a contribution limit of $800 per election for city council offices. This would mean that in most of these cities who have chosen to enact their own contribution limitations, AB 2911 would make the protections of the Levine Act moot despite a maximum contribution still being significant in those jurisdictions.

1. Related Legislation: SB 1243 (Dodd), which is pending in the Senate Elections & Constitutional Amendments Committee, proposes various changes to the Levine Act as modified by SB 1439, including raising the threshold for contributions regulated by the Levine Act from $250 to $1,000, limiting the prohibition on contributions made during and after a proceeding to the 9 months before and after a final decision in a proceeding is made, and extending the period during which an officer may cure a violation. SB 1243 additionally would specify that a person is not a “participant” for the purposes of a decision that is subject to the restrictions of the Levine Act if the person’s financial interest in the decision results solely from an increase or decrease in membership dues, and exempts specified housing development projects from the Levine Act’s provisions.
   
   SB 1181 (Glazer), which is pending in the Senate Elections & Constitutional Amendments Committee, would require the agenda for a proceeding that is a public meeting to include a notice describing the provisions of the Levine Act, as modified by SB 1439.
2. Political Reform Act of 1974: California voters passed an initiative, Proposition 9, in 1974 that created the FPPC and codified significant restrictions and prohibitions on candidates, officeholders, and lobbyists. That initiative is commonly known as the PRA. Amendments to the PRA that are not submitted to the voters, such as those contained in this bill, must further the purposes of the initiative and require a two-thirds vote of both houses of the Legislature.
3. Recent Amendments: The March 19, 2024, version of this bill proposed to revert the Levine Act to the form that existed in 2022 before the passage of SB 1439. Authors amendments adopted on April 16, 2024, however, substantially amended the bill to include the current contents. It is unclear whether position letters related to the prior version of the bill are relevant to the current version. Accordingly, this committee analysis does not reflect position letters submitted to the committee that relate to the prior version of the bill.

REGISTERED SUPPORT / OPPOSITION:

Support

California Building Industry Association
PowerCA Action

Opposition

California Common Cause

Analysis Prepared by: Ethan Jones / ELECTIONS / (916) 319-2094