PRINTER'S NO. 1771
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1606
Session of
2021
INTRODUCED BY GROVE, CUTLER, KERWIN, B. MILLER, PENNYCUICK,
HAMM, KEEFER, LEWIS, C. WILLIAMS, STAMBAUGH, DIAMOND,
DOWLING, SMITH, FEE, RYAN, SCHMITT, ROZZI, HELM, MIZGORSKI,
HERSHEY, OWLETT, MENTZER, BERNSTINE, THOMAS, ROWE AND GLEIM,
JUNE 10, 2021
REFERRED TO COMMITTEE ON STATE GOVERNMENT, JUNE 10, 2021
AN ACT
Amending Title 65 (Public Officers) of the Pennsylvania
Consolidated Statutes, in lobbying disclosure, further
providing for registration, for reporting, for exemption from
registration and reporting, for administration and for
registration fees, fund established, system and regulations;
and making editorial changes.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The definitions of "fund" and "personnel expense"
in section 13A03 of Title 65 of the Pennsylvania Consolidated
Statutes are amended to read:
§ 13A03. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
* * *
"Fund." The Lobbying Disclosure Fund established in section
13A10(b) (relating to [registration fees;] fees and fund
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established; system; regulations).
* * *
"Personnel expense." An expenditure for salaries or other
forms of compensation, benefits, vehicle allowances, bonuses and
reimbursable expenses paid to lobbyists, lobbying staff,
research and monitoring staff, consultants, publications and
public relations staff, technical staff, clerical and
administrative support staff and includes individuals who engage
in lobbying but are exempt from reporting under section 13A06
(relating to exemption from [registration and] reporting). For
an individual for whom lobbying is incidental to regular
employment, the term means a good faith prorated estimate based
on the value of the time devoted to lobbying.
* * *
Section 2. Sections 13A04(a), 13A05, 13A06 and 13A08(f) and
(j) of Title 65 are amended to read:
§ 13A04. Registration.
(a) General rule.--[Unless excluded under section 13A06
(relating to exemption from registration and reporting), a
lobbyist, lobbying firm or a principal must register with the
department electronically using the computerized filing system
developed by the department that is consistent with the purposes
of this chapter within ten days of acting in any capacity as a
lobbyist, lobbying firm or principal.] Registration shall be
biennial and shall begin January 1, 2007. Unless excluded under
section 13A06 (relating to exemption from reporting), the
following shall apply:
(1) A lobbyist, lobbying firm or a principal that is
registered at the end of a biennial term shall be
automatically registered for the next biennial term, unless a
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notice of termination under subsection (e) is filed with the
department by January 10 of the next biennial term.
(2) A lobbyist, lobbying firm or a principal that is not
registered at the end of a biennial term or which has filed a
notice of termination under paragraph (1) or previously, must
register within 10 days of acting in any capacity as a
lobbyist, lobbying firm or a principal.
* * *
§ 13A05. Reporting.
(a) General rule.--A registered [principal] lobbying firm or
lobbyist who is not affiliated with a lobbying firm shall,
subject to the penalties under 18 Pa.C.S. § 4904 (relating to
unsworn falsification to authorities), file quarterly expense
reports with the department electronically using the
computerized filing system developed by the department that is
consistent with the purpose of this chapter no later than 30
days after the last day of the quarter.
(b) Content.--
(1) Each expense report must list the names and
registration numbers when available of all [lobbyists by
whom] principals on whose behalf lobbying is conducted on
behalf of the principal and the general subject matter or
issue being lobbied.
(2) Each expense report shall include the total costs
incurred by the lobbying firm or lobbyist of all lobbying for
the period. The total shall include all office expenses,
personnel expenses, expenditures related to gifts,
hospitality, transportation and lodging to State officials or
employees, and any other lobbying costs. The total amount
reported under this paragraph shall be allocated in its
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entirety among the following categories:
(i) The costs for gifts, hospitality, transportation
and lodging given to or provided to State officials or
employees or their immediate families.
(ii) The costs for direct communication.
(iii) The costs for indirect communication.
(iv) Expenses required to be reported under this
subsection shall be allocated to one of the three
categories listed under this section and shall not be
included in more than one category.
(2.1) For purposes of filing an expense report under
this subsection, a registrant may use any reasonable methods
of estimation and allocation.
(2.2) The expense report shall identify the amount of
the total reported expenditures that the reporting party or
entity charged to the account of each principal and allocate
the amount attributable to each category listed in paragraph
(2)(i), (ii) and (iii).
(3) The following apply:
(i) In addition to reporting the totals required
under this subsection, the expense report must identify,
by name, position and each occurrence, a State official
or employee who receives from a principal or lobbyist
anything of value which must be included in the statement
under section 1105(b)(6) or (7) (relating to statement of
financial interests) as implemented by section 1105(d).
(ii) For purposes of this chapter, the amount
referred to in section 1105(b)(7) shall be considered an
aggregate amount per year.
(iii) For purposes of this chapter, the amount
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referred to in section 1105(b)(7) shall not include the
cost of a reception which the State official or employee
attends in connection with public office or employment.
(iv) Written notice must be given to each State
official or employee who is listed in an expense report
under this paragraph at least seven days prior to the
report's submission to the department. Notice under this
subparagraph shall include the information which will
enable the State official or employee to comply with
section 1105(b)(6) and (7). For purposes of this chapter
and Chapter 11 (relating to ethics standards and
financial disclosure), section 1105(b)(6) and (7) shall
constitute mutually exclusive categories. For each
category enumerated in paragraph (2)(i), each notice
shall include both the amount incurred during the quarter
and the cumulative amount incurred from January 1 through
the end of the applicable quarter.
(v) This paragraph shall not apply to anything of
value received from immediate family when the
circumstances make it clear that motivation for the
action was the personal or family relationship.
(vi) In determining whether an expense must identify
the State official or employee as required by
subparagraph (i), the total amount expended shall be
considered, regardless of whether the cost or expenditure
was allocated among one or more principals, or whether
all or any portion of the total is paid directly by one
or more of the reporting party's principals.
(4) A [lobbying firm or a lobbyist not associated with a
lobbying firm] principal shall sign the reports
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electronically submitted by each [principal] lobbying firm or
lobbyist for whom the [lobbying firm or lobbyist] principal
is registered to attest to the validity and accuracy of the
cost attributed in the report to the principal to the best of
the attestor's knowledge. A [lobbying firm or lobbyist]
principal may attach a statement to the electronic report of
[a principal] the lobbying firm or a lobbyist, describing the
limits of the knowledge of the [lobbying firm or lobbyist]
principal concerning the information contained in the expense
report.
(5) The [expense report] attestation of the principal
shall also include the name, permanent business address and
daytime telephone number of any individual, association,
corporation, partnership, business trust or other business
entity which contributed more than 10% of the total resources
received by the lobbying firm or lobbyist from the principal
during the reporting period.
(6) A [lobbying firm or a lobbyist not associated with a
lobbying firm] principal shall submit an expense report
electronically using the computerized filing system developed
by the department that is consistent with the purpose of this
chapter if during the reporting period the [lobbying firm or
lobbyist] principal engaged in lobbying which was not
contained in any expense report filed by a [principal or
principals represented] lobbying firm or lobbyist not
associated with a lobbying firm that represented the
principal.
(7) A registered principal that attempts or that retains
a lobbying firm or lobbyist to attempt to influence an
agency's preparing, bidding, entering into or approving a
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contract shall ensure that the related expenses are included
under paragraph (2).
(8) A lobbying firm or a lobbyist not associated with a
lobbying firm shall [submit a report] include in its report
filed electronically using the computerized filing system
developed by the department that is consistent with the
purpose of this chapter if the lobbying firm or lobbyist
engaged in lobbying on behalf of any entity that is exempt
under section 13A06(7), (8), (9) or (10) (relating to
exemption from [registration and] reporting).
(c) Records retention.--A registrant shall retain all
documents reasonably necessary to substantiate the reports to be
made under this section for four years from the date of filing
the subject report. Upon request by the Office of Attorney
General, the board, the commission or the department, these
materials shall be made available for inspection within a
reasonable period of time.
(d) Thresholds for reporting.--An expense report required
under this section shall be filed electronically using the
computerized filing system developed by the department that is
consistent with the purpose of this chapter when total expenses
for lobbying exceed $2,500 for a registered [principal] lobbying
firm or a lobbyist not associated with a lobbying firm in a
reporting period. In a reporting period in which total expenses
are $2,500 or less, a statement to that effect shall be filed
electronically using the computerized filing system developed by
the department that is consistent with the purpose of this
chapter.
(e) Indirect communication disclosure.--Whenever any person
makes an expenditure for indirect communication under this
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chapter, for the purpose of disseminating or initiating a
communication, such as a mailing, telephone bank, print or
electronic media advertisement, billboard, publication or
education campaign, the communication shall clearly and
conspicuously state the name of the person who made or financed
the expenditure for the communication.
§ 13A06. Exemption from [registration and] reporting.
The following persons and activities shall be exempt from
[registration under section 13A04 (relating to registration)
and] reporting under section 13A05 (relating to reporting):
(1) An individual who limits lobbying to preparing
testimony and testifying before a committee of the General
Assembly or participating in an administrative proceeding of
an agency.
(2) An individual who is an employee of an entity
engaged in the business of publishing or broadcasting while
engaged in the gathering and dissemination of news and
comment on the news to the general public in the ordinary
course of business.
(3) An individual who does not receive economic
consideration for lobbying.
[(4) An individual whose economic consideration for
lobbying, from all principals represented, does not exceed
$2,500 in the aggregate during any reporting period.
(5) An individual who engages in lobbying on behalf of
the individual's employer if the lobbying represents less
than 20 hours during any reporting period.
(6) Except as required under section 13A05(d), a
principal whose total expenses for lobbying purposes do not
exceed $2,500 during any reporting period.]
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(7) An elected State official who acts in an official
capacity.
(8) An appointed State official acting in an official
capacity.
(9) An elected or appointed official of a political
subdivision who is acting in an official capacity for the
political subdivision.
(10) An employee of the Commonwealth or an agency of the
Commonwealth who is acting in an official capacity for the
Commonwealth or agency.
(11) An individual representing a bona fide church or
bona fide religious body of which the individual is a member
where the lobbying is solely for the purpose of protecting
the constitutional right to the free exercise of religion.
(12) An individual who is not a registered lobbyist and
who serves on an advisory board, working group or task force
at the request of an agency or the General Assembly.
(13) Participating as a party or as an attorney at law
or representative of a party, case or controversy in any
administrative adjudication pursuant to 2 Pa.C.S. (relating
to administrative law and procedure).
(14) Expenditures and other transactions subject to
reporting under Article XVI of the act of June 3, 1937
(P.L.1333, No.320), known as the Pennsylvania Election Code.
(15) Vendor activities under 62 Pa.C.S. §§ 514 (relating
to small procurements), 516 (relating to emergency
procurements) and efforts directly related to responding to
publicly advertised invitations to bid and requests for
proposals.
§ 13A08. Administration.
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* * *
(f) Audits.--The following shall apply:
(1) Every two years the Secretary of the Commonwealth
shall contract for the services of one or more certified
public accountants or certified public accounting firms. The
contract shall be awarded in a manner consistent with the
provisions of 62 Pa.C.S. Pt. I (relating to Commonwealth
Procurement Code), and no certified public accountant or
certified public accounting firm shall be eligible to obtain
a contract for more than two successive contract periods.
(2) The secretary shall [randomly select, at a public
drawing 60 days following the close of each fourth quarter
reporting period, 3% of all] establish a process for
selecting completed registrations and expense reports filed
with the department under this chapter based on factors that
focus on risk of noncompliance and shall select audit
candidates consistent with that process.
(3) The certified public accountant shall conduct [the]
financial and performance audits in accordance with generally
accepted auditing standards and shall test as to whether each
registration or expense report is materially correct.
[(4) The audit report and findings shall be
confidential, except that the department shall make an audit
report and findings available to the commission if the
commission is investigating an alleged violation of this
chapter involving the audited registration or expense report.
The commission shall include the relevant portion of an audit
as part of its findings of fact in a commission order which
results from an investigation arising out of an audit.]
(4.1) The audit reports and findings shall be made
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public. The commission shall determine whether a report of
adverse findings warrants enforcement or remedial action
under the provisions of this chapter.
(5) Nothing in this subsection shall limit the authority
of the Department of Revenue under Article IV of the act of
March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
1971, to conduct audits to determine compliance with
applicable tax laws.
* * *
(j) Inflation adjustment.--On a biennial basis commencing in
January 2009, the department shall review the threshold under
section 13A06 (relating to exemption from [registration and]
reporting) for registration under section 13A04 (relating to
registration) and the threshold for reporting under section
13A05(d) (relating to reporting) and shall increase these
amounts to rates deemed reasonable for assuring appropriate
disclosure. [On a biennial basis commencing in January 2009, the
department shall review the filing fee established under section
13A10 (relating to registration fees; fund established; system;
regulations) and may by regulation adjust this amount if the
department determines that a higher fee is needed to cover the
costs of carrying out the provisions of this chapter. The
department shall publish adjusted amounts in the Pennsylvania
Bulletin by June 1, 2009, and by June 1 every two years
thereafter as necessary.]
* * *
Section 3. Section 13A10 heading, (a) and (b) of Title 65
are amended and the section is amended by adding a subsection to
read:
§ 13A10. [Registration fees;] Fees and fund established;
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system; regulations.
[(a) Registration fees.--At the time of registration, a
person required to be registered under this chapter shall pay a
biennial registration fee of $100 to the department.
(b) Fund.--
(1) The Lobbying Disclosure Fund is established as a
special fund in the State Treasury.
(2) Money received from registration fees under
subsection (a) shall be deposited in the fund. Money
remaining in the fund established under former 65 Pa.C.S. §
1310(b) shall be transferred to the fund.
(3) Money deposited in the fund is appropriated to the
department as a continuing appropriation for the exclusive
purpose of carrying out this chapter.]
(a.1) Fund.--The following shall apply:
(1) The Lobbying Disclosure Fund is established as a
special fund in the State Treasury.
(2) The following shall apply:
(i) Each individual or entity required to report and
remit sales and use tax for lobbying service, as defined
in section 201(k)(11) of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971, shall
concurrently pay an additional 1.8% fee on the amount
subject to the tax under Article II of the Tax Reform
Code of 1971.
(ii) The fee shall be separately reported and paid
to the Department of Revenue on forms established by the
Department of Revenue at the same time the tax under
Article II of the Tax Reform Code of 1971 is due.
(iii) The Department of Revenue shall submit a
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report to the department identifying any individual or
entity which has failed to file the report or to remit
the fee established under subparagraph (i), within 14
days of the due date.
(3) Money received from fees under paragraph (2)(i)
shall be deposited into the fund. Money remaining in the fund
established under former subsection (b) shall be transferred
to the fund.
(4) Money deposited into the fund is appropriated to the
department as a continuing appropriation for the exclusive
purpose of carrying out this chapter.
* * *
Section 4. This act shall take effect in 60 days.
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