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Act L. of the year 2003
on the National Civil Fund Program
∗

The Parliament recognises the necessity of ensuring the operating conditions of civil
organisations and foundations by state guaranties. For the interest of ensuring that the
financial sources of civil organisations are tran sparent, are built on budget automatics and are
independent from politics, it establishes a National Civil Fund Program. The objective of the
National Civil Fund Program is to strengthen the civil society, to help civil organisations to
play part in a society, to promote the partnership and workshare between government and
civil society for the sake of a more effective fulf ilment of state and local tasks. To achieve the
aims set and to promote the self-organisation of civil society, the Parliament adopts the
following act.

The objective of the Fund program

1. § (1) The National Civil Fund Program (hereinafter: Fund Program) provides national
budgetary resources for the acti vities and operation of civil organisations registered by the
court in Hungary.

(2) The Fund Program provides payments for the following purposes:

a) supporting operational expenses of civil organisations;
b) supporting public activity of civil organisations;
c) supporting anniversaries, festivals, domes tic and foreign events involving civil
organisations;
d) ensuring presence of the Hungarian civil organisations in international civil relations,
supporting participation in domestic and foreign events, festivals ; ensuring financial
support for international membership fees , support programs promoting European
integration;
e) supporting scientific research related to the civil sector, supporting monitoring activities
and administrative tasks;
f) supporting educational -, service-, advising-, developing and assisting activities and
institutions related to the civil sector;
g) supporting presentation materials introducing the a civil sector , supporting electronic and
written professional media;
h) supporting civil organisations to raise their own share for tenders ;
i) supporting grant of organisations based on of the Fund Program Council’s and the
Colleges decisions determined by unified principles ensuring source-automatism;
j) covering the expenses related to the operation and administration of the Fund Program ;
k) supporting civil brotherhood activities.

(3) Determined by the Council annually, certain sh ares -but at least 60 percent- of the sources
available for the Fund shall be spent to operational expenses according to Clause (2) point a).

∗ Th e Act was adopted by the Parliament on its sitting of June 23, 2003. Formatted

The financial source of the Fund Program

2. § (1) The realisation of the objectives of the Fund Program is served by the section of the
central budget in the Prime Minister’s Office source titled as National Civil Fund Program;
over which the member of the Government assigned by this task (hereinafter: minister)
disposes.

(2) 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. The supporting amount transferred to
the Fund Program can not be less than 0,5 percent of the personal income tax actually
paid by private persons in the previous budgetary year.
b) voluntary contributions and donations of legal persons, other organisations without legal
personality, as well as natural persons;
c) budgetary supports;
d) other revenues determined by the law.

(3) Time-proportional share of the resource defined in Clause (2) point a) is provided for the
Fund Program by the Hungarian Treasury quarterly, before the day 20 of the first month
following the quarter. The Hungar ian Treasury provides for the first and second quarterly the
time-proportional share of the resource of 1 percen t 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.
As source for the third quarterly the time-proportional share of the amount determined in
Clause (2) point a) shall be provided, corrected by the difference between the source for the
first and second quarter and of Clause (2) point a) time-proportionate amount. For the fourth
quarter the time-proportionate amount determined in Clause (2) point a) shall be provided.

(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.

The benefitiary

3. § (1) Support can be given to the following civil organisations:

a) those social organisations (except for political parties, employer and employee
brotherhoods, insurance institutions and churches), which are registered by the court at least
one year prior the first day of the year, when the tender was announced or the fulfilment of
supporting conditions determined by unified principles were determined, and which actually
carry out activities according to their foundation charter;

b) those foundations (not including public endowment), registered by the court at least one
year prior the first day of the year, when th e tender was announced or the fulfilment of

supporting conditions determined by unified principles were determined, and which actually
carry out activities according to their foundation charter;

(2) Except purposes determined in Paragraph 1, Clause (2) points a) and j) from the Fund
Program payments can only be made to civil organisations achieved legally binding the status
of public utility according to Act CLVI/1997 on the organisations of public utility.

(3) Civil organisations are not entitled to the subsidy for expenses of the Fund Program which
in the given budgetary year di rectly receive -on the basis of the Budget Act- subsidies for
their expenses.

(4) Civil organisations are not entitled to the subsidy of the Fund Program which carry out
direct political activity accord ing to Paragraph 26., point d) of Act CLVI/1997 on the
organisations of public utility.

The organisation of the Fund Program

4. § (1) The Council is the principal governing body of the Fund Program. Within the frame
of the present Act, it determines the basic regulations of the functioning of the Fund
Program, the regulation guidelines of the subsidies provided from the Fund Program , the
maximum decree of subsidies to be given for a civil organisation in a budgetary year; the rate
at which subsidies will be divided among Colleges and performs other tasks determined by
the present Act.

(2) The Council consists of seventeen members; of which two members are delegated by the
relevant Committee of the Parliament (herei nafter: Committee) and appointed by the
minister; three members are delegated by the minister at his discretion and appointed by the
minister. Twelve members of the Council are elected by the national civil representation
system determined by Paragraphs 12-13 of the present Act. The chairman of the Council is
asked among the members of the Council by the minister with the agreement of the
Committee based on the recommendation of the Council.

(3) The Council shall commence its operation following the delegation and appointment of
all of its members. The first session of the Council shall be called upon by the minister.

(4) The lawfully assembled Council is only capable of making a decision if more than half of
its members are involved in the voting. All th e members of the Council have one vote each.
The Council shall adopt its resolutions by the agreement of more than half of its members.

(5) The rules of procedure determines the functioning of the Council. The wording of these
rules will be drawn up by the mutual cons ent of the Chairman of the Council and the
minister. The Council adopts its rules of procedures and its modifications by at least 2/3
rd of
the members voting “yes”

(6) The Chairman of the Council and any member may raise an objection to the minister
within 30 days from adopting a resolution. The minister shall decide on the question of the
objection within 30 days. In case the minister establishes that there is an infringement of law
or the rules of procedure were not applied, he shall rule in a reasoned decision that the

resolution is inoperative. In such cases the Council is obliged to adopt a new resolution
within 30 days.

5 § (1) The Colleges are the operative decision-making bodies of the Fund Program which
are organised by regional and professional considerations. The Colleges decide on the
normative based subsidies, publications and judgement of scholarships based on the
supporting principles, methods and rates determined by the Council.

(2) The Colleges consist of at least 5 but not more than 11 members. The Colleges are
established by the minister with the agreement of the Council. The question on the number of
members of the Colleges and on which electorial party shall be present at electing the civil
delegates of the Colleges in accordance of Paragraph 12. Section (6) of the present Act is
decided by the minister based on the recomm endation of the Council. One member of the
College is delegated by the minister at his discretion, the other members are elected by a
method determined in Paragraphs 12-13 of the present Act. The leaders of the Colleges are
appointed by the minister, based on the recommendation of the College and the agreement of
the Council.

(3) The Colleges are capable of making decisions if at least half of the members are present.
All members of the Colleges have one vote each. The Colleges shall make its decisions by at
least a simple majority. In case of a ti e votes the vote of the leader decides.

(4) 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 leader of the College and the Chairman
of the Council. A 2/3rd majority of the College is necessary to accept the rules of procedures
and its modifications.

(5) The Chairman or any member of the Counc il, or any leader or member of the Colleges
may raise an objection against the resolution of the College to the Council within 30 days.
The Council shall decide on the question of the objection within 30 days. In case the Council
establishes that there is an infringement of law or the rules of procedure were not applied, it
shall rule in a reasoned decision that the resolution is inoperative. In such cases the College is
obliged to adopt a new resolution within 30 days.

6. § (1) The members of the Council and the College – within 15 days following their
appointment – will be commissioned by th e minister. The assignment of a member of the
Council or the College lasts for three years. After termination of the mandate the member of
the Council or of the Colleges can be re-delegated one more time.

(2) The members of the Council and of the College (including the Chairman of the Council
and the leader of the College) recei ve an amount determined annually by the minister for
their activities. The minimum amount of the monthly payment is the minimum wage
determined by law, while the maximum amount of the monthly payment is three times the
minimum wage. Apart from the monthly payment, the members and chairman of the Council
and the Colleges can be reimbursed for their justified travel expenses in relation to the
activity of the Fund Program. No ot her expenses can be claimed for.
(3) Civil servants appointed by the minister as members of the Council or the Colleges are
not entitled to a payment determined in Secti on (2) above. Civil servants of the Council and

the Colleges are entitled to be reimbursed for their justified travel expenses in relation to the
activity of the Fund Program.

7§ (1) The member of the Council or his/her cl ose 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 or was within 3 years an official in the civil organisation
supported, or if the member or a close relative or a civil organisation represented by the
member would financially profit as a result of the decision.

(3) Individuals, who had within 5 years prior to appointment fulfilled executive position in a
civil organisation, 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,
unless his/her mandate for executive position was especially for the sake of managing the
financial situation of the organisation.

(4) Incompatibility related to Chairman of the Council should be directed towards the
minister, while incompatibility related to the l eader of the College should be directed towards
the Chairman of the Council.

(5) In case of incompatibility, the minister or the Chairman of the Council will ask the
member to cease incompatibility within a give n period. Until incompatibility ceases the
member may not exercise his/her voting rights within the organisation. In case of a dispute
concerning the question of incompatibility -by the request of the concerned member of the
Council or the Colleges- the minister makes a decision.

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

(7) If the concerned member does not cease inco mpatibility within the given time period,
his/her mandates terminates on the day following the deadline.

(8) If the member of the Council or College di d 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 minister. If the chairman of
the Council or the leader of the College did not participate in more than half of the meetings
calculated in an annual average, the members of the Council or the College may initiate the
withdrawal of the assignment with the minister. If such initiatives are found well-grounded,
the minister may withdraw the assignment of th e member, chairman or leader of the Council
or the College.

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

a) with the termination of its mandate
b) in case the member did not cease inco mpatibility within the set deadline
c) in case of becoming unworthy
d) withdrawing assignment in accordance with this Act
e) with the resignation of the assignment
f) when the member dies.

(2) Apart from cases determined in Section (1), the mandate of the member of the Colleges
terminates with the cessation of College.

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

(4) The members of the Council or College may re sign in a written format and directed to the
minister.

(5) In case of a mandate terminates in a way de scribed in Section (1), the minister is obliged
to fill the position according to the procedures se t in the present Act. In cases of members that
are to be delegated by the minister, the appointment shall be carried out within 15 days
following the decision of terminating the mandate or 15 days following being informed about
termination. In cases of members of civil representation the minister shall commence the
procedure described in Paragraphs12-13 of the present Act within 15 days following the
decision of terminating the mandate or 15 days following being informed about termination.

(9) § (1) The meetings of the Council and the Colleges are open to the public . The place, date
and agenda of the meetings shall be disclosed on a homepage described in Section (2) at the
same time as sending the invitations. On the motion of the Chairman of the Council or the
leader of the College, the Council or the College with a 2/3
rd majority may decide on a secret
session if the protection of personal rights, of data or if fair competition related to tenders
should be ensured. Even in this case the announcement of the resolution shall be public as
well.

(2) Publicity of the functioning of the Fund Program is ensured by a separate homepage. The
decisions of the Council and the College are to be made public on this homepage within 30
days after adoption. On the homepage the following should be accessible: laws in connection
with the functioning of the Fund Program , all resolutions concerning the operation of the
Fund Program and the managing bodies and th e members’ names (of the Council and the
Colleges). The Chairman of the Council and the leader of the Colleges ensure the disclosure
of such information.

(3) Announcements shall be disclosed on the hom epage described in Section (2) and at least
two national newspapers and in a civil professional press.

(4 ) The Government Assign as often as necessary but at least by the 31 st of March each year
shall report to the minister on the previous year activities and operation of the Fund
Program and the experiences of application of the present Act.

(5) The minister by the 31 st of June each year shall report to the Committee on the previous
year activities and operation of the Fund Prog ram and the experiences of application of the

present Act, further it examines the necessity of modifications of the present Act. The
Committee shall send the minutes of the ministerial hearing to the Chairman of the Council
within 30 days, and the Chairman ensures the disclosure of the minutes in accordance of
Section (2) within 30 days.

10.§ At least 80 percent of the subsidies can be won through public tenders, and the
remaining part shall be won by supporting decisions determined by unified principles.

11.§ (1) Subsidies within the Fund Program may be granted as refundable, partly refundable
and non-refundable subsidies what the resolution establishing the subsidy shall regulate.

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

(3) The part of the subsidy which the benefitiary used not in accordance with the concerning
subsidy contract shall be collected as public debt.

(4) On the further use of the refunded amount described in the present Paragraph the College,
which originally decided on the subsidy is entitled to make a decision.

The civil representation system

12.§ (1) Through the civil representation system the national civil organisations shall elect
five members of the Council in a way to elect one-one member from civil organisations in the
area of:
a) health-conservation, illness prevention, recovery, health rehabilitation activity, social
activity, family-assistance, tending, assi stance of the socially disadvantaged;
b) cultural activities, educational, pedagogical activities, activities concerning Hungarian
national and ethnical minority, activities related to Hungarians outside Hungary;
c) nature protection, animal protection, environmental protection and cultural heritage
protection;
d) child and youth representation, protection, sport, leisure-time;
e) the protection of public order and safety, voluntary fire-fighting, rescuing, prevention of
catastrophies, protection of human and constitutional rights, consumer protection,
improvement of Euro-atlantic integration, services, support and donations for the non-
profit civil sector, other non-profit activities.

(2) One-one member of the Council per re gions shall be elected through the civil
representation system.

(3) The number and constitution of each College shall be determined by the minister in
accordance with the rules determined in Paragrap h 5 Section (2) of the present Act. The civil
delegated members of the Colleges shall be elected through the civil representation system.

(4) Those regional or national civil organisations can send electors to the civil representation
system, which indicate their intention to participate in the system in accordance with the
concerned announcement of the minister. The deadline for application cannot be shorter than
30 days. Each regional civil organisation can se nd one elector in its operational territory.
Each national civil organisation can send one elector at the national civil organisations

assembly only. In the application is shall be indicated that in which electorial assembly shall
the concerned civil organisation send an elector.

(5) All civil organisations applied in accordance with Section (4) above can delegate one
elector, and in one electorial procedure ever y person can enact on behalf of only one
organisation.

(6) The electorial assembly of the national civil organisations and the regional electorial
assemblies shall be called upon by the minist er. The place, date and method of mandatum-
calculation shall be disclosed in a public announcment.

13. § (1) The members of the Council and of the Colleges to be elected by the civil
representation system shall be elected by a smal l-list method, described in the present Act.

(2) The names of all of those candidates who won 10 percent of the votes of the electors
present in an open vote are indicated in the voting-paper.

(3) The electors can only vote for as many can didates in the voting-paper, as many members
shall be elected in the concerned procedure.

(4) The members of the Council and of the Colleges shall be those candidates, who obtained
the most votes. In case of tie votes, it shall be decided by lot, who receives the mandate.

Interpreting provisions

14. § For the purpose of this Act:

a) civil delegate : should be understood as the member of the Council or the Colleges who
was elected by the civil organisations in a ci vil representation system in accordance with
Paragraphs 12-13 of the present Act;

b) civil organisation: should be understood as an organisation with a legal personality
established by Act II/1989 of associations, society (except for political parties, employer
and employee brotherhoods, insurance associations and the church) foundations with
legal personality (not including public endo wments) established in accordance with Act
IV/1959 of the Civil Code;

c) close relative: should be understood as wife or husband, direct descendents, adopted-,
step- or foster child, adoptive-, step- or foster parent, sister or brother, partner in life;

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) public utility: should be understood as determ ined in Act CLVI/1997 on organisations of
public utility;

f) national civil organisation: should be understood as a civil organisation which in
accordance with the regulation exec uting this Act justifies that it carries out the activities
determined in its constitution at least in seven counties;

g) region: should be understood as determined in Clause e), Paragraph 5 of Act XXI/1996
on regional development: planning-statistical region as determined in Clause ea)
Paragraph 5 of OGY decision 35/1998 on the National Regional Development Concept;

h) regional civil organisation: should be understood as a civil organisation which in
accordance with the regulation exec uting this Act justifies that it carries out the activities
determined in its constitution at least in one county.

Closing provisions

15. § (1) This Act becomes effective on the 15 th day as of its announcement. Point a) of
Section 2 of Paragraph 2 shall come into effect on the 1 st of January, 2004.

(2) After the coming into effect of the presen t Act, the mandate of the members of the first
Council and the first Colleges established in the agreement of the Council lasts for 2 years.

(3) The Parliament entitles the Government to regulate the detailed rules of operation of the
civil representation system, the administering and utilising the Fund Program, the order of
controlling and reporting in a Decree.

Dr. Ferenc Mádl
President of the Republic of Hungary

dr. Katalin Szili
President of the Hungarian Parliament