Preliminary Draft of Proposed Rules

Office of the Colorado Secretary of State
Rules Concerning Lobbyist Regulation
8 CCR 1505-8

August 29, 2013

Disclaimer:
In accordance with the State Administrative Procedure Act, this draft is filed with the Secretary of State and submitted to the Department of Regulatory Agencies.

This is a preliminary draft of the proposed rules that may be revised before the October 4, 2013 rulemaking hearing. If changes are made, a revised copy of the proposed rules will be available to the public and a copy will be posted on the Department of State’s website no later than September 27, 2013.

Please note the following formatting key: 
Font effect	Meaning	
Sentence case	Retained/modified current rule language	
Small caps	New language	
Strikethrough	Deletions	
[Italic blue font text]	Annotations	

[Current 8 CCR 1505-8 is stricken in its entirety and re-codified as follows:]
Rule 1.  Definitions
[Current Rule 1.1 concerning bona fide personal emergency is amended and integrated into New Rule 5.3.1(g)]
[Current Rules 1.2 – 1.4 concerning rate, rule-making official, standard are amended and relocated to New Rule 2.1]
1.5 1.1	“State Liaison” means the one person designated by each principal department of state government who is responsible for any lobbying by a state official or employee on behalf of the principal department, in accordance with section 24‑6‑303.5(1)(a), C.R.S.
1.6	“Substantial Violation” means any one of the following violations of Part 3 of Article 6 of Title 24, C.R.S.:
1.6.1	Failure to register as a lobbyist in accordance with sections 24‑6‑303 or 24‑6‑303.5, C.R.S.;
1.6.2	Failure to file a monthly disclosure statement within 15 days after the due date while the general assembly is in session, in accordance with sections 24‑6‑303(3)(a) and 24‑6‑303.5(2)(b), C.R.S.;
1.6.3	Failure to file a monthly disclosure statement within 30 days after the due date while the general assembly is not in session, in accordance with sections 24‑6‑303(3)(a) and 24‑6‑303.5(2)(b), C.R.S.;
1.6.4	Knowingly underreporting any item of income or expenditures by any amount on the disclosure statement;
1.6.5	Underreporting income or expenditures by twenty percent or more on the entire disclosure statement;
1.6.6	Any violation of sections 24‑6‑306, 24‑6‑307, or 24‑6‑308, C.R.S.;
1.6.7	Any other violation that the Secretary of State finds “substantial,” taking into consideration the following factors:
[Current Rules 1.6 is repealed, except current Rules 1.6.7(a)-(c) are amended and moved to New Rule 5.6]
Amendments to current Rule 2:
Rule 2.  Fees Registration
1.3 2.1	“Rule-making official,” as used in section 24‑6‑301(1.7)(b), C.R.S., means A rule-making official includes an official of a state agency who has jurisdiction or authority to adopt any rule, standard, or rate.of the following:
2.1.1	A rule;
1.2 2.1.2	“Rate,” as used in sections 24‑6‑301(1.7)(b) and 24‑6‑301(3.5)(a)(IV), C.R.S., means A rate, meaning a ratio of valuation, percentage, percentage change, annual adjustment, or an amount charged for a good or service, adopted by a state agency having rulemaking authority.; or
1.4 2.1.3	“Standard,” as used in sections 24‑6‑301(1.7)(b) and 24‑6‑301(3.5)(a)(IV), C.R.S., means A standard, meaning a criterion measuring acceptability, quality, accuracy, weight, or an amount, or a threshold for agency jurisdiction adopted by a state agency having rulemaking authority.
[Current Rules 1.2, 1.3, and 1.4 are amended and relocated to New Rule 2.1 as shown above]
2.1 2.2	Professional lobbyists
2.2.1	The fee for filing a professional lobbyist registration statement is $40.00.
2.2 2.2.2	Waiver of registration fee
(a)	Upon written request, the Secretary of State may waive the registration fee for a professional lobbyist for a not-for-profit nonprofit organization if:
2.2.1 (1)	The lobbyist derives compensation solely from the organization; and
2.2.2 (2)	(a)(i)	The organization can demonstrate that it is operating under financial hardship conditions; or
(b)(ii)	The lobbyist will have particular interest in only one issue or bill and does not intend to lobby throughout the State fiscal year.
2.3 (b)	To receive a registration fee waiver, a professional lobbyist for a not-for-profit nonprofit organization must obtain Secretary of State approval prior to filing the before registration. The written request must:
2.3.1 (1)	State the information required by Rule 2.2 of these rules 2.2.2(a); and
2.3.2 (2)	Include a copy of the organization’s most recently filed Internal Revenue Service form 1024, or 990, if requesting a waiver under Rule 2.2.2(a) of these rules 990EZ, or 990-N form showing gross annual revenue of $50,000 or less.
2.2.3	In accordance with section 24-6-302(2.5)(a), C.R.S., the following must file separate registration statements:
(a)	An individual that owns or is employed by a principal organized for lobbying purposes; and
(b)	The principal.
2.3	A state liaison’s registration statements must include information for:
2.3.1	Each “state official or employee,” as defined in section 24‑6‑303.5(3), C.R.S.,  lobbying for state principal departments, including any subdivision. 
2.3.2	Lobbyists hired by the principal department on a contract basis who are not registered as  professional lobbyists as described in Rule 3.3.1 but excluding persons lobbying on behalf of an institution or governing board of higher education.
Current Rule 4 is amended and relocated to New Rule 3:
Rule 4 3.  Disclosure
4.1 3.1	Article XXIX of the Colorado Constitution prohibits lobbyists from offering or giving a gift or thing of value, of any kind or nature to a covered official.
4.2	Contents of the monthly disclosure statement:
4.2.1	The monthly disclosure statement for A professional lobbyist must meet the requirements of sections 24‑6‑301(1.9) and 24‑6‑302(2.5), C.R.S.
4.2.2	The monthly disclosure statement for a lobbying firm must meet the requirements of sections 24‑6‑301(1.9) and 24‑6‑302(2), C.R.S.
4.2.3	The monthly disclosure statement for state liaisons and state officials or employees lobbying on behalf of an institution or governing board of higher education must meet the requirements of section 24‑6‑303.5(2)(a), C.R.S.
3.2	Professional lobbyists 
4.2.3(a) 3.2.1	Professional lobbyists registered under sections 24‑6‑302 or 24‑6‑303, C.R.S., and who contract A professional lobbyist who contracts to lobby on behalf of a principal department or an institution or governing board of higher education and who are not state officials or employees must continue to file professional lobbyist disclosure statements in accordance with sections 24‑6‑302 and 24‑6‑303, C.R.S.
3.2.2	The following subcontractor requirements apply to a lobbyist or any firm organized for professional lobbying purposes that contracts to perform any lobbying activities for another lobbyist or lobbying firm.
(a)	A lobbyist or lobbying firm that subcontracts lobbying activities to another lobbyist or lobbying firm must disclose:
(1)	The name of each subcontractor;
(2)	The date and amount of each payment or other compensation for subcontracting work; and
(3)	The name of the principal for whom the subcontractor is performing the lobbying activities.
(b)	A subcontractor that performs lobbying activities for another lobbyist or lobbyist firm must disclose:
(1)	The name of the lobbyist or lobbying firm paying the subcontractor to perform lobbying activities;
(2)	The date and amount of each payment or other compensation received from the lobbyist or lobbying firm for performing lobbying activities; and
(3)	a description of the lobbying activity, position taken, and the name of the principal for whom the subcontractor performs the lobbying activities.
3.3	Lobbying by state officials and employees
4.2.4 3.3.1	In accordance with section 24‑6‑303.5(3), C.R.S., lobbyists hired on a contract basis to lobby on behalf of a principal department and who are not registered as professional lobbyists under sections 24‑6‑302 or 24‑6‑303, C.R.S., at the time of hiring must report their lobbying activities to the state liaison for the principal department.
4.3 3.3.2	The registration and disclosure statements of each state liaison must include the information required by section 24-6-303.5, C.R.S., for every “state official or employee”, as that term is defined in section 24-6-303.5(3), C.R.S., within the state principal department, including state officials and employees lobbying on behalf of any commission, board, council, agency, or other subdivision of the principal department, and including any lobbyist hired by the principal department on a contract basis who is not registered as a professional lobbyist as described in Rule 4.2.4, but excluding persons lobbying on behalf of an institution or governing board of higher education. A state liaison’s   disclosure statements must include information for:
(a)	Each “state official or employee,” as defined in section 24‑6‑303.5(3), C.R.S.,  lobbying for state principal departments, including any subdivision. 
(b)	Lobbyists hired by the principal department on a contract basis who are not registered as  professional lobbyist as described in Rule 3.3.1 but excluding persons lobbying on behalf of an institution or governing board of higher education.
4.4 3.3.3	Nothing in these rules or section 24‑6‑303.5, C.R.S., authorizes a state liaison to manage, control, supervise, or direct the lobbying activities of any state official or employee of the principal department except as may be necessary to enable the state liaison to comply with the registration and reporting requirements of the statutes and these rules.
Current Rule 3 is amended and renumbered as New Rule 4:
Rule 3 4.  Electronic Filing filing and record retention
3.1	A lobbyist must electronically file all registration and disclosure statements required by Part 3 of Article 6 of Title 24, C.R.S. The Secretary of State will not accept manual filings. The Secretary must make a computer terminal available in the Secretary’s main office for filing electronic registration and disclosure statements.
4.1	Electronic filing.  
4.1.1	A professional lobbyist or state liaison must file registration and disclosure statements electronically using the Secretary of State’s system.
3.2 4.1.2	The Secretary of State may grant an exception to the electronic filing requirement based on hardship or good cause shown.
3.3 (a)	All applications for an exception must include a brief statement of the hardship or good cause for the requested exception. 
(b)	A lobbyist must submit an application to the Secretary of State at least 15 calendar days prior to before the first applicable filing deadline, unless the exception is based on emergency circumstances arising after the deadline, in which case the lobbyist must describe the nature of the emergency in the application. 
(c)	Filing the application for exception based on emergency circumstances does not delay any reporting deadlines. If, however, a penalty is imposed for failure to file a disclosure statement on the due date, the Secretary of State may reduce or set the penalty aside in accordance with section 24‑6‑302(7), C.R.S.
3.4	For the purposes of this Rule 3, “electronic filing” means filing the registration and disclosure statements required by Part 3 of Article 6 of Title 24, C.R.S., using the internet system created by the Secretary of State in accordance with section 24‑6‑303(6.3)(a), C.R.S.
3.5 4.1.3	When a lobbyist or authorized agent uses the electronic filing system to submit a registration or disclosure statement, the submission constitutes the lobbyist’s or agent’s electronic signature in accordance with section 24‑71‑101, C.R.S., under penalty of perjury.
3.6	Automated extraction of bulk data from the Secretary of State’s web site by means of computerized “robots” or “data mining”, is prohibited. Upon request, the Secretary of State will provide bulk data for a fee established in accordance with section 24‑21‑104, C.R.S.
[Current Rule 3.6 is repealed.]
Rule 5.  Record Retention
5.1 4.2	Professional lobbyists and lobbyist firms Any person who is required to file statements or reports under Part 3 of Article 6 of Title 24, C.R.S., must retain the following in accordance with section 24‑6‑304(1), C.R.S.: receipts for expenditures or contributions made, documentation of income, and contracts for five years.
5.1.1	Receipts for expenditures or contributions made;
5.1.2	Documentation of income; and
5.1.3	Contracts.
[Current Rule 5 is amended and integrated into New Rule 4 as shown above.]
[Current Rule 6 is amended and renumbered New Rule 5]
Rule 6 5.  Enforcement
5.1	For the purposes of this Rule 5, the term “lobbyist” includes a professional lobbyist, state liaison, and a state official or employee lobbying on behalf of an institution or governing board of higher education, unless otherwise specified.
6.2 5.2 	Complaints. Any person who believes a lobbyist or lobbyist firm is not complying with the Colorado Lobbyist Regulation laws or Rule 4 these rules, may file a complaint with the Secretary of State in accordance with Section 24‑6‑305(2)(c), C.R.S. For the purposes of this Rule 6.2, “lobbyist” includes a state liaison and state official or employee lobbying on behalf of an institution or governing board of higher education.
6.2.1 5.2.1	A written complaint filed with the Secretary of State must be verified and notarized and contain the following information :
(a)	The complainant’s name;
(b)	The complainant’s full residence residential address and mailing address (if different from residence);
(c)	The alleged violation, which may include a reference to the particular specific statute or rule;
(d)	The lobbyist or firm’s firm name;
(e)	The date and location of the alleged violation, if known; and
(f)	Other applicable or relevant information.
6.2.2 5.2.2	The Secretary of State will review all properly submitted complaints and investigate as appropriate. If the Secretary determines that a violation occurred, the Secretary must take appropriate action under section 24‑6‑305, C.R.S.
6.2.3 5.2.3	Upon receipt of a properly submitted complaint, the Secretary of State must:
(a)	Notify the person against whom the complaint is filed by certified mail; and
(b)	In the case of a state liaison, notify the head of the principal department in writing;
(c)	In the case of a state official or employee lobbying on behalf of a principal department, notify the state liaison in writing; or
(d)	In the case of a state official or employee lobbying on behalf of an institution or governing board of higher education, notify the institution or governing board in writing.
6.2.4 5.2.4	Notification of a complaint in accordance with Rule 6.2.3 5.2.3 must include:
(a)	The date and factual basis of each act with which the lobbyist or firm is charged alleged;
(b)	The particular provision of the statute that the lobbyist or firm allegedly violated;
(c)	The action(s) the Secretary of State plans to take; and
(d)	Other relevant information.
[Current Rule 6.2 is amended and renumbered New Rule 5.2]
6.1 5.3	Waiver Process. Penalty waiver process
6.1.1 5.3.1	Under section 24‑6‑302(7), C.R.S., any A registered professional lobbyist or lobbyist firm registered with the Secretary of State may ask the Secretary of State to excuse or reduce an imposed fine by submitting a written request by letter mail, email, fax or hand-delivery within 30 days of the imposition of fine. The request should include:
(a)	The registered professional lobbyist’s name;
(b)	The request date;
(c)	The due date of the delinquently filed disclosure statement(s);
(d)	The filing date the professional lobbyist actually filed the disclosure statement(s) ;
(e)	A brief summary of the reason, circumstance, or other justification of the “bona fide personal emergency”, as defined in Rule 1.1;
[Current Rule 6.1.1(e) is amended and relocated to New Rule 5.3.1(g) below]
(f)	Any measures the professional lobbyist or firm has instituted or plans to institute to avoid future delinquencies, if applicable; and
(g)	Other relevant information.
(e) (g)	A brief summary of the reason, circumstance, or other justification of the “bona fide personal emergency”, as defined in Rule 1.1;
1.1 (1)	A “Bona fide personal emergency,” as used in section 24‑6‑302(7), C.R.S., means includes:
1.1.1 (A)	A medical emergency involving the individual responsible for filing or the individual’s immediate family. The medical emergency can include but is not limited to incapacitation, hospitalization, death, or debilitating illness or injury.
1.1.2 (B)	A practical emergency, including extraordinary obstacles out of beyond the control of the professional lobbyist or lobbyist firm, that preclude precludes timely disclosure. For example:
(a) (i)	The loss or unavailability of records, or a computer due to fire, flood, or theft;
(b) (ii)	A web site error that made it impossible to file a required registration document; or
(c) (iii)	Other compelling reasons beyond the professional lobbyist’s or lobbyist firm’s control.
1.1.3 (2)	The following are not a “bona fide personal emergency emergencies:”
(a) (A)	Failure to timely file registration documents due to failure to plan;
(b) (B)	Misunderstandings of applicable disclosure requirements and deadlines;
(c) (C)	Mistakes in electronic filing submissions, including incomplete filings;
(d) (D)	Lack of access to the internet or personal computer; or
(e) (E)	Lack of credit card or other means for of making online payments.
[Current Rule 1.1 is amended and integrated into New Rule 5.3.1(g) as shown above.]
6.1.2 5.3.2	The Secretary of State may take into account all appropriate facts and circumstances when granting or rejecting a waiver request or in reducing an imposed fine. The Secretary may also consider the frequency of the requests to excuse or reduce a fine within a two-year period, efforts to mitigate or remedy the failure to register or file, and the registrant’s demonstrated commitment to meet the requirements of Colorado’s laws concerning professional lobbyist regulation.
6.3	Suspension, Revocation, and Other Appropriate Actions.
6.3.1 5.4	The Secretary of State will investigate, provide notice of hearings, and hold hearings for a violation of Part 3 of Article 6 of Title 24, C.R.S., in accordance with section 24‑4‑105, C.R.S. the State Administrative Procedure Act (Article 4 of Title 24, C.R.S.).
6.3.2	If the Secretary of State finds a violation that does not warrant suspension or revocation, the Secretary may admonish the professional lobbyist.
(a)	The Secretary of State may admonish a professional lobbyist if:
(1)	The lobbyist violates a provision of Part 3 of Article 6 of Title 24, C.R.S., but the violation is not a substantial violation as defined in Rule 1.6 of these Rules;
(2)	The lobbyist commits a substantial violation, as defined by Rule 1.6 of these Rules, but takes prompt action to correct or remedy the violation;
(3)	The lobbyist fails to pay penalties within 45 days of the assessment of the penalties; or
(4)	The lobbyist’s violation was inadvertent, was an isolated event, and the lobbyist has made a good faith effort to comply.
(b)	Upon issuing an admonishment, the Secretary of State must notify the lobbyist and give the lobbyist 30 days to respond. The Secretary of State may reverse the admonishment, based on any additional information provided by the lobbyist.
6.3.3	The Secretary of State may pursue suspension of a professional lobbyist’s certificate of registration if:
(a)	The lobbyist commits a substantial violation and takes no action to remedy or correct the violation;
(b)	The lobbyist was previously admonished by the Secretary of State and commits the same violation; or
(c)	The lobbyist has a pattern of noncompliance and the Secretary of State reasonably believes that the pattern of noncompliance will likely continue.
6.3.4	The Secretary of State will pursue revocation of a professional lobbyist’s certificate of registration if:
(a)	The lobbyist knowingly and willfully commits a substantial violation of Part 3 of Article 6 of Title 24, C.R.S.;
(b)	The lobbyist continues to lobby during the period of suspension of the lobbyist’s certificate of registration; or
(c)	The lobbyist was suspended by the Secretary of State and willfully commits the same violation.
[Current Rule 6.3 is repealed except Current Rule 6.3.1 is amended and renumbered New Rule 5.4 as shown above]
5.5	In accordance with section 24‑6‑305, C.R.S., the Secretary of State:
5.5.1	May suspend, revoke, or bar from registration any lobbyist who fails to:
(a)	File disclosure statements under section 24‑6‑303, C.R.S.;
(b)	Upon request of the Secretary of State, provide books and records for the Secretary of State’s examination under section 24‑6‑304.5, C.R.S.; or
(c)	Pay penalties in full under section 24‑6‑302(7), C.R.S.
5.5.2	Will revoke the registration certificate of an individual who:
(a)	Is convicted in district court of violating any provision of Part 3 of Article 6 of Title 24, C.R.S.; or
(b)	Has been suspended from lobbying by the General Assembly.
5.6	If the Secretary of State deems any of the violations contained in Rule 5.5 to be substantial violations, the Secretary of State will notify the president of the senate and speaker of the house. In determining whether the violation is substantial, the Secretary of State will consider:
(a)	The extent of noncompliance;
(b)	The purpose of the applicable provision and whether that purpose is substantially achieved despite the alleged noncompliance; and
(c)	Whether there was a good-faith effort to comply or whether noncompliance is based on a conscious decision to lobby covered officials without registering or filing disclosure statements.
[Current Rules 1.6.7(a)-(c) are amended and moved to New Rule 5.6 as shown above]
[Current Rule 7 is renumbered as New Rule 6. Associated sub-rules are renumbered accordingly.]