Types of Lobbying
There are two types of lobbying in the Commonwealth of Kentucky: Executive Agency Lobbying and Legislative Lobbying. If
you are attempting to promote, advocate, oppose, or otherwise influence the
outcome of an executive agency decision through contacts with officials of the
executive branch of state government on behalf of an employer or real party in
interest for compensation, you are conducting executive agency lobbying
activity and must register as an Executive Agency Lobbyist with the Executive
Branch Ethics Commission. If you are
attempting to promote, advocate, or oppose the passage, modification, defeat,
of any bill, resolution, amendment, nomination, and any other matter pending
before or acted upon the Kentucky General Assembly by making contacts to
legislators, then you are conducting legislative lobbying and you must register
as a legislative agent with the Kentucky Legislative Ethics Commission, which
you should contact for further information:
Legislative
Ethics Commission
#22
Mill Creek Park
Frankfort,
Kentucky 40601
(502)
573-2863
https://klec.ky.gov
The distinction between the two types of lobbying is
based upon subject matter and whom you will be contacting; therefore, when
deciding whether to register as a legislative agent or an Executive Agency
Lobbyist you should determine what
you will be attempting to influence and whom
you will be contacting to attempt to influence.
In some cases, registration with both Executive Branch and
Legislative Ethics Commissions may be required.
What is Executive Agency Lobbying?
The
executive agency lobbying law requires that people, organizations or other
groups who expend funds or receive compensation to influence an executive
agency decision must register with the Executive Branch Ethics Commission (“the
Commission”). An executive agency decision means a decision of an executive agency
regarding the expenditure of state funds with respect to the award of a
contract, grant, lease, the inclusion or deletion of items in the executive
branch state budget, entitlement programs, or other financial arrangement under
which state funds are distributed or allocated.
An executive agency decision
also includes executive agency decisions made concerning the following, if such
decisions will “financially impact” the Executive Agency Lobbyist or his or her
employer or client:
1. The parameters
of requests for information, requests for proposal, and other forms of solicitation in KRS Chapter 45A or 176 ;
2. Drafting,
adopting or implementing a budget provision;
3. Administrative
regulations or rules;
4. Executive
orders; or
5. Legislation
and amendments to legislation.
KRS
11A.201(8) and (17).
Who Should Register as an Executive Agency Lobbyist, Employer, or Real Party in Interest?
Whether
a person should register as an Executive Agency Lobbyist is
determined by the person's activity. An
Executive Agency Lobbyist is any person who is engaged to influence executive
agency decisions or to conduct executive agency lobbying activity regarding a substantial
issue as one of his or her main purposes. This also includes associations, coalitions,
or public interest entities formed for the purpose of promoting or otherwise
influencing executive agency decisions. If
the advocacy by direct communication regarding an executive agency decision is
directed to the office of an elected executive official, a cabinet listed in KRS 12.250, an executive branch official, or
any other state agency, department, board, or commission controlled or directed
by an elected executive official or otherwise subject to their authority, and
the person is attempting to influence an executive agency decision, then the
person engaged in such advocacy is an Executive Agency Lobbyist. The term “Executive Agency Lobbyist” shall
also include placement agents and unregulated placement agents. KRS 11A.201(4), (5), (7), (8), (17), and (18).
SUBSTANTIAL ISSUE DEFINITION:
The question often arises what does the phrase "regarding a substantial issue
as one of his or her main purposes" mean.
In other words, at what point have you performed sufficient activity to
warrant registration as an Executive Agency Lobbyist? As a rule of thumb, if you have made direct
contacts during a calendar year with an executive agency official, for the
purpose of influencing an executive agency decision that would result in the
expenditure of state funds of at least $5,000 per year or that would
financially impact your client, you are required to be registered as an Executive
Agency Lobbyist. KRS 11A.201(17).
Who is an Executive Agency Lobbyist?
An Executive
Agency Lobbyist (“EAL”) is any person who is employed or
engaged to influence executive agency decisions or to
conduct executive agency lobbying activity as one of his or her main purposes regarding a substantial issue, including associations, coalitions, or
public interest entities formed for the purpose of promoting or otherwise influencing
executive agency decisions. The term “Executive Agency Lobbyist” shall
also include placement agents and unregulated placement agents.
- Engage means to make any arrangement, and "engagement" means any arrangement, whereby an individual is employed or retained for compensation to act for or on behalf of an employer to influence executive agency decisions or to conduct any executive agency lobbying activity.
KRS 11A.201(4)
- Compensation means any money, thing of value, or economic benefit conferred on, or received by, any person in return for service rendered, or to be rendered by himself or another. KRS 11A.201(1)
- Executive Agency Decision means a decision of an executive agency regarding the expenditure of funds of the state or of an executive agency with respect to the award of a contract, grant, lease, or other financial arrangement under which such funds are distributed or allocated. This shall also include decisions made concerning the parameters of requests for information and requests for proposal, and other forms of solicitation in KRS Chapter 45A or 176; drafting, adopting, or implementing a budget provision; administrative regulations or rules; an executive order; and legislation or amendments thereto. KRS 11A.201(8)
- Executive Agency means the office of an elected executive official, a cabinet listed in KRS 12.250 or any other state agency, department, board, or commission controlled or directed by an elected executive official or otherwise subject to his authority. "Executive agency" does not include any court or the Kentucky General Assembly. KRS 11A.201(7)
- Executive Agency Lobbying Activity means contacts made to promote, advocate, oppose the passage, modification, defeat, or executive approval or veto of any legislation or otherwise influence the outcome of an executive agency decision by direct communication with an elected executive official, the secretary of any cabinet listed in KRS 12.250, any executive agency official, whether in the classified service or not, or a member of the staff of any of the officials listed in this paragraph. KRS 11A.201(10)
- Executive Agency Official means an officer or employee of an executive agency whose principal duties are to formulate policy or to participate directly or indirectly in the preparation, review, or award of contracts, grants, leases, or other financial arrangements with an executive agency. KRS 11A.201(11)
- Financial Impact means to have an effect on the financial position of the employer of the executive agency lobbyist or the real party in interest whether or not the impact is positive or negative. KRS 11A.201(5)
- Person means an individual, proprietorship, firm, partnership, joint venture, joint stock company, syndicate, business, trust, estate, company, corporation, association, club, committee, organization, or group of persons acting in concert. KRS 11A.201(14)
- Placement agent means an individual or firm who is compensated or hired by an employer or other real party in interest for the purpose of influencing an executive agency decision regarding the investment of the Kentucky Retirement Systems or the Kentucky Teachers' Retirement System assets; and Unregulated placement agent means a placement agent who is prohibited by federal securities laws and regulations promulgated thereunder from receiving compensation for soliciting a government agency. KRS 11A.201(18) and (19)
- Staff means any employee of the office of the Governor, or cabinet official listed in KRS 12.250, whose official duties are to formulate policy and who exercises administrative or supervisory authority or who authorizes the expenditure of state funds. KRS 11A.201(15)
- Substantial Issue means contacts which are intended to influence a decision that involves one or more disbursements of state funds in an amount of at least five thousand dollars ($5,000) per year, or any budget provision, administrative regulation or rule or legislative matter that financially impacts the Executive Agency Lobbyist or his or her employer. KRS 11A.201(17)
Who is an Employer of an Executive Agency Lobbyist?
An employer means any person who employs or engages an executive agency lobbyist.
Who is a Real Party in Interest?
A real party in interest is the person or organization on whose behalf the executive agency lobbyist is acting, if that person is not the employer. For example, if the ABC Corporation engages XYZ Government Relations Firm which, in turn, hires John Smith to influence decisions or conduct executive agency lobbying on behalf of ABC Corporation: (a) John Smith is the executive agency lobbyist; (b) XYZ Government Relations Firm is the employer; and (c) ABC Corporation is the "real party in interest".
Who is Exempt from Registering?
- Persons exercising their constitutional right to assemble with others for their common good and petition state executive branch agencies for redress of grievances.
- Unpaid lobbyists.
- A person whose job does not include lobbying as a "main purpose." Example: an engineer for a public utility who sometimes is in contact with state highway officials about moving utility lines, but whose main duties do not include lobbying.
- A person whose contacts with state officials are for the sole purpose of submitting a request under the Kentucky Open Records Act.
- A person whose lobbying is done only during appearances before public meetings of executive agencies.
- A person whose contacts are limited to those employees whose official duties do not include policy formulation, administrative or supervisory authority, or expenditure authorization or would otherwise fulfill the definition of executive agency official or staff pursuant to definitions in KRS 11A.201(11) and (15). To be considered lobbying, contacts must be with: an elected official; a cabinet secretary; officials whose principal duties are to make policy or participate in the preparation or award of state contracts or other financial arrangements, or the staff of any of the above officials.
- A
person who is an elected or appointed officer or employee of federal, state, or
local government, state college and university, or other political subdivision
when acting within his or her official duties.
- Any
news, editorial, and advertising statements published in newspapers, journals,
or magazines, or broadcast over radio or television.
- A person or entity that is gathering or furnishing information and news by bona fide reporters, correspondents, or news
bureaus to news media described in Item
8.
- Any
publications primarily designed
for, and distributed to, members of bona fide associations or charitable or
fraternal nonprofit corporations.
- Any
Professional services performed in preparing executive agency decisions,
preparing arguments regarding executive agency decisions, or in advising clients and rendering opinions
regarding proposed or pending executive agency decisions, if the services
are not otherwise connected to lobbying.
- A
person submitting public comments to an executive agency during the public comment
period of administrative regulations or rules.
- A person acting to promote, oppose or otherwise
influence the outcome of a decision of the Cabinet for Economic Development or
any board or authority within or attached to the Cabinet relating to the
issuance or award of a bond, grant, lease, loan, assessment, incentive
inducement, or tax credit pursuant to KRS 42.4588, 103.210, Chapter 154 or Chapter
224A, or otherwise relating to another component of an
economic incentive package. KRS 11A.233(1).
Is there a Registration Fee?
Yes. Each Employer of one or more lobbyists, and each Real Party in Interest, must pay a registration fee of $500 upon the filing of an Updated RegistrationStatement due July 31 each year.
KRS 11A.211(5). The registration fee may be paid using a check, credit card, money order, or electronic check payment. Credit card and electronic check payments are made via the Commission's website credit card app. Checks are made payable to "Kentucky State Treasurer". It is preferred that the $500 registration fee accompany the submitted Updated Registration Statement for accurate recording purposes.
When an Employer or Real Party in Interest has terminated the engagement of all executive agency lobbyists registered on their behalf, the Employer or Real Party in Interest has consequently terminated its registration with the Executive Branch Ethics Commission. If an Employer or Real Party terminates their registration at any time during the reporting period, a final Updated Registration Statement and $500 registration fee must be submitted to the Commission. Failure to pay the $500 registration fee either with a regular Updated Statement or a final Updated Statement will constitute a deficiency in the filing of an updated registration statement and will subject the employer/real party in interest to the penalties outlined in KRS 11A.990(5).