Effective January 1, 2010, the Massachusetts Lobbying Law has been amended, expanding the scope of activities deemed to be lobbying, narrowing the range of activities exempted from regulation, increasing reporting requirements and increasing penalties for non-compliance. These changes affect businesses, business owners and their employees, as well as their attorneys and other service providers. Businesses that employ lobbyists and businesses that undertake lobbying activities themselves need to register with the Secretary of State and to file periodic reports of activities and expenditures. People who have never thought of themselves as lobbyists may now have some of their activities regulated by the new Lobbying Law.
As defined in the amended Lobbying Law, lobbying includes any act to promote, oppose or influence state legislation or the veto thereof, and any act to influence most state executive branch officials regarding policy, procurement, standards, rates or regulations. A person engaging in such activity must register if the activity is undertaken for “compensation or reward” and if the person has at least one direct lobbying communication with a government official. There is an exemption if such activity is merely incidental to such persons business or professional activities. As a “safe harbor,” the law provides that such activity will be held to be incidental if, in a 6-month reporting period, compensation or reward received for such activity is less than $2,500 and time spent on the activity totals fewer than 25 hours.
Some types of legal services and some types of business activities that previously were generally not viewed as lobbying now are, or may be, lobbying under the Lobbying Law. Lobbying now includes most instances of advocacy related to legislation, and many instances of advocacy related to procurement policy, standards or rates. “Procurement” specifically includes the acquisition or disposition of interests in real estate by the Commonwealth. Strategizing, planning and research with respect to matters regulated as lobbying, if used or intended for use in a communication with a government official, are now also viewed as lobbying. These new requirements apply to everyone who engages in lobbying activity – including business owners, business employees, attorneys, consultants, engineers, and expert witnesses –not just to those customarily thought of as “professional lobbyists.”
Some common business activities are specifically excluded from the definition of lobbying: Applying for permits, approvals or grants in accordance with written regulations and responding to requests for proposals for the procurement of goods or services or the purchase, sale or lease of real estate in accordance with the terms of the RFP are not lobbying. The status of some types of advocacy that previously were not generally viewed as lobbying remains unclear. For example, in some circumstances, high-level meetings with officials to present the merits of a project may constitute lobbying. However, the prior common practice of engaging a “professional lobbyist” to escort members of a team to various meetings with government officials will no longer ensure compliance.
Much of the Lobbying Law is vague and ambiguous, making compliance more difficult. Thus far, regulators have taken a “when in doubt, register” approach, rather than providing clarifying guidance. The penalties for non-compliance have been increased, and include up to five years in jail and significant fines.
Compliance with the Lobbying Law requires that both lobbyists and those who employ them register with the Secretary of State’s office and file periodic disclosures of activities undertaken, expenditures made and compensation or reward received. Business employees who engage in lobbying activity must comply with these registration and reporting requirements. In some circumstances, principals engaged in lobbying activity may need to register (e.g., if such activity is undertaken for a joint venture from which the principal receives management or development fees). Organizations that pay others to engage in “lobbying activity” (which now can include research and strategy related to legislation or executive decisions) may need to report such expenditures, even if neither they nor those they hire are required to register as lobbyists.
If the activities that your attorneys undertake as part of their legal services fall within this expanded range of activities deemed lobbying, both your attorneys, and you as the employer of the attorneys, will need to register and file reports. The same requirements apply to other service providers (e.g., consultants, government affairs advisors, engineers or other experts, etc.) whose activities constitute lobbying under the amended law.
If you have questions or would like assistance in complying with the expanded Massachusetts Lobbying law, including questions about the registration process, please contact your usual Goulston & Storrs attorney, or anyone of us listed below.
Peter D. Corbett
(617) 574-4124
pcorbett@goulstonstorrs.com
Peter N. Kochansky
(617) 574-3527
pkochansky@goulstonstorrs.com
This client advisory should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer concerning your situation and any specific legal questions you may have.
Pursuant to IRS Circular 230, please be advised that, this communication is not intended to be, was not written to be and cannot be used by any taxpayer for the purpose of (i) avoiding penalties under U.S. federal tax law or (ii) promoting, marketing or recommending to another taxpayer any transaction or matter addressed herein.
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