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State Registration and Disclosure Rules for Nonprofits that Lobby

Podcast

Quyen Tu, Natalie Roetzel Ossenfort, Leslie Barnes


 

On this episode, we’ll discuss how state law may impact your nonprofit’s efforts to impact public policy and lobby for legislation. In past episodes, we’ve focused largely on the tax code: how it permits lobbying for nonprofits and how nonprofits can measure their lobbying limits. But today, we will examine how state-level sunshine laws may require you (or your nonprofit) to register and report as a lobbyist or to report your ballot measure advocacy activities. 

Our attorneys for this episode:

Quyen Tu Natalie Ossenfort Leslie Barnes

Wait?  I have to register as a lobbyist too? 

  •  All states require lobbyists to register and most have some level of expenses or compensation to trigger the registration.  
  •  Laws generally aimed at disclosing when individuals or corporate entities (including nonprofits) provide some benefit to an elected official or spend money to influence public policy at the state or local level.  
  •  States may define lobbying differently from what the IRS uses 

 Examples: 

  •  For example, you work for a nonprofit that would like to partner with a state legislator to expand highspeed internet to rural areas. So, your nonprofit pays for a lawmaker to visit parts of the state that do not have access to internet to meet with constituents and hear their legislative proposals. The cost of the trip for you and the lawmaker would likely be costs your nonprofit would have to disclose to state officials as lobbying costs. 
  • In our example, the trip and communications with the lawmaker are likely direct lobbying for IRS purposes because staff are communicating with a legislator about a specific piece of legislation they want passed.  For IRS purposes, your nonprofit reports the cost of the trip as well as staff time spent on the trip and preparing for the trip to influence legislation. 
  • While most state lobbying laws may simply require the reporting of the expense of the trip and not any staff time. Providing funding to or for the legislator means you have to disclose that funding.  Think of it like a sunshine law—transparency around trips or lunches or events like this helps avoid the look of corruption because it is open and available to the public.   

So how do these laws work in practice? 

Texas:

  • Texas has a compensation and reimbursement based threshold for registering and reporting as a lobbyist. 
  • If you get paid or reimbursed $1620+ in a calendar quarter to directly communicate with members of the state legislature or executive branches of state government to influence legislation or administrative action, you must register and report as a lobbyist; OR  
  • If you spend $810 or more in a calendar quarter on qualifying lobbying expenditures, you must register and report as a lobbyist.  
  • Always exceptions: (e.g. testifying at public hearing, incidental lobbyist) 

 California:

  •  California has 2 different categories for reporting 
  • $5k filer-spends that amount in a calendar quarter, or 
  • you’re a lobbyist employer (in-house, contract lobbyist or lobbying firm) 
  • Lobbying = only paid activity is regulated; volunteer efforts don’t count 
  • Must register and report with CA Secretary of State until you terminate or the 2-year legislative session ends 
  • Can also be in a lobbying coalition where 10+ pool their resources 
  • The Fair Political Practices Commission (“FPPC”) oversees California lobbying, campaign finance and ethics laws 
  • Don’t forget to check local county and municipal lobbying laws too! 

In all other states:  

  • Lobbying registration and disclosure different in each state 
  • Who Registers?- Some states, like Indiana and Pennsylvania, require nonprofits and their designated representative to register as a lobbyist, where other states, like NH and NV, only require registration by the person who directly engages the government official.  
  • What’s Reported? – direct or grassroots activities 
  • And some states have separate gift and ethics rules that live in administrative rules. Just be sure to check all bases before you engage. 
  • Bolder Advocacy is releasing a chart on ALL 50 states’ lobbying registration thresholds. Look for it on Resource page coming soon 

 Nonprofits that work on ballot measures may have to register like PACs 

  •  If you listened to our show, you know that a 501(c)(3) public charity can run an entire campaign to the public to vote “yes” or “no” on a ballot initiative/measure.  That type of advocacy to the general public is reported to the IRS as direct lobbying because the public becomes the legislator in this example. The public adopts the new constitutional amendment or bond fund. 
  • In some states however, because the organization is communicating to the public how to vote, the state will ask the public charity or nonprofit to report like a more traditional political action committee (or PAC).   
  • Remember, a public charity cannot support or oppose a candidate.  Ballot measures are different though because these ask the public to adopt a new law or budget item.   

 Does Bolder Advocacy have state specific resources for ballot measures and campaign finance work? 

  •  Absolutely. Go to BolderAdvocacy.org, scroll to “state” and then select your state. Look for “Campaign Finance and Ballot Measure” for your state of interest. 
  • Let’s look at CA and TX in particular 

California: 

  • Ballot Measures = campaign activity, different set of rules for state, city, and local ballot measures 
  • You become a Recipient Committee (raising or receiving $2k+ in a calendar year earmarked for ballot measure work), a Major Donor Committee (contributing $10k+ in a calendar year), or an Independent Expenditure Committee (spending $1k+ in a calendar year on communications that expressly advocates for/against a ballot measure and not made in coordination with a ballot measure committee) 
  • Once you become a committee, you have to register within 10 days of qualifying and pay $50 annual fee with the Secretary of State 
  • There are non-reportable activities, most notably 10% or less of paid staff time in a calendar month 

Texas:  

  • Slightly less complicated campaign finance laws apply in Texas, but in some instances PAC registration may be triggered, or an organization may have to report their ballot measure related expenditures if they exceed a certain dollar amount. (aka direct campaign expenditure reporting) 

Other States:

  • Bolder Advocacy has state specific campaign finance and ballot measure resources on 36 states on our website along with contact information for the in-state attorneys who helped us prepare those resources. These guides help nonprofits understand when they need to register with the state when they’re spending money on a ballot measure communication as well as the content of any disclaimer requirements, such as who paid for the ad. 

 Reminder on the filing deadlines 

  •  For all nonprofits (whether a c3 or c4) just getting into lobbying at the state level or even the local level, remember that many of these registration and reporting requirements have very tight timelines.   
  • For example, in Wyoming, a lobbyist has to register within 48 hours of her first lobbying expense.   
  • And once registered, there are monthly or sometimes more regular reporting requirements to the state secretary of state office (or other office charged with the ethics and compliance).  

 If you have questions, you can call our hotline for free at 1–866-NP-LOBBY, email us at advocacy@afj.org or submit your questions using this online form. 

 

Resources 

 All our state law resources are found here on this page:  https://afj.org/subject/state-law-resources/ 

 California Ballot Measures:

 From the Fair Political Practices Commission: 

 California Lobbying Disclosures:

 From the Fair Political Practices Commission- California: 

 Texas Resources