HB1585: HB1585 Income tax; donations to nonprofit corporations that provide housing to cancer care patients; provide credit

26 LC 44 3326 House Bill 1585 By: Representatives Blackmon of the 146 th, Stinson of the 150 th, Crawford of the 89 th, Williamson of the 112th, Ballard of the 147th, and others A BILL TO BE ENTITLED AN ACT To amend Article 2 of Chapter 7 of Title 48 of the Official Cod e of Georgia Annotated,1 relating to imposition, rate, computation, exemptions, and cred its regarding income taxes,2 so as to provide for a tax credit for donations to nonprofit corporations that provide housing3 to cancer care patients; to provide for taxpayer certification of tax credits; to provide for4 sunsets of the tax credit and carry-forward period; to provide for applicability; to provide for5 pursuit of remedies; to provide for rules and regulations; to provide for definitions; to provide6 for related matters; to repeal conflicting laws; and for other purposes.7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:8 SECTION 1.9 Article 2 of Chapter 7 of Title 48 of the Official Code of Geor gia Annotated, relating to10 imposition, rate, computation, exemptions, and credits regarding income taxes, is amended11 by adding a new Code section to read as follows:12 "48-7-29.29.13 (a) As used in this Code section, the term:14 H. B. 1585 - 1 - 26 LC 44 3326 (1) 'Cancer' means bladder, blood, brain, breast, cervical, esophageal, intestinal, kidney,15 lymphatic, lung, prostate, rectal, respiratory tract, skin, tes ticular, and thyroid cancer;16 leukemia; multiple myeloma; or non-Hodgkin's lymphoma.17 (2) 'Cancer care' means any medical treatment for cancer that meets or exceeds the18 established standard of care.19 (3) 'Cancer housing accommodations' means temporary lodging fo r minor patients20 receiving cancer care and their parents or legal guardians.21 (4) 'Division' means the Division of Family and Children Services of the Department of22 Human Services.23 (5) 'Qualified contributions' means the preapproved contribution of funds made during24 the taxable year by a taxpayer to a qualified organization under the terms and conditions25 of this Code section.26 (6) 'Qualified expenditures' means expenditures made by a qual ified organization for27 cancer housing accommodations; provided, however, that such term shall not include any28 expenditures for which the qualified organization has received or is eligible to receive29 reimbursement from the division.30 (7) 'Qualified organization' means an organization that provid es cancer housing31 accommodations, is exempt from taxation under Section 501(c)(3) of the federal Internal32 Revenue Code, and has been certified and listed by the division pursuant to subsection33 (d) of this Code section.34 (b)(1) The aggregate amount of tax credits allowed under this Code section shall not35 exceed $10 million per calendar year, and no more than $5 milli on of such aggregate36 amount shall be allowed for corporations or other entities not provided for in37 subparagraphs (A) through (C) of paragraph (2) of this subsection.38 (2) Subject to the aggregate limit provided in paragraph (1) o f this subsection and the39 limitations of subsections (c), (d), and (n) of this Code secti on, each taxpayer shall be40 H. B. 1585 - 2 - 26 LC 44 3326 allowed a credit against the tax imposed by this chapter for qu alified contributions, as41 follows:42 (A) In the case of a single individual or a head of household, the actual amount of43 qualified contributions made;44 (B) In the case of a married couple filing a joint return, the actual amount of qualified45 contributions made;46 (C) Anything to the contrary notwithstanding, in the case of a n individual taxpayer47 who is a member of a limited liability company duly formed unde r state law, a48 shareholder of a Subchapter 'S' corporation, or a partner in a partnership, the actual49 amount of qualified contributions it made; provided, however, that tax credits pursuant50 to this paragraph shall only be allowed for the portion of the income on which such tax51 was actually paid by such member of the limited liability compa ny, shareholder of a52 Subchapter 'S' corporation, or partner in a partnership; or53 (D) In the case of a corporation or other entity not provided for in subparagraphs (A)54 through (C) of this paragraph, the actual amount of qualified contributions made.55 (c) For the period beginning on January 1 and ending on June 30 of each year, a taxpayer56 shall not be allowed a credit for contributions, and the commissioner shall not preapprove57 any contributions, that exceed the following limits:58 (1) In the case of a single individual or a head of household, $2,500.00;59 (2) In the case of a married couple filing a joint return, $5,000.00;60 (3) In the case of an individual who is a member of a limited liability company duly61 formed under state law, a shareholder of a Subchapter 'S' corpo ration, or a partner in a62 partnership, $5,000.00; or63 (4) In the case of a corporation or other entity not provided for in paragraphs (1) through64 (3) of this subsection, 30 percent of such entity's income tax liability.65 (d) For the period beginning on July 1 and ending on December 31 of each year, to the66 extent that the aggregate amounts of tax credits authorized by subsection (b) of this Code67 H. B. 1585 - 3 - 26 LC 44 3326 section have not been reached, the commissioner shall preapprov e, deny, or prorate68 additional requested amounts on a first come, first served basis and shall provide notice to69 such taxpayer and the qualified organization of such preapproval, denial, or proration.70 (e) A taxpayer that is preapproved for a tax credit allowed pursuant to this Code section71 and that does not make a qualified contribution of the total preapproved amount shall be72 allowed such credit in an amount not to exceed 95 percent of the amount of the qualified73 contribution actually made by the taxpayer.74 (f) The commissioner shall establish a page on the department' s public website for the75 purpose of implementing this Code section. Such page shall contain, at a minimum:76 (1) A link to the division's web based application for certifi cation as a qualified77 organization as provided for in subsection (g) of this Code section;78 (2) The current list of all qualified organizations;79 (3) The total amount of tax credits remaining and available for preapproval for each year;80 (4) A web based method for taxpayers seeking the preapproval status for contributions;81 and82 (5) The information received by the department from each quali fied organization83 pursuant to paragraph (1) of subsection (j) except for division (j)(1)(B)(iv) of this Code84 section.85 (g)(1) The division shall establish and maintain a web based application process for the86 purpose of certifying qualified organizations. At a minimum, such application created87 by the division shall include an agreement submitted by the app licant to fully comply88 with the terms and conditions of this Code section.89 (2)(A) Subject to the requirements of this subsection, the div ision shall certify any90 applicant as a qualified organization upon successful completio n of such application91 process and shall decertify an organization that fails to maintain the requirements to be92 a qualified organization or that the division determines to have violated any other law.93 H. B. 1585 - 4 - 26 LC 44 3326 (B) After receiving certification pursuant to this subsection, each qualified organization94 shall annually demonstrate to the division's satisfaction that it continues to maintain the95 requirements to be a qualified organization, and shall annually submit to the division96 a copy of such organization's most recent annual audit.97 (3) The division shall certify any applicant as a qualified or ganization within ten days98 of receipt of a written request or application.99 (4) The division shall establish a process for rolling applica tions and certifications100 consistent with the requirements of this Code section.101 (h)(1) Prior to making a contribution to any qualified organiz ation, the taxpayer shall102 electronically notify the department, in a manner specified by the commissioner, of the103 total amount of contribution that such taxpayer intends to make to such qualified104 organization.105 (2) Within 30 days after receiving a request for preapproval o f contributions, the106 commissioner shall preapprove, deny, or prorate requested amounts on a first come, first107 served basis and shall provide notice to such taxpayer and the qualified organization of108 such preapproval, denial, or proration. Such notices shall not require any signed release109 or notarized approval by the taxpayer. The preapproval of cont ributions by the110 commissioner shall be based solely on the availability of tax c redits subject to the111 aggregate total limit established under paragraph (1) of subsec tion (b) of this Code112 section.113 (3) Within 60 days after receiving the preapproval notice issu ed by the commissioner114 pursuant to paragraph (2) of this subsection, the taxpayer shall contribute the preapproved115 amount to the qualified organization or such preapproved contri bution amount shall116 expire. The commissioner shall not include such expired amount s in determining the117 remaining amount available under the aggregate limit for the respective calendar year.118 (i)(1) Each qualified organization shall issue to each contributor a letter of confirmation119 of contribution, which shall include the taxpayer's name, addre ss, tax identification120 H. B. 1585 - 5 - 26 LC 44 3326 number, the amount of the qualified contribution, the date of the qualified contribution,121 and the total amount of the credit allowed to the taxpayer.122 (2)(A) In order for a taxpayer to claim the tax credit allowed under this Code section,123 all such applicable letters as provided for in paragraph (1) of this subsection shall be124 attached to the taxpayer's tax return provided for in Code Section 33-8-6.125 (B) If the taxpayer files an electronic return, such confirmation shall only be required126 to be electronically attached to the return if the Internal Revenue Service allows such127 attachments to be affixed and transmitted to the department. I n any such event, the128 taxpayer shall maintain such confirmation and such confirmation shall only be made129 available to the commissioner upon request.130 (3) The commissioner shall allow tax credits for any preapproved contributions made to131 a qualified organization at the time the contributions were made if such organization was132 a qualified organization at the time of the commissioner's preapproval of the contributions133 and the taxpayer has otherwise complied with this Code section.134 (j)(1) Each qualified organization shall annually submit to the department no later than135 July 15 of each year:136 (A) A complete copy of its IRS Form 990 including applicable attachments, or for any137 qualified organization that is not required by federal law to file an IRS Form 990, such138 organization shall submit to the commissioner equivalent inform ation on a form139 prescribed by the commissioner; provided, however, that, if the organization's IRS140 Form 990 is not prepared by the filing deadline, the organizati on shall provide such141 form at the same time it submits such form to the Internal Revenue Service; and142 (B) A report detailing the contributions received during the calendar year pursuant to143 this Code section on a date determined by, and on a form provid ed by, the144 commissioner which shall include:145 (i) The total number and dollar value of individual contributi ons and tax credits146 approved. Individual contributions shall include contributions made by those filing147 H. B. 1585 - 6 - 26 LC 44 3326 income tax returns as a single individual or head of household and those filing joint148 returns;149 (ii) The total number and dollar value of corporate contributi ons and tax credits150 approved;151 (iii) The total number and dollar value of all qualified expenditures made;152 (iv) A list of contributors, including the dollar value of eac h contribution and the153 dollar value of each approved tax credit; and154 (v) An accounting of the funds withheld from qualified contributions demonstrating155 that no more than 20 percent of such funds were withheld from q ualified156 expenditures, as required by subparagraph (m)(1)(A) of this Code section.157 (2) Except for the information published in accordance with subsection (f) of this Code158 section, all information or reports relative to this Code secti on that were provided by159 qualified organizations to the department shall be confidential taxpayer information,160 governed by Code Sections 48-2-15, 48-7-60, and 48-7-61, whethe r such information161 relates to the contributor or the qualified organization.162 (k) By April 1 of each year, each qualified organization shall post on its public website in163 a prominent place:164 (1) A copy of its prior year's annual financials containing th e total amount of funds165 received from all sources relative to the amount of qualified contributions it received and166 the total amount and a description of how such contributions were utilized; and167 (2) A certification, signed by the chief executive officer of the qualified organization and168 attested to by an independent accounting firm, which substantia lly complies with the169 following statement:170 'I hereby certify that:171 (A) The organization has materially complied with the requirem ents of172 subparagraph (m)(1)(A) of O.C.G.A. Section 48-7-29.29 in that no more than 20173 H. B. 1585 - 7 - 26 LC 44 3326 percent of qualified contributions received by [the qualified o rganization] were174 retained by, withheld by, or otherwise paid to the organization; and175 (B) The description of how [the qualified organization] utilize d the qualified176 contributions is true and correct.'177 (l)(1) A taxpayer shall not be allowed to designate or direct the taxpayer's qualified178 contributions to any particular purpose or for the direct benef it of any particular179 individual.180 (2) A taxpayer that operates, owns, or is a subsidiary of an association, organization, or181 other entity that contracts directly with a qualified organization shall not be eligible for182 tax credits allowed under this Code section for contributions m ade to such qualified183 organization.184 (3) In soliciting contributions, no person shall represent or direct that, in exchange for185 making qualified contributions to any qualified organization, a taxpayer shall receive any186 direct or particular benefit. The status as a qualified organization shall be revoked for any187 qualified organization determined to be in violation of this pa ragraph and shall not be188 renewed for at least two years.189 (m)(1) Each qualified organization shall use at least 80 percent of the funds received by190 it from qualified contributions to make qualified expenditures. Each qualified191 organization shall maintain accurate and current records of all expenditures of such funds192 and provide such records to the commissioner upon his or her request. In no event shall193 a qualified organization retain for its own use or apply to its overhead or administrative194 expenses more than 20 percent of the funds received pursuant to this Code section.195 (2) A qualified organization that fails to comply with any of the requirements under this196 Code section shall be given written notice by the department of such failure to comply197 by certified mail and shall have 90 days from the receipt of su ch notice to correct all198 deficiencies.199 H. B. 1585 - 8 - 26 LC 44 3326 (3) Upon failure to correct all deficiencies within 90 days, the department shall revoke 200 the qualified organization's status as a qualified organization and such entity shall be201 immediately removed from the department's list of organizations . All applications for202 preapproval of tax credits for contributions to such qualified organization under this Code203 section made on or after the date of such removal shall be rejected.204 (4) Each qualified organization that has had its status revoke d and has been delisted205 pursuant to this Code section shall immediately cease all expenditures of funds received206 relative to this Code section and shall transfer all of such funds that are not yet expended207 to a properly operating qualified organization within 30 calendar days of its removal from208 the department's list of qualified organizations.209 (n)(1) No credit shall be allowed under this Code section to a taxpayer for any amount210 of qualified contributions that were utilized as deductions or exemptions from taxable211 income.212 (2) In no event shall the total amount of the tax credit used under this Code section for213 a taxable year exceed the taxpayer's income tax liability or st ate tax liability owed214 pursuant to Code Section 33-8-4. Any unused tax credit shall b e allowed the taxpayer215 against the succeeding three years' tax liability. No such cre dit shall be allowed the216 taxpayer against prior years' tax liability.217 (o) The chairperson of the House Appropriations Committee and the chairperson of the218 Senate Committee on Appropriations shall have the authority to request an audit219 concerning this Code section as a whole or of any one or more qualified organizations. The220 commissioner, the state auditor, each qualified organization, each aging-out program, and221 the director of the division shall cooperate to the full extent necessary to conduct such222 audits.223 (p) At the discretion of the commissioner or the director of t he division, any suspected224 misuse of funds contributed or expended pursuant to this Code section shall be forwarded225 to the Attorney General for investigation and prosecution.226 H. B. 1585 - 9 - 26 LC 44 3326 (q) The commissioner shall promulgate rules and regulations necessary to implement and227 administer the provisions of this Code section."228 SECTION 2.229 All laws and parts of laws in conflict with this Act are repealed.230 H. B. 1585 - 10 -