Important Updates to California’s “Pay to Play” Contribution Bans Go into Effect in 2025
More Action By the FPPC Expected
Introduction to the Levine Act
In 2022, California lawmakers expanded the Levine Act (Government Code Section 84308) to apply to local elected officials. This represented a significant shift in the state’s four-decade-old “Pay to Play” law. Previously, the Levine Act, which restricts participation in “licenses, permits, and other entitlements for use” if a covered official received a contribution from a party or participant in the proceeding, only applied to officials serving in an appointed capacity.
SB 1439 expanded the reach of the Levine Act to cover all appointed and local elected officials. This includes members of city councils and boards of supervisors, making them subject to the Levine Act’s restrictions and disqualification rules. SB 1439 has been in effect since 2023, and the Fair Political Practices Commission (FPPC) has since adopted numerous regulations to clarify and interpret the Levine Act.
Key Updates in 2024
Two state senate bills, SB 1243 and SB 1181, introduced significant updates to address some of the difficulties that local agencies and covered officials encountered with the expanded rules. These amendments include:
- Increased Contribution Threshold: The Levine Act contribution threshold was raised from $250 to $500. Contributions of more than $500 that are made beginning on January 1, 2025 will trigger the Levine Act’s prohibition and disqualification rules. Certain contributions continue to be aggregated for purposes of this threshold.
- Prohibition on Agent Contributions: Contributions by agents of a party or participant are no longer aggregated with the party or participant, but instead are prohibited.
- Contract Exclusions: Certain contracts are excluded from the Levine Act’s definition of a proceeding, including:
- Competitively bid contracts required by law, agency policy, or rule to be awarded via a competitive process
- Labor contracts
- Personal employment contracts
- Contracts under $50,000
- Contracts between two or more government agencies
- Contracts where no party receives financial compensation
- Periodic review or renewal of development agreements or competitively bid contracts with non-material modifications
- Extended Cure Period: The deadline for a covered official to return contributions of more than $500 has increased from 14 days to 30 days. This applies if the officer accepted, solicited, or received the contributions during the 12 months following a final decision on a license, permit, or entitlement for use.
- Other Notable Changes: The definition of a “participant” in a proceeding now excludes persons whose financial interest in the decision results solely from an increase or decrease in membership dues. This codifies advice by the FPPC and provides clarity to entities such as trade groups, chambers of commerce, and unions seeking to influence local proceedings.
Changes to Los Angeles MTA (LA MTA) Pay-to-Play Law
Assembly Bill 3123 repealed California Public Utilities Code Section 130051.20, which imposed a unique and restrictive $10 campaign contribution “pay to play” law that applied only to the Los Angeles Metropolitan Transportation Authority (LA MTA). According to the bill’s author, the Legislature’s intent with expanding the Levine Act to all appointed and local elected boards was to create a uniform ethics law. AB 3123 aligns the Los Angeles County Metro Board with current state law, explicitly applying the Levine Act to the Board in their primary elected positions.
Looking Forward
With the recent amendments to the Levine Act, we expect the FPPC to propose new regulations to further clarify its applications.
