(a) An organization that intends to claim the welfare exemption or veterans’ organization exemption shall file with the State Board of Equalization a claim for an organizational clearance certificate.
(b) The board staff shall review each claim for an organizational clearance certificate for the welfare exemption to ascertain whether the organization meets the requirements of Section 214 and shall issue a certificate to a claimant that meets these requirements. The board staff shall also review each claim for an organizational clearance certificate for the veterans’ organization exemption to ascertain whether the organization meets the requirements of Section 215.1 and shall issue a certificate to a claimant that meets these requirements. In this connection, the board staff shall consider, among other matters, whether:
(1) The services and expenses of the owner or operator (including salaries) are excessive, based upon like services and salaries in comparable public or private institutions.
(2) The operations of the owner or operator, either directly or indirectly, materially enhance the private gain of any individual or individuals.
(c) Any claim of any organization that files for an organizational clearance certificate for the first time shall be accompanied by the claimant’s corporate identification number, mailing address, and all of the following documents:
(1) A certified copy of the financial statements of the organization.
(2) A certified copy of the articles of incorporation and any amendments thereto, or in the case of any noncorporate fund or foundation, its bylaws, articles of association, constitution, or regulations and any amendments thereto.
(3) A copy of a valid, unrevoked letter or ruling from either the Franchise Tax Board or, in the alternative, the Internal Revenue Service, that states that the organization qualifies as an exempt organization under the appropriate provisions of the Bank and Corporation Tax Law or the Internal Revenue Code.
(d) (1) If the board staff determines that a claimant is not eligible for an organizational clearance certificate, the board shall notify the claimant of the ineligibility.
(2) The claimant may file an appeal of the board staff’s finding of ineligibility with the board within 60 days of the date of mailing of the notice of ineligibility. The appeal of the board staff’s finding shall be in writing and shall state the specific grounds upon which the appeal is founded.
(3) The board shall conduct a hearing on the appeal in accordance with any rules of notice, procedure, and briefing as the board shall prescribe. The parties to the hearing or proceeding shall be the board staff and the claimant appealing the finding of ineligibility. The board staff and the claimant may agree in writing to submit the matter to the board for a decision without a hearing. The board shall provide written findings and conclusions or a written decision to support its decision.
(e) (1) Once granted, an organizational clearance certificate for the welfare exemption remains valid until the board staff determines that the organization no longer meets the requirements of Section 214. Once granted, an organizational clearance certificate for the veterans’ organization exemption remains valid until the board staff determines that the organization no longer meets the requirements of Section 215.1.
(2) If the board staff determines that the organization no longer meets the requirements for an organizational clearance certificate, the board staff shall revoke the certificate and notify the claimant and each county assessor of the revocation.
(3) The organization may file an appeal of the board staff’s revocation with the board within 60 days of the date of mailing of the notice revocation. The appeal of the revocation shall be in writing and shall state the specific grounds upon which the appeal is founded.
(4) The board shall conduct a hearing on the appeal in accordance with any rules of notice, procedure, and briefing as the board shall prescribe. The parties to the hearing or proceeding shall be the board staff and the claimant appealing the finding of ineligibility. The board staff and the claimant may agree in writing to submit the matter to the board for decision without hearing. The board shall provide written findings and conclusions or a written decision to support its decision.
(f) Pursuant to Section 15618 of the Government Code, the board may institute an audit or verification of an organization to ascertain whether the organization meets the requirements of Section 214.
(g) Notwithstanding Section 20, for purposes of this section “State Board of Equalization” and “board” mean the State Board of Equalization.
(Amended by Stats. 2018, Ch. 37, Sec. 57. (AB 1817) Effective June 27, 2018.)