Closer Look: JCOPE’s Proposed “Source of Funding” Regulations

I took a quick look at a JCOPE’s proposed “source of funding” regulations in this post last week. I also noted that these rules must still go through the State Administrative Procedures Act (SAPA) approval process, meaning that they will not be finalized before late September, at the earliest.

The response to the proposed regulations was decidedly mixed.  The major issue that was raised was the date after which a lobbying group’s “source of funding” will have to be reported.

According to the original chapter, the language of Legislative Law 1-h(4) became effective on effective June 1, 2012.  However, June 1 does not coincide with the JCOPE lobbyist/client filing schedule.  So the Commission decided to make this new requirement effective with the July-Dec. 2012 Client Semi-annual filing, which is due in January 2013.

Gov. Cuomo was untroubled by the July 1 start date for the new mandate, instead focusing on the fact that New York State is the first state in the nation to require disclosure of their donors.  Common Cause/NY Executive Director Susan Lerner said that she is pleased with the proposed regulations.

JCOPE member Ravi Batra is not.  Commissioner Batra was the only member of the commission who did not support adoption of the proposed rules.   In an e-mail to reporters, he accused the other commissioners of illegally delaying enforcement of disclosure until January 2013, and of allowing donations from the last half of 2011 to remain shielded from public view. (He also suggested that if JCOPE does not improve, he will resign.)

While the reporting start date is curious, given the law’s effective date, my reading of the proposed rules is that they appear to go well beyond what the statute calls for in terms of disclosure.

JCOPE’s proposed definition of a “contribution” is “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.”

As I read it, the absence of the term “lobbying” in this sentence – as in “which is intended to fund, in whole or in part, the Client Filer’s lobbying activities” – means that JCOPE will require reporting of all funds provided to an entity that otherwise meets JCOPE’s criteria, not just funds intended to be used for lobbying.

So, to offer an example, if a large trade association spends 10% of its annual dues on lobbying activity (and otherwise meets the statutory criteria – spending over $50,000 in lobbying in the preceding 12 months or during threw calendar year and at least 3% of its total expenditures during that period were devoted to lobbying in New York), then (as I read JCOPE’s regulations), then that trade association will have to disclose all payments to it that exceed of $5,000.

In the proposed regulation’s “Intent and Purpose” section, it states “the Commission has sought the broadest determination possible of what must be disclosed pursuant to statute and as allowed by law.”  If my reading of the proposed regulation is correct, then this is a very broad construction of the statute.

If you have any concerns about this new regulation — regarding its scope, or any other issues I might have missed — feel free to reach out and let me know.

About Michael Fallon

To learn more about Michael Fallon, please visit his bio on Hinman Straub's website.
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