Bill S.2117

SENATE DOCKET, NO. 2219 FILED ON: 8/10/2009

SENATE . . . . . . . . . . . . . . No. 2117

The Commonwealth of Massachusetts

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In the Year Two Thousand Nine

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An Act to update public charities law.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Section 8E of chapter 12 of the General Laws, as so appearing, is hereby amended by striking the word “and”, in line 12, following the words: - “association or instrument of trust,”

Provided, further, that Section 8E of chapter 12, as so appearing, is hereby amended by inserting after the words “a true copy of its constitution and by laws,”, in line 12, the following words:- “and a one time initial registration fee of $100,”

Provided, further, that Section 8E of chapter 12, as so appearing, is hereby amended by striking the last paragraph and inserting the following: -

“If any public charity fails to comply with the requirements of this section, the director shall notify the delinquent public charity, or any responsible officer or agent of such public charity, by mailing a notice thereof by United States certified or registered mail, or by any other courier or service found by the director to be sufficiently reliable to generate written documentation of mailing, to its last known address or that of any such responsible officer or agent. Such notice mailed by the director shall be deemed a sufficient notice, and a certificate of the person mailing such notice that it has been mailed in accordance with this section, together with a Post Office, courier or service receipt of such mailing, shall be deemed prima facie evidence thereof and shall be admissible in any court of the commonwealth as to the facts contained therein. Refusal of delivery shall not be a defense to the receipt of such notice. If a complete registration is not filed within thirty days of the day such notice is mailed, the director may assess a civil penalty against the public charity unless such failure to register is for good cause. Notice of the assessment of such penalty shall be mailed to the public charity or responsible officer or agent in the manner provided above for the initial notice. Such civil penalties shall each be in an amount of up to fifty dollars per day for each day subsequent to the end of such thirty day period until a complete registration is filed; provided, however, that the maximum penalty for failure to register shall be no greater than ten thousand dollars. A public charity aggrieved by the imposition of a civil penalty pursuant to this section may bring a civil action in the nature of certiorari pursuant to section 4 of chapter 249; provided, however, that such action shall be commenced within sixty days of the date of the notice of the civil penalty. If any public charity shall fail to pay any civil penalty provided herein, the attorney general may initiate a civil action in the superior court to enforce such penalty or to obtain any other relief so required. Such action by the attorney general may be initiated, if no action is commenced under section 4 of chapter 249, upon the expiration of the sixty day period to bring such action or, if an action is commenced under section 4 of chapter 249, the issuance of a final judicial determination thereon,

Any such penalty that may be imposed on the public charity as above provided may be assessed against a responsible officer or agent of the public charity, upon a finding by the director that such responsible officer or agent has the authority to cause the public charity to comply with the registration requirements of this section but has neglected or refused to do so after notice and demand. The president and treasurer of the public charity, and any person authorized in its by-laws, operating agreement, articles of organization, charter, organizational documents or by resolution of its board of trustees or directors to sign documents or filings on behalf of the public charity, shall be rebuttably presumed to have the authority to cause the public charity to comply with the registration requirements of this section. Prior to any such assessment, the director shall provide such responsible officer or agent with notice of the director’s intention to find such person to be a responsible officer or agent and to assess such person the penalties provided for hereunder. Notice shall be mailed via United States certified or registered mail, or by any other courier or service found by the director to be sufficiently reliable to generate written documentation of mailing, to the last known address of such person as set forth in any filing made by the public charity or shown in its records, or as otherwise determined by the director. Such notice shall be deemed a sufficient notice of the division’s intention to assess such penalties and a certificate of the person mailing such notice that it has been mailed in accordance with this section, together with a Post Office, courier or service receipt of such mailing, shall be deemed prima facie evidence thereof and shall be admissible in any court of the commonwealth as to the facts contained therein. Refusal of delivery of such mailing shall not be a defense to the receipt of such notice. Such person may, within sixty days from the date of such notice, request an opportunity to be heard by the division to present reasons why he or she should not be determined to be a responsible officer or agent within the meaning of this section. Upon a finding by the division that such person is a responsible officer or agent and has failed, without good cause, to cause the public charity to meet the registration requirements of this section, any civil penalty that may be assessed against the public charity may be assessed against such person and such person shall not be entitled to indemnification or reimbursement by or from the public charity for such civil penalty. A person aggrieved by the imposition of a civil penalty pursuant to this section may bring a civil action in the nature of certiorari pursuant to section 4 of chapter 249; provided, however, that such action shall be commenced within sixty days of the date of the notice of the civil penalty. If any person shall fail to pay any civil penalty provided herein, the attorney general may initiate a civil action in the superior court to enforce such penalty or to obtain any other relief so required. Such action by the attorney general may be initiated, if no action is commenced under section 4 of chapter 249, upon the expiration of the sixty day period to bring such action or, if an action is commenced under section 4 of chapter 249, the issuance of a final judicial determination thereon.

SECTION 2. Section 8F of chapter 12 of the General Laws, as so appearing, is hereby amended by inserting after the words “if more than five hundred thousand dollars” in lines 43-44, the following words:- “but not more than one million dollars; (e) five hundred dollars, if more than one million but not more than ten million; (f) one thousand dollars, if more that ten million but not more than one hundred million; (g) two thousand dollars, if more than one hundred million.”

SECTION 3. Section 8F of chapter 12 of the General Laws, as so appearing, is hereby amended by striking the last paragraph and inserting the following:

“If any public charity fails to file a written report for any year, the director shall notify the delinquent public charity, or any responsible officer or agent of such public charity, by mailing a notice thereof to by United States certified or registered mail or by any other courier or service found by the director to be sufficiently reliable to generate written documentation of mailing, to its last known address or that of any such responsible officer or agent. Such notice mailed by the director shall be deemed a sufficient notice, and a certificate of the person mailing such notice that it has been mailed in accordance with this section, together with a Post Office, courier or service receipt of such mailing, shall be deemed prima facie evidence thereof and shall be admissible in any court of the commonwealth as to the facts contained therein. Refusal of delivery of such mailing shall not be a defense to the receipt of such notice. If a complete report is not filed within thirty days of the day such notice is mailed, the director may assess a civil penalty against the public charity unless such failure to file is for good cause. Notice of the assessment of such penalty shall be mailed to the public charity or responsible officer or agent in the manner provided above for the initial notice. Such civil penalties shall each be in an amount of up to fifty dollars per day for each day subsequent to end of such thirty day period until a complete report is filed; provided, however, that the maximum penalties assessed with respect to any report shall be no greater than ten thousand dollars. Any public charity aggrieved by the imposition of a civil penalty pursuant to this section may bring a civil action in the nature of certiorari pursuant to section 4 of chapter 249; provided, however, that such action shall be commenced within sixty days of the date of the notice of the civil penalty. If any public charity shall fail to pay any civil penalty provided herein the attorney general may initiate a civil action in the superior court to enforce such penalty or to obtain any other relief so required. Such action by the attorney general may be initiated, if no action is commenced under section 4 of chapter 249, upon the expiration of the sixty day period to bring such action or, if an action is commenced under section 4 of chapter 249, the issuance of a final judicial determination thereon,”

Any such penalty that may be imposed on the public charity as above provided may be assessed against a responsible officer or agent of the public charity upon a finding by the director that such responsible officer or agent has the authority to cause the public charity to comply with the requirements of this section but has neglected or refused to do so after notice and demand. The president and treasurer of the public charity, and any person authorized in its by-laws, operating agreement, articles of organization, charter, organizational documents or by resolution of its board of trustees or directors to sign documents or filings on behalf of the public charity, shall be rebuttably presumed to have the authority to cause the public charity to comply with the requirements of this section. Prior to any such assessment, the director shall provide such responsible officer or agent with notice of the director’s intention to find such person to be a responsible officer or agent and to assess such person the penalties provided for hereunder. Notice shall be delivered via United States certified or registered mail or by any other courier or service found by the director to be sufficiently reliable to generate written documentation of mailing, to the last known address of such person as set forth in any filing made by the public charity or shown in its records, or as otherwise determined by the director. Such notice shall be deemed a sufficient notice of the division’s intention to assess such penalties and a certificate of the person mailing such notice that it has been mailed in accordance with this section, together with a Post Office, service or courier receipt of such mailing, shall be deemed prima facie evidence thereof and shall be admissible in any court of the commonwealth as to the facts contained therein. Refusal of delivery of such mailing shall not be a defense to the receipt of such notice. Such person may, within sixty days from the date of such notice, request an opportunity to be heard by the division to present reasons why he or she should not be determined to be a responsible officer or agent within the meaning of this section. Upon a finding by the division that such person is a responsible officer or agent and has failed, without good cause, to cause the public charity to meet the filing requirements of this section, any civil penalty that may be assessed against the public charity may be assessed against such person and such person shall not be entitled to indemnification or reimbursement by or from the public charity for such civil penalty. A person aggrieved by the imposition of a civil penalty pursuant to this section may bring a civil action in the nature of certiorari pursuant to section 4 of chapter 249; provided, however, that such action shall be commenced within sixty days of the date of the notice of the civil penalty. If any person shall fail to pay any civil penalty provided herein, the attorney general may initiate a civil action in the superior court to enforce such penalty or to obtain any other relief so required. Such action by the attorney general may be initiated, if no action is commenced under section 4 of chapter 249, upon the expiration of the sixty day period to bring such action or, if an action is commenced under section 4 of chapter 249, the issuance of a final judicial determination thereon.”

“Any public charity, or any officer or agent of a public charity, who willfully makes, executes or files a report false in any material representation shall be punished by a fine of not more than five thousand dollars or by imprisonment for not more than one year or both.”

SECTION 4. Section 21 of chapter 68 of the General Laws, as so appearing, is hereby deleted in its entirety.

SECTION 5.Section 23 of chapter 68 of the General Laws is hereby amended by striking out section 23, as so appearing, and inserting in place thereof the following section:

“Section 23. All solicitations by professional solicitors and all solicitations by commercial co-venturers shall contain, at the time of solicitation, the following disclosures: (1) the name, address and telephone number of the charitable organization and a description of how the contributions raised by the solicitation will be utilized for charitable purposes, or if there is no charitable organization, the name, address and telephone number of the professional solicitor or commercial co-venturer and a description of how the contributions raised by the solicitation will be utilized for charitable purposes; (2) the statement that the solicitation is being conducted by a “paid fund-raiser”; and (3) such other disclosures as required by relevant rules and regulations promulgated under section twenty-nine. If the solicitation is for advertising, the disclosure shall also include the geographic distribution and the circulation of the publication in which the advertising will appear.”

SECTION 6. Section 24 of chapter 68 of the General Laws, as so appearing, is hereby amended by striking the words “(a) professional solicitor, three hundred dollars; (b) professional fund-raising counsel, two hundred dollars; (c) commercial co-venturer, fifty dollars.”, in lines 9-11, and inserting the following words:-“(i) professional solicitor, one thousand dollars; (ii) professional fund-raising counsel, four hundred dollars; (iii) commercial co-venturer, two hundred dollars.”

SECTION 7. Section 24 of chapter 68 of the General Laws, as so appearing, is hereby amended by striking the word “ten”, in line 17, and inserting the following word:-“twenty five.”

SECTION 8. Section 24 of chapter 68 of the General Laws, as so appearing, is hereby amended by inserting after the words “exceed the sum of said bond.”, in line 27, the following words:-“ A professional solicitor shall conduct solicitations only by or through persons who are covered (i) by a consolidated bond under which such professional solicitor is the principal obligor, or (ii) by a bond under which such person is both the principal obligor and independently registered with the division as a professional solicitor under clause (a) above.”

SECTION 9. Section 32 of chapter 68 of the General Laws, as so appearing, is hereby amended by adding after subsection (e) the following subsection: -

“(f) In addition to any remedies or actions authorized or permitted pursuant to subsections (a) through (e) of this section, if any charitable organization, professional fundraising counsel, commercial co-venturer or professional solicitor violates one or more applicable provisions of sections 19, 22 or 24 of chapter 68, the director shall notify the delinquent charitable organization, professional fundraising counsel, commercial co-venturer, professional solicitor, or any responsible officer or agent of any of the foregoing by mailing a notice thereof by United States certified or registered mail or by any other courier or service found by the director to be sufficiently reliable to generate written documentation of delivery, to its last known address or that of any such responsible officer or agent. Such notice mailed by the division shall be deemed a sufficient notice, and a certificate of the person mailing such notice that it has been mailed in accordance with this section, together with a Post Office, courier or service receipt of such mailing, shall be deemed prima facie evidence thereof and shall be admissible in any court of the commonwealth as to the facts contained therein. Refusal of delivery of such mailing shall not be a defense to the receipt of such notice. If the charitable organization, professional fundraising counsel, commercial co-venturer or professional solicitor fails to correct any such violation within thirty days of the day such notice is mailed, the director may assess a civil penalty against the charitable organization, professional fundraising counsel, commercial co-venturer or professional solicitor unless such failure is for good cause. Notice of the assessment of such penalty shall be mailed to the charitable organization, professional fundraising counsel, commercial co-venturer, professional solicitor or responsible officer or agent in the manner provided above for the initial notice. For charitable organizations such civil penalty shall be in an amount of up to fifty dollars per day for each day subsequent to the end of such thirty day period until such violation is cured; provided, however, that the maximum penalty shall be no greater than ten thousand dollars. For a professional fund raising counsel, commercial co-venturer or professional solicitor such civil penalty shall be in an amount of up to five hundred dollars per day for each day subsequent to the end of such thirty day period until such violation is cured; provided, however, that the maximum penalty shall be no greater than twenty five thousand dollars. Any charitable organization, professional fundraising counsel, commercial co-venturer or professional solicitor aggrieved by the imposition of a civil penalty pursuant to this section may bring a civil action in the nature of certiorari pursuant to section 4 of chapter 249; provided, however, that such action shall be commenced within sixty days of the date of the notice of the civil penalty. If any charitable organization, professional fundraising counsel, commercial co-venturer, professional solicitor or responsible officer or agent shall fail to pay any civil penalty provided herein, the attorney general may initiate a civil action in the superior court to enforce such penalty or to obtain any other relief so required. Such action by the attorney general may be initiated, if no action is commenced under section 4 of chapter 249, upon the expiration of the sixty day period to bring such action or, if an action is commenced under section 4 of chapter 249, the issuance of a final judicial determination thereon.”

Any such penalty that may be imposed on the charitable organization, professional fundraising counsel, commercial co-venturer or professional solicitor may be assessed against a responsible officer or agent of the charitable organization, professional fundraising counsel, commercial co-venturer or professional solicitor, upon a finding by the director that such responsible officer or agent has the authority to cause the charitable organization, professional fundraising counsel, commercial co-venturer or professional solicitor to comply with the requirements of this chapter but has neglected or refused to do so after notice and demand. The president and treasurer of the charitable organization, professional fundraising counsel, commercial co-venturer or professional solicitor, and any person authorized in its by-laws, operating agreement, articles of organization, charter, organizational documents or by resolution of its board of trustees or directors to sign documents or filings on behalf of the charitable organization, professional fundraising counsel, commercial co-venturer or professional solicitor, shall be rebuttably presumed to have the authority to cause the charitable organization, professional fundraising counsel, commercial co-venturer or professional solicitor to comply with the requirements of this chapter. Prior to any such assessment, the director shall provide such responsible officer or agent with notice of the director’s intention to find such person to be a responsible officer or agent and to assess such person the penalties provided for hereunder. Notice shall be delivered via United States certified or registered mail or by any other courier or service found by the director to be sufficiently reliable to generate written documentation of mailing, to the last known address of such person as set forth in any filing made by the public charity or shown in its records or as otherwise determined by the director. Such notice shall be deemed a sufficient notice of the division’s intentions to assess such penalties and a certificate of the person mailing such notice that it has been mailed in accordance with this section, together with a Post Office, courier or service receipt of such mailing, shall be deemed prima facie evidence thereof and shall be admissible in any court of the commonwealth as to the facts contained therein. Refusal of delivery of such mailing shall not be a defense to the receipt of such notice. Such person may, within sixty days from the date of such notice, request an opportunity to be heard by the division to present reasons why he or she should not be determined to be a responsible officer or agent within the meaning of this section. Upon a finding by the division that such person is a responsible officer or agent and has failed, without good cause, to cause the charitable organization, professional fundraising counsel, commercial co-venturer or professional solicitor to comply with the requirements of this chapter, any civil penalty that may be assessed against the charitable organization, professional fundraising counsel, commercial co-venturer or professional solicitor may be assessed against such person. In the case of a charitable organization, such person shall not be entitled to indemnification or reimbursement by or from the charitable organization for such civil penalty. A person aggrieved by the imposition of a civil penalty pursuant to this section may bring a civil action in the nature of certiorari pursuant to section 4 of chapter 249; provided, however, that such action shall be commenced within sixty days of the date of the notice of the civil penalty. If any person shall fail to pay any civil penalty provided herein, the attorney general may initiate a civil action in the superior court to enforce such penalty or to obtain any other relief so required. Such action by the attorney general may be initiated, if no action is commenced under section 4 of chapter 249, upon the expiration of the sixty day period to bring such action or, if an action is commenced under section 4 of chapter 249, the issuance of a final judicial determination thereon,

SECTION 10. Section 11A of chapter 180 of the General Laws, as so appearing, is hereby amended by striking the first paragraph and inserting the following:-

A charitable corporation constituting a public charity organized under the provisions of general or special law, which desires to voluntarily windup and close its affairs, may authorize its dissolution in accordance with the provisions of this section. The provisions of this section shall constitute the sole method for the voluntary dissolution of any such charitable corporation.

“(a) Petition for Dissolution. A petition for dissolution shall be authorized by vote of a majority of the corporation’s board of directors entitled to vote thereon, provided, however, that if the corporation has one or more classes of members, the corporation may in its articles of corporation, in a bylaw adopted by the incorporators pursuant to section three or in a bylaw adopted by the members, assign the power of authorization to the members acting by majority vote of the members entitled to vote thereon or provide that the exercise of such power shall be subject to approval by the members.

(b) No Net Assets. If the corporation has no remaining assets, the petition for dissolution shall be submitted to the division of public charities of the office of the attorney general setting forth in substance the grounds of the application for dissolution together with such forms, affidavits and information as the division may from time to time prescribe. If the division is satisfied that such corporation has or will become inactive and that its dissolution would be in the public interest, the division may approve the dissolution of the corporation.

(c) Net Assets. If the corporation has remaining assets, the petition for its dissolution shall be filed in the supreme judicial court setting forth in substance the grounds of the application for dissolution and requesting the court to authorize the administration of its funds for such similar public charitable purposes as the court may determine. The supreme judicial court may by rule or order provide that such petition and court authorization are not required for dissolutions approved by the division upon receipt of such forms, affidavits and information as the division may require if the corporation has net assets no greater than such amount as the court may provide in said rule or order or in such other situations as the court may so provide.”

SECTION 11. Sections 1, 3, 5, 6, 7, 8 and 9 shall be effective January 1, 2010. All other sections shall be effective upon passage, provided, however, that the fee changes set forth in Section 2 shall be effective only for reporting years ending on or after July 1, 2009.