California’s Levine Act, named for its author then-California Assemblymember Mel Levine, seeks to regulate the “pay-to-play” impacts of campaign contributions in stage agency actions. It was enacted in response to reports that members of a state agency sought to raise money from private sector interests that had requests pending before their agency. Until 2022, the Act applied only to state officials and those with business before state agencies.
As we have previously discussed in this newsletter, after 40 years, the Levine Act was amended by California Senate Bill 1439 (2022) to extend its restrictions to local elected officials—such as mayors and legislators, city councils, and boards of supervisors—who had received $250 or more in campaign contributions from persons with business before the elected official.
This change in law caused significant upheaval in California politics, and curtailed the flow of campaign contributions to local officials, even where potential donors did not have business currently pending before local boards or agencies.
In an effort to ameliorate some of these impacts, the California Legislature recently passed and Governor Newsom signed two bills amending the law: SB 1243 authored by Senator Bill Dodd, and SB 1181 authored by SB 1439’s original author, Senator Steve Glazer.
Today’s Law as Amended
SB 1243 and SB 1181 make four significant changes to the Levine Act (Government Code Section 84308):
- Raises the threshold of a potentially disqualifying campaign contribution from $250 to $500 or more within the twelve (12) months before an item is “pending” before the elected official;
- Extends the period of time that a potentially disqualifying campaign contribution can be “cured” through the return of the contribution from 14 to 30 days;
- Exempts City Attorneys and County Counsels from the law, where the attorney is not the final decisionmaker;
- Clarifies when a government decision is “pending” such that the campaign contribution restrictions are triggered.
In more detail:
Dollar Amounts
The changes raise the threshold for a conflicted contribution from the previous limit of $250 to $500 (in the aggregate per candidate). Aggregated contributions of $500 and below will not trigger the Act’s recusal requirements. Further, the restrictions on campaign contributions made in the 12 months after a government decision now only applies to aggregated contributions of more than $500.
Safe Harbor/Cure Timing
The changes extend the time period for a local official to return a potentially conflicting contribution from 14 to 30 days after the official makes the covered decision or knows or should have known about the contribution and relevant proceeding (whichever is later). We anticipate that the Fair Political Practices Commission (FPPC) will institute a new rulemaking proceeding to align FPPC regulations with this new legislation.
Contributions by Agents
The changes prohibit contributions by “agents” to local officials during the entire time that the agent’s party or participant has a proceeding “pending” before the local official, board, or agency. This prohibition is broader than the ban on lobbyist contributions imposed by many jurisdictions, such as the City of Los Angeles, and covers all “agents.”
SB 1243 specifies that contributions from agents are not aggregated with those of the parties with business pending before local government boards or agencies.
SB 1243 also makes clear that persons providing technical assistance, such as architects, engineers, or similar professionals, are not agents for purposes of the Levine Act when communicating with officials purely related to their technical submissions and not otherwise attempting to influence a proceeding.
Exclusion of Local Government Counsel
SB 1243 and SB 1181 explicitly exclude County Counsel and City Attorneys from the application of the Levine Act when providing legal advice on a matter where the attorney “does not have the authority to make a final decision in the proceeding.”
When is a Proceeding “Pending”?
SB 1243 and SB 1181 provide a clear definition of when a proceeding before a local board or agency is “pending”, with a different definition applying to elected officials and those who do business before them:
- before an official or body, either:
- when the item is placed on an agenda for discussion or decision; or
- when the official knows a proceeding is within the official’s agency’s jurisdiction AND it is reasonably foreseeable that the decision will come before the official
- for a party or their agent, either:
- when an application is filed with the agency; or
- if no application is required, when the proceeding is before the agency for a decision or other action.
Prior to these changes, the definition of when a proceeding was “pending” was not included in the statute and was subject to complex FPPC regulations.
With the amendments to the Levine Act take effect as of January 1, 2025, individuals and entities with business pending before local officials, boards, and agencies should remain vigilant about potentially-conflicted campaign contributions, including by employees and current or potential agents. While the amendments somewhat reduce the Levine Act’s impact, particularly by raising the contribution threshold and providing additional time for officials to return campaign contributions, the Act remains a significant risk for individuals and entities doing business with local governments and agencies in California.