Chapter 1: Divisions and the American Psychological Association (Part 2)
Division Legal Activities
Divisions are integral components of APA and the actions of the divisions can be imputed for legal purposes to APA. It is therefore important for divisions to exercise caution when engaging in activities that could expose the division or APA to legal risk.
Lobbying and Election Activities
General. Organizations such as APA that qualify for federal income tax exemption under 501c(3) of the Internal Revenue Code ("IRC") have the most favorable tax status. That status enables APA (including its divisions) to earn tax free income related to APA's tax-exempt purposes, receipt of grants from foundations, deductibility of contributions to the organization by members and others, advantages in maintaining nonprofit postal rate privileges, and other advantages as well. It is therefore vital for APA and its divisions to be aware of the extent of, and limits on, lobbying and election activities which are expressly regulated under the IRC.
What is lobbying? To be considered lobbying, a communication must refer to and reflect a view on a specific legislative proposal or legislation that has been introduced before a legislative body. Lobbying may either be direct or grass roots. Direct lobbying is a communication with a member or employee of a legislative body, or with other government employees if the purpose of the communication is to lobby. Direct lobbying includes contacting members to encourage them to communicate with these individuals. Grass roots lobbying is an attempt to encourage the public to communicate with these individuals. An organization engages in grass roots lobbying when, directly or through its members, it urges that the public contact legislators, or provides the public with the address or phone number of a legislator or a petition or tear-off postcard, or even merely identifies legislators who will vote on the item referred to.
What is not lobbying? Several activities are excepted from the definition of lobbying. Lobbying does not include providing technical assistance or advice to a governmental body in response to its unsolicited written request. Communications about pending legislation may fall under the exception for nonpartisan research. This exception applies to communications presenting research, analysis or study on an issue in a balanced and objective manner.
How much lobbying is permitted? To maintain nonprofit status, APA and its divisions must keep lobbying activities within legally specified permissible limits. The permissible limit for lobbying for APA and its divisions is governed by a special "expenditures test" -- which provides for quantifying exactly how much lobbying (grassroots and direct lobbying) APA and its Divisions may engage in each year. For purposes of this test, APA's lobbying is added to expenditures for lobbying incurred by APA divisions. Divisions wishing to support public policy initiatives should coordinate their activities through the APA Public Policy Office. It is important to note, however, that APA divisions which are separately incorporated and which are tax exempt under 501c6 have different, and in some respects, more stringent lobbying regulations with which to comply. Divisions wishing to participate in lobbying activities must consult withh the APA Office of General Counsel prior to the division's initial involvement.
What records of lobbying activity should be maintained? Under 501(h), detailed disclosure and thorough record-keeping are required. It is the responsibility of the division to maintain documentation of its direct and grassroots lobbying expenditures. If an activity has mixed lobbying or both lobbying and non-lobbying aspects, the organization will be expected to allocate expenditures accordingly. The allocation must be reasonable and supportable to withstand IRS scrutiny. Financial reports, invoices from outside suppliers, employee time records and other documentation of expenditures should identify those spent on direct and grassroots lobbying and should allocate expenditures for mixed lobbying (direct and grassroots) and mixed purpose (lobbying and non-lobbying) activities. The divisions that are involved in either grassroots or direct lobbying must contact the APA Office of General Counsel for more information regarding annual reporting requirements.
Election Campaign Activity. APA and its divisions are expressly prohibited by the Internal Revenue Code ("IRC") from engaging in any electioneering. The Internal Revenue Code provides that neither APA nor its divisions may participate in or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office. This prohibition is very broad and strictly interpreted so that seemingly minor innocuous election campaign activities can jeopardize exempt status. Examples of prohibited activity include, but are not limited to, the following: organization of a political action committee ("PAC"); direct or indirect support, financial or otherwise, for organizations that engage in electioneering or administer PACs where the resources are used for political campaign contributions or PAC administrative expenses; using resources to urge members, staff or others to support or contribute to particular PACs or candidates; organizing or participating in "fund raisers" to support candidates for political office; using resources to provide advice or counseling to candidates or PACs or to organizations that administer PACs. One court even held that an organization had engaged in electioneering because it mentioned in its newsletter the names of certain political candidates who happened to be members of the society and made comments in support of those candidates. Any questions concerning proposed division activity in this area must be directed to APA Office of General Counsel.
Position or Policy Statements
Association Rule 100-1.5 prohibits divisions or any other unit of the APA from releasing any position or policy statements on public policy matters in the name of the Association without the prior approval of Council. Statements issued in the name of the division or other unit should contain a disclaimer clause to make it clear that the division or other unit is not speaking for APA or for any other division or unit of the Association.
Division Grants and Contracts Activity
The Grants and Contracts Office (GCO) of the Financial Services Department is available to assist Divisions in the following areas: preparation of the business and financial portions of grant applications or proposals; post-award administration; financial reporting; and invoicing. This office can also assist with the execution of agreements and legally binding documents coordinating review and approval through the APA Office of General Counsel (see also Division Legal Activities, earlier in this chapter). Association Rule 100-1.8 specifies that "A Division may execute contracts or negotiate grants with outside entities. Such contracts or grants (with the exception of those for routine, annually recurring events or expenses, e.g., meetings) which provide for payment or receipt by a Division or the Association of funds, goods, services or other value in excess of $10,000 must be submitted to the APA Executive Office for prior legal and financial review..."
Because of the myriad financial reporting requirements and compliance issues contained in awards from federal sources and APA's ultimate financial responsibility for affiliated divisions, Divisions must notify the GCO of any federal awards within ten (10) days of receipt and provide a copy of the award notification. This information must be collected in order for APA to complete the government-mandated annual audit of all federal assistance received by the Association. Successful completion of this audit protects APA's position as a contractor in good standing and maintains the Association's, as well as the Division's, eligibility to received federal funds and perform on federally funded projects.
In addition, federal awards require special accounting procedures and must be administered in accordance with applicable statues and regulations. The penalties for noncompliance are severe, from financial judgments against individuals involved in project management to suspension and disbarment as an eligible federal contractor. The Association's GCO is available to advise Divisions on appropriate policies, procedures, and guidelines to follow when performing on a federal award.
The GCO along with the Convention and Meeting Services Office (CMSO) is also available to assist in the negotiation of function contracts. While these may not meet the $10,000 threshold requiring financial and legal review or are the result of a regularly occurring event, there are numerous financial and logistical advantages to enlisting support. Many hotel and food and beverage contracts contain harsh penalties and one-sided requirements that may not serve the best interests of the Division. Due to volume and existing infrastructure, GCO and CMSO staff can frequently obtain better, more balanced terms, limit the liability of the Division and the Association, and realize significant economies in the expenditure of Division funds. For example, it is possible to decrease or eliminate deposits, increase the allocation of complimentary rooms, reduce room rates, reduce attrition penalties, etc.
GCO can serve as a resource to the Divisions through a variety of reference materials that contain specific guidance on the availability, preparation, submission and administration of government-funded grants and contracts. These include the Federal Acquisition Regulations (FAR); the Federal Travel Regulation (FTR); the Health and Human Services Grants Administration Manual; the Federal Grants Management Handbook; the Public Health Services Grants and Contracts Manual; the Public Health Service Grants Policy Statement; the Federal Supply Class or Service Codes; the Federal Acquisition Report; the National Science Foundation Grants Policy Manual; and a selection of relevant Office of Management and Budget circulars. In addition, we monitor information on regulations, policies, funding sources and program descriptions on various websites and collect the following publications: the Catalogue of Federal Domestic Assistance; the Commerce Business Daily; the Federal Register; and the Public Health Service Profiles of Financial Assistance Programs. Other material is available upon request.
Policy on Division Involvement in Amicus Activity
APA policy (see Appendix VII), which covers both APA and/or division participation in court proceedings as amicus curiae, requires review by APA Central Office, the Committee on Legal Issues (COLI) and the APA Board of Directors. The division representative, who will act as the division's spokesperson in the review process, should forward all background materials on the case to the APA General Counsel. After Central Office and COLI review, a recommendation will be forwarded to the Board of Directors.
The Division referring the case is responsible for costs associated with the review process (legal review and COLI conference calls). However, if after reviewing the case, APA decides that the case is of major significance, costs of the legal review and brief preparation could possibly be covered by APA or the costs could be shared by APA and the division.
The review process is normally completed in 60 to 90 days, but, in cases of critical time importance, it may sometimes be done within a shorter period. See Association Rule 100-1.9 enacted in August, 1995.
Accreditation & Certification Activity
APA Bylaw VI.5 provides that divisions may not establish or enforce standards for ethics, accreditation, certification, or credentialling of specialty recognition. These activities are reserved to APA.
Association Professional Liability Insurance
APA maintains association professional liability insurance coverage policy which extends protection to the Association, governance members and volunteers for many legal claims that might be brought against APA. The coverage extends not only to APA, but also its division (as well as division officers and volunteers acting on the division's behalf). This coverage is provided to divisions at no charge. It should be noted that the policy is subject to various exclusions, sublimits and deductibles for certain types of claims. Of particular importance is a feature of the policy that requires timely notice to the insurer of claims against the insured. Failure to provide timely notice of claim could jeopardize coverage. If any divisions or their officers become aware of a possible legal claim or if there are any questions in this regard, the APA Office of General Counsel should be contacted immediately. For additional information on insurance coverage, call the General Counsel's Office at (202) 336-6079.
Establishing a Division
In order to increase communications within the Association regarding newly forming divisions, Association Rule 100-2.1 requests that the steering group of a forming new division informs Central Office of their intention by means of a letter of intent of (1) its interest in forming a new division; (2) progress toward the formation of the division; (3) evidence of financial and organizational viability; and (4) evidence and materials supporting the need for a new division. In addition, members interested in establishing a new division are invited to attend the annual Division Leadership Conference. An announcement inviting participation is published in the October issue of The APA Monitor each year.
A division may be established whenever one per cent or more of the members of the Association petition for it, and the Council of Representatives approves. In accordance with Association Rule 100-2.2, the petitioners' signatures must be written on a form stating that the signatories:
A petition for the establishment of a new division should include:
The petition is forwarded to the APA Recording Secretary with the name of an individual who will speak for the petitioners in further communications. At the next regular meeting of the Board of Directors, the Board will determine if the petition is technically complete. If so, the Board will request from petitioners representing an established group of APA members: minutes of the meetings at which action was taken to seek affiliation, a full list of members, lists of officers for current and recent years, and bylaws of the group.
If the petitioners represent a newly assembled group the Board will request: minutes of any organizational meeting of the group sponsoring the petitioners and a list of persons attending, provisional bylaws of the proposed division that conform to the requirements of the APA Bylaws, a list of provisional members by class if such is proposed, a list of members who are not petitioners, and a list of provisional officers.
The Board of Directors then forwards the petition, along with the additional materials, to all divisions and members of Council, inviting written comment on the establishment of this proposed division.
At a subsequent meeting, the Board of Directors will formulate a recommendation to the Council of Representatives based on the petition, the additional materials and comments from divisions and Council representatives. If the Board's recommendation is unfavorable, the petitioners may be allowed an additional year to perfect the petition while ensuring that the original intent of the petitioners is retained. If the Board's recommendation is favorable, the petition is forwarded to Council for action.
The Council of Representatives may create a new division provided that:
A two-thirds vote of those present and voting at the mid-winter meeting of Council is required for the establishment of a new division.
Following favorable action by Council, a new division is constituted when it holds its first business meeting within a year of its initial approval. During this meeting, the division should adopt the bylaws and elect its initial membership and permanent officers. The secretary of the division is responsible for reporting the substance of these actions to the Division Services Office. The division will hold candidate status for a period of two years, during which time the division has all of the privileges of a fully established division. The division is asked to report annually to the Council of Representatives, in accordance with Association Rule 100-1.1, describing its activities during the time of its candidacy. At the end of the candidacy period Council will vote on permanent status for the division. (That approval may only be delayed or rescinded if the division does not meet the criteria in the APA Bylaws and the Association Rules for divisional status.) A majority vote is required for final approval.
Dissolution or Sanctions Imposed on Individual Divisions
A division may be dissolved by vote of the Council of Representatives when either (a) the number of members within the division falls below .25% of the members of the Association, or (b) the division votes to recommend its own dissolution. The Council of Representatives may also dissolve a division for good and sufficient reason by a two-thirds vote of those present at an annual business meeting, provided that the reason for dissolution is stated in writing by the Council to the membership of the division and that the division membership has been given full opportunity to state the reasons for the continued existence of the division.
Association Rule 100-1.3, enacted in August, 1995, further specifies that "The Board of Directors shall inform Divisions of activities that appear to be out of compliance with the Bylaws, Association Rules, or policies of the Association. Continued failure or refusal to comply with these requirements may constitute good and sufficient reason for the imposition of sanctions, including dissolution of a Division by the Council of Representatives. The Board shall seek to resolve issues of concern with Divisions on an informal basis before placing the issue on Council's action agenda."