Budget Amendment ID: FY2013-S4-46-R2

2nd Redraft OTH 46

PUBLIC CHARITY EXECUTIVE AND BOARD OF DIRECTORS COMPENSATION

Mr. Montigny moved that the proposed new text be amended by inserting, after 161, the following new section:-

SECTION A. Chapter 12 of the General Laws is hereby amended by inserting after section 8F the following section:-

Section 8F 1/2. (a) For the purposes of this section, the following words shall have the following meanings:

"Compensation", anything given or received as an equivalent for services, but shall not include reimbursement for costs and expenses reasonably incurred by the independent officer, director or trustee in the course and support of such service.

"Independent officer, director or trustee", an officer, director or trustee of a public charity who is not also serving as an employee, or the equivalent of an employee, of such public charity.

"Massachusetts based public charity", a public charity incorporated or otherwise organized in the commonwealth or, if incorporated or organized outside of the commonwealth, that primarily conducts its business in the commonwealth.

(b) No Massachusetts based public charity required to be registered under section 8E and to file annual reports under section 8F, shall provide compensation to any independent officer, director or trustee for service as such independent officer, director or trustee except with the approval of the director under this section.

Any such public charity intending to provide compensation to any independent officer, director or trustee shall file an application with the division, on such forms and with such supporting information and documentation as the director shall from time to time prescribe, requesting the approval of the director for the public charity to provide compensation.

The director may adopt and promulgate guidelines, rules or regulations to carry out this section including, but not limited to, the criteria for granting approval and the time period during which such approval shall be effective. Such criteria shall recognize that service as an independent officer, director or trustee of a public charity is recognized as a voluntary contribution of time and expertise to benefit the community served by the public charity and that any departure from the voluntary nature of such service requires a clear and convincing showing that compensation is necessary to enable the public charity to attract and retain experienced and competent individuals to serve as independent officers, directors or trustees.

If the director approves an application for compensation, amounts paid as said compensation shall be limited to the amount the Massachusetts based public charity reasonably determines are necessary to accomplish the purposes for which compensation is paid. The director may rescind the approval for compensation if the director finds that any compensation paid under this section is in excess of that reasonably necessary to accomplish the purposes for which compensation is approved and paid.

SECTION B. Notwithstanding any general or special law to the contrary the attorney general may review the compensation of any officer, director or senior manager acting in an executive capacity for a public charity, required to be registered under section 8E of chapter 12 and to file annual reports under section 8F of chapter 12, to consider the appropriate compensation levels given the nature and mission of the public charity. In so doing, the attorney general may examine the compensation standards of not-for-profit public charities, both within the commonwealth and nationwide. For the purposes of this section, compensation shall include salary, bonus payments, incentive payments, deferred compensation, severance payments, below market rate loans, and the lease or rental of real estate, personal property or any vehicle. The attorney general shall report the findings of this review, which may include recommendations about excessive compensation, to the clerks of the senate and the house of representatives by December 31, 2012.

SECTION C.  Section A shall take effect 6 months after the effective date of this act.