Bill Text: OR HB3216 | 2011 | Regular Session | Introduced
Bill Title: Relating to regulation of charitable organizations; prescribing an effective date.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2011-06-30 - In committee upon adjournment. [HB3216 Detail]
Download: Oregon-2011-HB3216-Introduced.html
76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3506
House Bill 3216
Sponsored by Representative BARKER (at the request of Department
of Justice)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Allows Attorney General to issue order disqualifying charitable
organization from receiving contributions that are deductible for
purpose of Oregon income tax and corporate excise tax if Attorney
General finds that charitable organization has failed to expend
at least 30 percent of total annual functional expenses on
program services when those expenses are averaged over most
recent three fiscal years. Provides that Attorney General may
decline to issue disqualification order if certain mitigating
circumstances exist. Specifies exempt organizations.
Imposes mandatory disclosure requirements for charitable
organizations subject to disqualification order. Requires
Attorney General to publish on Internet and otherwise make
available list of charitable organizations that are subject to
disqualification orders.
Takes effect on 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to regulation of charitable organizations; and
prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 2 to 5 of this 2011 Act are added to
and made a part of ORS 128.610 to 128.750. + }
SECTION 2. { + (1) The Attorney General may issue an order
disqualifying a charitable organization from receiving
contributions that are deductible as charitable donations for the
purpose of Oregon income tax and corporate excise tax if the
Attorney General finds that the organization has failed to expend
at least 30 percent of the organization's total annual functional
expenses on program services when those expenses are averaged
over the most recent three fiscal years for which the Attorney
General has reports containing expense information. The
calculation of program services expenses and total functional
expenses shall be based on the amounts of program services
expenses and total functional expenses identified by the
organization in the organization's Internal Revenue Service Form
990 return or other Internal Revenue Service return required to
be filed as part of the organization's report to the Attorney
General.
(2) A charitable organization may request a contested case
hearing within 60 days after notification from the Attorney
General that the Attorney General proposes to issue a
disqualification order under this section. Notwithstanding a
finding that the charitable organization's program services
expenses fall below the minimum percentage specified in
subsection (1) of this section, the Attorney General may decline
to issue a disqualification order if the organization
establishes:
(a) That the organization made payments to affiliates that
should be considered in calculating the organization's program
services expenses;
(b) That the organization is accumulating revenue for a
specific program purpose consistent with representations in
solicitations; or
(c) Such other mitigating circumstances as may be identified by
the Attorney General by rule.
(3) A disqualification order under this section remains in
effect until such time as the charitable organization submits
sufficient information to the Attorney General to demonstrate
that the organization's program services expenses meet the
minimum percentage specified in subsection (1) of this section. A
charitable organization may submit information under this
subsection no earlier than one year after the disqualification
order becomes final, and may not submit information under this
subsection more than once each year after the initial submission
is made. The information submitted under this subsection must
include all Internal Revenue Service Form 990 returns, or
equivalent Internal Revenue Service returns, filed by the
organization after the disqualification order became final.
(4) A disqualification order under this section may not be
issued to:
(a) A private foundation as defined in section 509 of the
Internal Revenue Code, as in effect on the effective date of this
2011 Act;
(b) A community trust or foundation operating as described in
26 C.F.R. 1.170A-9(f)(10) and (11), as in effect on the effective
date of this 2011 Act;
(c) A qualified charitable remainder trust described in section
664 of the Internal Revenue Code, as in effect on the effective
date of this 2011 Act;
(d) An organization that does not qualify to receive tax
deductible contributions;
(e) An organization that is not required to file annual reports
with the Attorney General;
(f) An organization that is not required to file an Internal
Revenue Service Form 990 return or an equivalent Internal Revenue
Service return;
(g) An organization that receives less than 50 percent of the
organization's total annual revenues from contributions or grants
identified in accordance with Internal Revenue Service Form 990
or an equivalent form; and
(h) An organization that has been in existence for less than
four years. + }
SECTION 3. { + (1) When a disqualification order issued under
sections 2 to 5 of this 2011 Act becomes effective, the
charitable organization named in the order shall provide a
disclosure as described in this section in all solicitations made
by the organization to persons in Oregon. The disclosure must
clearly and conspicuously state that contributions to the
organization are not deductible as charitable donations for
Oregon income tax purposes. The disclosure also must appear in
any written document provided to a donor acknowledging the
donation or referring to the amount of the donation. The Attorney
General may specify additional disclosure requirements by rule.
(2) Failure to provide the disclosures required by this section
is a false or misleading representation for the purposes of ORS
128.886. + }
SECTION 4. { + (1) When a disqualification order issued under
sections 2 to 5 of this 2011 Act becomes effective, the Attorney
General shall publish on the Internet and otherwise make publicly
available information identifying the charitable organization
named in the order, the date that the order became effective and
the date that the information was published on the Internet.
(2) At least once every year the Attorney General shall file a
written report with the Department of Revenue that:
(a) Identifies all charitable organizations that are subject to
disqualification orders during the period covered by the report;
(b) The date the disqualification orders became effective;
(c) The date that information required by subsection (1) of
this section was published on the Internet for each order; and
(d) The methods by which the public can obtain a listing of
charitable organizations that are subject to disqualification
orders. + }
SECTION 5. { + The Attorney General may adopt all rules
necessary for the implementation of sections 2 to 5 of this 2011
Act. + }
SECTION 6. { + Section 7 of this 2011 Act is added to and made
a part of ORS chapter 316. + }
SECTION 7. { + (1) Except as provided in subsection (2) of
this section, in addition to any other modification to federal
taxable income under this chapter there shall be added to federal
taxable income the amount of any charitable contribution that:
(a) Is allowed as a deduction for federal tax purposes for the
tax year under section 170 of the Internal Revenue Code;
(b) Is attributable to a contribution to a charitable
organization that is the subject of a disqualification order
issued under sections 2 to 5 of this 2011 Act; and
(c) Was made to the charitable organization more than 30 days
after the date of Internet publication of information relating to
the disqualification order under section 4 of this 2011 Act.
(2) Charitable contributions described in subsection (1) of
this section shall not be added to federal taxable income if the
taxpayer provides to the Department of Revenue a written document
that the taxpayer received from the organization to which the
contribution was made that:
(a) Acknowledges receipt of the contribution by the
organization; and
(b) Does not include the disclosure required by section 3 of
this 2011 Act. + }
SECTION 8. { + Section 9 of this 2011 Act is added to and made
a part of ORS chapter 317. + }
SECTION 9. { + (1) Except as provided in subsection (2) of
this section, in addition to any other modification to federal
taxable income under this chapter there shall be added to federal
taxable income the amount of any charitable contribution that:
(a) Is allowed as a deduction for federal tax purposes for the
tax year under section 170 of the Internal Revenue Code;
(b) Is attributable to a contribution to a charitable
organization that is the subject of a disqualification order
issued under sections 2 to 5 of this 2011 Act; and
(c) Was made to the charitable organization more than 30 days
after the date of Internet publication of information relating to
the disqualification order under section 4 of this 2011 Act.
(2) Charitable contributions described in subsection (1) of
this section shall not be added to federal taxable income if the
taxpayer provides to the Department of Revenue a written document
that the taxpayer received from the organization to which the
contribution was made that:
(a) Acknowledges receipt of the contribution by the
organization; and
(b) Does not include the disclosure required by section 3 of
this 2011 Act. + }
SECTION 10. { + This 2011 Act takes effect on the 91st day
after the date on which the 2011 session of the Seventy-sixth
Legislative Assembly adjourns sine die. + }
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