Under some circumstances, favors done by neighbors may not be reportable as gifts under California law. See In the Matter of Cory, 1 FPPC Op. 153 (1975). Subsequent opinions provide some guidelines for determining when the “neighborliness” exception would apply:

1. If the neighbor is in the business or trade of providing such services. See CA FPPC Adv. A-85-002 (1985). For example, if the service provider would usually deduct the cost of the service on his tax return as a business expense, then the service is an economic transaction and not merely an act of neighborliness.  See In the Matter of Stone, 3 FPPC Op. 52 (1977).
2. If the neighbor spent less than $50 for the materials used in providing the services. See CA FPPC Adv. A-85-002 (1985).
3. If service provider has, or in the foreseeable future may have, business before the official who receives the service. While the absence of this factor does not necessarily mean that no gift has been made, the presence of this factor will in most cases provide strong, if not conclusive, evidence that a gift has been made. In the Matter of Stone, 3 FPPC Op. 52 (1977).
4. If the service is normally the subject of an economic transaction also is an important consideration. Providing a person with an occasional ride to work is not usually an economically based transaction whereas participation in a car pool or use of a car for a long period of time generally is such a transaction. The fact that the donor and the official frequently reciprocate the type of service in question or the existence of emergency circumstances also may be relevant in applying this standard. In the Matter of Stone, 3 FPPC Op. 52 (1977).

It’s important to note that these are old opinions written when the gift restrictions were relatively new and the regulations were much simpler. It’s possible that the current FPPC would be more skeptical and construe the “neighborliness” exception very narrowly. A safe practice is to seek FPPC advice if one intends to rely on an exception not reflected in the current FPPC regulations.

Go to the Gift Resource Center