Chicago Implementing New Lobbying Regulations In July Particularly For Non-Profit Entities

SJ
Steptoe LLP

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In more than 100 years of practice, Steptoe has earned an international reputation for vigorous representation of clients before governmental agencies, successful advocacy in litigation and arbitration, and creative and practical advice in structuring business transactions. Steptoe has more than 500 lawyers and professional staff across the US, Europe and Asia.
Effective July 1, 2024, Chicago is implementing new lobbying laws designed to clarify existing regulations, particularly for the non-profit community. Chicago is joining many other jurisdictions...
United States Government, Public Sector
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Effective July 1, 2024, Chicago is implementing new lobbying laws designed to clarify existing regulations, particularly for the non-profit community. Chicago is joining many other jurisdictions of its size in setting the registration threshold in terms of dollars or time spent. The new threshold is now $1,250 in compensation or 20 hours in a reporting period (quarterly).

Of great interest to the non-profit community is the fact that the lobbying registration threshold will apply to their organization, but only if the organization has both an operating budget and net assets of fund balances of five million dollars or more. In the past, lobbying registration regulations were generally not enforced against any non-profit entities. If a non-profit entity does have the requisite budget and is required to register, there will be a procedure in place for to request a waiver for the registration fees.

The exceptions to the lobbying registration requirements can often swallow the rule. Here, Chicago is taking a middle of the road approach. Some exceptions to the registration thresholds are those who are: providing technical information, observing a meeting for educational purposes only, or playing no part in the strategy, planning, messaging, or other substantive aspect of the overall lobbying effort. This last exception may be of particular interest to those people who lobby on behalf an employer on discrete, substantive topics but are not involved in the lobbying strategy of the entity. A non-profit entity making "self-defense" communications will not be required to register. These communications are those that that challenge the existence of the entity, the powers of the entity, or tax-exempt status of the entity. There is also a new bona fide salesperson exception, provided the person is only contacting the public official or employee who is responsible for the purchasing decision.

Unlike at the State level, the new ordinance applies only to direct, and not grassroots, lobbying. Again, there is an additional carve out for non-profit entities. Any direct lobbying that takes place as a part of an organized grassroots activity sponsored by a non-profit entity to influence legislative or administrative action will not trigger a registration requirement. This will be welcome news to many non-profits that organize volunteers to meet with public officials to urge action on legislative or administrative issues but who do not otherwise lobby directly.

Overall, the new lobbying regulations seek to provide clarity to the lobbying community, and particularly to non-profits.

The new laws can be found at Municipal Code of Chicago, Governmental Ethics Ordinance, Chapter 2-156.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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