Government Relations

NPCC's Government Relations Committee meets monthly to consider, and where appropriate, comment on legislative and regulatory developments affecting New York's nonprofit sector. The Committee of approximately 40 individuals includes many of the most eminent lawyers in the field of nonprofit law. It interacts regularly with the Charities Bureau of the New York State Attorney General. In its work, the Committee seeks to promote trust in the sector by supporting proposals that foster accountability and transparency, and seeking, at the same time, to avoid the imposition of undue administrative burdens on nonprofits.

The following are some of the Committee's recent activities:

New York State: Prompt Contracting
The “Prompt Contracting” bill designed to strengthen the rights of nonprofits to timely contract payments as well as several other issues related to state contracts has been signed into law by Governor Eliot Spitzer.  It is expected to solve longstanding problems with the state contracting process that have plagued nonprofits for many years.  The legislation, S2616-B-A6018-A, closes loopholes in existing law passed 15 years ago to ensure that New York State agencies contract and fund nonprofit organizations in a timely manner.  The new law will help ensure that State contracts are paid on time; improve the processing of contracts; and ensure that nonprofits are adequately notified when a State agency does not intend to renew a contract. 

Now, state agencies will be required to process contract renewals within 90 days before the expiration of the contract.  While the previous law also required advance notification, there were no meaningful penalties when state agencies failed to comply.  Now, if an agency fails to notify contractors of their intent not to renew an existing contract in a timely manner, the contract will remain in effect for a full 90-day period beyond the actual date of notification, regardless of the formal end date of the contract period.  The legislation also prohibits state agencies from requiring that a nonprofit waive interest and penalties for a late contract renewal in order to receive the renewal, unless there are unusual circumstances.

Previous iterations of the Prompt Contracting bill were vetoed several times by then Governor Pataki.  The version just passed and signed by Governor Spitzer had NPCC’s full support.  (See A6018/S2616—Chap. 292 of Laws of 2007 or www.assembly.state.ny.us/leg/?bn= S02616&sh=t.)  

The law was supported by a coalition of organizations led by United Way of New York State that included UJA-Federation, Catholic Conference, Federation of Protestant Welfare Agencies, Human Services Council, Commission on Independent Colleges and Universities, Hospital Association of New York State, the YMCA, and NPCC.

As NPCC’s senior consultant for government relations, Jon Small, reported to New York Nonprofit Press, “This law has been sorely needed.  It should save nonprofits millions in administrative expenses – the indirect costs of dealing with contract uncertainty – and enable them to use that money in carrying out their missions.”  (August 2007)

Immediate Real Property Tax Exemption Law Enacted for New York City
NPCC is delighted to report that a bill we had sought for many years that permits nonprofits to get an immediate real property tax exemption when they buy real property in New York City from a for-profit has been passed by the legislature and signed into law by Governor Spitzer.  (A8578 S5764.)  Getting such a bill passed and signed has been a longstanding hope of NPCC and NPCC’s Government Relations Committee worked on it, literally, for many years.  Under the old law, the waiting period for an exemption to begin after such a purchase has been as long as 18 months.  The tax hit has often come as a rude surprise to a purchasing nonprofit.  The new law is effective immediately.  Mayor Bloomberg supported the bill.  (September 2007)

NYS:  Bill Imposing Real Property Transfer Tax On Nonprofits Not Passed 
A bill that would have imposed real property transfer tax on sales of real estate by a nonprofit to a for-profit went nowhere (A2028, no Senate counterpart).  This bill would also have required the nonprofit to “reimburse the state and/or a municipality for any capital funding, grants or financing received through a state or municipal agency or public benefit corporation within the ten years preceding such sale,” and to pay back any real property tax abatements the nonprofit received.  NPCC’s Government Relations Committee was opposed to the legislation. (September 2007)

Pension Protection Act Provisions & Nonprofits
— The Pension Reform Act (H.R. 4) signed into law in 2006 includes numerous changes in the way nonprofits and foundations conduct business.  The Act is long and complex.  A summary of those provisions that will affect many NPCC members can be found at www.npccny.org/info/gov_rel_10-06.htm.

— Members of the Government Relations Committee have provided comments to the IRS's request for comments on Donor Advised Funds and Type III Supporting Organizations.

Independent Sector Work on Senate Finance Committee Staff Proposals

— NPCC's Government Relations Committee is reviewing Independent Sector's Principles for Effective Practice (draft) which can be found at www.nonprofitpanel.org/selfreg.

— NPCC's Government Relations Committee released its views on the Panel's Final Report (published in July 2005).  Go to www.npccny.org/info/gov_rel_080105.htm to read their findings.

— On April 6, 2005 Independent Sector held a meeting to discuss the interim report that the Panel on the Nonprofit Sector released for the Senate Finance Committee.  Go to www.npccny.org/info/gov_rel_040605.htm to read about this meeting.

— On January 25, 2005, NPCC co-hosted a town-hall meeting with NYRAG to inform members about Independent Sector's Panel on the Nonprofit Sector.  Go to www.npccny.org/info/gov_rel_012505.htm for a summary of the meeting.

Senate Finance Committee Hearings

— June 2004: In late June, the Senate Finance Committee held hearings on problems in the nonprofit sector. NPCC's concern for our members is that in crafting proposals to get the bad guys, the Committee will not pay sufficient attention to burdens imposed on the good guys. NPCC submitted a statement urging that benefits be weighed against costs. To read that statement, go to www.npccny.org/info/gov_rel_062304.htm. As the Finance Committee progresses toward specific proposals, we will be submitting additional comments.

— July 2004: The Senate Finance Committee, headed by Senators Charles Grassley (R-IA) and Max Baucus (D-MT) has begun its process of drafting legislation for “Charity Oversight and Reform.” The Committee has produced a white paper entitled Tax Exempt Governance Proposals: Staff Discussion Draft. The PDF of this report is at http://finance.senate.gov/hearings/testimony/2004test/062204stfdis.pdf. In response to this paper, NPCC’s Government Relations Committee has submitted extensive comments on the draft legislation which can be read at www.npccny.org/info/gov_rel_071404.htm.

New York State

— NPCC's Government Relations Committee kept a watchful eye during the State's legislative session (ending August 2005).  To read more, go to www.npccny.org/info/gov_rel_080105b.htm.

— Visit www.npccny.org/info/gti10.htm to read the history of NPCC Government Relations Committee's response to New York State then-Attorney General Eliot Spitzer's proposal for a Sarbanes-Oxley law for nonprofit organizations.

State and City Lobbying Changes

— The Government Relations Committee has carefully monitored recent changes in the registration and reporting requirements for both the City and the State on lobbying matters. Go to www.npccny.org/info/adv4.htm to read more.