In 2022, California passed a landmark political reform bill aimed at limiting “pay-to-play” practices in local politics. The bill, SB 1487, placed strict limits on campaign contributions from those seeking contracts, licenses or permits from local governments. Just two years later, legislators are moving to gut the law amid intense lobbying from business and labor interests. This article traces the rise and fall of California’s pay-to-play legislation.
The Problem of Pay-To-Play
Pay-to-play refers to the practice of individuals or companies making campaign contributions to politicians in order to influence them to award lucrative government contracts. It creates an uneven playing field with the highest bidders often winning contracts over more qualified competitors simply because they donated more money.
Pay-to-play scandals have plagued local governments across California In Los Angeles, former councilmembers Jose Huizar and Mark Ridley-Thomas were convicted for taking bribes from developers in exchange for approval of downtown high-rise projects In Huntington Park, over 30% of $125,000 in campaign contributions to city council members came from just eight contractors and executives who were awarded $11 million in city contracts.
These scandals highlighted the need to limit pay-to-play activities to restore public trust in local governance
The Passage of SB 1487 – California’s Pay-To-Play Law
To address pay-to-play corruption, Senator Steve Glazer introduced SB 1487, the California Anti-Corruption Act of 2022. The law placed strict limits on campaign contributions to local elected officials from those seeking “entitlements for use” – contracts, licenses, permits or other authorizations needed to conduct business.
Specifically, it prohibited contributors with matters before a city council, county board or other local agency from donating more than $250 to officials in that agency while their matter was pending and for 3 months afterwards. Officials were required to recuse themselves from decisions involving major donors.
SB 1487 passed unanimously through the Legislature and was hailed by its supporters as the most significant local political reform in decades. Senator Glazer declared the law would “help restore public trust by reducing special interest influences.”
The Gutting of SB 1487
Yet just months after it took effect, business groups sued to overturn SB 1487, alleging it violated free speech rights. When they lost in court, lobbyists took the fight to the Legislature.
In 2024, Senator Bill Dodd introduced SB 1243 to significantly weaken SB 1487. The bill increased the contribution limit tenfold, to $2500. It exempted housing developers, unions and other influential groups from the restrictions.
SB 1243 swiftly passed the Legislature with support from many of the same lawmakers who voted for SB 1487 two years prior. In explaining his reversal, Senator Dodd said “I don’t think anybody really read into the details” of SB 1487 before voting for it.
Senator Glazer blasted SB 1243, saying it would “essentially open the floodgates to unlimited campaign contributions.” He called it a “cynical maneuver by a handful of powerful special interests.”
Advocates decried what they saw as a bait-and-switch pulled on voters who believed SB 1487 would curb pay-to-play corruption. They vowed to continue pushing bans on contractor contributions through local ballot measures and ordinances.
The Future of Anti-Corruption Reform
The gutting of SB 1487 after near unanimous initial support laid bare the immense lobbying influence developers, unions and other interest groups wield in Sacramento.
It demonstrated how quickly landmark reforms can be dismantled before they have time to change longstanding practices and power dynamics.
Yet corruption scandals continue to roil California’s local governments. SB 1487’s demise makes grassroots anti-corruption campaigns all the more important to restore trust in cities, counties and special districts across the state. Voters must remain vigilant to ensure meaningful pay-to-play bans remain in place where politicians have failed to act.
Though SB 1487 was short-lived, the ideals behind it live on. The quest for integrity and fairness in California’s democracy continues.
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Existing Provisions Remain in Place Through 2024 Election Year
Governor Newsom signed a bill on September 30 that will update the State’s “pay to play” campaign contribution law commonly known as the “Levine Act” starting on January 1, 2025.
The Levine Act currently prohibits agency officers from accepting, soliciting or directing a contribution of more than $250 from a party or participant (or their agents) (1) while a proceeding involving a license, permit, or other entitlement for use, including most contracts, is pending before the agency and (2) for 12 months after a decision. The law also contains disclosure, recusal, and other requirements applicable to an officer who has received such contributions, and similar requirements applicable to parties, participants, and their agents.
Senate Bill 1243 (“SB 1243”) will make the following changes to the Levine Act in 2025:
- Raises the threshold for covered contributions to officers from $250 to $500;
- Extends from 14 days to 30 days the period during which an officer can return and “cure” a contribution in excess of the threshold that the officer accepted, solicited, or received during the 12 months following a final decision on a license, permit or entitlement;
- Establishes that the term “participant” excludes individuals whose only financial interest results from a change in membership dues; and
- Codifies that the term “pending,” as it relates to the officer, is when:
- The item involving the license, permit, or other entitlement for use is placed on the agenda; or
- The officer knows such license, permit, or other entitlement for use is within the jurisdiction of the officer’s agency, and it is reasonably foreseeable that the decision will come before the officer for a decision.
- Excludes the following contracts from the definition of “licenses, permits, or other entitlements for use” for the purposes of the Act:
- Contracts under $50,000;
- Contracts between two or more government agencies;
- Contracts where no party receives financial compensation; and
- Periodic review or renewal of development agreements or competitively bid contracts with non-material modifications.
Additionally, SB 1243 exempts a city attorney or county counsel from the definition of “officer” covered by the Act if the attorney’s role in the decision is solely to provide legal advice and the attorney has no authority to make a final decision in the proceeding.
The current provisions of the Levine Act, including the $250 contribution amount, remain in effect through 2024, and certain prohibitions or requirements arising from existing law may continue for up to 12 months after the law is updated as of January 1, 2025. As it did with the major update to the Levine Act in 2023, the Fair Political Practices Commission will likely need to provide guidance on certain timing issues for 2025 contributions that may relate to 2024 proceedings.
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.
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FAQ
Is there a no pay no play law in California?
In California, a “no pay, no play” state rule says that an uninsured driver who wasn’t at fault can’t sue an insured at-fault driver for damages like pain and suffering or inconvenience.
What is the pay to play rule limit?
For one year after the final decision of a proceeding, officials are not allowed to accept, ask for, or direct a contribution of more than $250 from a party or participant.
What is the California pay Transparency Act?
California’s salary range disclosure law requires employers to post salary ranges on all active job postings. Starting Jan. Posted jobs in California with 15 or more employees must include a pay range as of January 1, 2023.
What is the Levine Act in California?
Section 84308 of California’s government code, also known as the “Levine Act,” says that any officer of the City of Lincoln—that is, any elected or appointed officer, alternate, or candidate for elected office—cannot take part in any action or consideration related to a proceeding if they receive political contributions from
Will a 2022 ‘pay to play’ law change California?
A 2022 law seeks to curb California ‘pay to play’ by local elected officials. A bill would significantly change it.
Are California students protected under the fair pay to play act?
This protects California students under the Fair Pay to Play Act after the National Collegiate Athletic Association (NCAA) changed some rules. These changes let colleges and universities make their own rules in states that don’t have name, image, or likeness laws or states that don’t have laws yet.
Will California lawmakers gut ‘pay to play’ law?
California Ok’d a law to stop ‘pay to play’ in local politics. Now, lawmakers can take it apart. On April 29, 2024, lawmakers in the Assembly at the state Capitol in Sacramento Photo by Miguel Gutierrez Jr. , CalMatters.
Will California stop ‘pay to play’ in local politics?
California passed a law to stop ‘pay to play’ in local politics. After two years, lawmakers want to get rid of it. On April 29, 2024, lawmakers in the Assembly at the state Capitol in Sacramento (Miguel Gutierrez Jr. , CalMatters) By BY YUE STELLA YU | CalMatters.
Who signed the fair pay to play act?
In 2019, Governor Newsom signed the Fair Pay to Play Act along with Senator Skinner and Senator Bradford, who wrote it, as well as NBA legend LeBron James, UCLA gymnast Katelyn Ohashi, WNBA star Diana Taurasi, and Rich Paul, who used to play basketball at UCLA.
When does the fair pay to play Act take effect?
Under SB 26, the Fair Pay to Play Act will take effect on Sept. 1, 2021, ahead of the original January 2023 implementation date.
