TITLE 25 INDIANA DEPARTMENT OF ADMINISTRATION

Economic Impact Statement

LSA Document #07-231

The Indiana Department of Administration (IDOA) was established by law under IC 4-13-1-2 and is empowered to adopt rules pursuant to IC 4-13-1-7. Rules requiring registration of Executive Branch Lobbyists were promulgated pursuant to IC 4-22-2 in 2005 and became effective on January 1, 2006. The rule added 25 IAC 6 to the Indiana Administrative Code.

The Commissioner for the IDOA is responsible for administering the executive branch lobbying rule (EBLR), which includes prescribing forms for registration statements, annual reports, and other documents to be filed by executive branch lobbyists who are required to register under the rule. (25 IAC 6-3-1)

Effective July 1, 2006, the IDOA was given statutory authority to establish initial registration fees, annual report filing fees, and fines under IC 4-2-8. Specifically, IC 4-2-8-4 states:

(a) The department shall charge each executive branch lobbyist an initial registration fee and an annual report filing fee set by rules adopted by the department under IC 4-22-2.

(b) In the rules adopted under this section, the department may provide for late fees for registration statements and annual reports that are filed late.

IC 4-22-2.1-5 requires state agencies that intend to adopt changes to a rule which will impose requirements or costs on small businesses to prepare a statement that describes the annual economic impact of a rule on all small businesses after the rule is fully implemented.

IDOA has no historical data to support an accurate estimate of the number of small businesses subject to the rule. Executive branch lobbyist registration is required only for individuals who lobby the executive branch agencies. Business organizations and entities are not able to register. However, there may be an economic impact on the business organization by virtue of the fact that certain individuals within that business organization may be required to register as executive branch lobbyists. The number of individuals within that business organization who are required to register will depend upon the number of individuals within that business organization who engage in executive branch lobbying activity. The economic impact of the proposed rule change on the business organization will be dependent upon the number of executive branch lobbyists employed by the business organization. There are currently over 1,080 individuals registered as executive branch lobbyists in the state of Indiana.

All executive branch lobbyist reporting is done electronically through the IDOA website. The quantity of reports, filings, and forms that must be filed is minimal. The following information is required to be reported:

Sec. 1. Within fifteen (15) business days of making any contact with an agency regarding an executive branch action, an executive branch lobbyist shall file with the department a signed initial registration statement on a form approved by the commissioner, which shall include the following information:

(1) The name, business address, telephone number, electronic mail address, and occupation of the executive branch lobbyist.

(2) The name, business address, telephone number, and electronic mail address of the:

(A) executive branch lobbyist's employer; and

(B) any real party in interest on whose behalf the executive branch lobbyist is acting, if it is different from the employer.

(3) A brief description of the subject matter to which the engagement or engagements relate.

(4) The identity of the agency or agencies to which the engagement or engagements relate.

(5) A verified statement certifying that in the course of engaging in any executive branch lobbying activity, the executive branch lobbyist has read and will comply with the following:

(A) The state statutes governing ethics and conflicts of interest set forth in IC 4-2-6 and rules promulgated thereunder; and

(B) The state statutes governing the office of the inspector general and rules promulgated thereunder.

The only other report required by the registration rule is the annual report which requires the same information plus the "total amount of payments received for each engagement during the past year." (25 IAC 6-2-2(a)(4)) This information can be filed electronically through the IDOA website. Because of this, the only costs associated with filing the registration form and the annual report are costs associated with maintaining an Internet connection, which many lobbyists already maintain. There is no additional cost associated with the filing of these forms.

Individual lobbyists will be required to keep track of the time spent on lobbying activity for the purpose of completing the annual report. Many of these types of records are already maintained for other reporting purposes such as tax reporting. IDOA will not propose any specific or standard accounting procedures for tracking this information. Since the method of accounting will be at the discretion of the lobbyist, IDOA is unable to estimate the cost associated with the compliance of these reporting requirements, but we would estimate that the cost would be minimal.

Based upon the limited nature of the information to be reported, the minimal additional efforts which will be required to account for the required information, and the minimal expense associated with the electronic filing of the forms and reports, IDOA is certain that the estimated economic impact of the rule will not be greater than $500,000 for any regulated entity.

Effective July 1, 2006, the IDOA was given statutory authority to establish initial registration fees and annual report filing fees under IC 4-2-8. Thus, there is a statute authorizing the agency to impose this cost on small businesses. The purpose behind the statute was to allow IDOA to have a mechanism in place to recoup the cost of administrating executive branch lobbyist registration.

This regulatory scheme is already the least intrusive and least costly method of achieving the purpose of the rule. Under the current administrative scheme, a lobbyist is required to file one "initial registration statement" and an "annual report". An initial registration statement does not expire at the end of the year. Thus, once a lobbyist has registered he will not ever have to reregister or file another initial registration statement unless he or she has terminated his or her registration. However, the annual report must be filed in January of each year for the proceeding year that the person was registered as a lobbyist. Under the current regulatory scheme, there are no fees associated with either the filing of an initial registration statement or an annual report. IDOA has sought to recoup the costs associated with administering this program and the statute has authorized a $50 initial registration fee that theoretically would only be paid one time, and then a $50 annual report filing fee, that would only be paid annually. In addition, IDOA would have the ability to levy a $500 fine against individual lobbyists who do not comply with the terms of 25 IAC 6.

The reporting requirements under 25 IAC 6 are minimal as they exist, thus different standards are not necessary for "small businesses" than for "large businesses."

The schedules or deadlines for compliance or reporting requirements for executive branch lobbyist registration are minimal, thus there is no need for differentiation between "small" and "large" businesses.

The reporting requirements are minimal, thus consolidation or simplification of those procedures in not possible or necessary. There are no performance standards with respect to complying with this rule except for absolute compliance, thus there is no need for differentiation between "small" and "large" businesses, and there is no additional need to exempt small business from the application of this rule.

DIN: 20070801-IR-025070231EIA

Composed: Apr 29,2024 4:15:55PM EDT

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