74th OREGON LEGISLATIVE ASSEMBLY--2007 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 955
 
                         Senate Bill 110
 
Printed pursuant to Senate Interim Rule 213.28 by order of the
  President of the Senate in conformance with presession filing
  rules, indicating neither advocacy nor opposition on the part
  of the President (at the request of Attorney General Hardy
  Myers for 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.
 
  Authorizes Attorney General to determine if charitable
corporations with annual revenues of $100,000 or more provide
charitable program services that meet or exceed expenditure
threshold level. Directs Attorney General to notify Department of
Revenue of charitable corporations that fail to meet expenditure
threshold level.
  Directs Department of Revenue to list charitable corporations
that Attorney General has identified as failing to meet
expenditure threshold level in income and corporate excise tax
return instructions under heading 'Disqualified Charitable
Corporations.' Requires taxpayers to add back to federal taxable
income contributions made to disqualified charitable corporations
that were deducted for federal tax purposes.
  Takes effect on 91st day following adjournment sine die.
 
                        A BILL FOR AN ACT
Relating to regulation of charitable corporations; creating new
  provisions; amending ORS 128.620; and prescribing an effective
  date.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 128.620 is amended to read:
  128.620. As used in ORS 128.610 to 128.750:
  (1) 'Charitable corporation' means any nonprofit corporation
organized under the laws of this state for charitable or
eleemosynary purposes and any similar foreign corporation doing
business or holding property in this state for such purposes. The
mere making of grants or donations to institutions or
beneficiaries within the State of Oregon, or the investigation of
applicants for such grants or donations, shall not constitute
doing business in this state. However, the solicitation of funds
for charitable purposes in this state shall constitute doing
business therein.
    { - (2) 'Trustee' means: - }
    { - (a) Any individual, group of individuals, corporation or
other legal entity holding property in trust pursuant to any
charitable trust; - }
 
    { - (b) Any corporation which has accepted property to be
used for a particular charitable corporate purpose as
distinguished from the general purposes of the corporation;
and - }
    { - (c) A corporation formed for the administration of a
charitable trust, pursuant to the directions of the settlor or at
the instance of the trustee. - }
   { +  (2) 'Charitable program services' means the provision of
goods or services that promote or fulfill the charitable purposes
for which the charitable corporation was formed, but does not
include any fundraising, administrative or organizational
activities undertaken by the charitable corporation. + }
  (3) 'Charitable purpose' means any purpose to promote the
well-being of the public at large, or for the benefit of an
indefinite number of persons, including but not limited to
educational, literary, or scientific purposes, or for the
prevention of cruelty to children or animals, or for the benefit
of religion, rehabilitation services, public recreation, civic
improvement, or services which lessen the burdens of government.
  (4) 'Religious organization' means any organized church or
group organized for the purpose of divine worship, religious
teaching, or other directly ancillary purposes.
   { +  (5) 'Trustee' means:
  (a) Any individual, group of individuals, corporation or other
legal entity holding property in trust pursuant to any charitable
trust;
  (b) Any corporation that has accepted property to be used for a
particular charitable corporate purpose as distinguished from the
general purposes of the corporation; and
  (c) A corporation formed for the administration of a charitable
trust, pursuant to the directions of the settlor or at the
instance of the trustee. + }
  SECTION 2.  { + Section 3 of this 2007 Act is added to and made
a part of ORS 128.610 to 128.750. + }
  SECTION 3.  { + (1) Based on reports filed under ORS 128.610 to
128.750 or other available information, the Attorney General may
identify charitable corporations that have annual revenues of
$100,000 or more but that, averaged over a three-year period,
spend less than 25 percent of their annual revenues on charitable
program services.
  (2)(a) The Attorney General shall file a written report with
the Department of Revenue that names each charitable corporation
identified under subsection (1) of this section, in order to
facilitate implementation of sections 5 and 7 of this 2007 Act.
  (b) The Attorney General may not include on a written report
under this subsection a charitable corporation that has been in
existence for less than four years. The Attorney General may not
include on a written report under this subsection a charitable
corporation more than once every three years.
  (3) A charitable corporation that has been identified under
subsection (1) of this section may request a review by the
Attorney General annually. If requested by the charitable
corporation, the Attorney General shall examine the reports and
other information available to determine if the charitable
program services expenditure threshold in subsection (1) of this
section has been satisfied. If the expenditure threshold has been
satisfied, the Attorney General shall include in the report filed
under this section an instruction to the Department of Revenue to
remove the charitable corporation from the listing of
disqualified charitable corporations maintained under sections 5
and 7 of this 2007 Act for succeeding tax years.
  (4) Nothing in this section limits the authority of the
Attorney General to investigate the activities of a charitable
corporation with annual revenues of less than $100,000.
 
 
  (5) The Attorney General shall file written reports described
in this section with the Department of Revenue on or before
August 1 of each year. + }
  SECTION 4.  { + Section 5 of this 2007 Act is added to and made
a part of ORS chapter 316. + }
  SECTION 5.  { + (1) The Department of Revenue shall include a
listing of disqualified charitable corporations in the personal
income tax return instructions for tax years that begin on or
after receipt of the report described in section 3 of this 2007
Act that identifies charitable corporations that have failed to
meet the charitable program services expenditure threshold
described in section 3 of this 2007 Act. The return instructions
shall list the charitable corporations identified in the report
under the heading 'Disqualified Charitable Corporations' or
similar language. The return instructions shall also provide an
explanation of the modification to federal taxable income
described in subsection (3) of this section.
  (2) The department shall remove a charitable corporation from
the list described in subsection (1) of this section:
  (a) Upon instruction from the Attorney General that the
corporation satisfies the charitable program services expenditure
threshold described in section 3 of this 2007 Act or has ceased
to exist; or
  (b) If the corporation has been listed as a disqualified
charitable corporation for three consecutive tax years and the
department has not received a subsequent written report under
subsection (1) of this section listing the corporation.
  (3) 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 under section 170 of the Internal
Revenue Code for federal tax purposes for the tax year; and
  (b) Is attributable to a contribution to a charitable
corporation that, pursuant to subsection (1) of this section, is
listed in the instructions as a disqualified charitable
corporation. + }
  SECTION 6.  { + Section 7 of this 2007 Act is added to and made
a part of ORS chapter 317. + }
  SECTION 7.  { + (1) The Department of Revenue shall include a
listing of disqualified charitable corporations in the corporate
excise tax return instructions for tax years that begin on or
after receipt of the report described in section 3 of this 2007
Act that identifies charitable corporations that have failed to
meet the charitable program services expenditure threshold
described in section 3 of this 2007 Act. The return instructions
shall list the charitable corporations identified in the report
under the heading 'Disqualified Charitable Corporations' or
similar language. The return instructions shall also provide an
explanation of the modification to federal taxable income
described in subsection (3) of this section.
  (2) The department shall remove a charitable corporation from
the list described in subsection (1) of this section:
  (a) Upon instruction from the Attorney General that the
corporation satisfies the charitable program services expenditure
threshold described in section 3 of this 2007 Act or has ceased
to exist; or
  (b) If the corporation has been listed as a disqualified
charitable corporation for three consecutive tax years and the
department has not received a subsequent report under subsection
(1) of this section listing the corporation.
  (3) 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 under section 170 of the Internal
Revenue Code for federal tax purposes for the tax year; and
 
  (b) Is attributable to a contribution to a charitable
corporation that, pursuant to subsection (1) of this section, is
listed in the instructions as a disqualified charitable
corporation. + }
  SECTION 8.  { + Section 9 of this 2007 Act is added to and made
a part of ORS chapter 318. + }
  SECTION 9.  { + The Department of Revenue shall prepare
corporate income tax return instructions in conformance with
section 7 of this 2007 Act. + }
  SECTION 10.  { + This 2007 Act takes effect on the 91st day
after the date on which the regular session of the Seventy-fourth
Legislative Assembly adjourns sine die. + }
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