What Your Nonprofit Should Know
About the Lobbying Disclosure Act
The information contained in this site is of general nature and should not be acted upon in your specific situation without further details and/or professional assistance
The Lobbying Disclosure Act of 1995 (LDA) governs lobbying by tax-exempt organizations. The act applies to every lobbyist and lobbying organization. It requires organizations to register and file semiannual reports detailing lobbying activities if:
In 1998, Congress amended the LDA because of questions raised during its first year in effect. Nonprofit organizations that engage in lobbying activity — either by employing in-house lobbyists or by hiring outsiders — will want to know how the amendments affect them. But before reviewing the amendments, an overview of the act is in order.
The LDA defines lobbying activity as "lobbying contacts and efforts in support of such contacts." This includes background work that is intended for use in contacts and coordination with others’ lobbying activities. This excludes:
Similarly excluded from the definition of "lobbying contacts" are:
Who Must Register
The LDA requires nonprofit organizations that make more than one lobbying contact with a covered public official to register if they spend more than $20,000 during either of the two six-month reporting periods (January to June or July to December).
A lobbying firm must register on behalf of a nonprofit client if the firm spends more than $5,000 and more than 20% of its time lobbying on the client’s behalf during a reporting period. A self-employed lobbyist is considered a lobbying firm for registration purposes.
Registration is required within 45 days of the first lobbying contact or of being hired to make a lobbying contact. Organizations employing in-house lobbyists may file a single registration.
The act requires lobbying firms and organizations to register and file reports with the Secretary of the Senate and the Clerk of the House of Representatives. They file Form LD-1 to register. The registration statement must be filed within 45 days after an employee who qualifies as a lobbyist first makes a lobbying contact or agrees to make a lobbying contact, whichever comes first. The registration statement must include:
Registrants must file Form LD-2 (the lobbying report) for each semiannual period beginning Jan. 1 and July 1. Lobbying firms must file separate reports for each client for each semiannual period. Organizations employing in-house lobbyists must file one report covering their in-house lobbying activities for each semiannual period. Reports are date-stamped when received and are considered timely filed if postmarked by Feb. 14 or Aug. 14.
Each report must contain the names of the lobbyist and the client and any changes to the registration information. Key information that must be stated on Form LD-2 includes:
For In-House Lobbyists
Organizations that employ in-house lobbyists must report lobbying-related expenses as they are incurred (even if not yet paid for). These expenses include salaries, overhead or payments to vendors that may include lobbying firms. If lobbying expenses total $10,000 or more, the organization must provide a good-faith estimate of the actual dollar amount, rounded to the nearest $20,000.
An agreement not contrary to law or public policy to make lobbying contacts for a contingency fee, like other fee arrangements, triggers a registration requirement at inception. The fee must be disclosed on Form LD-2 for the semiannual period in which the registrant becomes entitled to it. Congress amended the LDA:
Revise and update instructions for the registration form (LD-1) and the reporting form (LD-2) to eliminate the former update form (LD-1U) and to require updated registration information to be reported on LD-2 only
semiannually — unless an immediate correction is requested,
Include in the group entitled to use the "safe harbor" provided by Section 15(b) a few trade associations not required by the Internal Revenue Code to report nondeductible lobbying expenses to their members (that is, those whose members are tax exempt),
Require filing IRS Form 990 with Form LD-2, and
Exempt official communications of international organizations (such as the World Bank) from the LDA’s registration and reporting requirements by expanding the definition of "public official" to add a "group of governments acting together as an international organization."
We Can Help You Comply
Your organization should determine if it is required to register under the LDA. If you are already registered, you’ll want to establish an accounting system to identify and track lobbying expenditures and lobbying information that you just report to comply with the act. We can help you do this. Please call us if you need further information.
(c)2001-06 Fraser CPA - Last Updated 05/01/2006