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2012 Legislative Session Report

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2012 Colorado Legislative Session Report Colorado Nonprofit Association worked on several key bills for Colorado nonprofits during the 2012 Colorado regular and special legislative sessions. Aponté and Busam, a political consulting firm, represents us at the Capitol to advance our positions on legislation. BUSINESS AND CHARITABLE REPORTING HB 12-1236 Modify Regulation Charitable Solicitations Actively Support 4/26/12 Signed by Governor PRIMARY SPONSORS Representative Ken Summers (R–Lakewood); Senator Cheri Jahn (D–Wheat Ridge) SUMMARY The bill gives a nonprofit an automatic three-month extension on its annual Colorado Charitable Solicitations Act (CCSA) report if the nonprofit has already requested an extension on IRS Form 990 (or 990-EZ, 990-PF, etc.). The law makes additional changes to specific CCSA reporting exemptions and disclosure requirements as follows: • Exempts persons who exclusively raise funds to directly benefit a named individual. • Clarifies that grant writers are not required to register separately from the organization as paid solicitors unless their compensation is based on a percentage of the funds they raise. • Requires that paid solicitors state their full name and if contributions are not tax deductible prior to securing a donation over the telephone. • Clarifies that only monetary contributions must be deposited in a charity’s bank account within two business days by a paid solicitor. RATIONALE FOR SUPPORT Many nonprofits currently have to apply for extensions on both their Form 990 and CCSA reports because necessary financial information from their Form 990 or their financial audits is not ready yet. With this change, nonprofits would not have to request a CCSA extension if they have already requested an extension from the IRS. This makes it easier for the charity to meet its deadline without an additional step and reduces the number of extensions processed by the Colorado Secretary of State’s office. The other changes simplify reporting by exempting fundraising efforts that only benefit an individual because these efforts do not provide a charitable benefit to the public. Also, the new law exempts grant writers from registering as paid solicitors unless they are compensated based on a percentage of the funds they raise. Paid solicitors must also give a full name and state if contributions are not tax deductible prior to securing a contribution over the telephone. Finally, paid solicitors must deposit monetary contributions into a charity’s bank account within two days of receipt but this requirement does not apply to other kinds of contributions. Serving nonprofits. Strengthening communities. 455 Sherman Street | Suite 207 | Denver, Colorado 80203-4494 | (303) 832-5710 | (800) 333-6554 | (303) 894-0161 | www.ColoradoNonprofits.org ASSOCIATION ACTIONS • Worked directly with the Secretary of State’s office and the bill sponsors to draft the bill • Testified in support of the bill • Actively lobbied legislators on the bill • Encouraged members to sign on in support LINKS Bill to streamline reporting by Colorado nonprofits SB 12-123 Secretary of State Online Filing System Actively Support 05/11/2012 Signed by Governor PRIME SPONSORS Senator Scott Renfroe (R–Greeley), Representative J. Paul Brown (R–Ignacio) SUMMARY The bill requires the Secretary of State to develop and implement enhancements to online business filing systems. Specifically, the enhancements should allow users to: • associate multiple business records in one account; • file multiple documents at one time; • pay for multiple filings at the same time; and • at the discretion of the Secretary: store payment information, view balances, view transaction history, and add money to accounts. This also includes enhancements to the systems for filing CCSA reports and reporting for charitable bingo and raffle licenses. RATIONALE FOR SUPPORT Although there are upfront costs to make these changes, it should make it easier for nonprofits to make and pay for required business filings in one visit from a single account (e.g. CCSA filings, periodic reports, applications for trademarks, bingo/raffle licenses). Nonprofits should also be able to complete CCSA filings more easily after updates to the CCSA filing system and the public should be able to access information on charities in a user-friendly way. Overall, these changes should save time and money for both businesses and the Secretary of State’s office. ASSOCIATION ACTIONS • Actively lobbied legislators on the bill • Testified in support of the bill LINKS Ed Sealover. Suite deal: Software may streamline Colorado business filings. Denver Business Journal. May 4, 2012. Senator Scott Renfroe testifying for SB 12-123 Serving nonprofits. Strengthening communities. 455 Sherman Street | Suite 207 | Denver, Colorado 80203-4494 | (303) 832-5710 | (800) 333-6554 | (303) 894-0161 | www.ColoradoNonprofits.org SJM 12-003 Memorialize Congress to Modify Certain Reporting Procedures for Small Nonprofits 5/09/12 House Third Reading Passed Actively Support PRIME SPONSORS Senator Kevin Lundberg (R–Berthoud); Representative Brian DelGrosso (R–Loveland) SUMMARY Memorializes Congress to amend 26 U.S.C., Sec. 6033 to require timely notices from the IRS for reminding 990-N filers when their annual filing deadline has passed, and for reminding nonprofits of impending revocation if they fail to file for a third consecutive year. RATIONALE FOR SUPPORT As amended, SJM 12-003 calls on Congress to amend Pension Protection Act as follows: Provide timely notices for failing to file on time and upon impending revocation. According to a 2011 analysis by Guidestar.org, 75 percent of revoked organizations have annual budgets less than $25,000. This would ensure clarity about required IRS notices and help ensure nonprofits know the law and how to prevent revocation. Require suspension, not revocation, of tax-exempt status for failing to file for three consecutive years. About 400,000 nonprofits nationwide are on the IRS revocation list (8,500 in CO) and nearly 9,000 have applied for reinstatement to date. Suspension would ensure nonprofits could restore tax-exemption without having to file for a determination of tax-exempt status all over again. This would make it easier to cure suspension and clarify which organizations are on the suspension list. ASSOCIATION ACTIONS • Actively lobbied legislators on the bill • Amended the resolution language • Testified in support of the bill LINKS Senator Kevin Lundberg speaks about SJM 12-003 ECONOMIC DEVELOPMENT HB 12-1241 Concerning Enterprise Zone Designations Actively Support 06/06/12 Signed by Governor PRIME SPONSORS Representative Mark Ferrandino (D-Denver); Senator Rollie Heath (D–Boulder) Serving nonprofits. Strengthening communities. 455 Sherman Street | Suite 207 | Denver, Colorado 80203-4494 | (303) 832-5710 | (800) 333-6554 | (303) 894-0161 | www.ColoradoNonprofits.org SUMMARY As amended, creates an Enterprise Zone Review Task Force from 2012 to 2014 to ensure that enterprise zone tax credits achieve intended economic development objectives and that designations are reviewed every five years to ensure they meet existing criteria. The original bill would have required that designated enterprise zones meet two, rather than one, of the following criteria: high unemployment, slow population growth, or per capita income below the state average. Currently, donors to designated enterprise zone projects - which include nonprofits providing economic and community development services and homeless assistance - receive tax credits for their donations. The Association supported further amendments to require nonprofit representation on the task force. RATIONALE FOR SUPPORT Taxpayers who donate to these projects can receive tax credits of 25% of the cash amount donated (12.5% for in-kind). More than 400 Enterprise Zone Contribution Projects statewide are integral to the implementation of enterprise zone plans and accomplishment of the program’s objectives. A December 2011 Association survey of nonprofits participating in the Enterprise Zone Contribution Project program found that about 87% of the ninety respondents felt that donors have given more to their projects because of enterprise zone tax credits. 81% felt that their ability to deliver services would be negatively impacted if their donors could not receive enterprise zone tax credits. Since this program supports the ability of nonprofits to serve their communities, 1241 ensures they can be part of discussions to address concerns about the program and improve its overall effectiveness. ASSOCIATION ACTIONS • Actively lobbied legislators on the bill • Testified in support of the bill LINKS Christopher N. Osher. Colorado Lawmakers OK Task Force to Scrutinize Enterprise Zone Tax Breaks. Denver Post. May 16, 2012. Ed Sealover. The strange case of business-backed enterprise-zone reform. Denver Business Journal. Feb. 23, 2012. OEDIT Enterprise Zone Information HB 12-1154 Regional Approach Economic Development Actively Support 04/20/2012 House Appropriatins Commiteee Postponed Indefinitely PRIME SPONSORS Representative Don Coram (D–Montrose); Senator Cheri Jahn (D–Wheat Ridge) Serving nonprofits. Strengthening communities. 455 Sherman Street | Suite 207 | Denver, Colorado 80203-4494 | (303) 832-5710 | (800) 333-6554 | (303) 894-0161 | www.ColoradoNonprofits.org SUMMARY This bill directs the Office of Economic Development and International Trade (OEDIT) to support regional economic development partnerships. These partnerships must include all necessary
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