Q. I will be having meetings with state legislators to introduce myself and my employer. I do not have any legislation of interest yet, though I anticipate that I will. Will this require lobbyist registration?

A. Goodwill lobbying is covered in many jurisdictions. The following 19 states may 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 jurisdictions have specifically addressed goodwill lobbying. Connecticut covers “door opening,” including such things as telephone calls that you make to set up informational meetings with officials. The Maryland State Ethics Commission has indicated generating goodwill or engaging in educational discussions with officials or employees is considered lobbying.

Some states consider additional activities in determining whether an activity is goodwill lobbying. In Pennsylvania, lobbying includes providing hospitality to a state official or employee for the purpose of advancing the interest of the lobbyist or principal. Kansas also includes entertaining or providing a gift to a state officer or employee in its definition of lobbying in certain circumstances.

Any time you interact with a state official or employee, you must consider whether your activities constitute lobbying, even if you are not engaging in lobbying in a traditional manner. Your activities may count toward the threshold requiring lobbyist registration.

 

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: experts@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

 

Q. For federal income tax purposes, our organization has been using the aggregate amounts reported on our quarterly LD-2 lobbying activity report as our nondeductible lobbying expenses.  Can the expenditures we compile for LDA reporting be used interchangeably for tax purposes?

A. In a word: maybe – It depends on the method of LDA reporting you’ve opted to follow.  If you file your LD-2 report using the IRC definitions (method C), then the number you compile and report on your LD-2 can be used interchangeably for tax purposes.  However, if you compile and report your quarterly lobbying expenditures using LDA definitions (method A), the results will not accurately reflect nondeductible lobbying expenses as defined by the IRS.  Because the definition of “lobbying” differs between the LDA and the IRC, the two compilation methods will produce very different results.  If you use LDA definitions to compile your quarterly LD-2, your organization must employ a second process by which to determine your nondeductible lobbying expenses for tax purposes.  A lobbying registrant can determine each year which method they will use to compile the LD-2 report.  Once a method has been selected, a registrant must use that method for all four quarterly reports during that year.

 

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: experts@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

 

Q. I am a registered lobbyist and have been asked to serve on a state board. Are there any laws preventing me from serving?

A. Generally, there are no laws preventing a registered lobbyist from serving on a state board or commission. However, many states have laws regulating the board service of registered lobbyists.

For example, in South Carolina a lobbyist is prohibited from serving as a member on any state board or commission. Illinois also has a general prohibition; however, their prohibition extends to the spouses and immediate family members of a lobbyist who are living at home. Such individuals are prohibited from serving on a board, commission, authority, or task force authorized by state law or executive order.

Other states only prohibit a registered lobbyist from serving on certain boards or commissions. In Ohio, both legislative and executive branch lobbyists are prohibited from serving on the Ohio Elections Commission. In New York, lobbyists are prohibited from serving as a member of the Joint Commission on Public Ethics and the Legislative Advisory Council.

Some states only prevent lobbyists from serving on boards that could possibly benefit themselves or their employers. In Tennessee, lobbyists are prohibited from serving as a member of a board, commission, or governmental entity with jurisdiction to regulate the business endeavors or professional activities of any employer of the lobbyist. In Wisconsin, lobbyists are prohibited from serving on a state board or commission related to who and what they are lobbying.

Every jurisdiction’s rules on lobbyists serving on state boards and commissions is different. Before agreeing to serve on a board or commission, you should consult that jurisdiction’s ethics commission.

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: marketing@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

Q. I am a registered lobbyist, and I receive a contingency fee as part of my compensation.  Should I be worried?

A. In a majority of jurisdictions, there are express provisions prohibiting registered lobbyists from receiving a contingency-based fee.  Every jurisdiction treats this issue differently, and there is a wide range of statutory oversight.  This issue becomes especially problematic for in-house employees who wear dual hats—you may be required to register as a lobbyist because of your interactions with government officials on behalf of your company, but you may additionally be involved in sales work.

In some jurisdictions, including Louisiana, New Hampshire, and Wyoming, there are no prohibitions whatsoever. Other jurisdictions, such as Nevada, only narrowly prohibit contingency fees for influencing the outcome of legislative action. However, there are even more restrictive bans in other jurisdictions, including Florida and Arkansas, that not only prohibit registered lobbyists from receiving a contingency-based fee, but prohibit this for anyone involved in government procurement, absent meeting a limited exception for salespersons or sales agents.

New York is one example of a jurisdiction banning lobbyists from receiving contingency fees, although the state does have a well-defined registration exception for individuals who qualify as commissioned salespersons. To qualify, the primary purpose of employment must be sales, other lobbying activity must be limited, and the individual must meet specific requirements regarding the percentage of the commission. Another example is North Carolina, where the contingency fee ban is not applicable to an individual doing business with the state whose regular remuneration includes commissions based on these types of sales.

Bottom line, if you are required to register as a lobbyist, you must be aware of the laws applicable in your jurisdiction if you receive a contingency-based fee for your work.

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: experts@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

Q. I provided a state legislator with a permissible gift.  I will be sure to include it on my next report.  Is there anything else I need to know regarding proper disclosure of this expenditure.

A. There are sometimes additional disclosure requirements related to an expenditure on a covered state official or employee.  You should be sure to consider two possibilities: a notification to the official or a supplemental report in addition to your routine lobbying report.

A number of states have a notification requirement if you are going to list the name of a covered public official on your lobbying report.  For example, Illinois actually requires two notifications.  You must provide the official with a contemporaneous notification at the time of the expenditure, and a post- notification is required within 30 days after the report has been filed.  In other jurisdictions, the notification is related to whether you must itemize the expenditure or list the official’s name on your report.  In Arkansas, you must list the state official’s name if payment for food (including beverages), lodging, or travel is in excess of $40.  Once the official is named on your report, you must provide him or her with a notification of this at least seven working days prior to the filing of your report.  Pennsylvania imposes a yearly aggregate threshold on the listing of an official on the principal’s lobbying report and corresponding required notification.  This threshold is $250 per calendar year for gifts and $650 per calendar year for transportation, lodging, and/or hospitality (which includes food and beverage).  Please keep in mind that notifications are not filed with the state, but sent to the official named on your report.

Some jurisdictions require an additional report to be filed with the state when making certain permissible expenditures.  For example, if you invite all members of a Maryland legislative unit to a meal or reception, you must extend a written invitation to all members of the legislative unit and register the meal or reception with the Maryland Department of Legislative Services at least five days before the date of the meal or reception.  You must then report the details of the meal or reception to the Maryland Ethics Commission within 14 days after the date of the meal or reception.  In Indiana, you must file a report within 15 days if you make a gift or gifts to a legislative person if the value of the gift or gifts equals $50 or more in one day or together totals more than $250 in a reporting year.

Proper disclosure of a permissible expenditure can include additional steps.  Be sure to check with your jurisdiction’s ethics agency to ensure all disclosure requirements are met.

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: marketing@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

Q. Several employees from my organization engage in selling to the states.  Do they have any lobbyist registration or reporting requirements?

A. The answer to your inquiry depends on two things:  first, does the state regulate procurement lobbying, and second, is there an applicable bona fide salesperson exception to the registration requirement.  To determine whether a state regulates procurement lobbying, you can use our Executive Source Guide on Procurement Lobbying.  The regulation of individuals attempting to influence the selection of a vendor has increased significantly, and this trend is expected to continue.

In states where procurement lobbying is regulated, individuals engaging in sales activity may be exempt from the registration requirement where a bona fide salesperson exception exists.  For example, in Maryland, a regular full time employee of a vendor paid to engage primarily in sales activity on behalf of the vendor is exempt from lobbyist registration.  In New York, the exception even extends to sales agents with contracts to represent their clients for a period longer than six months.

Absent an exception, sales employees who meet the lobbyist registration threshold in a state regulating procurement lobbying will be required to register.

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: marketing@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

 

Q. Do gift laws preventing registered lobbyists and employers from giving gifts to public officials, also prohibit gifts to the family members of public officials?

A. Generally, in states that feature a prohibition on lobbyists giving gifts to public officials or employees, the prohibition will extend to members of the public officials’ immediate family. However, immediate family is usually a defined term and will vary by jurisdiction.

For example, Alabama law prohibits lobbyists and employers of lobbyists from offering or providing a thing of value to a public employee, public official, or family member of a public employee or public official. The state defines a family member of a public employee as a spouse or dependent. A family member of a public official is defined as the spouse, dependent, adult child and his or her spouse, spouse’s parent, and siblings of spouse and their respective spouses.

In Kentucky, the General Assembly just passed House Bill 28, which extends the prohibition on gifts to family members of legislators or candidates. Effective July 14, 2014, registered legislative lobbyists will be prohibited from giving gifts to spouses or children of legislators or candidates for General Assembly.

In Pennsylvania, gifts are also prohibited to immediate family members of public officials, employees, or candidates for public office. They interpret immediate family members to include spouses, children, parents, and siblings.

However, not all states include family members in the gift prohibitions. Minnesota’s gift prohibition applies to public officials, employees of the Legislature, and local officials, but it does not extend to their family members.

Before giving a gift to a public official or employee, you should consult the jurisdiction’s ethics commission. Do not expect officials or their family members to know the applicable laws.

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: marketing@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

Q. To streamline LDA tracking and reporting, our company includes 100 percent of our in-house lobbyists’ compensation as lobbying on our quarterly report.  Is this a reasonable approach?

A. The LDA does not contain any special tracking requirements for reporting expenditures.  Registrants employing in-house lobbyists are required to provide a “good faith estimate of the total expenses” of their lobbying activities.  With the “good faith” standard as the back drop, an organization should determine whether including 100 percent of their lobbyists’ compensation meets that standard.  Aside from the tax implications of including 100percent of compensation, typically, there is some time that is spent during the course of a quarter that is not defined as lobbying and varies from month to month depending on what issues are being addressed.  Therefore, providing a good faith estimate, in most cases, will require a registrant to implement some sort of tracking process to meet the standard.  In the event of an audit, the ability to demonstrate reasonable efforts to track and capture lobbying activity, and only lobbying activity, is an additional benefit.

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: marketing@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

Q. I am currently a registered lobbyist who files reports on a monthly basis.  I incurred a permissible meal expenditure on a covered official at the end of last month.  However, I did not pay for the expenditure until I received my credit card bill this month.  What date should I use to report the expenditure?

A. A common question concerns what accounting method to use for the reporting of expenses. The accrual basis of accounting reports expenditures according to the time the benefit is given. The cash basis of accounting reports expenditures according to the time it is actually paid.

The exact accounting method used depends on the jurisdiction in question. Both Arizona and Michigan prefer the accrual method of accounting. An expenditure is reported when it occurs or is given, not when it is paid. Indiana provides for activity reports to be filed on a cash basis. South Carolina also follows this method requiring an expenditure to be reported at the time it is paid.

Some states do not have a set accounting method to be used when reporting expenditures or permit either method to be used. In California, an expenditure should be reported at the time the benefit is given; however, if it is reported when the money is paid, the actual date of the expenditure should be noted. Pennsylvania allows a registrant to use any reasonable methods of estimation and allocation. However, once a method of accounting is chosen, filers should be consistent in its use. The filer should also keep an internal record of the accounting method used in case there is an audit by the Pennsylvania Department of State. Texas law indicates an expenditure does not have to be reported until the amount is readily determinable. An expenditure made by a credit card may be reported either according to when the expenditure is made or when the bill is received.

After confirming an expenditure is permissible, you must include it on the proper report. Consult with your jurisdiction’s filing office to determine the accounting method used for the disclosure of expenditures.

 

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: experts@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

Q. My company is planning to get more engaged on the local level. What are some things I need to consider?

A. There are many considerations for a company prior to engaging on the local level. To ensure you are in compliance while interacting with municipal officials, it is important to check whether the municipality has a lobbyist registration ordinance, gift rules, or a pay-to-play ordinance. These provisions, if present, will impact your ability to engage with municipal officials. Requiring lobbyists to register on the municipal level is a quickly emerging trend throughout the U.S. This trend is not just impacting individuals who engage in what is generally regarded as lobbying, but also affecting permitting, sales, and other business functions.

For example, in San Jose, California, lobbying includes attempting to influence the proposal, drafting, development, adoption, recommendation, or approval of any contract, permit, license, or hiring action. The proliferation of these types of provisions has made it such that applying for a building permit, attempting to contract with the state, or even attempting to influence the selection of a candidate to be hired may be considered lobbying depending on the jurisdiction and the circumstances. The broad application of lobbying ordinances in municipalities merits attention and consideration prior to engaging to ensure registration is completed if needed.

An additional consideration is whether your company belongs to any trade associations with a lobbying presence in the municipality. Trade associations can help facilitate introductions to key players. However, you must still pay attention to the lobbyist registration threshold. It is a common misconception that being in the presence of a registered lobbyist negates an individual’s registration requirement. This is very rarely the case and should not be relied upon as a general rule. For more information about local level lobbying, please visit our website, www.stateandfed.com.

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: marketing@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

 

 

Q. I am a registered lobbyist and on occasion I use my personal funds to make political contributions, as does my spouse.  Are there states that prohibit such activity?

A. A lobbyist, simply by virtue of his or her profession, may be prohibited from making personal political contributions.

There are nine states that either prohibit or limit a registered lobbyist’s ability to contribute to state candidates. In most instances, a lobbyist’s ability to contribute to political parties and ballot measure committees remains intact.

Kentucky, North Carolina, and Tennessee impose an outright ban on lobbyists’ contributions. In Connecticut and Massachusetts, there isn’t an outright ban, but instead a monetary limit of $100 and $200, respectively. In Connecticut, the limitation extends to family members of lobbyists.

Perhaps the state most mired in “red tape” is Alaska. A lobbyist may not contribute to a candidate for office in a district outside the lobbyist’s own voting district. This prohibition continues for one year after a lobbyist’s registration or renewed registration date. A lobbyist who contributes to a legislative candidate must file a Lobbyist Report of Contributions to Legislative Candidates (Form 15-5A) within 30 days after making the contribution.

In some states, lobbyists may not contribute to state candidates or officeholders if registered to lobby the candidate’s or officeholder’s agency. Such is the case in California and South Carolina.

Finally, as a registered lobbyist you should be aware there are numerous states that impose a lobbyist ban during the legislative session. Be sure to review the relevant statutes, regulations, and guidelines.

 

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: marketing@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

 

Q. When must direct corporate political contributions be disclosed?

A. At least 15 states require some sort of corporate contribution disclosure, whether it be on a campaign finance statement or lobbyist/employer disclosure report.

Campaign finance reports typically require an annual aggregate threshold be exceeded before a report is triggered.  For example, in Utah, direct corporate contributions must exceed $750 in the aggregate per calendar year before a report is required.  In Georgia, the threshold is $25,000.  In Nebraska, a corporation making more than $250 in direct corporate contributions must file a report within 10 days after the end of the calendar month in which the contribution is made.

Conversely, lobbying reports typically start at “dollar one.” In New Mexico, lobbyists are required to report all political contributions made by the employer, regardless of amount.  The same holds true in South Carolina and New Hampshire.

And then there’s California—a hybrid of both campaign finance and lobbying disclosure.  Direct corporate contributions must exceed $10,000 in the aggregate per calendar year before a campaign finance report is due.  However, until this threshold is exceeded, corporate political contributions must be disclosed on the lobbyist employer’s quarterly report.

As always, the best practice is to track all corporate political contributions in the event disclosure is required.   Likewise, you need to familiarize yourself with the reporting requirements in those jurisdictions where your company is making contributions.

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: marketing@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

Q. Our company, a federal registrant, is a member of numerous outside organizations.  We join many of these organizations for reasons other than their lobbying/government relations activities.  Even so, some of the organizations allocate a percentage of dues toward lobbying activities.  If we are not actively engaged in supporting the organization’s lobbying efforts, do we still need to include the lobbying allocation in our good faith estimate of lobbying expenditures.

A. Yes. The disclosure requirement in this regard is not dependent on the rationale behind why a registrant joins any given membership organization.  The reporting mandate requires every registrant to track and ascertain what portion, if any, of all dues it pays is used for lobbying activities.  The registrant is then required to include those allocations in their total lobbying expenses reported.

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: marketing@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

Here is your chance to “Ask the Experts” at State and Federal Communications, Inc.

Q. I am a registered lobbyist in multiple jurisdictions and my reports are timely filed. Do I have to complete a training course?

A. Depending on where you are registered, you may be subject to a state mandated training requirement. Requiring the completion of a lobbyist training course has been an emerging trend as states expand their ethics and disclosure provisions.

For example, in Utah, a lobbyist must complete training, and obtain a perfect score on the examination, before their lobbying license is issued. In Louisiana, a registered lobbyist must complete one hour of training by December 31 of each year. The state provides in-person training classes, as well as an online training course.

Some states, such as Maryland, require training on bi-annual basis. In New York, the lobbyist is only required to attend a training course once every three years.

Failure to complete the required training can result in penalties to the lobbyist. Louisiana imposes a personal liability requirement on the lobbyist. Failure to complete the mandatory training class may result in a fine of up to $10,000.

While training is mandatory in some states, other states have optional training opportunities available to lobbyists who want to enhance their understanding of the state’s ethics and disclosure provisions. Colorado and Georgia are two of the states currently offering optional training courses.

To obtain additional information about the jurisdictions where you are registered, please visit www.stateandfed.com. Our new website premiered on November 1, 2013.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.