JANUARY 2017

State Law

Arizona

Tumbleweed Center for Youth Development, a prominent local nonprofit organization that provided resources and housing for homeless youth in the Phoenix area, filed for bankruptcy in late September and has suspended its operations. According to the filings, the organization is transferring its ongoing programs to other agencies in the community.

California

Governor Jerry Brown has nominated Xavier Becerra to replace Attorney General Kamala Harris who is elected to the Senate. The nomination is subject to confirmation by the General Assembly. According to The NonProfit Times, Becerra is likely to continue the current position of the Attorney General’s office to require the inclusion of Schedule B as part of the charitable filings with the state. Becerra has left Congress to accept the position as California’s Attorney General.

The same judge in the Central District of the Federal Court of California has again entered an order declaring the requirement that charities file their Schedule B is unconstitutional as applied. The most recent decision came down this past November in a challenge made by the Thomas Moore Law Center.

Colorado

The Attorney General’s office wants to create a dedicated unit to handle charitable solicitation, registration, and regulation in the state. It is currently handled by the Consumer Protection Division.

Florida

The Tampa Bay Times reports that seven individuals were arrested for serving food to the homeless in a city park. The charge pertained to their failure to have a permit to feed the homeless. The reaction by one of those arrested was “[w]e’re doing an act of kindness and mutual aid, and that should not be criminalized....”

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The founder of Children’s Charitable Services was sentenced to 90 months in federal prison, and ordered to pay $1.2 million dollars in restitution for mail fraud and other related counts. This case was prosecuted by federal authorities and included allegations that paid callers told consumers they were volunteers and 100% of their donation went to the charity for programs.

Illinois

The tax-exempt status of Illinois’ 156 not-for-profit hospitals may be in jeopardy if the Illinois Supreme Court rules in favor of local officials who contend that a 2012 law allowing these hospitals to skip paying property taxes is unconstitutional.

Mississippi

A bill was introduced in Mississippi (SB 2234) which would only require charities, fundraisers, and fundraising counsel to register once every four years in order to solicit charitable contributions. Like the majority of states requiring registration, currently registration in Mississippi is required annually for these groups.

Pennsylvania

A recent case out of this state stands for the proposition that you can’t retroactively seek a real estate tax exemption. In this case, a church that failed to seek real estate tax exemption was assessed $31,000 and did not pay the taxes, but instead applied for retroactive exemption. The court refused, holding that the failure to appeal the Tax Board’s decision barred the new claim in court.

Commentary: Real estate tax exemptions cannot be taken for granted. They must be applied for and specified procedure followed.

Other Matters

United States Postal Service

There will be a new nonprofit stamp designed for 2017.

The Alliance for Nonprofit Mailers also reports that a proposal has been made by the Office of Personnel Management whether it be a reevaluation of retirement liabilities for this key agency. Having to fully fund the pension for its employees has been an enormous burden on the agency.

Finally, First Class Forever stamps will rise in price, effective 1/22/2017, from $.47 to $.49.

United States Supreme Court

The Supreme Court heard argument in late January urging exemption from the requirements of The Employee Retirement Income Securities Act (ERISA) for all church managed charities.