LAW-52-12-00013-RP Contents of Annual Financial Reports Filed with the Attorney General by Certain Nonprofits

4/17/13 N.Y. St. Reg. LAW-52-12-00013-RP

NEW YORK STATE REGISTER

VOLUME XXXV, ISSUE 16

April 17, 2013

RULE MAKING ACTIVITIES

DEPARTMENT OF LAW

REVISED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. LAW-52-12-00013-RP

Contents of Annual Financial Reports Filed with the Attorney General by Certain Nonprofits

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following revised rule:

Proposed Action:

Addition of sections 91.6, 91.5(c)(2)(iii) and 91.7(b)(2)(iv); amendment of section 91.3; and renumbering of sections 91.6-91.12 to sections 91.7-91.13 of Title 13 NYCRR.

Statutory authority:

Executive Law, section 177(1); Estates, Powers and Trusts Law, section 8-1.4(h)

Subject:

Contents of annual financial reports filed with the Attorney General by certain nonprofits.

Purpose:

To require certain nonprofits to disclose information regarding election advocacy to the Attorney General and the public.

Text of revised rule:

13 NYCRR Sections 91.6-91.12 are renumbered to sections 91.7-91.13.

A new section 91.6 is added to title 13 to read as follows:

91.6 Annual Disclosure of Electioneering Activities by Non-501(c)(3) Registrants

(a) Definitions. For purposes of this section:

(1) “Annual Financial Report” means any report filed pursuant to section 91.5 or 91.7 of this part.

(2) “Covered organization” means any organization that is: (i) registered or required to be registered with the Attorney General pursuant to Article 7-A of the Executive Law and/or Article 8 of the Estates, Powers and Trusts Law; and (ii) not prohibited by Internal Revenue Code section 501(c) from participating in, or intervening in, any political campaign on behalf of, or in opposition to, any candidate for public office.

(3) “Election” means any general, special, or primary election for federal, state or local office, or at which any proposition, referendum or other question is submitted to the voters in any state or any locality in the United States.

(4) “New York Election” means only those general, special, or primary elections conducted by a New York state or local government entity for New York state or local office, or any election at which any New York state or local constitutional amendment, proposition, referendum or other question is submitted to the voters.

(5) “Election related expenditure” means (i) any expenditure made, liability incurred, or contribution provided for express election advocacy or election targeted issue advocacy; or (ii) any other transfer of funds, assets, services or any other thing of value to any individual, group, association, corporation whether organized for profit or not-for-profit, labor union, political committee, political action committee, or any other entity for the purpose of supporting or engaging in express election advocacy or election targeted issue advocacy by the recipient or a third party.

(6) “Express election advocacy” means any communication made at any time that:

(i) contains words such as “vote,” “oppose,” “support,” “elect,” “defeat,” or “reject,” which call for the nomination, election or defeat of one or more clearly identified candidates, the election or defeat of one or more political parties, or the passage or defeat of one or more constitutional amendments, propositions, referenda or other questions submitted to voters at any election; or

(ii) refers to or depicts one or more clearly identified candidates, political parties, constitutional amendments, propositions, referenda or other questions submitted to the voters in a manner that is susceptible of no reasonable interpretation other than as a call for the nomination, election or defeat of such candidates in an election, the election or defeat of such political parties, or the passage or defeat of such constitutional amendments, propositions, referenda or other questions submitted to the voters in any election.

(7) “Election targeted issue advocacy”

(i) means any communication other than express election advocacy made within forty-five days before any primary election or ninety days before any general election that: (A) refers to one or more clearly identified candidates in that election; (B) depicts the name, image, likeness or voice of one or more clearly identified candidates in that election; or (C) refers to any clearly identified political party, constitutional amendment, proposition, referendum or other question submitted to the voters in that election;

(ii) does not mean a communication that is: (A) directed, sent or distributed by the covered organization to individuals who affirmatively consent to be members of the covered organization, contribute funds to the covered organization, or, pursuant to the covered organization's articles or bylaws, have the right to vote directly or indirectly for the election of directors or officers, or on changes to bylaws, disposition of all or substantially all of the covered organization’s assets or the merger or dissolution of the covered organization; or (B) for the purpose of promoting or staging any candidate debate, town hall or similar forum to which at least two candidates seeking the same office, or two proponents of differing positions on a referendum or question submitted to voters, are invited as participants, and which does not promote or advance one candidate or position over another.

(8) “Communication” means: (i) paid advertisements broadcast over radio, television, cable, or satellite; (ii) paid placement of content on the Internet or other electronic communication networks; (iii) paid advertisements published in a periodical or on a billboard; (iv) paid telephone communications to one thousand or more households; (v) mailings sent or distributed through the United States Postal Service or similar private mail carriers to five thousand or more recipients; or (vi) printed materials exceeding five thousand copies.

(9) “Covered donation” means any contribution, gift, loan, advance, or deposit of money or any thing of value made to a covered organization unless such donation is deposited into an account the funds of which are not used for making New York election related expenditures.

(b) Disclosure of Election Related Expenditures.

(1) The annual financial report filed by any covered organization shall include the amount and the percentage of total expenses during the reporting period that are election related expenditures.

(2) The annual financial report filed by any covered organization that has made New York election related expenditures in an aggregate amount or fair market value exceeding ten thousand dollars during the reporting period shall include an itemized schedule disclosing information related to each New York election related expenditure exceeding fifty dollars in value, unless the information is exempt from disclosure pursuant to paragraph d of this section. Such information shall include for each New York election related expenditure: (i) the amount or fair market value of any funds, services or assets provided, and any liabilities incurred; (ii) the date that such funds, services or assets were provided, and that any liabilities were incurred; (iii) the name and address of the recipients of the expenditure; and (iv) a clear description of the expenditure and its purpose, including but not limited to support for or opposition to a candidate, political party, referendum or other question put before the voters in an election.

(c) Disclosures of Donations Related to New York Elections.

(1) The annual financial report filed by a covered organization that has made New York election related expenditures in an aggregate amount or fair market value exceeding ten thousand dollars during the reporting period shall include an itemized schedule disclosing information related to each covered donation it has received during the reporting period, unless the information is exempt from disclosure pursuant to paragraph d of this section. Such information shall include: (i) the name and address of each donor who made covered donations in an aggregate amount of one thousand dollars or more during the reporting period; (ii) the employer of each such individual donor, if known to the covered organization; and (iii) the date and amount of each such covered donation.

(2) If a covered organization keeps one or more segregated bank accounts containing funds used solely for New York election related expenditures, and makes all of its New York election related expenditures from such accounts, then the annual financial report need only include information specified in the preceding subparagraph concerning donations deposited into such accounts.

(d) Exceptions for Disclosures to Multiple Agencies. The annual financial report filed by a covered organization is not required to include the information specified by subparagraph two of paragraph b of this section, or paragraph c of this section, if: (i) any law or rule requires that such information be disclosed to any other government agency that makes such information available to the public, and (ii) the covered organization is in compliance with the requirements of such law or rule at the time it files the annual financial report.

(e) Schedule to be Provided by the Attorney General. Upon adoption of this regulation, the Attorney General shall make available a schedule (“Electioneering Disclosure Schedule”) to the Annual Filing for Charitable Organizations and if necessary amend existing forms to allow covered organizations to make the disclosures required by this section.

(f) Guidance to be Provided by the Attorney General. Upon adoption of this regulation, the Attorney General shall make available to the public guidance concerning compliance with this rule.

(g) Public Disclosure. The Attorney General shall make information contained in the completed Electioneering Disclosure Schedule available to the public on the Attorney General’s website, except for:

(1) information related to any covered donation received prior to the effective date of this rule; and

(2) information the Attorney General deems exempt from disclosure pursuant to paragraph (h) of this section.

(h) Exemption from Public Disclosure.

(1) Notwithstanding paragraph (g) of this section, the Attorney General may, upon application by a donor or covered organization to be made in a form and manner prescribed by the Attorney General, grant an exemption and refrain from disclosing any information to the public related to any covered donation if the applicant shows that the covered organization’s primary activities involve areas of public concern that create a substantial likelihood that disclosure will cause undue harm, threats, harassment or reprisals to any person or organization.

(2) An application for such exemption shall be submitted no later than forty-five days prior to the due date for the applicable annual filing. The Attorney General will inform the applicant and may inform other persons or organizations to which the exemption would apply, in writing, whether the application for exemption has been granted or denied. Any denial issued by the Attorney General shall include a statement of findings and conclusions, and the reasons or basis for the denial.

(3) The submission of an application does not relieve the covered organization of its obligation to timely file annual financial reports, including an Electioneering Disclosure Schedule disclosing all donors for which the covered organization has not sought exemption.

(4) To the extent permitted by federal and state law, the Attorney General will exempt from public disclosure all materials submitted in support of an application for an exemption; provided that the Attorney General may disclose such materials to a court in response to any judicial subpoena or court order. The Attorney General may publicly disclose that a covered organization has submitted one or more applications for an exemption, or that one or more of a covered organization’s requests for an exemption has been granted or denied.

(i) Filing Deadlines and Extensions. Covered organizations shall annually file the Electioneering Disclosure Schedule by the fifteenth day of the fifth month after the organization’s accounting period ends. No covered organization may obtain any extension to file an Electioneering Disclosure Schedule, including any extension otherwise available under section 91.5(f)(3) of this chapter.

(j) Severability. If any provision in this section or the application of such provision to any persons or circumstances shall be held invalid, the validity of the remainder of the provisions and/or the applicability of such provisions to other persons or circumstances shall not be affected thereby.

Section 91.5(c)(2)(iii) is added to title 13 to read as follows:

Schedule EDS (Electioneering Disclosure Schedule) or a successor form is required for covered organizations that must file such form pursuant to section 91.6 of this part.

Section 91.7(b)(2)(iv) is added to title 13 to read as follows:

Schedule EDS (Electioneering Disclosure Schedule) or a successor form is required for covered organizations that must file such form pursuant to section 91.6 of this part.

The introductory paragraph to section 91.3 of title 13 is amended to read as follows:

Certain organizations are exempt from registration with the Attorney General. Unregistered organizations that are exempt from registration are not required to submit an exemption request to the Attorney General, except that an organization that receives a failure to register notice from the Attorney General but believes it is exempt from registration must claim an exemption from registration. Organizations that wish to request exemption from registration under Article 7-A or the EPTL or both, shall claim such exemption by completing the appropriate registration, amended registration or reregistration statement form, defined in sections 91.4, 91.[7]8 and 91.[8]9, respectively, of this Chapter, or a successor form, including the exemption request section of such form, and attaching Schedule E (Request for Exemption for Charitable Organizations) or a successor form along with all required attachments listed in both the registration and exemption request forms.

Revised rule compared with proposed rule:

Substantial revisions were made in section 91.6(a)(7), (8), (9), (b)(2), (c)(1), (g), (h)(1) and (i).

Text of revised proposed rule and any required statements and analyses may be obtained from

Gregory M. Krakower, Counselor to the Attorney General, Department of Law, 120 Broadway NY, NY 10271, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

30 days after publication of this notice.

Revised Regulatory Impact Statement

1. Statutory Authority. Article 7-A of the Executive Law (hereinafter “Article 7-A”) and Article 8 of the Estates, Powers & Trusts Law (hereinafter “EPTL”) require certain organizations and trusts to file annual financial reports and other disclosures with the Attorney General, and require the Attorney General to establish and maintain a register of such disclosures. Section 177(1) of the Executive Law and section 8-1.4(h) of the EPTL empower the Attorney General to make rules and regulations necessary for the administration of these provisions.

2. Legislative Objectives. The rule requires certain organizations that are registered with the Attorney General and that may participate or intervene in political campaigns (hereinafter “covered organizations”) to disclose information concerning expenditures and donations related to such election related activity in annual financial reports that are submitted to the Attorney General. The rule does not apply to organizations exempt from taxation under section 501(c)(3) of the U.S. Internal Revenue Code. The rule aims to, among other things: enhance detection and deterrence of illegal conduct by covered organizations and related individuals; inform and protect prospective donors to such organizations; protect the integrity and reputation of nonprofit organizations that do not intervene in political campaigns; maintain the anonymity of donors to covered organizations if their donations are restricted to purposes unrelated to influencing New York elections; protect the public interest in transparent financing of state and local elections; shield donors to covered organizations that intervene in political campaigns from public disclosure if there is a substantial risk of undue harm, threats, harassment or reprisal; and ensure that there is clear guidance to covered organizations and related individuals concerning compliance.

3. Needs and Benefits. New York donors should know how nonprofit organizations that solicit donations from them are likely to use those funds. However, covered organizations, many of which enjoy tax-exempt status on the basis that they act to promote social welfare, may utilize funds solicited from the public to engage in direct and indirect election related activities. Donors to nonprofit organizations may be unaware that their donations to a charitable, social welfare or similar organization can be used to influence elections. Furthermore, such organizations can solicit funds without disclosing critical information about the political nature of their expenditures or sources of funding. There is substantial evidence in the public record that some nonprofit organizations are increasingly raising and spending funds to influence elections. The lack of transparency in this area creates the potential for covered organizations and related individuals to: mislead donors about the uses of their donations; violate tax and other laws without detection by regulators or law enforcement; and evade state and local campaign finance laws in a manner contrary to the public interest. The rule will, among other things:

(A) Better enable regulators to enforce tax and other laws and rules that restrict election related activities and other political activities by covered organizations, and deter illegal conduct;

(B) Protect donors from fraudulent, false or misleading solicitations by covered organizations;

(C) Protect the integrity and reputation of charities and other nonprofits that refrain from impermissible or excessive election related activity;

(D) Assist regulators in ensuring that charities, including organizations exempt from taxation pursuant to section 501(c)(3) of the U.S. Internal Revenue Code, do not illegally transfer assets to covered organizations to be used for election related activity, and deter such illegal conduct;

(E) Inform potential donors that contributions to covered organizations may be used to advance particular outcomes in elections, and provide relevant information to allow donors to take into account the political goals, interests, and activities of the organization and related individuals when contributing or responding to a solicitation;

(F) Protect the public interest in transparency in the electoral process by disclosing contributions that covered organizations transfer directly to candidates for elective office in New York, or are otherwise used to influence New York state and local elections;

(G) Maintain the anonymity of donors to covered organizations if their donations are restricted to purposes unrelated to influencing New York state and local elections;

(H) Protect donors to covered organizations from disclosure if there is a substantial risk that donors will be unduly harmed by such disclosure; and

(I) Provide clear guidance to covered organizations and related individuals concerning compliance.

4. Costs. Covered organizations that do not engage in election related activity will face de minimis costs associated with the rule. Covered organizations that choose to devote over $10,000 of their expenditures in any fiscal year to influencing New York state and local elections by engaging in either express election advocacy or election targeted issue advocacy, and that are not otherwise required to disclose those activities to other state or local agencies, might bear small costs associated with the tracking and accounting of funds raised and spent for purposes related to such advocacy. Some covered organizations that engage in election advocacy may choose to deposit donations available for election related activities into a segregated bank account or establish a separate political action committee to avoid disclosure of donors whose funds are not used for New York election related purposes. Such measures are not required by the rule but could entail small costs if taken by covered organizations that engage in election related activity. The Department of Law will also incur de minimis costs associated with processing filings of the new disclosure schedule by covered organizations, and with reviewing and making determinations concerning any applications for exemption from disclosure, as provided in the rule.

5. Paperwork. As part of their existing annual filing obligations, covered organizations will have to indicate what portion of expenditures were spent on election related activities, and covered organizations that spend at least $10,000 in a fiscal year to influence state or local elections in New York will be required to disclose itemized information concerning such election related expenditures and donations, unless they have disclosed this information to another government agency that makes the information publicly available.

6. Local Government Mandates. None.

7. Duplications. The rule has been drafted to coordinate with existing state and federal laws concerning disclosure of expenditures and contributions related to election related activities. Accordingly, the rule does not require a covered organization to disclose itemized information related to donations and expenditures that is disclosed to other government agencies and made publicly available.

8. Alternatives. (A) $10,000 Expenditure Threshold. The Department of Law considered thresholds both lower and higher than $10,000 in a year on election related expenditures to trigger additional disclosure under the rule. While establishing a threshold lower than $10,000 would provide benefits with respect to protecting donors from fraudulent solicitations, law enforcement functions, and transparency in New York state and local elections, the Department of Law determined that the added costs to organizations that engage in this level of election related activity outweighed these benefits. The Department of Law rejected establishing a threshold higher than $10,000, because this could reduce benefits the rule is designed to promote with respect to, among other things, law enforcement, fraud reduction, integrity of nonprofits, and transparency. (B) $1,000 Contribution Threshold. The Department of Law considered and rejected alternatives to the $1,000 contribution threshold at or above which a covered organization might have to disclose information concerning a specific donor. The Department of Law, in response to public comments, rejected a $100 threshold in the revised rule as unduly burdensome relative to the benefits to be achieved by this rule. A $1,000 threshold is less burdensome on covered organizations and donors while still advancing the goals of the rule. Additionally, the $1,000 amount is consistent with the contribution disclosure threshold required by the New York City Campaign Finance Board’s Independent Expenditure Regulations, and with certain pre-election reports required to be filed with the Federal Election Commission in connection with federal elections. (C) Application to federal elections. The Department of Law considered applying the rule’s itemized disclosure requirements to expenditures and donations in connection with federal campaigns but chose not to address this issue. (D) Disclosure of election targeted issue advocacy by a covered organizations to its members. The prior proposed rule did not exclude communications by a covered organization to its members from the definition of "election targeted issue advocacy." The Department of Law determined in response to comments that this would have imposed burdens on covered organizations unnecessary to achieve the goals of the rule. (E) Granting extensions to file the Electioneering Disclosure Schedule. The granting of extensions otherwise available in connection with the filing of other portions of annual reports would reduce the benefits sought to be achieved by the rule.

9. Federal Standards. Federal tax law requires tax-exempt nonprofit organizations to report certain information concerning expenses, donations and donors to the Internal Revenue Service, and federal campaign law requires disclosures of certain federal election related expenditures and donors to the Federal Election Commission. EPTL article 8, Executive Law article 7-A, and existing regulations require nonprofit organizations, regardless of tax exempt status, that solicit $25,000 or use a professional fundraiser in New York to register with the Attorney General and file annual financial reports. For such organizations that are allowed under federal and state tax law to influence elections, the proposed rule requires their annual reports to indicate the amount and percentage of the organization’s revenue spent on influencing elections. For such organizations that spend $10,000 or more in a fiscal year to influence New York state and local elections, the proposed rule requires their annual financial reports to include information concerning certain expenditures and donations relating to these elections. However, in order to avoid burdensome and unnecessary duplication and multiple filings, the rule does not require the annual financial reports to include specific information related to New York state or local elections that is disclosed to any other agency and made available to the public. The rule requires these additional disclosures, because, while federal law requires such organizations to publicly disclose certain types of expenditures and donations relating to federal elections, it does not require a statement of the percentage of expenses used to influence elections, or any disclosures relating to New York state or local elections. And to the extent federal law requires tax-exempt organizations to disclose the total amount of certain election related expenditures, it defines election related expenditures in a manner that leaves donors and regulators in the dark about nonprofit activity that could run afoul of New York state tax or charities law, or federal tax law, or that could otherwise constitute deceptive solicitations or practices. The rule accordingly requires these additional disclosures in order to, among other things: help regulators identify when a covered organization might be primarily engaged in influencing elections and thus in violation of federal tax law, state tax law, and other New York state laws; inform donors about election related activities of covered organizations; deter and detect fraudulent solicitations of funds by covered organizations; and support the public’s interest in transparency in regard to nonprofits and elections.

10. Compliance Schedule. Prior to filing annual financial reports with the Attorney General pursuant to Article 7-A and/or the EPTL for the fiscal year beginning on or after the effective date of the rule, covered organizations that made election related expenditures in excess of $10,000 during that year must compile the information necessary to make the required disclosures. Covered organizations shall annually file the Electioneering Disclosure Schedule by the fifteenth day of the fifth month after the organization’s accounting period ends. No covered organization may obtain any extension to file an Electioneering Disclosure Schedule, including any extension otherwise available under section 91.5(f)(3) of this chapter. Covered organizations wishing to identify and deposit covered donations into a segregated bank account to prevent disclosure of donors who prohibit their donations from being used for election related expenditures will need to open and begin utilizing such segregated accounts if they do not use them already.

Revised Regulatory Flexibility Analysis and Rural Area Flexibility Analysis

Changes made to the last published rule do not necessitate revision to the previously published Regulatory Flexibility Analysis and Rural Area Flexibility Analysis.

Assessment of Public Comment

A Notice of Proposed Rule Making was published in the State Register on December 26, 2012. The Department of Law convened four hearings on the regulations throughout the state, heard oral testimony from over 20 witnesses, and received thousands of written comments. The Department of Law reviewed and evaluated all comments that it received. The vast majority of written comments received by the Department of Law expressed support for the regulations as proposed with no changes. Some witnesses also expressed support for the regulations as written, including members of the State Assembly and State Senate, as well as local elected officials. Some witnesses suggested changes to the regulations.

While the Department of Law addressed many of the stated concerns in the proposed revisions, some comments were determined to be contrary to the goals of the proposed rulemaking. Among these were comments objecting to the underlying concept of the regulations, or portions thereof, stating that the proposed regulations or portions thereof were unconstitutional. The Department of Law rejected these comments because the regulations, as both originally proposed and as herein revised, fully comport with federal and state law.

Relatedly, some comments urged the removal from the rule of "election targeted issue advocacy" in its entirety. They argued that only communications “susceptible of no reasonable interpretation other than as a call for the nomination, election or defeat” should trigger the rule's disclosure requirements. In addition, comments suggested that disclosure of coordinated election related expenditures by the rule would more narrowly tailor the rule and still achieve its purposes. These comments were rejected as neither constitutionally required nor sufficient to advance the legitimate goals of the rule.

Most comments were generally supportive of the regulations while suggesting that the Department of Law narrow their scope to reduce administrative or disclosure burdens on covered organizations and donors. For instance, organizations expressed concern that the scope of “election targeted issue advocacy” was too broad and would capture communications that did not advance the regulations’ goals. In particular, they argued that: (a) the 180-day window was too long, (b) any communications between a covered organization and its members should be exempt, (c) communications from bona fide media outlets should be exempt, and (d) communications regarding candidate fora, debates and town hall meetings should be exempt. In response, the Department of Law accepted these suggestions where doing so did not compromise the goals of the regulations. Accordingly, the Department of Law has: shortened the election targeted issue advocacy window to 90 days before a general election and 45 days before a primary election; exempted communications (other than express advocacy) directed by an organization to its members; and exempted some communications (other than express advocacy) promoting candidate fora, debates, and town hall meetings. However, the Department of Law rejected the comments seeking a “media exception” as it appeared prone to potential abuse and as neither any witness nor the Department of Law could identify a covered organization that would qualify as bona fide media outlet.

Another set of comments sought to change the various dollar amounts that relate to the rule's requirements for covered organizations to disclose or itemize certain information. These included: (a) increasing the $10,000 election related expenditure threshold in section 91.6(b)(2); (b) creating in section 91.6(b)(2) a separate dollar threshold for a covered organization’s federal, state, and local expenditures, such that each expenditure category would have its own dollar threshold triggering itemized disclosure requirements; (c) exempting from itemization under section 91.6(b)(2) de minimis election related expenditures; (d) raising the annual threshold of $100 in covered donations to trigger itemized donor disclosure under section 91.6(c)(1); (e) linking the annual threshold for covered donations to a percentage of overall expenditures of the covered organization. The Department of Law accepted those comments that would reduce burdens on covered organizations without compromising the regulations’ legitimate goals or creating unnecessary complexity in the regulatory regime. For these reasons, the proposed revisions the Department of Law: did not increase the threshold for requiring itemized disclosure of election related expenditures; did not create separate thresholds for federal, state and local election related expenditures; exempted election related expenditures below $50 from having to be itemized; raised the annual threshold to $1000 in covered donations, but did not link this amount to the expenditures of the covered organization.

Some comments sought clarifications of certain provisions of the regulations. For instance, comments sought to clarify the requirement that donor employer information be disclosed when “reasonably available” to the organization. In response, the Department of Law has revised paragraph (c)(1) to require the disclosure of individual employer information only if such information is known to the covered organization. Comments also sought clarification regarding the meaning and purpose of section (g)(1), exempting from public disclosure information "exempt from disclosure pursuant to any state or federal law.” The revised rule no longer contains that provision. Comments also sought to clarify that mailings under section 91.6(a)(8)(v) include only those communications “sent through the United States Postal Service or similar private mail carriers." The Department of Law adopted this suggestion.

Several comments expressed concerns over the standard of proof applied to applicants seeking a waiver from disclosure of donor information where disclosure would cause harm, harassment, or reprisal. These comments stated that the original “clear and convincing” evidence standard was too severe to allow adequate protection of such applicants. The Department of Law accepts this comment and has revised the proposed standard in paragraph (h)(1) of the rule so that a donor or a covered organization only has to demonstrate that its primary activities involve areas of public concern that create a "substantial likelihood" that disclosure will cause undue harm, threats, harassment or reprisals to any person or organization.

Some comments suggested expansion of the proposed regulations’ scope, specifically that the Department of Law apply the rule's requirement to disclose and itemize election related expenditures and donation information based on a covered organizations' election advocacy in state or local elections in other states. The Department of Law rejected revising the rule in this manner, because it would produce a rule too expansive in scope and too burdensome on covered organizations in relation to the benefits sought by the rule.

Other comments suggested revising the rule to require covered organizations to produce election related disclosures based on the dates of elections rather than on annual reporting cycles. These comments were rejected as conflicting with state law.

Finally, some comments requested extending the effective date of the regulations to allow organizations time to implement compliance measures. Because of the extensive comment period for the proposed rule and the additional time for comment for the proposed revisions, no extended effective date is required. In addition, the Department of Law added a new paragraph (i) to the rule, which precludes the granting of extensions to file the Election Disclosure Schedule. Allowing extensions would reduce the benefits of the rule by making information on covered organizations' election related activities available up to ten and a half months after the close of the fiscal year.

The full Assessment of Comments is available on the Attorney General’s website at www.ag.ny.gov.