Minnesota Session Laws - 2011, Regular Session

CHAPTER 25--H.F.No. 786

An act

relating to state government; modifying certain financial statement requirements for charitable organizations; providing consistency in reporting compensation information for federal and state purposes;

amending Minnesota Statutes 2010, section 309.53, subdivision 3.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2010, section 309.53, subdivision 3, is amended to read:

Subd. 3.

Financial statement requirements.

The financial statement shall include a balance sheet, statement of income and expense, and statement of functional expenses, shall be consistent with forms furnished by the attorney general, and shall be prepared in accordance with generally accepted accounting principles so as to make a full disclosure of the following, including necessary allocations between each item and the basis of such allocations:

(a) total receipts and total income from all sources;

(b) cost of management and general;

(c) program services;

(d) cost of fund-raising;

(e) cost of public education;

(f) funds or properties transferred out of state, with explanation as to recipient and purpose;

(g) total net amount disbursed or dedicated within this state, broken down into total amounts disbursed or dedicated for each major purpose, charitable or otherwise;

(h) names of professional fund-raisers used during the accounting year and the financial compensation and profit resulting to each professional fund-raiser; and

(i) a list of the five highest paid directors, officers, and employees of the organization and its related organizations, as that term is defined by section 317A.011, subdivision 18, that receive total compensation of more than deleted text begin $50,000 deleted text end new text begin $100,000 new text end , together with the deleted text begin total deleted text end compensation paid to each deleted text begin . Total compensation shall include salaries, fees, bonuses, fringe benefits, deleted text end deleted text begin severance payments, and deferred compensation paid by the charitable organization and deleted text end deleted text begin all related organizations as that term is defined by section deleted text end deleted text begin 317A.011, subdivision 18 deleted text end . new text begin For purposes of this subdivision, "compensation" is defined as the total amount reported on Form W-2 (Box 5) or Form 1099-MISC (Box 7) issued by the organization and its related organizations to the individual. The value of fringe benefits and deferred compensation paid by the charitable organization and all related organizations as that term is defined by section 317A.011, subdivision 18, shall also be reported as a separate item for each person whose compensation is required to be reported pursuant to this subdivision. new text end

Unless otherwise required by this subdivision, the financial statement need not be certified.

A financial statement of a charitable organization which has received total revenue in excess of $750,000 for the 12 months of operation covered by the statement shall be accompanied by an audited financial statement prepared in accordance with generally accepted accounting principles that has been examined by an independent certified public accountant for the purpose of expressing an opinion. In preparing the audit the certified public accountant shall take into consideration capital, endowment or other reserve funds, if any, controlled by the charitable organization. For purposes of calculating the $750,000 total revenue threshold provided by this subdivision, the value of donated food to a nonprofit food shelf may not be included if the food is donated for subsequent distribution at no charge, and not for resale.

Presented to the governor May 16, 2011

Signed by the governor May 18, 2011, 9:32 a.m.