The special session, called by Governor Riley in late December, lasted seven days and saw the passage of several landmark bills, each of which was promptly signed into law.

The most dramatic change concerning lobbyists is the newly enacted expenditure limits.  Previously, lobbyists could spend anything on an official without having to report it until the spending exceeded $250 per day.  Now, lobbyists may only spend $25 on an official for a meal with an annual limit of $150.  For a lobbyist’s employer, the limit is $50 per meal with a $250 annual cap.  This law has been criticized by some as having too many loopholes.  For instance, the limit does not apply to an “educational function” or certain “widely attended” events.  Disclosure of spending at these events is still required when spending exceeds $250 per official.

Lawmakers also passed a ban on PAC-to-PAC transfers of funds.  This, lawmakers hope, will reduce the “shell game” sometimes played which makes it very difficult for the public to track who is actually funding candidates or making expenditures.

Several of the laws passed impacted the actions of state officials directly.  Starting in 2014, a state lawmaker will no longer be allowed to hold another government job.  Additionally, the reforms include a ban on “pass through pork.”  This is a practice whereby state lawmakers could direct an agency to spend money a certain way without legislative approval.  Finally, the Alabama Ethics Commission will be granted subpoena power; this is expected to make enforcement of the laws much easier and effective.

The most controversial bill passed during the session is one banning politically active groups from receiving contributions via payroll deduction from state employees.  This law was decried as an attack on the American Education Association, a group usually linked to Democratic candidates.  Governor Riley, a Republican, defended the bill as a step to prevent misuse of state time and money.

While most agree the reform package is not perfect or all-inclusive, most within the state’s ethics and political circles agree they are a significant step forward at a time when Alabama badly needs one.

Photo of the Alabama Statehouse by Spyder_Monkey on Wikipedia.

Q. If I provide a gift to a covered official exceeding the gift limit in that jurisdiction, can the covered official reimburse my employer for the difference?

A. This is a situation you never, ever want to be in, but sometimes it happens. Fortunately, most of the states allow for the covered official to reimburse the donor in order to rectify the situation.

One of the circumstances precluding reimbursement is when too much time has elapsed between providing the excessive gift and reimbursement by the official. If too much time has passed, the state considers the gift to have been “accepted” by the official, and reimbursement is not an option.

Also, even if the official reimburses the overage, sometimes the lobbyist, the official, or both must nonetheless report the total value of the gift. From a disclosure standpoint, this makes a precarious situation even more suspect.

Some examples of these rules include the following:

• In Connecticut, the gift limit is $10. The official may not partially reimburse a more expensive gift to bring the final cost to the lobbyist below $10, because the overall value of the item is still over $10 [Advisory Opinion 1997-15].

• In the state of Washington, an official’s name cannot be removed from a filed lobbying report, regardless of whether the official has fully reimbursed the lobbyist for the reported expenditure. In addition, an official cannot partially reimburse a lobbyist for an expense to bring the total cost below the $50 reporting threshold. Even if a partial reimbursement occurs, both the lobbyist and the official must report the full amount. The only way an expenditure exceeding the threshold does not have to be reported is if the official fully reimburses the lobbyist prior to the lobbyist filing the lobbying report disclosing the expenditure.

• In New York, public officials and employees may completely reimburse the donor of a gift if the reimbursement is not removed or remote in time in order to comply with the gift ban [Advisory Opinion No. 97-03]. If an item, entertainment, or other benefit is received and payment of its market value is made prior to or simultaneously with receipt, there is no gift [Advisory Opinion No. 97-03].

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.