[38 Pa.B. 435]
[Saturday, January 19, 2008]
[Continued from previous Web Page] § 55.2. Records maintenance, retention and availability.
(a) A registrant shall maintain records reasonably necessary to substantiate the filings of lobbying activity made under sections 13A04 and 13A05 of the act (relating to registration; and reporting).
(1) The Department will prescribe standardized forms for reports, which shall be used by all principals, lobbying firms and lobbyists required to be registered under the act.
(2) In maintaining records, registrants may use any reasonable methods of estimation and allocation.
(3) Records of lobbying activity may be kept under any reasonable accounting basis, which includes:
(i) Cash basis. Revenue and related assets are recognized when received and expenses are recognized when payment is disbursed. For example, payroll costs are reported when paid, not when the associated hours are worked.
(ii) Accrual basis. Income is recognized when earned and expenses when incurred. For example, payroll is recognized when the associated hours are worked regardless of when payment is made.
(iii) Modified accrual basis. Recognizes an economic transaction or event as revenues in the operating statement when the revenues are both measurable and available to liquidate liabilities of the current period. Available means collectible in the current period or soon enough thereafter to be used to pay liabilities of the current period. Similarly, expenditures are generally recognized when an event or transaction is expected to draw on current spendable resources.
(4) Records of lobbying activity shall be maintained in sufficient detail to enable the registrant to fully comply with the act and this part.
(5) The records must identify the general subject matter or issue being lobbied. The specific contents of a particular communication, or the identity of those with whom the communications take place, need not be recorded or maintained.
(6) A registrant should keep its records on the same accounting basis for the 2-year period covering its registration under the act. If a registrant changes its accounting basis, it should make an internal record noting the date of the change and the reason for the change.
(b) A registrant may keep records of all lobbying activity separate from records of the registrant's nonlobbying activity. A registrant may keep records related to registering and reporting under the act separate from other records relating to lobbying.
(1) Records that integrate both lobbying and nonlobbying activities shall be retained and made available for inspection or audit under this section and Chapter 61 (relating to compliance audits).
(2) An expenditure incurred partially in connection with lobbying may be prorated by any reasonable accounting method, but the method used shall be described in detail in the records maintained as to the expenditure.
(3) A registrant may value time spent lobbying in using any of the following examples of viable options as long as the method selected is a reasonable method of estimation and allocation:
(i) A registrant may employ a good faith estimate by using any reasonable method of estimation and allocation.
(ii) A registrant may keep a record of all of the time spent lobbying.
(iii) A registrant may use the entire fee expended for lobbying.
(c) A registrant shall retain the documents used in recordkeeping reasonably necessary to substantiate the filings to be made under section 13A04 or section 13A05 of the act for 4 years from the date of filing.
(1) The documents to be used in recordkeeping include, but are not limited to: books, journals, ledgers, accounts, statements, invoices, bills, vouchers, receipts, charge slips, cancelled checks, payroll check stubs, time sheets, tax returns and related forms, contracts, subcontracts, business diaries and calendars, and other related written or computerized records.
(2) Original source records received by the registrant shall be retained in their original form to the extent possible.
(3) Records prepared by the registrant under this section may be in written or computerized/electronic formats.
(4) Computerized/electronic records shall be maintained to enable the Department, the Commission, the Office of Attorney General or the Board to access in readable form all of the information reasonably necessary to substantiate the registration statements or reports.
(5) Affidavits may be used if actual records are lost, stolen or destroyed through no fault of the registrant, or are otherwise unavailable, and cannot be recreated from other sources. An affidavit must be as complete and detailed as is reasonably possible, and include the specific reasons for the unavailability of the actual records.
(d) Reportable expenditures shall be supported by original source documents to the extent they are available. If an original source document is not available to support a reportable expenditure, the registrant shall upon payment of the expenditure promptly prepare a written voucher, journal entry, or other written or electronic form of record to document the expenditure. The record must include a notation of the reason an original source document was not available.
(e) The documents and records maintained and retained to substantiate expenditures must reflect for each reportable item, the following information:
(1) The full names of the payor and payee.
(2) The date of the transaction.
(3) The dates and forms of payments.
(4) The full name and official position of each State official or employee who was a beneficiary, and the amount of the expenditure reasonably attributable to each of them.
(5) The number of immediate family members of a State official or employee, who were beneficiaries, and the amount of the expenditures reasonably attributable to them.
(6) A description of the goods or services or other consideration for which the expenditure was made or incurred.
(f) Contributions of resources which are reportable under section 13A05(b)(5) of the act shall upon receipt be promptly documented by the registered principal through the preparation of a written receipt, an entry in a journal maintained by the principal, or other written or electronic form of record.
(g) Documents and records maintained and retained to substantiate contributions of resources reportable under section 13A05(b)(5) of the act must reflect for each reportable item, the following information:
(1) The full names of the donor and donee.
(2) The amount or value and date of the contribution.
(3) In the case of a nonmonetary contribution, a description of the goods, services or other forms of resources provided.
(4) Instructions, directions, conditions, restrictions, limitations or controls provided or imposed by the donor as to the use or disposition of the contribution.
(h) Upon written request by the Office of Attorney General, the Department, the Commission or the Board, documents reasonably necessary to substantiate filings made under sections 13A04 and 13A05 of the act shall be made available for inspection and copying within 30 days.
(1) Either the Office of Attorney General, the Department, the Commission or the Board may extend this 30-day deadline in connection with its own requests, when circumstances compelling an extended deadline are established.
(2) Computerized/electronic records shall be provided in readable form.
§ 55.3. Public inspection and copying.
(a) The Department will make completed expense reports, which have been filed with the Department, available for public inspection and provide copies of these documents at a price not in excess of the actual cost of copying.
(b) The Department will make all reports available on a publicly accessible Internet web site. Documents maintained and reproducible in an electronic format shall be provided in that format upon request.
§ 55.4. Reliance on documents
(a) Reliance on manual. A registrant's establishment and maintenance of records, as well as the filing of quarterly expense reports based on those records, in accordance with any manual or interim guidelines adopted by the Committee shall serve as evidence of the registrant's good faith effort to comply with the act during the time when the manual or guidelines are in effect.
(b) Reliance on instructions for forms. A registrant's completion of registration statements and quarterly expense reports in accordance with instructions published by the Department will serve as evidence of the registrant's good faith effort to comply with the act during the time when the instructions are in effect.
CHAPTER 57. EXEMPTION FROM REGISTRATION AND REPORTING Sec.
57.1. General rule. 57.2. Qualifications for exemption. § 57.1. General rule.
(a) Unless specified in § 57.2 (relating to qualifications for exemption), a person, principal, lobbying firm or lobbyist that qualifies for any exemption under § 57.2 will not be required to register or report with respect to any activity covered by the exemption. However, if an individual does not qualify for an exemption in § 57.2(a), the activity described in the exemption shall be included within the reports otherwise required by the act.
(b) Upon losing exempt status, a person, principal, lobbying firm or lobbyist is immediately subject to the registration and reporting requirements of the act.
(c) Upon losing exempt status, a principal is not required to retroactively file reports for previous quarterly reporting periods in which the exemption applied.
(d) Upon losing exempt status, a lobbying firm or lobbyist is not required to retroactively sign or file reports for previous quarterly reporting periods in which the exemption applied.
§ 57.2. Qualifications for exemption.
(a) Exemption from registration. The following persons and activities shall be exempt from registration under section 13A04 of the act (relating to registration) and reporting under section 13A05 of the act (relating to reporting):
(1) The exemption in section 13A06(1) of the act (relating to exemption from registration and reporting) is limited to an individual or entity whose only lobbying activities consist of preparing testimony and testifying before a committee of the General Assembly or participating in an agency administrative proceeding. Participating in an administrative proceeding includes, but is not limited to, preparing and delivering comments on regulations or preparing and delivering comments at agency advisory committee meetings. To the extent an individual or entity, which is otherwise required to register and report under the act, engages in those activities, the individual or entity does not qualify for the exemption under this subsection.
(2) The exemption in section 13A06(2) of the act is limited to an individual or entity which is engaged in the business of publishing or broadcasting, regardless of the medium used, while engaged in the gathering and dissemination of news and comment on the news to the general public in the ordinary course of business. The term ''individual'' in this subsection includes employees and independent contractors.
(i) To qualify for this exemption, the individual or entity shall satisfy the following criteria:
(A) Regularly report or comment on government news or current events.
(B) Receive compensation or revenue for the publications or broadcasts.
(C) Make the publications or broadcasts available to the general public, whether for a fee or free of charge.
(D) Be independent of any principal, lobbying firm or lobbyist that is engaged in lobbying activities under the act.
(E) Be independent of any organization or entity that is not a news organization.
(ii) To the extent an individual or entity, which is otherwise required to register and report under the act, engages in activities other than the publishing or broadcasting of news or comment on the news, the other activities will not be afforded an exemption under this subsection.
(3) The exemption in section 13A06(3) of the act is limited to an individual who does not receive any economic consideration for lobbying.
(4) The exemption in section 13A06(4) of the act is limited to an individual whose economic consideration for lobbying, from all principals represented, does not exceed $2,500 in the aggregate during any reporting period.
(5) The exemption in section 13A06(5) of the act is limited to an individual who engages in lobbying on behalf of the individual's employer if the lobbying activity represents less than 20 hours during any reporting period.
(6) The exemption in section 13A06(6) of the act is limited to a principal whose total expenses for lobbying purposes do not exceed $2,500 during any reporting period.
(7) The exemptions in section 13A06(7)--(10) of the act (as referenced in section 13A05(b)(8)) exclude Commonwealth governmental entities and political subdivisions as well as elected officials, appointed officials and employees of the entities or subdivisions from the registration and reporting requirements of the act to the extent that the lobbying activities are performed by the governmental entities or by their officials/employees in an official capacity. Specifically, these sections exempt lobbying by a governmental entity on its own behalf and lobbying by an official/employee of the entity acting in an official capacity so that neither the official/employee nor the governmental entity would be required to register or report as to those activities under the act. The governmental entity would be required to register and report as a principal if other lobbyists or lobbying firms would engage in lobbying on behalf of the governmental entity and the total expenditures for those lobbying activities would not bring the governmental entity within the exemption in section 13A06(6) of the act.
(8) The exemption in section 13A06(11) of the act is limited to an individual representing a bona fide church or bona fide religious body of which the individual is a member, or the bona fide church or bona fide religious body itself, when the lobbying is solely for the purpose of protecting the constitutional right to the free exercise of religion. Lobbying on issues beyond the scope of the free exercise of religion does not qualify for this exemption no matter who engages in the lobbying.
(9) The exemption in section 13A06(12) of the act applies to an individual who is not otherwise required to register and who serves on an advisory board, working group or task force at the request of an agency or the General Assembly. This exemption is limited to the scope of the individual's service on the advisory board, working group or task force.
(10) The exemption in section 13A06(13) of the act applies to the activity of participating as a party or as an attorney-at-law or representative of a party, case or controversy in any administrative adjudication pursuant to 2 Pa.C.S. (relating to administrative law and procedure). This activity is exempt whether performed by an individual or entity, but will not operate to exclude from reporting other activities performed by individuals or entities that are otherwise required to register and report under the act.
(11) The exemption in section 13A06(14) of the act applies to expenditures and other transactions subject to reporting under Article XVI of the Election Code (25 P. S. §§ 3241--3260b).
(b) Vendor activities. The exemption in section 13A06(15) of the act applies to vendor activities under 62 Pa.C.S. §§ 514 and 516 (relating to small procurements; and emergency procurement) and efforts directly related to responding to publicly advertised invitations to bid and requests for proposals. This exemption also includes the following vendor activities in response to procurement actions initiated by the Commonwealth:
(1) Submission of supplier pricing requests and sealed quotes, bids and proposals in response to a public Request for Quotes (RFQ), Invitation For Bids (IFB) or Request for Proposals (RFP) procurement process.
(2) Submission of questions, participation in a site visit, prebid or preproposal conference, and communications concerning the procurement process between the vendor's and the covered agency's contracting officer designated by the public competitive procurement document (RFQ, IFB or RFP) during an active procurement.
(3) Submission of a response to a public Request for Expressions of Interest (RFEI) or Request For Information (RFI) seeking formal expression of interest or identification of vendor capabilities for a potential future procurement.
(4) Demonstration of products or services authorized by an existing contract to covered agencies that may order from the contract.
(5) Participation in trade shows, conventions or product demonstrations open to the public or held for an open community when Commonwealth representatives are among the attendees.
(6) Participation in an open, public forum for vendors conducted by the Commonwealth.
CHAPTER 59. OPINIONS AND ADVICES OF COUNSEL Sec.
59.1. Opinions and advices of counsel. 59.2. Standing requirements. 59.3. Prospective conduct to be reviewed. § 59.1. Opinions and advices of counsel.
(a) The Commission will provide advices of counsel and opinions in accordance with the procedures in section 1107 of the Ethics Act (relating to powers and duties of commission) and Chapter 13 (relating to opinions and advices of counsel).
(b) A person who acts in good faith based upon a written advice or opinion of the Commission issued as to that person will not be held liable for a related violation of the act if the material facts are as stated in the request.
(c) A respondent or defendant who reasonably relies upon advices or opinions of the Commission shall have an affirmative defense under section 13A09(g)(1) of the act (relating to penalties).
§ 59.2. Standing requirements.
(a) The following shall have standing to request an advisory under the act:
(1) A principal, lobbying firm, lobbyist, State official or employee, the Department, the Board, or the authorized representative of any of the aforesaid.
(2) Individuals, entities or their authorized representatives regarding their status or duties under the act.
(b) A principal or lobbying firm shall have standing to request an advisory regarding the status, duties or activities of its employees.
(c) An unauthorized request for an advice or opinion as to the conduct of another shall be considered a ''third-party request'' and will not be entertained.
(d) The Department and the Board will have standing to request an advisory as to questions or issues regarding their respective duties and authority under the act.
§ 59.3. Prospective conduct to be reviewed.
An advice or opinion will only be issued as to prospective conduct, pertinent to the subject of the request.
CHAPTER 61. COMPLIANCE AUDITS Sec.
61.1. Lotteries. 61.2. Scope of compliance audits. 61.3. Audit procedures. 61.4. Audit report. 61.5. Confidentiality. 61.6. Duty of the Department to contract for an audit. § 61.1. Lotteries.
(a) Each year, the Department will randomly select, at a public drawing 60 days following the close of each fourth quarter reporting period, 3% of all completed registration statements and expense reports filed with the Department under the act.
(b) A lobbyist, lobbying firm or principal will not be selected for a random audit in consecutive audit contract periods.
§ 61.2. Scope of compliance audits.
(a) The audits will be conducted in accordance with generally accepted auditing standards and will test as to whether each registration statement or expense report is materially correct.
(b) An audit will be limited in time to the previous 2 calendar years. Lobbying activities performed prior to January 1, 2007, will not be audited under the act.
§ 61.3. Audit procedures.
The following general procedures will be employed by the Department for audits conducted under section 13A08(f) of the act (relating to administration):
(a) At least 30 days prior to the initiation of the audit, each audit subject will be advised by letter that the audit subject was randomly selected for audit and further advised of the time, date, place and general scope as well as a tentative time frame for completion of the audit. The letter will contain a request for documents deemed necessary for conduct of the audit.
(b) Prior to the initiation of the audit, a review of the subject's reports on file with the Department for a period not to exceed 2 years will be conducted. Lobbying activities performed prior to January 1, 2007, will not be audited under the act.
(c) The audit will be initiated by way of conference between the auditor and the audit subject or the designated representative thereof.
(1) The audit may include related records from other sources, in which case the subject of the audit shall cooperate fully and execute all waivers, releases or authorizations to allow the independent auditor to obtain the records.
(2) Registrants shall have an affirmative duty to cooperate fully in any audit of their registration statements or expense reports. If the independent auditor believes that the subject of the audit is delaying the submission of requested records, the independent auditor shall inform the Department in writing.
(d) The audit may include interviews of lobbyists, principals, representatives and employees thereof and other individuals necessary to the completion of the audit.
(e) The independent auditor will offer to conduct an audit exit conference with the subject of the audit, or the designated representative thereof, prior to the issuance of a final report.
§ 61.4. Audit report.
(a) The certified public accountants or certified public accounting firms, selected under section 13A08(f)(1) (relating to administration) and § 61.6 (relating to duty of the Department to contract for an audit), that are responsible for performing compliance audits will, at the conclusion of each audit, prepare an audit report which must include findings.
(b) An audit report may include recommendations as to recordkeeping, reporting and other related practices arising from the audit.
(c) Upon completion, the independent auditor shall send a copy of the audit report and the findings of fact by certified mail to the subject of the audit. The independent auditor shall issue the audit report within 1 year of being notified of the selection of the subject for audit.
(1) Issuance of the audit report will be deemed complete upon mailing to the subject of the audit.
(2) Within 30 days of issuance of the audit report, the subject of the audit may file with the Department a statement setting forth the subject's position as to the audit report.
(d) Audit reports and any related responses shall be submitted to the Department for review and may form the basis for further proceedings or referrals under the act or the Ethics Act.
§ 61.5. Confidentiality.
The audit report and findings will be confidential except that the Department will make an audit report and findings available to the Commission if the Commission is investigating an alleged violation of this chapter involving the audited registration or expense report within the requirements of the act and Chapters 53 and 55 (relating to registration and termination; and reporting). The Commission will include the relevant portion of an audit as part of its findings of fact in a Commission order that results from an investigation arising out of an audit.
§ 61.6. Duty of the Department to contract for an audit.
Every 2 years, the Department will contract for the services of one or more certified public accountants or certified public accounting firms. The contract will be awarded in a manner consistent with 62 Pa.C.S. Part. I (relating to Commonwealth Procurement Code), and no certified public accountant or certified public accounting firm will be eligible to obtain a contract for 2 successive contract periods.
CHAPTER 63. COMMISSION REFERRALS, INVESTIGATIVE PROCEEDINGS AND NONINVESTIGATIVE PROCEEDINGS Sec.
63.1. Commission referrals.. 63.2. Commission proceedings under section 1307-A of the act. 63.3. Commission proceedings regarding late or deficient filings. 63.4. Noninvestigative process for late or deficient filings. 63.5. Investigative process for late or deficient filings. 63.6. Administrative penalties for late or deficient filings. 63.7. Commission decisions as to late or deficient filings. § 63.1. Commission referrals.
(a) If the Commission has reason to believe that an intentional violation of the act has been committed, it will refer all relevant documents and other information to the Office of Attorney General and, if the lobbyist or principal is an attorney-at-law, to the Board.
(b) The Commission may, in its discretion, refer any alleged violation of section 13A07(f) of the act (relating to prohibited activities) to the Office of Attorney General for both investigation and prosecution.
(c) The Commission will refer any alleged violation of section 13A07(d) of the act or section 1307A(f) of the act to the Board if the subject of the alleged violation is an attorney-at-law.
(d) Under section 13A09(b) of the act (relating to penalties) and § 63.4(16) (relating to noninvestigative process for late or deficient filings), if the Commission finds that a failure to register or report was intentional, it will refer the matter to the Attorney General for investigation and prosecution and, if the person is an attorney-at-law, to the Board.
(e) Nothing contained in the act or this part will prohibit the Office of Attorney General from independently initiating an investigation or prosecution under the act under its authority by law, and the Office of Attorney General need not await a referral from the Commission before initiating such an investigation or prosecution.
(f) Nothing contained in the act or this part will restrict the Board's authority to discipline an attorney-at-law who is acting as a lobbyist or principal.
(g) Except for a matter under section 13A07(d)(8) of the act, a referral by the Commission or the Office of Attorney General to the Board will not preclude the referring agency from also conducting its own enforcement proceeding under the act.
§ 63.2. Commission proceedings regarding prohibited activities under section 13A07 of the act.
(a) Upon receipt of a complaint as defined in § 51.1 (relating to definitions), the Commission, through its Executive Director, will conduct a preliminary inquiry into an alleged negligent or unintentional violation of section 13A07 of the act (relating to prohibited activities). A preliminary inquiry will not be conducted for matters under the act that are required to be referred to the Board for the Board's exclusive review under section 13A07(d)(8) or for matters involving section 13A07(f) that the Commission, in its discretion, chooses to refer to the Office of Attorney General for investigation.
(b) Except for matters required to be referred to the Board for its exclusive review under section 13A07(d)(8) of the act, the Commission, upon the motion of the Executive Director, may conduct a preliminary inquiry into an alleged negligent or unintentional violation of section 13A07 of the act.
(c) Preliminary inquiries will be conducted in accordance with the procedures for preliminary inquiries set forth in section 1108 of the Ethics Act (relating to investigations by commission) and § 21.3 (relating to preliminary inquiries), to the extent applicable.
(d) The Commission, through its Executive Director, may initiate an investigation and hold a hearing concerning alleged negligent or unintentional violations of section 13A07 of the act by a lobbyist, lobbying firm or principal, in accordance with sections 1107 and 1108 of the Ethics Act (relating to powers and duties of commission; and investigations by commission) and, to the extent applicable, the related provisions in §§ 21.1--21.3, 21.5 and 21.21--21.27.
(1) If the respondent does not submit a timely request for a hearing, the Investigative Division will have an additional 7 days beyond the respondent's deadline in which to submit a written request for a hearing.
(2) The Commission may sua sponte schedule a hearing if it is determined that a hearing is needed to resolve any contested facts to make a final determination.
(e) The Commission will decide cases, issue orders and rule upon requests for reconsideration concerning alleged negligent or unintentional violations of section 13A07 of the act, in accordance with sections 1107 and 1108 of the Ethics Act and, to the extent applicable, the related provisions in §§ 21.28--21.30 (relating to decision; finality; reconsideration; and effect of order).
(f) At least four members of the Commission present at a meeting must find a violation by clear and convincing proof.
§ 63.3. Commission proceedings regarding late or deficient filings.
(a) Commission proceedings under section 13A04 or section 13A05 of the act (relating to registration; and reporting) may be initiated based upon one or more of the following:
(1) Receipt of a complaint.
(2) Information submitted by the Department, at its discretion, including, but not limited to, referrals or other information pertaining to late or incomplete filings, the failure to file required registration statements and the failure to file quarterly expense reports.
(3) A referral by the Department of any information arising from an audit, which, in the view of the Department, is appropriate for the Commission to consider.
(4) Reviews of filings conducted by Commission staff.
(5) On the motion of the Commission's Executive Director, which is based upon a reasonable belief that a violation of section 13A04 or section 13A05 of the act may have occurred.
(b) The Commission, through its Executive Director, will initiate proceedings involving section 13A04 or section 13A0 of the act under either the noninvestigative procedures in § 63.4 (relating to noninvestigative process for late or deficient filings) or under the investigative procedures in § 63.5 (relating to investigative process for late or deficient filings).
(1) In each case, the Executive Director of the Commission will elect the process to be followed based upon factors which include, but are not limited to:
(i) The complexity of the matter.
(ii) Whether an investigation is needed to fully review the matter.
(iii) Whether the filer has had prior notice of the requirements of the act.
(iv) Whether the filer has in the past complied with the act.
(2) The election of the process to be followed will not be controlled by the manner in which the alleged negligent violation or noncompliance comes to the attention of the Commission.
(3) If a formal complaint is received alleging a failure to register or report as required by the act, or the filing of a registration or report containing a false statement, the Commission through its Executive Director may elect to proceed in the matter under the noninvestigative procedures of § 63.4 rather than through the investigative procedures of § 63.5.
(4) A complainant will be notified of the Executive Director's election of the process to be followed.
(5) Information received under subsection (a) may form the basis for proceedings under either the noninvestigative procedures of § 63.4, or, on the motion of the Commission's Executive Director, the investigative procedures of § 63.5.
(c) If the Department makes a referral to the Commission based on an audit, the Commission will handle the referral through the investigative process.
§ 63.4. Noninvestigative process for late or deficient filings.
The noninvestigative process for matters under section 13A04 or section 13A05 of the act (relating to registration; and reporting) will include the following procedures:
(1) Prior to the issuance of a notice of alleged noncompliance under section 13A09 of the act (relating to penalties), the Executive Director of the Commission will issue a warning notice to the lobbyist, lobbying firm or principal that has allegedly failed to register or report as required by the act. The warning notice may encompass multiple alleged failures to comply with the act. The warning notice will state the nature of the alleged noncompliance and the administrative and criminal penalties for failing to register, failing to file a report, or filing a report that contains a false statement or that is incomplete.
(2) The recipient of the warning notice shall have 30 days from the mailing date of the warning notice in which to cure the alleged noncompliance. The Investigative Division, in its discretion, may extend the 30-day time period for curing the alleged noncompliance. If the alleged noncompliance is not cured within the 30-day period or any extension thereof, the Investigative Division of the Commission may file a notice of alleged noncompliance with the Commission. The notice will be served upon the respondent by the Investigative Division. A notice of alleged noncompliance may encompass multiple alleged failures to comply with the act.
(3) The notice of alleged noncompliance will set forth the pertinent factual averments in numbered paragraph form and will state the nature of the alleged noncompliance and the administrative and criminal penalties for failing to register, failing to file a report, or filing a report that contains a false statement or that is incomplete. A notice of alleged noncompliance will also advise of the right to appeal from the notice, to file a written answer to the notice and to request a hearing before the Commission. A notice of alleged noncompliance will set forth the time and manner in which to file an appeal, file a written answer and request a hearing.
(4) An answer to the notice of alleged noncompliance shall be filed (received at the Commission) within 30 days of service of the notice upon the respondent, and the notice of alleged noncompliance will include a statement to this effect. Filing of an answer is deemed to be both an appeal and a request for a hearing.
(5) An answer to the notice of alleged noncompliance must specifically admit or deny each of the factual averments made in the petition, set forth the facts and state concisely the matters of law upon which the respondent relies. Matters not specifically denied will be deemed admitted. The notice of alleged noncompliance will include a statement to this effect.
(6) Failure to file an answer within the 30-day period or the filing of general denials will be deemed an admission of the averments of the notice of alleged noncompliance. The notice of alleged noncompliance will include a statement to this effect.
(7) To the extent that a respondent does not file an answer, a request by the respondent for a hearing must be in writing and be received at the Commission within 30 days of service of the notice of alleged noncompliance upon the respondent. Failure to submit a timely request for a hearing will be deemed a waiver of a hearing, so that a final order may be entered against the respondent without a hearing.
(8) If the recipient of a notice of alleged noncompliance fails to file a written answer or otherwise fails to file an appeal or a request for a hearing, the notice of alleged noncompliance is deemed admitted and the Commission may find the respondent to be in noncompliance and impose penalties under the act. Furthermore, filing a notice of appeal will automatically constitute a request for a hearing.
(9) If the respondent does not file an answer or otherwise submit a timely request for a hearing, the Investigative Division will have an additional 7 days beyond the respondent's deadline in which to submit a written request for a hearing.
(10) The Commission may sua sponte schedule a hearing if it is determined that a hearing is needed to resolve contested facts to make a final determination.
(11) If a hearing is requested by the respondent or Investigative Division or is scheduled by the Commission, the respondent will be given access to evidence intended to be used by the Investigative Division at the hearing, as well as exculpatory evidence obtained by the Investigative Division.
(12) Access to evidence does not include an original complaint or the name of a complainant, information which is otherwise privileged, or information not within paragraph (11).
(13) A hearing under section 13A09(b) of the act as to a negligent failure to register or report will be public and will be conducted by the Commission in accordance with sections 1107(14) and 1108(e) of the Ethics Act (relating to powers and duties of commission; and investigations by Commission), and to the extent applicable, the related provisions of Part I (relating to State Ethics Commission). The Investigative Division bears the burden of proof.
(14) The hearing officer or the parties may request that briefs be presented. The filing of briefs must be in accordance with the procedures for filing briefs under § 21.27 (relating to briefs) to the extent applicable.
(15) After the opportunity for a hearing has been provided, and following the submission of any briefs, the Commission will determine, based upon the record before it, whether the respondent was required to register or report under the act; whether the failure to register or report was negligent; and if the failure was negligent, the amount of the administrative penalty to be imposed. At least four members of the Commission present at a meeting must find a violation by clear and convincing proof.
(16) If the Commission finds that the failure to register or report was intentional, it will refer the matter to the Attorney General for investigation and prosecution, and if the person is an attorney-at-law, the Commission will also refer the matter to the Board.
(17) The determination of the Commission will be in the form of a final order with findings and reasons for the adjudication.
(18) At any time prior to a final adjudication by the Commission, the Investigative Division will have authority to negotiate settlements and to enter into settlement agreements to resolve matters under this section. Settlement agreements will be subject to review and approval by the Commission. Settlement agreements may include arrangements for deferral or termination of proceedings prior to any adjudicative disposition, or terms for an adjudicative disposition, including penalties provided by the act.
(19) Requests for reconsideration may be submitted to the Commission. The Commission will consider and rule upon requests for reconsideration under the procedures in § 21.29(b) and (d)--(f) (relating to finality; reconsideration) to the extent applicable.
(20) The Commission will notify the Board of any administrative/civil penalty imposed by the Commission against an attorney-at-law for failure to register or report.
(21) A complainant will be notified of the final resolution of the matter.
(22) The official record of the case before the Commission will be publicly available.
(23) The files of the Investigative Division will not be publicly available.
§ 63.5. Investigative process for late or deficient filings.
The investigative process for matters under section 13A04 or section 13A05 of the act (relating to registration; and reporting) will include the following procedures:
(1) The Commission, through its Executive Director, may conduct a preliminary inquiry into any alleged negligent violation of section 13A04 or section 13A05 of the act. Preliminary inquiries will be conducted under the procedures for preliminary inquiries in section 1108 of the Ethics Act (relating to investigations by commission) and, to the extent applicable, § 21.3 (relating to preliminary inquiries).
(2) The Commission, through its Executive Director, may initiate an investigation and hold a hearing concerning alleged negligent violations of section 13A04 or 13A05 of the act, in accordance with sections 1107 and 1108 of the Ethics Act (relating to powers and duties of commission; and investigations by commission) and, to the extent applicable, the related provisions in §§ 21.1--21.3, 21.5 and 21.21--21.27.
(i) If the respondent does not submit a timely request for a hearing, the Investigative Division will have an additional 7 days beyond the respondent's deadline in which to submit a written request for a hearing.
(ii) The Commission may sua sponte schedule a hearing if it is determined that a hearing is needed to resolve any contested facts to make a final determination.
(iii) A person has a duty to comply with a lawfully issued subpoena, even if that person is located out-of-State under 42 Pa.C.S. § 5322 (relating to the bases of personal jurisdiction over persons outside this Commonwealth).
(3) At any time prior to a final adjudication by the Commission, the Investigative Division will have authority to negotiate settlements and to enter into settlement agreements to resolve matters under this section. Settlement agreements will be subject to review and approval by the Commission. Settlement agreements may include arrangements for deferral or termination of proceedings prior to any adjudicative disposition, or terms for an adjudicative disposition, including penalties provided by the act.
(4) The Commission will decide cases, issue orders and rule upon requests for reconsideration concerning alleged negligent violations of section 13A04 or section 13A05 of the act, in accordance with sections 1107 and 1108 of the Ethics Act and, to the extent applicable, the related provisions in §§ 21.28--21.30 (relating to decision; finality; reconsideration; and effect of order). At least four members of the Commission present at a meeting must find a violation by clear and convincing proof.
§ 63.6. Administrative penalties for late or deficient filings.
Following a noninvestigative process under § 63.4 (relating to noninvestigative process for late or deficient filings), or an investigative process under § 63.5 (relating to investigative process for late or deficient filings), if the Commission finds negligent failure to register or report as required by the act, the Commission may, upon the vote of at least four of its members present, levy one or more administrative penalties as provided for in this section.
(1) Each negligent failure to register or report as required by the act is punishable by an administrative penalty of up to $50-per-day for each day the registration statement or report is delinquent or deficient.
(2) An administrative penalty will be calculated from the first day the registration statement or report is delinquent or deficient, through the date a complete and accurate registration statement or report is filed or the Commission decides the matter, whichever occurs first.
(3) In determining whether to impose an administrative penalty that is less than $50-per-day, the Commission may consider factors including the following:
(i) Whether the respondent contacted the Commission or took any meaningful measures to attempt to remedy the delinquency, deficiency or false statement.
(ii) Whether the respondent has raised any justifiable excuse such as, for example, the following:
(A) The unavailability of records due to loss, theft or destruction through no fault of the respondent.
(B) Incapacitating physical or mental illness, hospitalization, accident involvement, or death of a person required to register or report, a person whose participation is essential to the filing, or a member of the immediate family of the person.
(iii) Whether the record establishes that the matter involved the first instance that the respondent was subject to the registration/reporting requirements of the act.
(iv) Whether Commission records indicate that the Commission has previously notified the respondent, in writing, of other delinquent, deficient, or false registration statements or reports.
(v) Whether proceedings have previously been initiated against the respondent under the act, either by the Commission or by the Office of Attorney General.
(vi) Whether there are any other factors that should be considered as aggravating or mitigating factors in the case.
(4) The imposition of an administrative penalty by the Commission will not preclude a criminal prosecution for intentional violation of the act.
§ 63.7. Commission decisions as to late or deficient filings.
The determination of the Commission will be in the form of a final order with findings and reasons for the adjudication.
CHAPTER 65. PROHIBITION AGAINST LOBBYING FOR ECONOMIC CONSIDERATION AS A SANCTION Sec.
65.1. Basis for prohibition against lobbying for economic consideration. 65.2. Procedures for imposing prohibition against lobbying for economic consideration. § 65.1. Basis for prohibition against lobbying for economic consideration.
(a) Under sections 13A07 and 13A09 of the act (relating to prohibited activities; and penalties), the Commission may prohibit a lobbyist from lobbying for economic consideration for up to 5 years when the lobbyist has done one or more of the following:
(1) Violated section 13A07(d) of the act.
(2) Violated section 13A07(f) of the act.
(b) Under section 13A09(e)(4) of the act, the Commission may prohibit a person from lobbying for economic consideration for up to 5 years when the person has done one or more of the following:
(1) Intentionally failed to register or report as required by the act, as provided in section 13A09A(e)(1) of the act.
(2) As a registrant, filed a report under the act with knowledge that the report contained a false statement or was incomplete, as provided in section 13A09(e)(2) of the act.
(3) Otherwise intentionally violated the act, as provided in section 13A09(e)(3).
(4) Failed to comply with section 13A04, 13A05 or 13A07 of the act (relating to registration; reporting; and prohibited activities) after notice of noncompliance and after a hearing, if requested, as provided in section 13A09(d).
(c) For the limited purpose of the imposition of a prohibition against lobbying for economic consideration, the respondent shall be deemed to have been notified of noncompliance when served with both of the following:
(1) A findings report, notice of alleged noncompliance or other form of process which meets the requirements of section 13A09(a) of the act.
(2) A Commission order or court order finding the respondent in noncompliance with, or in violation of, the act.
(d) For the limited purpose of the imposition of a prohibition against lobbying for economic consideration, the respondent shall be deemed to have failed to comply after notice of alleged noncompliance if the respondent has not satisfied the requirements of the act within 30 days of the issuance of a Commission order or court order finding the respondent in noncompliance/violation, or within another time for compliance as specified by the order.
(e) The prohibition against lobbying for economic consideration will not be imposed unless the defendant/respondent has been afforded the opportunity for a hearing as to whether the prohibition should be imposed.
(f) At any time prior to a final determination by the Commission as to the imposition of a prohibition against lobbying for economic consideration, the Investigative Division of the Commission will have authority to negotiate settlements and to enter into settlement agreements to resolve matters under this chapter. Settlement agreements will be subject to review and approval by the Commission. Settlement agreements may include arrangements for deferral or termination of proceedings prior to any disposition, or terms for a disposition, including the duration of any prohibition against lobbying for economic consideration to be imposed under the act.
(g) The record of the underlying proceeding on violation/noncompliance, as well as relevant evidence of mitigating or aggravating factors, shall be admissible in a Commission proceeding involving the imposition of a prohibition against lobbying for economic consideration. At the hearing, the Commission will determine initially whether the defendant or respondent violated the act. If the Commission makes an initial determination that the defendant or respondent violated the act, the defendant/respondent may thereafter present argument regarding an appropriate penalty.
§ 65.2. Procedures for imposing prohibition against lobbying for economic consideration.
(a) Giving consideration to the factors in subsection (b)(14), the Commission, through its Executive Director, may institute proceedings to seek the imposition of a prohibition against lobbying for economic consideration.
(b) The procedures for the imposition of a prohibition against lobbying for economic consideration will be as follows:
(1) The proceedings will be initiated with the Commission through the filing of a petition by the Investigative Division. The petition will be served upon the respondent by the Investigative Division.
(2) The petition will set forth the pertinent factual averments in numbered paragraph form, and will notify the respondent of the opportunity to file a written answer and to request a hearing in the matter. If the basis for the petition is the failure to comply with a Commission order, the petition will be docketed to the same number as the base case before the Commission. If the basis for the petition is the failure to comply with a court order, the petition will be docketed to the same number as the base case before the Commission if there was one, and if not, to a new number.
(3) An answer to the petition shall be filed (received at the Commission) within 30 days of service of the petition upon the respondent.
(4) An answer to the Investigative Division's petition must specifically admit or deny each of the averments made in the petition, and set forth the facts and state concisely the matters of law upon which the respondent relies. Matters not specifically denied will be deemed admitted.
(5) Failure to file an answer within the 30-day period or the filing of general denials will be deemed an admission of the averments of the petition seeking the prohibition.
(6) A request by the respondent for a hearing must be in writing and be received at the Commission within 30 days of service of the petition upon the respondent. The Commission will schedule a hearing at least 30 days after the filing of an answer.
(i) A request for a hearing may be set forth within an answer to the petition or it may be submitted separately.
(ii) Failure to submit a timely request for a hearing will be deemed a waiver of a hearing, so that a final order may be entered against the respondent without a hearing.
(7) If the respondent does not submit a timely request for a hearing, the Investigative Division will have an additional 7 days beyond the respondent's deadline in which to submit a written request for a hearing.
(8) The Commission may sua sponte schedule a hearing if it is determined that a hearing is needed to resolve contested facts to make a final determination.
(9) The Investigative Division of the Commission will give the respondent access to evidence intended to be used by the Investigative Division at the hearing, as well as exculpatory evidence obtained by the Investigative Division.
(10) Access to evidence does not include an original complaint or the name of a complainant, information which is otherwise privileged or information not within paragraph (9).
(11) A hearing under this chapter will be public and be conducted by the Commission in accordance with sections 1107(14) and 1108(e) of the Ethics Act (relating to powers and duties of commission; and investigations by commission), and to the extent applicable, the related provisions of Part I (relating to State Ethics Commission). The Investigative Division bears the burden of proof.
(12) The hearing officer or the parties may request that briefs be presented. The filing of briefs shall be in accordance with the procedures for filing briefs under § 21.27 (relating to briefs), to the extent applicable.
(13) After the opportunity for a hearing has been provided, and following the submission of briefs, the Commission will determine, based upon the record before it, whether and for how long a prohibition against lobbying for economic consideration is to be imposed against the respondent.
(i) If a lobbyist or person has been found to be in noncompliance or in violation of the act in a proceeding before the Commission, for which noncompliance or violation the penalty of prohibition against lobbying for economic consideration may be imposed, the finding of noncompliance or violation will be res judicata, and the Commission's further determination will be limited to the amount of time, if any, that the lobbyist or person shall be prohibited from lobbying for economic consideration.
(ii) To the extent any factual matters remain to be proven, the matters will be proven by clear and convincing evidence.
(iii) A prohibition against lobbying for economic consideration may only be imposed by a vote of at least four members of the Commission present at a meeting.
(14) In determining whether and for how long a prohibition against lobbying for economic consideration is to be imposed against a respondent, the Commission may consider factors including the following:
(i) Whether the respondent contacted the Commission or took any meaningful measures to attempt to remedy the violation or failure to comply.
(ii) Whether the respondent has raised a justifiable excuse.
(iii) Whether the record establishes that the matter involved the first instance that the respondent was subject to the requirements of the act.
(iv) Whether other proceedings have been initiated against the respondent under the act, either by the Commission or by the Office of Attorney General.
(v) Whether there are other factors that should be considered as aggravating or mitigating factors in the case.
(15) The determination of the Commission will be in the form of a final order with findings and reasons for the adjudication.
(16) Requests for reconsideration may be submitted to the Commission. The Commission will consider and rule upon requests for reconsideration under the procedures in § 21.29(b) and (d)--(f) (relating to finality; reconsideration), to the extent applicable.
(17) The official record of the case, including a consent agreement, before the Commission will be publicly available.
(18) The files of the Investigative Division will not be publicly available.
(c) If a lobbyist or person is convicted in a criminal proceeding for a violation of the act for which the penalty of prohibition against lobbying for economic consideration may be imposed, the conviction will be res judicata, and the Commission's determination will be limited to the amount of time, if any, that the lobbyist or person shall be prohibited from lobbying.
[Pa.B. Doc. No. 08-125. Filed for public inspection January 18, 2008, 9:00 a.m.]
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