Changes to Gift Rules

Office of the General Counsel

› Regents of the University of California › Office of the General Counsel ’ Changes to Gift Rules

Changes to Gift Rules

The Fair Political Practices Commission (FPPC) revised several of the gift regulations in 2008.

  1. Gift Limit (Effective January 1, 2009)
    Effective January 1, 2009 the gift limit increased to $420. This limit will remain in effect until December 31, 2010.

    A University employee who must file a Statement of Economic Interests cannot accept gifts totaling more than $420 in a calendar year from a single source, if the employee is required to report that source on his or her Statement as described in the "disclosure category" section of the University’s Conflict of Interest Code. (This provision has not changed, except for the increase in the gift limit.)
  2. Gifts to an Agency (Effective July 1, 2008)
    Regulation 18944.2, Gifts to an Agency, establishes the criteria under which a payment that provides a personal benefit to a public official may be considered a gift to the official's agency instead of a gift to the official. Under the revised rules, a payment is a gift to the public official's agency and not to the public official if all of the following requirements are met:
    1. Agency Controls Use of Payment: The Agency head, or his or her designee, determines and controls the agency's use of the payment. The donor may identify a purpose for the payment, but the donor may not designate by name, title, class, or otherwise, an official who may use the payment. If the payment will provide a personal benefit to an official, the agency head, or his or her designee, shall select the individual who will use it. The agency official who determines and controls the agency's use of the payment may not select himself or herself as the individual who will use the payment.
    2. Official Agency Business: The payment must be used for official agency business.
    3. Agency Reports the Gift: Within 30 days after use of the payment, the agency reports the payment on a form prescribed by the FPPC Form 801.

    The FPPC's revised criteria stipulate that the donor may not designate the "class" of official who can use the payment. The FPPC has advised that this prohibits a donor from limiting a payment to even a large class of officials.

    The amended regulation substantially revises and updates the reporting of gifts given to an agency. Gifts that provide a personal benefit, for example a gift of travel, must be reported on a Form 801, which must be sent to the FPPC and the information posted on the agency’s web pages. The President has delegated to the campuses and the Laboratory the responsibility to select the individual who will use a gift, to report the payment to the FPPC and to post the information.

    The regulation imposes three new limitations on travel payments provided by a third party:
    1. A payment for travel, including transportation, lodging, and meals cannot be used by officials that file under Government Code section 87200 (members of the Board of Regents, the President, the Chief Investment Officer and Vice President for Investments and Acting Treasurer of The Regents, and the Associate Chief Investment Officer). In certain circumstances, these officials can accept travel payments in connection with a speech or from a government, a government agency, a nonprofit 501(c)(3) entity, or a bona fide public or private educational institution, but the payments are not considered gifts to the University, but gifts to the officials and are reportable on the official’s Statement of Economic Interests, Form 700.
    2. The regulation limits travel payments from a third party to the amount of the agency's own reimbursement rates. The FPPC characterizes this provision as an "anti-lavish" provision. An amount in excess of the University’s reimbursement rates is a gift to the traveler.
    3. The agency head or his or her designee must pre-approve the travel in advance of the trip.

    Before the regulation was revised, one of the criteria for determining whether a gift was a gift to the agency, rather than to the official who used it, was that the agency had to "receive" and control the use of the gift. The revised regulation removes the word "receive." This change is meant to clarify that the donor may make a monetary payment for goods or services directly to the vendor of the goods or services so long as the agency controls the use of the goods or services. For example, a donor may offer to pay the airfare for an official's travel. If the University independently selects the official who will take the trip, the donor can then purchase the tickets in the name of the official directly from the airfare provider.
  3. Tickets and Passes to Events (Effective February 7, 2009)
    Regulation 18944.1, Gifts: Tickets or Passes to Events, addresses a specific type of gift - tickets or passes for admission to entertainment or recreational events. The regulation sets out the circumstances under which an agency’s distribution of tickets or passes to a public official does not result in a gift to the official. The revised regulation eliminates many of the previous exceptions to the gift rules and implements narrowly tailored exceptions that are limited to tickets or passes that are used in conjunction with some identified public purpose. All University employees are "public officials" for purposes of this regulation.

    The revised regulation requires the disclosure of the distribution and use of the tickets and passes by posting the information on the agency's website.

    A ticket or pass is not a gift to a public official in the circumstances set out below:
    1. A ticket or pass is provided to a public official from a source other than the official's agency for admission to an event at which the official performs a ceremonial role or function on behalf of the agency.
    2. A ticket or pass is provided to the public official by the official's agency:
      1. When the agency provides the ticket or pass as part of the employee's salary, consistent with state and federal income tax laws;
      2. When the ticket or pass is given to an agency by an outside source and the agency gives it to a public official, if:
        1. The ticket or pass is not earmarked by the original source for use by the agency official who uses the ticket or pass; and
        2. The agency determines, in its sole discretion, which official may use the ticket or pass; and
        3. The distribution of the ticket or pass by the agency is made in accordance with a policy adopted by the agency;
      3. When the ticket or pass is obtained by the agency (i) pursuant to the terms of a contract for use of public property, (ii) because the agency controls the event, or (iii) is purchased by the agency at the fair market value, provided the distribution is made pursuant to a written policy.

    The regulation sets out the minimum requirements of a written policy, including that it state the public purpose to be accomplished by the distribution of the ticket or pass.

    Any distribution by the agency of a ticket or pass pursuant to the regulation must be reported on FPPC Form 802 and posted on the agency's website within 30 days after the distribution. The official does not have to disclose tickets or passes received or distributed in accord with the regulation on his or her Statement of Economic Interests, Form 700, but tickets or passes received or distributed by the official that are not in accord are subject to disclosure on the official's Form 700 and are subject to the gift limit.

    The rules concerning a ticket or pass provided by the public official's agency (section 2 above) apply only to admission, and are not applicable to any other benefits the official may receive that are not included with the admission, such as food or beverages, or any other item presented to the official at the event.
  4. Valuing Gifts of Air Transportation (Effective August 15, 2008)
    The FPPC has adopted a series of rules concerning the valuation of gifts. Previously, the FPPC valued the cost of travel aboard a private aircraft to be the same as a flight aboard a commercial flight. That has changed with the adoption of regulation 18946.6, Reporting and Valuation of Gifts: Air Transportation, which provides two methods for valuing gifts of air transportation:
    1. For transportation on a "commercial aircraft," the value is the actual cost of the ticket.
    2. For private air transportation, the value is determined by taking the fair market value of the normal and usual charter fare or rental charge for a comparable plane of comparable size divided by the number of the following persons that share the same flight: a) designated officials as defined in Gov. Code section 82019, b) public officials specified in Gov. Code section 87200, and c) members of Congress, and officers and employees of the executive, legislative, or judicial branch of the United States government.

    The actual cost or fair market value of any other personal benefit provided to the official during the air transportation, including food, beverages, or entertainment, is treated as a separate gift to the official unless the benefit is included as part of the fare.
  5. Tickets to Nonprofit and Political Fundraising Events (Effective October 4, 2008)
    Revised regulation 18946.4, Reporting and Valuation of Gifts: Tickets Provided by Nonprofit and Political Organizations for Their Fundraising Events, allows a public official to accept, for his or her own use, a single ticket (new) or other admission privilege to a specific fundraising event provided to the official by a nonprofit or political organization holding its own fundraiser.
    1. Nonprofit Fundraiser: The value of a gift of a ticket, pass, or other admission privilege to a fundraising event for a nonprofit, tax-exempt organization, other than a 501(c)(3) organization (see below), is determined as follows:
      1. Where the ticket clearly states that a portion of the ticket price is a donation to the organization, the value of the gift is the face value of the ticket reduced by the amount of the donation.
      2. If there is no ticket or the ticket or other admission privilege has no stated price or no stated donation portion, the value of the gift is the pro rata share of the cost of any food, and beverages, plus any other specific item presented to the attendee at the event.
    2. 501(c)(3) Organization Fundraiser: Where the event is a fundraising event for a organization exempt from taxation under Section 501(c)(3) of the Internal Revenue Code, the organization may provide one ticket per event to an official and that ticket is deemed to have no value so long as the cumulative value of the nondeductible portion of the ticket(s) received by the official from the same organization during the calendar year, does not exceed the gift limit.
    3. Political Fundraiser: For a gift of a ticket, pass, or other admission privilege to a fundraising event for a campaign committee, the committee or the candidate may provide one ticket per event to an official and that ticket is deemed to have no value.

    An official is not required to report the receipt of a single ticket to a 501(c)(3) or political fundraising event received for his or her own use from the organization or the committee holding the fundraiser. Note that the gift limit applies to the nondeductible portion of a ticket from any nonprofit entity.

    6. 182514.1