1February 8, 2012MEMORANDUMTo: North Carolina House and Senate legislatorsFrom: Parents for Educational Freedom in North CarolinaRe: Florida fact-finding trip March 14-15, 2012
Purpose:
This memo is drafted to outline the impact of the North Carolina ethics andlobbying laws on the proposed fact-finding trip in Florida on March 14-15, 2012. ThoughParents for Educational Freedom i
n North Carolina (“PEFNC”) sponsored a similar fact
-finding trip in 2008, our analysis considers specific facts regarding our proposed trip inMarch to answer the relevant questions.
Issue:
This memo addresses whether it is permissible for PEFNC, a lobbyist principalunder the State Lobbying Law (G.S. Chap. 120C), to provide transportation, lodging, andmeals in connection with meetings and a tour of schools in Florida.
Conclusion:
The transportation, lodging, and meals provided in connection with the tourand meetings would be gifts subject to the Lobbying Law (G.S. 120C-303(a)(1)).However, pursuant to the educational meeting exception in the Lobbying Law, PEFNCmay provide those items to State legislators, legislative employees, and public servants.
Facts:
PEFNC is a non-profit corporation that qualifies for tax-exempt status under
Section 501(c)(3) of the Internal Revenue Code (“IRC”) and a North Carolina
-registeredlobbyist principal. PEFNC will help facilitate a tour of various schools served through
Florida’s Opportunity Tax Credit Program. The educational goal of the tour and meetingsis to enhance the participants’ understanding of various schools in Florida that participatein Florida’s Opportunity Tax Scholarship Program. In addition to touring
schools, thelobbyist principal and legislators will be meeting with key leaders and state groups thatmade the program possible. PEFNC will pay for transportation, lodging, and meals inconnection with the tour and meetings.
Applicable Statutory Provisions:
G.S. Chapter 120C prohibits, among other things, alobbyist, a lobbyist principal, or legislative liaison personnel from giving gifts to adesignated individual unless an exception to the gift ban listed in G.S. 138A-32(e)applies. G.S. 138A-32(e)(3)(
i) permits a lobbyist principal to pay for the “reasonableactual expenditures” of a public servant, legislator, or legislative employee incurred inconnection with the individual’s attendance at an educational meeting “for purposes
primarily relating to t
he public duties and responsibilities of the covered person……”
2In order to meet the educational meeting requirement, any food, beverages,transportation, or entertainment must be provided to all attendees or defined groups of 10or more attendees and the meeting must: (a) be attended by at least 10 or moreparticipants; (b) have a formal agenda; and (c) be noticed at least 10 days in advance.
Any entertainment provided at the meeting “must be incidental to the principal agenda of the meeting.”
Application of Educational Meeting Criteria
The North Carolina Ethics Commission adopted several non-exclusive factors that are
considered when determining what an “educational meeting” is under G.S. 138A
-
32(e)(3)(i) (“Criteria”). These Criteria are for guidance on
ly, and no one factor iscontrolling.
1. Is the educational content of the meeting related to a public duty or responsibilityof the covered person?
The public duties of legislators include making policy decisions that involve schoolsystems. They are responsible for being informed about best education practices in NorthCarolina and other states across the country. Therefore, studying and visiting schoolsinvolved in a statewide Opportunity Tax Credit Scholarship program clearly relates totheir responsibilities as a legislator.
2. What is the meeting’s primary purpose? Is it to influence a public servant,
legislator, or legislative employee with respect to executive action or to curry favorconcretely? Or is the meeting primarily intended to present information to enhance
a person’s understanding of a subject matter or for the purpose of self
-improvement?
The educational meeting includes visiting participating schools in Florida’s Opportunity
Tax Credit Scholarship Program. Their program has shown significant achievement gainsfor thousands of low-income students. Therefore, the primary purpose of the meeting andtrip is educational.
3. What is the nature of the entity holding the meeting?
The hosting lobbyist principal is a North Carolina entity with IRC § 501(c)(3) status.
4. Is the lobbyist principal paying for the person’s attendance at the meeting also
sponsoring the meeting?
The hosting lobbyist principal is paying all related travel costs, including airfare andother necessary transportation, lodging, meals, and other incidental items of nominalvalue connected to the study trip for the participants who have been designated by non-
sponsors as “policymakers.”
3
5. What is the agenda of the meeting? What portions of the events scheduled includea tour, roundtable discussion, or other educational content? Would the meeting takeplace regardless of whether the invited designated individuals attend? Who are thespeakers? Are they independent experts in their field? What portion of the sessionsis held in absence of a meal or entertainment?
The meeting is a two-day study trip consisting of educational, meal, and travel time toand from school locations. All activities deemed to be entertainment are both incidentalto the principal agenda and purpose of the study trip. The educational time includes
acquiring specific information about successful schools in Florida’s scholarship programand what they are doing to meet individual student’s needs. In addition, the educational
content will include meeting with key Republican and Democratic leaders and stategroups that made the program possible.Many of the speakers on this trip are deemed experts in their fields, whether that is ingovernmental, public policy, or education issues. In addition, one of the purposes of themeeting is to have legislators participate in this trip, which is why the lobbyist principalpays for their trip-related costs and expenses. Furthermore, a significant portion of thetrip is held in the absence of a meal or entertainment.
6. Is the location of the meeting directly related to meeting educational content? Isthere a reason for holding the meeting in a location other than where the attendeeslive or work? Is it necessary to the educational purpose that an individual travel inconnection with the meeting? Is the location of the meeting otherwise integral to theeducational content of the meeting? Would an individual be capable of obtaining acomparable degree of educational information through means that would notrequire travel?
The trip is being held in another state (Florida). The state was selected for several
reasons, one of which is related to the state’s opportunity tax credit scholarship program.
There is emphasis on examining how the state has made educational progress through thedevelopment of their tax credit program that serves over 37,000 low-income children.Holding the trip in Florida is necessary to meet the educational goals set for the trip. Forexample, the trip involves visits and tours of the various scholarship programparticipating schools, and meetings with various leaders relating to the program. Anindividual would not be capable of obtaining a comparable degree of educationalinformation from other means.
7. Is the length of the educational meeting reasonably necessary to fulfill theeducational purpose of the trip?
The trip, including travel time to and from Florida, will begin on Wednesday and end onThursday. The amount of time related to education is reasonably necessary to fulfill theeducational requirements.
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