Mike Toomey Texas Best Lobbyist
The following document is available at the Texas Ethics Commission website. It is presented here by the Texas Lobby Group as a public service for Texas Lobbyists, those interested in tracking Government Lobby activities, Government Consultants, and other interested parties.
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. 1 T.A.C. §§ 34.45, .65, .85. An individual registrant may report an expenditure made by a lobby entity if the entity requests that the individual do so in order for the entity to avoid registration; and
(1) the entity makes the expenditure in order for the individual to act on the entity’s behalf to communicate directly with a member of the legislative or executive branch to influence legislation or administrative action; or
(2) the entity compensates or reimburses the individual to act on behalf of the entity or on behalf of the entity’s clients to communicate directly with a member of the legislative or executive branch to influence legislation or administrative action.
1 T.A.C. § 34.85.
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. See Ethics Advisory Opinion No. 115 (1993).
COMMUNICATIONS ON BEHALF OF POLITICAL PARTY
A person who lobbies only on behalf of a political party is subject to a different registration threshold. Registration is required only if the person’s lobby compensation and expenditures combined exceed $5,000 in a calendar year.
INDEPENDENT CONTRACTORS. Effective September 1, 2009, certain persons who have communications in their capacity as independent contractors, as defined by Texas Ethics Commission Rule § 34.1(5), AND whose compensation for those communications is contingent on the outcome of a purchasing decision or negotiations regarding such decisions, are required to register as lobbyists and report information about those communications. An “independent contractor” is defined as a person, including a consultant, who communicates with a member of the executive branch concerning state agency purchasing decisions involving a product, service, or service provider or negotiations regarding such decisions. The term does not include an employee, as defined by section 305.022(e) of the Government Code, of a vendor. 1 T.A.C. § 34.1(5).
NOTE: Persons who have communications in their capacity as an independent contractor, whose compensation is NOT contingent on the outcome of the purchasing decision or negotiations regarding the purchasing decision, may be required to register under the expenditure threshold.
A person who meets the definition of independent contractor is required to register as a lobbyist if the compensation for the communication is totally or partially contingent on the outcome of a purchasing decision or negotiations regarding such decisions. (To be a legal contingent fee, the amount of the purchasing decision may not exceed $10 million.) Gov’t Code § 305.0041, 1 T.A.C. § 34.46. A person who is required to register as an independent contractor is considered a registrant subject to all the requirements and restrictions under the Texas lobby law.
An independent contractor whose compensation for the communication is totally or partially contingent on the outcome of a purchasing decision or negotiations regarding such a decision must, in addition to the regular information required on the lobby registration, disclose the vendor as a client, indicate that the client is a vendor of a product or service on whose behalf the independent contractor communicates concerning state agency purchasing decisions or negotiations regarding such decisions, disclose the amount or percentage of the sales commission or such fee, and disclose the amount of the purchasing decision. If the amount of either the sales commission or purchasing decision is not known at the time of the registration, the independent contractor must disclose a reasonable estimate of the maximum amount of the sales commission or purchasing decision and the method under which that amount will be computed. 1 T.A.C. § 34.73.
STATE AGENCY AS A CLIENT. A person who is paid a sales commission or such fee by a state agency is required to disclose on a lobby registration the state agency as a client and disclose certain information regarding the sales commission or fee. 1 T.A.C. § 34.75.