Section 146.1 Definitions

(a) “Charitable” means, pursuant to Article 7-A of the Executive Law (Article 7-A), all purposes deemed charitable under applicable federal law, philanthropic, patriotic, eleemosynary or for law enforcement support and any other purpose included in the definition of charitable organizations in Article 7-A, and any purpose included in Not-for-Profit Corporation Law Section 102(a)(3-b).

(b) “Charitable organization” means an organization that is organized and/or operated for charitable purposes, whether or not exempt from federal income taxation, that is required to register with the Attorney General pursuant to Article 7-A of the Executive Law.

(1) The term charitable organization includes any domestic or foreign corporation, unincorporated association or other legal entity, that is organized and/or operated for charitable purposes, including without limitation:

(i) any corporation formed and/or operated for charitable purposes as defined in NPCL section 102(a)(3-b);

(ii) organizations exempt from federal income taxation pursuant to United States Internal Revenue Code (the Code) section 501(c)(3), including wholly charitable trusts; and

(iv) organizations exempt from federal income taxation pursuant to another code section that are organized and/or operated for charitable purposes.

(c) “Charitable purpose” means the statement of the charitable organization’s mission, all charitable categories identified in a filing entity’s application for recognition of exemption as a 501(c) entity, any narrative description of the filing entity’s activities provided with such application, and any supporting details to the narrative description provided with such application that is filed with the Department of State pursuant to this Part.

(d) “Filing entity” means a qualifying 501(c)(3) entity or qualifying 501(c)(4) entity required to file an annual financial report, funding disclosure report, or financial disclosure report pursuant to Article 7-A of the Executive Law.

(e) “Qualifying 501(c)(3) entity” means any corporation or entity that is qualified as an exempt organization or entity by the United States Department of the Treasury under I.R.C. 501(c)(3) that is required to report to the department of state pursuant to section 172-e of the Executive Law.

(f) “Qualifying 501(c)(4) entity” means any corporation or entity that is qualified as an exempt organization or entity by the United States Department of the Treasury under I.R.C. 501(c)(4) that is required to file a source of funding report with the joint commission on public ethics pursuant to sections one-h and one-j of the legislative law.

(g) “Disclosure-related harm” means harm, threats, harassment, or reprisals to the source of a donation or to individuals or property affiliated with the source of a donation that may stem from public disclosure of all or a portion of in-kind donations made to a qualifying 501(c)(3) entity and financial assistance provided by any qualifying 501(c)(3) entity to one or more qualifying 501(c)(4) entities.

(h) “Notice of Intent to Publish” means a document or electronic notice provided by the Secretary to a filing entity of the Secretary’s intent to publish any report filed with the Department of State pursuant to Article 7-A of the Executive Law, where a filing entity has provided a statement of fact relating to disclosure-related harm and where the Secretary has determined that the facts provided in such statement fail to demonstrate that publication of any report may cause disclosure-related harm.

Section 146.2 Applicability; filing of reports

(a) Part 146 applies to charitable organizations as defined in section 146.1 and contains requirements regarding their duty to file reports with the Department.

(b) Charitable organizations must submit their financial report to the NYS Department of State, Division of Corporations, State Records and Uniform Commercial Code.

Section 146.3 Annual Financial Report.

(a) An Annual Financial Report may be filed if it complies as to form with the requirements of law and the filing fee required by law has been paid.

(b) A filing entity shall also submit to the Department of State, a statement of the filing entity’s mission that is consistent with what was or would be provided to the Internal Revenue Service, with a filing entity’s application for recognition of exemption as a 501(c) (3), all charitable categories identified in such application, any narrative description of the filing entity’s activities provided with such application, and any supporting details to the narrative description provided with such application.

Section 146.4 Funding Disclosure Report

(a) A qualifying 501(c)(3) entity shall file, along with the entity’s Funding Disclosure Report, a statement of the qualifying 501(c)(3) entity’s mission that is consistent with what was or would be provided to the Internal Revenue Service of the United Stated Department of the Treasury with a qualifying 501(c)(3) entity’s application for recognition of exemption as a 501(c)(3), all charitable categories identified in such application, any narrative description of the qualifying 501(c)(3) entity’s activities provided with such application, and any supporting details to the narrative description provided with such application.

(b) If the qualifying 501(c)(3) entity filing a funding disclosure report has reason to believe that public disclosure will cause disclosure-related harm, the qualifying 501(c)(3) entity may submit to the Department of State a statement of relevant facts supporting such assertion. Such statement of relevant facts shall indicate whether disclosure-related harm would stem from public disclosure of all of the in-kind donations to the qualifying 501(c)(3) entity and financial assistance provided by any the qualifying 501(c)(3) entity to one or more the qualifying 501(c)(4) entities, or only to a portion thereof. A statement of relevant facts shall not be subject to publication or public disclosure.

(c) Each funding disclosure report shall be signed by an officer, director or authorized person.

(d) If a Funding Disclosure Report delivered to the Department of State for filing complies as to form with the requirements of law and the filing fee required by law for such report has been paid, the report shall be filed.

Section 146.5 Financial Disclosure Report

(a) A qualifying 501(c)(4) entity shall file, along with the entity’s Financial Disclosure Report, a statement of the qualifying 501(c)(4) entity’s mission that is consistent with what was or would be provided to the Internal Revenue Service with a qualifying 501(c)(4) entity’s application for recognition of exemption as a 501(c)(3), all charitable categories identified in such application, any narrative description of the qualifying 501(c)(4) entity’s activities provided with such application, and any supporting details to the narrative description provided with such application.

(b) If the qualifying 501(c)(4) entity filing a Financial Disclosure Report has reason to believe that public disclosure will cause disclosure-related harm, the qualifying 501(c)(4) entity may submit to the Department of State with the qualifying 501(c)(4)’s report a statement of relevant facts supporting such assertion. Such statement of relevant facts shall indicate whether disclosure-related harm would stem from public disclosure of all of the in-kind donations to the qualifying 501(c)(3) entity and financial assistance provided by any the qualifying 501(c)(3) entity to one or more the qualifying 501(c)(4) entities, or only to a portion thereof. A statement of relevant facts shall not be subject to publication or public disclosure.

(c) Each Financial Disclosure Report shall be signed by an officer, director or authorized person.

(e) If a Funding Disclosure Report delivered to the Department of State for filing complies as to form with the requirements of law and the filing fee required by law has been paid, the report shall be filed.

Section 146.6 Manner of filing; fees

(a) All submissions may be filed electronically.

(b) Identifying information must be placed on all documents.

(c) Charitable organizations are required to pay the filing fee required by law for each report or document delivered to the Department for filing under Executive Law Article 7-A.

Section 146.7 Additional Information or Documentation

In addition to any documents a qualifying 501(c)(3) entity or qualifying 501(c)(4) entity must file with the Department as part of or with any report required by Article 7-A of the Executive Law, the Department may require a charitable organization to submit any information or documentation relevant to the Secretary of State’s review of such reports as required by section 93-a of the Executive Law.

Section 146.8 Examination of Reports

(a) Should Notice of the Secretary of State determine that public disclosure of all or any part of a report required to be filed with the Department pursuant to Article 7-A of the Executive Law will not cause disclosure-related harm, and where the filing entity filed a statement of relevant facts asserting that public disclosure of all or part of the subject report may cause disclosure-related harm, the Secretary shall notify the filing entity of the intent to publicly disclose all or part of the report.

(b) If the filing entity wishes to administratively appeal the Secretary’s determination, the filing entity shall notify the Secretary within 30 days of transmission of Notice of Intent to Publish.

Section 146.9 Administrative Hearings

(a) Administrative hearings shall be conducted in conformity with SAPA Article 3 and this section.

(b) A filing entity that has filed a timely notification of intent to administratively appeal a Notice of Intent to Publish shall be provided with a notice of hearing.

(c) The filing entity may opt-in to the hearing being conducted remotely by electronic means.

(d) There shall be limited discovery in administrative proceedings conducted pursuant to this Part. Upon demand, either party is entitled to information such as the following:

(1) Any record disclosable under the Freedom of Information Law;

(2) Certain records relied on by the Department in issuing Notice of Intent to Publish;

(3) Identification of witnesses intended to be called at hearing; and

(4) Disclosure of evidence intended to be introduced at hearing.

(e) Appearances.

(1) A filing entity shall participate in any administrative hearing through one or more officers of the filing entity or an attorney representing the entity.

(2) Any person appearing on behalf of a party in a representative capacity may be required by the Administrative Law Judge to file a notice of appearance.

(f) Conduct of administrative hearing.

(1) The filing entity shall have the burden of proving, by the preponderance of the evidence, that publication of the report at issue may cause disclosure-related harm. The filing entity shall present evidence in support of the statement of relevant facts that was provided with the funding or financial disclosure report.

(2) The Administrative Law Judge has discretion to determine order of events and presentation of evidence.

(3) The Administrative Law Judge has power to:

(i) Rule upon all motions and requests;

(ii) Set the time and place of the hearing, recesses and adjournments;

(iii) Administer oaths and affirmations;

(iv) Issue subpoenas;

(v) Quash and modify subpoenas;

(vi) Summon and examine witnesses;

(vii) Preclude irrelevant, immaterial or unduly repetitious, tangential or speculative evidence, argument, examination or cross-examination;

(viii) Limit the number of witnesses;

(ix) Take measures necessary to maintain order and conduct; and

(x) Issue orders limiting the length of cross-examination, the form, length and content of motions and briefs and similar matter.

(4) The evidence shall be confined to whether publication of all or part of any subject report may cause disclosure-related harm.

(5) Upon issuance of a final ruling by the Administrative Law Judge as to whether publication of all or part of any subject report may cause disclosure-related harm, the administrative hearing process shall conclude.

146.10 Publication of Reports

(a) Whenever a filing entity fails to provide the Department of State with a statement of relevant facts pursuant to paragraph (b) of section 146.4 or 146.5 of this Part, upon expiration of the time for a filing entity to provide the Secretary with notice of intent to appeal a Notice of Intent to Publish any report filed with the Department of State, or whenever the Secretary makes a determination under section 93-a of the Executive Law, the Secretary may publish any report filed with the Department pursuant to Article 7-A of the Executive Law, and the mission statement provided by the filing entity, on its website. Such publishing shall not include the names and addresses of individual donors to filing entities nor shall such publishing include a filing entity's Internal Revenue Service Form 990 Schedule B.

1. Statutory authority:

Executive Law sections 172-e and 172-f authorize the Secretary of State to adopt and promulgate rules related to the public disclosure of Funding Disclosure Reports and Financial Disclosure Reports, respectively. In addition, Executive Law section 91 authorizes the Secretary of State to adopt and promulgate rules which regulate and control the exercise of the powers of the Department of State and the performance of the duties of officers and employees of the Department.

2. Legislative objectives:

Article 7-A of the Executive Law, as amended by Chapter 55 of the Laws of 2020, requires certain charitable organizations to file financial reports with the Department of State. Executive Law section 93-a requires the Secretary of State to examine all such reports to determine the nature and extent of the in-kind support provided by any charitable organization to one or more recipient entities and the nature and extent of covered communications by any charitable organization. Whenever the Secretary of State, in consultation with the Department of Taxation and Finance or the Department of Law, determines that the nature and extent of a charitable organization’s in-kind support to other entities or the nature and extent of a charitable organization's spending on covered communications is inconsistent with the charitable purposes of such charitable organization, the Secretary of State shall publish the reports, filed by such charitable organization, on the Department of State’s website.

3. Needs and benefits:

The proposed rulemaking sets forth the procedures which would be used by the Department of State when reviewing financial reports submitted by charitable organizations under Article 7-A of the Executive Law. The proposed regulations will: clarify procedures and requirements for financial reports required to be filed with the Department of State by charitable organizations; provide definitions for terms to clarify filing requirements and procedures related to the Department’s review of financial reports; and provide procedures for charitable organizations to appeal a determination of the Department of State to publicly disclose all or any part of a financial report.

4. Costs:

A. Article 7-A of the Executive Law requires the filing of certain reports with this Department. The proposed regulations will specify the inclusion of some additional information, in financial reports filed by certain charitable organizations, to the extent necessary to ensure implementation of the law. Such information is ordinarily maintained by charitable organizations and may be included in financial reports submitted through the Department’s electronic filing system. As such, these regulations do not impose any additional costs on the regulated entities.

B. The proposed regulations do not impose any additional costs on the Department of State, the State or local governments.

5. Local government mandates:

The proposed regulations do not impose any mandates on local governments.

6. Paperwork:

Article 7-A of the Executive requires the filing of certain reports with this Department. These proposed regulations will specify the inclusion of some additional information, in financial reports filed by certain charitable organizations, to the extent necessary to ensure implementation of the law. Such information is ordinarily maintained by charitable organizations and may be included in financial reports submitted through the Department’s electronic filing system. As such, these regulations do not impose additional paperwork or reporting requirements.

7. Duplication:

These proposed regulations do not duplicate any existing requirements of the state or federal governments. These proposed regulations are not in conflict with 13 NYCRR 90, which regulates the filing of annual financial reports with the Department of Law.

8. Alternatives:

No significant alternatives were considered; these regulations are required in order to provide guidance necessary to implement the law.

9. Federal standards:

The federal government does not have any minimum standards for this subject area.

10. Compliance schedule:

Regulated entities will be capable of complying with the regulations beginning on the date they become effective, which is planned to coincide with date of publication of Notice of Adoption in the State Register.

The Department of State has concluded after reviewing the nature and purpose of the proposed regulations that their adoption will not impose any adverse economic impact or reporting, record keeping, or other compliance requirements on small businesses or local governments. The proposed rulemaking will set forth procedures and requirements to be followed by charitable organizations that are required to file financial reports with this Department and will facilitate the Department’s examination of such reports. These regulations will provide guidance to charitable organizations in preparing and filing financial reports with the Department of State. The proposed regulations will also provide clear guidance regarding implementation of new provisions of law to enable charitable organizations to more easily and efficiently file financial reports with the Department of State. Local governments will not be subject to the provisions of these regulations.

Article 7-A of the Executive Law, as amended by Chapter 55 of the Laws of 2020, requires the filing of financial reports by certain charitable organizations. These regulations will require the inclusion of some information in the reports, which is not specifically indicated in the law, in order to ensure the Department’s ability to perform its functions under the law. Such information is ordinarily maintained by charitable organizations and may be included in financial reports that charitable organizations will be able to submit through the Department’s electronic filing system. These regulations will not require any additional filings by any regulated entities. As such, these regulations will not impose adverse economic impact or reporting, record keeping, or other compliance requirements on small businesses or local governments.

The Department of State has concluded after reviewing the nature and purpose of the proposed regulations that their adoption will impose neither any adverse economic impact on rural areas, nor any reporting, record keeping or other compliance requirements on public or private entities in rural areas. The proposed rulemaking will set forth procedures to be used by the Department of State in its examination of financial reports filed by charitable organizations. The proposed regulations will also provide guidance to charitable organizations in preparing and filing financial reports with the Department of State. The proposed regulations will not have any individualized impact in rural areas or upon entities located in rural areas. Rural areas will not be impacted by these regulations in any greater amount than non-rural areas.

A Job Impact Statement is not required because it is evident from the subject matter of the regulations that they will have no impact on jobs or employment opportunities. As apparent from the nature and purpose of these regulations, they will merely provide guidance and processes pertaining to certain reports that charitable organizations are statutorily required to file with the Department of State.