New York Codes, Rules and Regulations
Title 19 - DEPARTMENT OF STATE
Chapter XX - Joint Commission on Public Ethics
Part 938 - Source of Funding Regulations
Section 938.2 - Definitions. For purposes of this Part

Current through Register Vol. 44, No. 38, September 21, 2022

(a) Affiliate Relationship shall mean:

(1) Two or more persons whom the Client Filer has actual knowledge live in the same household.

(2) Two or more corporations, partnerships, organizations, or other entities that the Client Filer has actual knowledge or reason to know have any of the following relationships: parent/subsidiary; subsidiaries with the same corporate parent; national or regional organization and their local chapter(s); local chapters of the same national or regional organization.

(3) A sole proprietorship and its sole proprietor if the Client Filer knows or has reason to know of the relationship.

(4) Whether a Client Filer has "reason to know" of the relationships listed in paragraphs (2) and (3) of this subdivision is based on an examination of the totality of the facts and circumstances. If a reasonable person, looking at the all the facts and circumstances, would conclude that a Client Filer should know of the existence of one or more these relationships, then the "reason to know" standard has been satisfied.

(b) Client Filer shall mean:

(1) A Beneficial Client, as defined in section 3 of Part 943 of this Title, other than a Public Corporation; or

(2) Any lobbyist registered pursuant to Legislative Law § 1-e whose lobbying activity is performed on its own behalf and not pursuant to retention by a client. (Such a lobbyist is considered its own client for reporting purposes.)

(c) Client Semi-Annual Report shall mean the semi-annual reports filed with the Commission pursuant to Legislative Law § 1-j.

(d) Coalition shall have the meaning described in section 9 of Part 943 of this Title.

(e) Contribution shall mean any payment to, or for the benefit of, the Client Filer and which is intended to fund, in whole or in part, the Client Filer's activities or operations. Contribution shall include equity investments in limited liability companies, general partnerships, and corporations; provided, however, Contribution shall not include publicly traded stocks or shares. Contribution shall not mean:

(i) a payment in exchange for goods or services rendered or delivered directly to the individual or entity making the payment; and

(ii) a payment that:
(a) is earmarked and conditioned by the payor such that it may only be used for a specific purpose other than lobbying activity in New York; and

(b) is maintained in a segregated bank account solely for the specific purpose and unavailable for general operating expenses. For example, an organization that maintains a separate segregated bank account for a lobbying initiative in California need not report a payment earmarked by the payor for this initiative, provided however, that funds from this account may not be used for operating expenses or any other reason other than the California initiative.
(1) Records of such payments must be retained for a period of three years and may be requested by the Commission to verify qualification for this exclusion.

(2) To qualify for the exclusion in subparagraph (ii) above, it is not sufficient for a payor to restrict a payment from being used for lobbying in New York; the payor must earmark the payment for the specific purpose stated in (ii)(a).

(f) Expenditure Threshold consists of the following two requirements:

(1) The Client Filer has spent in excess of $15,000 in Reportable Compensation and/or Expenses for lobbying in New York State during the Expenditure Threshold Period; and

(2) The Client Filer's Reportable Compensation and Expenses constitute at least 3% of the Client Filer's Total Expenditures during the Expenditure Threshold Period.

A Client Filer who is a member of a Coalition must include all amounts it has contributed to the Coalition when determining whether such Client Filer has exceeded the Expenditure Threshold.

(g) Expenditure Threshold Period is determined according to the following:

(1) Twelve-Month Calculation: the 12-month period preceding and including the last day of the applicable client semi-annual reporting period.

(2) Calendar-Year Calculation: January 1st to the last day of the applicable client semiannual reporting period.

Any Client Filer that does not meet the Expenditure Threshold using the Twelve-Month Calculation must then determine whether it has met the Expenditure Threshold using the Calendar-Year Calculation, and if it has, then the Client Filer is deemed to have met the statutory Expenditure Threshold. To illustrate for the 2016 Client Semi-Annual Reports:

Client Semi-Annual Filing Date

Twelve-Month Calculation Dates

Calendar Year Calculation Dates

January 15, 2016 (covering

July 1, 2015 - December 31, 2015)

January 1, 2015 - December 31, 2015

January 1, 2015 - December 31, 2015

July 15, 2016 (covering January 1, 2016 - June 30, 2016)

July 1, 2015 - June 30, 2016

January 1, 2016 - June 30, 2016

(h) Reportable Amount of Contribution(s) shall mean, for each Contribution not specifically designated for lobbying in New York, the product of:

(1) the dollar amount of the Contribution; and

(2) Reportable Compensation and Expenses divided by Total Expenditures.

The Reportable Amount of Contribution shall also include, in addition to the amount yielded by this formula, any Contribution specifically designated for lobbying in New York. The Reportable Amount of Contribution shall not include any amounts contributed for membership dues, fees, or assessments.

(i) Reportable Compensation and Expenses: the phrase "reportable compensation and expenses" shall mean "compensation" and "expenses," devoted to lobbying in New York, as those terms are defined below:

(1) Compensation: shall have the same meaning as is in Legislative Law § 1-c(h), i.e. any salary, fee, gift, payment, benefit, loan, advance or any other thing of value paid, owed, given or promised to the lobbyist (retained or employed) by the Client Filer for lobbying but shall not include contributions reportable pursuant to article fourteen of the Election Law.

(2) Expenses:
(i) For any Client Filer who lobbies on its own behalf, the term "expenses" shall have the same meaning as in Legislative Law § 1-c(g), i.e., any expenditures incurred by or reimbursed to the employed or designated lobbyist for lobbying but shall not include contributions reportable pursuant to article fourteen of the election law.

(ii) For all other Client Filers, the term "expenses" shall mean any expenditure reimbursed to the lobbyist for lobbying, but shall not include contributions reportable pursuant to article fourteen of the Election Law.

(j) Responsible Party shall mean the Client Filer's Chief Administrative Officer or designee who is responsible for filing the Client Semi-Annual Reports and/or Source of Funding Disclosure with the Commission.

(k) Source shall mean any person, corporation, partnership, organization, or entity that makes a Contribution. A Source includes any persons, corporations, partnerships, organizations, or entities with an Affiliate Relationship. To determine if reporting is required pursuant to section 938.3 of this Part, a Client Filer shall aggregate the Contributions from each person, corporation, partnership, organization, or entity with an Affiliate Relationship. If such reporting is required, the Client Filer shall report, consistent with section 938.3 of this Part, Contributions from each person, corporation, partnership, organization, or entity with the Affiliate Relationship.

(l) Source of Funding Disclosure shall mean the section within the Client Semi-Annual Report completed by Client Filers who serve only as a Beneficial Client and, thus, are only responsible for the source of funding disclosure section of the Client Semi-Annual Report, as prescribed by subsection 943.9(h) of this Title.

(m) Total Expenditures shall mean the sum of any and all payments of cash or cash equivalents made in the ordinary course of business, or a charge against available funds in settlement of an obligation made in the ordinary course of business. Total expenditures also includes a promise to pay, or a promise of a payment or a transfer of anything of value made in the ordinary course of business for goods and services that have been provided or performed.

Amended, New York State Register May 21, 2014/Volume XXXVI, Issue 20, eff.5/21/2014

Amended New York State Register February 15, 2017/Volume XXXIX, Issue 07, eff. 2/15/2017

Amended New York State Register May 9, 2018/Volume XL, Issue 19, eff. 1/1/2019

Amended New York State Register February 10, 2021/Volume XLIII, Issue 06, eff. 2/10/2021

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