ARA STATE ASSOCIATION POLICY

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1 Policy American Rental Association th St Moline IL ARA STATE ASSOCIATION POLICY INTRODUCTION The American Rental Association (ARA) recognizes the important role of its State Associations (subsidiary corporate entities) in delivering value to general members throughout the country. ARA is committed to working in tandem with the State Associations to increase membership for mutual benefit throughout the organization and provides financial and administrative resources to State Associations in support of its core purpose, To promote the success of our members and advance the growth of the equipment rental industry. GOAL OF ARA STATE ASSOCIATIONS To represent and promote the equipment rental industry in collaboration with ARA through membership recruitment/ engagement/outreach, to include member-driven legislative advocacy. Regular member meetings and consistent communication are essential to provide for: Networking among current and prospective members. Education and training; information sharing. Engagement in legislative Issues, including awareness of ARA s Political Action Committee (ARAPAC). Communication of membership benefits, including ARA Insurance and risk management programs. Leadership development opportunities. Awareness and support of the ARA Foundation. Member awareness that ARA membership dues allocated by ARA to the state associations are the primary source of funding for State Association activities and that ARA also provides administrative support to the State Associations. To support the State Associations in fulfilling their purpose, ARA offers financial, administrative, program and advisory support. ARA is bound by IRS guidelines relating to 501(c)(6) organizations and provides the following written policies and procedures in order to maintain its tax-exempt status for ARA and all ARA State Associations. Section One MEMBERSHIP GENERAL MEMBERSHIP Businesses engaged in renting tangible personal property to the general public qualify for ARA General Membership. All General Members of ARA are automatically members of the State Association for the state in which their primary business operation is located. They hold dual membership status with ARA and the ARA State Association. Under the provisions of this policy, State Associations cannot charge separate dues for 1

2 General Members or their branches or allow non-ara General Members to join the State Associations. Non-ARA General Members may be invited to participate in member meetings as prospective ARA members. ARA manages the administration of General Memberships and provides monthly reports to the president and treasurer of each State Association to keep them/their board informed of membership numbers and enable them to communicate with members and prepare State Association budgets. State Associations are highly encouraged to offer networking opportunities for branch employees of General Members through attendance at meetings and program participation to benefit both the state association and ARA. ARA facilitates this by including branches in the listing to receive notices of state meetings. Branch personnel can represent the General Member in the state association in which the primary business operation is located. ASSOCIATE MEMBERSHIP ARA Associate Members do not have dual membership status. State Associations are encouraged to involve manufacturers, suppliers and independent manufacturer representatives in their organizations by extending invitations to attend, sponsor and participate in meetings and events. ARA will include these persons in meeting notices they send, as instructed by the state association. A state association may also develop and implement a separate state associate membership program, which they solely maintain, that does not conflict with the ARA associate member program. It is the responsibility of the state association to maintain the accuracy of a listing of the manufacturers, suppliers and independent manufacturer representatives that may be provided to ARA for ARA staff to use when distributing meeting notices on behalf of the state association. Section Two MARKS ARA licenses State Associations to use and display the name, American Rental Association, and certain of ARA s registered trademarks, consistent at all times with ARA rules, regulations and established policies. In addition, State Associations may use such other abbreviations, marks, symbols and slogans as ARA may adopt as identified for its state subsidiaries, but such use must always be consistent with ARA rules, regulations and established policies. As this usage is a reflection of the ARA brand, ARA may require the State Associations to adopt these official ARA marks over a reasonable period of time, with a defined deadline. ARA may at any time, with or without cause, require that State Associations immediately discontinue any and all use of such intellectual property of ARA. State Associations should discourage non-members from displaying ARA marks and report such instances, when they arise, to the ARA Director of State, Local and Provincial Programs. Section Three COMPREHENSIVE SUPPORT AVAILABLE TO STATE ASSOCIATIONS The ARA and the State Associations utilize a partnership approach to serve members and provide member benefits and opportunities. The ARA Board of Directors budgets annually for staff services and financial support to be directed to State Associations. This support and services are offered to assist in achievement of joint objectives to benefit the membership with the expectation that they will be universally utilized by the State Associations. Essential components to operating a successful State Association include regular elections for the state board of directors and approval of an annual financial budget. 2

3 1. DIRECT FINANCIAL SUPPORT. Direct Financial Support from membership dues is budgeted by the ARA Board of Directors and directed to the State Association through quarterly rebate deposits according to the Tier Status System. State Associations qualify for the various levels of Tier Funding by completing the program requirements outlined below and submitting required Tier Status Documentation to ARA each spring and Summary Financial Reports each fall. Tier level determinations are made on June 30 for the following fiscal year with a mid-year review occurring in December for those State Associations classified as a Tier Two and actively working toward attaining Tier One status. The rebated funds are to be utilized to provide value to the members within the state, most specifically on regular member and board meetings, member networking events, member-driven state legislative activities, and education/training or informational events. TIER 1 TIER 2 Rebate: $75/General Member Primary Location Each of these program requirements must be met annually and detailed in the required Tier Status documentation: Has a Board of Directors in place. Holds elections as required in the State Association bylaws. Holds a minimum of one Board of Directors meeting annually and remits minutes to ARA promptly. Nominates at least one qualified member to attend the ARA Leadership Conference. Holds at least one general member meeting providing an educational, business or social program. (Regional events qualify only for host state.) Nominates at least one qualified member to attend the ARA National Legislative Caucus and establishes member-driven state legislative priorities. Rebate: $25/General Member Primary Location Each of these program requirements must be met annually and detailed in the required Tier Status documentation: Has a Board of Directors in place. Holds elections as required in the State Association bylaws. Holds a minimum of one Board of Directors meeting annually and remits minutes to ARA promptly. Nominates at least one qualified member to attend the ARA Leadership Conference. AND EITHER Holds at least one general member meeting, providing an educational, business or social program. (Regional events qualify only for host state.) OR Nominates at least one qualified member to attend the ARA National Legislative Caucus. A. Inactive State Associations: A State Association may be reclassified to inactive if it had previously been a Tier Two State Association and failed to meet all of the program requirements for the fiscal year. Once deemed inactive, the board members of the State Association will be advised to remit any funds remaining in the State Association treasury to ARA for safekeeping and possible future reactivation. ARA will continue to pay the annual corporate filing fee for these inactive states in order to maintain legal eligibility for reactivation. B. Budgeting and Financial Reserve Levels: State Associations are encouraged to utilize the Model State Association budget and prepare a balanced annual budget. Establishing a financial reserve is a prudent goal, and a level of two year s accumulated rebates is suggested. 3

4 C. Rebate Deposits: Quarterly membership dues rebate deposits, net of state expenses, are sent from ARA to the State Association s designated financial institution based on Tier Status level achieved. Material expenses, such as Caucus sponsorship, will be invoiced as the expenses are incurred. 2. ADVISORY AND ADMINISTRATIVE STAFF SUPPORT. State Associations require varying degrees of administrative or program assistance to achieve their goals. ARA makes available to all State Associations ARA staff as a resource for membership/volunteer needs, communications, legislative issues, administration/ operations, financial management and programs for meetings. This assistance may include complimentary services, as well as services paid by the State Association or funded through a cost sharing arrangement between ARA and the ARA State Associations. State Associations are advised of any cost and approve the service in advance. In order to serve all the State Associations properly, ARA must reserve the right to prioritize and grant requests based on available resources. A. Administrative Services: An itemized Menu of Services is available in the Volunteer Leader Guide found on the ARA website. For complete details, log on to the ARA website, Members Only section, and choose State/Local/Provincial Associations, and Volunteer Leader Guide, which includes submission forms to request services. B. Tier Status Documentation: To assist State Associations with communications and operations, ARA requires certain information annually as part of the Tier Status documentation. This information provides the documentation needed by ARA and State Associations to be in compliance with IRS provisions regarding 501(c)(6) organizations to maintain a tax-exempt status. C. Programs for Meetings: State Associations are encouraged to use both ARA and ARA Insurance staff to conduct programs throughout the year. Any service that includes staff travel to State Associations must be approved in advance, with availability determined by staff schedules. Dependent on resources, a determination will be made by ARA if the expense is paid entirely by the State Association or cost-shared with ARA. D. Leadership/Board Training: ARA staff also offers additional leadership or board training throughout the year, upon request and as staff schedules permit. Expenses are paid by the State Association. 3. GOVERNMENT AFFAIRS STAFF SUPPORT A. Advice and Assistance: ARA offers advice and counsel to State Associations and assists in evaluation of state legislative or regulatory issues as a determination is made to pursue an initiative in-state or not, and if so, whether to seek any coalition partners. Requests for assistance can be made by contacting the ARA Director, State Government Affairs. B. Programs: ARA Government Affairs staff will work with State Associations to develop memberdriven programs that promote participation in the political process. These programs are multifaceted and range from formation of a legislative committee to conducting a state legislative day to other in-state program areas to build awareness of the political process and increase membership in the ARA Political Action Committee (ARAPAC). C. In-State Legislative Activity/Expenses: State Associations fund in-state legislative activity. ARA may consider cost-shared governmental services on state issues when they are of major significance to the equipment rental industry. Requests for such support shall be made to the ARA 4

5 Director, State Government Affairs. Costs incurred by a State Association for legislative expenses without prior consultation with ARA cannot be reimbursed by ARA. Any service that includes staff travel to State Associations must be approved in advance, with availability based on staff schedules. A determination will be made by ARA as to whether the expense is to be paid by or cost-shared with the State Association. 4. LEADERSHIP TRAINING OPPORTUNITIES A. ARA Leadership Conference: Each year, as a requirement of the Tier Status program, State Associations are to nominate at least one volunteer leader for consideration to participate in the ARA Leadership Conference which focuses on the ARA/State Association partnership. ARA utilizes a cost-sharing approach for this activity and pays for travel, two nights lodging and conference meals for one invited participant who has not attended the conference more than once. The State Association bears all other expense for the individual or all expenses for additional attendees. B. ARA Legislative Caucus: Each year, as a requirement of the Tier Status program, State Associations are to nominate at least one person for consideration to participate in the ARA Legislative Caucus in Washington, D.C. The Caucus is held to advance key industry legislative priorities and engage and prepare ARA state leadership for member-driven legislative activity. ARA utilizes a cost-sharing approach for this activity and pays for hotel accommodations for two nights at the designated host hotel as well as program meals/receptions for the invited participant. State Associations are responsible for all travel and other food and lodging costs. Low membership states may apply for grant assistance by contacting the ARA Director of State Government Affairs. All participants must stay at the designated host hotel and are expected to attend an orientation session held at The Rental Show to prepare them for the event. Caucus Sponsorship: ARA suggests that State Associations contribute funds to sponsor the National Caucus as a part of their legislative program. 5. INSURANCE. ARA provides State Associations with General Liability Insurance, Directors and Officers Errors and Omissions Liability Insurance and Directors and Officers Travel/Accident Coverage for the State Association presidents. There is a minimal cost, which is deducted from rebate deposits. 6. CORPORATE FILINGS A. Group Exemption Filing: ARA has a group exemption from federal income tax under Section 501(c)(6) of the Internal Revenue Code for subordinate organizations which maintain operations consistent with ARA s policy. ARA will file with the IRS an updated Group Listing on behalf of State Associations. State Associations with gross receipts over $50,000 are responsible for filing their own tax return at their expense. B. 990 Tax Filing: ARA files the required information return with the Internal Revenue Service for all states with less than $50,000 in revenue for their fiscal year. C. Other: ARA manages the filing of corporate annual reports with the secretary of state or equivalent office of the applicable states. Expenses are withheld from rebate deposits as appropriate. 5

6 Section Four STATE ASSOCIATION RESPONSIBILITIES AND OBLIGATIONS 1. STATE ASSOCIATION AUTONOMY. State Associations are responsible for compliance with all applicable laws and regulations, including without limitation, the current Section 501(c)(6) of the Internal Revenue Code applicable to ARA and State Association organizations exempt from federal income taxation. Each State Association operates as an independent entity, responsible for its own activities and obligations. The State Association will comply with ARA bylaws, policies and procedures, including those relating to the State Association that may be adopted and/or revised from time to time by the ARA Board of Directors, and programs developed for the general good of ARA members. Without the express written consent of the ARA, the State Association will not enter into any contract, business arrangement or other financial obligation which purports to bind ARA, or is adverse to its purpose. 2. MEETING YOUR OBLIGATION TO ARA. State Associations are responsible for the representation and promotion of the equipment rental industry in their respective state. Further, State Associations are responsible for adherence to the ARA-advised State Association Bylaws and Articles of Incorporation, which includes: electing the Board of Directors and Officers, service to ARA members, demonstrated supportive partnership with ARA and regular reporting of their activities to ARA, as requested. 3. FUNDING. State Associations conduct their operations and activities within their state and utilize ARA membership dues rebate funding. Additional revenues can be derived from sources that are not in conflict with this policy, such as meeting sponsorships, event registration fees, voluntary contributions or associate membership programs they maintain. 4. ANTITRUST COMPLIANCE. ARA requires adoption by the State Association of the Antitrust Compliance Policy published by the Association, as may be amended by the ARA Board of Directors from time to time, and suggests operation under and within the requirements and limits of such guidelines. 5. RESPONSIBILITY OF STATE ASSOCIATION BOARD OF DIRECTORS. The Officers and Board of Directors of each State Association shall be directly responsible for ensuring full compliance with this Policy and its purpose to benefit the members of the association. 6. ARA ROLE. The ARA Board of Directors or Executive Committee will issue the final determination for the State Association/ARA on issues that may be in conflict with this policy. Section Five SUSPENSION OF FUNDING ARA is committed to providing a continuous funding base for the benefit of members and support services as described in this policy to its state subsidiaries. To accomplish this ARA requires that the defined responsibilities be accomplished within certain time frames set by ARA. ARA will ensure that the State Associations are notified in advance regarding the time frames. Funding could be suspended if any of the following situations occur: A. The State Association operates or sponsors a trade show or program in conflict or competition with the purposes of The Rental Show. B. The State Association fails to submit information required for ARA to make Tier Status determinations within the required time frame. 6

7 C. The State Association does not comply with the State Association Policy consistent with the best interests of ARA and its members. Section Six IMPLEMENTATION AND ENFORCEMENT OF THE POLICY The ARA Director, State/Local/Provincial Programs and the ARA CEO/Executive Vice President shall be directly responsible for implementation of this policy. The ARA President and CEO/Executive Vice President are charged with enforcement of this policy. Section Seven EXCEPTIONS TO THE POLICY Requests for exceptions to this policy must be in writing and submitted to the ARA CEO/Executive Vice President. Any exception must receive advance written authorization from the ARA Board of Directors or Executive Committee. Category: State & Local Associations Approval: ARA Board of Directors, July 25, 2013 Updated: July 2013 Reviewed: July