Texas Lobbying Registration and Reporting
Texas lobby laws regulate direct communications with members of the legislative or executive branch of state government to influence legislation or administrative action.
i) “Communicates directly with” or any variation of the phrase means contact in person or by telephone, telegraph, letter, facsimile, electronic mail, or other electronic means of communication. See e.g. Ethics Advisory Opinion No. 85 (1992) (holding that if an organization publishes a newsletter for its members, the individuals writing the newsletters are not “communicating directly” with members of the legislature, even if a legislator may read the newsletter.).
ii) “Member of the executive branch” means an officer, officer-elect, candidate for, or employee of any state agency, department, or office in the executive branch of state government. “Member of the legislative branch” means a member, member-elect, candidate for, or officer of the legislature or of a legislative committee, or an employee of the legislature. While the lobby law is not applicable to communications with the judicial branch or local government officials, individuals should ensure they comply with other regulations related to such communications.
iii) “Legislation” means: (A) a bill, resolution, amendment, nomination, or other matter pending in either house of the legislature; (B) any matter that is or may be the subject of action by either house or by a legislative committee, including the introduction, consideration, passage, defeat, approval, or veto of the matter; or (C) any matter pending in a constitutional convention or that may be the subject of action by a constitutional convention. “Administrative action” means rulemaking, licensing, or any other matter that may be the subject of action by a state agency, including the proposal, consideration, or approval of the matter.
Lobbyist registration is required if a person meets either the “compensation and reimbursement threshold” or the “expenditure threshold.”
Pursuant to the “compensation and reimbursement threshold,” a person must register if the person receives, or is entitled to receive under an agreement under which the person is retained or employed, more than $1000 in a calendar quarter in compensation and reimbursement for lobbying. Notwithstanding this requirement, “a person is not required to register if no more than 5.0% of the person's compensated time during a calendar quarter is time spent engaging in lobby activity.” For calculation purposes, “a person shall make a reasonable allocation of compensation between compensation for lobby activity and compensation for other activities.”
Pursuant to the “expenditure threshold,” a person must register if the person makes total expenditures of more than $500 in a calendar quarter for lobbying. An expenditure is defined as "a payment, distribution, loan, advance, reimbursement, deposit, or gift of money or any thing of value and includes a contract, promise, or agreement, whether or not legally enforceable, to make an expenditure." There are six types of expenditures: transportation and lodging, food and beverages, entertainment, gifts, awards and mementos, and attendance of a state officer or employee at a political fundraiser or charity event. A lobby expenditure that one person makes on behalf of and with the consent or ratification of another person is considered to have been made by each person for purposes of calculating the expenditure threshold. (If an expenditure is attributable to two or more registrants, the reporting requirements for that lobby expenditure are satisfied if one of those registrants reports the expenditure.) Certain things are expressly exempt from the definition of expenditure, including taxes and tips, a lobbyist’s own expenditures, payments of less than $200 if the person who makes the expenditure is fully reimbursed by the state officer or employee benefiting from the expenditure before the date the expenditure would otherwise be required to be reported, and gifts to a state agency which become state property. Whether a state agency may accept a gift depends on the laws specifically applicable to that agency.
A corporation, partnership, association, or other type of entity may be required to register as a lobbyist if the entity exceeds either the compensation threshold or expenditure threshold. An entity that is required to register may nonetheless avoid registration if all activity otherwise reportable by the entity is reported by one or more registrants. An individual reporting compensation, reimbursement, or expenditures for an entity must indicate that he or she is doing so on the lobby registration or activities report, as applicable. The fact that an entity has registered does not relieve any individual associated with the entity of the obligation to register if the individual crosses a registration threshold. For example, if a law firm registers, an individual lawyer employed by the firm as a lobbyist for the firm's clients must also register if he or she meets either the compensation or expenditure threshold.
Communications on behalf of a political party:
A person who lobbies only on behalf of a political party is required to register only if the person’s lobby compensation and expenditures combined exceed $5,000 in a calendar year.
Exceptions from Required Registration
- Incidental Lobbying: A person is not required to register under the compensation threshold, regardless of compensation, if lobbying constitutes no more than five percent of the person's compensated time during a calendar quarter. The "incidental lobbying" exception is not an exception to the expenditure threshold.
- Exempt Communications: Compensation or reimbursement received for certain communications to influence a state officer or employee do not count toward the compensation threshold and are not required to be reported.
- Public Officials: A government officer or employee who communicates to influence legislation or administrative action in his or her capacity as a government officer or employee is not required to register on the basis of those communications.
The statute excepts from the registration requirement a person who owns, publishes, or is employed by the media, provided that the person does not engage in any other activities requiring registration.
A person does not have to register if the person’s only activity to influence official action is to compensate or reimburse someone else to lobby on the person’s behalf.
Lobby registrations and lobby activity reports are generally required to be filed electronically.
The lobby registration fee is $500 for all registrants except organizations exempt from federal taxes under the IRS Code, 26 U.S.C. § 501(c)(3) or 501(c)(4) and lobbyists who represent only such organizations. The fee for those registrants is $100. The fee is not prorated for lobbyists who are registered for only a portion of the year. Note that the Texas Ethics Commission recently posted new proposed rules regarding registration. The new proposed rules are available at http://www.ethics.state.tx.us/rules/proposed_080609.html
Registration must be filed no later than five days after the date of making communication which necessitates registration.
The lobby registration requires information about each person that employs, retains, or reimburses a lobbyist.
A lobby registration must contain the compensation and reimbursement that a lobbyist receives.
Reporting Subject Matter
A lobby registration must identify the subject matters about which one lobbies.
A lobby registration must report a research or administrative assistant, but not one who provides only clerical or secretarial support.
Time of Filing:
Lobbyists must file quarterly, unless they intend to make less than $1,000 of expenditures per year, in which case an annual filing is allowed.
Prohibitions and Restrictions
Restrictions on Expenditures:
The lobby law contains a number of restrictions on expenditures by lobbyists, but lobbyists should also be aware of the restrictions in Chapter 36 of the Penal Code.
The lobby law contains a number of restrictions on acceptance of lobby expenditures, including cash gifts and loans, transportation and lodging, food beverages, and entertainment, gifts, and awards and mementoes. Furthermore, there is a general requirement that a lobbyist be present at an event in order to pay for activities involving a state officer or employee.
- Contingent Fees: Contingent fees for lobbying services are generally not allowable. However, this prohibition does not apply to cases in which contingent fees are expressly allowed by law, such as a contested hearing or adversarial proceeding. The contingent fee prohibition is also generally inapplicable to efforts to influence the purchase decision of a state agency within certain fiscal constraints.Note that the 81st Texas Legislature passed new laws with respect to contingent fees in H.B. 3445. The new proposed rules are available at http://www.ethics.state.tx.us/rules/proposed_080609.html.
- Conflicts of Interest: The lobby law sets out circumstances in which a lobby registrant may not represent a client, or for some reason must satisfy certain conditions prior to representing a client.
- False Communications: The lobby law generally prohibits knowingly false statements made to a state officer.
- Access to the Floor of the Legislature: A lobbyist may not go on to the floor of either house of the legislature while that house is in session unless invited by that house.
The law provides criminal and civil sanctions for violation of the lobby law or the Penal Code.
- Criminal Penalties
- Bribery is a second degree felony, punishable by imprisonment of no more than twenty years and no less than two years. Additionally, a fine not to exceed $10,000 may be imposed.
- Violation of the prohibition against contingent fees is a third degree felony, punishable by imprisonment of no more than ten years and no less than two years. Additionally, a fine not to exceed $10,000 may be imposed.
- Any other intentional or knowing violation of a provision of the lobby law, or of one of the Penal Code prohibitions against accepting or offering a benefit, is a Class A misdemeanor, punishable by a jail term of up to one year, a fine not to exceed $4,000, or both.
- Sworn Complaints: An individual who believes a person has violated a provision of the lobby law or the Ethics Commission's rules may file a sworn complaint with the Ethics Commission. New proposed rules regarding sworn complaints are available at http://www.ethics.state.tx.us/rules/proposed_080609.html
- Reports: Lobbyists are subject to fines for late or inaccurate reports.