© 2010 Foley Hoag LLP. All Rights Reserved.The New Massachusetts Lobbying Law Tad Heuer & Kalah Auchincloss June 1, 2010.

© 2010 Foley Hoag LLP. All Rights Reserved. The New Massachusetts Lobbying Law

The New Massachusetts Lobbying Law

Tad Heuer & Kalah Auchincloss

June 1, 2010

© 2010 Foley Hoag LLP. All Rights Reserved. The New Massachusetts Lobbying Law | 2

Background to the New Lobbying Law

Governor Patrick demanded “Reform before Revenue”

Three overhaul bills passed – Pensions, Transportation, and Ethics

Ethics Bill signed into law in July 1, 2009 (Chapter 28 of Acts of 2009)

Lobbying provisions became effective January 1, 2010.

M.G.L. c. 3, §§ 39-50


The Secretary’s “Are You a Lobbyist?” Flowchart


Key Differences in Relation to the Prior Law

Reduces numerical thresholds – 50 hours to 25 hours, $5000 to $2500

Applies dollar/hour thresholds on a “first-reached” basis, not a “second reached” basis (i.e., first of either 25 hours or $2500 now triggers reporting requirement)

Adds “strategizing, planning and research” to definition of what constitutes lobbying – no longer only the actual communication with covered officials.

Requires disclosure of client’s positions on bills

Includes acts to influence municipal officials if done in concert with lobbying at the state level

Increases penalties for late filings and for enforcement violations


General Threshold Requirements

Any individual who:

– Meets all three thresholds for either Legislative or Executive Lobbying (calculated independently of one another)

– And does so within a single biannual reporting period (January-June or July-December)

– Must register as either a legislative or an executive agent


Two Distinct Categories of Lobbyist

A lobbyist is a person who, “as part of his regular and usual business or professional activities and not simply incidental thereto, engages in legislative lobbying, whether or not any compensation in addition to the salary for such activities is received for such services.”

Massachusetts law requires two distinct categories of lobbyists to register with the Secretary of the Commonwealth:

– Legislative Agents

– Executive Agents


Legislative Thresholds

A Legislative Agent is someone who does all of the following:

– Makes at least one “lobbying communication” with a “government employee;”

– Receives “compensation or reward” for “legislative lobbying,” defined as

• a) any act to promote, oppose, influence or attempt to influence legislation, including,

• b) any act to promote, oppose or influence the governor’s approval or veto of legislation,

• c) any act to influence the introduction, sponsorship, consideration, action, or non-action on any piece of legislation, or

• d) “strategizing, planning and research,” if performed either in connection with or for use in an actual lobbying communication; and

– Engages in legislative lobbying for more than 25 hours, or receives $2500 or more in compensation for legislative lobbying activity.


Legislative Definitions

Legislation

– “bills, resolutions and proposals of every kind, character or description considered by the general court or any committee thereof, or the governor.”

Legislative Lobbying

– any act to promote, oppose, influence or attempt to influence legislation, or

– to promote, oppose or influence the governor’s approval or veto thereof

– including, without limitation, any action to influence the introduction, sponsorship, consideration, action or non- action with respect to any legislation.


Executive Thresholds

An Executive Agent is someone who does all of the following:

– Makes at least one “lobbying communication” with a government employee;

– Receives “compensation or reward” for “executive lobbying,” defined as

• a) any act to promote, oppose, influence, or attempt to influence the decision of any officer or employee of the executive branch or an authority regarding either legislation or the adoption, defeat or postponement of a standard, rate, rule or regulation,

• b) any direct communication with a covered executive official in attempt to influence a policy or procurement decision, or

• c) “strategizing, planning and research,” if performed either in connection with or for use in an actual lobbying communication (the statute also contains several limited exceptions to this general definition); and

– Engages in executive lobbying for more than 25 hours, or receives $2500 or more in compensation for legislative lobbying activity.


Executive Definitions

“Covered executive official”

– The Constitutional Offices (Governor, Lieutenant governor, State Secretary, Attorney General, Treasurer, and Auditor)

– Any person who holds a “major policy making position, as defined in section one of chapter two hundred and sixty-eight B,”

– The secretary or deputy or assistant secretary of any executive office,

– The executive or administrative head or deputy or assistant head of any authority, any department, board, commission, or division of the state government or subdivision of any of the foregoing.


Executive Branch – Policy and Procurement

Lobbying includes communicating with an executive official to influence a decision concerning policy or procurement

What is “policy”?– A plan or course of action– Applicable to a class of persons, proceedings or other matters– Designed to influence the subsequent decisions of the agency

Examples – Regulations– Interpretive guidance– Administrative bulletins


Executive Branch - Policy Exceptions

“Policy” does not include “the issuance or denial of a license [or] permit”

– Meetings about securing permits or licenses– Meetings regarding the negotiation of permit terms

“Policy” does not include “the determination of any rights, duties or obligations of a person made on a case by case basis” or issuance or denial of a “certification”

– Applications for governmental benefits such as grants, tax credits or other benefits

– Negotiating agreements regarding public benefits such as grants, tax credits or other economic incentives


General Exceptions and Exemptions

Volunteering or Pro Bono Lobbying

– No express exemption for volunteer or pro bono lobbying.

– Requirement of “compensation or reward” to be classified as a legislative or executive agent means volunteer lobbying does not trigger registration.

Written Responses

– A written response to a written inquiry from an executive or legislative branch employee does not constitute lobbying.

– Both the inquiry and the response must be written for this exception to apply.

Testimony

– The law exempts testimony provided before a legislative committee if requested by that committee.

– Testifying voluntarily does constitute a lobbying activity.


Other Exemptions

Certain interactions with officials are exempt, regardless of time spent, including:

– Request for a meeting or for the status of legislation

– Participating in an advisory committee or task force

– Participation in an adjudicatory proceeding

– “Petitioning” an agency in writing during an established agency proceeding

– Communications with an agency following the procedures set by an RFP or “similar” process


Filing Requirements for Lobbying Entities

Lobbying Entities

– Organizations that employ lobbyists are known as “lobbying entities.”

– Must file annual registration statements and pay an annual registration fee ($1,000)

– Required to file biannual reports that include a detailed list of expenditures incurred, payments made, campaign contributions made, issues lobbied upon, and compensation received from clients

– Organizations hiring only “in-house” lobbyists do not need to register as lobbying entities


Filing Requirements for Lobbying Clients

Lobbying Clients

– Organizations that hire lobbyists are known as “lobbying clients.”

– Must file annual registration statements and pay an annual registration fee ($100).

– Required to file biannual reports that include a list of all lobbying-related salaries paid and expenditures made


Filing Requirements for Lobbyists

Must file an annual list of the clients for whom they will be lobbying, and pay an annual fee ($100).

Must file biannual reports, itemizing their lobbying activities, clients, expenditures, and lobbying-related income.

Prior to registration, and annually thereafter, each lobbyist must complete an online or in-person seminar offered by the Secretary.

Massachusetts law bans lobbyists from giving gifts of “any kind or nature” to public officials and public employees, and prohibits lobbyists from purchasing meals for public officials and public employees.

Limited to donating $200 annually to any given state/local candidate, and are limited to donating $200 annually to any state/local political committee (other than a “ballot question” committee).


Filing Requirements for Organizations Not Employing Agents

Organizations not employing agents are still required to register separately with the Secretary if they expend more than $250 annually on lobbying activities.

The registration statement must include:

– names and addresses of the organization’s principals– its purpose– total and itemized expenditures – names of all individuals who contributed $15 or more to the group for

lobbying purposes.

Nonprofit organizations not employing agents are exempt if they do not make political contributions and expend less than $2,000 annually on lobbying activities.


Penalties

The penalties for violating the registration provisions of the Massachusetts lobbying statute include:

– Fines of up to $10,000,

– Up to five years imprisonment in the state prison,

– Up to 2 ½ years in a house of correction,

– Or both [sic].


Summary for Massachusetts

Three Thresholds

– Contacts: At least one lobbying contact is required– Compensation: Must be compensated — volunteer, pro bono, and

personal lobbying does not require registration.– Thresholds: 25 hours or $2500 of lobbying activities per 6-month

period

Lobbying includes preparation time and background research, not just the actual communication

Discussing a general issue with an official is not lobbying, but discussing a specific proposal is lobbying

Responding in writing to a written request for information from an official is not lobbying


Brief Federal Lobbying Overview

Governed by the federal Lobbying Disclosure Act (2 U.S.C. 1602 et seq.)

Quarterly reporting of lobbying activities and expenditures

Registration as a lobbyist is required when an individual meets three thresholds in a given quarterly reporting period for a given client:

– Contacts: More than one “lobbying contact” on behalf of a client per quarter

– Compensation: Must be compensated for lobbying

– Twenty Percent Rule: Must spend at least 20% of time worked for that client on “lobbying activities” (this includes actual contacts as well as preparation, planning, and research).

De minimis “safe harbor” – no need to register if an organization spends less than $11,500 in a quarterly reporting period on “lobbying activities,” or if an outside lobbyist receives less than $3,000 per quarter per client for lobbying activities


Brief Federal Lobbying Overview

“Lobbying Contact” means oral or written contacts concerning existing or proposed federal legislation, regulations, policy, grants, permits, contracts, and nominations, with almost all legislative branch officials, and many executive branch officials.

Nonprofit organizations can “elect” to use the IRS definitions of lobbying, which include “grassroots” lobbying, but exclude lobbying contacts with executive branch officials on non-legislative matters.

Limited exemptions for administrative requests, testimony, written responses and written public comments, and certain other activities.

Funds from Federal grants and contracts cannot be used for lobbying purposes

Penalties for failure to comply can be as high as $200,000 and five years imprisonment

© 2010 Foley Hoag LLP. All Rights Reserved.The New Massachusetts Lobbying Law Tad Heuer & Kalah Auchincloss June 1, 2010.

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legislative lobbying

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actual lobbying communication

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legislative thresholds

executive thresholds