The Rules of Engagement: Lobbying in Pennsylvania Corinna Vecsey Wilson, Esq. President, Wilson500, Inc.
Corinna Vecsey Wilson, Esq. March 1, 2017 Lobbying What it is. And what it isn t.
As American as apple pie Lobbying is an activity protected by both the United States and Pennsylvania Constitutions $473 million spent on lobbying in PA in 2014 It s something in which all advocacy groups should engage
THE L WORD LOBBYING: WHAT IT IS AND WHAT IT ISN T
Advocate or Lobbyist? Have you: ü Identified ü Embraced ü And promoted a cause you care about? In the last 3 months, did you: ü Earn over $2500 for lobbying? ü Make more than one lobbying contract? ü Spend 20% or more of your time lobbying on behalf of your employer or a client?
Why we need lobbying. Why we need YOU Lobbying isn t just a constitutionally protected activity, guaranteed to us under the First Amendment. It can be one of the best ways to educate, advocate, further your mission, change the world! Public officials need information; it s our job to provide it to them!
Is it legal? YES! IRS Federal Your group State Local 3 WAYS LOBBYING IS REGULATED: 1. IRS via regulations for tax exempt (501c3) organizations 2. Federal government via requirements for lobbying disclosure 3. State & local via additional disclosure requirements
PA What is lobbying? Each defines lobbying a bit differently: FEDS Tax code The IRS uses the most limited, specific definition: Influencing legislation applies to all tax-exempt organizations Federal law expands the definition: Influencing legislation & administrative action federal activities only PA has the most broad definition: Any effort to influence legislative action or administration action state activities only
Lobbying Defined IRS Regulated Activity Not Regulated The limitation applies only to attempting to influence legislation. Legislation includes action by a legislative body at any level of government, such as Congress, a state legislature or city council. It also includes action by the public on a referendum, ballot initiative, constitutional amendment or similar procedure. Legislation does not include promulgating administrative regulations or taking executive actions which do not require changes in the law. It does not include action by administrative bodies, such as school boards, zoning boards, housing authorities or other agencies which do not pass laws It does not include litigation.
Lobbying Defined Federal Law Definition Exceptions Lobbying activity is any oral, written or electronic communication with a covered legislative branch official or executive branch official in connection with the formulation, modification, or adoption of any legislation or regulation and also the administration or execution of a federal program (including the negotiation, award or administration of a contract, grant, loan, permit, or license), as well as senate confirmations. It also includes research, planning and preparation for lobbying. Public speeches or testimony Written responses to an official inquiry; responses to federal register notices Comments or petitions that become part of the written record or Communications that are required by subpoena or in accordance with any contract, grant, loan, permit or license
Lobbying Defined Pennsylvania Definition Exceptions/Exclusions Lobbying: An effort to influence legislative action or administration action and includes direct or indirect communication, office expenses, and providing any gift, hospitality, transportation or lodging to a state official or employee for purposes of advancing the interest of a lobbying firm or principal Effort to influence is not defined. Testifying before committee or agency; Participation in administrative proceeding or adjudication; Newsgathering; Service on an advisory board, working group or task force at request of agency or General Assembly; Vendor activities relating to procurement code
Brief Review of IRS Rules on Nonprofit Advocacy Section 501(c)(3) of United States Tax Code: no substantial part of an organization s activities can include attempting to influence legislation or lobbying.
What is Regulated Advocacy Under IRS Regs? (Regardless of Election) Not all advocacy is limited. The limitation applies only to attempting to influence legislation. Legislation includes action by a legislative body at any level of government, such as Congress, a state legislature or city council. It also includes action by the public on a referendum, ballot initiative, constitutional amendment or similar procedure. Most nonprofits which are grantees or contractors to federal government are bound by OMB Cir. A-122 and cannot use federal funds for lobbying
What Isn t Regulated Advocacy Under IRS Regs Legislation does not include promulgating administrative regulations or taking executive actions which do not require changes in the law. It does not include action by administrative bodies, such as school boards, zoning boards, housing authorities or other agencies which do not pass laws. It does not include litigation. Understanding this distinction opens a whole lot of territory for advocacy, without having to worry whether it is a substantial portion of your activity.
However, the IRS is very clear about electioneering by nonprofits. You can t do it!
Details on Prohibited Electioneering Prohibited political campaign intervention includes any and all activities that favor or oppose one or more candidates for public office at any level. The prohibition extends beyond candidate endorsements. Contributions to political campaign funds or public statements of position (verbal or written) made by or on behalf of an organization in favor of or in opposition to any candidate for public office clearly violate the prohibition on political campaign intervention.
Details on Prohibited Electioneering Distribution of statements prepared by others that favor or oppose a candidate are also prohibited. Allowing a candidate to use an organization s assets or facilities will also violate the limit if other candidates are not given an equivalent opportunity. Voter registration and get-out-the-vote activities are permissible so long as they don t favor or oppose a candidate. Many determinations will be made on a facts and circumstances review of the entire situation.
Tax Law vs. Lobbying Disclosure Rules Federal tax law is not the only legal consideration when planning advocacy strategies. Consider applicable federal, state and local (including Philadelphia and Pittsburgh) lobbying registration and disclosure laws, which have different definitions, registration requirements and expense filing standards.
Federal Lobbying Registration and Disclosure The Lobby Disclosure Act of 1995 as amended by the Honest Leadership and Open Government Act of 2007, requires lobbying firms and organizations to register and file quarterly reports on lobbying and certain contributions and expenses with the Secretary of the Senate and the Clerk of the House.
Federal definition of lobbying Lobbying activity is any oral, written or electronic communication with a covered legislative branch official or executive branch official in connection with the formulation, modification, or adoption of any legislation or regulation and also the administration or execution of a Federal program (including the negotiation, award or administration of a contract, grant, loan, permit, or license), as well as Senate confirmations. It also includes research, planning and preparation for lobbying.
Exceptions Public speeches or testimony; Written responses to an official inquiry; responses to federal register notices; Comments or petitions that become part of the written record; or Communications that are required by subpoena or in accordance with any contract, grant, loan, permit or license.
Federal Definition of Lobbyist Under the LDA, a lobbyist is any person who: Receives financial or other compensation for lobbying in excess of $2,500 per three month period; Makes more than one lobbying contact; and Spends twenty per cent or more of his or her time over a three month period on lobbying activities on behalf of an employer or individual client. Unless each of these criteria is met, there is no registration requirement for that individual
Pennsylvania Registration and Disclosure Laws $473 million reported to have been spent on lobbying in 2014 Aggregate fines average $100,000 over past two years / 0.002 percent Not considered a particularly strong law; it s no MN or WA Many advocate a dollar one system for maximum transparency
Other Factors Governor Wolf implemented a total gift ban for Executive branch staff Other, independent agencies have followed suit (PA Turnpike Commission, PA Liquor Control Board, the PA Public Utility Commission) PA Senate and House have banned cash gifts
Lobbying Overview Does not apply to volunteer lobbying activities or pro bono legal services. Salaries of employees and reimbursement of expenses for volunteers counts as payment, however. Expressly applies to attorneys via PA Rule 1.19 of PA Rules of Professional Conduct
Key Definitions Lobbying: An effort to influence legislative action or administration action and includes direct or indirect communication, office expenses, and providing any gift, hospitality, transportation or lodging to a state official or employee for purposes of advancing the interest of a lobbying firm or principal. Effort to influence is not defined.
Legislative Action Action taken by a state official or employee involving the preparation, research, drafting, introduction, consideration, modification, amendment, approval, passage, enactment, tabling, postponement, defeat or rejection of: legislation; Legislative motions; A veto by the governor; or Confirmation of appointments by the governor or appointments to public boards or commissions by a member of the General Assembly.
Administrative Action An agency s proposal, consideration, promulgation or recission of a regulation; Development or modification of a statement of policy; Approval or rejection of a regulation; Procurement of supplies, services and construction under 62 PA.C.S. (relating to procurement) The review, revision, approval or disapproval of a regulation under the Regulatory Review Act; The Governor s approval or veto of legislation; The nomination or appointment of an individual as an officer or employee of the Commonwealth; and The proposal, consideration, promulgation or rescission of an executive order.
What Is Lobbying in PA? Efforts to get inclusion of funds into the Capital Budget Day on the Hill activities of a trade association PR firm activity if otherwise meeting the definition of lobbying, e.g. in an effort to influence legislative or executive actions Attempts to influence an agency s preparation, bidding or entering in a contract
What Is Lobbying in PA? Buying an online in print ad advocating for the inclusion of funding for a particular initiative (e.g., gas well monitoring) Hosting legislators for dinner at an annual industry meeting if their committee assignments or geography makes them relevant to the success or failure of an organization s legislative agenda. Comments made in news media by an association executive or officer opposing legislation.
What Is Not Lobbying in PA? A lawyer representing her client in an administrative adjudicatory proceeding before the PA Board of Finance and Revenue. Campaign expenditure or activities expressly regulated by the Election Code, such as campaign finance disclosures. Participating in a Day at the Capitol event as a volunteer (for the volunteer); this may be considered lobbying by the sponsoring organization if it reimburses its volunteers for expenses. Seeking a charitable foundation grant for mission-related work that may include activities in the public sector.
What Is Not Lobbying in PA? Actions to obtain state contracts if type of contract is within PA Procurement Code with limited exception for competitive bidding process. Partnering with the First Lady on a charitable event. Mere monitoring of legislative or administrative action; if entity otherwise required to register as a lobbyist or principal, the costs of monitoring must be reported with it occurs in connection with activity that constitutes lobbying.
What Is Not Lobbying in PA? The participation of promoters and sponsors of Capitol All-Stars charitable softball game is not lobbying because it does not seek to influence legislative or administrative action. The dissemination of legislative news such as PCN or PLS. Newsgathering and distribution Comments made in the news media about an industry s overall issues. Donating to a state agency s annual holiday drive to benefit needy families.
Registration WHO? Anyone who or any organization which lobbies Principal: An individual, association, corporation, partnership etc. on whose behalf a lobbying firm or lobbyist engages in lobbying. Lobbying Firm/ Lobbyist: An individual, association, corporation, partnership etc. that engages in lobbying on behalf of a principal for consideration, including employees. WHEN? Within ten days of acting in any capacity as a lobbyist, lobbying firm or principal. HOW MUCH? Each registration = $300 every other year. FOR HOW LONG? Once an entity registers, it must file a report each quarter even if it made no expenditures during that quarter until its registration is amended or terminated.
Exclusions to Registration Requirements Activities limited to testifying before committee or agency; Participation in administrative proceeding or adjudication; Newsgathering; No consideration or payment; Lobbying for an employer if lobbying less than 20 hours in one quarter; Principal s total economic consideration for lobbying is less than $2,500 in the aggregate in one quarter.
More Exclusions to Registration Requirements Church personnel if lobbying done solely to protect constitutional right to free exercise of religion; Service on an advisory board, working group or task force at request of agency or General Assembly; Campaign finance expenditures; Vendor activities relating to procurement code.
Reporting Requirements WHEN: Within 30 days of the end of each quarter WHO? Registered principal required to file under oath quarterly expense reports no later than 30 days after the last day of the quarter. Lobbyists only required to file expense reports if lobbying expenses not contained in principal s expense report. If $2,500 threshold not met, then a statement to that effect must be filed by checking the appropriate block on the reporting form.
Reporting Requirements INCLUDES WHAT? Expense report must include total costs of all lobbying for the period, including office expenses, personnel expenses, expenditures related to gifts, hospitality, transportation and lodging to state officials or employees and any other lobbying costs. Or a sworn statement that the $2,500 threshold was not met. WHO SIGNS? Lobbying firm or lobbying must sign principal s report to the best of his knowledge. Good faith standard used.
Gifts, Hospitality, Transportation, Lodging Only have to report hospitality, transportation and lodging on an individual basis if in excess of $650 to any one person. Gift includes anything which is received without consideration of equal or greater value. Must only report in itemized format when in excess of $250 to any one individual Must report to any individual at least six days in advance if you are going to report gifts in excess of $250 Wolf Administration cannot accept any gifts Senate and House members cannot accept cash gifts of any value
Enforcement The Act also provides for criminal penalties, granting the Attorney General jurisdiction to investigate and prosecute violations. Intentional violations constitute misdemeanors of the second (carrying a sentence of up to two years in prison) or third degree (carrying a sentence of up to one year in prison). A court may impose a fine not to exceed $25,000 against the principal found guilty of an intentional violation.
Thank you!