The nonprofit sector encompasses a wide range of entities that vary greatly in size and scope. As a result, there is a lot of legislation impacting these organizations in each legislative session. Bills vary widely on their topic, from amending specific details in nonprofit corporation laws to charitable donation regulation. Nonprofit legislation in 2021 legislation sessions was typical, with many bills looking at taxation, contribution incentives, charitable donation regulations, charitable gaming, business liability, unemployment insurance protections, emergency appropriations or measures, and minor amendments to nonprofit corporation laws. Below are a few specific enactments from the 2021 legislative session that stand out from general trends:
Creates the Government Interaction with Nonprofit Entities Act, regulating public agency interaction with a nonprofit entity. The act amends a law concerning disclosure of information maintained by nonprofit entities and creates a misdemeanor offense for the disclosure of private information of a nonprofit entity.
Arizona S.B. 1828: Non-Itemizer Charitable Deduction
Increases the cap on the charitable contribution by the rate of inflation each year.
California S.B. 87: Small Business COVID-19 Relief Grant Program
Administers three rounds of grants of up to $25,000 to qualified small businesses, including small nonprofits; appropriates $2.075 billion for small business COVID-19 relief grants, including $50 million for nonprofit cultural institutions.
Colorado S.B. 242: Housing Development Grants Hotels Tenancy Support
Concerns the expansion of the allowable uses of the housing development grant fund; relates to grants and loans to local governments and nonprofit organizations for the rental, acquisition, or renovation of underutilized hotels, motels, and other properties to provide non-congregate sheltering or affordable housing for people experiencing homelessness.
Expands liability protection for donors to include donations of food and similar donations made to needy persons by organizations. The act authorizes the donation of expired food when the donor reasonably believes in good faith that the food remains fit for human consumption.
Maryland H.B. 908: Unemployment Insurance Protections
Permits contributing employers and reimbursing nonprofits to defer unemployment insurance contributions for calendar year 2021 without filing an extension or paying interest.
Provides for the modification of contract terms on public contracts between non-profit organizations and state agencies for the inability to perform due to the COVID-19 Public Health Emergency and State of Emergency.
South Dakota H.B. 1079: Limited Actions Against Nonprofits and Charitable Trusts
An executive branch agency, bureau, department, division, board, commission, officer, or official may not require any annual filing or reporting of a nonprofit corporation or charitable trust that is more stringent, restrictive, or expansive than that required by state or federal law.
Broadens the definition of governmental entity under the Tennessee Governmental Tort Liability Act to include certain nonprofit property owners associations that, among other requirements, own and operate a water or sewer distribution service.
Authorizes charitable and public service organizations to raise funds by conducting charitable raffles and bingo virtually over the Internet.
Additionally, because of the ongoing Covid-19 pandemic, nonprofits were eligible to receive aid under pandemic federal stimulus packages, such as state and local flexible aid and Small Business Administration programs like the Paycheck Protection Program, Economic Injury Disaster Loans, and Main Street Lending Programs.
Legislative efforts to support nonprofits are building momentum. Maryland Senator Cheryl Kagan (D), in consultation with NCSL and the National Council of Nonprofits established the National Nonprofit Legislative Caucus. The bipartisan, bicameral group of legislators is dedicated to supporting charitable nonprofits and their communicates. Legislators are invited to join the caucus to share ideas, proposed legislation and talk with nonprofit leaders.
It is no surprise the pandemic has shed light on the impact of nonprofits in improving the quality of life for individuals, communities and governments at all levels. To support their endeavors, legislators are taking note to make their small business operations less restrictive and more inclusive of incentives. Without a significant push during the holiday giving season, combined with expanded temporary contribution incentives, the spectrum of services provided by nonprofits would be challenging to execute.