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Indiana Lobby Registration Commission

ILRC > Advisory Opinions > Final Advisory Opinions > FINAL ADVISORY OPINION 97-03 Advisory Opinions

FINAL ADVISORY OPINION 97-03
Contract for Lobbying when No Performance Yet Rendered and No Consideration Yet Paid

Indiana Lobby Registration Commission

(Determination made at public meeting of July 22, 1997)
(Ratification at public meeting of January 28, 1998)
VOTES ON RATIFICATION

Chairman Bepko (in absentia) - yes
Vice-Chairman Krahulik - yes
Commissioner Hicks - yes
Commissioner Abbs - yes

Questions and written comments may be directed to 
Indiana Lobby Registration Commission,
115 W. Washington, Suite 1375, Indianapolis, IN 46204
(317) 232-9860


Determination

A lobbyist who enters into a contract which contains a promise to pay of greater than $500 for lobbying services must register the contractual relationship at the time of the contract and must report the expenditures / compensation made pursuant to the c ontract in the respective periods in which the said expenditures / compensation are made.

Example

In November, 1997, "L" lobbyist enters into a contract with "C" client. The contract specifies that C will pay L $10,000 to lobby for C in the 1998 legislative session. C does not perform any services under the contract until 1998, and L does not render payment on the contract until the August, 1998. Both L and C must register as lobbyists at the time of the making of the contract. L must report the expenditures made on the contract during the reporting period in which the expenditures are made. L an d C must report payment made / received on the contract during the period in which payment is made / received.

Rationale

Ind.Code § 2-7-1-9 defines "lobbying" as "communicating by any means, or paying others to communicate by any means, with any legislative official with the purpose of influencing any legislative action." A contract for lobbying involves the paying of ano ther to communicate with the purpose of influencing legislative action. The operative terms are: (1) "paying"; (2) "to communicate"; and, (3) "with the purpose of influencing legislative action."

(1)

"Pay" is defined as "the act of making payment." I.C. § 2-7-1-11(c). "Payment" means "any contract, agreement, promise, or other obligation, whether or not legally enforceable, to make a payment." I.C. § 2-7-1-11(a). Thus, a contract, agreement, or pr omise to lobby is a "payment" under the statute.

(2)

The statute requires not just a "paying" but a "paying to communicate." Accordingly, to the extent the contract is a contract to monitor rather than a contract to lobby, then the contract is not a "paying to communicate." However, the statute does not require that actual communication take place, but only that payment for communication be made to trigger a duty to register. To the extent a contract, agreement, or promise is made in which consideration greater than $500 is to be paid under the contract in exchange for communication, there is a duty to register the relationship at the making of the contract, agreement or promise.

The statute defines the word "expenditure" in two ways: one for the purposes of determining a duty to register, and the second for the purpose of determining a duty to report on the activity report. In the section which defines "lobbyist", the word "expe nditure" is defined in the broadest possible way and includes "anything of value . . . and any contract. . .to make an expenditure." I.C. § 2-7-1-3. Therein lies the duty to register.

In a separate part of the statute which governs activity reporting, I.C. § 2-7-3-3, et. al., the word "expenditure" is modified in that it requires reporting of expenditures based upon certain categories. This modification of the word "expenditure" in this part of the statute contemplates an actual transfer of value, and not just a contract to make such expenditures. As such, when a contract for lobbying is involved, there is no "expenditure" for the purpose of activity reporting until payment has bee n made under the contract.

(3)

Whether the contract is made in anticipation of influencing legislative action is fact specific and such a discussion will be considered by the Commission during its consideration of the issue of contracts made to monitor legislative action. To the extent, however, the contract, agreement or promise is made to influence legislative action, the aforementioned duties with regard to registering and reporting apply.