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Legal Alert

New Gift Rules Effective January 1, 2012

New Gift Rules Effective January 1, 2012

The Fair Political Practices Commission ("FPPC") recently adopted wholesale changes to the regulations governing the acceptance of gifts by state and local public officials.  The goals of the overhaul were to clarify the regulations, ensure consistency between regulations, close certain loopholes, and codify some exceptions which had already been created by FPPC opinions or advice letters.  The proposed changes seem to achieve these goals, though as with any regulatory changes of this magnitude, there will likely be some unintended consequences that become apparent as public officials throughout the state begin to comply with the new regulations. 

Select highlights of the changes are as follows: 

Catch-All Exceptions: The FPPC has created two new catch-all exceptions to the gifts rules for gifts from friends when the friendships are unrelated to the official's status or activities as an official (the "Best Friends Forever" or "BFF" exception), and for gifts from someone with whom the official otherwise has an existing relationship as long as the official does not participate in the kinds of governmental decisions that could have a financial effect on the gift giver.  In addition, while the FPPC had already exempted reciprocal exchanges of gifts for birthdays, holidays and other occasions from the operation of the gift rules, the regulations now also exempt more routine rotating payments, such as for meals or activities, as long as the exchanges are roughly equal in value over the course of a year and no single expense exceeds the annual gift limit (currently $420).

Tickets to Nonprofit and Political Fundraisers:   A public official will now be able to receive two  free tickets (up from one ticket) to a charitable or political fundraiser from the organization hosting the event without receiving a gift.  In addition, a ticket to any nonprofit or political fundraiser (other than free tickets described above) will now be valued at the value of the benefit received (food, entertainment, gift bags, etc.) rather than the face value of the ticket, which often includes a donation to the nonprofit or political organization. 

Ceremonial Roles:   In response to some recent abuses of public officials attending sporting events, concerts, and other events while claiming that they had performed a "ceremonial role" at the events, the FPPC regulations will now allow a public official to receive a ticket to an event without it counting as a gift only if the ceremonial role which the public official performs is the focus of the event for a period of time (e.g., throwing out the first pitch).  In addition, the revised regulation now places the burden of disclosing the receipt of tickets or passes under this exception on the official's agency, and allows public agencies to adopt their own policies limiting or expanding the types of permissible ceremonial roles their officials can perform under the regulation. 

Acts of Neighborliness:  The FPPC codified an exception from the definition of "gift"  for "acts of neighborliness" (e.g., loan of a tool, a cup of sugar, an occasional ride, assistance in making a home repair, or taking care of a pet).

Acts of Human Compassion:  The FPPC also created a new exception from the definition of "gift" for a public official's receipt of assistance in meeting medical or living expenses resulting from an accident, illness, loss of employment, death or unexpected calamity, or the adoption of an orphaned child, provided that the person offering the assistance has a prior relationship with, and does not have business pending before, the public official.

Bona Fide Dating Relationships:  The FPPC codified a limited exception for gifts exchanged between a public official and an individual whom the official is dating.  If the official is dating an individual who has business pending before the official's agency, the gifts would not be subject to gift limits or disclosure, but would be subject to the conflict of interest provisions of the Political Reform Act. 

Although the proposed changes were supposed to include a new definition of "personal benefit," which would have allowed public officials to receive non-extravagant benefits while performing official duties, as well as "payments to agency" and travel regulations, these proposed changes were tabled for consideration in early 2012.

The new regulations will take effect on January 1, 2012, so public officials and employees receiving gifts this holiday season should continue to follow the gift rules in place prior to the adoption of the above changes.

If you have any questions or would like more information regarding the gift rules, please contact Kevin Heneghan, Shayna van Hoften or your Hanson Bridgett attorney. 

For More Information, Please Contact:

Shayna Mittler van Hoften
Shayna van Hoften
Walnut Creek, CA