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.

Q: We recently hired a lobbyist that is coming to our company directly from spending a number of years as a Senate staffer. What restrictions should we be aware of as her new employer in terms of who she can contact on the Hill?

A: Both the House and the Senate have post-employment restrictions for certain individuals leaving their employment on the Hill.

Importantly, the House and Senate ethics committees will discuss with the staffer prior to their departure the restrictions under which they must operate.  That said, as her new employer, you should definitely be aware of what restrictions are applicable to her situation so neither the company nor she violates the rules. For the Senate, senior staff, defined as individuals whose annual salary is $130,500 or more, are subject to a one year Senate-wide ban. Essentially, senior staff leaving the Senate may not lobby the entire Senate for one year following their departure – this includes lobbying contact with personal, committee, and leadership offices. Staff making less than $130,500 a year are subject to a one-year ban from lobbying their particular office – whether personal, committee, or leadership office. The House restriction for senior staff is a one-year ban from lobbying the particular office for which the former staffer worked and there is no ban in the House for staffers making less than $130,500.

For more information about post-government restrictions in both the federal legislative and executive branch, please contact us directly.

Q: I heard the Indiana Lobby Registration Commission (ILRC) updated their website. How will the changes affect how lobbyists register and file reports?

A: Yes, the ILRC has upgraded their reporting system and new features have been added. Per the ILRC, the updates will be live as of September 2023.

For registrations, memorandums of understanding (MOU) will be filed from within the online filing system. Lobbyists will no longer need to email a digital copy and the MOU will be a part of the online filing process and accessible online. To add a new lobbyist, a lobbyist will be asked to enter the date of the lobbying agreement and the social security or tax identification number. The system will search and verify the lobbyist is not already in the system. If the lobbyist is not in the system, then it will proceed to create a new MOU. If the lobbyist is in the system, instructions will be given on how to proceed. To amend a current MOU, the lobbyist may select their name from a dropdown list and make the appropriate changes to the information.

All filings will now be submitted directly to the ILRC after being approved by either the lobbyist or by the responsible person. Previously, filers were required to do a final submission as the preparer of the report or registration after approval. Going forward, lobbyists will be notified when the filing is approved and submitted directly to the Commission. An audit process has been added to the filing system to ensure the accuracy of filings and the ILRC will reach out if a filing was declined due to an error or omission which must be corrected before it is accepted.

Other changes include upgrades to the system’s search function. As soon as a lobbyist opens their account the dashboard will now include pending filings, MOUs, and appeals. Additional search upgrades include being able to sort previous filings by year, type, status, and confirmation number.

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 heard New York has new ethics training requirements. What do I need to know to be compliant?

A: That is correct. The New York State Commission on Ethics and Lobbying in Government (COELIG) has expanded the ethics training requirements as part of the new Ethics Reform Act of 2022. All lobbyists (Principal, Individual, and In-House lobbyists), contractual clients, and beneficial clients listed on a submitted 2023-2024 Statement of Registration are required to take this new training in 2023 and certify completion of the training requirement on the Lobbying Application website. The training requirement is triggered by and applicable to those individuals and entities listed on a lobbyist or client Statement of Registration once the registration is submitted.

For the purposes of training compliance by organizations listed as a lobbyist or client, the Chief Administrative Officer of the organization is responsible for taking the training. Individuals associated with 2023-2024 registrations submitted on or before January 18, 2023, had an extended training due date of March 18, 2023. Those individuals associated with a 2023-2024 registration submitted after January 18, 2023, have 60 days from the registration submission date to complete and certify the training. Following completion of the initial training, individuals will be required to take a refresher training every three years.

Individuals may access the course through a hyperlink on the COELIG website or directly at https://lobbyingtraining.ethics.ny.gov/

Q: I need to register as a lobbyist in Quebec for my company. What steps do we need to complete in the new system?

A: The Lobbyist Registry in Quebec has been replaced by Carrefour Lobby Quebec.  Previously, the senior officer was responsible for creating an account, and would list any individual lobbyists or administrators on the company’s account.  With the new system using Carrefour Lobby Quebec, the senior officer and each lobbyist must create an individual account, referred to as a professional space.  A professional space can then be linked to an organization’s account, referred to as a collective space.

To create a personal space, you first need to create your account with Carrefour Lobby Quebec.  After creating your account, you must verify it.  You can use the Verified.Me platform, which requires you to login to your financial institution.  This is the easiest method to use.  In the alternative, you can use an ID verification form managed by Lobbyisme Quebec.  With this option, you will be required to upload photo identification such a driver’s license along with a recent financial statement verifying your current address.  Once authenticated, you will have access to your professional space.

The collective space for an organization can be opened by the senior officer, an employee, or even a third party.  Once the collective space has been opened, all individuals with an authenticated professional space can request access to the collective space.  The senior officer must approve or validate these requests.  All mandates can then be published to the collective space by the senior officer, a lobbyist, or an administrator who has been granted access by the senior officer.

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

Q: My organization wants to sponsor a reception in Texas. State legislators, staff, and family members are likely to be in attendance. As a registered lobbyist, what are my limits and reporting obligations?

As a registered lobbyist, there are several items to keep in mind when sponsoring an event. First, a lobbyist can provide an unlimited amount of food and beverage to an official, employee, immediate family member, or guest when the lobbyist attends the event. If not present at the event, food and beverage expenditures are limited to $100 or less.

Next, when engaging with officials at the event, sponsorship is considered a lobbying expenditure and will need to be disclosed on the appropriate lobbying report. These reports break expenditures down by type (food and beverage, entertainment, transportation, etc.) and by recipient. This may seem straightforward, but if your sponsorship goes to the organizing entity, how do you know how your dollars are being used?

The state provides some guidance here. When reporting expenditures for a reception or banquet type event, the Food and Beverage category includes all items needed to hold the event such as room rental, table settings, and printing costs. Other categories may need to be included depending on the specific event.

Additionally, you will need to know who among the attendees are in a reportable category of persons benefitted. Generally, this is state senators/representatives, state officers, state employees, immediate family members, and guests. If a combination of these groups are in attendance, or a combination of covered and non-covered individuals, the expenditure should be divided appropriately based on the numbers in each category. If all members of the legislature are invited, the entire expenditure is reported under that category. As long as all members are invited, it does not matter how many actually attend.

Finally, keep in mind the detailed reporting threshold. If the per person costs exceed the threshold, currently $132.60, the individuals must be identified and other details disclosed.

For more information, please see the “Reports Required” and “Gift Law” sections of the Lobbying Compliance Laws online  publication for Texas. If you have any questions, please feel free to contact us.