PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Action taken:
Repeal of section 6200.10; and addition of new section 6200.10 to Title 9 NYCRR.
Statutory authority:
L. 2014, ch. 55
Finding of necessity for emergency rule:
Preservation of general welfare.
Specific reasons underlying the finding of necessity:
The Commissioners determined that it is necessary for the preservation of the general welfare that this amendment be adopted on an emergency basis as authorized by section 202(6) of the State Administrative Procedure Act, effective immediately upon filing with the Department of State. This amendment is adopted as an emergency measure because time is of the essence and to adopt the regulation in the normal course of business would be contrary to the public interest as a necessary change in the agency’s regulations would not be effective for the June 1, 2014 effective date.
The General Government Budget Bill (Chapter 55 of the laws of 2014) created the new independent expenditure disclosure requirements.
Subject:
Independent Expenditure Disclosure.
Purpose:
The purpose of this law is to set forth the requirements for Independent Expenditure Committees to disclose financial activity.
Substance of emergency rule:
Chapter 55 of the Laws of 2014 increased the disclosure and reporting requirements for independent expenditure committees. The purpose of this regulation is to set forth the requirements to achieve compliance of reporting and disclosure requirements by Independent Expenditure Committees.
This notice is intended
to serve only as an emergency adoption, to be valid for 90 days or less. This rule expires April 7, 2015.
Text of rule and any required statements and analyses may be obtained from:
Cheryl Couser, New York State Board of Elections, 40 N. Pearl Street, Suite 5, Albany, NY 12207, (518) 474-2063, email: Cheryl.Couser@elections.ny.gov
Regulatory Impact Statement
1. Statutory authority: Chapter 55 of the Laws of 2014.
2. Legislative objectives: The SFY 2014-2015 New York State Budget set forth new requirements for the increased disclosure of Independent Expenditure activity.
3. Needs and benefits: The New York State Election Law mandates how financial activity, including independent expenditures, is to be disclosed. Article 14 of the Election law sets forth the requirement that independent expenditures be disclosed through the filing of campaign financial disclosure reports.
Chapter 55 of the Laws of 2014 set forth definitions on what an independent expenditure is and how they are to be disclosed in order to promote public transparency of political activity. The effective date of this law was June 1, 2014.
4. Costs: Regulated parties should incur minimal costs for additional compliance requirements. Those entities that engage in certain independent expenditure activities have been required to register and report with the New York State Board of Elections. Chapter 55 of the Laws of 2014 requires an increased level of record keeping and reporting.
5. Local government mandates: There are no additional responsibilities imposed by this rule upon any county, city, town, village, school district, fire district or other special district.
6. Paperwork: This rule requires Committees to make additional electronic disclosures for any contribution received over $1,000 or any expenditure made over $5,000 within certain set time frames. This could include 24 hour disclosures of activity or weekly disclosure of such activity.
In addition, for any Independent Expenditure communication which cost more than $1,000 in the aggregate are required to include attribution on the communication. Such attribution would include the name of the person who paid for the Independent Expenditure and a statement that the communication was not expressly authorized or requested by any candidate or by any candidate’s political committee or its agents.
Lastly, a copy of all political communications paid for by an Independent Expenditure Committee must be submitted to the NYSBOE.
7. Duplication: The Federal Elections Commission and the New York City Campaign Finance Board have other legal requirements that may duplicate, overlap or conflict with the rule. At the time of publication, the Board has not undertaken efforts to resolve or minimize the impact of any duplication, overlap or conflict on regulated persons, including but not limited to seeking waivers or amendments of or exemptions from such other rules or legal requirements, or entering into a memorandum of understanding or other agreement regarding same.
8. Alternatives: As the provisions of this law were enacted as part of the SFY 2014-15 budget, the Board did not consider alternative proposals. However, the Board did request public comment on the proposed rule on its website since May 2014. Public comment is still being accepted.
9. Federal standards: Not applicable.
10. Compliance schedule: This provision of law was effective June 1, 2014. NYSBOE provided several webinars in May and provided guidance materials via our website to enable regulated persons to achieve compliance with the rule.
Regulatory Flexibility Analysis
1. Effect of rule: There is no impact on local governments due to this rule. This rule will have a minimal impact on small businesses. Should a small business engage in independent expenditures, they would already be required to register and report activity to the Board.
2. Compliance requirements: If a small business were to engage in independent expenditures, they would have to register with the NYSBOE as a political committee. In addition, they would have to maintain books of related financial activity and make required disclosures to the Board of such activity. This rule does not impact local government.
3. Professional services: A small business that engages in independent expenditures may acquire accounting services to maintain and report activity to comply with this rule.
4. Compliance costs: It is unclear as to the initial capital costs that will be incurred by a regulated business or industry to comply with the rule. A regulated business may hire a staff accountant or services to comply.
5. Economic and technological feasibility: Our assessment of the economic and technological feasibility of compliance with such rule by small businesses and local governments would be that a computer is necessary to make required disclosures.
6. Minimizing adverse impact: The rule was not designed to minimize any adverse economic impact the rule may have on small businesses. There is no impact on local governments.
7. Small business and local government participation: Although this is an emergency rule, the NYSBOE has solicited and will continue to receive and consider public comment. This would include comments that may suggest alternatives to minimize the impact on small businesses.
8. (IF APPLICABLE) For rules that either establish or modify a violation or penalties associated with a violation: The rule text does not include a cure period or other opportunity for ameliorative action, the successful completion of which will prevent the imposition of penalties on the party or parties subject to enforcement, as the underlying statute, Chapter 55 of the Laws of 2014, did not authorize such a cure period.
9. (IF APPLICABLE) Initial review of the rule, pursuant to SAPA § 207 as amended by L. 2012,ch. 462: Not applicable.
Rural Area Flexibility Analysis
1. Types and estimated numbers of rural areas: This rule has a statewide impact. Any entity which engages in independent expenditure activity, over a $1,000 threshold, will have to register and report to the NYSBOE. This rule does not impact local government.
2. Reporting, recordkeeping and other compliance requirements; and professional services: Entities that engage in independent expenditures activity will have to open and maintain a bank account, maintain books for a period of five years, and make a variety of disclosure reports depending on their activity. Disclosure reports range from 24 hour disclosures, weekly disclosures, periodic and election cycle disclosure reports, as applicable. Accounting services may be needed to comply although many entities will absorb this function in house. A computer is needed to comply with disclosure requirements of this rule.
3. Costs: Undetermined.
4. Minimizing adverse impact: This rule was not designed to minimize any adverse impact on rural areas, however, only entities that engage in such activity are captured.
5. Rural area participation: NYSBOE has solicited and is accepting public comment on for impacted entities to participate in the rule making process to minimize cost or complexity.
6. (IF APPLICABLE) Initial review of the rule, pursuant to SAPA § 207 as amended by L. 2012,ch. 462: Not Applicable.
Job Impact Statement
1. Nature of impact: This rule should have a minimal impact on jobs as it amends existing disclosure requirements for independent expenditures by political committees. Prior to this rule, Committees have had to register and disclose independent expenditure activity with the Board.
2. Categories and numbers affected: This rule will impact Committees which engage in independent expenditure activity. It may create employment opportunities due to increased recording keeping and reporting requirements. Approximate numbers of employment opportunities have not been determined.
3. Regions of adverse impact: This rule has a statewide impact but would not have an adverse impact on jobs or employment opportunities.
4. Minimizing adverse impact: The Board has not taken any measures to minimize adverse impacts on existing jobs or to promote the development of new employment opportunities. The Board has not determined that this rule would have an adverse impact on jobs.
5. (IF APPLICABLE) Self-employment opportunities: Not applicable.
6. (IF APPLICABLE) Initial review of the rule, pursuant to SAPA § 207 as amended by L. 2012, ch. 462: Not applicable.
Assessment of Public Comment
The New York State Board of Elections has received public comment from the following:
