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New Behested Payment Provisions of City Law Effective January 23, 2022

This reminder notice is being provided to all Elected officials, Department Heads, Board and City Commission members, and Conflict of Interest Code-designated employees who are required to file their Annual Statement of Economic Interest (Form 700) electronically by April 1st. The behested payment content of this notice addresses provisions of current law. Please note that this information supersedes the behested payment content that appears in existing online Ethics and Sunshine training, which has not yet been updated to reflect this information as of the date of this reminder notice.

On January 23, 2022, a new behested payments law took effect in San Francisco following its unanimous adoption by the Board of Supervisors on December 24, 2021. As adopted, Ordinance No. 201132 amends the San Francisco Campaign and Governmental Conduct Code to prohibit elected officials and other officials and employees specified in the law from soliciting behested payments from any person who is an “interested party” for them as local law defines that term. Prior to this new legislation, City law allowed behested payments to be solicited from an “interested party” subject to specific public disclosure requirements. As discussed more below, the City’s new law prohibits the practice of specified officials and employees soliciting any behested payments from persons that are an interested party to them and, as a result, has eliminated the local behested payments filing requirement that applied previously.

Important Note:
The City’s new law does not change existing disclosure requirements for elected officials under California State law that apply to behested payments they solicit from persons who are not defined as an “interested party.” State law continues to require elected officials report all behested payments of $5,000 or more made at their behest. Such payments are reported to the official’s agency on the State Form 803. For more information about this requirement, click here.

Charged under the City Charter with authority to administer and enforce the Campaign and Governmental Conduct Code, the Ethics Commission has compiled the information below to assist the public and those who are subject to the revised behested payments ordinance to become familiar with the new provisions of law. Additional information can be found on the Commission’s website. For compliance guidance or specific advice on how these laws may apply prospectively to individual circumstances, please feel free to contact the Commission at ethics.commission@sfgov.org or to contact us by phone to speak with a member of the Commission Staff.

Overview of Legislation Enacted

• As discussed more fully below, the City’s new behested payment law makes three key changes. Effective January 23, 2022, City law:
  now prohibits the direct or indirect solicitation of behested payments from “interested parties” by elected officials, department heads, members of boards and commissions, and specified City employees.
• expands the definition of interested party to include certain City contractors who were not previously covered by that definition, persons seeking to influence City officers and employees, registered lobbyists, and registered permit consultants.
• has eliminated the City’s behested payment disclosure filing that previously required officials to report behested payments solicited from interested parties. This disclosure report, which previously applied to elected officials, commissioners, board members, and donors and recipients of behested payments, was deleted from the law because the law now prohibits these kinds of behested payment solicitations.

Whose Activities are Covered Under the New Law?

Elected officials, members of City boards and commissions, department heads remain subject to the City’s behested payment law, which now prohibits them from soliciting any bested payments from an “interested party.”
In addition, employees who are designated in their departmental Conflict of Interest Code to file a Statement of Economic Interests (Form 700) are also prohibited from soliciting behested payments from a person who is an “interested party” to them. For a list of positions that qualify as a Code-designated Form 700 filer, see Article III, Chapter 1 of the Campaign and Governmental Conduct Code).

Expanded Definition of “Interested Party”

An “interested party” is:

• a party, participant (or agent of a party or participant) involved in a proceeding regarding administrative enforcement, a license, a permit, or other entitlement for use, before you or your board, commission, or department;
• an organization that is contracting or seeking to contract with your board, commission, or department, including the directors, officers, and major shareholders of that organization;
• a person who has attempted to influence you in any legislative or administrative action;
• a contact lobbyist or expenditure lobbyist who has registered with the Ethics Commission to lobby your board, commission, or department; or
• a permit consultant who has registered with the Ethics Commission, if the permit consultant has reported any contacts with your board, commission, or department to carry out permit consulting services during the prior 12 months.

What is Exempted from the Definition of “Interested Party”

“Interested party” does not include:

• a nonprofit organization that the Charter has explicitly authorized to support one of the arts and culture departments established in Article V (i.e., the nonprofits that support the Asian Art Museum and the Fine Arts Museum);
• any federal or State government agency;
• an individual solely because the individual is an uncompensated board member of a nonprofit organization that is an interested party; or
• for the purposes of the “contractor and prospective contractor” category, “interested party” does not include a person providing a grant to the City or a City department.

Local Behested Payments Filing Requirements are Now Eliminated

The ordinance deletes the following local behested payment filing obligations under Campaign and Governmental Conduct Code, Article III, Chapter 6:

• Section 3.610(a) reports – applied primarily to elected officials, commissioners, and board
  members who directly or indirectly solicit payments totaling $1,000 or more from an interested party;
• Section 3.620 reports – filing by donors (“interested parties”) who make a behested payment of $10,000 or more in a calendar year; and
• Section 3.630 reports – filing by recipients of major behested payments totaling $100,000 or more in a calendar year.

Over What Time Period Does the Behested Payment Solicitation Prohibition Apply?

The period of time during which the prohibition applies depends on what makes a person an interested party. It is typically 12 months after a certain event involving the interested party occurs. The rule applies in the following ways:

• For a party, participant or agent of a party of participant in a proceeding before your department, the rule applies while the matter is pending and for 12 months following the end of such a proceeding;
• For contractors who are a party to or seeking a contract with your department, the rule applies from the submission of a proposal until the later of either the termination of negotiations for the contract or 12 months following the end of the contract’s term;
• For persons who have attempted to influence you in any legislative or administrative action, the rule applies for 12 months following the date of each attempt to influence;
• For a registered contact or expenditure lobbyist, the rule applies anytime the contact lobbyist or expenditure lobbyist is registered to lobby your department; and
• For a registered permit consultant, the rule applies if the permit consultant has reported any contacts with your department to carry out permit consulting services during the prior 12 months.

The “Public Appeal” Exemption

Under the law, the prohibition on soliciting behested payments from interested parties does not apply to solicitations made through a “public appeal,” even if an interested party receives the solicitation.

A “public appeal” is a request for a payment when such request is made by means of television, radio, billboard, a public message on an online platform, the distribution of 200 or more identical pieces of printed material, the distribution of a single email to 200 or more recipients, or a speech to a group of 20 or more individuals.

EXAMPLES OF HOW THE NEW BEHESTED PAYMENT LAW APPLIES

What is NOT Allowed Under the Law

• An official asking a company executive to make a behested payment if that executive’s company is a party to, or is seeking to enter into, a City contract with the official’s department.
  Why? The executive is an interested party.
• An official asking a permit applicant who is seeking a permit from the official’s department to make a behested payment
  Why? The permit applicant is an interested party.
• An official asking a person to make a behested payment if the person has sought to influence the official’s action on a City matter in the last 12 months.
  Why? The person is an interested party.
• An official asking a lobbyist who is registered to lobby the official’s department to make a behested payment.
  Why? The lobbyist is an interested party.
• An official asking a permit consultant who has reported contacting the official’s department in the last 12 months regarding a permit.
  Why? The permit consultant is an interested party.
• An official asking a person to make a behested payment if that person is the subject of an administrative enforcement proceeding before the official’s department.
  Why? The person is an interested party.

What Is Permitted Under the Law

• Officials can solicit behested payments from anyone who is not an interested party for them.
  Note: It is likely that the vast majority of individuals in communities served by the official will not be interested parties to that official. The law does not restrict the solicitation of behested payments from those individuals so long as they are not an “interested party.” As noted above, for elected officials, State law may continue to require disclosure of those activities.
• Officials can solicit behested payments TO any organization they may wish to, including an organization that is an interested party to the official.
  Note: The law prohibits officials from asking an “interested party” to make a behested payment. The law does not prohibit officials from asking a permissible source to make a payment to any organization, including an organization that may be an interested party for the official. The law only requires that the source of the payment is not an “interested party” to the official. For example, if the Board of Supervisors approves a grant to a nonprofit organization, Members of the Board may solicit behested payments for that non-profit organization, so long as they do not solicit behested payments from an “interested party.” In this example it does not matter that the non-profit that is a recipient of a behested payment is an interested party.
• Officials can solicit behested payments from an interested party if the request is made through a public appeal.
  Note: A public appeal is one made through TV, radio, public social media social media post, 200 or more identical pieces of printed material, the distribution of a single email to 200 or more recipients, or through a speech or presentation to 20 or more people.
• City employees whose positions are not designated in their departmental Conflict of Interest Code as a designated Form 700 filer are not subject to the prohibition.

For More Information

Additional information is available by visiting the Ethics Commission’s online Behested Payments page.