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.
*sb0254*
SENATE BILL 254
C2 3lr2686
CF HB 72
By: Senator Hester
Introduced and read first time: January 25, 2023
Assigned to: Judicial Proceedings
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: March 9, 2023
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
BY repealing and reenacting, with amendments, 15
Article – Business Regulation 16
Section 6–101(c) and 6–402 17
Annotated Code of Maryland 18
(2015 Replacement Volume and 2022 Supplement) 19
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 20
That the Laws of Maryland read as follows: 21
2 SENATE BILL 254
Article – Business Regulation 1
6–101. 2
(a) In this title the following words have the meanings indicated. 3
(c) (1) “Charitable contribution” means a contribution made on a 4
representation that it will be used for a charitable purpose. 5
(2) “Charitable contribution” includes the payment, transfer, or 6
enforceable pledge of financial help, including money, credit, property, or services. 7
(3) “Charitable contribution” does not include: 8
(i) an unsolicited gift; 9
(ii) a government grant or government money; 10
(iii) membership assessments, dues, or fines; 11
(iv) a payment for property sold or services rendered by a charitable 12
organization, unless the property is sold or the services are rendered in connection with a 13
charitable solicitation; [and] 14
(v) a public safety contribution as defined in subsection (j) of this 15
section; AND 16
(VI) A DONATION OF PROPER TY THAT IS INTENDED TO BE 17
REDISTRIBUTED WITHOU T CHARGE FOR A BENEV OLENT, EDUCATIONAL , 18
ELEEMOSYNARY , HUMANE, PATRIOTIC, PHILANTHROPIC , OR RELIGIOUS PURPOSE ; 19
AND 20
(VII) AN AUTHORIZATION FOR OR A DISCOUNT ON THE USE OF 21
SERVICES OR MATERIAL S, EQUIPMENT, OR FACILITIES , INCLUDING THOSE 22
RELATING TO: 23
1. ADVERTISING; AND 24
2. BROADCAST AIRTIME , INCLUDING PUBLIC SERVICE 25
ANNOUNCEMENTS . 26
6–402. 27
(a) A registration statement shall be on the form that the Secretary of State 28
provides. 29
SENATE BILL 254 3
(b) Except as provided in subsection (c) of this section, the registration statement 1
shall contain or be accompanied by: 2
(1) the name and address of the charitable organization and of any affiliate, 3
branch, or chapter in the State; 4
(2) the name and address of: 5
(i) each officer, including each principal salaried executive staff 6
officer, and each other person with final responsibility for the custody and final distribution 7
of the charitable contributions made to the charitable organization; or 8
(ii) each person who has custody of the financial records of the 9
charitable organization if the charitable organization does not have a local office in the 10
State; 11
(3) a statement of: 12
(i) the purposes for which the charitable organization was 13
organized; 14
(ii) the purposes for which charitable contributions will be used; and 15
(iii) whether the charitable organization intends to solicit directly or 16
to have a professional solicitor or fund–raising counsel solicit charitable contributions on 17
its behalf; 18
(4) a copy of the articles of incorporation or other governing instrument of 19
the charitable organization; 20
(5) a copy of a letter from the Internal Revenue Service, or other evidence, 21
showing the tax–exempt status of the charitable organization; 22
(6) (i) a copy of federal Form 990 that the charitable organization 23
submits to the Internal Revenue Service; or 24
(ii) information that the charitable organization states on a form 25
that the Secretary of State provides; 26
(7) (i) an audit by an independent certified public accountant if the 27
gross income from charitable contributions in the most recently completed fiscal year is at 28
least $750,000; or 29
(ii) a review by an independent certified public accountant if the 30
gross income from charitable contributions in the most recently completed fiscal year is at 31
least $300,000 but less than $750,000; 32
4 SENATE BILL 254
(8) an affidavit signed by the chairman, president, or other principal officer 1
attesting to the truth of the registration statement and each supporting document; 2
(9) (i) a certification that all taxes due from the applicant to the State 3
or to Baltimore City or a county of the State for the preceding fiscal year have been paid, 4
and all taxes the applicant was required to collect and pay over to the State or to Baltimore 5
City or a county of the State for the preceding fiscal year have been collected and paid over; 6
or 7
(ii) a certification that the taxes due from the applicant to the State 8
or to Baltimore City or a county are under dispute and the dispute has not been finally 9
resolved; and 10
(10) any other information that the Secretary of State requires by 11
regulation. 12
(c) The Secretary of State may accept other documentation in place of any item 13
required under subsection (b) of this section, INCLUDING, IN PLACE OF THE AUDI T OR 14
REVIEW REQUIRED BY S UBSECTION (B)(7) OF THIS SECTION , SUPPORTING 15
DOCUMENTS INDICATING , AND AN AFFIDAVIT ATTESTING , THAT: 16
(1) THE CHARITABLE ORGAN IZATION: 17
(I) PRIMARILY SOLICITS I N–KIND CONTRIBUTIONS ; 18
(II) RECEIVES DONATIONS O F PROPERTY , INCLUDING 19
HOUSEHOLD GOODS , FURNITURE, APPLIANCES, AND CLOTHING , THAT ARE 20
INTENDED TO BE REDIS TRIBUTED TO INDIVIDUALS RESID ING IN THE STATE 21
WITHOUT CHARGE ; 22
(III) DOES NOT EMPLOY A PR OFESSIONAL SOLICITOR OR 23
FUND–RAISING COUNSEL ; 24
(IV) USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLES 25
TO DETERMINE THE VAL UE OF PROPERTY RECEI VED AS CHARITABLE 26
CONTRIBUTION S DURING THE IMMEDIA TELY PRECEDING FISCA L YEAR; 27
(V) HAS CASH RECEIPTS FR OM CHARITABLE CONTRI BUTIONS 28
NOT EXCEEDING $300,000 AND AMOUNTING TO 20% OR LESS OF THE CHARI TABLE 29
ORGANIZATION ’S GROSS INCOME DURIN G THE IMMEDIATELY PR ECEDING FISCAL 30
YEAR THAT ARE USED FOR PROGRAM SER VICES OR MANAGEMENT AND GENERAL 31
EXPENSES OF THE CHAR ITABLE ORGANIZATION , AS SET FORTH UNDER COMAR 32
01.02.04.04.A AND C; 33
SENATE BILL 254 5
(VI) IS CURRENT AND UP TO DATE IN ALL REGISTRA TION AND 1
REPORTING REQUIREMEN TS UNDER THIS TITLE ; 2
(VII) IS IN GOOD STANDING WITH TH E STATE DEPARTMENT OF 3
ASSESSMENTS AND TAXATION, IF APPLICABLE; AND 4
(VIII) HAS TAX–EXEMPT STATUS UNDER § 501(C)(3) OF THE 5
INTERNAL REVENUE CODE; 6
(2) THE CHARITABLE CONTR IBUTIONS OF PROPERTY ARE: 7
(I) DIRECTLY RELATED TO THE PURPOSES FOR WHICH T HE 8
CHARITABLE ORGANIZAT ION WAS ORGANIZED ; AND 9
(II) WILL BE USED IN COND UCTING THE CHARITABL E 10
ORGANIZATION ’S PROGRAMS; AND 11
(3) THE GOVERNING BODY O F THE CHARITABLE ORG ANIZATION: 12
(I) IS COMPOSED OF AT LE AST THREE INDEPENDEN T AND 13
UNRELATED DIRECTORS ; AND 14
(II) COMPLETED AN ONBOARD ING AND TRAINING PRO GRAM 15
DURING THE IMMEDIATE LY PRECEDING FISCAL YEAR, PROVIDED INTERNALLY OR 16
EXTERNALLY , THAT COVERED : 17
1. THE CHARITABLE ORGAN IZATION’S MISSION; 18
2. THE POLICIES, PROCEDURES , AND OPERATIONS OF 19
THE CHARITABLE ORGAN IZATION; AND 20
3. THE DUTIES AND RESPO NSIBILITIES OF DIREC TORS 21
AND OFFICERS AS FIDU CIARIES OF THE CHARI TABLE CONTRIBUTIONS THAT THE 22
CHARITABLE ORGANIZAT ION COLLECTS AND SPE NDS. 23
(d) The Secretary of State may require an audit or review if the amount of gross 24
income is less than $750,000. 25
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 26
October 1, 2023. 27