GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

H	2 

HOUSE BILL 89
Committee Substitute Favorable 5/2/91

Short Title:  Ethics/Lobbying.	(Public)
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Sponsors:
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Referred to:  
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February 18, 1991

A BILL TO BE ENTITLED
AN ACT TO CHANGE THE REGISTRATION, IDENTIFICATION, AND REPORTING REQUIREMENTS FOR LOBBYISTS AND THEIR PRINCIPALS; TO PROHIBIT CAMPAIGN FUND-RAISING FROM LOBBYISTS FOR LEGISLATORS AND COUNCIL OF STATE MEMBERS WHILE THE GENERAL ASSEMBLY IS IN REGULAR SESSION; AND TO REQUIRE A ONE-YEAR WAIT AFTER THEY LEAVE OFFICE BEFORE LOBBYING MAY BE DONE BY FORMER MEMBERS AND PRESIDING OFFICERS OF THE GENERAL ASSEMBLY, FORMER COUNCIL OF STATE MEMBERS, AND FORMER CABINET SECRETARIES.

PART I	CHANGES IN REGISTRATION, IDENTIFICATION,
AND REPORTING FOR LOBBYISTS
AND THEIR PRINCIPALS.

PART II	NO-FUNDRAISING IN SESSION FROM LOBBYISTS.

PART III	ONE-YEAR WAIT BEFORE EX-LEGISLATORS,
EX-COUNCIL OF STATE MEMBERS, AND
EX-CABINET SECRETARIES MAY LOBBY.

The General Assembly of North Carolina enacts:
PART I – CHANGES IN REGISTRATION AND REPORTING.
Section 1.1.   Article 9A of Chapter 120 of the General Statutes reads as rewritten:
"ARTICLE 9A.
"Lobbying.
"§ 120-47.1. Definitions.
For the purposes of this Article, the following terms shall have the meanings ascribed to them in this section unless the context clearly indicates a different meaning:
(1)	The terms 'contribution,' 'compensation' and 'expenditure' mean any advance, conveyance, deposit, payment, gift, retainer, fee, salary, honorarium, reimbursement, loan, pledge or anything of value and any contract, agreement, promise or other obligation whether or not legally enforceable.
	" " 	(4)	The term 'legislative action' means the preparation, research, drafting, introduction, consideration, modification, amendment, approval, passage, enactment, tabling, postponement, defeat, or rejection of a bill, resolution, amendment, motion, report, nomination, appointment, or other matter by the legislature or by a member or employee of the legislature acting or purporting to act in an official capacity.
(5)	The term 'legislative official' includes:
a.	A member or member-elect of either house of the General Assembly;
b.	A member of a commission or other entity established by and responsible to either house, or both houses, of the General Assembly; or
c.	A legislative employee.
(6)	The term 'lobbying' means:
a.	Influencing or attempting to influence legislative action through oral or written communication;
b.	Solicitation of others to influence legislative action; or
c.	An attempt to obtain the goodwill of a legislative official.
(7)	The term 'lobbyist' means an individual who:
a.	Is employed and receives compensation, or who contracts for economic consideration, for the purpose of lobbying; or
b.	Represents another person and receives compensation for the purpose of lobbying.
The term 'lobbyist' shall not include those individuals who are specifically exempted from this Article by G.S. 120-47.8.  For the purpose of determining whether an individual is a lobbyist under this subdivision, reimbursement of actual travel and subsistence expenses shall not be considered compensation; provided, however, that reimbursement in the ordinary course of business of these expenses shall be considered compensation if a significant part of the individual's duties involve lobbying before the General Assembly.
(8)	The terms 'lobbyist's principal' and 'principal' mean the entity in whose behalf the lobbyist influences or attempts to influence legislative action.
(9)	The term 'person' means any individual, firm, partnership, committee, association, corporation or any other organization or group of persons.
(10)	The General Assembly is in 'regular session' from the date set by law or resolution that the General Assembly convenes each year until the General Assembly either:
a.	Adjourns sine die; or
b.	Recesses or adjourns for more than 10 days.
"§ 120-47.2. Registration procedure.
(a)	A lobbyist shall file a registration statement with the Secretary of State before engaging in any lobbying, but no later than 30 days after being appointed, employed, or retained as a lobbyist.  A separate registration statement is required for each lobbyist's principal.
(b)	The form of the registration shall be prescribed by the Secretary of State and shall include the registrant's full name, firm, and complete address; the registrant's place of business; the full name and complete address of each person by whom the registrant is employed or retained; and a general description of the matters on which the registrant expects to act as a lobbyist.
(c)	Each lobbyist shall register again with the Secretary of State no later than 10 days after any change in the information supplied in his last registration under subsection (b). Each supplementary registration shall include a complete statement of the information that has changed.
(d)	Within 20 days after the convening of each regular session of the General Assembly, the Secretary of State shall furnish each member of the General Assembly and the State Legislative Library a list of all persons who have registered as lobbyists and whom they represent. A supplemental list shall be furnished periodically each 20 days thereafter as the session progresses.
(e)	Each lobbyist who ceases to engage in lobbying requiring registration under this section shall file a written statement with the Secretary of State acknowledging the termination of lobbying.  The written statement of termination is effective immediately.  Each lobbyist who files a written statement of termination shall file reports required by this Article for any reporting period during which he was registered as a lobbyist.
(f)	Each registration statement required under this Article shall be effective from the date of filing until January 1 of the following odd numbered year.  The lobbyist shall file a new registration statement after that date, and the applicable fee shall be due and payable.
"§ 120-47.3. Registration fee.
Every lobbyist's principal shall pay to the Secretary of State a fee of seventy-five dollars ($75.00) which fee shall be due and payable by either the lobbyist or the lobbyist's principal at the time of registration.
A separate registration, together with a separate registration fee of seventy-five dollars ($75.00), shall be required for each lobbyist's principal for which a person acts as a lobbyist.  Fees so collected shall be deposited in the General Fund of the State.
"§ 120-47.4. Written authority from lobbyist's principal to be filed.
Each lobbyist shall file with the Secretary of State within 10 days after his registration a written authorization to act as such, signed by the lobbyist's principal.
"§ 120-47.5. Contingency lobbying fees and election influence prohibited.
(a)	No person shall act as a lobbyist for compensation which is dependent in any manner upon the passage or defeat of any proposed legislation or upon any other contingency connected with any action of the General Assembly, the House, the Senate or any committee thereof.
(b)	No person shall attempt to influence the action of any member of the General Assembly by the promise of financial support of the member's candidacy, or by threat of financial contribution in opposition to the member's candidacy in any future election.
"§ 120-47.6. Statements of lobbyist's lobbying expenses required.
(a)	For each calendar year that a lobbyist is registered, the lobbyist shall file an expense report with respect to each principal within 30 days after the last day of the regular session.  This expense report shall include all expenditures made between January 1 and the last day of the regular session.  The lobbyist shall file a supplemental report including all expenditures made after the last day of the regular session, but during the calendar year, by January 31 of the following year.  The lobbyist shall file both expense reports whether or not expenditures are made.
(b)	Each expense report shall set forth the date of each expenditure, to whom paid, the name of any legislator who benefitted from each expenditure, identification of the legislative action, if any, which was the subject of the lobbying activity, and the amount of each expenditure made during the previous reporting period in connection with  lobbying, in each of the following categories: (1) transportation, (2) lodging, (3) entertainment, (4) food, (5) any item having a cash equivalent value of more than twenty-five dollars ($25.00) and (6) contributions made, paid, incurred or promised, directly or indirectly. It shall not be necessary to report expenditures in a particular category if the total amount expended during the reporting period in the particular category on behalf of a lobbyist's principal is twenty-five dollars ($25.00) or less. When more than 25 members of the General Assembly benefitted or were invited to benefit from an expenditure, the lobbyist shall not be required to report the name of any legislator, but shall be required to report the number of legislators or the party affiliation, legislative district, or any other basis for their selection.
(c)	All reports shall be in the form prescribed by the Secretary of State and shall be open to public inspection.
(d)	When a lobbyist fails to file a lobbying expense report as required herein, the Secretary of State shall send a certified or registered letter advising the lobbyist of the delinquency and the penalties provided by law. Within 20 days of the receipt of the letter, the lobbyist shall deliver or post by United States mail to the Secretary of State the required report and an additional late filing fee of ten dollars ($10.00). Filing of the required report and payment of the additional fee within the time extended shall constitute compliance with this section. Failure to file an expense report in one of the manners prescribed herein shall result in revocation of any and all registrations of a lobbyist under this Article. No lobbyist may register or reregister under this Article until he has fully complied with this section.
"§ 120-47.7. Statements of lobbyist's principal lobbying expenses required.
(a)	For each calendar year that a lobbyist's principal has employed, appointed, or retained one or more lobbyists to lobby on the principal's behalf, the principal shall file an expense report within 30 days after the last day of the regular session.  This expense report shall include all expenditures made between January 1 and the last day of the regular session.  The principal shall file a supplemental expense report, including all expenditures made after the last day of the regular session, but during the calendar year, by January 31 of the following year.  The principal shall file both expense reports whether or not expenditures are made during a reporting period.
(b)	Each expense report shall set forth the name and address of each lobbyist employed, appointed, or retained by the lobbyist's principal, the date of each expenditure made, to whom paid, name of any legislator who benefitted from each expenditure, identification of the legislative action, if any, which was the subject matter of the lobbying, and amount of each expenditure made during the previous reporting period in connection with lobbying, in each of the following categories: (1) transportation, (2) lodging, (3) entertainment, (4) food, (5) any item having a cash equivalent value of more than twenty-five dollars ($25.00), (6) contributions made, paid, incurred or promised, directly or indirectly, and (7) compensation to lobbyists in connection with their lobbying activities.  It shall not be necessary to report expenditures in any particular category if the total amount expended during the reporting period in the particular category is twenty-five dollars ($25.00) or less. When more than 25 members of the General Assembly benefitted or were asked to benefit from an expenditure, the principal shall not be required to report the name of any legislator, but shall be required to report the number of legislators or the party affiliation, legislative district, or any other basis for their selection.  In the category of compensation to lobbyists, the principal shall report the sum of all compensation paid or promised, directly or indirectly, to all lobbyists in connection with lobbying activities on behalf of the principal.  
(c)	All reports shall be in the form prescribed by the Secretary of State and open to public inspection.
(d)	When a lobbyist's principal fails to file a lobbying expense report as required herein, the Secretary of State shall send a certified or registered letter advising the lobbyist's principal of the delinquency and the penalties provided by law. Within 20 days of the receipt of the letter, the lobbyist's principal shall deliver or post by United States mail to the Secretary of State the required report and a late filing fee of ten dollars ($10.00). Filing of the required report and payment of the late fee within the time extended shall constitute compliance with this section. 
"§ 120-47.7A. Identification of lobbyists.
Any lobbyist registered under this Article shall, while in the Legislative Building or in the Legislative Office Building, or while in attendance at any reception for members of the General Assembly, wear an identification tag giving that person's name and the word 'Lobbyist.'
"§ 120-47.8. Persons exempted from provisions of Article.
The provisions of this Article shall not be construed to apply to any of the following:
		(2)	A person appearing before a legislative committee at the invitation or request of the committee or a member thereof and who engages in no further activities as a lobbyist in connection with that or any other legislative matter.
(3)	a.	A duly elected or appointed official or employee of the State, the United States, a county, municipality, school district or other governmental agency, when appearing solely in connection with matters pertaining to his office and public duties.
b.	Notwithstanding the persons exempted in this Article, the Governor, Council of State, and all appointed heads of State departments, agencies and institutions, shall designate all authorized official legislative liaison personnel and shall file and maintain current lists of designated legislative liaison personnel with the Secretary of State and shall likewise file with the Secretary of State a full and accurate accounting of all money expended on lobbying, other than the salaries of regular full-time employees, at the same times lobbyists are required to file expense reports under G.S. 120-47.5.
(4)	A person performing professional services in drafting bills or in advising and rendering opinions to clients as to the construction and effect of proposed or pending legislation where the professional services are not otherwise, directly or indirectly, connected with legislative action.
(5)	A person who owns, publishes or is employed by any news medium while engaged in the acquisition or dissemination of news on behalf of the news medium.
	(7)	Legislative officials.
(8)	A person responding to inquiries from a legislative official, and who engages in no further activities as a lobbyist in connection with that or any other legislative matter.
	"§ 120-47.9. Punishment for violation.
Whoever willfully violates any provision of this Article shall be guilty of a misdemeanor and upon conviction shall be fined not less than fifty dollars ($50.00) nor more than one thousand dollars ($1,000), or imprisoned not exceeding two years, or both. In addition, no lobbyist who is convicted of a violation of the provisions of this Article shall in any way act as a lobbyist for a period of two years following his conviction.
"§ 120-47.10. Enforcement of Article by Attorney General.
The Secretary of State shall report apparent violations of this Article to the Attorney General. The Attorney General shall, upon complaint made to him of violations of this Article, make an appropriate investigation thereof, and he shall forward a copy of the investigation to the district attorney of the prosecutorial district as defined in G.S. 7A-60 of which Wake County is a part, who shall prosecute any person who violates any provisions of this Article.
"§ 120-47.11. Rules and forms.
The Secretary of State may make, amend, and rescind any rules, orders, forms, and definitions as are necessary to carry out the provisions of this Article."
Sec. 1.2. Article 10 of Chapter 120 of the General Statutes is repealed.
PART II – LIMITS ON FUND-RAISING IN SESSION.
Sec. 2. Chapter 163 of the General Statutes is amended by adding a new section to read:
"§ 163-278.13A.  No fund-raising from lobbyists for legislators or Council of State members while General Assembly is in regular session.
(a)	While the General Assembly is in regular session, none of the following entities may solicit or accept a contribution from an individual registered as a lobbyist pursuant to Article 9A of Chapter 120 of the General Statutes:
(1)	A member of the Council of State; or
(2)	A member of the General Assembly; or
(3)	A political committee the principal purpose of which is to assist a member or members of the Council of State or General Assembly.
(b)	While the General Assembly is in regular session, no individual registered as a lobbyist under Article 9A of Chapter 120 of the General Statutes may make a contribution to any of the entities listed in subdivisions (1) through (3) of subsection (a).
(c)	This section does not apply to:
(1)	Any contribution made to or by a State, county or congressional district executive committee of a political party; or
(2)	Any contribution made to a political committee that operates on a Statewide basis in conjunction with the executive committee of a political party for the purpose of assisting that party's candidates for Council of State or General Assembly; or
(3)	Any contribution made by a member of the Council of State or General Assembly to a political committee the principal purpose of which is to assist himself; or
(4)	Any contribution accepted with the intent that it be used to defray legal or other expenses incurred in connection with the contesting of election results.
(d)	A violation of this section is a misdemeanor, but no individual or person shall be prosecuted under this section for accepting a contribution unless the State Board of Elections has notified the individual or person of the apparent violation in writing by certified mail, has given the individual or person an opportunity to return or to request the return of the contribution, and, within 10 days of the receipt of the notification, the individual or person has failed to return or to request the return of the contribution.
(e)	For purposes of this section, the General Assembly is in regular session from the date set by law or resolution that the General Assembly convenes each year until the General Assembly either:
(1)	Adjourns sine die; or
(2)	Recesses or adjourns for more than 10 days."
PART III – ONE-YEAR WAIT BEFORE LOBBYING.
Sec. 3.  Article 9A of Chapter 120 of the General Statutes is amended by adding a new section to read:
"§ 120-47.5A. Waiting period before ex-officials may lobby.
Notwithstanding the provisions of G.S. 120-47.8, no individual may be employed or retained or may act as a lobbyist within one year after having served as a member or presiding officer of either house of the General Assembly, as a member of the Council of State, or as the principal head of any department listed in G.S. 143B-6(1)	through (9)."
Sec. 4. This act becomes effective January 1, 1993. Section 3 shall apply only to individuals who leave office or State employment after January 1, 1993.  This act shall be implemented within funds available to the Secretary of State.  Nothing in this act shall be construed to obligate the General Assembly to appropriate funds to implement the provisions of this act.