IN
Indiana Senate Bill SB0278

Indiana 2023 Regular Session

Indiana Senate Bill SB0278 Compare Versions

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1-*SB0278.2*
2-Reprinted
3-February 28, 2023
1+*SB0278.1*
2+February 17, 2023
43 SENATE BILL No. 278
54 _____
6-DIGEST OF SB 278 (Updated February 27, 2023 3:37 pm - DI 149)
7-Citations Affected: IC 4-6; IC 23-17.
5+DIGEST OF SB 278 (Updated February 16, 2023 3:03 pm - DI 149)
6+Citations Affected: IC 4-6; IC 23-17; IC 35-52.
87 Synopsis: Nonprofit corporations. Provides that the contents of an
98 investigative demand issued by the attorney general are to be kept
109 confidential. Defines charitable organization. Expands the definition of
11-"public benefit corporation" to include a domestic corporation that
12-serves a public benefit with an operating budget that is supported by
13-public funds or authorized to spend public funds in furtherance of its
14-mission. Provides that a court may dissolve a corporation under certain
10+"public benefit corporation" to include a domestic corporation serves
11+a public benefit with an operating budget that is supported by public
12+funds or authorized to spend public funds in furtherance of its mission.
13+Provides that a court may dissolve a corporation under certain
1514 circumstances. Specifies procedural requirements that the attorney
16-general must take before petitioning the court for dissolution of a
17-corporation for certain reasons. Provides exceptions. Allows the
18-attorney general to petition a court for additional remedies against a
19-corporation, in addition to or as an alternative dissolution, for certain
20-violations. Provides that upon a showing of reasonable cause, a court
21-may appoint a receiver to manage a corporation under certain
22-circumstances. Requires a corporation to keep certain records for at
23-least three years. Allows the attorney general to inspect records of
24-certain corporations. Prohibits a state agency from imposing a filing or
25-reporting requirement on a charitable organization that is more
26-burdensome than Indiana law allows. Provides exceptions. Allows the
27-attorney general to take certain actions if the attorney general finds that
28-a corporation has failed to comply with certain record requirements.
29-Makes conforming changes.
15+general must take before petitioning the court for dissolution for certain
16+reasons. Provides additional remedies that the attorney general may
17+seek for certain violations. Provides that upon a showing of reasonable
18+cause, a court may appoint a receiver to manage a corporation under
19+certain circumstances. Allows the attorney general to inspect records
20+of certain corporations. Prohibits a state agency from imposing a filing
21+or recording fee that is more burdensome than Indiana law allows.
22+Provides exceptions. Makes conforming changes.
3023 Effective: July 1, 2023.
31-Freeman, Johnson T,
32-Randolph Lonnie M
24+Freeman, Randolph Lonnie M
3325 January 11, 2023, read first time and referred to Committee on Judiciary.
3426 February 16, 2023, amended, reported favorably — Do Pass.
35-February 27, 2023, read second time, amended, ordered engrossed.
36-SB 278—LS 7086/DI 148 Reprinted
37-February 28, 2023
27+SB 278—LS 7086/DI 148 February 17, 2023
3828 First Regular Session of the 123rd General Assembly (2023)
3929 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
4030 Constitution) is being amended, the text of the existing provision will appear in this style type,
4131 additions will appear in this style type, and deletions will appear in this style type.
4232 Additions: Whenever a new statutory provision is being enacted (or a new constitutional
4333 provision adopted), the text of the new provision will appear in this style type. Also, the
4434 word NEW will appear in that style type in the introductory clause of each SECTION that adds
4535 a new provision to the Indiana Code or the Indiana Constitution.
4636 Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
4737 between statutes enacted by the 2022 Regular Session of the General Assembly.
4838 SENATE BILL No. 278
4939 A BILL FOR AN ACT to amend the Indiana Code concerning
5040 business and other associations.
5141 Be it enacted by the General Assembly of the State of Indiana:
5242 1 SECTION 1. IC 4-6-3-9, AS AMENDED BY P.L.5-2015,
5343 2 SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
5444 3 JULY 1, 2023]: Sec. 9. (a) The contents of an investigative demand,
5545 4 all documentary material, answers to written interrogatories, and
5646 5 transcripts of oral testimony that are provided pursuant to an the
5747 6 investigative demand shall be kept confidential by the attorney general
5848 7 until an action is filed against a person for the violation under
5949 8 investigation, unless:
6050 9 (1) confidentiality is waived by the person being investigated and
6151 10 the person who has testified, answered interrogatories, or
6252 11 produced documentary material; or
6353 12 (2) disclosure is made by the attorney general to another state or
6454 13 federal attorney general or law enforcement agency for the
6555 14 purposes of cooperation in law enforcement of state or federal
6656 15 laws.
6757 16 (b) All documentary material, answers to written interrogatories,
6858 17 and transcripts of oral testimony that are provided to the attorney
6959 SB 278—LS 7086/DI 148 2
7060 1 general pursuant to an investigative demand issued by another state or
7161 2 federal attorney general or law enforcement agency under similar
7262 3 authority shall be treated as if obtained pursuant to an investigative
7363 4 demand issued by the attorney general under section 3 of this chapter.
7464 5 SECTION 2. IC 23-17-2-5.7 IS ADDED TO THE INDIANA CODE
7565 6 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
7666 7 1, 2023]: Sec. 5.7. "Charitable organization" means an
7767 8 organization described in Section 501 of the Internal Revenue
7868 9 Code.
7969 10 SECTION 3. IC 23-17-2-23 IS AMENDED TO READ AS
8070 11 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 23. "Public benefit
8171 12 corporation" means a domestic corporation that is the following:
8272 13 (1) Either:
8373 14 (A) formed as a public benefit corporation under this title;
8474 15 (B) designated as a public benefit corporation by another law;
8575 16 (C) recognized as tax exempt under Section 501(c)(3) of the
8676 17 Internal Revenue Code of 1986; or
8777 18 (D) a not-for-profit corporation that serves a public benefit
8878 19 with an operating budget that is supported in whole or in
89-20 part by public funds, or is otherwise authorized to spend
90-21 public funds in furtherance of the corporation's mission;
91-22 or
92-23 (D) (E) otherwise organized for a public or charitable purpose,
93-24 including a veterans organization or a post, a unit, or an
94-25 auxiliary of the veterans organization, that is chartered by a
95-26 federal statute for patriotic, public, or charitable purposes and
96-27 recognized as tax exempt under Section 501(c)(4) or Section
97-28 501(c)(19) of the Internal Revenue Code.
98-29 (2) Restricted so that on dissolution the corporation must
99-30 distribute the corporation's assets to an organization organized for
100-31 a public or charitable purpose, a religious corporation, the United
101-32 States, a state, or a person that is recognized as exempt under
102-33 Section 501(c)(3) of the Internal Revenue Code of 1986.
103-34 (3) Not a religious corporation.
104-35 SECTION 4. IC 23-17-24-1 IS AMENDED TO READ AS
105-36 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 1. (a) A circuit court or
106-37 superior court may dissolve a corporation as follows:
107-38 (1) In a proceeding by the attorney general if one (1) of the
108-39 following is established:
109-40 (A) The corporation obtained the corporation's articles of
110-41 incorporation through fraud.
111-42 (B) The corporation has continued to exceed or abuse the
79+20 part by public funds, or otherwise authorized to spend
80+21 public funds in furtherance of its mission; or
81+22 (D) (E) otherwise organized for a public or charitable purpose,
82+23 including a veterans organization or a post, a unit, or an
83+24 auxiliary of the veterans organization, that is chartered by a
84+25 federal statute for patriotic, public, or charitable purposes and
85+26 recognized as tax exempt under Section 501(c)(4) or Section
86+27 501(c)(19) of the Internal Revenue Code.
87+28 (2) Restricted so that on dissolution the corporation must
88+29 distribute the corporation's assets to an organization organized for
89+30 a public or charitable purpose, a religious corporation, the United
90+31 States, a state, or a person that is recognized as exempt under
91+32 Section 501(c)(3) of the Internal Revenue Code of 1986.
92+33 (3) Not a religious corporation.
93+34 SECTION 4. IC 23-17-24-1 IS AMENDED TO READ AS
94+35 FOLLOWS [EFFECTIVE JULY 1, 2023]: Sec. 1. (a) A circuit court or
95+36 superior court may dissolve a corporation as follows:
96+37 (1) In a proceeding by the attorney general if one (1) of the
97+38 following is established:
98+39 (A) The corporation obtained the corporation's articles of
99+40 incorporation through fraud.
100+41 (B) The corporation has continued to exceed or abuse the
101+42 authority conferred upon the corporation by law.
112102 SB 278—LS 7086/DI 148 3
113-1 authority conferred upon the corporation by law.
114-2 (C) The corporation is a public benefit corporation and the
115-3 corporate assets are being misapplied or wasted.
116-4 (D) The corporation is a public benefit corporation and is no
117-5 longer able to carry out the corporation's purposes or a
118-6 requirement imposed upon the corporation by law.
119-7 (E) The corporation is a public benefit corporation and
120-8 uses solicited property or assets in a way that is
121-9 substantially inconsistent with the stated purpose for
122-10 which the funds were solicited.
123-11 (F) The corporation is a public benefit corporation and has
124-12 grossly mismanaged property or assets.
125-13 (G) The corporation has failed to respond in a good faith
126-14 manner to a reasonable written interrogatory from the
127-15 attorney general to the corporation, the corporation's
128-16 officers, or the corporation's directors. This clause does
129-17 not apply if a circuit court or superior court determines
130-18 that the written interrogatory was not supported by
131-19 reasonable cause.
132-20 Clauses (E) through (G) do not apply to a community mental
133-21 health center (as defined in IC 12-7-2-38), an ICF/IID (as
134-22 defined in IC 16-29-4-2), an entity that provides community
135-23 based services for individuals with a developmental disability
136-24 (as defined in IC 12-7-2-61), a federally-qualified health
137-25 center (as defined in 42 U.S.C. 1396d(l)(2)(B)), a hospital
138-26 licensed under IC 12-25, IC 16-21, IC 16-22, or IC 16-23, a
139-27 health carrier (as defined in IC 27-2-26-1), or a public utility
140-28 (as defined in IC 8-1-2-1).
141-29 (2) Before commencing an action under subdivision (1)(G),
142-30 the attorney general shall:
143-31 (A) deliver written notice of the specific violation to the
144-32 corporation; and
145-33 (B) give the corporation forty-five (45) days to remedy the
146-34 relevant violation, whether by:
147-35 (i) amending the corporation's articles of incorporation
148-36 or bylaws; or
149-37 (ii) taking or ceasing to take an action.
150-38 The attorney general may commence an action against a
151-39 corporation if the corporation fails to remedy the violation
152-40 after forty-five (45) days.
153-41 (2) (3) Except as provided in the articles of incorporation or
154-42 bylaws of a religious corporation, in a proceeding by fifty (50)
103+1 (C) The corporation is a public benefit corporation and the
104+2 corporate assets are being misapplied or wasted.
105+3 (D) The corporation is a public benefit corporation and is no
106+4 longer able to carry out the corporation's purposes or a
107+5 requirement imposed upon the corporation by law.
108+6 (E) The corporation is a public benefit corporation and
109+7 uses solicited property or assets in a way that is
110+8 substantially inconsistent with the stated purpose for
111+9 which the funds were solicited.
112+10 (F) The corporation is a public benefit corporation and has
113+11 grossly mismanaged property or assets.
114+12 (G) The corporation has failed to respond in a good faith
115+13 manner to a reasonable written interrogatory from the
116+14 attorney general to the corporation, the corporation's
117+15 officers, or the corporation's directors. This clause does
118+16 not apply if a circuit court or superior court determines
119+17 that the written interrogatory was not reasonable.
120+18 Clauses (E) through (G) do not apply to a county hospital
121+19 licensed under IC 16-22, a public utility (as defined in
122+20 IC 8-1-2-1), or a utility owned, operated, or held in trust by a
123+21 consolidated city.
124+22 (2) Before commencing an action under subdivision (1)(G),
125+23 the attorney general shall:
126+24 (A) deliver written notice of the specific violation to the
127+25 corporation; and
128+26 (B) give the corporation forty-five (45) days to remedy the
129+27 relevant violation, whether by:
130+28 (i) amending the corporation's articles of incorporation
131+29 or bylaws; or
132+30 (ii) taking or ceasing to take an action.
133+31 The attorney general may commence an action against a
134+32 corporation if the corporation fails to remedy the violation
135+33 after forty-five (45) days.
136+34 (2) (3) Except as provided in the articles of incorporation or
137+35 bylaws of a religious corporation, in a proceeding by fifty (50)
138+36 members or members holding at least five percent (5%) of the
139+37 voting power, whichever is less, or by a director or a person
140+38 specified in articles of corporation, if one (1) of the following is
141+39 established:
142+40 (A) The directors are deadlocked in the management of the
143+41 corporate affairs, and the members, if any, are unable to break
144+42 the deadlock.
155145 SB 278—LS 7086/DI 148 4
156-1 members or members holding at least five percent (5%) of the
157-2 voting power, whichever is less, or by a director or a person
158-3 specified in articles of corporation, if one (1) of the following is
159-4 established:
160-5 (A) The directors are deadlocked in the management of the
161-6 corporate affairs, and the members, if any, are unable to break
162-7 the deadlock.
163-8 (B) The directors or those in control of the corporation have
164-9 acted, are acting, or will act in a manner that is illegal,
165-10 oppressive, or fraudulent.
166-11 (C) The members have deadlocked in voting power and have
167-12 failed, for a period that includes at least two (2) consecutive
168-13 annual meeting dates, to elect successors to directors whose
169-14 terms have, or would otherwise have, expired.
170-15 (D) The corporate assets are being misapplied or wasted.
171-16 (E) The corporation is a public benefit or religious corporation
172-17 and is no longer able to carry out the corporation's purposes.
173-18 (3) (4) In a proceeding by a creditor if either of the following is
174-19 established:
175-20 (A) The creditor's claim has been reduced to judgment, the
176-21 execution on the judgment returned unsatisfied, and the
177-22 corporation is insolvent.
178-23 (B) The corporation has admitted in writing that the creditor's
179-24 claim is due and owing and the corporation is insolvent.
180-25 (4) (5) In a proceeding by the corporation to have the
181-26 corporation's voluntary dissolution continued under court
182-27 supervision.
183-28 (b) Before dissolving a corporation, a court must consider the
184-29 following:
185-30 (1) Reasonable alternatives to dissolution.
186-31 (2) If dissolution is in the public interest if the corporation is a
187-32 public benefit corporation.
188-33 (3) If dissolution is the best way of protecting the interests of
189-34 members if the corporation is a mutual benefit corporation.
190-35 SECTION 5. IC 23-17-24-1.5, AS AMENDED BY P.L.65-2014,
191-36 SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
192-37 JULY 1, 2023]: Sec. 1.5. (a) This section applies to the following:
193-38 (1) Notwithstanding IC 23-17-1-1, all corporations organized
194-39 under Indiana law for a purpose for which a corporation may be
195-40 organized under this article, regardless of the date of
196-41 incorporation.
197-42 (2) A foreign corporation that desires to transact business in
146+1 (B) The directors or those in control of the corporation have
147+2 acted, are acting, or will act in a manner that is illegal,
148+3 oppressive, or fraudulent.
149+4 (C) The members have deadlocked in voting power and have
150+5 failed, for a period that includes at least two (2) consecutive
151+6 annual meeting dates, to elect successors to directors whose
152+7 terms have, or would otherwise have, expired.
153+8 (D) The corporate assets are being misapplied or wasted.
154+9 (E) The corporation is a public benefit or religious corporation
155+10 and is no longer able to carry out the corporation's purposes.
156+11 (3) (4) In a proceeding by a creditor if either of the following is
157+12 established:
158+13 (A) The creditor's claim has been reduced to judgment, the
159+14 execution on the judgment returned unsatisfied, and the
160+15 corporation is insolvent.
161+16 (B) The corporation has admitted in writing that the creditor's
162+17 claim is due and owing and the corporation is insolvent.
163+18 (4) (5) In a proceeding by the corporation to have the
164+19 corporation's voluntary dissolution continued under court
165+20 supervision.
166+21 (b) Before dissolving a corporation, a court must consider the
167+22 following:
168+23 (1) Reasonable alternatives to dissolution.
169+24 (2) If dissolution is in the public interest if the corporation is a
170+25 public benefit corporation.
171+26 (3) If dissolution is the best way of protecting the interests of
172+27 members if the corporation is a mutual benefit corporation.
173+28 SECTION 5. IC 23-17-24-1.5, AS AMENDED BY P.L.65-2014,
174+29 SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
175+30 JULY 1, 2023]: Sec. 1.5. (a) This section applies to the following:
176+31 (1) Notwithstanding IC 23-17-1-1, all corporations organized
177+32 under Indiana law for a purpose for which a corporation may be
178+33 organized under this article, regardless of the date of
179+34 incorporation.
180+35 (2) A foreign corporation that desires to transact business in
181+36 Indiana.
182+37 (b) In addition or as an alternative to a dissolution under section
183+38 1 of this chapter, the attorney general may petition a court to issue one
184+39 (1) or more of the following remedies:
185+40 (1) Injunctive relief.
186+41 (2) Appointment of temporary or permanent receivers.
187+42 (3) Permanent removal of trustees, corporate officers, or directors
198188 SB 278—LS 7086/DI 148 5
199-1 Indiana.
200-2 (b) In addition or as an alternative to a dissolution under section
201-3 1 of this chapter, the attorney general may petition a court to issue one
202-4 (1) or more of the following remedies:
203-5 (1) Injunctive relief.
204-6 (2) Appointment of temporary or permanent receivers.
205-7 (3) Permanent removal of trustees, corporate officers, or directors
206-8 who have breached the fiduciary duty.
207-9 (4) Appointment of permanent court approved replacement
208-10 trustees, corporate officers or directors, and members.
209-11 (5) Sequestration of assets.
210-12 (6) Reimbursement of donations to persons from whom
211-13 contributions have been unlawfully solicited.
212-14 (7) Reimbursement for relevant costs, to be payable to the
213-15 attorney general on behalf of the state, including the
214-16 following:
215-17 (A) Reasonable attorney's fees for the action.
216-18 (B) Reasonable costs of an investigation.
217-19 (C) Reasonable costs for obtaining expert evidence.
218-20 (D) Audit fees.
219-21 (8) Assessment of a civil penalty, which does not replace any
220-22 other relief granted by the court, of not more than ten
221-23 thousand dollars ($10,000) per violation. Additionally, a
222-24 penalty of twenty thousand dollars ($20,000) may be added
223-25 for each repeat violation.
224-26 (9) Other relief the court deems appropriate.
225-27 (c) The attorney general may seek a remedy against any or all of the
226-28 following:
227-29 (1) If the attorney general establishes a condition enumerated in
228-30 section 1(a)(1) of this chapter, a corporation.
229-31 (2) For a violation of the officer's duties under IC 23-17-14-2, a
230-32 corporate officer.
231-33 (3) For a violation of IC 23-17-13, a corporate director.
232-34 (d) In addition to any remedies described in subsection (b), the
233-35 attorney general may accept a written assurance of voluntary
234-36 compliance with respect to:
235-37 (1) a past, an existing, or an imminent condition enumerated in
236-38 section 1(a)(1) of this chapter; or
237-39 (2) any past, existing, or imminent violation of a duty under this
238-40 article by a corporation, director, officer, member, trustee, or
239-41 other corporate principal.
240-42 (e) An assurance of voluntary compliance described in subsection
189+1 who have breached the fiduciary duty.
190+2 (4) Appointment of permanent court approved replacement
191+3 trustees, corporate officers or directors, and members.
192+4 (5) Sequestration of assets.
193+5 (6) Reimbursement of donations to persons from whom
194+6 contributions have been unlawfully solicited.
195+7 (7) Reimbursement for relevant costs, to be payable to the
196+8 attorney general on behalf of the state, including the
197+9 following:
198+10 (A) Reasonable attorney's fees for the action.
199+11 (B) Reasonable costs of an investigation.
200+12 (C) Reasonable costs for obtaining expert evidence.
201+13 (D) Audit fees.
202+14 (8) Assessment of a civil penalty, which does not replace any
203+15 other relief granted by the court, of not more than ten
204+16 thousand dollars ($10,000) per violation. Additionally, a
205+17 penalty of twenty thousand dollars ($20,000) may be added
206+18 for each repeat violation.
207+19 (9) Other relief the court deems appropriate.
208+20 (c) The attorney general may seek a remedy against any or all of the
209+21 following:
210+22 (1) If the attorney general establishes a condition enumerated in
211+23 section 1(a)(1) of this chapter, a corporation.
212+24 (2) For a violation of the officer's duties under IC 23-17-14-2, a
213+25 corporate officer.
214+26 (3) For a violation of IC 23-17-13, a corporate director.
215+27 (d) In addition to any remedies described in subsection (b), the
216+28 attorney general may accept a written assurance of voluntary
217+29 compliance with respect to:
218+30 (1) a past, an existing, or an imminent condition enumerated in
219+31 section 1(a)(1) of this chapter; or
220+32 (2) any past, existing, or imminent violation of a duty under this
221+33 article by a corporation, director, officer, member, trustee, or
222+34 other corporate principal.
223+35 (e) An assurance of voluntary compliance described in subsection
224+36 (d) may include a stipulation for the voluntary payment by the person
225+37 of:
226+38 (1) the costs of an investigation;
227+39 (2) an amount to be held in escrow pending the outcome of an
228+40 action;
229+41 (3) an amount to be held in escrow pending the outcome of an
230+42 action as restitution to an aggrieved nonprofit corporation or
241231 SB 278—LS 7086/DI 148 6
242-1 (d) may include a stipulation for the voluntary payment by the person
243-2 of:
244-3 (1) the costs of an investigation;
245-4 (2) an amount to be held in escrow pending the outcome of an
246-5 action;
247-6 (3) an amount to be held in escrow pending the outcome of an
248-7 action as restitution to an aggrieved nonprofit corporation or
249-8 person; or
250-9 (4) both amounts described in subdivisions (2) and (3).
251-10 (f) An assurance of voluntary compliance described in subsection
252-11 (d):
253-12 (1) must be filed with; and
254-13 (2) is subject to the approval of;
255-14 the court having jurisdiction.
256-15 (g) An assurance of voluntary compliance described in subsection
257-16 (d) is not considered an admission of a violation of any law.
258-17 (h) If the attorney general closes a matter by accepting an assurance
259-18 of voluntary compliance described in subsection (d), the attorney
260-19 general may reopen the matter for further proceedings within the period
261-20 of the applicable statute of limitations.
262-21 SECTION 6. IC 23-17-24-3, AS AMENDED BY P.L.245-2005,
263-22 SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
264-23 JULY 1, 2023]: Sec. 3. (a) A court in a judicial proceeding brought by
265-24 the attorney general or by any other party named under section 1 of this
266-25 chapter to dissolve a public benefit or mutual benefit corporation may
267-26 appoint at least one (1):
268-27 (1) receiver to wind up and liquidate; or
269-28 (2) custodian to manage;
270-29 the affairs of the corporation. The court shall hold a hearing, after
271-30 notifying all parties to the proceeding and any interested persons
272-31 designated by the court, before appointing a receiver or custodian. The
273-32 court appointing a receiver or custodian has exclusive jurisdiction over
274-33 the corporation and all of the corporation's property wherever located.
275-34 (b) The court may appoint an individual or a domestic or foreign
276-35 business or nonprofit corporation authorized to transact business in
277-36 Indiana as a receiver or custodian. The court may require the receiver
278-37 or custodian to post bond, with or without sureties, in an amount the
279-38 court directs.
280-39 (c) The court shall describe the powers and duties of the receiver or
281-40 custodian in the appointing order, which may be amended from time to
282-41 time, including the following:
283-42 (1) The receiver may do the following:
232+1 person; or
233+2 (4) both amounts described in subdivisions (2) and (3).
234+3 (f) An assurance of voluntary compliance described in subsection
235+4 (d):
236+5 (1) must be filed with; and
237+6 (2) is subject to the approval of;
238+7 the court having jurisdiction.
239+8 (g) An assurance of voluntary compliance described in subsection
240+9 (d) is not considered an admission of a violation of any law.
241+10 (h) If the attorney general closes a matter by accepting an assurance
242+11 of voluntary compliance described in subsection (d), the attorney
243+12 general may reopen the matter for further proceedings within the period
244+13 of the applicable statute of limitations.
245+14 SECTION 6. IC 23-17-24-3, AS AMENDED BY P.L.245-2005,
246+15 SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
247+16 JULY 1, 2023]: Sec. 3. (a) A court in a judicial proceeding brought by
248+17 the attorney general or by any other party named under section 1 of this
249+18 chapter to dissolve a public benefit or mutual benefit corporation may
250+19 appoint at least one (1):
251+20 (1) receiver to wind up and liquidate; or
252+21 (2) custodian to manage;
253+22 the affairs of the corporation. The court shall hold a hearing, after
254+23 notifying all parties to the proceeding and any interested persons
255+24 designated by the court, before appointing a receiver or custodian. The
256+25 court appointing a receiver or custodian has exclusive jurisdiction over
257+26 the corporation and all of the corporation's property wherever located.
258+27 (b) The court may appoint an individual or a domestic or foreign
259+28 business or nonprofit corporation authorized to transact business in
260+29 Indiana as a receiver or custodian. The court may require the receiver
261+30 or custodian to post bond, with or without sureties, in an amount the
262+31 court directs.
263+32 (c) The court shall describe the powers and duties of the receiver or
264+33 custodian in the appointing order, which may be amended from time to
265+34 time, including the following:
266+35 (1) The receiver may do the following:
267+36 (A) Dispose of all or any part of the assets of the corporation
268+37 wherever located, at a public or private sale, if authorized by
269+38 the court. However, the corporation is subject to a trust, an
270+39 endowment, and other restrictions that would be applicable to
271+40 the corporation.
272+41 (B) Sue and defend in the receiver's or custodian's name as
273+42 receiver or custodian of the corporation in all Indiana courts.
284274 SB 278—LS 7086/DI 148 7
285-1 (A) Dispose of all or any part of the assets of the corporation
286-2 wherever located, at a public or private sale, if authorized by
287-3 the court. However, the corporation is subject to a trust, an
288-4 endowment, and other restrictions that would be applicable to
289-5 the corporation.
290-6 (B) Sue and defend in the receiver's or custodian's name as
291-7 receiver or custodian of the corporation in all Indiana courts.
292-8 (2) The custodian may exercise all of the powers of the
293-9 corporation, through or in place of the corporation's board of
294-10 directors or officers, to the extent necessary to manage the affairs
295-11 of the corporation in the best interests of the corporation's
296-12 members and creditors or to carry out the corporation's lawful
297-13 purposes.
298-14 (d) The court during a receivership may redesignate the receiver a
299-15 custodian, and during a custodianship may redesignate the custodian
300-16 a receiver if doing so is in the best interests of the corporation and the
301-17 corporation's members and creditors.
302-18 (e) The court may, during the receivership or custodianship, order
303-19 compensation paid and expense disbursements or reimbursements
304-20 made to the receiver or custodian and the receiver's or custodian's
305-21 counsel from the assets of the corporation or proceeds from the sale of
306-22 the assets.
307-23 (f) Upon a showing of reasonable cause by the attorney general
308-24 or any other person, a circuit or superior court may appoint a
309-25 receiver to manage the corporation or property of the corporation
310-26 even if an action to dissolve the corporation has not been filed.
311-27 SECTION 7. IC 23-17-27-1, AS AMENDED BY P.L.118-2017,
312-28 SECTION 94, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
313-29 JULY 1, 2023]: Sec. 1. (a) A corporation shall keep as permanent
314-30 records a record of the following:
315-31 (1) Minutes of meetings of the corporation's members and board
316-32 of directors.
317-33 (2) A record of actions taken by the members or directors without
318-34 a meeting.
319-35 (3) A record of actions taken by committees of the board of
320-36 directors as authorized under IC 23-17-15-6(d).
321-37 (b) A corporation shall maintain appropriate accounting records.
322-38 (c) A corporation or the corporation's agent shall maintain a record
323-39 of the corporation's members in a form that permits preparation of a list
324-40 of the names and addresses of all members, in alphabetical order by
325-41 class, showing the number of votes each member is entitled to cast.
326-42 (d) A corporation shall maintain the corporation's records in written
275+1 (2) The custodian may exercise all of the powers of the
276+2 corporation, through or in place of the corporation's board of
277+3 directors or officers, to the extent necessary to manage the affairs
278+4 of the corporation in the best interests of the corporation's
279+5 members and creditors or to carry out the corporation's lawful
280+6 purposes.
281+7 (d) The court during a receivership may redesignate the receiver a
282+8 custodian, and during a custodianship may redesignate the custodian
283+9 a receiver if doing so is in the best interests of the corporation and the
284+10 corporation's members and creditors.
285+11 (e) The court may, during the receivership or custodianship, order
286+12 compensation paid and expense disbursements or reimbursements
287+13 made to the receiver or custodian and the receiver's or custodian's
288+14 counsel from the assets of the corporation or proceeds from the sale of
289+15 the assets.
290+16 (f) Upon a showing of reasonable cause by the attorney general
291+17 or any other person, a circuit or superior court may appoint a
292+18 receiver to manage the corporation or property of the corporation
293+19 even if an action to dissolve the corporation has not been filed.
294+20 SECTION 7. IC 23-17-27-1, AS AMENDED BY P.L.118-2017,
295+21 SECTION 94, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
296+22 JULY 1, 2023]: Sec. 1. (a) A corporation shall keep as permanent
297+23 records a record of the following:
298+24 (1) Minutes of meetings of the corporation's members and board
299+25 of directors.
300+26 (2) A record of actions taken by the members or directors without
301+27 a meeting.
302+28 (3) A record of actions taken by committees of the board of
303+29 directors as authorized under IC 23-17-15-6(d).
304+30 (b) A corporation shall maintain appropriate accounting records.
305+31 (c) A corporation or the corporation's agent shall maintain a record
306+32 of the corporation's members in a form that permits preparation of a list
307+33 of the names and addresses of all members, in alphabetical order by
308+34 class, showing the number of votes each member is entitled to cast.
309+35 (d) A corporation shall maintain the corporation's records in written
310+36 form or in another form capable of conversion into written form within
311+37 a reasonable time.
312+38 (e) A corporation shall keep a copy of the following records at the
313+39 corporation's principal office:
314+40 (1) The corporation's articles of incorporation or restated articles
315+41 of incorporation and all amendments to the articles of
316+42 incorporation currently in effect.
327317 SB 278—LS 7086/DI 148 8
328-1 form or in another form capable of conversion into written form within
329-2 a reasonable time.
330-3 (e) A corporation shall keep a copy of the following records at the
331-4 corporation's principal office:
332-5 (1) The corporation's articles of incorporation or restated articles
333-6 of incorporation and all amendments to the articles of
334-7 incorporation currently in effect.
335-8 (2) The corporation's bylaws or restated bylaws and all
336-9 amendments to the bylaws currently in effect.
337-10 (3) Resolutions adopted by the corporation's board of directors
338-11 relating to the characteristics, qualifications, rights, limitations,
339-12 and obligations of members or a class or category of members.
340-13 (4) The minutes of all meetings of members and records of all
341-14 actions approved by the members for the past three (3) years.
342-15 (5) Written communications to members generally within the past
343-16 three (3) years, including the financial statements furnished for
344-17 the past three (3) years under section 6 of this chapter.
345-18 (6) A list of the names and business or home addresses of the
346-19 corporation's current directors and officers.
347-20 (7) The corporation's most recent biennial report delivered to the
348-21 secretary of state under IC 23-0.5-2-13.
349-22 (f) Except as otherwise provided in articles of incorporation or
350-23 bylaws, ballots must be retained by a corporation until the earlier of the
351-24 following:
352-25 (1) The date of the next annual meeting.
353-26 (2) One (1) year after the date the ballot was received.
354-27 (g) Records required by subsections (a) through (e) must be
355-28 maintained for at least three (3) years.
356-29 (h) The attorney general may gain access to the records
357-30 identified in this chapter using the provisions of IC 4-6-3-3. This
358-31 subsection does not apply to a community mental health center (as
359-32 defined in IC 12-7-2-38), an ICF/IID (as defined in IC 16-29-4-2),
360-33 an entity that provides community based services for individuals
361-34 with a developmental disability (as defined in IC 12-7-2-61), a
362-35 federally-qualified health center (as defined in 42 U.S.C.
363-36 1396d(l)(2)(B)), a hospital licensed under IC 12-25, IC 16-21,
364-37 IC 16-22, or IC 16-23, a health carrier (as defined in IC 27-2-26-1),
365-38 or a public utility (as defined in IC 8-1-2-1). A corporation may file
366-39 a petition in circuit court or superior court for a court order to
367-40 determine whether:
368-41 (1) the attorney general's request for access to the
369-42 corporation's records is supported by reasonable cause; and
318+1 (2) The corporation's bylaws or restated bylaws and all
319+2 amendments to the bylaws currently in effect.
320+3 (3) Resolutions adopted by the corporation's board of directors
321+4 relating to the characteristics, qualifications, rights, limitations,
322+5 and obligations of members or a class or category of members.
323+6 (4) The minutes of all meetings of members and records of all
324+7 actions approved by the members for the past three (3) years.
325+8 (5) Written communications to members generally within the past
326+9 three (3) years, including the financial statements furnished for
327+10 the past three (3) years under section 6 of this chapter.
328+11 (6) A list of the names and business or home addresses of the
329+12 corporation's current directors and officers.
330+13 (7) The corporation's most recent biennial report delivered to the
331+14 secretary of state under IC 23-0.5-2-13.
332+15 (f) Except as otherwise provided in articles of incorporation or
333+16 bylaws, ballots must be retained by a corporation until the earlier of the
334+17 following:
335+18 (1) The date of the next annual meeting.
336+19 (2) One (1) year after the date the ballot was received.
337+20 (g) The attorney general may gain access to the records
338+21 identified in this chapter using the provisions of IC 4-6-3-3. This
339+22 subsection does not apply to a county hospital licensed under
340+23 IC 16-22, a public utility (as defined in IC 8-1-2-1), or a utility
341+24 owned, operated, or held in trust by a consolidated city. A
342+25 corporation may file a petition in circuit court or superior court
343+26 for a court order to determine whether:
344+27 (1) the attorney general's request for access to the
345+28 corporation's records is reasonable; and
346+29 (2) the records requested are subject to this chapter.
347+30 (h) Unless specifically required or authorized by federal law, a
348+31 state agency (as defined in IC 4-6-3-1) may not impose an annual
349+32 filing or reporting requirement on a charitable organization that
350+33 is more burdensome than what is required by state law. This
351+34 subsection does not apply to a state grant or contract, a fraud
352+35 investigation, or a legal enforcement action.
353+36 SECTION 8. IC 35-52-23-21.1 IS ADDED TO THE INDIANA
354+37 CODE AS A NEW SECTION TO READ AS FOLLOWS
355+38 [EFFECTIVE JULY 1, 2023]: Sec. 21.1. IC 23-17-24-1.5 defines a
356+39 crime concerning nonprofit organizations.
370357 SB 278—LS 7086/DI 148 9
371-1 (2) the records requested are subject to this chapter.
372-2 (i) Unless specifically required or authorized by federal law, a
373-3 state agency (as defined in IC 4-6-3-1) may not impose an annual
374-4 filing or reporting requirement on a charitable organization that
375-5 is more burdensome than what is required by state law. This
376-6 subsection does not apply to a state grant or contract, a fraud
377-7 investigation, or a legal enforcement action.
378-8 (j) If the attorney general reviews the records of a corporation
379-9 under subsection (h) and finds that the corporation has failed to
380-10 comply with this section, the attorney general may:
381-11 (1) deliver written notice of the specific violation to the
382-12 corporation; and
383-13 (2) give the corporation thirty (30) days to remedy the
384-14 violation; whether by:
385-15 (A) amending the corporation's articles of incorporation or
386-16 bylaws; or
387-17 (B) taking or ceasing to take an action.
388-18 (k) If, after sixty (60) days, the corporation fails to remedy the
389-19 violation identified in the notice served under subsection (j), the
390-20 attorney general may take one (1) or more of the following actions:
391-21 (1) Petition a court to assess a civil penalty under
392-22 IC 23-17-24-1.5(b).
393-23 (2) File a complaint with:
394-24 (A) the United States Internal Revenue Service; or
395-25 (B) the department of state revenue;
396-26 regarding the tax-exempt status of a public benefit
397-27 corporation.
398-28 (3) Report a corporation that receives public funds to the state
399-29 agency that has disbursed state funds to the corporation for
400-30 an audit or investigation of the corporation's finances.
401-SB 278—LS 7086/DI 148 10
402358 COMMITTEE REPORT
403359 Madam President: The Senate Committee on Judiciary, to which
404360 was referred Senate Bill No. 278, has had the same under consideration
405361 and begs leave to report the same back to the Senate with the
406362 recommendation that said bill be AMENDED as follows:
407363 Page 1, between the enacting clause and line 1, begin a new
408364 paragraph and insert:
409365 "SECTION 1. IC 4-6-3-9, AS AMENDED BY P.L.5-2015,
410366 SECTION 5, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
411367 JULY 1, 2023]: Sec. 9. (a) The contents of an investigative demand,
412368 all documentary material, answers to written interrogatories, and
413369 transcripts of oral testimony that are provided pursuant to an the
414370 investigative demand shall be kept confidential by the attorney general
415371 until an action is filed against a person for the violation under
416372 investigation, unless:
417373 (1) confidentiality is waived by the person being investigated and
418374 the person who has testified, answered interrogatories, or
419375 produced documentary material; or
420376 (2) disclosure is made by the attorney general to another state or
421377 federal attorney general or law enforcement agency for the
422378 purposes of cooperation in law enforcement of state or federal
423379 laws.
424380 (b) All documentary material, answers to written interrogatories,
425381 and transcripts of oral testimony that are provided to the attorney
426382 general pursuant to an investigative demand issued by another state or
427383 federal attorney general or law enforcement agency under similar
428384 authority shall be treated as if obtained pursuant to an investigative
429385 demand issued by the attorney general under section 3 of this chapter.
430386 SECTION 1. IC 23-17-2-5.7 IS ADDED TO THE INDIANA CODE
431387 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
432388 1, 2023]: Sec. 5.7. "Charitable organization" means an
433389 organization described in Section 501 of the Internal Revenue
434390 Code.".
435391 Page 1, line 9, after "(D)" insert "a not-for-profit corporation that
436392 serves a public benefit with an operating budget that is".
437393 Page 1, line 11, after "mission;" insert "or".
438394 Page 1, delete lines 12 through 13.
439395 Page 1, line 14, delete "(F)" and insert "(E)".
440396 Page 2, line 24, delete "fails to use" and insert "uses".
441397 Page 2, line 24, delete "for the purpose" and insert "in a way that
442398 is substantially inconsistent with the stated purpose for which the
443-SB 278—LS 7086/DI 148 11
399+SB 278—LS 7086/DI 148 10
444400 funds were solicited.".
445401 Page 2, delete lines 25 through 33, begin a new line double block
446402 indented and insert:
447403 "(F) The corporation is a public benefit corporation and
448404 has grossly mismanaged property or assets.".
449405 Page 2, line 34, delete "(I)" and insert "(G)".
450406 Page 2, line 34, delete "answered falsely or".
451407 Page 2, line 35, delete "answer" and insert "respond in a good faith
452408 manner to".
453409 Page 2, line 37, after "directors." insert "This clause does not apply
454410 if a circuit court or superior court determines that the written
455411 interrogatory was not reasonable.
456412 Clauses (E) through (G) do not apply to a county hospital
457413 licensed under IC 16-22, a public utility (as defined in
458414 IC 8-1-2-1), or a utility owned, operated, or held in trust by a
459415 consolidated city.".
460416 Page 2, line 38, delete "bringing" and insert "commencing".
461417 Page 2, line 38, delete "(1)(H) or".
462418 Page 2, line 39, delete "(1)(I)," and insert "(1)(G),".
463419 Page 2, line 42, delete "thirty (30)" and insert "forty-five (45)".
464420 Page 3, delete lines 5 through 7, begin a new line block indented
465421 and insert:
466422 "The attorney general may commence an action against a
467423 corporation if the corporation fails to remedy the violation
468424 after forty-five (45) days.".
469425 Page 4, line 11, after "addition" insert "or as an alternative".
470426 Page 4, delete lines 20 through 23.
471427 Page 4, line 24, delete "(6)" and insert "(5)".
472428 Page 4, line 25, delete "(7)" and insert "(6)".
473429 Page 4, line 27, delete "(8)" and insert "(7)".
474430 Page 4, delete line 30, begin a new line double block indented and
475431 insert:
476432 "(A) Reasonable attorney's fees for the action.".
477433 Page 4, line 34, delete "(9)" and insert "(8)".
478434 Page 4, line 39, delete "(10)" and insert "(9)".
479435 Page 5, delete lines 5 through 17.
480436 Page 5, line 18, reset in roman "(d)".
481437 Page 5, line 18, delete "(e)".
482438 Page 5, line 26, reset in roman "(e)".
483439 Page 5, line 26, delete "(f)".
484440 Page 5, line 27, reset in roman "(d)".
485441 Page 5, line 27, delete "(e)".
486-SB 278—LS 7086/DI 148 12
442+SB 278—LS 7086/DI 148 11
487443 Page 5, line 36, reset in roman "(f)".
488444 Page 5, line 36, delete "(g)".
489445 Page 5, line 37, reset in roman "(d):".
490446 Page 5, line 37, delete "(e):".
491447 Page 5, line 41, reset in roman "(g)".
492448 Page 5, line 41, delete "(h)".
493449 Page 5, line 42, reset in roman "(d)".
494450 Page 5, line 42, delete "(e)".
495451 Page 6, line 2, reset in roman "(h)".
496452 Page 6, line 2, delete "(i)".
497453 Page 6, line 3, reset in roman "(d),".
498454 Page 6, line 3, delete "(e),".
499455 Page 6, delete lines 6 through 8, begin a new paragraph and insert:
500456 "SECTION 4. IC 23-17-24-3, AS AMENDED BY P.L.245-2005,
501457 SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
502458 JULY 1, 2023]: Sec. 3. (a) A court in a judicial proceeding brought by
503459 the attorney general or by any other party named under section 1 of this
504460 chapter to dissolve a public benefit or mutual benefit corporation may
505461 appoint at least one (1):
506462 (1) receiver to wind up and liquidate; or
507463 (2) custodian to manage;
508464 the affairs of the corporation. The court shall hold a hearing, after
509465 notifying all parties to the proceeding and any interested persons
510466 designated by the court, before appointing a receiver or custodian. The
511467 court appointing a receiver or custodian has exclusive jurisdiction over
512468 the corporation and all of the corporation's property wherever located.
513469 (b) The court may appoint an individual or a domestic or foreign
514470 business or nonprofit corporation authorized to transact business in
515471 Indiana as a receiver or custodian. The court may require the receiver
516472 or custodian to post bond, with or without sureties, in an amount the
517473 court directs.
518474 (c) The court shall describe the powers and duties of the receiver or
519475 custodian in the appointing order, which may be amended from time to
520476 time, including the following:
521477 (1) The receiver may do the following:
522478 (A) Dispose of all or any part of the assets of the corporation
523479 wherever located, at a public or private sale, if authorized by
524480 the court. However, the corporation is subject to a trust, an
525481 endowment, and other restrictions that would be applicable to
526482 the corporation.
527483 (B) Sue and defend in the receiver's or custodian's name as
528484 receiver or custodian of the corporation in all Indiana courts.
529-SB 278—LS 7086/DI 148 13
485+SB 278—LS 7086/DI 148 12
530486 (2) The custodian may exercise all of the powers of the
531487 corporation, through or in place of the corporation's board of
532488 directors or officers, to the extent necessary to manage the affairs
533489 of the corporation in the best interests of the corporation's
534490 members and creditors or to carry out the corporation's lawful
535491 purposes.
536492 (d) The court during a receivership may redesignate the receiver a
537493 custodian, and during a custodianship may redesignate the custodian
538494 a receiver if doing so is in the best interests of the corporation and the
539495 corporation's members and creditors.
540496 (e) The court may, during the receivership or custodianship, order
541497 compensation paid and expense disbursements or reimbursements
542498 made to the receiver or custodian and the receiver's or custodian's
543499 counsel from the assets of the corporation or proceeds from the sale of
544500 the assets.
545501 (f) Upon a showing of reasonable cause by the attorney general
546502 or any other person, a circuit or superior court may appoint a
547503 receiver to manage the corporation or property of the corporation
548504 even if an action to dissolve the corporation has not been filed.".
549505 Page 7, delete lines 9 through 19, begin a new paragraph and insert:
550506 "(g) The attorney general may gain access to the records
551507 identified in this chapter using the provisions of IC 4-6-3-3. This
552508 subsection does not apply to a county hospital licensed under
553509 IC 16-22, a public utility (as defined in IC 8-1-2-1), or a utility
554510 owned, operated, or held in trust by a consolidated city. A
555511 corporation may file a petition in circuit court or superior court
556512 for a court order to determine whether:
557513 (1) the attorney general's request for access to the
558514 corporation's records is reasonable; and
559515 (2) the records requested are subject to this chapter.".
560516 Page 7, line 20, delete "(i) Except where" and insert "(h) Unless".
561517 Page 7, line 21, after "agency" insert "(as defined in IC 4-6-3-1)".
562518 Page 7, line 22, delete "public benefit corporation" and insert
563519 "charitable organization".
564520 Page 7, line 23, delete "the requirements authorized by Indiana law."
565521 and insert "what is required by state law.".
566522 Page 7, line 24, delete "state grants and contracts, or to" and insert
567523 "a state grant or contract, a fraud investigation, or a legal
568524 enforcement action.".
569525 Page 7, delete lines 25 through 26.
570526 Renumber all SECTIONS consecutively.
571-SB 278—LS 7086/DI 148 14
527+SB 278—LS 7086/DI 148 13
572528 and when so amended that said bill do pass.
573529 (Reference is to SB 278 as introduced.)
574530 BROWN L, Chairperson
575531 Committee Vote: Yeas 11, Nays 0.
576-_____
577-SENATE MOTION
578-Madam President: I move that Senate Bill 278 be amended to read
579-as follows:
580-Page 3, delete lines 18 through 21, and begin a new line block
581-indented and insert:
582-"Clauses (E) through (G) do not apply to a community mental
583-health center (as defined in IC 12-7-2-38), an ICF/IID (as
584-defined in IC 16-29-4-2), an entity that provides community
585-based services for individuals with a developmental disability
586-(as defined in IC 12-7-2-61), a federally-qualified health
587-center (as defined in 42 U.S.C. 1396d(l)(2)(B)), a hospital
588-licensed under IC 12-25, IC 16-21, IC 16-22, or IC 16-23, a
589-health carrier (as defined in IC 27-2-26-1), or a public utility
590-(as defined in IC 8-1-2-1).".
591-Page 8, line 21, after "This" insert "subsection does not apply to a
592-community mental health center (as defined in IC 12-7-2-38), an
593-ICF/IID (as defined in IC 16-29-4-2), an entity that provides
594-community based services for individuals with a developmental
595-disability (as defined in IC 12-7-2-61), a federally-qualified health
596-center (as defined in 42 U.S.C. 1396d(l)(2)(B)), a hospital licensed
597-under IC 12-25, IC 16-21, IC 16-22, or IC 16-23, a health carrier
598-(as defined in IC 27-2-26-1), or a public utility (as defined in
599-IC 8-1-2-1). A".
600-Page 8, delete lines 22 through 24.
601-(Reference is to SB 278 as printed February 17, 2023.)
602-BROWN L
603-SB 278—LS 7086/DI 148 15
604-SENATE MOTION
605-Madam President: I move that Senate Bill 278 be amended to read
606-as follows:
607-Page 2, line 20, after "or" insert "is".
608-Page 2, line 21, delete "its" and insert "the corporation's".
609-Page 3, line 17, delete "was not reasonable." and insert "was not
610-supported by reasonable cause.".
611-Page 8, between lines 19 and 20, begin a new paragraph and insert:
612-"(g) Records required by subsections (a) through (e) must be
613-maintained for at least three (3) years.".
614-Page 8, line 20, delete "(g)" and insert "(h)".
615-Page 8, line 28, delete "reasonable;" and insert "supported by
616-reasonable cause;".
617-Page 8, line 30, delete "(h)" and insert "(i)".
618-Page 8, between lines 35 and 36, begin a new paragraph and insert:
619-"(j) If the attorney general reviews the records of a corporation
620-under subsection (h) and finds that the corporation has failed to
621-comply with this section, the attorney general may:
622-(1) deliver written notice of the specific violation to the
623-corporation; and
624-(2) give the corporation thirty (30) days to remedy the
625-violation; whether by:
626-(A) amending the corporation's articles of incorporation or
627-bylaws; or
628-(B) taking or ceasing to take an action.
629-(k) If, after sixty (60) days, the corporation fails to remedy the
630-violation identified in the notice served under subsection (j), the
631-attorney general may take one (1) or more of the following actions:
632-(1) Petition a court to assess a civil penalty under
633-IC 23-17-24-1.5(b).
634-(2) File a complaint with:
635-(A) the United States Internal Revenue Service; or
636-(B) the department of state revenue;
637-regarding the tax-exempt status of a public benefit
638-corporation.
639-(3) Report a corporation that receives public funds to the state
640-agency that has disbursed state funds to the corporation for
641-an audit or investigation of the corporation's finances.".
642-Page 8, delete lines 36 through 39.
643-(Reference is to SB 278 as printed February 17, 2023.)
644-FREEMAN
645532 SB 278—LS 7086/DI 148