EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
Italics indicate opposite chamber/conference committee amendments.
*hb0072*
HOUSE BILL 72
C2 (3lr0307)
ENROLLED BILL
— Economic Matters/Judicial Proceedings —
Introduced by Delegate Watson
Read and Examined by Proofreaders:
_______________________________________________
Proofreader.
_______________________________________________
Proofreader.
Sealed with the Great Seal and presented to the Governor, for his approval this
_______ day of _______________ at _________________ _______ o’clock, ________M.
______________________________________________
Speaker.
CHAPTER ______
AN ACT concerning 1
Business Regulation – Charitable Contribution – Definition Organizations 2
FOR the purpose of altering the definition of “charitable contribution” to exclude donations 3
of property made with a certain intent and an authorization for or a discount on the 4
use of certain services or materials, equipment, or facilities for purposes of provisions 5
of law regulating charitable organizations and charitable representatives; 6
authorizing the Maryland Secretary of State to accept certain documentation in place 7
of an audit or review in connection with a charitable organization’s registration 8
statement; and generally relating to charitable contributions organizations. 9
BY repealing and reenacting, without amendments, 10
Article – Business Regulation 11
Section 6–101(a) 12
Annotated Code of Maryland 13
(2015 Replacement Volume and 2022 Supplement) 14 2 HOUSE BILL 72
BY repealing and reenacting, with amendments, 1
Article – Business Regulation 2
Section 6–101(c) and 6–402 3
Annotated Code of Maryland 4
(2015 Replacement Volume and 2022 Supplement) 5
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 6
That the Laws of Maryland read as follows: 7
Article – Business Regulation 8
6–101. 9
(a) In this title the following words have the meanings indicated. 10
(c) (1) “Charitable contribution” means a contribution made on a 11
representation that it will be used for a charitable purpose. 12
(2) “Charitable contribution” includes the payment, transfer, or 13
enforceable pledge of financial help, including money, credit, property, or services. 14
(3) “Charitable contribution” does not include: 15
(i) an unsolicited gift; 16
(ii) a government grant or government money; 17
(iii) membership assessments, dues, or fines; 18
(iv) a payment for property sold or services rendered by a charitable 19
organization, unless the property is sold or the services are rendered in connection with a 20
charitable solicitation; [and] 21
(v) a public safety contribution as defined in subsection (j) of this 22
section; AND 23
(VI) A DONATION OF PROPER TY THAT IS INTENDED TO BE 24
REDISTRIBUTED WITHOU T CHARGE FOR A BENEV OLENT, EDUCATIONAL , 25
ELEEMOSYNARY , HUMANE, PATRIOTIC, PHILANTHROPIC , OR RELIGIOUS PURPOSE ; 26
AND 27
(VII) AN AUTHORIZATION FOR OR A DISCOUNT ON THE USE OF 28
SERVICES OR MATERIAL S, EQUIPMENT, OR FACILITIES , INCLUDING THOSE 29
RELATING TO: 30
HOUSE BILL 72 3
1. ADVERTISING; AND 1
2. BROADCAST AIRTIME , INCLUDING PUBLIC SERVICE 2
ANNOUNCEMENTS . 3
6–402. 4
(a) A registration statement shall be on the form that the Secretary of State 5
provides. 6
(b) Except as provided in subsection (c) of this section, the registration statement 7
shall contain or be accompanied by: 8
(1) the name and address of the charitable organization and of any affiliate, 9
branch, or chapter in the State; 10
(2) the name and address of: 11
(i) each officer, including each principal salaried executive staff 12
officer, and each other person with final responsibility for the custody and final distribution 13
of the charitable contributions made to the charitable organization; or 14
(ii) each person who has custody of the financial records of the 15
charitable organization if the charitable organization does not have a local office in the 16
State; 17
(3) a statement of: 18
(i) the purposes for which the charitable organization was 19
organized; 20
(ii) the purposes for which charitable contributions will be used; and 21
(iii) whether the charitable organization intends to solicit directly or 22
to have a professional solicitor or fund–raising counsel solicit charitable contributions on 23
its behalf; 24
(4) a copy of the articles of incorporation or other governing instrument of 25
the charitable organization; 26
(5) a copy of a letter from the Internal Revenue Service, or other evidence, 27
showing the tax–exempt status of the charitable organization; 28
(6) (i) a copy of federal Form 990 that the charitable organization 29
submits to the Internal Revenue Service; or 30
4 HOUSE BILL 72
(ii) information that the charitable organization states on a form 1
that the Secretary of State provides; 2
(7) (i) an audit by an independent certified public accountant if the 3
gross income from charitable contributions in the most recently completed fiscal year is at 4
least $750,000; or 5
(ii) a review by an independent certified public accountant if the 6
gross income from charitable contributions in the most recently completed fiscal year is at 7
least $300,000 but less than $750,000; 8
(8) an affidavit signed by the chairman, president, or other principal officer 9
attesting to the truth of the registration statement and each supporting document; 10
(9) (i) a certification that all taxes due from the applicant to the State 11
or to Baltimore City or a county of the State for the preceding fiscal year have been paid, 12
and all taxes the applicant was required to collect and pay over to the State or to Baltimore 13
City or a county of the State for the preceding fiscal year have been collected and paid over; 14
or 15
(ii) a certification that the taxes due from the applicant to the State 16
or to Baltimore City or a county are under dispute and the dispute has not been finally 17
resolved; and 18
(10) any other information that the Secretary of State requires by 19
regulation. 20
(c) The Secretary of State may accept other documentation in place of any item 21
required under subsection (b) of this section, INCLUDING, IN PLACE OF THE AUDI T OR 22
REVIEW REQUIRED BY S UBSECTION (B)(7) OF THIS SECTION , SUPPORTING 23
DOCUMENTS INDICATING , AND AN AFFIDAVIT ATT ESTING, THAT: 24
(1) THE CHARITABLE ORGAN IZATION: 25
(I) PRIMARILY SOLICITS I N–KIND CONTRIBUTIONS ; 26
(I) (II) RECEIVES DONATIONS O F PROPERTY , INCLUDING 27
HOUSEHOLD GOODS , FURNITURE, APPLIANCES, AND CLOTHING , THAT ARE 28
INTENDED TO BE REDIS TRIBUTED TO INDIVIDUALS RESIDING IN THE STATE 29
WITHOUT CHARGE ; 30
(II) (III) DOES NOT EMPLOY A PR OFESSIONAL SOLICITOR OR 31
FUND–RAISING COUNSEL ; 32
HOUSE BILL 72 5
(III) (IV) USED GENERALLY ACCEPTED ACCOUNTING 1
PRINCIPLES TO DETERMI NE THE VALUE OF PROP ERTY RECEIVED AS CHA RITABLE 2
CONTRIBUTIONS DURING THE IMMEDIATELY PRECEDIN G FISCAL YEAR; 3
(IV) (V) HAS CASH RECEIPTS FR OM CHARITABLE 4
CONTRIBUTIONS NOT EXCEEDING $300,000 AND AMOUNTING TO 20% OR LESS OF 5
THE CHARITABLE ORGAN IZATION’S GROSS INCOME DURIN G THE IMMEDIATELY 6
PRECEDING FISCAL YEAR THAT ARE USED F OR PROGRAM SERVICES OR 7
MANAGEMENT AND GENER AL EXPENSES OF THE C HARITABLE ORGANIZATI ON, AS 8
SET FORTH UNDER COMAR 01.02.04.04.A AND C; 9
(V) (VI) IS CURRENT AND UP TO DATE IN ALL REGISTRA TION 10
AND REPORTING REQUIR EMENTS UNDER THIS TI TLE; 11
(VI) (VII) IS IN GOOD STANDING WITH THE STATE DEPARTMENT 12
OF ASSESSMENTS AND TAXATION, IF APPLICABLE; AND 13
(VII) (VIII) HAS TAX–EXEMPT STATUS UNDER § 501(C)(3) OF THE 14
INTERNAL REVENUE CODE; 15
(2) THE CHARITABLE CONTR IBUTIONS OF PROPERTY ARE: 16
(I) DIRECTLY RELATED TO THE PURPOSES FOR WHI CH THE 17
CHARITABLE ORGANIZAT ION WAS ORGANIZED ; AND 18
(II) WILL BE USED IN COND UCTING THE CHARITABL E 19
ORGANIZATION ’S PROGRAMS; AND 20
(3) THE GOVERNING BODY O F THE CHARITABLE ORG ANIZATION: 21
(I) IS COMPOSED OF A T LEAST THREE INDEPE NDENT AND 22
UNRELATED DIRECTORS ; AND 23
(II) COMPLETED AN ONBOARD ING AND TRAINING PRO GRAM 24
DURING THE IMMEDIATE LY PRECEDING FISCAL YEAR, PROVIDED INTERNALLY OR 25
EXTERNALLY , THAT COVERED : 26
1. THE CHARITABLE ORGAN IZATION’S MISSION; 27
2. THE POLICIES, PROCEDURES , AND OPERATIONS OF 28
THE CHARITABLE ORGAN IZATION; AND 29
6 HOUSE BILL 72
3. THE DUTIES AND RESPO NSIBILITIES OF DIREC TORS 1
AND OFFICERS AS FIDU CIARIES OF THE CHARI TABLE CONTRIBUTIONS THAT THE 2
CHARITABLE ORGANIZAT ION COLLECTS AND SPE NDS. 3
(d) The Secretary of State may require an audit or review if the amount of gross 4
income is less than $750,000. 5
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 6
October 1, 2023. 7
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.