50 N.J.R. 2549(a)

VOLUME 50, ISSUE 24, DECEMBER 17, 2018
RULE PROPOSALS

Reporter
50 N.J.R. 2549(a)
NJ - New Jersey Register  >  2018  >  DECEMBER  >  DECEMBER 17, 2018  >  RULE PROPOSALS  >  LAW AND PUBLIC SAFETY -- DIVISION OF CONSUMER AFFAIRS

Interested Persons Statement

INTERESTED PERSONS
Interested persons may submit comments, information or arguments concerning any of the rule proposals in this issue until the date indicated in the proposal. Submissions and any inquiries about submissions should be addressed to the agency officer specified for a particular proposal.
The required minimum period for comment concerning a proposal is 30 days. A proposing agency may extend the 30-day comment period to accommodate public hearings or to elicit greater public response to a proposed new rule or amendment. Most notices of proposal include a 60-day comment period, in order to qualify the notice for an exception to the rulemaking calendar requirements of    N.J.S.A. 52:14B-3. An extended comment deadline will be noted in the heading of a proposal or appear in a subsequent notice in the Register.
At the close of the period for comments, the proposing agency may thereafter adopt a proposal, without change, or with changes not in violation of the rulemaking procedures at    N.J.A.C. 1:30-6.3. The adoption becomes effective upon publication in the Register of a notice of adoption, unless otherwise indicated in the adoption notice. Promulgation in the New Jersey Register establishes a new or amended rule as an official part of the New Jersey Administrative Code.
Agency


LAW AND PUBLIC SAFETY > DIVISION OF CONSUMER AFFAIRS > CHARITIES REGISTRATION UNIT

Administrative Code Citation

Proposed Amendments:  N.J.A.C. 13:48-4.3 and 5.3
Text

Financial Reports List of Contributors

Authorized By: Paul R. Rodriguez, Acting Director, Division of Consumer Affairs.

Authority: N.J.S.A. 45:17A-21.b.

Calendar Reference: See Summary below for explanation of exemption to calendar requirement.

Proposal Number: PRN 2018-125.

Submit written comments by February 15, 2019, to:

   Paul R. Rodriguez, Acting Director
   Office of the Director
   Division of Consumer Affairs
   PO Box 45027
   Newark, New Jersey 07101
   or electronically at: http://www.njconsumeraffairs.gov/Proposals/Pages/default.aspx.
The agency proposal follows:
Summary

Charitable organizations registering with the Division of Consumer Affairs (Division) must submit a copy of their most recent Internal Revenue Service (IRS) filings, which include Form 990, Form 990EZ, Form 990PF, and Form 990T. Under existing IRS regulations applicable to organizations exempt from tax under Section 501 of the Internal Revenue Code, these forms include a list of every contributor who, during the previous year, gave the organization money, securities, or any other type of property totaling $ 5,000 or more. The IRS has recently stated that it will no longer require such organizations that are required to file Form 990 or Form 990-EZ to submit this information, unless the organization is described in Section 501(c)(3) of the Internal Revenue Code.

The Division believes that information on contributors is vital for the proper regulation of all charitable organizations. Therefore, the Division proposes to amend  N.J.A.C. 13:48-4.3 and 5.3 to state that charitable organizations exempt from tax under Section 501 of the Internal Revenue Code must continue to report this information to the Division, regardless of whether the IRS's new reporting policy excuses an organization from reporting the information to the IRS. The proposed amendments require that, for charitable organizations that do not provide a list of contributors as part of their IRS filings, the annual financial reports filed by such organizations with the State of New Jersey must include a list of every contributor who, during the previous year, gave the organizations, directly or indirectly, money, securities, or any other type of property totaling $ 5,000 or more. The amendments permit separate and independent gifts of less than $ 1,000 to be disregarded. Charitable organizations will be required to provide the name and address of each contributor, the total amount given by each contributor, and a description of noncash property given.

The Division has determined that the comment period for this notice of proposal shall be 60 days; therefore, pursuant to  N.J.A.C. 1:30-3.3(a)5, this notice is excepted from the rulemaking calendar requirement.

Social Impact
The proposed amendments will have a beneficial impact on society in that they will help to ensure that the Division has relevant information to effectively regulate charitable organizations.

Economic Impact

The proposed amendments may have an economic impact on charitable organizations. Such organizations will be required to develop lists of contributors who gave them $ 5,000 or more and submit this list to the Division. The Division does not believe that the costs of developing these lists will be substantial.

The proposed amendments are not expected to have an economic impact on charitable organizations that report the names and addresses of their contributors to the Internal Revenue Service on Schedule B of their Forms 990 or 990-EZ. Such organizations are already required to submit their Forms 990 and 990-EZ to the Division and include the completed Schedule B in their filings. In addition, charitable organizations that the Internal Revenue Service has relieved of the obligation to report contributors' names and addresses are still required by the Internal Revenue Service to keep this information in their books and records.

Federal Standards Statement

A Federal standards analysis is not required because the proposed amendments are governed by N.J.S.A. 45:17A-18 et seq., and are not subject to any Federal requirements or standards.

Jobs Impact

The Division does not believe that the proposed amendments will increase or decrease the number of jobs in New Jersey.

Agriculture Industry Impact

The Division does not believe that the proposed amendments will have any impact on the agriculture industry in the State.

Regulatory Flexibility Analysis

It is possible that some charitable organizations could be considered "small businesses" under the Regulatory Flexibility Act (the Act), N.J.S.A. 52:14B-16 et seq. The proposed amendments will have the same economic impact on small businesses as on all businesses, as outlined in the Economic Impact statement. The proposed amendments will not require charitable organizations to employ professional services. The proposed amendments will impose compliance requirements as detailed in the Summary above. For charitable organizations that the Internal Revenue Service recently relieved of the obligation to report contributors' names and addresses, these organizations will be required to report to the Division certain information that the Internal Revenue Service already requires them to keep in their books and records and that the organizations historically have been required to report to the Division.

As the proposed amendments ensures that the Division has the information it needs to effectively regulate charitable organizations, no differing compliance requirements are imposed on charitable organizations based on the size of the business.

Housing Affordability Impact Analysis

The proposed amendments will have an insignificant impact on the affordability of housing in New Jersey and there is an extreme unlikelihood that the proposed amendments would evoke a change in the average costs associated with housing because the proposed amendments concern annual financial reports by charitable organizations.

Smart Growth Development Impact Analysis

The proposed amendments will have an insignificant impact on smart growth and there is an extreme unlikelihood that the proposed amendments would evoke a change in housing production in Planning Areas 1 or 2, or within designated centers, under the State Development and Redevelopment Plan in New Jersey because the proposed amendments concern annual financial reports by charitable organizations.

Racial and Ethnic Community Criminal Justice and Public Safety Impact

The Division has evaluated this rulemaking and determined that it will not have an impact on pretrial detention, sentencing, probation, or parole policies concerning adults and juveniles in the State. Accordingly, no further analysis is required.

[page=2550] Full text of the proposal follows (additions indicated in boldface thus; deletions indicated in brackets [thus]):

SUBCHAPTER 4.   REGISTRATION OF CHARITABLE ORGANIZATIONS--SHORT FORM REGISTRATION

13:48-4.3   Financial reports

(a) A charitable organization filing a short form registration or a short form renewal shall file an accompanying annual financial report on a form prescribed by the Attorney General. The financial report form shall include the following:

1.-7. (No change.)

8. A complete copy of the charitable organization's most recent Internal Revenue Service filings including, but not limited to, Form 990, Form 990EZ, Form 990PF, and Form 990T (with schedule A), if the organization filed any one or more of these forms during the most recent fiscal year. All schedules and statements shall be included; [and]

9.If a charitable organization's Internal Revenue Service filing under (a)8 above did not include a completed schedule B, a schedule of every contributor who, during the organization's previous tax year, gave the charitable organization, directly or indirectly, money, securities, or any other type of property totaling $ 5,000 or more. In determining the total amount, separate and independent gifts of less than $ 1,000 can be disregarded. The schedule shall include:

i. The name and address of each contributor;

ii. The total amount each contributor gave; and

iii. For noncash property contributions, a description of the noncash property given, fair market value of the noncash property, and the date the noncash property was received by the charity; and

[9.] 10. (No change in text.)

SUBCHAPTER 5.   REGISTRATION OF CHARITABLE ORGANIZATIONS--LONG FORM REGISTRATION

13:48-5.3   Financial reports; audits

(a) (No change.)

(b) Information required for the financial report shall include the following:

1.-3. (No change.)

4. A statement of cash flows[.]; and

5. If a charitable organization's Internal Revenue Service filing under  N.J.A.C. 13:48-5.1(b)5 did not include a completed schedule B, a schedule of every contributor who, during the organization's previous tax year, gave the charitable organization, directly or indirectly, money, securities, or any other type of property totaling $ 5,000 or more. In determining the total amount, separate and independent gifts of less than $ 1,000 can be disregarded. The schedule shall include:

i. The name and address of each contributor;

ii. The total amount each contributor gave; and

iii. For noncash property contributions, a description of the noncash property given, fair market value of the noncash property, and the date the noncash property was received by the charity.

(c)-(g) (No change.)