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Regular Session, 2010
HOUSE BILL NO. 532
BY REPRESENTATIVE LORUSSO
CORPORATIONS: Provides relative to open records of certain nonprofit corporations
AN ACT1
To enact Chapter 2 of Code Title X of Code Book I of Title 9 of the Louisiana Revised2
Statutes of 1950, to be comprised of R.S. 9:1061 through 1070, relative to nonprofit3
organizations; to provide for definitions; to provide for maintenance of certain4
required information and reports; to provide for the designation and responsibilities5
of treasurers; to provide for the form and limitations of expenditures; to provide for6
the content and time period for reports; to provide for responses to requests for7
information; to provide for penalties; and to provide for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. Chapter 2 of Code Title X of Code Book I of Title 9 of the Louisiana10
Revised Statutes of 1950, comprised of R.S. 9:1061 through 1070, is hereby enacted to read11
as follows: 12
CHAPTER 2. TRANSPARENCY OF NONPROFI T ORGANIZATIONS13
§1061. Short title14
This Chapter may be cited as the "Nonprofit Organization Transparency Act".15
§1062. Statement of purpose16
The legislature finds that the use of public funds for certain nonprofit17
organizations should be subject to public scrutiny. Public scrutiny of the use of18
public funds by nonprofit organizations is dependent upon a knowledgeable public19
which requires that information regarding the disbursement and use of these funds20 HLS 10RS-8 ORIGINAL
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shall be readily available for inspection by the general public. The legislature,1
therefore, enacts this Chapter to establish public disclosure of expenditures by2
nonprofit organizations which receive public funds.3
§1063. Definitions4
(1) "Expenditure" means any payment or disbursement of money, funds, or5
assets of any kind from the nonprofit organization.6
(2) "Income" means any money, funds, or assets of any kind received by the7
nonprofit organization from donation, loan, payment of a debt, investment, or any8
other source.9
(3) "Nonprofit organization" means any person organized as a Louisiana10
nonprofit corporation under R.S. 12:201 et seq., or certified as having 26 U.S.C.11
§501(c) tax exempt status, and who receives public funds during the reporting12
period.13
(4) "Person" means any natural or juridical person as provided by Civil Code14
Article 24.15
(5) "Public funds" means funds received from a federal, state, political16
subdivision of the state, or any other governmental source.17
§1064. Disclosure reports; persons required to maintain18
Except as otherwise specifically provided, all nonprofit organizations shall19
maintain a financial report of income and expenditures as provided in R.S. 9:1066.20
The treasurer of each nonprofit organization shall maintain the records and reports21
required by the provisions of this Chapter.22
§1065. Nonprofit organization treasurers; expenditures by check; petty cash fund23
A. Every nonprofit organization shall designate a treasurer. The name and24
address of the treasurer shall be made immediately available to any person upon25
written or verbal request.26
B.(1) When any officer, director, or employee of a nonprofit organization27
makes any expenditure of funds or assets for the nonprofit organization, he shall28
transmit directly to the treasurer all information concerning the expenditure required29 HLS 10RS-8 ORIGINAL
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by the provisions of this Chapter. The treasurer shall be responsible pursuant to the1
provisions of this Chapter for any errors or omissions in the records or reports of the2
expenditures or disbursements.3
(2) For purposes of all reports required by the provisions of this Chapter, all4
expenditures made by a nonprofit organization shall be considered expenditures of5
the nonprofit organization.6
C. Except as provided in Subsection D of this Section, no expenditure shall7
be made by any nonprofit organization, except by check, credit card, or debit card.8
Each check shall indicate the objects or services for which the check is drawn and9
the check shall be maintained as part of the records required by the provisions of10
R.S. 9:1066.11
D. A nonprofit organization may maintain a petty cash fund or funds. A12
petty cash fund shall be maintained on an imprest system, that is, expenditures may13
be made in cash from the fund, and the fund shall from time to time be restored to14
its original amount by a transfer of funds from other funds of a sum equal to the15
aggregate of the sums expended from the fund. No expenditure in excess of one16
hundred dollars shall be made from the petty cash fund, and no expenditure shall be17
made from the petty cash fund for any personal services, except for gratuities paid18
for the serving of food, drink, or transportation. A complete record of petty cash19
expenditures specifying the date, purpose, and recipient of the expenditure shall be20
maintained in accordance with the provisions of R.S. 9:1066.21
§1066. Maintenance of records; valuation of in-kind contributions and expenditures22
A. Every nonprofit organization receiving public funds shall be responsible23
for providing and maintaining its financial records as are necessary to comply with24
and verify the provisions of this Chapter, including but not limited to the records25
specifically required by this Section.26
B. The treasurer of every nonprofit organizational shall maintain the27
following records for the nonprofit organization:28 HLS 10RS-8 ORIGINAL
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(1) The total amount of all income and contributions made to the nonprofit1
organization, specifying the total received from private sources and the total received2
from public sources. The total received from public sources shall also identify each3
particular source of public funds and a total of funds received from that source.4
(2) Tax exempt application and all supporting attachments and documents.5
(3) Federal Form 990 Return and all supporting attachments and schedules.6
(4) Annual report filed with secretary of state, if required to do so by the7
provisions of R.S. 12:205.1.8
(5) Records of all expenditures made or contracted, including the full name9
and address of the person receiving the funds, the date, the amount or value, the10
purpose of the expenditure, and a description and valuation of all in-kind11
contributions and expenditures. The valuation of in-kind contributions or12
expenditures shall be the estimated fair market value at the time of the transaction.13
(6) All expenditures made from the petty cash fund, for which provision is14
made in R.S. 9:1065, including the name and address of the person or firm from15
whom goods or services were purchased or contracted, the amount and the purpose16
of the expenditure, and a description of the goods or services purchased or17
contracted. In addition, a receipt shall be kept for each such expenditure in any case18
in which a receipt would normally be provided in the usual course of business.19
(7) Each loan made by the nonprofit organization to or from any person,20
together with the full name and address of the lender, of the recipient of the proceeds21
of the loan, and of any person who makes any type of security agreement binding22
himself or his property, directly or indirectly, for the repayment of all or any part of23
the loan. In addition, a record shall be kept of the repayment of each loan and24
whether the source of funds expended for repayment was public or private funds.25
(8) All transfers of funds to or from another nonprofit organization, the name26
and address of the nonprofit organization to or from which the transfer is made and27
the date and amount of the transfer.28
(9) All debts and obligations.29 HLS 10RS-8 ORIGINAL
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(10) All other expenditures, the name and address of the person to whom1
made, and the date and amount of the expenditure.2
C. A treasurer shall preserve records required by the provisions of this3
Chapter for six years.4
D. The accounts and records kept by a treasurer pursuant to the provisions5
of this Chapter shall be available for inspection or use by the state, political6
subdivision, the general public, or by any grand jury or court in connection with any7
proceeding instituted pursuant to the provisions of this Chapter.8
E. Failure of any nonprofit organization to timely furnish the information9
required for compliance with this Chapter shall be grounds for a civil action for10
damages and for penalties as provided by R.S. 9:1070.11
§1067. Reports required; reporting times and periods12
A. The treasurer shall be responsible for maintaining a report containing a13
summary of all information required in R.S. 9:1066. The treasurer shall certify, in14
each report, that the information contained in the report is true and correct to the best15
of his knowledge, information, and belief, that no expenditures have been made and16
no contributions have been received that are not reported as required by the17
provisions of this Chapter, and that no information required by the provisions of this18
Chapter has been deliberately omitted.19
B. The report shall be prepared, signed by the treasurer, and notarized20
annually no later than February fifteenth and shall be complete and contain all21
information required by this Chapter from January first through December thirty-first22
of the prior year.23
§1068. Reports; contents24
A. Unless otherwise specifically provided, each report required by the25
provisions of this Chapter shall contain the following information: (1) the name and26
address of the nonprofit organization for whom the report is maintained; (2) the27
name and address of the treasurer completing the report; and (3) the names and28
addresses of the principal officers and directors.29 HLS 10RS-8 ORIGINAL
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B. Each report required to be in conformity with this Section shall also1
contain a summary of the records required to be maintained by R.S. 9:1066.2
§1069. Delays for response; costs3
A. If a request is made in writing, the nonprofit organization shall have thirty4
days to supply the requested records required to be maintained pursuant to the5
provisions of this Chapter.6
B. If the request is made in person, the nonprofit organization shall7
immediately produce for inspection the records required to be maintained pursuant8
to the provisions of this Chapter.9
C. A nonprofit organization which makes the report and supporting records10
required to be maintained pursuant to the provisions of this Chapter available in PDF11
or similar format on its website shall be deemed to be in compliance with the12
requirement of records availability pursuant to this Chapter.13
D. The person requesting copies of the report or supporting documentation14
shall pay the costs of producing the copies at a rate not to exceed one dollar per page,15
plus any actual shipping or postage expenses incurred.16
§1070. Penalties17
A. Failure by any nonprofit organization to timely furnish the information18
required by the provisions of this Chapter shall be grounds for a civil action for19
damages.20
B. Any nonprofit organization that violates the provisions of this Chapter21
shall be ineligible to and prohibited from receiving any public funds for a period of22
three years.23
C. The treasurer and any officer, director, or employee of a nonprofit24
organization which continues to receive public funds subsequent to a court finding25
that the nonprofit organization is in violation of any provision of this Chapter shall26
be personally subject to a penalty of not more than one thousand dollars. On a27
second or subsequent offense, the penalty shall be a fine of not more than five28
thousand dollars.29 HLS 10RS-8 ORIGINAL
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DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Lorusso HB No. 532
Abstract: Enacts the Nonprofit Organization Transparency Act which provides for
reporting of expenditures by nonprofit organizations receiving public funds.
Proposed law enacts the "Nonprofit Organization Transparency Act".
Proposed law provides for legislative findings regarding the necessity of public scrutiny of
nonprofit organizations receiving public funds.
Proposed law provides definitions for "expenditure", "income", "nonprofit organization",
"person", and "public funds".
Proposed law requires all nonprofit organizations to maintain a financial report of income
and expenditures as specified by proposed law (R.S. 9:1066), and requires the treasurer of
each nonprofit organization to maintain the report.
Proposed law requires every nonprofit organization to designate a treasurer, whose name and
address shall be made available to any person.
Proposed law requires that when any officer, director, or employee of a nonprofit
organization makes any expenditure of funds, he shall transmit directly to the treasurer all
information concerning the expenditure.
Proposed law requires that all expenditures made by any nonprofit organization shall be by
check, credit card, or debit card.
Proposed law authorizes a nonprofit organization to maintain a petty cash fund and provides
for limitations of the use of the petty cash fund.
Proposed law requires the treasurer of every nonprofit organization receiving public funds
to provide and maintain financial records as are necessary to comply with proposed law,
which shall include:
(1)The total amount of all income and contributions made to the nonprofit organization,
specifying the total received from private sources and the total received from public
sources. The total received from public sources shall also identify each particular
source of public funds and a total of funds received from that source.
(2)Tax exempt application and all supporting attachments and documents.
(3)Federal Form 990 Return and all supporting attachments and schedules.
(4)Annual report filed with secretary of state, if required to do so by present law (R.S.
12:205.1).
(5)Records of all expenditures made or contracted, including the full name and address
of the person receiving the funds, the date, the amount or value, and the purpose of
the expenditure, and a description and valuation of all in-kind expenditures. The
valuation of in-kind contributions or expenditures shall be the estimated fair market
value at the time of the transaction. HLS 10RS-8 ORIGINAL
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(6)All expenditures made from the petty cash fund for which provision is made in
proposed law (R.S. 9:1065), including the name and address of the person or firm
from whom goods or services were purchased or contracted, the amount and the
purpose of the expenditure, and a description of the goods or services purchased or
contracted. In addition, a receipt shall be kept for each such expenditure in any case
in which a receipt would normally be provided in the usual course of business.
(7)Each loan made by the nonprofit organization to or from any person, together with
the full name and address of the lender, of the recipient of the proceeds of the loan,
and of any person who makes any type of security agreement binding himself or his
property, directly or indirectly, for the repayment of all or any part of the loan. In
addition, a record shall be kept of the repayment of each such loan and of the
whether the source of funds expended for repayment was public or private funds.
(8)All transfers of funds to or from another nonprofit organization, the name and
address of the nonprofit organization to or from which the transfer is made, and the
date and amount of the transfer.
(9)All debts and obligations.
(10)All other expenditures, the name and address of the person to whom made and the
date and amount of the expenditure.
Proposed law requires the treasurer to preserve records for six years.
Proposed law provides that the accounts and records kept by a treasurer shall be available
for inspection or use by the state, political subdivision, the general public, or by any grand
jury or court.
Proposed law provides that failure of any nonprofit organization to timely furnish the
information shall be grounds for a civil action for damages and for penalties as provided by
proposed law (R.S. 9:1070).
Proposed law requires the treasurer to be responsible for maintaining a report containing a
summary of all information required in proposed law (R.S. 9:1066), which report shall be
prepared, signed by the treasurer, and notarized annually no later than Feb. 15 and shall
contain all information required by proposed law from Jan. 1 through Dec. 31 of the prior
year.
Proposed law requires the report to contain the following information:
(1)The name and address of the nonprofit organization for whom the report is
maintained.
(2)The name and address of the treasurer completing the report.
(3)The names and addresses of the principal officers and directors.
(4)A summary of the records required to be maintained by proposed law (R.S. 9:1066).
Proposed law provides that if a request is made in writing, the nonprofit organization shall
have 30 days to supply the requested records, and that if the request is made in person, the
nonprofit organization shall immediately produce the records for inspection.
Proposed law provides, as an alternative to actual production of the records, that a nonprofit
organization may make the report and supporting records available in PDF or similar format
on its website. HLS 10RS-8 ORIGINAL
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Proposed law authorizes a nonprofit organization to charge no more than $1 per page, plus
any actual shipping or postage expenses incurred in the production of records.
Proposed law provides that failure by any nonprofit organization to timely furnish the
information shall be grounds for a civil action for damages.
Proposed law provides that any nonprofit organization that violates the provisions of
proposed law shall be ineligible to and prohibited from receiving any public funds for a
period of three years.
Proposed law provides that the treasurer and any officer, director, or employee of a nonprofit
organization which continues to receive public funds subsequent to a court finding the
nonprofit organization in violation of any provision of proposed law shall be personally
subject to a penalty of not more than $1,000, and that on a second or subsequent offense, the
penalty shall be a fine of not more than $5,000.
(Adds R.S. 9:1061-1070)