1. Proposed Rule: § 34.45. Entity Registration
PAAT Recommendation: Support
(a) An entity that is required to register under Government Code, § 305.003, and this chapter may nonetheless avoid registration if all activity otherwise reportable by the entity is reported by one or more individual registrants in accordance with § 34.65 and § 34.85 of this title (relating to Compensation Reported by Lobby Firm Employee and Individual Reporting Expenditure by Entity).
(b) An entity that avoids registration under subsection (a) of this section becomes subject to Government Code, § 305.024 on the date that the entity would have been required to register as a lobbyist, and ends on midnight, December 31, of each year in which the activity occurs.
(c) [b] Registration by an entity does not relieve any individual of the requirement to register if that individual meets one of the registration thresholds in Government Code, § 305.003.
- This change to §34.45 would provide that an entity that avoids the requirement to register as a lobbyist by having a lobbyist report on its behalf is subject to §305.024 of the Government Code.
- This means that entities will now have the same $500 limitations on entertainment, gifts, awards and mementos as individual registrants.
- The Commission may include in the new rule a wording change to provide that an entity or individual is subject to the reporting requirements as soon as they cross the expenditure threshold, not as of the date they are required to register.
2. Proposed Rule: § 34.65. Compensation Reported by Lobby Firm Employee
PAAT Recommendation: Support
(a) An individual registrant employed, reimbursed, or retained by a business entity that receives compensation and/or reimbursement for lobby activity is required to report all compensation and/or reimbursement paid to the entity for lobby activity by that individual.
(b) An individual registrant employed, reimbursed, or retained by a business entity that receives compensation and/or reimbursement for lobby activity may also report compensation and/or reimbursement paid to the entity for lobby activity by one or more other persons if the entity requests that the individual do so in order for the entity to avoid registration.
(c) The individual registrant shall report the compensation by the date on which the entity, if registered, would have been required to report it. The individual registrant shall indicate on a registration or amended registration, as applicable, that he has reported compensation and/or reimbursement paid to an entity for lobby activity by one or more persons other than the registrant.
- This change to §34.65 would require a registered lobbyist who is reporting compensation on behalf of an entity that is not registered to report the compensation by the date on which the entity, if registered, would have been required to report the compensation.
3. Proposed Rule: § 34.85. Individual Reporting Expenditure by Entity
Recommendation: Change to (a); Support (b) and (c)
(a) An individual registrant may report an expenditure made by a lobby entity if:
1. The entity requests that the individual do so in order for the entity to avoid registration; and [.]
2. The entity makes the expenditure in order for the individual to act on the entity’s behalf to communicate directly with a member of the legislative or executive branch to influence legislation or administrative action; or
3. The entity compensates or reimburses the individual to act on behalf of the entity or on behalf of the entity’s clients to communicate directly with a member of the legislative or executive branch to influence legislation or administrative action.
(b) The individual registrant shall report the expenditure by the date on which the entity, if registered, would have been required to report it. The individual registrant shall indicate on a lobby activity report that he or she has reported expenditures made by an entity and indicate the specific amount reported on behalf of the entity.
(c) For purposes of Government Code, § 305.0021(b), an expenditure made by an entity under subsection (a) of this section, is not a joint expenditure for purposes of Government Code, § 305.0021(b) if the entity makes the entirety of the expenditure at issue.
(d) [b]In this provision “lobby entity” means a corporation, association, firm, partnership, committee, club, organization, or other group of persons voluntarily acting in concert that meets one of the registration thresholds in Government Code, § 305.003.
- These changes to §34.85 would set a criteria that must be satisfied before a registered lobbyist may report an expenditure on behalf of an entity in order for the entity to avoid the requirement to register as a lobbyist.
- Current rules allow any registrant to report on behalf of an entity to avoid registration.
- The rules as currently proposed provide that an unregistered entity (with no individual registered on its behalf) which makes an expenditure that is required to be reported will:
1. be required register to report the expenditure or
2. be required to have an individual register on its behalf and report the expenditure.
- For those entities that now report their expenditures through a non-related lobbyist (one who is not registered for the entity), this will be a significant change.
- If you comment to the Commission on these rules, we hope you will request that the Commission create a third option: to allow a non-registered entity to report through any registrant when there is no registrant retained by the entity if the entity and the registrant both file information about the expenditure to the Commission in a form acceptable to the Commission so that the details of the expenditure may be more easily reviewed and found by the public.
- The new rule would also require a registered lobbyist who is reporting an expenditure on behalf of an entity that is not registered, to report the expenditure by the date on which the entity, if registered, would have been required to report the expenditure.
- The new rule would also require the registered lobbyist who is reporting on behalf of an entity to report the specific amount of the expenditure in addition to the name of the entity.
- Additionally, the rule makes it clear that if an entity makes an expenditure that is not a split expenditure, and the entity gets a lobbyist to report the expenditure on its behalf, then the expenditure is not considered to be a split expenditure and the entity is therefore afforded the necessary protection under the Penal Code that comes with “an expenditure made and reported in accordance with Chapter 305, Government Code.” A comment supporting this subsection (c) is particularly important.
