Lobbyists in Austin have agreed to cooperate with the city and disclose how much clients pay them. Taking a lead from state and federal filing requirements, Austin began requiring lobbyists to report what they are paid last year.

Seventeen lobbyists registered with the city, all lawyers, asserted attorney-client privilege prohibited them from the disclosure. The city’s Ethics Review Commission was scheduled to hear ethics complaints filed against the group, but all 17 amended their reports to add the missing information.

A lobbyist who originally refused to disclose his compensation said the City Clerk accepted the form without the information and there is even space provided for an explanation as to why the compensation information was not disclosed.

Austin’s actions this week have set an example for enforcing the reporting requirements moving forward.

California’s Fair Political Practices Commission (FPPC) will consider a proposed regulation to further clarify the definition of “lobbyist” at a public hearing set for July 21, 2016.

The proposed regulation would create a rebuttable presumption that all compensation from a person for services that include direct communication with a qualifying official for the purpose of influencing legislative or administrative action received within a calendar month is for the purpose of direct compensation.

The FPPC is accepting written comments on the proposal until July 18, 2016.

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.

Here is a question we have been asked many, many times by clients over the years.

Q. How do I most accurately calculate my pro-rata share of compensation when I am registered as a lobbyist in five different states? Do I take my gross annual salary and divide it by five?

A. If you take your gross annual salary and divide it by five, you will undoubtedly over-report your compensation. Although you can never go wrong over-reporting, you should also strive for accurate reporting, especially in this instance.

Think of your lobbying in terms of hours. Review your calendar a month, or even a week, at a time to determine the number of hours you lobbied in a particular state. Now, assign a dollar value to those hours, and the result is accurate reporting.

To do this, follow this formula:

1.    Take your gross annual salary and divide it by 2,080 (52 weeks in a calendar year multiplied by 40 hours per week). This is your hourly rate.

2.    Multiply the number of hours you lobbied by your hourly rate. This amount is the reportable pro-rata share of your compensation for lobbying in that state.

Here’s an example:

1.     Gross annual salary is $120,000.

2.     $120,000 divided by 2,080, is an hourly rate of $57.69.

3.    Fifteen hours lobbied in a particular state during a reporting period, multiplied by the hourly rate of $57.69, is $865.35. In this example, this is your reportable pro-rata share of your compensation for lobbying.

Of course, you have work weeks that exceed 40 hours. And you also go on vacation. Using 2,080 as the number of work hours in a calendar year is a generally accepted accounting principle that will sustain scrutiny of even the most stringent of state auditors.

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.