California Campaign Contribution Law Impacts Land Use Businesses

In brief

A new campaign contribution law that became effective January 1, 2023 can cause major headaches for unaware land use permit, license, and entitlement seekers. Among other things, the law, known as SB 1439, would disqualify a local elected official from making a decision on a land use permit, license, or entitlement if the official had received a campaign contribution of $250 or more from the applicant within the preceding 12 months.

In detail

Earlier this year a California law went into effect that expanded the state’s “pay-to-play” restrictions. The new law contains three central provisions:  

1) it prohibits local elected officials from accepting a campaign contribution of $250 or more from a party with a pending application for a use permit, license or entitlement, and for 12 months after a final decision is made on that party’s application;

2) it prohibits a local elected official from voting on any use permit, license, or entitlement where the local elected official has accepted a campaign contribution of $250 or more from the applicant within the preceding 12 months, and requires the official to disclose such contributions; and

3) it prohibits a party from contributing more than $250 to the campaign fund for any local elected official while an application for a use permit, license, or entitlement is pending before that official, and for 12 months following a final decision on that application, and requires applicants to disclose any such contributions made in the 12 months prior to submitting a land use application.

There are heavy consequences for those who inadvertently violate the law. A local elected official is required to recuse her or himself from a permit, license, or other use entitlement decision if the officer has received a contribution of more than $250 from acompany within the preceding 12 months. Violators are also subject to fines, and in some cases contributions above the threshold can result in a voided decision.

On June 15, 2023, the California Fair Political Practices Commission (FPPC) adopted regulations that clarify how and when the new SB 1439 rules apply. Of note is the FPPC’s determination that the backward-looking provisions of the new law do not apply to proceedings participated in, or contributions made to or accepted, prior to January 1, 2023.

While there is pending litigation that challenges the constitutionality of the new law, entities doing business in California should ensure that updated compliance procedures are in place. There are several nuances to the new law and Everview can assist clients seeking land use permits, licenses, or other entitlements to navigate these nuances, plan to ensure local agencies can vote on decisions affecting clients, and make sure clients don’t inadvertently violate the law.