DAR File No. 44123

Lieutenant Governor, Elections

Rule R623-1

Lieutenant Governor's Procedure for Regulation of Lobbyist Activities

Notice of Proposed Rule

(Amendment)

DAR File No.: 44123
Filed: 10/10/2019 11:36:13 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

In accordance with Section 36-11a-302, establish a process to adjudicate alleged violations and impose statutory penalties for local lobbyists, a new category of lobbyists was created by H.B. 64, passed in the 2019 General Session. These rule amendments clarify the existing adjudicative procedure for all lobbyists and align it with Title 63G, Chapter 4, Administrative Procedures Act; and clean up the administrative rule by eliminating processes and penalties that are already established by statute or not authorized by statute.

Summary of the rule or change:

The changes: 1) modify definitions, 2) eliminate processes and penalties in this rule that are established by statute or not authorized by statute, 3) align the adjudicative procedure with practices in Title 63G, Chapter 4, 4) apply the adjudicative procedure process to local lobbyists, and 5) add a new category of lobbyists that was created by H.B. 64 (2019).

Statutory or constitutional authorization for this rule:

• Section 36-11a-302
• Subsection 36-11-404(1)

Anticipated cost or savings to:

the state budget:

This rule may pose costs to the Lieutenant Governor's Office if a local lobbyist requests a formal adjudicative proceeding and requests an administrative law judge (ALJ) to preside over it. Based on other statewide contracts for ALJ services, the Lt. Governor's Office estimates it would cost $83 per hour. Because this is an hourly rate, the total cost would be dependent on the total time ALJ services are necessary. Although hiring ALJs may pose a cost, it is unlikely that the Lt. Governor's Office will need their services. Data from 2017-2019 show that the Lt. Governor's Office assessed penalties on 33 lobbyists (out of approximately 565 lobbyists), but none requested an adjudicative proceeding. This trend, when paired with the fact that there are only 2 registered local lobbyists, suggests that an adjudicative proceeding for a local lobbyist is unlikely.

local governments:

Local governments are not regulated or affected by this rule.

small businesses:

Small businesses are not regulated or affected by this rule.

persons other than small businesses, businesses, or local governmental entities:

The proposed rule changes do not impose additional regulations, requirements, or penalties on lobbyists than what is currently outlined in statute. The adjudicative proceeding is optional for all lobbyists.

Compliance costs for affected persons:

None--The adjudicative proceeding is optional for all lobbyists.

Comments by the department head on the fiscal impact the rule may have on businesses:

Simply put, this rule applies an existing adjudicative procedure to local lobbyists and clarifies the procedure for all lobbyists. Please note that statute establishes penalties and fines. This administrative rule merely outlines procedures to adjudicate potential violations and assess penalties and fines.

Spencer Cox, Lieutenant Governor

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Lieutenant Governor
Elections
Room 220 UTAH STATE CAPITOL
350 N STATE STREET
SALT LAKE CITY, UT 84114

Direct questions regarding this rule to:

• Derek Brenchley at the above address, by phone at 801-538-1041, by FAX at , or by Internet E-mail at dbrenchley@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

12/02/2019

This rule may become effective on:

12/09/2019

Authorized by:

Justin Lee, Director

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs	FY 2020	FY 2021	FY 2022
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Person	$0	$0	$0
Total Fiscal Costs:	$0	$0	$0
Fiscal Benefits
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Persons	$0	$0	$0
Total Fiscal Benefits:	$0	$0	$0
Net Fiscal Benefits:	$0	$0	$0

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described in the narrative. Inestimable impacts for Non - Small Businesses are described in Appendix 2.

 

Appendix 2: Regulatory Impact to Non - Small Businesses

These proposed rule changes do not impose additional regulations, requirements, or penalties on non-small businesses or the lobbyists that may represent non-small businesses.

 

The Director of Elections within the Office of the Utah Lieutenant Governor, Justin Lee, has reviewed and approved this fiscal analysis.

 

 

R623. Lieutenant Governor, Elections.

R623-1. Lieutenant Governor's Procedure for Regulation of Lobbyist Activities.

R623-1-1. Purpose.

Pursuant to [Utah Code ]Sections 36-11-404 and 36-11a-302, this rule provides procedures for the lieutenant governor['s office] to:

[A. Issue lobbyist licenses;

B. Disapprove lobbyist applications;

C. Suspend and revoke lobbyist licenses;

D. Reinstate lobbyist licenses; and

E. Appoint administrative law judges.]

(a) Appoint administrative law judges to adjudicate alleged violations and impose penalties outlined in Title 36, Chapter 11, Lobbyist Disclosure and Regulation Act;

(b) Appoint administrative law judges to adjudicate alleged violations and impose penalties outlined in Title 36, Chapter 11a, Local Government and Board of Education Lobbyist Disclosure and Regulation Act; and

(c) Provide procedures for license applications, disapprovals, suspensions, revocations, and reinstatements that comply with the procedures and requirements of Title 63G, Chapter 4, Administrative Procedures Act.

 

R623-1-2. Authority.

This rule is [required]authorized by [Utah Code ]Sections 36-11-404 and 36-11a-302.

 

R623-1-3. Definitions.

(1) In addition to the terms defined in [Utah Code ]Section s 63G-4-103, 36-11-102, and 36-11a-102, the following definitions apply:

[A. "Director" means the director of the state elections office.

B. "Register" means the process of obtaining a lobbying license as required by Sections 36-11-103 and 36-11-105.

C. "Report" means any report required under Sections 36-11-201.]

(a) "Director" means the director of elections within the Office of the Lieutenant Governor.

(b) "Licensure Period" means the period beginning January 1 and ending December 31 of each calendar year.

(c) "Lobbyist" means the term lobbyist as defined by Sections 36-11-102 and 36-11a-102.

(d) "Office" means the Office of the Lieutenant Governor.

 

R623-1-4. [Registration/License Application Procedure.]Disapproval of Lobbyist License Application.

[A. In order to register and obtain a license, a lobbyist shall:

1. Pay the registration fee as required by 36-11-103 and successfully complete the training as required by 36-11-307.

(a) The training for the first year of a two-year license period must be completed before the registration can be approved.

(b) To maintain the license for the second year in a two-year license period, the training for that year must be completed within the first 60 days of the second year or before engaging in lobbying activity, whichever is first.

2. File a registration/license application statement in compliance with the provisions of Section 36-11-103. The lieutenant governor's office shall make available forms that comply with Section 36-11-103. The lobbyist may either:

(a) Submit the completed form to the lieutenant governor's office; or

(b) File the lobbyist registration/license application by completing the electronic form available on the Utah Lobbyist Online system; and submit the completed signature authorization form to the lieutenant governor's office.

B. Upon receipt of a completed lobbyist registration/license application form the lieutenant governor's office shall:

1. Review the registration form for accuracy, completeness and compliance with the law;

2. Approve or disapprove the registration/license application; and

3. Notify the lobbyist in writing within 30 days of approval or disapproval.

C. An applicant who has not been convicted of any of the offenses listed in Section 36-11- 103(4)(a)(i), and who has not had a civil penalty imposed as described in Section 36-11-103(4)(a)(ii), may commence lobbying activities upon filing of a completed registration/license application form with the lieutenant governor's office and payment of the registration fee.

D. By applying for a license, the lobbyist certifies that the lobbyist intends to engage in lobbying activities under the circumstances stated in the application or supplements filed with the lieutenant governor's office during the time the registration and license are valid.

1. If a lobbyist intends to cease all lobbying activities for the remainder of the period of licensure, the lobbyist shall notify the lieutenant governor's office in writing and surrender the license.

2. If the lobbyist has a change in circumstances that affects the lobbyist's activities, the lobbyist shall notify the lieutenant governor's office in writing.

3. If a lobbyist has surrendered the license and then decides to reengage in lobbying activities, a reissued license without a fee may be requested, if it is within the 2-year period of the original registration.

4. The lobbyist must submit a written request to the lieutenant governor's office in order to have the license reissued.

5. A reissued license expires on December 31 of each even numbered year in accordance with Section 36-11-103(3)(b).

E. A lobbyist may add and delete principals and provide other notices electronically as prescribed by the lieutenant governor's office.]

(1) The office may disapprove a lobbyist license application described in Section 36-11-103 if:

(a) The applicant or license application meets any of the disapproval criteria outlined in Section 36-11-103(4);

(b) The license application is not accurate, complete, or compliant with law;

(c) If the applicant has not paid a fine imposed under Section 36-11-401 or 36-11a-301; or

(d) If, at the time of the pending application, the applicant's current lobbyist license is suspended.

 

R623-1-5. [Disapproval of Application.]Suspension of Lobbyist License.

[A. A lobbyist who is convicted of violation of any of the offenses listed in Utah Code Section 36-11-103, shall have his application for license disapproved by the lieutenant governor's office and a license will not be issued.

B. The lobbyist will receive written notice of the license disapproval from the lieutenant governor's office within 30 days.]

(1) In addition to the penalties outlined in Sections 36-11-401 and 36-11a-301, the office may suspend the lobbyist license of an individual for a period of up to one year if the individual:

(a) Fails to pay a fine imposed under Section 36-11-401 within 30 calendar days after the day on which the office imposes the fine;

(b) Fails to file a required report described in Section 36-11-201 and fails to submit the required report within 30 calendar days after the deadline described in Section 36-11-201; or

(c) Files a license application, report, or other document to the office that contains materially false information or omits material information; including, but not limited to, the failure to list all principals for which the lobbyist works or is hired as an independent contractor.

(2) If the office suspends a lobbyist license, it shall immediately notify:

(a) The speaker of the House of Representatives;

(b) The president of the Senate; and

(c) The governor.

(3) If the office suspends an individual's lobbyist license:

(a) The individual may not lobby during the period of the suspension; and

(b) Except as provided in Subsection R623-1-5(3)(b)(i), the individual may apply for a lobbyist license after the suspension period expires by following the procedures of Section 36-11-103.

(i) The individual's lobbyist license is automatically reinstated when the period of suspension ends if the beginning and end of the suspension period is within the same licensure period.

 

R623-1-6. [Suspensions, Revocations and Fines.]Reinstatement.

[A. Registration and reporting violations.

1. In addition to any fines imposed under 36-11-401, a lobbyist license may be suspended for any of the following willful and knowing violations of Section 36-11-103, Sections 36-11-201:

a. Failure to register;

b. Failure to file a year end or supplemental report on or before the statutory due date;

c. Failure to file a year end or supplemental report;

d. Filing a report or other document that contains materially false information or the omission of material information; including, but not limited to, the failure to list all principals for which the lobbyist works or is hired as an independent contractor;

e. Failure to update a registration when a lobbyist accepts a new client for lobbying; or

f. Otherwise violating Sections 36-11-103, 36-11-201.

2. If a fine or other penalty is imposed more than once under the immediately preceding section, suspension or permanent revocation of the lobbyist license shall be imposed.

3. The determination of the penalty to be imposed will be made by following the procedures as provided by Section R623-1-7.

B. Illegal Activities of lobbyists.

1. If the lieutenant governor's office discovers or receives evidence of a possible violation of Sections 36-11-301 to 305, the evidence will be sent to the appropriate county attorney or district attorney's office for prosecution.

2. If a lobbyist is convicted of a violation of Sections 36-11-103, 36-11-201, 36-11-301, 36-11-302, 36-11-303, 36-11-304, 36-11-305 or 36-11-403, the lieutenant governor shall revoke the lobbyist license for one year as required by Subsection 36-11-401(1) and give the lobbyist notice of the same, together with notice of the lobbyist's right to request a hearing under Section R623-1-9.

3. If the county or district attorney does not prosecute a possible violation under Sections 36-11-302 or 36-11-303, the lieutenant governor's office shall review the evidence to determine if a civil fine or suspension may be appropriate following the procedures for civil enforcement set forth in Section R623-1-7.

4. If a lobbyist is convicted of a violation of any of the Title 76 Criminal Code Sections referenced in Subsection 36-11-401(4), suspension of up to three years or permanent revocation of the lobbyist license shall be imposed, but no civil fine may be imposed. The determination of whether to revoke or suspend a lobbyist license and for what length of time shall be made following the procedures for civil enforcement as provided by Section R623-1-7.]

(1) An individual with a suspended license may apply for reinstatement by filing a written request for reconsideration in accordance with Section 63G-4-302.

 

R623-1-7. [Enforcement.]Designation of Formal and Informal Adjudicative Proceedings.

[A. Any person with evidence of a possible violation of the Lobbyist Disclosure and Regulation Act may provide such evidence to the director in the lieutenant governor's office or may file a complaint with such officer. If the evidence is of a criminal violation, the person may report the information directly to the appropriate county attorney or district attorney.

B. If the director discovers or receives evidence of a criminal violation, such evidence shall be provided to the appropriate county or district attorney and any civil enforcement actions will proceed as set forth in Subsection R623-1-6(B).

C. If the director discovers or receives evidence of a violation of a civil provision, the director will investigate the alleged violation and make a determination regarding what fine and/or suspension or revocation should be imposed, if any.

D. The director shall give notice of the recommended penalty to the lobbyist, and if a complaint was filed, to the complainant.

E. If either the lobbyist or the complainant desire to contest the recommended penalty, they or either of them may do so by requesting a hearing within fifteen (15) days of receipt of the notice of the recommended penalty. If neither file a request for a hearing within the fifteen day period, the recommended penalty will be the penalty imposed for the violation. The notice of recommended penalty shall include a notice of hearing rights.

F. The administrative law judge for the hearing is not bound by the recommended penalty and may impose a penalty greater or less than the recommended penalty, as seems justified by the evidence.

G. If a lobbyist license is suspended or revoked, the lieutenant governor's office shall remove the lobbyist's name from the official list and notify the following of such:

1. The speaker of the house of representatives;

2. The president of the senate; and

3. The governor.]

(1) Pursuant to 63G-4-202, the office designates all adjudicative proceedings commenced under the authority of Title 36, Chapters 11 and -11a, as proceedings to be conducted as informal proceedings. Except as provided in Subsection R623-1-7(2), all adjudicative proceedings shall be conducted as informal adjudicative proceedings.

(2) An adjudicative proceeding will be conducted as a formal adjudicative proceeding if:

(a) A party submits a written request for a formal adjudicative proceeding to the director within seven calendar days after the day the office provides notice of office action in accordance with Section 63G-4-201; or

(b) The director determines that a formal adjudicative proceeding is in the public interest and does not unfairly prejudice the rights of any party.

 

R623-1-8. [Hearings, Appointment of Administrative Law Judges.]Commencement of Adjudicative Proceedings.

[A. Hearings will be conducted as informal adjudicative proceedings under the Administrative Procedures Act.

B. The lieutenant governor's office shall appoint administrative law judges from state agencies to act as presiding officers over adjudicative proceedings.]

(1) Adjudicative proceedings shall be commenced in accordance with Section 63G-4-201.

(2) The office shall commence an adjudicative proceeding to:

(a) Impose a civil penalty described in Section 36-11-401;

(b) Impose a civil penalty described in Section 36-11a-301;

(c) Disapprove a lobbyist license application; or

(d) Suspend or revoke a lobbyist's license.

(3) The office may not commence an adjudicative proceeding to determine alleged criminal violations and will refer complaints and allegations of criminal violations to the appropriate prosecutorial entity.

 

R623-1-9. [Reinstatement of a Lobbyist License.]Informal Adjudicative Proceedings.

[A. A lobbyist whose license is suspended or revoked may apply for reinstatement.

B. The lieutenant governor's office shall not reinstate any lobbyist license until the lobbyist pays any fines that have been imposed.]

(1) The office shall hold a hearing for an informal adjudicative proceeding if:

(a) A hearing is required by statute;

(b) A hearing is permitted by statute and is requested by a party in writing within 30 calendar days after the day the office provides notice of office action; or

(c) The director determines a hearing is necessary to issue a decision and order.

(2) Hearing Procedure.

(a) The director shall serve as the presiding officer of an informal adjudicative proceeding.

(b) Notice of the hearing shall be mailed to all parties by regular mail at least 10 business days prior to the hearing date.

(c) Parties named in the notice shall be permitted to testify, present evidence, and comment on the issues.

(i) The presiding officer shall accept oral or written testimony from any party.

(ii) The presiding officer may question and examine any witness called to present testimony.

(iii) The presiding officer may establish rules to conduct an orderly hearing, provided the rules do not unfairly prejudice the rights of any party.

(iv) The presiding officer shall weigh the merits of the evidence provided and exclude evidence that is irrelevant, immaterial, unduly, or repetitious.

(d) Discovery is prohibited, but the office may issue subpoenas or other orders to compel production of necessary evidence.

(e) All parties shall have access to information contained in the office's files and to all materials and information gathered in any investigation, to the extent permitted by law.

(f) Intervention is prohibited, except when a federal statute or rule requires that a state permits intervention.

(g) All hearings shall be open to all parties.

(h) The office may record the hearing, and any party, at the party's own expense, may have a reporter approved by the office to prepare a transcript from the office's record of hearing.

(i) The director may schedule a conference to encourage settlement before the hearing.

(3) If no hearing is held for an informal adjudicative proceeding, the presiding officer shall issue a decision and order pursuant to 63G-4-203 within a reasonable time.

 

R623-1-10. Formal Adjudicative Proceedings.

(1) A formal adjudicative proceeding shall be held if the requirements of R623-1-7(2) are met.

(2) Except as provided in Subsection R623-1-10(2)(a), the director shall serve as the presiding officer of a formal adjudicative proceeding.

(a) The director shall appoint an administrative law judge to serve as the presiding officer of a formal adjudicative proceeding if the respondent requests the appointment of an administrative law judge in writing when the respondent makes the request described in Subsection R623-1-7(2)(a).

(3) Formal adjudicative proceedings shall be conducted in accordance with Sections 63G-4-204 through 63G-4-209.

 

R623-1-11. Continuance.

(1) The presiding officer of any adjudicative proceeding may grant a continuance for a hearing if a party or respondent submits a written request for a continuance to the presiding officer no later than one business day before the hearing is scheduled.

 

KEY: lobbyists, lobbyist registration

Date of Enactment or Last Substantive Amendment: [August 24, 2015]2019

Notice of Continuation: January 28, 2019

Authorizing, and Implemented or Interpreted Law: 36-11-404 ; 36-11a-302