1. Splitting expenditures

The 2007 Legislature clarified that it is permissible for a lobbyist to split a lobby expenditure with other parties. However, there are some caveats that can trip you up if you are not careful. The law, effective for expenditures made after September 1, 2007, provides that a lobby expenditure may be split, and a registrant only has to report the portion that you (the registrant) paid. But, and this is where it gets more complicated, you also have to report any portion that was paid by a non-lobbyist if no one else is reporting it. Another provision that you should understand in the law is that you can’t split an expenditure for entertainment, gifts or awards or mementos of more than $500 with a nonlobbyist, period. And while the total expenditure for these categories can exceed $500 if you split them with other lobbyists, no single registrant’s portion can exceed $500. Got it? See how easy that was?

2. Reporting compensation and expenditures for an entity

The requirements to register as a

lobbyist apply not only to individuals,

but also to entities, like corporations.

If an entity that receives compensation

or makes expenditures for

lobby activities wishes to avoid the

requirement to register, it may ask

one of its lobbyists (or more than one

in the case of compensation) to register

and report the compensation or

expenditures on its behalf. If reporting

compensation on behalf of an entity,

the registered lobbyists must

report it so that the total reported

does not exceed the total paid by the

client to the entity.

Allocation of fees/compensation paid

to an entity or to a lobbyist is required

under Commission rules, and

Commission directives require a

lobbyist to only report the amount of

compensation paid by a client and

allocated to that lobbyist. (The registrant

could also report compensation

paid to the entity for the lobby activities

of an unregistered individual.)

An individual reporting compensation

and/or expenditures for an

entity must indicate that he or she is

doing so on their lobby registration

report as applicable.

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3. Market value v. cost reporting

Think there’s nothing to report

when you give a member an item for

which you didn’t have to pay? Not

so! Whenever you give something of

value — food, gift, entertainment,

mementos — there is usually a cost

that someone (maybe your client)

paid. If so, you should report the expenditure

using a reasonable

method to determine the cost paid.

For those items with no cost, the advice

is to use the fair market value

of the item – again, using a reasonable

method to determine that market

value.

4. Caucus prohibition

The prohibition on contributions to

caucuses during the session includes

buying or sponsoring meal functions

for caucus meetings. Remember,

sponsoring caucus events during the

session is treated just like campaign

contributions to members: prohibited.

5. Legislative advertising

disclaimers

Thinking about what to include in

that piece that tells your story?

Don’t forget to include a legislative

advertising disclaimer if you need it!

It’s legislative advertising if it is a

communication that supports, opposes

or proposes legislation and

that:

(1) in return for consideration, is

published in a newspaper, magazine,

or other periodical or is broadcast by

radio or television; or

(2) appears in a pamphlet, circular,

flier, billboard or other sign, bumper

sticker, button, or similar form of

written communication.

The Commission has determined

that the requirement for the legislative

advertising disclaimer does not

apply to Web sites or e-mails. The

Commission asked the Legislature

to revisit this issue to make sure

they really meant to exempt websites.

The Legislature did nothing,

so the exemption stands.

6. Mass media reporting

Don’t forget to report “mass media

expenditures” on your lobby activities

report. “Mass media expenditures”

are expenditures made for

broadcast or print advertisements,

direct mailings, and other mass media

communications that support,

oppose, or encourage others to support

or oppose pending legislation or

administrative action if those communications

are made to a person

other than a member, employee, or

stockholder of an entity that reimburses,

retains or employs the registrant.

7. Gifts of food and beverage

In 2005, PAAT supported changes in

the law which allow for an expenditure

for food and beverages intended

as a gift to be reported as a gift under

certain circumstances. This is

important since you have to be present

to make an expenditure for food

and beverages, but you don’t have to

be present for a gift. In this specific

case — food and beverages with a

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value of $50 or less intended as a

gift delivered by first-class United

States mail or by common or contact

carrier outside the Capitol complex

— the charge for delivery is not considered

part of the reportable expenditure.

You are only required to

report the cost of the food and beverage,

which is then reported as a

gift.

8. Conflicts of interest: you

better know it when you see it

The laws governing conflicts of interest

for lobbyists are pretty technical,

and are somewhat similar to the

conflicts rules for lawyers (which

also apply to lawyer-lobbyists).

A lobbyist may continue to represent

a client when there is a conflict of

interest (as defined in the statutes)

so long as the lobbyist (a) complies

with the required client and Commission

notification requirements

and, (b) in some instances, each affected

client consents to the conflict

and grants the lobbyist permission

to continue the representation. The

penalties for violation of the conflicts

provision of the lobby law not only

carry potential monetary fines of up

to $2,000, but also have the possible

sanction of removing the right to act

as a registered lobbyist for up to two

years.

9. Credit card reporting options

A welcome flexible provision of the

law dealing with expenditures allows

a lobby expenditure made with

a credit card to be included in either

the report in which the charge is

made (the date of the expenditure)

or the report filed for the period in

which the credit card statement is

received.

10. Correcting reports and

avoiding fines

In the past, if you were to correct

your lobby report that was previously

filed on-time, that correction

would have subjected you to a $500

late-filing penalty. The law now provides

that a lobby registration or activity

report is not considered late if

a corrected report is filed no later

than 14 business days after the date

the registrant became aware of the

error and the registrant files an affidavit

that the error was made in

good faith.