Tickets to Political and Non-Profit
Fundraisers Now Have Value
Since the passage of Measure R in 2006, gifts to a
City official have been prohibited when made by a lobbyist or
a lobbying firm that is a restricted source to the official.
LAMC §49.5.10(A)(4). A gift is
defined as anything of value for which equal or greater
consideration is not received and may include a rebate or
discount, unless the rebate or discount is made in the regular
course of business to the public without regard to official
status. LAMC §49.5.2.
By definition, gifts may include tickets, passes, and
other admission privileges to various
events.
Effective October 4, 2008, Section 18946.4 of Title
2 of the California Code of Regulations was amended to change
the way that tickets to non-profit and political fundraisers
are valued and reported.
Formerly, tickets to these types of events were
determined to have no value, regardless of the source. However, the Fair
Political Practices Commission has established a new valuation
system, which is explained below; and tickets to these events
may now have value.
When tickets to non-profit and political fundraisers do
have value, lobbyists and lobbying firms that are restricted
sources to City officials may no longer give those tickets to
those officials.
Lobbyist employers must also be aware of the
changes to the law.
While they are not subject to the lobbyist and lobbying
firm gift prohibition, lobbyist employers may not give more
than $100 in gifts per year to City officials to whom they are
restricted sources.
For non-profit fundraisers
a) If the
admission ticket clearly states that a portion of the
ticket price is a donation to the organization, the gift
value is the face value of the ticket reduced by the amount of
the donation. 2
Cal. Code of Regs. §
18946.4(a)(1).
Example: The United
Way holds a fundraiser. A ticket to the event
states a $150 face value with a $100 tax-deductible
donation. The
gift value for the event ticket is $50:
$150 (face value of ticket)
– $100
(clearly stated amount of
donation)
$50 (gift value)
b) If there
is no ticket indicating a stated price or there is no
stated donation, the gift value is the pro rata share of
the cost of any food and beverages, plus any items presented
to an attendee. 2 Cal. Code of Regs. §
18946.4(a)(2).
Example: The American Heart
Association has a fundraiser. There are no tickets
required for admission to the event. From the organizers of
the event, you learn that the pro rata share of food and
beverages for each attendee is $40. Additionally, each
attendee receives a gift bag worth $25. The gift value for
admission to the event is $65:
$40 (pro rata share of food/beverages)
+ $25
(value of gift items)
$65 (total value)
c) If you are
a lobbyist employer that is a 501(c)(3) organization, there
are certain instances when you may give a City official a
single ticket to your own fundraiser and the ticket will have
no gift value. This holds true when subtracting the amount
allowable as a deduction under applicable tax law from the
face value of the ticket results in an amount that does not
exceed the state's annual gift limit of $390. 2 Cal.
Code of Regs. § 18946.4(b).
Example: Your organization has
a fundraiser and you give a ticket to the event that has a
$500 face value to a City official. The tax deductible
portion of the ticket is $200. Under Section 18946.4(b), the
ticket has no value:
$500 (face value of ticket)
– $200 (tax
deductible portion)
$300 (soft value of ticket)
Because
$300 does not exceed the state’s annual gift limit, the ticket
has no value.
This no-value situation only applies when the
source of the ticket is the 501(c)(3) organization, itself,
and only to a single ticket per City official. Additionally, if the
organization holds multiple fundraisers in a year, the
combined total of the deductible amounts of all single event
tickets given to the official in that calendar year may not
exceed $390.
For political fundraisers
a)
A committee or candidate holding an event in California may give a single
ticket per event to a City official and the ticket will have
no value. 2
Cal. Code of Regs. §
18946.4(c). For
additional tickets and for tickets that are not given by the
committee or candidate, the value of the ticket is either its
face value or, if there is no face value, the amount at which
it is offered for sale to the public.
To see the full amended text of Section 18946.4,
please click here (http://www.fppc.ca.gov/legal/new-regs/18946.4.pdf)
The City Ethics Commission is committed to helping
you comply with the law.
Should you have questions regarding this or any other
law under our purview, please call us at
213-978-1960.
Lobbying Ordinance
Review
The City Ethics Commission continues its
comprehensive review of the municipal lobbying ordinance. At its meeting on
November 18, 2008, our commissioners will consider the types
of activities that should define a lobbyist’s conduct, as well
as what criteria should be used to determine whether an
individual should register as a lobbyist.
Staff memos prepared for the September 2008
(http://ethics.lacity.org/PDF/agenda/2008/September/090508_A9_RegisUnderMLO.pdf)
and October 2008
(http://ethics.lacity.org/pdf/lobbying/ProposedUpdateMLO_10.07.2008.pdflink)
meetings are available on our website.
The commission encourages your feedback on this
issue. Please
submit written comments by November 7 for consideration at the
November commission meeting to ethics.policy@lacity.org.
Written comments received after that date will be
considered at the December meeting. You are also welcome to
participate in the discussion at the commission’s meeting on
November 18.
