Special Legal Feature
Impact of the
On the Activities of
by Nancy L. Kaszak
The 1993 amendments to the Illinois Lobbyist Registration Act made many significant changes in the registration and reporting requirements for lobbyists in Illinois. In spite of these changes, the impact on municipal, park district, school district and other local governmental officers and employees has been reduced substantially because of regulations issued by the Illinois Secretary of State. These regulations exempt elected or appointed officers or employees of national, state, county or local political subdivisions who lobby State government within the scope of their office. Nevertheless, local governmental officials and employees should be aware of these changes in the law and the potential effect on their activities.
If you have questions that you believe are not fully answered in this article, please call Ancel, Glink, Diamond, Cope & Bush, P.C. at (312) 782-7606. The questions that you have are likely to be shared with others involved in local government.
This article is an attempt to provide guidance to park district officers, employees and contractors on the 1993 amendments to the Illinois Lobbyist Registration Act (Act) on their activities. The amendments, which became effective January 1, 1994, made several significant changes. First, the amendments expand lobbying to include communications to certain executive and administrative officials. Second, the definition of lobbying activity is expanded from activity to "promote or oppose" to include activities to influence and create good will. Third, the amendments impose more stringent disclosure and itemization of expenditures by those required to register as lobbyists.
WHO MUST REGISTER AS A LOBBYIST?
The first issue that a local governmental officer, employee or contractor needs to address is whether he or she is required to register as a lobbyist. Unless a person or their employer is exempt, a person who undertakes to influence executive, legislative or administrative action by a direct lobbying communication with certain elected state officials and certain aides to those officials must register as a lobbyist with the Illinois Secretary of State (25 ILCS 170/3; 2 111. Admin. Code §560.200). To determine whether you fall within the requirement, you must answer four questions. If you do not satisfy the first three requirements or if you fall within one of the exemptions, you are not required to register as a lobbyist.
1. Am I communicating with a state official who is covered by this Act?
The Act provides that members of the General Assembly and Constitutional Officers, the chiefs of staff and cabinet members of Constitutional Officers are covered by the Act (25 ILCS 170/2 (c)). The Illinois Secretary of State has issued guidelines that specify the job titles identified by the Constitutional Officers as covered by the Act. If you are not communicating with an official covered by the Act, you need not register.
2. Am I engaging in a direct lobbying communication that is covered by the Act?
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A direct lobbying communication is defined in the regulations very broadly (2 111. Admin. Code §560.100). The Act covers activities involving the direct contact of covered officials in person or by letter, telephone or other electronic medium for the purpose of influencing executive, legislative or administrative action. "Influencing" is defined in the Act and the regulations as a communication, action or reportable expenditure to promote, support, affect, modify, oppose or delay such action or to promote good will with the covered officials (25 ILCS 170 (f); 2 111. Admin. Code §560.100).
While this definition is very broad, the regulatory definition of "direct lobbying communication" specifically exempts correspondence or contacts of a routine nature when the person is exercising the right of a citizen to lawfully petition a member of the General Assembly or member of the executive branch, provided the person is not a hired lobbyist and the activity is not done in conjunction with a reportable expenditure. The regulations fail to define "routine" contacts. Certainly, regular newsletters, reports and meetings should fall outside the scope of covered communications. If you are not engaging in direct lobbying communication, you need not register.
3. Am I seeking to influence an action covered by the Act?
There are three types of governmental actions that are covered by the Act. "Executive actions" include actions involved with the preparation, drafting, amending or modification by a state entity of a rule, regulation, order, decision, agreement or a quasi-legislative or quasi- judicial action or proceeding (25 ILCS 170/2(g)). "Legislative actions" include the development, drafting and review of a bill or other matter considered by the General Assembly (25 ILCS 170/29 (h)). "Administrative actions" means the execution or rejection of a rule, regulation, fee, contract or other delegated legislative or quasi- legislative action by any executive agency, department, board or commission of the State (25 ILCS 170/2 (i)). If you are not seeking to influence such actions, you need not register.
4. Am I otherwise exempt from registration under this Act?
The Act identifies ten exemptions from registration for communications that would otherwise trigger a registration requirement (25 ILCS 170/4). The Illinois Secretary of State has identified three additional exemptions (2 111. Admin. Code §560.210 (k). (m), (o)). The following is a list of exemptions that could cover activities of local government officers, employees and contractors. If you satisfy any one of these exemptions, you need not register.
A. General Exemption for Officers and Employ- ees of Local Government
The Illinois Secretary of State has issued regulations that exempt elected or appointed officers or employees of national, state, county or local political subdivisions (including municipalities and units of local government) who "independently within the scope of their public or party office" lobby state government. A person who is employed by an association of units of local government would not be covered under this exemption, unless that person is also an employee or officer of a particular local government and acting within that capacity. The regulations issued by the Secretary of State (2 111. Admin. Code §560.210 (k)) specify that such officers or employees do not need to register, so long as the communication is "independent" and "within the scope of their public or party office." However, the regulations specify that such officers and employees who participate in a Grass Roots Lobbying Event must report expenditures reimbursed by anyone other than the unit of local government through the registered entity sponsoring the Grass Roots Lobbying Event.
It is unclear on which part of the Act the Secretary of State relies in recognizing this exemption. It is also unclear what is meant by "independent" communication. It may refer to actions taken by individuals independent of and not organized with other officers. This exemption may well be the subject of future legislative activity to either provide a stronger statutory basis for the exemption or clarifying the intent of the legislature not to exempt these communications. It is also likely that the Secretary of State will further clarify the meaning of "independent." Local government officers or employees may rely on the exemption at this time, understanding that the exemption may be subject to challenge and further legislative and regulatory activity.
B. General Exemption for Uncompensated Persons Not Making Reportable Expenditures.
In addition to the exemption for local government officers or employees, you should know that persons who receive no compensation other than reimbursement for expenses of up to $500 per year are exempt from the registration requirement, unless those persons make re- portable expenditures (25 ILCS 170/4 (h)). The Act specifically exempts these persons when they appear before legislative committees or seek the approval or veto of the Governor (25 ILCS 1704/4 (a)). More broadly, though, non-compensated officers are exempt so long as they do not make reportable expenditures. Reportable expenditures are things of value for the purpose of influencing executive, legislative or administrative action (25
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ILCS 170/2 (b)). Under this exemption, a non-compensated local government officer or employee may lobby a member of the legislature so long as he or she does not make expenditures by giving things of value for the purpose of influencing legislative, executive or demonstrative action. It should be noted that the Act does not specify who the recipient of the expenditure may or may not be. Only the purpose of the expenditure is specified. Under this exemption, a non-compensated officer of a local government can attempt to influence legislative, administrative or executive action so long as they do not spend money to influence the legislators. Constitutional Officers or their top staff.
C. General Exemption for Persons Not Making Annual Expenditures in Excess of $100.
The regulations exempt persons who engage in direct lobbying communication on behalf of a registered lobbyist and who does not make reportable expenditures in an aggregate amount in excess of $ 100 within a calendar year (2 111. Admin. Code §560.210 (1)). Those persons must report their expenditures to such registered lobbyist.
D. Exemption for Certain Grass Roots Lobbying Activity.
Occasionally, local governmental officials or employees may become involved in grass roots lobbying activity or communications. The Illinois Secretary of State has issued regulations that exempt employees of registered lobbyists, a group affiliated with a registered lobbyist and any other person participating in a Grass Roots Lobbying Event from the registration requirement (2 111. Admin. Code §560.210 (n)). A Grass Roots Lobbying Event is an organized activity sponsored by a registered lobbyist intended to influence the actions of officials by inviting or transporting participants to a specific site on the grounds of or in the proximity of public offices or other meeting places where officials are expected to be accessible for grass roots lobbying activities (2 111. Admin. Code §560.100). The regulations define a "grass roots lobbying communication" as any attempt to influence any executive, legislative or administrative action through an attempt to affect the opinions of the general public. Encouraging a person to take action with respect to such an action qualifies as such a communication (2 111. Admin. Code §560.100).
E. Exemptions for Certain Activities by Persons Providing Professional Services for Local Governments.
The regulations specifically exclude from the definition of lobbying "any professional or technical assistance or ministerial function (a function in which nothing is left to discretion) as a normal course of business" (2 111. Admin. Code §560.100). The Act specifies that the following persons providing professional services are exempt from registration:
• Persons who provide professional services in drafting bills or advising clients on legislation (25 ILCS 170/4 (c));
• Persons with technical skills or knowledge who make occasional appearances for or on behalf of a registered lobbyist, provided these persons do not make re- portable expenditures (25 ILCS 170/4 (f)); and
• An attorney or witness in an administrative or judicial proceeding in which ex parte communications are prohibited, provided they make no reportable expenditures (25 ILCS 170/4 (i)).
This exemption would appear to cover routine professional work by attorneys in advising their client as to the current or proposed laws. The exemption would even cover the drafting of bills by the attorney for the local government. It does not appear that this exemption extends beyond advising the client. Further, it does not appear that the exemption extends to efforts by attorneys to influence an action. In fact, the regulatory definition of "professional services and technical skills" specifically provides that being a professional or technical person does not in itself exempt a person from registering if that person communicates with an official with the intent to influence action or if that person makes reportable expenditures (2 111. Admin. Code §560.100). Communications made by a lawyer with the intent to influence action which generally advocates one proposal over another is not an exempt communication because the lawyer is not solely providing professional legal services.
F. Exemption for Incidental Contacts.
The regulations also specify that persons who make incidental contacts with officials at town meetings, workshops, educational programs, banquets, events for distribution of awards or other social functions where executive, legislative or administrative action is discussed openly with the entire group, are exempt provided the person does not make a reportable expenditure other than meal, gift or honorarium in excess of $100 (2 111. Admin. Code §560.210 (m)).
HOW DOES A PERSON REGISTER AS A LOBBYIST?
Every person required to register must register each and every year or before service is performed which requires the person to register. The person shall file a Lobbyist Registration Statement and appropriate attachments
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with a $50 registration fee. A person required to register must report all expenditures for lobbying made by the lobbyist. There are various regulatory provisions delineating the reporting responsibility between employers and employee-lobbyists and contractor lobbyists. Also, special provisions exist delineating the reporting responsibility for reporting certain expenditures made in connection with a Grass Roots Lobbying Event initiated or sponsored by a registered person (25 ILCS 170/5).
WHAT ARE THE REPORTING REQUIREMENTS FOR EXPENDITURES?
The Secretary of State has designed forms for reporting the expenditures. Expenditures over $100 must be categorized by type of expenditure and the action and particular official sought to be influenced. Expenditures of $100 or less must be identified, valued and attributed to a particular official (25 ILCS 170/6).
WHAT ARE THE PENALTIES FOR FAILING TO COMPLY WITH REGISTRATION AND REPORTING REQUIREMENTS?
Any person who violates the Act can be fined up to $10, 000 (25 ILCS 170/10 (a)). In addition, any person who violates the Act is prohibited from lobbying for three years from the date of conviction (25 ILCS 170/10 (b)).
HOW DOES THIS LAW APPLY TO PARTICULAR SITUATIONS?
CASE #1. As the executive director of a park district, I meet with my local state representative at his or her office. I encourage the representative to support a bill pending before the General Assembly which would prohibit unfunded mandates on local governments. As an executive director, I am concerned about the ability of my park district to fund several programs mandated by the State. Do I need to register?
No. The regulations provide that an employee of a unit of local government is exempt from the registration requirement if the employee is acting within the scope of his/her employment. Clearly, the problem of unfunded mandates is a problem concerning local governments, including park districts.
CASE #2. Does the answer to Case #1 change if I meet with the representative at a five-star restaurant for dinner and I pay the $150 tab?
No. The exemption for local government employees applies whether or not you make expenditures for
the purpose of influencing or creating good will with the representative.
CASE #3. In the course of meeting with the representatives in Case #1, 1 discuss with the representative a problem my sister, an accountant, is having in setting up her new accounting firm. I try to persuade the representative to support a bill to establish a new expanded form of professional corporations that would benefit accountants. Do I need to register?
No. So long as your sister is not compensating you to attempt to influence this representative's vote, you need not register. The regulations exempt uncompensated persons not making expenditures exceeding $100 within the calendar year. Please note that your exemption as a local government employee does not apply to this situation because you are discussing legislation that does not pertain to the scope of your employment.
CASE #4. Does the answer to Case #3 change if I take the representative out to the five-star restaurant to discuss my sister's problem and the proposed legislation and pay the $150 bill?
Yes. The exemption described in Case #3 does not apply because your expenditures for the calendar year exceed $100.
CASE #5. I am the president of a park district board and a member of the legislative committee of the Illinois Association of Park Districts (IAPD). I contact my local representative to persuade him or her to support a group of bills prepared by the committee. Do I need to register?
No. It can safely be presumed that your work with the committee falls within the scope of your park district office. Both officers and employees of park districts are exempt from registration pursuant to regulations.
CASE #6. I am an attorney who has entered into a professional service agreement with a park district. I have been hired by the park district to testify before a legislative committee to present my legal opinion on the impact of a bill dealing with alcohol use by minors on the ability of park districts to pass ordinances with stricter standards. Do I need to register?
Probably Not. While the Act itself does not appear to exempt you, the regulations specifically state that the drafting of an opinion as the effect of proposed legislative action is exempt.
CASE #7. Prior to testifying before the legislative committee in Case #6, my client asks me to call the members of the committee and argue against passage of the proposed legislation. Do I have to register?
Yes. The regulations that exempt professional opinions clearly state that any direct lobbying communica-
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tion by such professionals is considered an effort to influence, requiring that person and that person's employing entity to register. You would not have to register if you were volunteering to assist the IAPD in this lobbying effort and were not billing for that time.
CASE #8. As the president of a park district, I talk to the president of the local bank, who is a personal friend of the Governor. I ask her to contact the Governor and encourage him to sign into law the bill which would prohibit unfunded mandates on local governments. Do I have to register?
No. You are exempt not only because of your capacity as a park district official, but also because you are not communicating with a state official covered by the Act. In addition, you may also be exempt because you are engaging in a grass roots lobbying communication. Please note, however, that if the bank president invites the Governor to her box seats at Soldier Field to view a World Cup Soccer game (current value well over $ 1, 000) for the ultimate purpose of influencing his action on this
bill, the bank president would need to register.
CASE #9. I am the spouse of a park district president. I have been invited to be on an educational panel at the IAPD conference advocating specific reforms in the state's workers compensation statute. I will be joined on the panel by a state representative. I am not being compensated for my participation on the panel. Do I need to register?
No. You are exempt, provided you are not making any reportable expenditures over $100 to influence the state representative. Furthermore, the regulations specifically exempt persons who make incidental contacts with officials at educational programs, workshops and banquets where the proposed legislative action is discussed openly to the entire group.
Nancy L. Kaszak is counsel to the law firm Ancel, Glink, Diamond, Cope & Bush, P.C. She is also the state representative from District 24.*
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Sam S. Manivong, Illinois Periodicals Online Coordinator