Land use practitioners in San Francisco need to be aware of significant new amendments to the City’s Lobbyist Ordinance that will take effect on July 26, 2014. The Lobbyist Ordinance and its regulatory and public disclosure requirements concerning lobbying activities serve an important purpose. These measures speak to the preservation of our democratic principles. The new amendments, however, go too far. They impose such drastic reporting and record-keeping requirements on the everyday business of typical land use practitioners that they likely will have a chilling effect on public participation in the political process. These new measures will only further insulate our City government from the populace and its participation in the governing process.
Moreover, not surprising for San Francisco, the new amendments reflect blatant political favoritism. Officers or employees of non-profits are excluded from the new requirements. Apparently, the City’s interest in political reform extends to everyone except the non-profit community.
One group particularly hard hit by the new amendments will be the City’s so-called “permit expediters.” The new amendments impose significant burdens on anyone who provides assistance to others in obtaining permits, which will add to the cost of doing business, slow down the permitting process, and deliver another regulatory blow to the production of housing. Just when the City is in the midst of a housing crisis.
A summary of the new amendments is as follows.
Lobbyist Qualification Threshold
The new rules change the lobbyist qualification threshold, which is now based entirely on the number of compensated lobbying contacts an individual has with a City officer. More specifically, an individual must register and report as a lobbyist if he or she makes:
- one or more compensated lobbying contacts in a calendar month with a City officer on behalf of a client, or
- five or more compensated lobbying contacts in a calendar month with City officers on behalf of the individual’s employer (unless the individual owns 20 percent or more of the employing entity).
Exemptions from Lobbyist Registration
An officer or employee of a 501(c)(3) non-profit nonprofit organization (or any organization it fiscally sponsors) is not subject to the lobbyist registration and reporting requirements when the officer or employee is communicating on behalf of that organization. Also exempt are such communications by officers and employees of 501(c)(4) non-profit organizations that file either an IRS Form 990-N or an IRS Form 990-EZ.
The new rules also narrow the current exemption for communications in connection with bidding on a City contract, negotiating the terms of a City Contract, or administering a City contract. The exemption for communications by a “party or prospective party” to a contract no longer applies to a City contractor’s outside consultants or independent contractors.
Permit Consultants (aka Permit Expediters)
The new rules create registration and reporting requirements for “permit expediters.” These new requirements are similar to, but not exactly the same as, those for lobbyists and will take effect on January 1, 2015.
The new rules require developers of major City real estate projects to file reports with the Ethics Commission disclosing donations of $5,000 or more to nonprofit entities that have lobbied the City regarding the developers’ projects. The filing requirement applies to real estate development projects costing over $1,000,000 and is triggered by the certification of an environmental impact report under the California Environmental Quality Act.
Covered City Officials
The new rules expand the list of those City officials with whom compensated lobbying contacts will trigger lobbyist registration and reporting. Whereas previously the covered City officials were limited to the Board of Supervisors, Planning Commission, Building Inspection Commission, and the like, the new officials include members of the following boards and commissions:
- Successor Agency to the former Redevelopment Agency of the City and County of San Francisco
- Oversight Board of the Successor Agency
Office of Community Investment and Infrastructure Commission
First Five Commission
Health Authority Board
Housing Authority Commission
Law Library Board of Trustees
Local Agency Formation Commission
Relocation Appeals Board
Workforce Investment San Francisco Board
Also included is any person appointed as a department head by any City board or commission.
The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben, Junius & Rose LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.