Government Relations Council Updates
NPCC's Government Relations Council meets monthly to consider, and where appropriate, comment on legislative and regulatory developments affecting New York's nonprofit sector. The Committee of approximately 100 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.
Nonprofit Revitalization Act
The issue: the Nonprofit Revitalization Act of 2013 provided for sweeping changes in regulations governing nonprofits incorporated or doing business in New York. As of December 2015, Governor Cuomo signed into law amendments to the New York nonprofit corporation law in order to further implement and address any deficiencies present in the NPRA. However, not all the amendments proposed by nonprofit sector advocates were included.
Our position: NPCC has been active in a working group which submitted a white paper making recommendations to the NPRA's legislative sponsors. We will continue to meet as part of the working group in order to consider a strategy to have our concerns met, either in law or by Attorney General Guidance.
Executive Order 38 – Executive Compensation
The issue: Governor Cuomo's Executive Order #38 "prevent(s) public funds from being diverted to excessive compensation and unnecessary administrative costs, and... ensure(s) that taxpayer dollars are being used to help New Yorkers in need" (Governor Andrew Cuomo, Executive Order #38).
Our position: The Government Relations Council is monitoring the impact of the court case (Agencies for Children’s Therapy Services, Inc. v. New York State Department of Health) resolving a difference in implementation between Nassau and Suffolk jurisdictions. There are other cases pending in New York State, but they are not as procedurally advanced as the ACTS case. Once there is clarity in New York as to the constitutional status of the Executive Order, we will raise awareness and provide guidance to the sector.
Status: The court recently found in favor of governor, overturning a lower court decision. There is currently an interim stay on this decision, so nonprofits do not yet have to comply with the Order. The Court of Appeals has decided that it will hear the case.
Joint Commission on Public Ethics (JCOPE) Advisory Opinion 1601
The issue: JCOPE issued an advisory opinion which is vague around lobbying practices, including what constitutes lobbying, whether social media use constitutes lobbying, and who is required to register as a lobbyist.
Our position: The Government Relations Council is participating in roundtables and discussions to push back against this controversial JCOPE advisory opinion, and to bring more clarity regarding what and whom it governs.
Status: The Government Relations Council participated in a roundtable at the end of February 2016.
Federal 2016-17 Budget
The issue: The President issued his Fiscal Year 2017 $4 trillion budget. This budget has provisions that can impact Nonprofits including:
- A cap at 28% for the value of itemized deductions including charitable donations;
- Ongoing inclusion of the Buffett rule: taxpayers owning more than $1m have to pay at least 30% taxes after contributions.
- Projects replacing current two tier rate structure for taxing private foundations with an across the board 1.3% excise tax.
- Increase to the IRS budget (a 9.3% increase over previous year) in order to obtain additional staff and increase IRS IT capabilities.
Our position: Changes to the tax structure will impact tax revenue and on private giving, which is why the Government Relations Council is monitoring the federal budget processes.
Real Estate Taxation
The issue: In two court cases (Matter of Greater Jamaica Development Corporation (GJDC) v New York City Tax Commission. and Drug Policy Alliance (DPA) v. NYC Tax Commission), the issue of a nonprofit’s entitlement to a real estate tax exemption came under attack. In Greater Jamaica, the Tax Commission revoked the exemption for garages owned and operated solely by the GJDC, claiming that use of parking facilities, even if for economic development purposes does not constitute a “charitable use.” Similarly, in the Drug Policy Alliance case, the Tax Commission denied a real estate tax exemption for DPA’s recently purchased office condominium, claiming that the DPA’s advocacy for a cause does not qualify as “charitable” within the meaning of the statute governing the exemption. A negative decision could impact other similarly situated nonprofits.
Our position: NPCC has submitted amicus curiae briefs in both cases. NPCC strongly supported GJDC’s position, filing amicus briefs in both lower court and Court of Appeals arguments. After prevailing in all lower court decisions, the Court of Appeals ruled against GJDC, seriously eroding what was considered settled law and may have a significant impact on other nonprofits engaged in economic development, especially those generating income from real estate. The DPA has prevailed in all lower courts as well, and we are awaiting the court’s decision at the Appellate Division level.
Status: We are awaiting the DPA case decision before strategizing with other nonprofit advocates on the broader impact of these decisions on the general nonprofit community, and to consider what options we might have.
- NJ: Tax Court decision against Morristown medical center: Center to pay $15m in back taxes and $1m going forward. Bill pending NJ leg to redress this.
- IL: 4th District Court of Appeals struck down 2012 law to define test for hospitals making them eligible for real estate tax exemption: Law was response to a case in which the court denied real estate exemption because the hospital failed to provide sufficient charity care, yet didn’t state standard of what level of care it would have to give. A 2012 statute attempting to provide that standard – value of charity care to equal tax exemption is now overturned.
Quick Review of Recent Legal Developments in Protections and Benefits for Employees and Job Applicants as of September 23, 2017
New York State minimum wage rules have been changed effective December 31, 2016, increasing the minimum wage to $15, to be phased in over a period years in different regions in the State.
The federal Department of Labor also has minimum wage rules, but in general the New York State wage rates are in excess of federal rates. Increasing overtime pay under the federal rules is under consideration in Washington. The US Department of Labor has issued a Request for Information on overtime rates, how to implement them and the effect new rates will have on organizations, to assist it in developing new rules. But again, the New York State overtime rates are in excess of federal rates, so but for a few job categories, changes in federal rates should not impact New York employers.
The federal Family and Medical Leave Act (FMLA) requires employers with more than 50 employees to provide 12 weeks of unpaid leave for certain covered events. Though generally the FMLA and the PFL benefits must be taken concurrently, FMLA covers an employee’s own serious medical condition while the PFLL does not. Hence, for example, an employee might request an unpaid FMLA leave for childbirth and then a paid PFL leave to bond with the new-born.
Since May 1,2014, the New York City Paid Sick Leave Law has been ineffect. It requires employers with five or more employees to provide employees with one hour of sick leave for each 30 hours worked, up to 40 hours of leave per calendar year for certain covered events.
- Name and mailing address of both parties;
- Itemization of services the freelancer is to provide;
- Value of the services and rate and method of compensation; and
- Date compensation is due or method by which date will be determined.
The law has teeth because the freelancer can file a complaint with the City and/or bring a civil action against the hiring party, and depending on the nature of the claim, could receive double damages, attorney fees and costs.
- The internship must be provided in an educational environment or program;
- The training or experience is for the benefit of the intern;
- The intern does not displace regular employees, and works under supervision;
- The employer derives no immediate advantage from the activities of the intern;
- The intern is not necessarily entitled to a job at the end of the internship; and
- The intern understands there is no entitlement to wages; and in NYS the intern must be so notified in writing, and that the intern is not considered an employee for minimum wage purposes.
The State has five additional requirements:
- Training is to be preformed under the supervision of persons knowledgeable and experienced in the activity;
- The intern does not receive employee benefits;
- Training in general is not designed specifically for a job with the employer;
- Screening process for interns uses only criteria for admission to and independent educational program; and
- Ads, posters, etc., clearly indicate the program is for education and training rather than employment.
- Discuss with legal counsel which of these laws, rules and regulations apply to your organization, and understand their terms, penalties, exceptions and interpretations;
- Review and revise the organization’s employee handbooks, training manuals and web pages to see they conform to the new requirements;
- Assure practices and procedures, ads, notices, required postings, and interviewing guidelines comply with the new requirements;
- Review with HR staff current practices and how they may need to be revised;
- Review payroll, recordkeeping and security practices and procedures to assure they are compliant; and,
- Inform employees and post notices of the new benefits and protections as may be required by the new laws, rules and regulations.
- Charitable donation exemption extenders have been made permanent. However, Congress is likely to take a closer look at them, and may expand, extend or institute more restrictions.
- The IRS is apparently not giving up on plans to draft new (c)(4) regulations.
- Ongoing scrutiny of Donor Advised Funds remain, but nothing is clear as to any developments.
- Private letter ruling procedures: Tax exempts can no longer receive ruling from IRS as to whether changes in operations are consistent with their tax status. However, by refiling a request for public letter ruling and framing the question as a legal matter, one should get same answer. Previously NP could get private letter as to status.
- Impact on Jamaica case: got private letter ruling that operating parking lot was consistent with their status.
City Contracting Procedures
- The Comptroller is modernizing procurements processes: Tax documents that must be on file with Comptroller’s office need no longer be in hard copy, but can be filed/edited online.
- Vendor notifications in RFPs that traditionally mail-based are now e-mailed.
Equal Employment Opportunity Commission (EEOC)
As of January 2016, the Women’s Equality Agenda will go into effect, amending New York State’s equal pay, sex discrimination, harassment and other laws in order to provide more protection for women in and outside of the workplace. This regulation, which was signed in October 2015, includes amendments that broaden the definition of “equal work” for equal pay, adds “familial” status as a protected class, requires employers to accommodate pregnant workers, and provides sex discrimination plaintiffs with a new right to attorneys’ fees, and applies the laws prohibition on sexual harassment to all employers regardless of size.