Chapter 305 of the Government Code requires a person who crosses either a compensation or expenditure threshold to register with the Texas Ethics Commission and to file periodic reports of lobbying activity. Chapter 305 also contains restrictions applicable to persons required to register as lobbyists. This lobby law is administered and enforced by the Ethics Commission. Rules that the Ethics Commission has adopted under the lobby law are in Chapter 34 of title 1 of the Texas Administrative Code (T.A.C.).
Even if you are not required to register as a lobbyist, you should be aware of the bribery, honorarium, and gift prohibitions in Chapter 36 of the Penal Code. In addition, you should be aware of Title 15 of the Election Code, the campaign finance law, which places restrictions on contributions and expenditures to support, oppose, or assist candidates and elected officeholders.
If you have a question that is not clearly answered by this guide or by the instructions to a lobby report, please contact the Ethics Commission.
WHAT IS LOBBYING?
The lobby law regulates “direct communications” with members of the legislative or executive branch of state government to influence legislation or administrative action. See Gov’t Code §§ 305.001, 305.003(a). To understand what activity is regulated by the lobby law, it is important to understand the terms “direct communication,” “member of the legislative or executive branch,” and “communication for the purpose of influencing legislation or administrative action.”
The lobby law regulates certain “direct communications.” “Direct communication” includes contact in person or by telephone, telegraph, or letter. The communication must be directed to a member of the legislative or executive branch of state government. For example, if an organization publishes a newsletter for its members, the individuals writing the newsletter are not “communicating directly” with members of the legislature, even if a legislator may read the newsletter. See Ethics Advisory Opinion No. 85 (1992).
MEMBER OF THE LEGISLATIVE OR EXECUTIVE BRANCH OF STATE GOVERNMENT
The lobby law regulates direct communications to “members of the legislative or executive branch” of state government. This guide uses the term “state officer or employee” as a shorthand term to refer to a member of the executive or legislative branch of state government. You should remember, though, that the term does not include an officer or employee of the judicial branch.
Member of the Legislative Branch. A “member of the legislative branch” of state government includes a member, member-elect, candidate for, or officer of the legislature or of a legislative committee. Gov’t Code § 305.002(7). Employees of the legislature are also “members of the legislative branch” of state government. Id.
Member of the Executive Branch. A “member of the executive branch” of state government includes an officer, officer-elect, candidate for, or employee of any state agency, department, or office in the executive branch of state government. Gov’t Code § 305.002(4).
Lobby Law Not Applicable to Communications to Judicial Branch. Communications to a member of the judicial branch of state government (such as a judge or a court clerk) are not subject to the lobby law. Such communications may be regulated by other laws.
Lobby Law Not Applicable to Communications to Local Government Officials. The lobby law applies only to communications to state officers and employees. It does not apply to a communication made to an officer, an employee, or anyone else who represents a political subdivision of state government, such as a county, city, school district, or other local government or special district. (A person communicating to influence the actions of a local governmental body should check to see whether the local governmental body has adopted its own lobby regulations.)
COMMUNICATING TO INFLUENCE LEGISLATION OR ADMINISTRATIVE ACTION
The lobby law applies to direct communication with state officers and employees to influence “legislation or administrative action.” “Legislation” means a matter that is or may be the subject of action by either house of the legislature or by a legislative committee. See Gov’t Code § 305.002(6). “Administrative action” means any matter that may be the subject of action by a state agency or executive branch office, including a matter relating to the purchase of products or services by the agency or office. See id. § 305.002(1).
The fact that a communication does not include a discussion of specific legislation or administrative action does not mean that the discussion is not a lobby communication. If a communication is intended to generate or maintain goodwill for the purpose of influencing potential future legislation or administrative action, the communication is a lobby communication. See Gov’t Code § 305.002(2-a) and Ethics Advisory Opinion Nos. 94, 90, 89, 34, 4 (1992).
DETERMINING WHETHER LOBBY REGISTRATION IS REQUIRED
Lobby registration is required if a person meets either one of two thresholds: the “compensation and reimbursement threshold” or the “expenditure threshold.” A “person” required to register may be a corporation, partnership, association, or other type of business entity as well as an individual. See Entity Registration.
COMPENSATION AND REIMBURSEMENT THRESHOLD
Under current Ethics Commission rules, a person who receives, or is entitled to receive under an agreement under which the person is retained or employed, more than $1,000 in a calendar quarter as compensation or reimbursement to lobby must register as a lobbyist. 1 T.A.C. § 34.43. (Compensation and reimbursement must be added together to determine whether registration is required. Ethics Advisory Opinion No. 103 (1992).) Compensation for certain communications, however, does not count toward the compensation threshold even though the communications may be intended to influence legislation or administrative action. See EXCEPTIONS FROM REQUIRED REGISTRATION, in this guide. Also, a person who crosses the compensation threshold is not required to register if lobbying constitutes not more than 26 hours, or another amount of time determined by Ethics Commission rule, of the person’s compensated time during a calendar quarter. Gov’t Code § 305.002(b-3). See EXCEPTIONS FROM REQUIRED REGISTRATION, Incidental Lobbying.
Compensation to Prepare for Lobbying. Compensation received for preparing lobby communications (for example, compensation attributable to strategy sessions, review and analysis of legislation or administrative matters, research, or communication with a client concerning lobbying strategy) is counted toward the compensation threshold. 1 T.A. C. § 34.3. If a person engages in preparatory activities, but does not actually communicate to influence legislation or administrative action, registration is not required. Id. A person employed by a lobbyist (or a person employed by the lobbyist’s employer who works under the lobbyist’s direction) to assist the lobbyist in nonclerical lobby activities must be listed as an assistant on the lobbyist’s registration. See Reporting Assistants.
Reimbursement for Personal Expenses. Reimbursement that a person receives for the person’s own transportation, food and beverage, or lodging is not included for purposes of calculating the compensation and reimbursement threshold.
Reimbursed Office Expenses. Reimbursement for the following office expenses is not included in calculating the compensation threshold and does not have to be reported as compensation or reimbursement received for lobbying:
long distance telephone charges;
dues and subscriptions.
1 T.A.C. § 34.7.
Allocating Compensation for Services Other Than Lobbying. A lobbyist who receives compensation or reimbursement for both lobbying and non-lobbying services is required to make a reasonable allocation of the compensation or reimbursement for lobbying. Only the compensation or reimbursement attributable to lobbying counts toward the compensation threshold and is reported as compensation. 1 T.A.C. § 34.43(c).
A person who expends more than $500 in a calendar quarter for certain purposes must register as a lobbyist.
What is a Lobby Expenditure? The expenditures that count toward the expenditure threshold are expenditures that benefit a state officer or employee or the immediate family of a state officer or employee, that are made to communicate with a state officer or employee to influence legislation or administrative action, and that fall into one of the following six categories:
transportation and lodging;
food and beverages;
awards and mementos; and
the attendance of a state officer or employee at a political fundraiser or charity event.
An “expenditure” is “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.” Gov’t Code § 305.002(5).
Lobby Expenditure Made on Behalf of Another Person. If a registrant, or a person on the registrant’s behalf and with the registrant’s consent or ratification, joins with another person to make an expenditure described by the lobby law, the amount of the expenditure made by or on behalf of the registrant for purposes of the lobby law includes only (1) the amount of the portion of the joint expenditure contributed by the registrant and (2) the amount of any portion of the joint expenditure that: is made on behalf of the registrant by a person who is not a registrant; and is not otherwise reported under the lobby law. Gov’t Code § 305.0021.
What Is Not Counted as a Lobby Expenditure?
Taxes and Tips. A tax or tip paid in connection with a lobby expenditure is not counted as part of the lobby expenditure for purposes of calculating the threshold or reporting. 1 T.A.C. § 34.9.
Lobbyist’s Own Expenses. An expenditure for a person’s own food, beverages, entertainment, transportation, and lodging is neither counted toward the expenditure threshold nor reported on lobby activity reports.
Certain Expenditures Reimbursed by a State Officer or Employee. A payment of less than $200 is not a lobby expenditure 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. 1 T.A.C. § 34.1 (definition of expenditure).
Gift to a State Agency. A gift to a state agency (as opposed to a gift to or expenditure for an individual officer or employee of that agency) is not a lobby expenditure. A gift to a state agency becomes state property, and neither the agency nor any officer or employee of the agency is permitted to use it for personal or private purposes. Ethics Advisory Opinion No. 130 (1993). Whether a state agency may accept a gift depends on the laws specifically applicable to that agency.