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HomeMy WebLinkAbout13-1002 Standish (2) OPINION OF THE COMMISSION Before: John J. Bolger, Chair Nicholas A. Colafella, Vice Chair Raquel K. Bergen Mark R. Corrigan Roger Nick Kathryn Streeter Lewis DATE DECIDED: 10/9/13 DATE MAILED: 11/4/13 Liesel Adam, Chair Daniel E. Standish, Past Chair Pennsylvania Section American Water Works Association 1309 Bridge Street P.O. Box D New Cumberland, PA 17070 13-1002 Dear Ms. Adam and Mr. Standish: This Opinion is issued in response to your advisory request letters dated January 10, 2013, and June 25, 2013. I. ISSUE: Pursuant to Pennsylvania’s lobbying disclosure law (“Lobbying Disclosure Law”), 65 Pa.C.S. § 13A01 et seq., whether it would be considered to be “lobbying” if the Water Utility Council (“WUC”) of the Pennsylvania Section of the American Water Works Association (“PA-AWWA”) would provide written public comment on a proposed regulation prepared by a department of state government during the public comment period of the proposed regulation, and, if so: (1) What reporting would be required of PA-AWWA for the time spent by the WUC members assisting in or preparing the public comment that would be submitted; (2) What should be the basis for the good faith valuation of the time spent by the WUC members; and (3) What other reporting, if any, would be required by the WUC members. Adam/Standish, 13-1002 November 4, 2013 Page 2 II. FACTUAL BASIS FOR DETERMINATION: You have been authorized by the Board of Directors of PA-AWWA and by Ms. Louise Knight (“Ms. Knight), a member and secretary of the WUC, to request an advisory from this Commission on their behalf pursuant to the Lobbying Disclosure Law. You have submitted facts, the material portion of which may be fairly summarized as follows. PA-AWWA is a nonprofit scientific and educational society dedicated to the improvement of drinking water quality and supply. Its members represent what you describe as the “full spectrum” of the drinking water community: treatment plant operators and managers, environmental advocates, scientists, academicians, and others who hold a genuine interest in water supply and public health. PA-AWWA is a registered principal. PA-AWWA engages the lobbying firm of “Gmerek Government Relations, Inc.” (“Gmerek”). You state that although it is not typical for PA-AWWA to spend more than $2500 per quarter on lobbying activities, such could occur on occasion. The quarterly expense reports for PA-AWWA, prepared by Gmerek, have included expenditures for monitoring activities as well as any lobbying work, the value of awards, gifts, and expense payments provided to state employees or officials, and certain other expenses incurred. PA-AWWA bylaws establish the WUC within PA-AWWA. The purpose and responsibilities of the WUC include developing action programs to initiate, evaluate, respond and comment, within the framework of PA-AWWA and American Water Works Association (“AWWA”) policy, on legislative, regulatory and other matters that directly affect water utilities. PA-AWWA Bylaws, Appendix B, Sections 1, 16. The specific tasks performed by the WUC include, inter alia: (1) developing proposed PA-AWWA positions on issues of interest to the industry; (2) coordinating PA-AWWA membership response to legislative/regulatory initiatives; and (3) recommending legislation and regulations. PA- AWWA Bylaws, Appendix B, Section 16. All recommended policies and positions of the WUC must receive the approval of the PA-AWWA Board or, if time does not allow for prior approval by the PA-AWWA Board, the concurrence of the PA-AWWA officers. Id. The WUC includes representatives from member utilities (private, public and authority) and representatives from regulators, water works operators, and engineering firms. The WUC is comprised of eighteen members. Twelve of the WUC members are individuals who represent, and are elected by, “utility members” of PA-AWWA. PA-AWWA Bylaws, Appendix B, Sections 2-3. Utility members are organizations that hold a utility membership in the AWWA and are current in paying their dues and any assessments of the AWWA and PA-AWWA. PA-AWWA Bylaws, Appendix B, Section 2. Six of the WUC members are “non-utility members” and include at least one representative of a state agency with regulatory authority over public water supplies. Id. The non-utility members of the WUC, and any alternates, are appointed by the PA-AWWA Chair with the concurrence of the PA-AWWA Board. PA-AWWA Bylaws, Appendix B, Section 3. Only WUC members may vote on matter(s) before the WUC, except that a substitute for a utility representative may vote with a written proxy. PA-AWWA Bylaws, Appendix B, Sections 8-9. Under certain circumstances, the WUC may, with the concurrence of the PA-AWWA Board, make a special assessment against utility members of the PA-AWWA for purposes of implementing the WUC’s programs. PA-AWWA Bylaws, Appendix B, Section 13. The WUC elects officers. The Chair of the WUC represents the WUC on the PA- Adam/Standish, 13-1002 November 4, 2013 Page 3 AWWA Board and serves as the primary liaison with the AWWA’s Water Utility Council. PA-AWWA Bylaws, Appendix B, Section 5. The members of the WUC are not employees of PA-AWWA and receive no compensation from PA-AWWA. The twelve utility member representatives who serve on the WUC are employees of the utilities that they represent, and those utilities are members of PA-AWWA. As utility employees, the representatives are compensated by their employers for the duties that they perform for their employers. The organizations represented by the six non-utility members of the WUC may or may not be their employers. You state, “It is reasonable to say that they are employed, are compensated by their employer and attend the WUC meeting with the approval of their employer.” January 10, 2013, advisory request letter, at 2. The industry organizations represented on the WUC provide input to discussion and are voting members of the WUC. They may elect to join or not to join on WUC comments. Public comments prepared by WUC members either must have the approval of the PA-AWWA Board or the concurrence of the PA-AWWA officers prior to submission. By letter dated September 4, 2013, you were notified of the date, time and location of the public meeting at which your request would be considered. At the public meeting on October 9, 2013, the WUC Chair and another individual who serves on the WUC appeared and offered to answer questions of the Commission. III. DISCUSSION: It is initially noted that pursuant to Section 13A08(a) of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A08(a), in conjunction with Sections 1107(10) and 1107(11) of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, this Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all of the material facts. Based upon the submitted facts, this Opinion assumes that PA-AWWA is required to be registered as a principal. As a registered principal in Pennsylvania, PA-AWWA is subject to the prohibitions, restrictions, and requirements imposed upon principals by the Lobbying Disclosure Law. The WUC is part of PA-AWWA. You are advised that the WUC’s submission of written public comments on a proposed regulation prepared by a department of state government during the public comment period of the proposed regulation would constitute “lobbying” as that term is defined by the Lobbying Disclosure Law. The Lobbying Disclosure Law defines the term “lobbying,” in pertinent part, as “[a]n effort to influence legislative action or administrative action in this Commonwealth….” 65 Pa.C.S. § 13A03. The term “administrative action” is defined in the Lobbying Disclosure Law to include an agency’s “proposal, consideration, promulgation or rescission of a regulation,” “approval or rejection of a regulation,” or “the review, revision, approval or disapproval of a regulation under the act of June 25, 1982 Adam/Standish, 13-1002 November 4, 2013 Page 4 (P.L. 633, No. 181), known as the Regulatory Review Act.” 65 Pa.C.S. § 13A03. Therefore, the WUC’s submission of written public comments on a proposed regulation prepared by a department of state government during the public comment period of the proposed regulation would be an effort to influence “administrative action in this Commonwealth” and would constitute “lobbying” as that term is defined by the Lobbying Disclosure Law. The exemption at Section 13A06(1) of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A06(1) (pertaining to those who limit lobbying to preparing testimony and testifying before a committee of the General Assembly or participating in an administrative proceeding of an agency), would not apply to the submission of such written comments by the WUC. The Regulations promulgated under the Lobbying Disclosure Law (“Lobbying Disclosure Regulations”), 51 Pa. Code § 51.1, et seq., provide that the exemption at Section 13A06(1) does not apply to an entity which, in addition to submitting comments on regulations, also engages in other lobbying activities not encompassed within that exemption. 51 Pa. Code § 57.2(a)(1); see also, the Preamble to the Lobbying Disclosure Regulations, Section 57.2. Based upon the submitted facts, PA-AWWA reports other lobbying expenditures including awards, gifts, and expense payments provided to state employees or officials. Therefore, the WUC’s submission of written public comments on a proposed regulation prepared by a department of state government during the public comment period of the proposed regulation would not fall within the exemption provided pursuant to Section 13A06(1) of the Lobbying Disclosure Law. Turning to your remaining questions, you ask what reporting would be required of PA-AWWA for the time spent by the WUC members assisting in or preparing the public comment that is submitted. Per the submitted facts, the WUC members receive no compensation from PA-AWWA. Their time spent assisting in or preparing the public comments submitted by PA-AWWA is paid for by their respective employers, most if not all of whom are members of PA-AWWA. The industry organizations represented on the WUC may elect to join or not to join on WUC comments. In considering whether the time spent by WUC members is a resource contributed to the PA-AWWA and then expended by it (see, 65 Pa.C.S. § 13A05(b)(5) regarding the contribution of resources to a principal), we note the following illustration provided in the Lobbying Disclosure Regulations Committee’s “Manual for Accounting and Reporting”: Sometimes, an event may require reporting of lobbying expenses by a principal, but not necessarily by its members, where the principal is a trade association or a labor organization. An event requiring reporting of lobbying expenses by a principal will not require reporting by the principal’s members unless the members incur expenses that are not paid by the principal. For example, annually a principal hosts an event in Harrisburg where members come to discuss issues of importance to the principal’s profession. Part of the day is spent with members “walking the halls” of the capitol and in meetings with legislators and staff discussing and promoting the principal’s legislative agenda and related matters. The activities of a principal’s members would be reported as direct lobbying on the principal’s next quarterly expense report. However, expenses paid by the members would be attributable to them and reportable by them to the extent the members would not be exempt. Manual for Accounting and Reporting, Section III (Emphasis added). Under the submitted facts, we consider the WUC members’ time to be a resource Adam/Standish, 13-1002 November 4, 2013 Page 5 contributed to PA-AWWA and expended by it. The WUC is part of PA-AWWA, and it operates under PA-AWWA Bylaws. Per the PA-AWWA Bylaws, the WUC prepares comments within the framework of PA-AWWA/AWWA policy, and such comments are controlled by PA-AWWA. We conclude that PA-AWWA would be required to report the value of the WUC members’ time spent assisting in or preparing the public comment submitted by the WUC. We do not address in this Opinion any reporting requirements of employers of the WUC members in that you have not established standing to request an advisory on their behalf. With regard to the valuation of the time spent by the WUC members, we note that the Lobbying Disclosure Regulations Committee’s Manual for Accounting and Reporting provides as follows: C. Valuation of Time Because Section 13A05(b)(2.1) provides that “a registrant may use any reasonable methods of estimation and allocation,” there is no specific method for valuing time required by the Act. The following are offered as examples of viable options: 1. Employ a good faith estimate by using any reasonable method of estimation and allocation. 2. Keep a record of all hours spent lobbying. 3. Use the entire fee for lobbying, which could have sales tax implications. NOTE: Regardless of the method used to value time, consult with anattorney or registrants may wish to accountant to address this issue. Manual for Accounting and Reporting, Section V(C). We similarly conclude that because Section 13A05(b)(2.1) of the Lobbying Disclosure Law provides that “[f]or purposes of filing an expense report under this subsection, a registrant may use any reasonable methods of estimation and allocation,” 65 Pa.C.S. § 13A05(b)(2.1), this Commission may not prescribe a particular method for PA- AWWA to use to value the time of the WUC members. We shall merely note that one reasonable method would be to report the costs of such time as incurred by the respective employers. Turning to your final question, you have established standing to request an advisory as to Ms. Knight, a member and secretary of the WUC. You ask what reporting would be required of Ms. Knight as a WUC member. You are advised that generally, registered principals file quarterly expense reports, and a lobbying firm or lobbyist not associated with a lobbying firm is only required to submit a separate expense report if, during the reporting period, the lobbying firm or lobbyist engaged in lobbying that was not contained in any expense report filed by a principal or principals represented. See, 65 Pa.C.S. § 13A05. The Lobbying Disclosure Law defines the terms “lobbyist” and “principal” as follows: Adam/Standish, 13-1002 November 4, 2013 Page 6 § 13A03. Definitions. "Lobbyist." Any individual, association, corporation, partnership, business trust or other entity that engages in lobbying on behalf of a principal for economic consideration. The term includes an attorney at law while engaged in lobbying. "Principal." An individual, association, corporation, partnership, business trust or other entity: (1) on whose behalf a lobbying firm or lobbyist engages in lobbying; or (2) that engages in lobbying on the principal’s own behalf. 65 Pa.C.S. § 13A03. Under the submitted facts concerning Ms. Knight’s activities as a member and secretary of the WUC, you are advised that Ms. Knight would not be considered a principal with regard to her activities as a member and secretary of the WUC. The submitted facts as to Ms. Knight’s lobbying-related activities are insufficient to enable a determination as to whether Ms. Knight would be a “lobbyist” required to register under the Lobbying Disclosure Law. For example, the submitted facts do not indicate: (1) whether Ms. Knight’s name appears on the submission of the WUC’s written public comments as to proposed regulations; (2) whether Ms. Knight otherwise engages in lobbying activities under the Lobbying Disclosure Law; or (3) whether, in any event, Ms. Knight would fall within an exemption at Section 13A06 of the Lobbying Disclosure Law. Therefore, this Opinion must be limited to providing the following general guidance. Ms. Knight would not be required to file a separate expense report under the Lobbying Disclosure Law unless she would be a “lobbyist” required to register under the Lobbying Disclosure Law and she would engage in lobbying not contained in any expense report filed by a principal or principals represented. 65 Pa.C.S. § 13A05. The request for an advisory has only been addressed under the Lobbying Disclosure Law and, derivatively, the Ethics Act to the extent applicable. IV. CONCLUSION: As a registered principal in Pennsylvania, the Pennsylvania Section of the American Water Works Association (“PA-AWWA”) is subject to the prohibitions, restrictions, and requirements imposed upon principals by Pennsylvania’s lobbying disclosure law (“Lobbying Disclosure Law”), 65 Pa.C.S. § 13A01 et seq. Based upon the submitted facts that: (1) PA-AWWA is a nonprofit scientific and educational society dedicated to the improvement of drinking water quality and supply; (2) PA-AWWA engages a lobbying firm which prepares its quarterly expense reports; (3) PA-AWWA’s quarterly expense reports have included expenditures for monitoring activities as well as any lobbying work, the value of awards, gifts, and expense payments provided to state employees or officials, and certain other expenses incurred; (4) PA-AWWA bylaws establish a “Water Utility Council” (“WUC”) within PA-AWWA; (5) the purpose and responsibilities of the WUC include developing action programs to initiate, evaluate, respond and comment, within the framework of PA-AWWA and American Water Works Association policy, on legislative, regulatory and other matters that directly affect water utilities; (6) the WUC is comprised of Adam/Standish, 13-1002 November 4, 2013 Page 7 eighteen members; (7) twelve of the WUC members are individuals who represent, and are elected by, utility members of PA-AWWA; (8) six of the WUC members are non-utility members and include at least one representative of a state agency with regulatory authority over public water supplies; (9) the non-utility members of the WUC, and any alternates, are appointed by the PA-AWWA Chair with the concurrence of the PA-AWWA Board; (10) the members of the WUC are not employees of PA-AWWA and receive no compensation from PA-AWWA; (11) the twelve utility member representatives who serve on the WUC are employees of the utilities that they represent, which utilities are members of PA-AWWA; (12) the twelve utility member representatives of the WUC are compensated by their employers for the duties that they perform for their employers; (13) the organizations represented by the six non-utility members of the WUC may or may not be their employers; (14) the six non-utility members of the WUC are compensated by their employers and attend the WUC meeting with the approval of their employers; (15) the industry organizations represented on the WUC provide input to discussion and are voting members of the WUC and may elect to join or not to join on WUC comments; and (16) public comments prepared by WUC members either must have the approval of the PA- AWWA Board or the concurrence of the PA-AWWA officers prior to submission, you are advised as follows. The WUC’s submission of written public comments on a proposed regulation prepared by a department of state government during the public comment period of the proposed regulation would constitute “lobbying” as that term is defined by the Lobbying Disclosure Law and would not fall within the exemption provided pursuant to Section 13A06(1) of the Lobbying Disclosure Law. PA-AWWA would be required to report the value of the WUC members’ time spent assisting in or preparing the public comment submitted by the WUC. Because Section 13A05(b)(2.1) of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A05(b)(2.1), provides that “[f]or purposes of filing an expense report under this subsection, a registrant may use any reasonable methods of estimation and allocation,” this Commission may not prescribe a particular method for PA-AWWA to use to value the time of the WUC members. One reasonable method would be to report the costs of such time as incurred by the respective employers. WUC member/secretary Louise Knight would not be required to file a separate expense report under the Lobbying Disclosure Law unless she would be a “lobbyist” required to register under the Lobbying Disclosure Law and she would engage in lobbying not contained in any expense report filed by a principal or principals represented. 65 Pa.C.S. § 13A05. Pursuant to Section 13A08(a) of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A08(a), a requester who truthfully discloses all material facts in a request for an advisory and who acts in good faith based upon a written Opinion of this Commission issued to the The requester shall not be held liable for a violation of the Lobbying Disclosure Law. protection afforded for reliance upon this Opinion will remain in effect until such time as any regulation, statutory enactment, or ruling precludes further reliance upon this Opinion. This letter is a public record and will be made available as such. By the Commission, Adam/Standish, 13-1002 November 4, 2013 Page 8 John J. Bolger Chair