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Signed Into Law
Signed June 20, 2025Effective 2025-09-01
SB2781

Regular Session

Relating to the imposition of civil penalties for certain violations with respect to political contributions and expenditures made by certain persons who engage in lobbying activities.

Government Affairs & Regulatory Compliance Analysis

SB2781: Government Affairs Overview

SB2781 introduces aggressive strict liability financial penalties for registered lobbyists who also maintain candidate/officeholder accounts. Effective September 1, 2025, the law imposes civil penalties of up to double (2x) the amount of prohibited contributions or expenditures, drastically increasing the financial risk for firms employing "dual-hatted" individuals who fail to segregate their lobbying and campaign finance activities.

Sen. Brian Birdwell·Senate Bill·Regular Session

Moderate
Low Cost
Effective:2025-09-01
Enforcing Agencies

Texas Ethics Commission

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SB2781
Moderate
Relating to the imposition of civil penalties for certain violations with respect to political contributions and expenditures made by certain persons ...
Moderate Compliance Urgency
Requires near-term attention
Cost Impact
Low
Effective
2025-09-01
Enforcing Agencies
Texas Ethics Commission
Primary Author: Sen. Brian Birdwell
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: September 1, 2025
  • Compliance Deadline: August 15, 2025 (Internal controls must be active prior to the effective date to prevent day-one violations).
  • Agency Rulemaking: The Texas Ethics Commission (TEC) is not explicitly mandated to issue new rules by a specific date, but we anticipate advisory opinions defining "knowingly" and penalty calculations will emerge post-enforcement. The period between Sept 1, 2025, and the first major TEC ruling constitutes a high-risk regulatory gray zone.

Immediate Action Plan

  • 1. Audit Personnel: Immediately identify all registered lobbyists on your payroll who currently hold office or have an active Campaign Treasurer Appointment.
  • 2. Segregate Funds: Ensure these individuals have distinct banking for personal campaign funds vs. corporate/PAC funds, with zero commingling or transfers.
  • 3. Update Handbooks: Insert a policy explicitly forbidding registered lobbyists from using their candidate accounts to contribute to other candidates or PACs.
  • 4. Review Insurance: Consult your broker regarding D&O coverage; confirm whether civil penalties arising from Election Code violations are excluded from your policy.

Operational Changes Required

Contracts

  • Lobbying Engagement Letters: Must be amended to include indemnification clauses. External lobbyists must warrant compliance with Election Code Sec. 253.006 and 253.007; if their personal campaign finance violations trigger a probe or penalty against your association, they must bear the cost.
  • Employment Agreements: For in-house Government Affairs Directors who also hold public office, define a violation of SB2781 as "Cause" for termination to protect the organization from reputational and financial fallout.

Hiring/Training

  • "Revolving Door" Screening: HR and Legal must implement a mandatory 2-year contribution history audit for all new lobbyist hires. If a candidate has made restricted contributions in the last 24 months, they are statutorily barred from lobbying; hiring them exposes the firm to penalties based on their past financial activity.
  • Firewall Training: Mandatory training for any staffer with a Campaign Treasurer Appointment. They must understand that funds cannot move from their personal campaign account to *any* other political entity while they are registered lobbyists.

Reporting & Record-Keeping

  • Pre-Expenditure Authorization Log: Implement a "Stop-Check" workflow. No registered lobbyist may authorize a check from their personal campaign account without a documented compliance review confirming the recipient is not a restricted candidate or committee.
  • 24-Month Lookback Ledger: Maintain a rolling log of all political contributions made by your lobbyists. This data is required to calculate potential liability exposure under Sec. 253.007.

Fees & Costs

  • No New Filing Fees: There are no new administrative fees for registration.
  • Penalty Exposure: The cost impact is punitive. Penalties are uncapped in total dollar amount, calculated as 200% of the prohibited transaction or 200% of *all* contributions made in the preceding two years, depending on the violation.

Strategic Ambiguities & Considerations

  • Calculation of "All" Contributions: Section 253.007 penalizes lobbying while restricted by fining 2x "all political contributions... made... in the two years preceding." The text does not specify if this multiplier applies only to *prohibited* contributions or the *total sum* of all contributions (compliant and non-compliant). Until TEC clarifies, businesses must assume the worst-case scenario: the penalty base is the total historical spend.
  • Definition of "Activities": The law penalizes engaging in "lobbying activities" while restricted. It is unclear if a single email or phone call triggers the full penalty, or if it requires a threshold of time/expenditure.

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JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

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Legislative Timeline

This bill's path through the Texas Legislature

Filed
Mar 14, 2025
Passed Senate
May 8, 2025
Passed House
May 28, 2025
Signed
Jun 20, 2025
Effective
Sep 1, 2025
TopicsCivil Remedies & LiabilitiesElectionsElections--campaign FinancingEthicsLobbyists & LobbyingPolitical Contributions
03

Senate Authors

Sen. Brian BirdwellRepublican · Primary Author
Coauthors (1)

House Sponsor

Rep. Matthew ShaheenRepublican · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

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Quick Reference

Frequently Asked Questions

Common questions about SB2781

Q

What does Texas SB2781 do?

SB2781 introduces aggressive strict liability financial penalties for registered lobbyists who also maintain candidate/officeholder accounts. Effective September 1, 2025, the law imposes civil penalties of up to double (2x) the amount of prohibited contributions or expenditures, drastically increasing the financial risk for firms employing "dual-hatted" individuals who fail to segregate their lobbying and campaign finance activities.

Q

Who authored SB2781?

SB2781 was authored by Texas Senator Brian Birdwell during the Regular Session.

Q

When was SB2781 signed into law?

SB2781 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce SB2781?

SB2781 is enforced by Texas Ethics Commission.

Q

How significant are the changes in SB2781?

The regulatory priority for SB2781 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SB2781?

The cost impact of SB2781 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does SB2781 address?

SB2781 addresses topics including civil remedies & liabilities, elections, elections--campaign financing, ethics and lobbyists & lobbying.

Q

What are the key dates for SB2781?

Key dates for SB2781: Effective date is 2025-09-01. Consult with legal counsel regarding applicability.

Q

What are the penalties under SB2781?

SB2781 establishes the following penalties: civil penalty of Not to exceed 2x the amount of the prohibited contribution or expenditure for Registered lobbyists making political contributions to other candidates/committees using funds from their own candidate/officeholder accounts (Sec. 253.006); civil penalty of Not to exceed 2x the amount of all political contributions made in the preceding two years for Engaging in lobbying activities while under the two-year 'revolving door' ban triggered by making campaign contributions (Sec. 253.007). Consult with legal counsel for specific applicability to your situation.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026