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:

bulletThey have at least one employee who qualifies as a lobbyist as defined by the act, and
bulletExpect to spend $20,000 or more in a six-month period on lobbying.

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.

Lobbying Defined

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:

bulletCommunications by public officials and media representatives in the course of their work,
bulletPublicly disseminated information,
bulletConfidential information provided by corporate whistleblowers,
bulletCommunication from tax-exempt churches and religious orders,
bulletInformation provided on behalf of foreign governments or political parties covered by the Foreign Agents Registration Act, and
bulletInformation disclosed in violation of law, in which the government is legally required to maintain confidentiality.

Similarly excluded from the definition of "lobbying contacts" are:

bulletAdministrative requests for information,
bulletParticipation in federal advisory committees,
bulletTestimony before congressional committees and subcommittees,
bulletWritten responses to a covered official’s request for specific information,
bulletLegally compelled communications, such as responses to subpoenas,
bulletComments responsive to notices of proposed rulemaking,
bulletStatements made in the course of judicial or administrative adjudications,
bulletRequests for agency action on the public record,
bulletCommunications made between a self-regulatory organization under the Securities and Exchange Act and the SEC or the Commodities Future Trading Commission regarding the organization’s regulatory responsibilities,
bulletCommunications made on the record in public proceedings, and
bulletCommunications made on behalf of a person, unless aimed toward private legislation.

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:

bulletBasic identifying information about the organization,
bulletA statement of the general issue areas in which the organization intends to lobby,
bulletSpecific issues that have already been lobbied on or are likely to be addressed in future lobbying,
bulletThe identity of and background information regarding employees qualifying as lobbyists, including whether they have served as "covered" executive branch officials in the past two years (and if so, in what capacity),
bulletIdentification of employees who play a major role in the planning or supervision of the organization’s lobbying, and
bulletInformation regarding some foreign interests in the organization.

Reporting Deadlines

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:

bulletGeneral issues the registrant lobbied on for the client during the reporting period,
bulletSpecific issues the registrant lobbied on — including (when practical) specific bill numbers and references to executive branch actions and which Houses of Congress and executive agencies the registrant or its employed lobbyists contacted,
bulletThe registrant’s employees who lobbied on behalf of the client and a description of any interest any listed foreign entity had in the specific issues the registrant lobbied on for the client, and
bulletA good-faith estimate of the registrant’s total income during the reporting period for lobbying on the client’s behalf or — in the case of a registrant lobbying on its own behalf — a good-faith estimate of the registrant’s total lobbying expenses.

Reporting Expenses
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.

Contingency-Fee Arrangements
Trigger Registration

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:

How Changes
In The Law Affect Nonprofits

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

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