July 31, 2020 •

Ask the Experts – Disclosing Contributions on the LD-203

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

Rebecca South
Federal Compliance Associate Rebecca South

Q: What contributions am I required to disclose on the Semi-annual LD-203 contribution report?

A: Though much focus is placed on the PAC and political contributions that must be disclosed on the LD-203, there are four (4) additional categories of reportable expenditures.  Below is an overview of all the expenditures required to be tracked and reported by employer registrants and individual lobbyists:

FECA (Federal Election Campaign Act)

  • Contributions (including in-kind) of $200 or more (in the aggregate) to any Federal candidate or officeholder, leadership PAC, or political party committee (such as the RNC or DNC).   For an employer report, this involves listing contributions from the company’s associated PAC.  FECA contributions tend to be the most common type reported but do not represent full disclosure when other reportable expenditures exist.

HONORARY

  • An expenditure of any amount made to an entity established, financed, maintained, or controlled by a covered legislative branch official or covered executive branch official, or an entity designated by such official.  Of note, this can include donations made to charitable organizations and other non-profit entities.
  • An expenditure of any amount made to pay the cost of an event to honor or recognize a covered legislative branch official or covered executive branch official.  The purchase of a table or ticket to another entity’s event, in and of itself, is not sufficient to be considered “paying the cost” of the event.
  • An expenditure of any amount made to an entity named for a covered legislative branch official or to a person or entity in recognition of such official.

MEETING

  • An expenditure of any amount made for a meeting, retreat, conference, or other similar event held by, or in the name of, one or more covered legislative branch officials or covered executive branch officials.

PRESIDENTIAL LIBRARY and/or INAUGURAL COMMITTEE

  • Contributions of $200 or more to any presidential library foundation and/or presidential inaugural committee made by an individual or employer (including from employer’s PAC) during the reporting period.

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.

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September 10, 2018 •

Ask the Experts – Using Federal PAC Funds to Contribute to State Candidates

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

Can I use my company’s federal PAC to make contributions to candidates for state office?

 

With the exception of Massachusetts, contributions from a federal PAC to non-federal state candidates are permissible.  However, the challenging aspect of making these types of contributions is that every jurisdiction has different rules regarding how to register and report such contributions.  To make this a little easier to digest, we have broken down the states into five categories.  Please note:  regardless of the registration and reporting process, in all jurisdictions the federal PAC is subject to the contribution limits according to the law of that jurisdiction.

Category #1:  You do not have to do anything.  Simply make the contribution to the state candidate as you would any other contribution from your federal PAC.  This option is usually only available if your FEC filings are current and complete.  Examples of these jurisdictions include Alabama, Delaware, South Dakota, and West Virginia.

Category #2:  You must register and report as a state PAC.  In these instances, your federal PAC is treated no differently than any other out-of-state PAC.  You must register your federal PAC using that jurisdiction’s registration forms.  You must report your contributions using state forms and file your reports according to that jurisdiction’s filing deadlines.  Examples of these jurisdictions include Connecticut, Georgia, and Tennessee.

Category #3:  You may file your FEC registration and reports in lieu of state registrations and reports. The tricky thing about these jurisdictions is keeping track of whether you file your reports according to the jurisdiction’s reporting schedule or the FEC’s reporting schedule.  Examples of these jurisdictions include Kentucky, New Mexico, and North Dakota.

Category #4:  You have to register using state form and report using your FEC filings, or vice versa. Examples of these jurisdictions include Illinois, South Carolina, and Virginia.

Category #5:  You have a choice regarding how to register and report.  These two jurisdictions include Iowa and Kansas.

As was mentioned, in Massachusetts, federal PACs may not contribute to campaigns in that state.  Federal PACs must establish a separate segregated fund for contributions in Massachusetts and comply with the same requirements as in-state committees.  The separate segregated fund must be established as a depository account in a financial institution authorized to transact business in Massachusetts and having its main office, or a branch office, in Massachusetts.

We have not listed PAC rules for all the states, only examples of some states. If you have a question on a state not listed here, please contact us directly at 330-761-9960

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.

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May 1, 2018 •

Ask the Experts – Employee Personal Political Contributions

Q. Before I can make a political contribution using my own funds, my employer requires that I obtain permission first.  Can my employer legally do this? A. Yes, employers may require employees to seek preapproval before making personal political contributions. Not […]

Nola Werren
Q. Before I can make a political contribution using my own funds, my employer requires that I obtain permission first.  Can my employer legally do this?

A. Yes, employers may require employees to seek preapproval before making personal political contributions. Not only can your employer require this, it’s smart business to do so. Employers may even require preapproval from family members of employees.

This preapproval requirement has evolved as a result of the increased number of jurisdictions enacting pay-to-play laws. A seemingly innocuous contribution by an employee could result in the loss of government contracts, fines, and a ban on future contracting. Criminal sanctions may apply when repeated violations occur. By requiring pre-approval, your employer can properly vet the contribution for compliance with a jurisdiction’s pay-to-play law, including disclosure requirements.

In a majority of jurisdictions, employees covered by pay-to-play laws include officers, partners, directors, senior management, salespersons, and their spouses and dependent children. In Pennsylvania and Kentucky, all employees are covered in the instance of a no-bid contract.

Requiring preclearance of employee personal political contributions is certainly more preferable than imposing a ban on employee contributions, which could result in a violation of applicable labor laws. Various jurisdictions bar employers from retaliating against employees for engaging in political activities, which can include everything from participating in a political rally to making campaign contributions. Even though an employer can require preapproval, an employer cannot directly or indirectly affect an individual’s employment by means of discrimination or threat of discrimination based on the individual’s personal political contributions.

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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.

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April 4, 2018 •

Ask The Experts – Covering Expenditures for Site Visits

Q. As a company, we would like to organize site visits for agency officials, so they can better understand our company and industry.  Can we cover expenditures for these visits? A. State and local gift restrictions will apply to company expenditures […]

Q. As a company, we would like to organize site visits for agency officials, so they can better understand our company and industry.  Can we cover expenditures for these visits?

A. State and local gift restrictions will apply to company expenditures associated with a site visit by a government official or employee, especially if your company is a lobbyist employer or state contractor.  Food, beverage, entertainment, travel, lodging, or other promotional/welcome gifts could be restricted or banned.  However, many jurisdictions have specific gift exceptions allowing expenditures in conjunction with site visits.  Each jurisdiction has its own requirements for gift law compliance…

Read the full article here

For more information, be sure to check out the Gift Law and Reports Required sections of the Lobbying Compliance Laws online publication for any  jurisdiction. Please feel free to contact us if you have any questions.

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January 4, 2018 •

Ask The Experts – Ride-Along Exception

Q. I’m an in-house lobbyist planning to meet with California legislators to influence state government action. If I go to the meeting accompanied by a registered lobbyist, isn’t my time at the meeting exempt from counting toward the lobbyist registration […]

Q. I’m an in-house lobbyist planning to meet with California legislators to influence state government action. If I go to the meeting accompanied by a registered lobbyist, isn’t my time at the meeting exempt from counting toward the lobbyist registration threshold under the “ride-along” exception?

A. That depends. The California Fair Political Practices Commission (FPPC) amended its regulations in 2016 to narrow the so-called “ride-along” exception.  The exception is now only available to in-house employees who act as “subject matter experts” in communicating with California government officials while accompanied by a registered lobbyist employed or retained by their employer. If the exception does not apply to your circumstances, you must…

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September 8, 2017 •

Ask the Experts – Lobbyist Reporting

Q: I have been out of the office on an extended vacation.  I just noticed a reminder e-mail that I have a lobbying report due today that cannot be filed electronically.  What are my options? A: You still have the ability to […]

Q: I have been out of the office on an extended vacation.  I just noticed a reminder e-mail that I have a lobbying report due today that cannot be filed electronically.  What are my options?

A: You still have the ability to submit the report in a timely manner.  Your first step should be to confirm the reportable activity for your report.  If it is your lobbyist report, check your calendar or records to see whether you lobbied during the reporting period.  If the report is for your employer, you must review not only your activity, but possibly information for a contract lobbyist as well…

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June 6, 2017 •

Ask the Experts – Does the 5% de minimus Rule Apply to your LD-2 Quarterly Report?

Q. We file our federal LD-2 quarterly lobbying reports under the IRC definitions.  Does the IRC 5 percent de minimus rule apply to capturing reportable expenditures on our quarterly LD-2 disclosure? A. In short, yes, but with a caveat.  If your […]

Q. We file our federal LD-2 quarterly lobbying reports under the IRC definitions.  Does the IRC 5 percent de minimus rule apply to capturing reportable expenditures on our quarterly LD-2 disclosure?

A. In short, yes, but with a caveat.  If your organization has opted to compile lobbying expenditures using Method B or Method C, the 5 percent de minimus rule applies.  As a frame of reference, the IRC allows taxpayers an exception for including the time of individuals who spend less than 5 percent of their time engaged in lobbying activities as defined by the IRS…

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Here is your chance to “Ask the Experts” at State and Federal Communications, Inc. 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 email with questions about your particular company or organization. As always, we will confidentially and directly provide answers and information. Our replies are not legal advice, rather analysis of laws, rules, and regulations.

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May 9, 2017 •

Ask the Experts – Contributions by Out-of-State PACs

Q.  Can a PAC from one state make contributions to candidates and ballot measures in a different state? A.  Yes, an out-of-state PAC may make contributions in a different state, but it must be aware of the state laws governing […]

Q.  Can a PAC from one state make contributions to candidates and ballot measures in a different state?

A.  Yes, an out-of-state PAC may make contributions in a different state, but it must be aware of the state laws governing such a practice.

In most states, the out-of-state PAC will be subject to the same rules governing an in-state PAC, although there may be parameters.  For example:

  • In North Carolina, the out-of-state PAC must have a certified assistant treasurer who is a resident of North Carolina.
  • In New Jersey, the Election Law Enforcement Commission will determine if the out-of-state PAC has a significant percentage of activity within the state to require registration and reporting.
  • In Nevada, the out-of-state PAC must appoint a registered agent from Nevada.
  • In New York, out-of-state committees must designate a depository, which must be a banking organization authorized to do business in New York.

In other jurisdictions, an out-of-state PAC must create an in-state PAC before it can contribute.  For instance…Click here to read this and all Ask the Experts articles in full


We have not listed PAC rules for all the states, only examples of some states.
If you have a question on a state not listed here, please contact us directly
at 330-761-9960.

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May 1, 2017 •

Ask the Experts – Federal PAC Contributions to State Candidates

Q. Can I use my company’s federal PAC to make contributions to candidates for state office? A. With the exception of Massachusetts, contributions from a federal PAC to non-federal state candidates are permissible.  However, the challenging aspect of making these […]

Nola WerrenQ. Can I use my company’s federal PAC to make contributions to candidates for state office?

A. With the exception of Massachusetts, contributions from a federal PAC to non-federal state candidates are permissible.  However, the challenging aspect of making these types of contributions is that every jurisdiction has different rules regarding how to register and report such contributions.  To make this a little easier to digest, we have broken down the states into five categories.  Please note:  regardless of the registration and reporting process, in all jurisdictions the federal PAC is subject to the contribution limits according to the law of that jurisdiction…

experts line

We have not listed PAC rules for all the states, only examples of some states.
If you have a question on a state not listed here, please contact us directly
at 1-330-761-9960.

Click here to read ALL Ask the Experts articles in full

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April 6, 2017 •

Ask The Experts – Giving Gifts to University Officials and Employees

Q: Our company is a registered lobbyist employer in many states, and we regularly do business with universities. Can my company give gifts to university officials and employees? A: Gifts to university officials and employees fall under the purview of […]

Myra CottrillQ: Our company is a registered lobbyist employer in many states, and we regularly do business with universities. Can my company give gifts to university officials and employees?

A: Gifts to university officials and employees fall under the purview of state ethics laws in a majority of states.  Additionally, universities will often have more restrictive gift policies with respect to vendors. It is especially important to understand what your company can and can’t do at this level, because university employees (especially professors) are sometimes unaware of potential restrictions. Potential penalties can include loss of contracts with a university and/or state fines. Further, if your company is registered as a lobbyist employer, some gifts will need to be disclosed on appropriate reports.

The first step to determine whether a gift to a university official or employee will be permissible is to determine the scope of a state’s gift restrictions…

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Here is your chance to “Ask the Experts” at State and Federal Communications, Inc. 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 email us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need. Our replies are not legal advice, just our analysis of laws, rules, and regulations.

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September 2, 2016 •

Ask the Experts!

Q. My company has registered lobbyists and is a member of local and regional associations in numerous states. Are there any unique disclosure requirements due to these circumstances? A. You should always consider a couple of different aspects of reporting with […]

James WarnerQ. My company has registered lobbyists and is a member of local and regional associations in numerous states. Are there any unique disclosure requirements due to these circumstances?

A. You should always consider a couple of different aspects of reporting with this type of relationship. First and most obvious, the dues you pay to a trade association may have to be disclosed on your lobbying disclosure report.  A trade association can engage in lobbying on behalf of its members, making a portion of your dues reportable as a lobbying expense.

 

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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.

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August 2, 2016 •

Ask the Experts – Best Practices for Record-Keeping

Q. Our company is active and registered as a lobbyist employer in several states. What are best practices for record-keeping? What will we need to access and keep in the event of a state audit? A. Each state takes a […]

Myra Cottrill

Q. Our company is active and registered as a lobbyist employer in several states. What are best practices for record-keeping? What will we need to access and keep in the event of a state audit?

A. Each state takes a different approach to auditing, requiring registered companies and lobbyists to keep substantiating records for varying periods of time.  As a conservative rule of thumb, it’s generally advisable to keep substantiating records for seven years.  However, for each state where your company has an active registration, you should determine if there is a set document retention policy.  While some states have no set period of time for lobbyists/employers to retain records, a majority of states require retention for a set period of time, usually within a three to five year range.

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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.

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June 6, 2016 •

Ask the Experts – The Umbrella Exemption

Q. When I talk to state officials, I’m always with my registered contract lobbyists. That means I’m exempt from registering, correct? A. The kind of exemption you are referring to is commonly called an umbrella exception. In most instances, being […]

Shamus WilliamsQ. When I talk to state officials, I’m always with my registered contract lobbyists. That means I’m exempt from registering, correct?

A. The kind of exemption you are referring to is commonly called an umbrella exception. In most instances, being with a registered lobbyist does not exempt an individual from having to register as a lobbyist.

California and Utah are two states with an umbrella exception, but there are limits to those exceptions. In Utah, an individual is not considered a lobbyist (and thus does not have to register) if he or she:

Interacts with a public official in that official’s capacity as a public official while accompanied by a registered lobbyist who is lobbying in relation to the subject of the interaction or while presenting at a legislative committee meeting at the same time the registered lobbyist is attending another legislative committee meeting; and

Does not make an expenditure for, or on behalf of, a public official in relation to the interaction or during the period of interaction.

California’s umbrella exception is the most well-known, but it was narrowed in March. Now, the umbrella exception will only apply if the individual:

Is an employee of a lobbyist employer;

Meets or speaks with a state official in the company of a registered lobbyist retained by the individual’s lobbyist employer; and

Participates as a subject matter expert regarding a legislative or administrative action at issue.

California’s exception was narrowed to prevent contract lobbyists from being able to utilize the exception and avoid registration and reporting requirements.

As you can see, there are very few umbrella exceptions allowing you to avoid registration. And even when a state has an umbrella exception, there are limits on who can take advantage of them. If you will be attempting to influence a state official, be sure to give us a call prior to your meeting to make sure lobbyist registration will not be required.

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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.

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May 5, 2016 •

Ask the Experts – Aggregation of Contribution Limits

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. This […]

Nola WerrenQ. 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. This is a very important question that must be addressed when making a contribution, particularly when there is a hierarchy to the corporate structure.  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 New York, each affiliated or subsidiary corporation, if a separate legal entity, has its own limit.

In California, contributions made by certain combinations of affiliated individuals, entities, and committees must be aggregated.  It all comes down to a matter of control:

  • The contributions of an entity whose contributions are directed and controlled by any individual must be aggregated with contributions made by that individual and any other entity whose contributions are directed and controlled by the same individual.
  • If two or more entities make contributions directed and controlled by a majority of the same persons, the contributions of those entities must be aggregated.
  • Contributions made by entities majority-owned by any person must be aggregated with the contributions of the majority owner and all other entities majority-owned by that person, unless those entities act independently in their decision to make contributions.

So 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 independently 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.

These are just a few examples of aggregation of limits.  As we always advise, verify the rules in your state before making political contributions.

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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.

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