Starting next year, all elected board members, board member candidates, and heads of local educational agencies will be subject to the pay-to-play restrictions that previously were limited to appointed officials. The rules will effectively impose blackout periods on solicitation and acceptance of campaign contributions (for candidates and ballot measures) from persons and companies with business before the board for periods before, during, and after the business is concluded. While the scope of the new law is somewhat limited in some respects, it will still mark a significant shift from the current rules under which campaign contributions do not trigger a conflict of interest provisions for board members and chief executives of local educational agencies.
Senate Bill No. 1439 Expands Pay-to-Play Rules To Districts
Currently, Government Code section 84308 applies pay-to-play restrictions to boards comprised of appointed officials. However, beginning in 2023, Senate Bill No. 1439 expands these rules to all local agencies and their elected members, candidates, and agency heads (i.e., superintendents or chancellors/presidents). Importantly, it will prevent such officials from participating in decisions (including decisions on contracts) if the official has received campaign contributions from a person/company involved in the decision and will also prohibit the solicitation of campaign contributions from those who have been involved in recent decisions.
1. Which Campaign Contributions Trigger SB 1439
Campaign contributions fitting the following criteria will invoke the provisions of SB 1439:
- Amount exceeds $250;
- Contribution is:
- Made 12 months before, during, or 12 months after a “proceeding;” which means a decision involving a license, permit, or other entitlement for use, including non-bid contracts;
- Made by individual or entity involved in the proceeding; and
- Made to the campaign committee of an “officer” (defined to includes board member, board candidates, and agency heads) or to another candidate or ballot measure committee at the solicitation of one of those officers
Contributions that do not meet all of these criteria do not trigger SB 1439. Contributions that do meet these criteria may create a conflict of interest or may be prohibited.
2. Campaign Contributions Before a Proceeding May Create a Conflict of Interest
An officer may not participate in a proceeding if they accepted a campaign contribution of more than $250 from an individual or entity involved in the proceeding in the prior 12 months. The officer may not participate in the decision, and they (and the contributor) must publicly disclose the contribution as part of the proceeding. However, an officer who previously accepted such a contribution may participate in the proceeding if they refund the contribution in excess of $250 within 30 days of learning that the contributor is involved in the decision.
Example:
Program support consultant contributes $500 to board member Lee’s re-election campaign committee in October. The board will consider a contract with the same consultant in March of the following year. Board member Lee will need to recuse themselves from any involvement in consideration of the contract, unless they refund at least $250 of the contribution within 30 days of learning of the potential contract coming to the board.
3. Campaign Contributions May Not Be Made, Accepted, or Solicited After a Proceeding
An officer may not accept, solicit, or direct campaign contributions of more than $250 from an individual or entity involved in a proceeding during the pendency of the proceeding or for the 12 months following. This prohibition applies in two ways. First, it prevents an officer from accepting contributions to their own campaign committee while the proceeding is pending and for 12 months after. Second, it also prohibits an officer from soliciting or directing contributions of more than $250 to another campaign committee (including a ballot measure committee) during this time period. As a corollary to these prohibitions, SB 1439 also prohibits contributors from making such contributions.
Example:
School district approves legal services agreement with a law firm in January and places a parcel tax ballot measure on the November ballot, when two board members are also up for election. The board members would be prohibited from accepting contributions of more than $250 from the law firm. Additionally, the board member and superintendent (even in their individual capacity) would be prohibited from soliciting a contribution of more than $250 from the law firm to the campaign committee formed to support the parcel tax ballot measure
4. Officials & Contributors Must Exercise Caution in Observing New Rules
Prior to this amendment, campaign contributions to candidate campaigns and ballot measure committees generally did not trigger a conflict of interest concerns for local educational agencies. However, with SB No. 1439, both officers and contributors will need to be careful about when and how contributors are solicited, made, and accepted. As part of the Political Reform Act, these prohibitions will be enforced by the Fair Political Practices Commission which has the authority to investigate potential violations and impose fines.
Summary
In summary, major impacts of SB 1439 include the following:
Board members may not:
- Participate in any proceeding involving an individual or entity who within the past 12 months, contributed more than $250 to their campaign.
- Accept campaign contributions of more than $250 from an individual or entity involving in a proceeding during, or for 12 months following, the proceeding.
- Solicit contributions of more than $250 to any other campaign committee, including a ballot measure committee, from an individual or entity involving in a proceeding during, or for 12 months following, the proceeding.
Agency heads (i.e. superintendents, presidents/chancellors) may not:
- Solicit contributions of more than $250 to any other campaign committee, including a ballot measure committee, from an individual or entity involving in a proceeding during, or for 12 months following, the proceeding.
Given the new rules and their complexities officials should work with counsel to determine how they may apply to proceedings in which they are involved. Please contact a DWK attorney in our Board Ethics, Transparency and Accountability (BETA) Group for more information on how these rules may apply to your district.
