Retroactive Changes Affect Lobbyist, Ethics Legislation

May 11, 2011

By HunterMaclean Attorneys

Published in Business in Savannah

Due to a broadening of the legal definition of a lobbyist in 2010, many Georgia companies found that they suddenly had quite a few such individuals on their payroll. After a frantic reaction across the state, the Georgia Legislature moved quickly to change the law. On March 15, 2011, Governor Nathan Deal signed House Bill 232, which narrows last year’s ”new” definition of lobbyist.

Now, if at the end of a month a person has spent more than 10% of their monthly working hours engaged in traditional lobbying activities – and has been specifically compensated for such lobbying activities – that person is required to register and report as a lobbyist.

The ease in lobbyist registration and reporting comes on the heels of what many in various professions viewed as being overly broad legislation that resulted in unnecessarily harsh consequences for those violating the law.

The new law more closely tracts what we think the definition of a lobbyist is and should be. The definition of a lobbyist includes paid personnel who act as advocates for a particular legislative policy and lobby political representatives with regards to a particular issue, goods or services at the behest of another individual, business or organization.

The chaos began in 2010 when the Georgia General Assembly passed new legislation significantly changing the face and consequences of the Georgia Ethics Law. The changes in the law greatly expanded the definition of lobbyist to include all salespeople who either directly or indirectly “court city and county agencies to buy goods and/or services” to register as “vendor lobbyists” and to file reports on expenditures. Additionally, if they pitch any agency considered a “local political subdivision,” they must also register as a lobbyist. In the past, this mandate only included statewide agencies.

Based on the change in law in 2010, the Georgia Government Transparency and Campaign Finance Commission, formerly known as the State Ethics Commission, ruled that all salespeople who court city and county agencies to buy goods and/or services needed to register as lobbyists and file reports on expenditures. In the past, this mandate only included statewide agencies.

The example that was often cited to demonstrate the absurdity of the law was that a pencil salesman would have to register as a lobbyist if he tried to have an elementary school buy his pencils. As the legislation stands today based on House Bill 232, salespeople are now considered exempt from regulation as vendor lobbyists. This legislation is retroactively in effect as of January 10, 2011.

If a person meets the 10% and compensation test, then she is required to register and provide an initial disclosure report within five days of the end of each month during the “lookback” period. Further, lobbyist expenditures for registration have been increased from $250 to $1,000 and they have also been granted a grace period of three business days for filing all disclosure reports.

For now, it seems the debate over lobbyist ethics regulations may quiet down for the time being. Still, employers need to pay specific attention to what “specific duties” and “understood duties” of their salespeople actually mean. A strong business plan will include a clear comprehensive distinction of the two to be sure that companies know which side of the lines their business now falls. As always, when in doubt how the law applies to you it is wise to seek out appropriate counsel for advice.

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