Insights

Political & Election Law: Texas Lobby Rule Relaxed – By Fourteen Hours

Tuesday, December 13, 2016

As the Texas legislative session nears, it is time for those engaging in the policy-making process to determine whether they are required to register as lobbyists with the Texas Ethics Commission.

For decades, many people have used the so-called “five percent” rule to avoid registering as a lobbyist. Soon after the Ethics Commission was created in the early 1990s – including the accompanying lobby regulations found in Chapter 305 of the Government Code – the Commission adopted a rule that provided an exception to registration if a person spent less than five percent of his or her compensated time engaging in lobby activity during a calendar quarter.

In 2015, the Legislature finally codified something similar to the five percent rule. The new statutory exception provided that a person need not register as a lobbyist if he or she spent less than 26 hours  – or another amount of time determined by the Commission – in a calendar quarter engaged in lobby activities.

This month – on the eve of Texas’s biennial legislative session – the Commission used its discretion to allow for 40 hours of lobbying before the registration requirement kicks in. The new rule provides that “a person is not required to register if the person spends not more than 40 hours for which the person is compensated or reimbursed during a calendar quarter” engaging in lobby activity. “Lobby activity” means direct communication with a member of the legislative or executive branch to influence legislation or administrative action. Preparatory work includes participation in strategy sessions, review and analysis of legislation, and research and communication with the client.

So, assume that a person comes to Austin for a week at the beginning of the legislative session to meet with legislative staff, and then comes to Austin for another week at the end of the session. If those two weeks constitute his or her only lobby activity, the person would not be required to register as a lobbyist.

What if a company has multiple employees that engage in lobby activity, but each stays beneath the 40-hour threshold? None of the employees would be required to register.  However, if the company spent more than $500 in lobby expenditures, someone would need to register on behalf of the company and report those expenses.

If a person is required to register but fails to do so, it constitutes a Class A misdemeanor. Once a person crosses the threshold, they must register with the Commission, pay a registration fee, and begin filing monthly activity reports.

So, as people gear up for the biennial throw-down known as the 85th Legislative Session, keeping track of time spent on advocacy efforts will be important to complying with the lobby law.  Thankfully, the Ethics Commission just granted a little more breathing room.

Ross Fischer of the Gober Group is the former Chairman of the Texas Ethics Commission and an expert in the field of Texas campaign finance and lobby laws.