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ADVISORY OPINION 1987-3
FACTS

(A) A not-for-profit federal tax exempt organization, and or its legal representative is required to file a Lobbyist Statement of Registration with the City Clerk pursuant to Local Law 14, of 1986. The not-for-profit, tax exempt organization is concerned that if it files a Lobbyist Statement of Registration with the City Clerk, the organization will be forced to recognize "lobbying expenditures", as defined by federal tax law, which could expose the organization to a potential assessment of federal tax liability and jeopardize its tax exempt status.

(B) A housing development fund company organized under the New York State Not-For-Profit Corporation Law develops low income housing utilizing land obtained from the City of New York. A clause in the City's form of the certificate of incorporation for the housing development fund company states the following:

No substantial part of the activities of the company shall be the carrying on of propaganda, or otherwise attempting to influence legislation (except as otherwise provided by IRC Section 501(h) or participating in, or intervening in (including the publication or distribution of statements), any political campaign on behalf of any candidate for political office.

ISSUES
(A) Will a federal tax exempt, not-for-profit organization that is required to file a Lobbyist Statement of Registration with the City Clerk, be forced to recognize lobbying expenditures as defined by the federal tax laws, which could expose the organization to a potential assessment of tax liability, and jeopardize its tax exempt status?

(B) Will a housing development fund company, organized under the New York State Not-For-Profit Corporation Law, be in violation of its certificate of incorporation if it is required to file a Lobbyist Statement of Registration with the City Clerk?

OPINION
Title 3 Section 213(a)(1) and (2), of the New York Administrative Code states:

(A) (1) Every lobbyist shall annually file with the City Clerk, a Statement of Registration for each calendar year. . .

(A) (2) Such filing shall be completed on or before January first by those who have been retained, employed, or designated as lobbyists on or before December 15th of the previous calendar year who reasonably anticipate combined reportable compensation and expenses in an amount in excess of two thousand dollars. . .

Title 3, Section 211(c)(1)(i)-(vii) of the New York Administrative Code defines the term "lobbying" or "lobbying activities" to mean any attempt to influence:

(i) the passage or defeat of any legislation by the City Council, (ii) the approval or disapproval of any legislation by the Mayor, (iii) the approval or disapproval of any resolution by the Board of Estimate, (iv) the adoption or rejection by an agency of any rule or regulation having the force and affect of the law, (v) the outcome of any rate making proceeding before an agency, (vi) any determination by an agency in connection with a proposed concession agreement, or (vii) any determination of a board or commission, other than a determination in an adjudicatory proceeding.

Furthermore, Section 3-213 of Local Law 14 of 1986 requires those persons or organizations engaged in lobbying activities, as described in Section 3-211(c)(1)(i)-(vii), to file with the Office of the City Clerk, a Statement of Registration if the person or organization reasonably anticipates that during the year they will expend, incur, or receive combined reportable compensation and expenses in excess of two thousand dollars.

Accordingly, if a federal tax exempt, not-for-profit organization engages in lobbying activities as defined by Section 3-211(c)(1)(i)-(vii), and if the two thousand dollar threshold is met, the not-for-profit organization must file a Lobbyist Statement of Registration with the City Clerk."

If a federal tax exempt, not-for-profit organization is engaging in lobbying activities as defined by federal tax law and incurring lobbying expenditures, as defined by the federal tax law, that organization's federal tax liability and federal tax exempt status will be affected because its activities and expenditures fall within these federal tax law definitions, regardless of whether the organizations activities are considered lobbying under Local Law 14.


The question of whether a federal tax exempt not-for-profit organization's activities and expenditures could expose the organization to a potential assessment of tax liability and jeopardize its tax exempt status, should be properly addressed in the form of a request for an opinion from the Internal Revenue Service, as this is not the proper place to seek an interpretation of the federal tax laws.

(B) If a housing development fund company organized under the New York State Not-For-Profit Corporation Law is engaging in lobbying activities as defined by Section 3-211(c)(1)-(vii) of Local Law 14, and if the two thousand dollar threshold is met pursuant to Section 3-213 of Local Law 14, the above described organization must file a Lobbyist Statement of Registration with the City Clerk.

CARLOS CUEVAS City Clerk of the City of New York
KATHRINE E. TIMON Counsel
TIMOTHY McFARLAND Assistant Counsel

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