Gov. Newsom signs SB 1439, Expanding the Levine Act’s Restrictions

Local elected officials – including city council members, special district board members and school district board members – will now have to “conflict out” of certain proceedings involving persons that made contributions to their respective political campaigns. Gov. Newsom signed SB 1439 into law, making a number of changes to the “Levine Act,” which is a part of the Political Reform Act. The Levine Act previously only applied to local governing boards composed of appointed officials, such as joint powers authorities or other regional agencies whose boards are appointed by their member agencies. Effective Jan. 1, 2023, SB 1439 extends the Levine Act’s coverage to elected governing boards.

The Levine Act will now impose two key duties on city council and district board members. First, it will prohibit accepting, soliciting or directing a campaign contribution of $250 if the donor is involved in a proceeding involving a license, permit or other entitlement for use, including a contract award, that is pending before the agency. Under SB 1439, this prohibition continues for 12 months following the proceeding. (It was previously three months.) Second, the Levine Act will now require city council and district board members to recuse from any proceeding involving a license, permit or other entitlement for use, including a contract award, if the member has received a campaign contribution from a person involved in the proceeding within the previous 12 months.

The Levine Act applies to both the parties directly involved in the proceeding, such as an applicant for an entitlement, as well as to other participants who actively support or oppose a particular decision in the proceeding. As with other provisions of the Political Reform Act, officials with a Levine Act conflict of interest cannot make, participate in making, or attempt to influence any such proceeding. The rule does not apply to labor contracts, personal employment contracts or contracts that are competitively bid.

In light of SB 1439, both elected and appointed officials of a local government agency must therefore do all of the following:

• Disclose. Before participating in any decision in a proceeding involving a license, permit or other entitlement for use (including certain contracts), an officer who received a contribution over $250 in the preceding 12 months from a party or any participant in the proceeding must disclose that fact on the record.
• Recuse. If the officer knows or has reason to know that the party or participant who made the contribution has a financial interest in the decision, the officer must not make – or participate in making – the decision.
  • Or Return. If the officer returns the contribution within 30 days from the time the officer knows or should have known about the contribution and relevant proceeding, the officer may participate in the decision.
• Refuse. While the proceeding is pending for 12 months after a final decision is rendered, an officer must not accept, solicit or direct a contribution of more than $250 from the party or participant if the officer knows or has reason to know the party, participant or the party’s or participant’s agent has a financial interest in the decision.
  • Or Return. If an officer accepts, solicits or directs a contribution of more than $250 during the 12 months after the date a final decision is rendered in the proceeding, the officer may cure the violation by returning the contribution, or the portion of the contribution that exceeds $250, within 14 days of accepting, soliciting or directing the contribution, whichever comes latest. This opportunity to cure is only available if the officer did not knowingly and willfully accept, solicit or direct the prohibited contribution and the officer or officer’s controlled committee keeps a record of curing the violation.

SB 1439 presents a significant change for local elected officials because campaign donations previously did not give rise to a conflict of interest and the Levine Act did not apply to the agencies that officials were elected to represent. Thus, elected officials will need to be aware of these new “refuse and recuse” requirements.

The Levine Act is located at Government Code section 84308. If you have any questions regarding the applicability of this law, please contact your city attorney or agency counsel.

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