| PAAT Members:
As discussed in our February 14 Commission Update, we asked the Ethics Commission to establish a working group to discuss the proposed rules on entity reporting and registration and they have done so. The Secretary of State published the proposed rules on February 29th and the working group is scheduled to meet this Thursday, March 13th. The Ethics Commission meeting information is pasted below or you can click here to see the posting on the Ethics Commission website.
I will participate in this session on behalf of PAAT and if you are interested, I encourage you to join us for the work session.
To summarize, the Commission has published three rules dealing with entities and the registration/reporting procedures impacting them. For the purposes of this update, the particular entity rules that need your immediate attention are:
§34.45, which 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.
§34.65, which 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.
§34.85, which 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. This one is the most consequential because it limits the persons that can report on behalf of an entity to a lobbyist for the entity. This obviously will be extremely limiting for entities that currently do not have anyone registered on its behalf. Current law allows any registrant to report on behalf of an entity to avoid registration, so this is a significant change. This becomes a problem, for example, for entities that make direct expenditures but have no lobbyists to report expenditures, and currently use their association lobbyists or related corporation lobbyists to report on their behalf.
We believe that a better approach, and one you should consider addressing in your comments, would be for the Commission to change its form so as to allow the public to more easily determine when an entity has made an expenditure, but continue to allow persons who are not registered for the entity to report when there is no lobbyist working directly for the entity.
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.
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 protection under the Penal Code that comes with “an expenditure made and reported in accordance with Chapter 305, Government Code.”
We asked the Commission to have this working session to discuss the implications of the rule changes prior to the Commission considering the rule for final adoption on April 4th. If you have an interest in attending this session to express your thoughts, please let us know and we will be glad to discuss these issues in greater detail. Otherwise, please consider sending in comments. Please let me know if you have any questions.
Jack Gullahorn
President & General Counsel
Lobby Entity Rules Working Session
The Texas Ethics Commission staff will hold a working session regarding  the lobby entity rules that were proposed by the Commission on February 12, 2008:
Date of Session: March 13, 2008
Time of Session: 9:30 a.m.
Place of Session: State Capitol Extension
Room E1.022
Austin, Texas
To ensure there is sufficient space in the session, please register by calling Mary Young at 512-463-5800 by March 12.
If you have questions about the session, call the Commission’s General Counsel or Deputy General Counsel at 512-463-5800.
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