Lobbying Lingo Decoded: A Beginner's Guide to State Lobbying Compliance Terminology

New to the world of lobbying? You will likely come across terms that are new or unfamiliar to you. Knowing the definitions of these terms is important not only in your lobbying strategies but also in maintaining compliance with state regulations.

Understanding Different Types of Lobbying and Lobbyist Roles

Direct vs Indirect Lobbying Methods

When people think of lobbying, direct lobbying is often the first thing that comes to mind. It occurs when communicating directly with a legislator or public official. Direct lobbying can include activities such as meeting with a Maryland State Senator in Annapolis to advocate for or against a bill, or testifying before a committee in some states like Alaska or Wisconsin. A lobbyist does not need to be in the physical presence of a government official to engage in direct lobbying—Zoom meetings, email, and phone calls can count as well.

Indirect lobbying, also known as grassroots lobbying, differs from direct lobbying in that it often involves asking the general public to support or oppose legislation. Social media strategies and targeted advertising are examples of indirect lobbying.

Lobbyist Employment Classifications

In-House Lobbyists are employees of a business or organization whose responsibilities include lobbying on issues of interest to their employer. On the other hand, contract lobbyists are retained on a contractual basis and may represent different companies or organizations that advocate for or against certain legislation or issues.

Designated Lobbyists are designated by the principal as the single point of contact. In states like Minnesota, this differs from reporting lobbyists, who are responsible for reporting lobbying disbursements of two or more lobbyists representing the same entity, while designated lobbyists are responsible for reporting the lobbyist disbursements of the entity represented.

Placement agents are individuals who are hired, engaged, or retained by, or serving for the benefit of, or on behalf of, another placement agent. They act for compensation as a finder, solicitor, or other intermediary in connection with the sale of securities, assets, or services of an external manager to a board or investment vehicle.

Responsible officers, sometimes called the authorizing officer or signer, are responsible for filing required statements or reports for lobbyists.

Essential State Lobbying Law Terminology

You may encounter unfamiliar terminology when reviewing state statutes and regulations.

Financial and Compensation Terms

Contingency fees are payments made upon the achievement of a successful outcome—such as the passage or defeat of legislation, or being awarded a public contract. It's important to note that these fees are generally prohibited for lobbyists.

Procurement lobbying involves promoting or attempting to influence the awarding of grants, contracts, permits, or similar things from state agencies. In some states, procurement activity is also considered lobbying activity.

Many states use the term principal to refer to people or businesses that employ lobbyists. For instance, Michigan defines a “principal” as an individual or association that spends either a certain amount to engage a lobbyist, or a certain amount on influencing legislative action. Other states use employer or client to refer to the same subject.

Compensation refers most often to a lobbyist’s salary, income, or wage. Some states also extend the definition of compensation to include reimbursements of travel, food, or other costs, such as Mississippi and Tennessee.

While reporting lobbying activity, some jurisdictions may require the source of funds for the association, coalition, or public interest entity. In Kentucky and Ohio, the real party in interest is identified as the person or organization on whose behalf the lobbyist is acting, if different from the employer.

Government Actions and Official Classifications

Administrative action and legislative action are terms that refer to actions undertaken by state legislatures and their committees and executive branch agencies. Administrative action is the proposal, drafting, consideration, amendment, adoption, or any other action involving rules and regulations. On the other hand, legislative action deals directly with the process of introducing, modifying, and enacting bills, resolutions, amendments, and other legislative topics. For instance, lobbying for a certain bill to be passed would be classified as trying to influence legislative action. Lobbying for gubernatorial actions such as a veto on legislation is generally considered lobbying on a legislative action.

Covered executive branch officials include high-level officials with titles such as Commissioner or Executive Director, and certain other officers or employees serving in certain positions or under certain pay grades. Covered legislative branch officials include members of the legislature and their employees, including committee employees, leadership staff, and working groups. At the federal level, the Lobbying Disclosure Act outlines exactly who a covered executive branch official is and includes a requirement that when asked, an official must tell the lobbyist if they are a covered executive branch official.

Compliance Requirements and Reporting Obligations

Disclosure Reports, sometimes called periodic reports, include information about contributions, expenditures, and lobbying activities conducted within the filing period of a jurisdiction. The information required varies depending on the jurisdiction, so it’s important to know what must be reported before completing a disclosure report. For instance, Vermont requires reporting of all lobbying expenditures, compensation, and gifts.

Lobbyists or firms may choose to end their engagement in a jurisdiction for a variety of reasons through a process called termination. While the process differs from state to state, terminating your lobbyist registration often involves submitting a document or statement, as well as sometimes a final report of your activity.

Professional Standards and Ethical Restrictions

Revolving door restrictions regulate the transition of employees in the public sector into new roles as lobbyists or consultants. States will often set specific time limits during which public officials cannot serve as lobbyists. These time limits can range from less than a year in states like North Carolina, up to six years in Florida. Failing to abide by these restrictions can lead to financial, civil, or criminal penalties, as well as reputational damage. In some jurisdictions, this is called a cooling-off period.

Gifts can mean both tangible items and intangible benefits. It is especially important to understand the state-by-state definitions of gifts, gifting restrictions, and gift exemptions to ensure no restrictions are violated.

Expenditures refer to payments made. State-by-state definition varies, but common types of expenditures are food and beverages, entertainment and event costs, and other expenses incurred while trying to influence legislative and administrative action.

Need Compliance Help? Get In Touch!

Keeping up with rules, deadlines, and often confusing requirements is a daunting prospect for teams of all sizes. Let us manage your federal, state, and local registration and reporting responsibilities, or manage your Campaign Finance program. Read more about our Compliance Services here, or get in touch here.