Q. My company is running ads in several states asking the public to contact their legislators in favor of pending legislation, so-called grassroots lobbying. My team member insists we do not need to worry about disclosing this activity. Is that correct?

A. As is often my response when talking about state lobbying, the answer is, “It depends on the state.” Your colleague is correct in a number of states. Alabama, Oklahoma, and Utah are among the states that do not require registration or reporting for solely engaging in grassroots lobbying.

Many states consider grassroots activities to be lobbying, and they will therefore count towards lobbyist registration. Rhode Island includes a good example of this, providing in its statute that lobbying includes soliciting others to act for the purpose of promoting any action by any member of the legislative branch of state government. In Pennsylvania, lobbying includes an effort to influence legislative action through indirect communications. You should know the definition of lobbying in the affected states so you can determine if lobbyist registration is required for your ads.

The expenses for these advertisements may need to be disclosed. If your company is not registered as a lobbyist employer or principal, special reporting may be required. California requires entities expending $5,000 or more in a calendar quarter in connection with soliciting or urging others to enter into direct communications with any elective state official or legislative official to file Form 645 according to the same quarterly schedule for lobbyist reports. Washington requires a company who has made expenditures, not reported by a registered lobbyist, exceeding $3,000 in the aggregate within any three-month period or $1,500 in the aggregate within any one-month period in presenting a campaign to the public, a substantial portion of which is intended to solicit the public to influence legislation, to register and file monthly reports as a sponsor of a grassroots lobbying campaign. Keep in mind that California and Washington are like a number of states, requiring grassroots lobbying expenses to be disclosed if you company is already registered.

We are seeing increasing regulation of grassroots lobbying in the states. You should be aware of your disclosure requirements before running any such campaigns.

The information from this response can easily be found on our website in the Lobbying Compliance section of the United States Lobbying Compliance Guidebook. Please do not hesitate to contact us if you have questions.

Q. I’ve received emails about Michigan transitioning to a new lobbyist system. What do I need to do to be able to file reports?

A. Michigan has completely overhauled their lobbyist reporting system, integrating lobbying reporting into their MiTN (Michigan Transparency Network) and MiLogin services. The old system has been sunsetted and placed in “read only mode.” Due to the old system shutting down, every lobbyist and lobbyist agent must create a new account to file reports electronically. Registrations and reports may still be completed via paper, signed, scanned, and emailed to the Secertary of State. But much like their old lobbyist system, they have disabled their old email. Now all correspondence must be sent to “MDOS-FinancialDisclosure@michigan.gov.”

The first hurdle with the new system is figuring out what portal to use to create their MiLogin profile. Individual lobbyists should use “milogin.michigan.gov.” This is a “personal” login and one that should already be used by lobbyists who are Michigan residents. This ensures an individual does not have multiple accounts. Businesses, lobbying firms, and organizations should use “milogintp.michigan.gov.”
An individual can use the MiLogin for businesses if they wish to file for multiple clients.

Once a profile is created, you must “add” the MiTN link to your MiLogin home page and create a two-factor authorization method. The next step is to link your old Michigan lobbyist information to your MiTN account. Importantly, only people who are listed on a registration, such as an employee or signatory, may file reports. The system will ask what your MiTN user role is. You may select either “Lobby Registrant” or “Lobby Data Entry.” Anyone can be labeled as “Lobby Data Entry” but, only people who are listed on a registration can be labeled as “Lobby Registrant.” Only people labeled as “Lobby Registrant” may file reports. Your account will be reviewed, and once approved, you will be able to file registrations and reports through the portal.

[For more information about the nuances of the changed system, please check out the “Registration” and “Reporting” sections of the Michigan Lobbying Compliance Laws online publication.]

Q. I’m sending informational emails to legislators to educate them about an issue. Do I need to register as a lobbyist?

A. In some jurisdictions, yes, you’ll need to register for informational or educational communications to legislative officials.

Making this determination usually depends on a few factors: 1) the definition of lobbying in the jurisdiction, 2) the intent behind sending the information, and 3) the presence of any registration exceptions or thresholds.

If a jurisdiction has a very broad definition of lobbying, or a very low registration threshold, then it is likely you will need to register for the type of communication mentioned above. For example, Illinois requires registration as a lobbyist before you perform a lobbying activity, and the state has a broad definition of lobbying that includes communicating with legislative officials to promote goodwill or build relationships. As a result, if you are proactively communicating with legislative officials there, it is likely you will need to register.

In contrast, some states might have a low registration threshold but also include registration exceptions that would limit or eliminate your need to register. For example, Nebraska specifically excludes persons who limit their lobbying activity solely to writing letters or furnishing written materials to the legislature from the need to register.

Other jurisdictions have exceptions for information provided by technical experts who do not otherwise lobby, and for individuals who provide information only in response to a question or query from an official.

Because the regulatory environment surrounding lobbying can vary widely from jurisdiction to jurisdiction, you need to consider carefully the circumstances of a specific interaction when determining whether registration is or will be necessary. The decision to register is often one that is based on the specific facts of your particular engagement, so if you prefer to take a one-size-fits-all approach, you may need to err on the side of registering (and consequently reporting) to be sure that you are complying with every jurisdiction’s requirements.

More information about procurement lobbying requirements can easily be found on our website in the Registration section of the Lobbying Compliance Guidebook.

Q: My employer is a wholly-owned subsidiary of a parent corporation. Does a parent corporation, a subsidiary, or other affiliated entity have its own contribution limit or must the contributions be aggregated and have a shared limit?

A: The answer varies and is jurisdiction-dependent.  If a limit is shared, the parent, subsidiary, or other affiliated entity must have an open line of communication when it comes to making political contributions.

In California, a parent and subsidiary share a contribution limit if the decision to make a contribution is directed and controlled by a majority of the same persons.  If the parent and subsidiary act wholly independent of each other in deciding to make a contribution, the parent and subsidiary each have their own limit.

In New Jersey, if a corporation has subsidiaries, affiliates, branches, or locals then the contributions of these organizations cannot exceed the applicable contribution limit in the aggregate.  Two or more corporations will be conclusively deemed to be affiliated if:

• Any individual, corporation, partnership, company, association, or other entity owns, directly or indirectly, more than a 30 percent interest in each of such corporations; or
• One such corporation owns, directly or indirectly, more than a 30 percent interest in the other such corporation.

In New York, an organization financially supported by a corporation may not make expenditures for political purposes (including contributions to candidates, political parties, and political committees) in excess of $5,000 in the aggregate in any calendar year.

An organization financially supported by a corporation is an entity, among other things, run by the corporation, features no discernible differences between the organization and the corporation, and is simply doing the corporation’s business under a different name.  If a political committee is created by a corporation, but is run separately and distinctly, then it is not an organization financially supported by a corporation and is not subject to the $5,000 yearly contribution limit.

Each affiliated or subsidiary corporation, if a separate legal entity, has its own limit.

These are just a few broad examples of aggregation of limits.  As always, we advise you follow best practice to verify the rules in your jurisdiction before making political contributions.

For more information, be sure to check out the “Contribution” section of the U.S. Political Contributions Compliance Laws online publication. Please feel free to contact us if you have any questions.

Campaign Finance

Oregon: “The City’s Public Campaign Financing Program Allowed Candidates with Little Support to Snag Taxpayer Dollars” by Sophie Peel for Willamette Week

Ethics

California: “Assessor Reports $1M Behested Payment, Biggest Charitable Donation Made at a Local Elected Official’s Request” by Jeff McDonald (San Diego Union-Tribune) for MSN

National: “Trump Transition Team Ethics Pledge Appears to Exclude President-Elect” by Betsy Klein, Steve Contorno, and Arlette Saenz (CNN) for MSN

Florida: “Tickets to Master’s Tournament Trigger Feud in Hillsborough County Politics” by Jack Evans and Justin Garcia (Tampa Bay Times) for MSN

Indiana: “Nonprofit Braun Transition Group Follows Former Governors’ Model” by Leslie Bonilla Muñiz (Indiana Capital Chronicle) for Yahoo News

Legislative Issues

National: “Supreme Court to Examine Power of Congress to Delegate Authority” by Justin Jouvenal (Washington Post) for MSN

Lobbying

National: “As His Power Grows, D.C. Wonders: How do you lobby a man like Elon Musk?” by Cat Zakrzewski, Faiz Siddiqui, and Pranshu Verma (Washington Post) for MSN

New York: “N.Y. Ethics Commission Faces New Constitutional Challenge” by Brendan Lyons for Albany Times Union

Q: We are currently reviewing our process for complying with the various reporting requirements established under the Lobbying Disclosure Act (LDA) and would like some advice on how we can improve our accuracy moving forward. I don’t think we have been capturing all the relevant expenditures that we need to include. Can you review what expenditures are required to be reported on the LD-2 quarterly activity report?

A: Thank you for your question. I applaud your effort to review and improve upon your existing processes.  Continually taking a look at how and what information is being compiled is an important part of any comprehensive compliance process. The LDA requires registrants to provide a good faith estimate of all lobbying expenditures within the organization on a quarterly basis. This seemingly simple requirement can prove to be somewhat complex given the number of moving parts involved in accurately reflecting reportable expenditures.

Relevant expenditures required to be included in the organization’s quarterly calculation:

1. The value (including compensation and associated overhead and expenses)  of any and all employee time spent on lobbying activities. This includes employees who spend 20% or more of their time engaged in lobbying activities (and are, therefore, listed by name on the report thereby becoming a “registered lobbyist”) and those who do not meet the statutory definition of a “lobbyist” (employees with activity below 20% during the quarter – non-lobbyists).

While it is often straightforward to collect this information for your registered lobbyists, it can be more nuanced to properly capture this activity for those folks under the 20% threshold. Non-lobbyist activity can come in many forms.  Generally, it includes direct (with a covered official) and indirect (internal or with an outside organization) communication such as planning activities, research, coordination, conference calls, meetings, strategy discussions and any other work that is undertaken to augment or further the lobbying objectives of the organization.

Examples of capturable indirect activities:

Research and/or preparation of talking points to be used in connection with a lobbying contact with a covered official.

Engaging in an internal discussion regarding strategic lobbying plan to support organization’s position on proposed legislation or administrative policy.

Drafting bill language, presentations, or letters to be shared with Covered Officials regarding federal policy or administrative actions.

CEO or other leadership meeting with or otherwise communicating with covered officials on the Hill or in the Administration.

Participation with an outside organization to accomplish any of the above listed ends.

2. Payments accrued to outside lobbyists and lobbying firms;
3. Federal lobbying portion of any dues or other payments made to trade associations, membership organizations and the like.

As you undoubtedly know, there are a variety of subtle reporting details that organizations must review and understand when establishing processes and procedures to ensure compliance with the federal law.  For tailored advice centered around your organizational realities, contact us directly for assistance. In addition, details regarding reporting requirements can be located in the Federal Lobbying Compliance Law section of our online publication resource.

Q: I heard the New York State Commission on Ethics and Lobbying in Government (COELIG) was found unconstitutional. What does this mean for lobbyist and lobbyist employer reporting?

A: That is correct. On May 9, a New York appellate court unanimously upheld a lower court decision finding COELIG unconstitutional. The court found COELIG violates the governor’s ability to enforce ethics laws as many members of the commission are not appointed by the governor. COELIG will continue to promote compliance with ethics and lobbying laws and may continue to process ethics disclosures and lobbyist filings.

In New York, registered lobbyists must file bimonthly reports by the 15th day of the month following the end of the reporting period in which the lobbyist was first required to register. Reports are due for each subsequent reporting period thereafter.

Lobbyist employers must file semiannual reports for every calendar year during which the employer retained, employed, or designated a lobbyist and reasonably anticipates that during the year such client will expend or incur more than $5,000.

A lobbyist or lobbyist employer may be suspended for up to a year if they knowingly and willfully fail to file a report on time or fail to file a report at all. Any bimonthly or semiannual report not timely filed will be subject to late fees.

While the court case is going through the appeals process, COELIG was granted a stay to continue administering and enforcing ethics and lobbying laws, overseeing the filing and review of lobbying registrations and reports, providing guidance and advice, and investigating and enforcing violations of the laws and regulations under its jurisdiction. It is always good practice to make sure you are submitting reports on time.

Information to assist with your commitment to compliance, can be found in the Important Features of the Law section of State & Federal Communication’s U.S. Lobbying Compliance Laws.

Q: Since Minnesota updated their lobbying law and the changes went into effect at the start of 2024, how will the changes practically affect how lobbyists register and file reports?

A: Minnesota passed legislation affecting lobbying registration and reporting that went into effect on January 1, 2024. To correspond with the changes the Campaign Finance Board (CFB) has updated their lobbyist registration, termination statement, and reporting forms.

Lobbyists should be aware the registration threshold has increased from $250 to more than $3,000 for individuals who spend personal funds to influence government action. Calculating the threshold does not include an individual’s own traveling expenses and membership dues. While the increased threshold allows individuals to track their activities until they reach the higher amount the law expanded the scope of local government lobbying which could lead to more activities being included in determining your registration requirements.

The scope of local government lobbying was expanded by amending the definition of lobbyist to replace all references to metropolitan governmental unit with political subdivision. A political subdivision includes the metropolitan council, a metropolitan agency, including the Metropolitan Parks and Open Space Commission, Metropolitan Airports Commission, and Metropolitan Sports Facilities Commission, and a municipality, including a county, town, city, school district or other municipal corporation or political subdivision of the state authorized by law to enter into contracts. Communication with local officials of a political subdivision will need to be tracked and included in calculating your threshold. The new form released by CFB reflects these changes. Lobbyists will also be required to list the general lobbying categories of interest on registrations.

On the reporting and termination forms, lobbyists will no longer be required to report disbursements. Instead, individuals must affirm whether legislative, administrative, or local governmental action occurred during the reporting period. For each type of governmental action, the lobbyist must include at least one general lobbying category and up to four specific subjects of interest lobbied during the reporting period. For administrative actions, individuals must also include the agency lobbied and revisor number if applicable. Lobbyists must continue to report the amount and nature of each gift, item, or benefit $5 or more, given or paid to any public official, an employee of the Legislature, or a local official, by the lobbyist, an employer, or employee of the lobbyist, and each original source of money in excess of $500 in any year used for the purpose of lobbying.

While the CFB has not released an updated form for the annual report, the new lobbying law requires the total amount spent on each lobbying type during a calendar year to be rounded to the nearest $9,000 instead of the current $20,000. We expect the CFB to release a new form closer to the annual reporting due date.

The information from this response can easily be found on our website in the Lobbying Compliance section of the United States Compliance Laws publication.  Please do not hesitate to contact us if you have questions.

Q: I’m travelling to a new state to have lobbying meetings with legislators and staffers. My outside counsel will be with me and has told me I don’t need to register as a lobbyist because we will be together. Is this true?

A: This is a question I get routinely and I refer to it as the “bubble rule.” The basic idea is if I am with a registered lobbyist while engaging in lobbying, I will not have to register myself. The majority of states do not have such a rule. When you engage in lobbying, you must evaluate whether you need to register independently of the fact that a registered lobbyist is with you during your communications.

Some states do have a version of the “bubble rule”. In California, an individual does not engage in a direct lobbying communication if he or she is an employee of a lobbyist employer, meets or speaks with a qualifying official in the company of a registered lobbyist retained by the individual’s employer, and participates as a subject matter expert. Idaho will not require registration for employees of a corporate entity if the entity itself has registered as a lobbyist, has appointed one or more of its employees or contractors as its official designated lobbyist, and the person so appointed by the entity has registered. Finally, Utah might have the best version of the rule. In short, an individual representing an entity who interacts with a public official, while accompanied by a registered lobbyist who is lobbying in relation to the subject of the interaction, is not required to register so long as the person does not make an expenditure on a public official.

Please keep in mind the nature of the interaction and why you are accompanying your outside counsel may itself be an exemption to lobbyist registration. You may be serving as a subject matter expert, which is referenced in the above California example. You may be testifying before a legislative committee, which is often seen as an exemption from lobbyist registration. Remember if using a testifying exemption from registration, you often cannot engage in any other lobbying communications.

In summary, do not believe that you are exempt from lobbyist registration simply because you are lobbying with someone who is already registered. Know the laws in the state and evaluate your need to register independently of who is with you during your meetings.

The information from this response can easily be found on our website in the Lobbying Compliance section of the United States Lobbying Compliance Guidebook.  Please do not hesitate to contact us if you have questions.

Q: I need to register as a lobbyist in Georgia and I have heard Georgia has overhauled their system. Were there any changes to how one registers or to what is required on lobbying reports?

A: Georgia has undergone a massive renovation of their lobbyist system. Registration is now a complex process that requires clients to make an account, which was not necessary under the old system.

When creating a client account, the system will request a list of officers and authorized agents. Any officers listed will have a client account created, using the email provided as a Login ID. Only officers are able to file reports, while authorized agents may only input information into the system.

Once the registration is submitted, an email will be sent to each of the listed officers, prompting them to create a password. The Ethics Commission will only discuss issues with the client account with the listed officers.

Following the creation of the client account, the lobbyist account may be created.

Once the lobbyist registration is submitted, a “token” will be created and emailed to the officers of the listed client. The client must then accept the “token” by clicking on the link and authorizing the lobbyist. The system will then send an email to the lobbyist to create their password. Once the password is created, the lobbyist is officially registered. It is important to note the lobbyist’s account will not be created until the client accepts the relationship. The $20 badge fee may be paid from the lobbyist account or the client account.

While the changes to lobbyist reporting are more modest, there are still differences between the old and new systems.

A large change is that there are now only three different reports: Local, Legislative, and Agency. The Agency report has combined Agency, Vendor, and State Board of Transportation into one report. Even if you only registered as an Agency lobbyist, your report will be labeled as an Agency, Vendor, and State Board of Transportation report.

The new system now requires additional information to file a report. Each expenditure disclosure must now contain:

•     Date of the expenditure

•     Amount

•     The client of the lobbyist

•     The “type” of expenditure

•     A description of the expenditure

•     The name of the payee

•     Whether the recipient is a public officer or group and their name.

The system also allows for the disclosure of the purpose of the expenditure and the number of the bill, resolution, or regulation, but this is an optional disclosure.

A few years ago, we added a tab on our website and called it Ask the Expert. Subscribers could pose a question about the content of our online guidebooks. We found this to be a great value add for our clients.

1. You mentioned a change in Louisiana. When will that go into effect?
2. Should our state folks track federal activity if they are not registered?
3. How can I amend a report we filed in Tennessee?

These are great questions, and we are happy to help.

However, two things have happened since we started.

1. Our clients have a lot of questions. Most of the questions deal with definitions from the states along with clarification of dates.
2. Michael Beckett has been terribly busy. Michael is our Associate Director of Research with six managers working for him. Whatever the district, he can route it to an attorney for a response.

We want to be of assistance to our subscribers when there are questions. We just need to make sure we have all the information.

Subscriber benefits are designed to include inquiries about the content of our online guidebook. Questions requiring novel research, application of subject matter, and projects involving multiple districts are outside the scope of this program.

We want to make sure we have all the information needed to answer your questions, and it helps if we can set up an agreement to assist you with your concerns. This does not move you over to our Consulting work. It just makes sure both sides are protected, and the cost is minimal.

Lobbying compliance is not easy, and we know you have other business to handle for your organization. We can help you at any level.

Until next month, prepare for the busy summer schedule of meetings being held everywhere, and Ask the Expert if you are stumped.

See you on the road.

Thank you.
Elizabeth Z. Bartz
@elizabethbartz

Q: I want to sell my company’s product to a state or local government entity. Do I need to register as a lobbyist?

A: Jurisdictions approach the issue of procurement lobbying differently and registration requirements can vary widely from one jurisdiction to the next.

Some jurisdictions completely exempt procurement activities from their definition of lobbying. For example, in Maine, registration is not required for procurement-related activities because those activities are not considered lobbying. On the other hand, jurisdictions like Idaho require registration for procurement-related activities, subject only to the state’s general registration threshold.

To complicate matters further, some jurisdictions set different registration thresholds for procurement lobbying activities than they do for other lobbying activities. In Florida, for example, employees engaged in procurement activities on behalf of their employer are required to register as executive branch lobbyists if they lobby to procure a contract with a value of more than $20,000.

Additionally, even if a state’s law doesn’t cover a particular procurement activity, local entities and municipalities may have more stringent registration requirements that do reach your contemplated activities. Certain hospital systems and school districts in Florida, for example, require representatives of companies hoping to do business with them to register as lobbyists prior to meeting with them to discuss potential procurement opportunities.

Though sales teams often function separately from government affairs teams, if your company is selling to a governmental entity, you should carefully consider whether any lobbying laws will apply to your procurement efforts.

More information about procurement lobbying requirements can easily be found on our website in the Registration section of the Procurement Lobbying Compliance Guidebook.

Q: I am an in-house lobbyist and frequently like to meet with legislators to build relationships. If I am not lobbying on any issues, do I still need to worry about registration requirements? 

A: You should absolutely be thinking about registration requirements anytime you interact with public officials or employees.  Many states require registration for goodwill lobbying.

Goodwill lobbying is covered under the definition of lobbying in several states. The following states require lobbyist registration for goodwill activities: Alaska, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Maryland, Minnesota, Missouri, New York, North Carolina, Oregon, Pennsylvania, Tennessee, Texas, and Vermont.

Some states go as far as defining the specific conduct constituting goodwill lobbying. Registration in Connecticut is required for “door opening” when an influential individual interacts with a state agency on behalf of a client. The Tennessee Ethics Commission has said that “getting to know” or “building rapport” is considered lobbying in the state of Tennessee and is subject to all registration requirements.

Oregon defines, goodwill, as used in the definition of lobbying, as kindness, friendliness, benevolence, or generosity by a person or entity directed toward a legislative official that could cause the legislative official to have a favorable impression of, or thankfulness to, the person or entity.

It is always a good idea to check the jurisdiction’s specific registration requirements on our website prior to communicating with officials.

You can find this information under the “Registration” section of the U.S. Lobbying Compliance Laws online publication.

Q: I need to lobby on the municipal level, but I’m registered with the state. Am I covered?

A: It will depend on the state, but you might not be covered. Some states, including Georgia, Illinois, Missouri, and New York, to name just a few, have lobbying laws covering both state and local governments. If you are registered in such a state, however, that does not necessarily end the analysis.

Even in states where state lobbying laws apply locally, you may still have local obligations. New York state law requires registration if you lobby locally and otherwise meet the registration requirements, but New York City has its own registration regime you will be required to follow, potentially requiring registration at both the state and local level. Illinois lobbying law covers local governments as well, but includes a carve out for lobbying in Chicago. Lobbying in Chicago requires registration with the city, but not with the state.

Whether you are or are not in a state where the lobbying laws apply locally, you will need to verify whether the city or county you are contacting has its own lobbying law. Even if it does not, be aware there may be other requirements, such as visitor logs, with which you will still need to comply.

Finally, be aware some local agencies, particularly those covering large metro areas, have their own lobbying laws as well, so registration with the city or county still may not cover your contacts with those agencies. For instance, Broward County Public Schools and the Los Angeles Metropolitan Transportation Authority (LAMTA) have adopted lobbying provisions separate from those of the counties in which they are located.

It is safest to always assume your government outreach, regardless of the level of your interaction, is covered by a lobbying law until you confirm otherwise.

Further information about the lobbying laws in hundreds of cities, counties, and local agencies can be found in the Lobbying Compliance Laws section of the State and Federal Communications website.