The Philadelphia Board of Ethics approved amendments to the city’s campaign finance rules this week. Included in the amendments is a more expansive definition of third party support of a candidate.

Campaign materials produced by a candidate and subsequently used by an individual or PAC, independent of the candidate, now constitutes an in-kind contribution subject to the city’s contribution limits. The new rule is intended to curb a growing trend among candidates of posting videos on the internet, allowing third parties to take the material and independently create political advertisements.

The board unanimously approved the changes in an expedited manner to ensure the new rules would cover the impending 2015 mayoral race.

On August 21, the Texas Ethics Commission issued two advisory opinions and a proposed rule amendment.

Advisory Opinion 519 holds a state candidate is not prohibited from accepting an in-kind political contribution from an out-of-state political committee. The contribution to a candidate is allowed if made from a permissible source and the candidate properly complies with the applicable disclosure requirements.

In Advisory Opinion 518, the commission upheld that a group is not a political committee if not accepting or intending to accept political contributions and not using or intending to use more than 20 percent of its funds and other resources to make political expenditures.

The Ethics Commission also voted to propose a rule change by defining “principal purpose” in relation to a group making political contributions and expenditures. While a group can have more than one principal purpose, the definition would create a threshold triggering the disclosure of political contributions and expenditures. The commission also proposed other rule changes. The proposed rules are currently open for comment.

Photo of the Texas Capitol Rotunda dome interior by Ed Uthman on Wikimedia Commons.

Q. I am a registered lobbyist who was asked to make an in-kind contribution on behalf of my company for an event to be held by a state political party. Is this permissible?

A. As a registered lobbyist, your contributions may be governed by two sets of laws: campaign finance and lobbying.

First, you must determine whether the state would consider the in-kind payment to be a contribution or a lobbying expenditure.

If the in-kind payment is determined by the state’s governing body to be a contribution, then this contribution must be compliant with the campaign finance laws. You must first determine if the amount and source of funding are permissible. Assuming permissibility of the contribution, potential restrictions on contributions facilitated by lobbyists and the reportability of contributions facilitated by lobbyists will need to be reviewed. In some states, once the in-kind contribution is made, the lobbyist and the lobbyist’s principal may not have additional involvement with the planning of the event, but will be permitted to attend.

Where the state considers the in-kind payment to be a lobbying expenditure and not a political contribution, you must ensure that the expenditure will not exceed the state’s gift limit. The pro-rata share of the expenditure attributable to all public officials who attend the event may be reportable on a disclosure report.

While this analysis will vary from state to state, it is important to be cautious when making in-kind payments.

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.