DRAFT: ACT ____/2003 ON THE NATIONAL CIVIL FUND PROGRAM (unofficial translation)

1. The objective of the Act is to provide national budgetary resources to implement the tasks related to activities and operation of civil organizations through the establishment of the National Civil Fund Program (hereinafter referred to as Fund Program), for the purpose of improving social (civil) relations.

2. The Fund Program is a discreet category of the central budget titled as National Civil Fund Program. Tasks related to the Fund Program shall be performed by the political under-secretary managing the Government Office of IT and Social Relations of the Prime Minister’s Office as a government assign (hereinafter referred to as Government Assign) as stipulated in this Act, along with the rights of the Social Organizations Committee of the Parliament (hereinafter referred to as Committee) as stipulated in this Act.

3. (1) In order to implement the objectives of the Fund Program, the Government Assign shall

a) establish the Fund Program Council (hereinafter referred to as Council). Chairman of the Council is the person appointed by the Government Assign with the consent of the Chairman of the Committee. The Council consists of fifteen members; three members are delegated by the Government Assign at his discretion, two members are delegated by the Committee at its discretion, the remaining ten members are delegated by the national civil representation but are appointed by the Government Assign. The national civil representation will invite nominees in a way so that in the Council the representation of the seven regions of Hungary and of Budapest Capital are ensured, also the representation of organisations of public utility determined in Clause c), Paragraph 26 of Act CLVI/1997 is ensured at least according to Clauses a-f, Article 4, Paragraph 16.

b) with the agreement of the Committee found professional Colleges and appoints their leaders, taking into consideration the recommendations of the Council. One third of the members of professional Colleges are invited by the Government Assign at his discretion, while two third of them are delegated by the involved social organizations.

(2) The Council can only function if the total number of its members are nominated and appointed.

4. (1) The Council is the principal governing body of the Fund Program. It determines the normative regulations of the functioning of the Fund Program, regulation guidelines of the subsidies provided from the Fund Program, the rate at which subsidies will be divided among Colleges and performs the tasks determined by the act.

(2) The Council is only capable of making a decision if 3/4^th of its members are present. 2/3^rd of the present members voting "yes" are necessary to bring about a decision compared to votes "no". The votes ‘abstained’ do not have to be taken into consideration. In case of parity of votes, the Chairman’s vote shall be deciding.

(3) There are rules of procedure determining the functioning of the Council. The wording of these rules will be drawn up by the mutual consent of the Chairman of the Council and the Government Assign. All the members of the Council have one vote each. A 3/4^th majority of present members of the decisive Council is necessary to accept the rules of procedures and its modifications.

(4) Any member may raise an objection against the resolution of the Council to the Minister of Prime Minister’s Office if there is an infringement of law or if the rules of procedure were not applied. The Minister must in every case ask the opinion of the Chairman of the Committee. If the Minister accepts the objection, he will rule the resolution to be inoperative.

5. (1) Colleges -except for the Government Assign’s budget determined by Paragraph 12- decide on the normative based subsidies, the publications and judgement of scholarships based on the supporting principles, methods and rates determined by the Council.

(2) The professional Colleges make its decisions with simple majority. All members of the College have one vote each. The votes ‘abstained’ should not be taken into consideration. To be capable of making decisions at least half of the members must be present.

(3) There are rules of procedure determining the functioning of the College within the boundaries of the provisions of law and the decrees of the Council. The wording of these rules will be drawn up by the mutual consent of the Chairman of the College and the Chairman of the Council. All the members of the Council have one vote each. A 2/3rd majority of present members of the College is necessary to accept the rules of procedures and its modifications.

(4) Any member may raise an objection against the resolution of the College to the Council if there is an infringement of law or if the rules of procedure or the decrees of the Council were not applied. If the Council accepts the objection, it will rule the resolution to be inoperative.

6. (1) The members of the Council and the College -right after their appointment- will be commissioned by the Government Assign. The assignment of a member of the Council or the professional College lasts for three years. The temporary assignment stated in Article (4), Paragraph 16 terminates on the last day of the given year.

(2) The members of the Council and of the College (including the Chairman of the Council and the leader of the College) receive an amount determined annually by the Government Assign for their activities and expenses based on fixed amounts (ie.: normatives)s.

7. (1) The member of the Council or his/her close relative cannot be a member of the College.

(2) The member of the College cannot participate in decision-making if he/she or his/her close relative is an official in the civil organisation supported, or if the member or a close relative would financially profit as a result of the decision.

(3) Individuals, who had fulfilled executive position in a civil organization, the operation of which has been terminated, and accumulated public debts during the last two years before its termination and did not pay those debts although there is definitive judgement, may not become members of the Council or the professional Colleges.

(4) If the member of the Council or College did not participate in more than half of the meetings calculated in an annual average, the Chairman of the Council or the leader of the College may initiate the withdrawal of the assignment with the Government Assign for the effective functioning of these bodies. If such initiatives are found well-grounded the Government Assign may withdraw the assignment of the member of the Council or the College.

(5) Incompatibility related to Chairman of the Council should be directed towards Government Assign while incompatibility related to the leader of the College should be directed towards the Chairman of the Council. In case of incompatibility, the Government Assign will take necessary steps to terminate incompatibility related to the Chairman of the Council at his discretion, while in case of incompatibility of the leader of the College, the necessary steps will be taken by the Chairman of the Council.

(6) Incompatibility related to a member of the Council should be reported to the Chairman of the Council. If incompatibility is well-founded in case of a member of the Council, the Chairman of the Council will ask the member to cease incompatibility. Until that time the individual may not exercise his/her rights within the Council. If, in case of incompatibility, there is a debate, on the request of the individual, a decision should be made by the Minister of the Prime Minister’s Office. If incompatibility related to a member of the College is well-founded according to the leader of the College, the member in question cannot exercise his/her rights won as a member and cannot participate in the direct decision-making of this question. If, in case of incompatibility, there is a debate, on the request of the individual, a decision should be made by the Council.

(7) If a member fails to report his/her incompatibility, he/she becomes unworthy of membership of the Council or the College. Those decisions that were made by the supportive vote of the incompatible member are all invalid. The statement of invalidity cannot cause the injury of gained and exercised rights of the civil organisation.

8. (1) The meetings of the Council and the College are open to the public. On the motion of the Chairman of the Council or the leader of the College, the Council or the College may decide on a secret session if the protection of personal rights, of data or if fair competition related to tenders should be ensured.

(2) Publicity of the functioning of the Fund Program is ensured by a separate NCFP homepage. The decisions of the Council and the College are to be made public on this homepage. In an exceptional case the judicial body may, according to the protection of rights stated in Article (1), decide to disregard publicity. On the homepage the following should be accessible: laws in connection with the functioning of the Fund Program, regulations that are based on normatives and on contracts and which are related to functioning of the Fund Program and its operative bodies and the members’ names (of the Council and the College).

(3) The members of the Committee and the Government Assign or the individuals representing them are the permanent visitors to the sessions of both the Council and the College. Permanent visitors may participate in secret sessions and sessions dealing with the agenda.

(4) The Government Assign by the 31^st of March each year shall report to the Committee: the previous year activities and operation of the Fund Program and the experiences of application of the present Act.

9. (1) The assignment of the member of the Council or the College terminates:

a) three years following his/her assignment

b) with the cessation of College

c) parallel to withdrawing assignment and becoming unworthy, in case of termination as a result of incompatibility and in case of greater absence than the law allows.

d) with the resignation of the assignment

e) when the member dies.

(2) The withdrawal of the assignment of any member of the Council or the College can be initiated at the Government Assign for any reason on the request of the civil representation or civil organisation that appointed the member in question. In case of such initiation the Government Assign is obliged to withdraw the assignment.

(3) The assignment of individuals appointed by the Committee will be withdrawn by the Government Assign whose decision is based on the decision of the Committee.

(4) The members of the Council or College may resign their assignment at any time for any reason. This resignation should be in a written format and directed to the Government Assign. In such cases, the Government Assign is obliged to fill the position according to the procedures set in the law. In cases of members that were appointed by the Committee, civil representation or civil organisations or representative co-operations the Government Assign must send appointment to members and after appointment to assign the individuals.

10. (1) Revenue sources of the Fund Program:

a) 1 percent of the personal income tax of he previous budgetary year, reduced by the ratio of the personal income tax actually paid to the beneficiaries indicated by the tax-payers, as defined in Paragraph 4 of the Act CXXVI/1996;

b) voluntary contributions and donations of legal persons, other organizations without legal personality, as well as natural persons;

c) other revenues determined by the law.

(2) Time-proportional share of the resource defined in Clause (1) a) is provided for the Fund Program by the Hungarian Treasury quarterly, before the day 20 of the first month following the quarter.

(3) In the year of coming into force of the Act, the amount defined in the in Clause (1) a) is proportionately due to the Fund Program from the validity of the Act until the end of the budgetary year.

(4) Voluntary contributions and donations of legal persons, other organisations without legal personality as well as natural persons will be assumed as obligations for purposes of public interest. The acceptance of payments that are for determined purposes or are tied to conditions will be discussed by the Council of the Fund Program.

(5) After a procedure of public procurement, the handling of the Fund Program is done by an appointed Administrator, whose activities and tasks are defined by the Government Assign in accordance with the relevant contract and the decisions of the Fund Program based on this Act and a Minister decree dealing with the execution of this Act.

(6) The budget of the Fund Program and its bodies annually -including all the expenses related to the Administrator- cannot exceed 10 % of the amount defined in Point a), Paragraph 1 of the Fund Program.

11. (1) From the amount defined in Paragraph 1O for the Fund Program a budget should be separated for the Government Assign. The rate of the amount separated for the Government Assign is 10% of the amount allocated for the Fund Program.

(2) From the amount defined in point (1) the Government Assign supports civil organisations defined in Paragraph 13 to purposes related to the Fund Program after a decision of an advisory board set up at his discretion. The Government Assign may grant exemption from tendering obligation for a maximum of 5O% of the budget of the Government Assign in the case of the realisation of civil strategic purposes, in case of extraordinary appreciation, also when there are unforeseen circumstances or when a case demands urgency.

12. (1) The Fund Program provides resources for supporting the operation of civil organizations according to the objectives, as well as for concrete events and tasks.

(2) Payments from the Fund Program may be performed particularly for the following purposes:

a) supporting operational expenses of civil organizations;

b) supporting public activity of civil organizations;

c) supporting anniversaries, festivals, domestic and foreign events involving civil organizations;

d) ensuring presence in international civil relations, supporting participation in domestic and foreign events, festivals;

e) supporting scientific research related to the civil sector;

f) supporting educational activity related to the civil sector;

g) supporting presentation materials introducing the a civil sector;

h) international membership fees;

i) supporting mechanisms which help civil organisations to raise their own share for tenders

j) supporting grantor organisations based on decisions of the Council and the College

k) covering the expenses related to the operation and administration of the Fund Program separate from those expenses that emerge independent of the Administrator.

13. (1) Support can be given to the following civil organizations identified in this Act:

a) social organizations as defined in Act II/1989 on the right of association (except for political parties, employer and employee brotherhoods, and also organisations that fall under the law that deals with 1% of Personal Income Tax that can be transferred to the church), registered by the court at least two years prior the first day of the year, when the tender was announced, and

b) foundations (not including public endowment), registered by the court at least two years prior the first day of the year, when the tender was announced, and

c) foundations (not including public endowment), social organizations of public utility, registered by the court at least one year prior to the first day of the year, when the tender was announced, which organizations – according to their constitution and/or foundation charter – have actually been involved in activities of public utility – as determined in Clause c), Paragraph 26 of Act CLVI/1997 on the organizations of public utility for at least one year before the first day of the mandatory statement.

d) foundations (not including public endowment), social organizations of public utility, registered definitely by the court as an organization of high public utility at least one year prior to the first day of the year, when the tender was announced, which organizations – according to their constitution and/or foundation charter – have actually been involved in activities of public utility – as determined in Clause c), Paragraph 26 of Act CLVI/1997 on the organizations of public utility for at least one year before the first day of the mandatory statement.

(2) Civil organisations are not entitled to the subsidy for expenses of the Fund Program which live up to the conditions in (1) and which directly receive -on the basis of the Budget Act- subsidies for their expenses.

14. (1) Support can be won through public tenders or after a decision based on normative support. Colleges may grant exemption from tendering obligation in a maximum of 1O% of their budget in the case of the realisation of civil strategic purposes, in case of extraordinary appreciation, also when there are unforeseen circumstances or when a case demands urgency.

(2) The chairman of the Council and the leaders of professional Colleges ensure continuous public communication of decisions on the subsidies provided within the frames of the Fund Program.

15. (1) Subsidies within the Fund Program may be granted as refundable, partly refundable and non-refundable subsidies.

(2) In case of illegal or improper use, or deviation from the objectives and requirements set out in the contract during the implementation, the administrator of the Fund Program may enforce partial or full refund against the beneficiary.

(3) The refund obligation as described in Article (2) is considered as public debt to be collected, as regulated by the Act XCI/1990 on the order of taxation.

(4) Accounting and budgetary audit of the Fund Program is the right of the competent organizations determined in the relevant legal regulations.

16. (1) For the purpose of this Act, national civil representation are self-organising civil organisations and associations that were set up primarily to represent common interests of the members. These organisations provide for the representation of the interests of the seven regions in Hungary and Budapest Capital through democratically structured regional platforms (county-, town of county rank, districts of the capital) and have professional platforms, the activities of which are defined in Clause (4) and these activities are at least as detailed as in points a)-f) of Clause (4).

(2) If more organisations of national civil representation are formed that live up to the requirements defined in Clause (1) then the rights laid down in this Act will be exercised on the mutual consent of these organisations of civil representation.

(3) In case of the establishment of a national civil representation, defined in Clause (1), the leading body of the representation will report to the Government Assign in writing, who, within 60 days after the report and after examining legal conditions, will ask the national civil representation to nominate individuals. Members delegated by the national civil representation will receive their assignment from the Government Assign on the first day of the year following the current year.

(4) If no national civil representation defined in Clause (1) is formed, the Government Assign with the consent of the Chairman of the Committee will appoint the civil members from the seven regions of Hungary and from the Capital to the positions of the Council of the Fund Program and also will appoint national civil representation. Nominees should be chosen for the positions of the Council in a way that in the persons of the civil nominees the civil representation of the seven regions of Hungary and of Budapest Capital is ensured, also the representation of the civil organisations as determined in Clause c), Paragraph 26 of Act CLVI/1997 on the organisations of public utility which actually have been involved in activities of public utility should chose persons engaged in the following activities:

a) a person engaged in pedagogical, educational, cultural, scientific and research, protection of national heritage and historic monuments,

b) a person engaged in healthcare and social activities, tending,

c) a person engaged in environmental and nature protection, animal protection, the protection of public order and safety, prevention of crime, voluntary fire-fighting, rescuing, prevention of catastrophies, flood and internal water protection,

d) a person engaged in the protection of human and civil rights, improving equal opportunity for socially disadvantaged groups, consumer protection, protection of children and youngsters and their representation and organisations, national and ethnic minorities, activities related to Hungarians outside Hungary,

e) a person engaged in rehabilitative employment, education for disadvantaged groups and helping their employment, healthy lifestyle and sports,

f) a person engaged in improving Euroatlantic integration, services, support and donations for the non-profit civil sector.

(5) If no national civil representation defined in Clause (1) is formed, the Government Assign will ask and appoint the civil members defined in point b, Clause (1) Paragraph 3. for nomination to the Colleges appropriate for the different nature of the given College.

17. For the purpose of this Act:

a) organisations of public utility and of high public utility should be understood as determined in Act CLVI/1997 on organisations of public utility,

b) civil organisation should be understood as social organisations and associations (except for political parties, employer and employee brotherhoods, and also organisations that fall under the law that deals with 1% of Personal Income Tax that can be transferred to the church) and foundations (not including public endowments)

c) civil co-operation should be understood as civil non-profit organisations without legal personality that were at least partially set up to represent their interests (such as associations, groupings, platforms, societies and networks)

d) assumption of obligations for purposes of public interest should be understood as determined in Paragraphs 593-596, Act IV/1959 of the Civil Code.

e) 1 percent Act should be understood as determined in Act CXXVI/1996 on a part of the personal income tax that can be offered by the taxpayer.

f) region should be understood as determined in Clause e), Paragraph 5 of Act XXI/1996 on regional development: planning-statistical region: an area including the area of more counties (capital city) and within the administrative boundaries of the counties in question, planning or statistical territorial unit.

g) close relative should be understood as wife or husband, direct descendents, adopted-, step- or foster child, adoptive-, step- or foster parent, sister or brother ( as in Clause b), Paragraph 685 of Act IV/1959 of the Civil Code)

18. (1) This Act becomes effective on the 15^th day as of its announcement.

(2) The Parliament entitles the Minister of the Prime Minister’s Office to regulate detailed rules of administering and utilizing the Fund Program, the order of controlling and reporting, as well as further provisions related to the tendering system in a Decree.