Campaign Alert (October 2022)

Governor Newsom signed a law last week which will require city councilpersons and members of county boards of supervisors to recuse themselves from voting on real estate projects and government contracting decisions if they have received a contribution over $250 from the property owner or prospective contractors, or their agents, in the prior 12 months. The law also prohibits property owners, prospective contractors and their agents from making contributions over $250 while the land use entitlement or contract proceeding is pending and for 12 months afterwards. (SB 1439.)

You may recognize this law because the $250 recusal threshold and prohibition has applied to members of state and local appointed boards and commissions for 40 years. (It was originally referred to as the “Levine Act” and now just goes by “section 84308.”) This new law simply adds city councils and board of supervisors to the current law.

SB 1439 was supported by Common Cause, the League of Women Voters and other “good government” groups – though this new statewide law seems to follow in the footsteps of local laws in San Francisco and Los Angeles which target contributions from real estate entities. These local laws have been promoted by more left-leaning, anti-development special interests which believe that real estate money is more likely to flow to more moderate candidates – this new statewide law is likely to impact campaign contributions to local officials on a much broader and more drastic level.

One notable caveat: extending the disqualification rule to city councils and boards of supervisors raises a very real legal issue. The California Supreme Court issued a ruling over 40 years ago which clearly states that elected officials are legally permitted to vote on matters impacting their campaign contributors; this court case in fact involved a real estate entity which had made political contributions to a Councilperson before the Council voted on the project. (Woodland Hills Residents Assn. v. City Council(1980) 26 Cal.3d 938.) This California Supreme Court precedent applies directly to SB 1439 – and sets up a collision course between the law and the courts.

If a court does not enjoin the law before it goes into effect, one unanswered question is whether contributions made this year, before the law takes effect, will trigger disqualification if a project comes before a city council and board of supervisors next year. Although courts generally disfavor the “retroactive” application of laws, there is an argument that the law itself is not retroactive –it will only require disqualification for city council and board of supervisor votes occurring on or after January 1, 2023 – but it simply uses facts born prior to the effective date to calculate disqualification.