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k <br />BEST BEST & KRIEGER <br />ATTORNEYS AT LAW <br />71,111 r, F:n 2 6 ^"° H: 7)7 <br />Cli_.._ . <br />MEMORANDUM <br />To: PUBLIC AGENCY CLIENTS <br />From: BEST BEST & KRIEGER LLP <br />Date: FEBRUARY 21, 2019 <br />Re: AMENDMENTS TO THE MATERIALITY STANDARD FOR REAL PROPERTY <br />INTRODUCTION <br />The Political Reform Act (Gov. Code, § 87100 et seq.) prohibits a local official <br />from participating in or influencing a governmental decision in which he or she is <br />financially interested. (Gov. Code, § 87100.) A public official has a financial interest in a <br />decision if it is "reasonably foreseeable" that the decision will have a "material financial <br />effect" on certain enumerated economic interests, including an interest of $2,000 or <br />more in real property. (Gov. Code, § 87103(b).) FPPC Regulation 18702.2 sets forth the <br />materiality standard for interests in real property, including the rule that when a decision <br />affects the value of property located within 500 feet of an official's property interest, the <br />financial effect of that decision on the official's interest is presumed to be material (the <br />"500 foot rule"). <br />On January 17, 2019, the FPPC adopted amendments to Regulation 18702.2, <br />which, among other changes, replaced the 500 foot rule with three categories of <br />materiality based on the distance between the official's property and the property <br />subject to the decision. The FPPC also made clarifying revisions to the other materiality <br />factors listed in Regulation 18702.2. The amendments, which became effective on <br />February 16, 2019, are discussed in detail below. <br />500 FOOT RULE <br />Previous Law <br />The 500 foot rule was set forth in previous Regulation 18702.2, subsection (a)(11), <br />which provided that the reasonably foreseeable financial effect of a decision on an <br />official's parcel of real property was material when the decision <br />[w]ould consider any decision affecting real property value <br />located within 500 feet of the property line of the official's <br />This product provided under the Public Policy & Ethics Group Program <br />93939.00001A31812027.3 <br />