A "principal" is anyone who employs a lobbyist or a person required to report pursuant to MCA 5-7-208. Principals can also be lobbyists as well. Simply, anyone who pays another person or entity $2,600 or more for 2019 lobbying is a principal.
To understand if you need to register and file L-5 reports as a principal, check out these following scenarios:
- Scenario 1: Interns: Do you pay an intern or multiple interns $2,600 or more for lobbying activities? (See Scenario 7 on page 3)
- Scenario 2: Outsourcing: Will you pay a firm or third-party entity $2,600 or more to handle lobbying activities to advance your interests? (See Scenario 8 on page 3)
- Scenario 3: Your organization’s employees are engaged to advance a principal’s interests: Will you pay your employees $2,600 combined or more for the purposes of lobbying? (See Scenario 8 on page 3).
If Scenario 1 or Scenario 2 apply to you, you must 1) register with the COPP as a principal and 2) submit L-5 lobbying reports. In Scenario 3, your organization does not need to register as a principal. See the below examples for more scenarios.
Example 1: Group A registers as a principal and hires Group B to plan and execute a lobbying strategy on behalf of Group A’s interests. This includes the hiring of lobbyists to lobby on behalf of Group A. Group A pays Group B $10,000 for these services, and Group B turns around and provides that money to the lobbyists lobbying on behalf of Group A.
So who is the principal? Because Group A’s interests are the ones being advanced, Group A would be the principal and would need to fill out an L-2 form (details here). Group A is responsible to report all lobbying expenditure activity on its L-5 report (see details on what must be reported on an L-5 report here). Group A’s payments to Group B would not need to be reported; instead Group A would need to report the name(s) of the lobbyists Group B had hired to lobby on Group A’s behalf, and the amount they were paid. Group B would simply be a pass-through in this scenario, not a principal with registration or reporting requirements.
Example 2: You are a registered lobbyist lobbying on behalf of multiple principals. To handle the load, you hire two interns and pay them each $3,000.00. As part of the responsibilities you have delegated them, each intern will be engaging in lobbying activity to advance your principal’s interests.
Here are the forms that must be completed:
1. You already filed an L-1 lobbyist registration form to register as a lobbyist for your principal.
2. Since you are paying the interns $2,600 or more, you must file an L-2 Principal Authorization Statement registering yourself as a principal for each of the two interns
3. Each intern must file an L-1 lobbyist registration form that lists you as the principal they will represent
4. L-5s: Does both the principal and the original registered lobbyist need to file?
Example 3: The Anti-Mosquito Organization (AMO) hires Montana Local Consulting (MLC) to manage lobbying activities to advance NAO’s interests. AMO will pay MLC $30,000 to make sure their interests are represented at the 2019 session. Three MLC employees will do lobbying activities to represent AMO, and they are paid by their employer, MLC, for their work. Two employees will earn $14,000 in wages, and the third employee will earn $2,000 over the course of the session.
Here are the forms that must be completed by the Anti-Mosquito Organization:
- 1. Must file a L-2 Principal Authorization Statement to register as the principal for each MLC employee who will earn $14,000 for the purpose of lobbying.
- 2. As a principal, AMO must file all legally required L-5 lobbying reports (details here). These L-5 reports would need to disclose the names of the two lobbyists AMO has contracted to represent them who will earn at least $2,600. The L-5s must also disclose each $14,000 payment and the $2,000 payment.
Any principal who makes payments or agrees to make payments exceeding $2,600* in a calendar year for the purpose of lobbying must complete and file a “Principal Authorization Statement.” Businesses, associations, government agencies and others who pay lobbyists to work on their behalf are also principals (See § 5-7-208 and 5-7-112, MCA; and § 44.12.202, ARM for more information.).
To decide what Principal Authorization Statement you need to fill out, ask:
- -Have you paid or intend to pay more than $2,600* to an individual lobbyist to lobby on your behalf? If so, you must file a Principal Authorization Statement, form L-2 (more details here), for each lobbyist you pay at least $2,600.
- -Have you paid or intend to pay more than $2,600* to individuals to lobby on your behalf, but will not pay any individual lobbyist $2,600? If so, you must file a Principal Registration Application, form L-3 (more details here).
If you are the principal to multiple lobbyists, reference this Guide for Lobbying Forms for example scenarios.
Principals are required to report all payments and expenditures made to support or assist lobbying activity on L-5 Lobbying Financial Reports (more details here). The L-5 must include:
1) Payments or other monetary compensation provided to the lobbyist(s) authorized to lobby on the Principal’s behalf. This includes lobbyists who are paid but will not meet the threshold amount and are not required to register with the COPP;
2) The cost of support staff, administrative fees (office rent, internet, etc.), or travel expenses paid to support or assist lobbying activity;
3) Equipment, advertising, or supplies or social expenditures used to support or assist lobbying activity; and
4) Expenditures associated with entertainment events (dinners, banquets, socials, etc.) meant to lobby individual members of the legislature.
Reports must be submitted electronically via the COPP website in the lobbyist database, or via mail (P.O. Box 202401, Helena, MT 59620-2401), via fax (406-444-1643), or delivered in person to the COPP office (1209 8th Avenue, Helena, MT). Please keep in mind that all reports MUST be received by the due date.
Report Due Dates:
- 1. February 15, 2019: 2018 Non-Session Year End Report, required for all lobbyists who had lobbying activity at any time from Jan.1-Dec. 31, 2018.
- 2. February 15, 2019: Mandatory L-5 report covering January 1st-31st of 2019. This report is required for all registered Principals, regardless of financial activity.
- 3. March 15, 2019: L-5 report required if you spent $5,000 or more between February 1st-28th.
- 4. April 15, 2019: L-5 report required if you spent $5,000 or more between March 1st-31st.
- 5. End of session report: Mandatory L-5 report due 30 days after the session adjourns. This report is required for all registered principals, regardless of financial activity.
There is a $50 per day late fee (up to $2,500) assessed to all principals for each day form L-5 is late.
A principal and lobbyist can terminate a lobbying relationship at any time, including before the legislative session ends.
To end a lobbying relationship, the principal must:
- 1. File a final L-5 that covers the dates from the last submitted L-5 through the day the relationship was terminated. The final L-5 can be filed whenever it is know that the relationship is terminated.
- 2. Send an email to email@example.com stating the date the relationship between the specific principal and specific lobbyist is terminated.
If a principal makes (or plans on making) payments to a lobbyist or lobbyists for lobbying activity during a special session that exceed the $2600 registration threshold, their registration and reporting requirements would fall under one of two scenarios.
Scenario 1: The principal has terminated the lobbyist(s) authorized to represent the principal at the conclusion of the regular legislative session:
- 1) The lobbyist would need to file a new L-1 application requesting to represent the Principal
- 2) The principal would need to file a new L-2 authorization authorizing that lobbyist to lobby on their behalf
- 3) The $150.00 lobbyist registration fee would need to be paid to complete the lobbyist application
- 4) The principal would be required to file a Post Special Session L-5 financial report 30 days after adjournment of the special session to disclose money spent on lobbying activity.
- 5) Both the lobbyist and principal would need to re-register because their original filings were terminated (i.e., the original filings are no longer valid because the COPP has been told the original agreement has been ended)
Scenario 2: The principal did not terminate the lobbyist(s) authorized to represent the principal at the conclusion of the regular legislative session:
- 1) The principal would be required to file a Post Special Session L-5 financial report 30 days after adjournment of the special session to disclose money spent on lobbying activity.
- 2) Neither the lobbyist or principal would need to re-register with the COPP, as their original filings would still be valid.