Types of Lobbying
There are two types of lobbying in the Commonwealth of Kentucky: Legislative Lobbying and Executive Agency Lobbying. If you are attempting to promote, advocate, or oppose the passage, modification, defeat, or executive approval or veto of any bill, resolution, amendment, nomination, and any other matter pending before the General Assembly, executive approval or veto of any bill acted upon by the General Assembly, then you are conducting Legislative Lobbying and you must register as a legislative agent. If you are attempting to promote, oppose, or otherwise influence the outcome of an executive agency decision, then you are conducting Executive Agency Lobbying and you must register as an executive agency lobbyist.
The distinction between the two types of lobbying is based upon subject matter -legislation or executive agency decisions. 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.
This is a guide to Executive Agency Lobbying, which is administered by the Executive Branch Ethics Commission. Legislative Lobbying is administered by the Legislative Ethics Commission.
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 and report their expenditures. An executive agency decision means a decision of an executive branch 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. The purpose of the executive agency lobbying law is to allow the public to know which persons or entities are making a significant effort to influence public policy as it relates to the expenditure of state funds. The provisions of the law can be found in Chapter 11A of the Kentucky Revised Statutes and Chapter 9 of the Kentucky Administrative Regulations.
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 individual who is engaged by an employer or real party in interest on a substantial basis, as one of his or her main purposes, to to conduct executive agency activity by direct communication. If the advocacy by direct communication regarding an executive agency decision is directed to an elected executive official, a member of the staff of any such 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 question that often arises is what does the phrase "on a substantial basis, 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 contact during a calendar year, for the purpose of influencing an executive agency decision involving one or more disbursements of state funds of at least $5,000 per year, you should be registered as an executive agency lobbyist.
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 main purposes on a substantial basis. 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.
- 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.
- 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.
- 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.
- Executive Agency Lobbying Activity means contacts made to promote, oppose, 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, or a member of the staff of any of the officials listed in this paragraph.
- 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.
- 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.
- 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.
- 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.
- Substantial Basis 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.
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?
- Unpaid lobbyists.
- A person who is attempting to influence a decision of an executive agency that does not involve the expenditure of state funds
or the award of a contract, grant, lease, or other financial arrangement under
which such funds are distributed or allocated. Examples:
a public utility appears before the Public Service Commission to request
a rate increase; a manufacturing plant communicates directly with officials
with the Air Quality Commission to discuss policies/regulations regarding air
- 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 state contacts do not involve "substantial" state spending. Decisions involving state spending of less than $5,000 per year are not considered "substantial."
- A firm or individual merely submitting a bid or responding to a Request for Proposal for a contract.
- A person whose contacts with state officials are for the sole purpose of gathering information contained in a public record. Example: a businessman who seeks a fuller explanation of bidding specifications, but makes no effort to change or otherwise influence a state decision on the bids
- 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. 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. (See KRS 11A.201(9), (10) and (14) for complete details.)
- Officers or employees of federal, state or local governments or of state colleges and universities when acting within their official duties.
- Persons exercising their constitutional right to assemble with others for their common good and petition state executive branch agencies for redress of grievances.
- Persons 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, KRS 103.210, KRS Chapter 154 or KRS Chapter 224A, or otherwise relating to another component of an economic incentive package.
The executive agency lobbying laws do not apply to the efforts of persons who are attempting to influence executive agency decisions or conducting executive agency lobbying activity in any of the following circumstances:
- Appearances at public hearings of the committees of the General Assembly, at court proceedings, at rule-making or adjudication proceedings, or at other public meetings;
- News, editorial, and advertising statements published in newspapers, journals, or magazines, or broadcast over radio or television;
- The gathering and furnishing of information and news by bona fide reporters, correspondents, or news bureaus to news media described in number two above;
- Publications primarily designed for and distributed to members of associations or charitable or fraternal nonprofit corporations.
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 Registration Statement 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).