Minnesota Session Laws - 1994, Regular Session

                            CHAPTER 535-H.F.No. 2680 
                  An act relating to charitable organizations; changing 
                  definitions; modifying registration requirements; 
                  amending Minnesota Statutes 1993 Supplement, section 
                  309.501, subdivisions 1 and 3. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1993 Supplement, section 
        309.501, subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] (a) As used in this section, 
        the following terms have the meanings given them.  
           (b) "Registered combined charitable organization" means a 
        federated funding organization: 
           (1) which is tax exempt under section 501(c)3 of the 
        Internal Revenue Code of 1986, as amended through December 31, 
        1992 (hereinafter "Internal Revenue Code"), and to which 
        contributions are deductible under section 170 of the Internal 
        Revenue Code; 
           (2) which exists for purposes other than solely 
        fundraising; 
           (3) which secures funds for distribution to 14 or more 
        affiliated agencies in a single, annual consolidated effort; 
           (4) which is governed either by a local, independent, 
        voluntary board of directors which represents the broad 
        interests of the public and 90 percent of the directors of the 
        governing board live or work in the community or surrounding 
        area or, if the charitable agencies are solely educational 
        institutions which meet the requirements of paragraph (c), by a 
        national board of directors that has a local advisory board 
        composed of members who live or work in the community or 
        surrounding area; 
           (5)  which distributes at least 70 percent of its total 
        campaign income and revenue to its affiliated agencies and to 
        the designated agencies it supports and expends no more than 30 
        percent of its total income and revenue for management and 
        general costs and fund raising costs; 
           (6)  which distributes at least 70 percent of its total 
        campaign income and revenue to affiliated agencies and 
        designated agencies that are incorporated in Minnesota or 
        headquartered in the service area in which the state employee 
        combined charitable campaign takes place or, if the charitable 
        agencies are solely educational institutions which meet the 
        requirements of paragraph (c), distributes at least 70 percent 
        of the state employee combined charitable campaign income and 
        revenue directly to Minnesota residents using established 
        eligibility criteria; 
           (7)  and each designated or affiliated agency supported by 
        the recipient institution devotes substantially all of its 
        activities directly to providing health, welfare, social, or 
        other human services to individuals; 
           (8)  and each designated or affiliated agency supported by 
        the recipient institution with funds contributed by state 
        employees through the combined charitable campaign provides all 
        or substantially all of its health, welfare, social, or other 
        human services, in the community and surrounding area in which 
        the state employee combined charitable campaign takes place; 
           (9)  and each charitable agency is affiliated with no more 
        than one registered combined charitable organization within the 
        registered combined charitable organization's service area in 
        the state's employee combined charitable campaign; and 
           (10)  which has been registered with the commissioner of 
        employee relations in accordance with this section.  
           Registered combined charitable organization includes a 
        charitable organization organized by Minnesota state employees 
        and their exclusive representatives for the purpose of providing 
        grants to nonprofit agencies providing Minnesota residents with 
        food or shelter if the charitable organization meets the 
        requirements of clauses (1), (4), and (5). 
           (c) "Affiliated agency" means a charitable agency that is 
        represented by a federation and has an ongoing relationship with 
        that federation which involves a review and monitoring process 
        to ensure financial, managerial, and programmatic responsibility.
           (d) "Charitable agency" means a governmental agency or an 
        organization (1) which is tax exempt under section 501(c)3 of 
        the Internal Revenue Code; (2) to which contributions are 
        deductible under section 170 of the Internal Revenue Code; and 
        (3) which is in compliance with the provisions of this chapter. 
           (e) "State employees combined charitable campaign" means 
        the annual state campaign whereby a state employee may designate 
        that the employee's contribution to a registered combined 
        charitable organization may be deducted from the pay of the 
        employee for each pay period. 
           Sec. 2.  Minnesota Statutes 1993 Supplement, section 
        309.501, subdivision 3, is amended to read: 
           Subd. 3.  [REGISTRATION.] (a) In order to participate in 
        the state employee combined charitable campaign, a federated 
        funding organization shall apply to the commissioner of employee 
        relations as a registered combined charitable organization on or 
        before June 1, 1993, and in 1994 and thereafter on or before 
        March 1 in order to be eligible to participate in the campaign 
        for that year. 
           (b) A federated funding organization which applies to the 
        commissioner of employee relations shall provide the 
        commissioner with all information the commissioner deems 
        necessary to identify the charitable and tax exempt status of 
        the organization and its compliance with the provisions of this 
        chapter including, but not limited to the following: 
           (1) a copy of the organization's most recently filed annual 
        report required by section 309.53, which shall also be filed 
        with the attorney general; 
           (2) assurance of tax exempt status for the federated 
        funding organization and each of the charitable agencies 
        identified by the federated funding organization as an 
        affiliated agency; 
           (3) (2) assurance of proper registration with the attorney 
        general of Minnesota to solicit contributions in the state of 
        Minnesota for the federated funding organization and each of the 
        charitable agencies identified by the federated funding 
        organization as an affiliated agency.  A copy of the 
        registration letter must be available upon request; 
           (4) (3) an affidavit signed by a duly constituted officer 
        of the federated funding organization attesting to the fact that 
        the federated funding organization and its affiliated agencies 
        are in compliance with each of the provisions of this section; 
           (5) (4) a list of the board of directors for the federated 
        funding organization which identifies the address for each 
        director; and 
           (6) (5) a fee of $100, or ten percent of the funds raised 
        from state employees in the previous campaign, whichever is less.
           (c) A registered combined charitable organization shall 
        disclose in its solicitation and its annual report filed under 
        section 309.53:  
           (1) gross dollars received in contributions in the prior 
        year; 
           (2) names of, business addresses, and amount of money 
        distributed to each affiliated charitable agency by the 
        registered combined charitable organization; 
           (3) percentage of gross dollars contributed which was 
        directly received by the charitable agencies; and 
           (4) projected percentage of the contribution to be received 
        by the charitable agencies in the year for which the 
        solicitation is being made.  
           If participating charitable agencies are required to pay 
        any fees to the combined charitable organization, it shall also 
        be disclosed in the solicitation and annual report.  In the 
        annual report the combined charitable organization shall include 
        a list of charitable agencies to which donors specifically 
        designated funds, and the amount designated to each agency.  
        Notwithstanding section 309.53, subdivision 1a, each charitable 
        agency shall file the report required in section 309.53.  The 
        commissioner shall consult with the attorney general to 
        determine if the combined charitable organization and its 
        charitable agencies are in compliance with this chapter.  
           (d) The commissioner shall register or not register the 
        application of an organization within 60 75 days.  No 
        organization may apply to the commissioner more than once in a 
        calendar year.  An organization whose application is denied has 
        ten calendar days after receiving notice of the denial to appeal 
        the decision or file an amended application correcting the 
        deficiency.  The commissioner shall register or not register the 
        organization within ten calendar days of the submission of the 
        appeal.  If the organization fails to correct the deficiency and 
        registration is denied a second time, the organization may 
        appeal within five calendar days after being notified by the 
        commissioner or the commissioner's designee that the deficiency 
        has not been cured and the organization is not registered.  A 
        hearing shall be scheduled by the commissioner of employee 
        relations and shall be held within 15 calendar days after 
        receiving notice of the appeal.  The provisions of chapter 14 do 
        not apply to the hearing.  The hearing shall be conducted in a 
        manner considered appropriate by the commissioner.  The 
        commissioner's determination following the hearing shall be made 
        within five calendar days after the hearing has been completed.  
        Registered combined charitable organizations shall file the 
        report required in section 309.53.  The commissioner shall 
        notify the commissioner of finance in writing of the decision to 
        register an organization under this section by July 15. 
           (e) An organization whose application as a registered 
        combined charitable organization is denied shall not be eligible 
        to participate in the state employee combined charitable 
        campaign for that year.  Only organizations that are approved 
        may participate in the state employee combined charitable 
        campaign for the year of approval and only contributions 
        authorized during the campaign may be deducted from an 
        employee's pay pursuant to section 16A.134. 
           Sec. 3.  [EFFECTIVE DATE.] 
           Sections 1 and 2 are effective the day following final 
        enactment. 
           Presented to the governor April 26, 1994 
           Signed by the governor April 28, 1994, 2:20 p.m.