In late 2013, the New York City Council passed Local Law 129 of 2013, making many changes to current lobbying law in the city and surrounding boroughs. Many of the new law’s provisions are effective today, May 16, 2014.

The definition of lobbying is revised to include attempts to influence legislation not yet introduced, legislation at the state and federal level, and mayoral executive vetoes. It is also revised to include attempts to influence the agenda or calendaring of a meeting of a board or commission. The revised definition excludes architects and engineers as lobbyists under certain parameters, and the law now imposes a $10,000 registration threshold for such individuals should they undertake lobbying activities. The registration threshold for all other lobbyists is $5,000.

Local Law 129 of 2013 requires more detailed disclosure on the statement of registration and on periodic reports. The new law further establishes a first-of-its-kind amnesty program, allowing noncomplying lobbyists to enroll in the program and be exonerated of late filing fees and applicable civil and criminal penalties dating back to December 10, 2006.

Provisions taking effect in the future include a mandatory lobbyist training program and the practice of the city clerk reviewing sources of information such as state lobbyist filings and the Doing Business Database to identify lobbyists required to register who have not done so.

Photo of the New York City Hall courtesy of Momos on Wikimedia Commons.

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.

Senate Bill 6414, introduced this week by a group of Washington senators led by Senator Joe Fain, requires all reports to be filed electronically. The bill contains several other strictures, including requiring the Public Disclosure Commission to make all filings available on its website, mandating each lobbyist or lobbyist’s employer sharing in an expenditure greater than $25 to report the specific dollar amount of his or her share, and requiring all lobbyist filings to include an itemized list of all payments made to a state official, regardless of dollar amount.

Another section of the bill implores the Ethics Board to define the limits of “infrequent occasions” in the context of the acceptance of gifts of food and beverages by public officials from lobbyists. This section of the bill comes after a widely-read report showing the state’s 50 most active lobbyists pampered legislators with meals totaling more than $65,000 over a four-month period.

A final section of the bill allows lobbyists to avoid reporting expenses for a legislator’s food at a meeting with the lobbyist if such expenses were paid by the legislator.

Photo of the interior of the Washington State Capitol courtesy of Eric Hunt on Wikimedia Commons.

Following the November 13, 2013 meeting, the Georgia Government Transparency and Campaign Finance Commission issued an order to deny lobbyist renewal for the calendar year of 2014 for each lobbyist with outstanding registration, supplemental registration, identification card, and/or badge fees.

The commission will also deny lobbyist renewal for each lobbyist with unpaid fines or unfiled disclosure reports.

The 2014 fees for the lobbyist identification badge ($20) and supplemental registration ($10) will remain unchanged from 2013 amounts.

Senate President Don Gaetz is calling for random audits of lobbying firm compensation reports. Gaetz says funding was never set aside for audits to be performed in the past, so he has asked the Senate general counsel to determine what powers the Legislature has to provide funding to conduct audits going forward.

House Speaker Will Weatherford has already indicated his support for the proposal.

Governor Mike Pence has signed a bill to change legislative lobbying regulations. Enrolled Act 1222 expands the definition of lobbying to include communications with any employee of the legislative branch and requires lobbyists to file registration statements and activity reports electronically.

The bill also increases the annual lobbyist registration fee from $100 to $200 and makes the lobbyist registration year match the current lobbyist reporting periods. Lobbyist registration statements issued for 2013 will expire November 1, 2013.

Most of the bill’s provisions become effective July 1, 2013.

The House has passed a bill to overhaul ethics laws, including campaign finance and lobbying. House Bill 3945 creates the Joint Committee on Ethics and the Public Integrity Unit to investigate complaints and replace the separate House and Senate ethics committees.

The bill includes new reporting requirements for campaign contributions just before an election and extends lobbyist registration and reporting for individuals lobbying local governments and school boards.

A final approval on Wednesday, May 1, 2013, allows the bill to meet the crossover deadline for Senate consideration. If sent any later, the bill would need a two-thirds vote for Senate passage.

As a result of the state of Maine’s observance of Patriot’s Day, the March lobbying report is now due on April 16, 2013. Normally, the monthly lobbying report is due on the 15th day of each month, but with the state holiday, the Ethics Commission has pushed back the due date.

All registered lobbyists must file a report, even if no lobbying was done during the month. If a lobbyist did not lobby during the month of March, he or she may file a short-form report.

Patriot’s Day is only a state holiday in Maine and Massachusetts (in Massachusetts it is officially Patriots’ Day) and celebrates the anniversary of the Battles of Lexington and Concord, the first battles of the Revolutionary War. In Boston, the holiday is celebrated by the running of the annual Boston Marathon and a late morning Boston Red Sox game.

Photo of the Lexington Minuteman statue by Daderot on Wikipedia.

Q. We’ve had some disagreement internally within our organization – please help. As a federal registrant employing in-house lobbyists, are we only required to report the time and expenses associated with our “registered” lobbyists.

A. It’s a good question. The answer to which often gets lost amongst the efforts to report lobbyists’ activities. Federal registrants are certainly required to make best efforts to track, capture, and report the lobbying activities and expenses of those employees who meet the 20% threshold standard (lobbyist employee). In addition, registrants are equally required to track, capture, and report expenditures associated with employees who do not meet the 20% threshold but still engage in lobbying activities during the course of the quarter (non-lobbyist employees.) The names of non-lobbyist employees are not included on the report and neither is information related to what issues they addressed or contacts they made. That said, the Secretary of the Senate and Clerk of the House have consistently advised that all employee time spent engaged in lobbying activities should be included when determining an organization’s lobbying expenses, even when the employee(s) does not meet the statutory definition of being a lobbyist. In line with the best efforts standard, then, it is important to have in place reasonable, demonstrable processes to capture both lobbyist and non-lobbyist activities.

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.

The first rule details when non-lobbyist employees must register as a lobbyist. In North Carolina, an employee must register as a lobbyist if a significant part of that employee’s job duties include lobbying. The new rules stipulate that this threshold is met if at least five percent of an employee’s duties include direct or goodwill lobbying during any rolling 30 day period. Once this threshold is met, the employee must register as a lobbyist within one business day.

The second rule explains what must be included when providing a description of a reportable expenditure for the lobbyist reports. The description must identify what was given, who the third party was that received the expenditure, and the name of the event or meeting where the expenditure was given.

The third rule describes how to determine the immediate family member who is connected with a reportable expenditure. On the reports, the name of the designated individual or immediate family member connected with the expenditure must be reported. The person that must be identified is the person who either received or benefited from the expenditure, or who requested the expenditure be made on someone’s behalf.

The fourth and final rule effecting lobbying details what must be reported in connection with a lobbying event. The entire cost of a lobbying event must be reported, rather than just the costs of any gifts given. Examples of the non-gift expenditures that must be reported include supplies, facility rental, food, name badges, flowers and other decorations, planning services, and all other expenses and charges incurred in connection with the lobbying event.

If you are registered as a state lobbyist, there is a good chance you have received notification for the state to conduct an audit on your lobbying reports. California, Indiana, Pennsylvania, New York, West Virginia are just a few states with random acts of audit.

But, are you ready for an IRS audit of your federal reports?

According to State and Federal Communications friend and client, Ken Gross from Skadden Arps, about 75 percent of the filings to the US Secretary of the Senate are filed using the LDA method, as opposed to the IRS method. That’s fine in practice, but your organization’s IRS filings need to show everything but lobbying activities.

When we are speaking with clients and audiences we emphasize the importance of keeping track of time, not only for your lobbying reports, but for your company’s filing with the IRS since the time devoted for lobbying is not deductible. It is impossible for anyone to spend 100% of time on lobbying because there are other administrative things people have to do, meetings to attend, and conferences to attend.

It is important companies keep two sets of books.

No, this is not The Producers where Matthew Broderick has two books—one to show the government and one not to show the government. It allows your organization to file its LD2 report without having to disclose lobbying expenditures for state and grassroots activities and still have the information to include in the IRS filings.

Take the opportunity to ask the accounting department if they are keeping track of time two different ways to insure your LD2 reports are accurate and, more important, when the IRS is a’knocking you can rest assured your reports are A-OK.

Until next month, I wish you all a Merry Christmas and Happy New Year.

Federal:

K Street Flags Shortcomings of Lobbying Law

From the States and Municipalities:

Arizona

Judge: Listing of PAC contributors unconstitutional

California

California’s Campaign Finance Watchdog Agency Demands Names of Donors to Shadowy Arizona Group

California

Judge Rejects Former Bell Police Chief’s Bid to Double Pension

Florida

State Ethics Commission: David Rivera broke 11 ethics laws while serving in Florida Legislature

Georgia

Atlanta Region Sees Spike in Public Corruption Cases

Idaho

Idaho Sues to Force Disclosure of Secret Donations

Illinois

Appeals Court Allows Illinois Limits on Campaign Financing

Iowa

‘Donations’ to State Agency Let Landlords Avoid Charges

Kentucky

Ethics Panel Wants Lobbyists to Report Ad Spending

Montana

Supreme Court Won’t Block Montana Campaign Finance Law Ahead Of Elections

New Jersey

Infamous Federal Informant Solomon Dwek Is Sentenced to Six Years, Must Pay $22.8 Million

North Dakota

Campaigning Fargo Candidate Finds Body under Tree

Tennessee

With Registry’s Ruling, Burchett Case Closed

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Tomorrow at a public hearing at its offices at 11:00am, the New Jersey Election Law Enforcement Commission (ELEC) will consider proposed changes to the administrative code allowing for electronic filing for lobbyists’ annual reports.

Electronic filing would be mandatory through ELEC’s website and would replace the requirement to file paper copies. Copies of what a lobbyist files electronically must be retained by the lobbyist. The proposed amendments cover governmental affairs agents, represented entities, and representatives of “persons communicating with the general public.” The proposals also make technical changes, such as substituting “represented entity” for “lobbyist” throughout the relevant sections.

Other issues to be addressed at the meeting include proposed amendments concerning campaign cost index adjustments and personal financial disclosure statements by candidates.

Delaware is now a signature away from adding to its lobbyist reporting requirements. On Thursday, the House passed Senate Bill 185, leaving the bill only a governor’s signature away from becoming a law.

The bill requires lobbyists to report to the Public Integrity Commission the identity of each bill, resolution, or regulation they have lobbied for or against. These reports would be due within five days after the first direct communication a lobbyist makes. The Public Integrity Commission will make the reports available online so that the public will be able to see who is lobbying on each measure going through the legislature.

If the governor signs the bill, which he is expected to do, the law would become effective in 2013.

Photo of Legislative Hall in Dover courtesy of Joshua Daniel Franklin on Wikipedia.