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The new lobbying regulations: a federal definition of "fund raising." (Legal/Legislative Guide) (column)

By Hopkins, Bruce R.
Publication: Fund Raising Management
Date: Tuesday, January 1 1991

The rule precluding a charitable organization which has

engaged in excessive lobbying from converting to an exempt social welfare organization applies to activities occurring after October 4, 1976 (the date of enactment of the Tax Reform Act of 1976).

In the language of an IRS summary of the regulations, the new rules reflect "a careful balancing of the statutory mandate limiting the amount of lobbying expenditures by [IRC] section 501 (c) (3) organizations with the expressed desire of the affected organizations and individuals to involve themselves in the public policymaking process to the greatest extent consistent with that statutory mandate."

Genesis Of Legislative Process

Among the difficult issues in this field of the law is the matter of the point in time in the legislative process that these rules begin to apply. A reading of the statute can yield an interpretation that the rules cannot begin until a legislative proposal is actually introduced. The same provisions can also be read to mean that the niles can be triggered at an earlier stage in the gestation of the legislative process.

This matter is most apparent when it comes to determining the commencement of grass roots lobbying, discussed below.

The term legislation," as defined in the statute, includes "acts, bills, resolutions, or similar items." The regulations expand on this definition by including examples showing that the Senate's confirmation vote executive branch nominees is a vote on "legislation."

The rules proposed in 1986 contained an expansive definition of the term "grass roots lobbying." The final regulations, however, substantially revise the definition of grass roots lobbying. The language in the 1986 definition used phraseology such as a communication that "pertains to" legislation, so that some forms of activity that involve legislation but lack any "call to action" could be regarded as grass roots lobbying. This approach has been abandoned.

Grass Roots Lobbying

The regulations define the term "grass roots lobbying communication" to generally include only those communications that 1) refer to "specific legislation" (namely, legislation that has already been introduced in a legislative body or a specific legislative proposal that the organization either supports or opposes); 2) reflect a view on the legislation; and 3) encourage the recipients of the communication to take action with respect to the legislation.

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