Public social services: tax-exempt nonprofit organizations.

Plain English Breakdown

The official source material does not provide specific details on the exact nature of the state tax-exempt status requirements or how they will be applied in practice.

Public Social Services: Nonprofit Organizations

AB-1318 updates the definition of 'qualified nonprofit organization' to include those exempt from state taxes, and ensures that federal tax law references for grants and contracts also apply to California's Corporation Tax Law.

What This Bill Does

• Updates the definition of a qualified nonprofit organization to include organizations exempt from both federal and state taxes.
• Ensures that when federal tax laws are used to determine eligibility for state grants or service contracts, they also refer to California’s Corporation Tax Law.

Who It Names or Affects

• Nonprofit organizations working with refugees, immigrants, and asylees in California.
• The State Department of Social Services and local agencies administering public social services grants and contracts.

Terms To Know

Qualified nonprofit organization

A nonprofit group that meets certain requirements to receive state or federal tax exemptions, as well as grants and service contracts from the government.

Corporation Tax Law

California's law providing tax exemptions for specific organizations similar to how federal tax laws do.

Limits and Unknowns

• The bill does not specify which state tax-exempt status requirements nonprofits must meet.
• It is unclear if this change will affect all types of grants and contracts or only those related to public social services.

Official Summary Text

AB 1318, Bonta.
Public social services: tax-exempt nonprofit organizations.
The Corporation Tax Law, in modified conformity with federal tax law, provides an exemption from the taxes imposed by that law for specified organizations. Existing law references federal tax law to give priority to tax-exempt organizations, or to require tax-exempt status, for the purpose of certain grants and service contracts.
This bill would provide that where specified federal tax law is referenced to determine eligibility for any state grant or service contract, or for the disbursement of state or local funds, it is deemed to also refer to the relevant provision of the Corporation Tax Law.
Existing law designates the State Department of Social Services as the single agency with full power to supervise every phase of the administration of public social services, including services for refugees, immigrants, and asylees, except as specified.
Existing law requires the department to allocate federal funds for refugee social services programs to eligible counties and, in certain circumstances, to qualified nonprofit organizations. Existing law requires the department, subject to an appropriation, to provide grants to qualified nonprofit organizations through contracts to provide certain immigration-related legal services to persons residing in, or formerly residing in, the state. Existing law requires the department to administer a rapid response program to award grants or contracts to entities, including nonprofit organizations, that provide critical assistance to immigrants during times of need. Existing law, subject
to an appropriation, establishes the Enhanced Services for Asylees and Vulnerable Noncitizens program to provide resettlement services for persons granted asylum by the United States Attorney General or the United States Secretary of Homeland Security or who are eligible to receive refugee cash assistance and services as victims of crime. Existing law requires a grant or contract awarded pursuant to that program to be executed only with a qualified nonprofit organization. Existing law defines “qualified nonprofit organization” or “nonprofit organization” for purposes of these provisions to include a nonprofit organization that, among other things, is exempt from federal income taxation, as specified.
This bill would revise the definition of “qualified nonprofit organization” or “nonprofit organization” under the above-described provisions to additionally include a nonprofit organization that meets specified requirements to qualify for state tax-exempt status.
This bill would declare that it is to take effect immediately as an urgency statute.

Current Bill Text

Download Bill PDF