[Senate Report 105-147]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 283
105th Congress                                                   Report
                                 SENATE

 1st Session                                                    105-147
_______________________________________________________________________


 
          LOBBYING DISCLOSURE TECHNICAL AMENDMENTS ACT OF 1997

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                 S. 758

TO MAKE CERTAIN TECHNICAL CORRECTIONS TO THE LOBBYING DISCLOSURE ACT OF 
                                  1995





                November 8, 1997.--Ordered to be printed


                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
SUSAN COLLINS, Maine                 JOHN GLENN, Ohio
SAM BROWNBACK, Kansas                CARL LEVIN, Michigan
PETE V. DOMENICI, New Mexico         JOSEPH I. LIEBERMAN, Connecticut
THAD COCHRAN, Mississippi            DANIEL K. AKAKA, Hawaii
DON NICKLES, Oklahoma                RICHARD J. DURBIN, Illinois
ARLEN SPECTER, Pennsylvania          ROBERT G. TORRICELLI, New Jersey
BOB SMITH, New Hampshire             MAX CLELAND, Georgia
ROBERT F. BENNETT, Utah
          Hannah S. Sistare, Staff Director and Chief Counsel
                    Richard Hertling, Senior Counsel
                 Leonard Weiss, Minority Staff Director
                    Michal Sue Prosser, Chief Clerk


                            C O N T E N T S

                              ----------                              
                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background.......................................................1
III. Legislative History..............................................2
 IV. Section-by-Section Analysis......................................2
  V. Estimated Cost of Legislation....................................5
 VI. Evaluation of Regulatory Impact..................................5
VII. Changes in Existing Law..........................................6



                                                       Calendar No. 283
105th Congress                                                   Report
                                 SENATE

 1st Session                                                    105-147
_______________________________________________________________________


          LOBBYING DISCLOSURE TECHNICAL AMENDMENTS ACT OF 1997

                                _______
                                

                November 8, 1997.--Ordered to be printed

_______________________________________________________________________


Mr. Thompson, from the Committee on Governmental Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 758]

    The Committee on Governmental Affairs, to whom was referred 
the bill (S. 758) to make technical amendments to the Lobbying 
Disclosure Act of 1995 (P.L. 104-65), having considered the 
same, reports favorably thereon with no amendment and 
recommends that the bill do pass.

                         I. Summary and Purpose

    S. 758, the Lobbying Disclosure Technical Amendments Act of 
1997, amends the Lobbying Disclosure Act of 1995 to make minor 
adjustments to ensure that the law continues to operate as 
intended.

                             II. Background

    The Lobbying Disclosure Act of 1995 (LDA) was the first 
substantive reform in the laws governing lobbying disclosure in 
fifty years, since the Federal Regulation of Lobbying Act 
became law in 1946. Passage of the LDA was necessary to plug a 
number of serious loopholes in the 1946 Act. Under the LDA, 
lobbying of Congressional staff, lobbying of executive branch 
officials, and lobbying on non-legislative issues are no longer 
exempt from reporting and disclosure requirements. Moreover, as 
much-abused ``primary purpose'' test has been eliminated. At 
the same time, the lobbying disclosure requirements have been 
made more understandable and provide for more simple and easy 
compliance. Since enactment of the lDA, paid, professional 
lobbyists are required to disclose who is paying them how much 
to lobby Congress and the executive branch on what issues.
    Once the LDA was implemented by the Clerk of the House and 
the Secretary of the Senate, several minor problems with the 
language of the statute materialized. The offices of the Clerk 
and the Secretary have sought to interpret the LDA with respect 
to these problems in accordance with the original intent of the 
law, but it is necessary and appropriate to conform the 
language of the law to intent, and that is the motivation 
behind the introduction of S. 758.

                        III. Legislative History

    S. 758 was introduced in the Senate by Senator Levin (D-MI) 
on May 16, 1997. Last year, Congressmen Charles Canady (R-FL) 
and Barney Frank (D-MA) sponsored similar legislation, H.R. 
3534, and moved it through the House of Representatives. A 
dispute over one of the provisions precluded the bill from 
passing in the Senate in the last Congress.
    The Senate Committee on Governmental Affairs considered S. 
758 on November 5, 1997, and ordered it reported, without 
amendment, by voice vote.

                    IV. Section-by-Section Analysis

                  section 1. short title and reference

    This section provides that this Act may be cited as the 
``Lobbying Disclosure Technical Amendments Act of 1997.''

        sec. 2. definition of covered executive branch official

    Section 2 addresses an unclear statutory reference in 
section 3(3)(F) of the Lobbying Disclosure Act (LDA) that 
defines a covered executive branch official in part as ``any 
officer or employee serving in a position of a confidential, 
policy-determining, policy-making, or policy advocating 
character described in section 7511(b)(2) of title 5, United 
States Code.''
    The intended scope of coverage of section 3(3)(F) was for 
``Schedule C'' employees only. The change to the definition 
made in section 2 reflects the stated intent by narrowing the 
statutory reference in subsection 3(3)(F) to ensure that only 
``Schedule C'' employees are ``covered executive branch 
employees'' as defined in subsection 3(3)(F). Employees in 
theSenior Executive Service are not covered executive branch employees 
as defined in this paragraph.

         SEC. 3. CLARIFICATION OF EXCEPTION TO LOBBYING CONTACT

    Section 3(8)(B) of the LDA lists a series of exceptions to 
the definition of ``lobbying contact.'' Subsection 3(8)(B)(ix) 
excepts communications ``required by subpoena, civil 
investigative demand, or otherwise compelled by statute, 
regulation, or other action of the Congress or an agency.'' 
This exception reflects Congress' intent that communications 
that are compelled by an action of the federal government 
should not fall within the definition of a lobbying contact 
under the Act.
    The House and Senate reports on the LDA indicated that 
Congress intended this provision to except communications 
required under the terms of a Federal contract, grant, loan, 
permit, or license. The change made by section 3(a) of S. 758 
would ensure such communications will not be considered 
lobbying contacts under the Act.
    Section 3(b) of S. 758 clarifies the definition of a 
``public official'' in subsection 3(15)(F) of the LDA. This 
subsection currently defines a public official in part as any 
national, regional, or local unit of any foreign government. 
However, because no express exemption exists for communications 
by international organizations composed of groups of 
governments acting together (such as the World Bank), such 
international organizations are potentially subject to the 
registration and reporting requirements of the LDA. In view of 
the clear exemption of foreign governments under the LDA, it 
appears to have been an oversight not to have included groups 
of governments acting together as international organizations 
in this exemption as well. This clarification would confirm 
that officials and employees of such organizations will be 
treated in the same manner as employees of the governments that 
comprise them.

            SEC. 4. ESTIMATES BASED ON TAX REPORTING SYSTEM

    Section 15 of the LDA allows those who are subject to 
sections 6033(b) and 162(e) of the Internal Revenue Code--
namely non-profit organizations and businesses required to keep 
records of lobbying expenses for tax purposes--to elect an 
alternate method for the reporting of lobbying expenses. In 
lieu of reporting expenditures based on the LDA definition of 
``lobbying activities'', such organizations are permitted to 
report such expenditures on the basis of the Internal Revenue 
Code's definition of ``influencing legislation.''
    However, the statute is not clear on the extent to which 
such organizations may use the Internal Revenue Code definition 
for the other reporting and disclosure requirements in the 
LDA--for example, the Act's threshold test for a ``lobbyist'', 
the identification of lobbying contacts, the identification of 
issues which are the subject of the lobbying, and the 
identification of the persons who have been lobbied.
    Section 4 leaves unchanged the option for non-profit 
organizations and businesses to report lobbying expenditures 
based on the Internal Revenue Code definition. For all other 
Lobbying Disclosure Act purposes, the provision clarifies that 
registrants who make a Section 15 election must use the 
Internal Revenue Code definition (including the tax code's 
definition of a covered executive branch official) for 
executive branch lobbying, and the LDA definitions for 
legislative branch lobbying. So, while registrants would base 
their estimates of expenses on the tax code definition for 
lobbying of both the legislative and executive branches, they 
would use the LDA's definitions for all other reporting and 
disclosure purposes with respect to legislative branch lobbying 
and the IRS definitions for all other reporting and disclosure 
purposes with respect to executive branch lobbying.
    Section 4 would also require that when registrants elect 
under Section 15 to use the tax code definition to report their 
lobbying expenses, they must use that definition in its 
entirety. No modification is permitted to add back categories 
of expenditures that would be covered by the LDA definition, 
and no modification is permitted to exclude expenditures--such 
as grassroots lobbying expenses and state lobbying expenses--
for activities that are not otherwise required to be reported 
or disclosed under the LDA.
    The Committee notes that nothing in this Section, or in 
Section 15 of the LDA, authorizes any lobbying firm to use the 
tax code definitions for any purpose; the option to elect under 
Section 15 to use the tax code definition is available only to 
organizations reporting on the activities of in-house 
lobbyists. The Committee believes the Section 15 reporting 
option should also be made available to the small number of 
trade association registrants not required by the Internal 
Revenue Code to report non-deductible lobbying expenses to 
their members (i.e., those whose members are tax-exempt) if 
they nevertheless elect to do so, adhering to the same 
standards and requirements followed by associations required to 
make such reports.

       SEC. 5. EXEMPTION BASED ON REGISTRATION UNDER LOBBYING ACT

    In section 9(3) of the LDA, Congress added a new Section 
3(h) to the Foreign Agents Registration Act (FARA) to reflect a 
determination that the FARA standards are appropriate for 
lobbying on behalf of foreign governments and political 
parties, but the LDA disclosure standards should apply to other 
foreign lobbying. Under the LDA, any lobbyist who represents a 
foreign interest (other than a foreign government or foreign 
political party which must register under the Foreign Agents 
Registration Act) and registers under the LDA is required to 
provide specific information about such foreign interest.
    Section 5 would amend section 3(h) of FARA (as added by the 
LDA) to clarify that any agent of a foreign principal engaged 
in lobbyists activities (other than an agent of a foreign 
government or foreign political party) who registers under the 
LDA would be exempt from the requirements of FARA. Under 
section 5 such lobbyists may elect to register under the LDA 
instead of FARA, even though they may not otherwise be required 
to register under the LDA because they do not meet the 
threshold registration requirements of the LDA. This change is 
made to address an anomaly, under which the most active 
lobbyists for foreign commercial entities are permitted to 
register under the LDA, while the least active lobbyists for 
such entities are required to meet the stricter standards of 
FARA (because they don't meet the 20% lobbying threshold test 
of the LDA.) The Committee notes that domestic lobbyists who do 
not meet all of the threshold requirements of the LDA are 
wholly exempt from disclosure under either statute.
    The Committee's intention is to reaffirm the bright line 
distinction between governmental and non-governmental 
representations. Agents of private commercial foreign 
principals will be exempt from FARA requirements so long as 
they register under the LDA, whether the level of their 
reportable activity is substantial (requiring LDA 
registration), or de minimis (LDA registration optional). For 
registered entities, this exemption from FARA requirements 
applies to all employees, including but not limited to those 
listed as lobbyists. Agents who fail or choose not to register 
under the LAD (or who terminate their LADA registration) will 
remain subject to FARA.

                  V. Estimated Cost of the Legislation

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, November 8, 1997.
Hon. Fred Thompson,
Committee on Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 758, the Lobbying 
Disclosure Technical Amendments Act of 1997.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mary 
Maginniss.
            Sincerely,
                                          Paul Van de Water
                                   (For June E. O'Neill, Director).
    Enclosure.

               congressional budget office cost estimate

S. 758--Lobbying Disclosure Technical Amendments Act of 1997

    CBO estimates that enacting this bill would have no 
significant impact on the federal budget. S. 758 would not 
affect direct spending or receipts; therefore, pay-as-you-go 
procedures would not apply. S. 758 contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act of 1995 and would have no 
significant impact on the budgets of state, local, or tribal 
governments.
    S. 758 would make a number of technical clarifications to 
the Lobbying Disclosure Act of 1995. It would exclude from the 
definition of a ``covered executive branch official'' certain 
employees, including members of the Senior Executive Service, 
and amend the definition of ``lobbying contact'' and ``public 
official'' to clarify certain exemptions. S. 758 also would 
allow a qualifying nonprofit organization or business to meet 
its semiannual lobbying reporting requirement by filing with 
the Senate and the House of Representatives the same report 
filed to satisfy requirements of the Internal Revenue Code. 
Finally, the bill would amend the Foreign Agents Registration 
Act of 1938 to exempt from a requirement to register as a 
foreign agent anyone who has engaged in lobbying activities and 
has registered under the Lobbying Disclosure Act of 1995. 
According to the Office of the Secretary of the Senate, these 
changes largely codify existing practices.
    The CBO contact for this estimate is Mary Maginniss. This 
estimate was approved by Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                  VI. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory and paperwork impact of S. 758, 
including the impact of the bill on personal privacy. This bill 
does not create new regulatory and paperwork impacts or 
additional impacts on the privacy of individuals. The bill will 
have no significant impact on paperwork or individual privacy 
beyond those imposed by existing law.

                      VII. Changes to Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic and existing law in which no change 
is proposed is shown roman):

                    LOBBYING DISCLOSURE ACT OF 1995

          * * * * * * *

SEC. 3. DEFINITIONS.

    As used in this Act:
          (1) Agency.--The term ``agency'' has the meaning 
        given that term in section 551(1) of title 5, United 
        States Code.
          * * * * * * *
          (3) Covered executive branch official.--The term 
        ``covered executive branch official'' means--
                  (A) * * *
          * * * * * * *
                  (F) any officer or employee serving in a 
                position of a confidential, policy-determining, 
                policy-making, or policy-advocating character 
                described in section [7511(b)(2)] 7511(b)(2)(B) 
                of title 5, United States Code.
          * * * * * * *
          (8) Lobbying contact.--
                  (A) * * *
                  (B) Exceptions.--The term ``lobbying 
                contact'' does not include a communication that 
                is--
                          (i) * * *
          * * * * * * *
                          (ix) required by subpoena, civil 
                        investigative demand, or otherwise 
                        compelled by statute, regulation, or 
                        other action of the Congress or an 
                        agency, including any communication 
                        compelled by a Federal contract, grant, 
                        loan, permit, or license;
          * * * * * * *
          (15) Public official.--The term ``public official'' 
        means any elected official, appointed official, or 
        employee of--
                  (A) * * *
          * * * * * * *
                  (F) a national, regional, or local unit of 
                any foreign government, or a group of 
                governments acting together as an international 
                organization.
          * * * * * * *

SEC. 15. ESTIMATES BASED ON TAX REPORTING SYSTEM.

    (A) Entities Covered by Section 6033(b) of the Internal 
Revenue Code of 1986.--[A registrant] A person, other than a 
lobbying firm, that is required to report and does report 
lobbying expenditures pursuant to section 6033(b)(8) of the 
Internal Revenue Code of 1986 may--
          (1) make a good faith estimate (by category of dollar 
        value) of applicable amounts that would be required to 
        be disclosed under such section for the appropriate 
        semiannual period to meet the requirements of section 
        4(a)(3) and 5(b)(4); and
          [(2) in lieu of using the definition of ``lobbying 
        activities'' in section 3(7) of this Act, consider as 
        lobbying activities only those activities that are 
        influencing legislation as defined in section 4911(d) 
        of the Internal Revenue Code of 1986.]
          (2) for all other purposes consider as lobbying 
        contacts and lobbying activities only--
                  (A) lobbying contacts with covered 
                legislative branch officials (as defined in 
                section 3(4)) and lobbying activities in 
                support of such contacts; and
                  (B) lobbying of Federal executive branch 
                officials to the extent that such activities 
                are influencing legislation as defined in 
                section 4911(d) of the Internal Revenue Code of 
                1986.
    (b) Entities Covered by Section 162(e) of the Internal 
Revenue Code of 1986.--[A registrant that is subject to] A 
person, other than a lobbying firm, who is required to account 
and does account for lobbying expenditures pursuant to section 
162(e) of the Internal Revenue Code of 1986 may--
          (1) make a good faith estimate (by category of dollar 
        value) of applicable amounts that would not be 
        deductible pursuant to such section for the appropriate 
        semiannual period to meet the requirements of sections 
        4(a)(3) and 5(b)(4); and
          [(2) in lieu of using the definition of ``lobbying 
        activities'' in section 3(7) of this Act, consider as 
        lobbying activities only those activities, the costs of 
        which are not deductible pursuant to section 162(e) of 
        the Internal Revenue Code of 1986.]
          (2) for all other purposes consider as lobbying 
        contacts and lobbying activities only--
                  (A) lobbying contacts with covered 
                legislative branch officials (as defined in 
                section 3(4)) and lobbying activities in 
                support of such contacts; and
                  (B) lobbying of Federal executive branch 
                officials to the extent that amounts paid or 
                costs incurred in connection with such 
                activities are not deductible pursuant to 
                section 162(e) of the Internal Revenue Code of 
                1986.
    (c) Disclosure of Estimate.--Any registrant that elects to 
make estimates required by this Act under the procedures 
authorized by subsection (a) or (b) for reporting or threshold 
purposes shall--
          (1) inform the Secretary of the Senate and the Clerk 
        of the House of Representatives that the registrant has 
        elected to make its estimates under such procedures; 
        and
          (2) make all such estimates, in a give calendar year, 
        under such procedures.
          * * * * * * *

        SECTION 3 OF THE FOREIGN AGENTS REGISTRATION ACT OF 1938

    Sec. 3. Exemptions.--The requirements of section 2(a) 
hereof shall not apply to the following agents of foreign 
principals:
    (a) * * *
          * * * * * * *
    (h) Any agent of a person described in section 1(b)(2) or 
an entity described in section 1(b)(3) if the agent [is 
required to register and does register] has engaged in lobbying 
activities and has registered under the Lobbying Disclosure Act 
of 1995 in connection with the agent's representation of such 
person or entity.

                                
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