HB 2600

This bill authorizes a mutual aid organization to register with the secretary of state. However, unregistered mutual aid organizations retain all common law rights of voluntary associations. In order to register with the secretary of state, a mutual ai d organization must file articles of organization or other documentation containing all of the following:  T he name and principal address of the organization .  A statement of mutual aid purposes .  A description of the community served .  A certification of community governance structure .  A n estimate of annual revenue .  A registration fee not to exceed $50. As used in this bill, a "mutual aid organization"" means an unincorporated association or nonprofit corporation organized primarily to provide mutual support and assistance within a community or neighborhood through (i) pooling and sharing of resources, (ii) cooperative provision of goods or services, (iii) emergency assistance, or (iv) community-based support systems. This bill clarifies that its provisions must be liberally construed to facilitate mutual aid and community self-reliance. Further, this bill does not require registration or informal mutual aid or limit the common law rights of voluntary association. ANNUAL REPORT This bill requires a registered mutual aid organization to file an annual report showing the (i) approximate number of individuals served, (ii) the types of mutual aid provided, (iii) the total annual revenue for the prior year, and (iv) a certificate of continued community governance. QUALIFIED MUTUAL AID ORGANIZATIONS Tax Exemptions This bill exempts registered qualified mutual aid organizations from the payment of taxes imposed by the Excise Tax Law of 1999 and the Franchise Tax Law of 1999, on income derived from mutual aid activities. As used in this bill, a ""qualified mutual aid organization"" means a mutual aid organization that (i) receives less than $100, 000 in total annual revenue; (ii) is not required to file IRS Form 990, 990-EZ, or 990-PF; (iii) provides opportunities for all participants to have a voice in decisions about r esource distribution and priorities; (iv) operates on the principle that those receiving assistance may also contribute assistance to others in the community; and (v) maintains open access to individuals within the community served. This bill exempts qualified mutual aid organizations from sales and use taxes imposed by present law if the property is purchased for distribution to community participants at no charge or at no cost; or is used in providing direct mutual aid services. This bill exempts real and personal property owned by a qualified mutual aid organization, that is established for nonprofit, mutual aid purposes and which property is exclusively used for such purposes from ad valorem taxation. Requirements after a Change in Qualified Status This bill requires a qualified mutual aid organization that exceeds $100, 000 in annual revenue, or that becomes required to file IRS Form 990, 990-EZ, or 990-PF, to notify the secretary of state of such change within 60 days. Further, the qualified mutual aid organization has 12 months from the end of the fiscal year in which it exceeds the revenue threshold to either reduce the annual revenue below the thresho ld or obtain federal tax exempt status and incorporate as a nonprofit corporation. This bill cl arifies that all tax credits, tax exemptions, and liability, food, and zoning protections, afforded to a qualified mutual aid organization cease at the end of such 12-month transition period unless the qualified mutual aid organization complies with such requirements. This bill requires the secretary of state, in consultation with the department of economic and community development, to develop and make available model organizational documents for mutual aid organizations transitioning to federal nonprofit status. Further, the secretary of state must provide or arrange for technical assistance on federal tax-exempt application procedures; maintain a list of pro bono legal resources and nonprofit support organizations; and create a simplif ied guide to nonprofit governance requirements. Tax Credits This bill authorizes a person making a contribution to a qualified mutual aid organization to claim a tax credit against the person's combined franchise and excise tax liability equal to 50% of the contribution. However, the credit must not exceed $5, 00 0, or the taxpayer's total franchise and excise tax liability for the taxable year. Liability Protections This bill provides that a person who voluntarily provides services or goods through a qualified mutual aid organization is not generally liable for civil damages resulting from any act or omission in providing such assistance, and is not subject to a civ il suit of any nature arising out of providing such assistance. However, a person who voluntarily provides services or goods through a qualified mutual aid organization may be liable for acts or omissions constituting gross negligence, recklessness, or i nt entional misconduct; or for acts or omissions that violate criminal law. This bill provides that a person who permits the person's property to be used for activities of a qualified mutual aid organization, without compensation is not generally liable for civil damages arising from such use and is not subject to a civil suit o f any nature arising out of such use. However, a person may be liable for gross negligence or willful or wanton conduct. This bill provides that a person or qualified mutual aid organization that donates apparently healthy food in good faith for free distribution is not generally subject to a criminal penalty for the violation of unfair trade practice laws or civil damages arising from the condition of the food. However, a person or qualified mutual aid organization may be liable for an injury caused by gross negligence, recklessness, or intentional. This bill clarifies that this protection supplements, but does not repl ac e, protections provided by federal law. Zoning Protections This bill requires the following mutual aid activities of a qualified mutual aid organization to be considered customary accessory uses conducted in a residential zone: (i) food preparation and distribution, (ii) c hildcare cooperatives serving community participants, (iii) t ool libraries and equipment sharing, (iv) c ommunity health clinics, and (v) educational programs. However, local governments may establish reasonable time, place, and manner restrictions on such activities. STATE AGENCY COOPERATION This bill authorizes all departments, agencies, and instrumentalities of state government to take the following actions:  Recognize mutual aid organizations as eligible service providers where consistent with federal law and program requirements .  Develop streamlined application, licensing, and compliance procedures for mutual aid organizations .  Establish reduced fee schedules for mutual aid organizations providing services at or below cost to community participants .  Provide technical assistance to mutual aid organizations seeking to participate in state programs .  Give preference to mutual aid organizations in procurement when cost and quality are substantially equivalent .  Enter into partnerships with mutual aid organizations to deliver services that serve the public welfare. Further, this bill requires each state agency to review its rules and procedures to identify opportunities to facilitate mutual aid organization participation in relevant programs and to report its findings to the general assembly on or before July 1, 20 27. However, this bill clarifies that its provisions do not require an agency to take action that conflicts with federal law or that would jeopardize federal funding. MUNICIPAL AND COUNTY GOVERNMENTS This bill authorizes municipalities and counties to make grants to qualified mutual aid organizations operating within their jurisdiction and enter into contracts with qualified mutual aid organizations for the provision of services. Such grants and con tracts must require (i) a demonstration that the qualified mutual aid organization serves a public purpose, (ii) annual reporting on services provided, and (iii) compliance with community governance requirements. This bill also authorizes municipalities and counties to (i) provide meeting space, storage facilities, equipment, or other in-kind support; (ii) establish mutual aid support zones with streamlined permitting; and (iii) create public-private partnerships with qualified mutual aid organizations. RULEMAKING This bill authorizes the secretary of state to promulgate rules to effectuate this bill. Additionally, this bill authorizes the department of revenue to establish procedures to effectuate this bill."