MD
Maryland Senate Bill SB254

Maryland 2023 Regular Session

Maryland Senate Bill SB254 Compare Versions

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1- WES MOORE, Governor Ch. 380
21
3-– 1 –
4-Chapter 380
5-(Senate Bill 254)
62
7-AN ACT concerning
3+EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4+ [Brackets] indicate matter deleted from existing law.
5+ Underlining indicates amendments to bill.
6+ Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7+amendment.
8+ *sb0254*
89
9-Business Regulation – Charitable Contribution – Definition Organizations
10+SENATE BILL 254
11+C2 3lr2686
12+ CF HB 72
13+By: Senator Hester
14+Introduced and read first time: January 25, 2023
15+Assigned to: Judicial Proceedings
16+Committee Report: Favorable with amendments
17+Senate action: Adopted
18+Read second time: March 9, 2023
1019
11-FOR the purpose of altering the definition of “charitable contribution” to exclude donations
12-of property made with a certain intent and an authorization for or a discount on the
13-use of certain services or materials, equipment, or facilities for purposes of provisions
14-of law regulating charitable organizations and charitable representatives;
15-authorizing the Maryland Secretary of State to accept certain documentation in place
16-of an audit or review in connection with a charitable organization’s registration
17-statement; and generally relating to charitable contributions organizations.
20+CHAPTER ______
1821
19-BY repealing and reenacting, without amendments,
20- Article – Business Regulation
21-Section 6–101(a)
22- Annotated Code of Maryland
23- (2015 Replacement Volume and 2022 Supplement)
22+AN ACT concerning 1
2423
25-BY repealing and reenacting, with amendments,
26- Article – Business Regulation
27-Section 6–101(c) and 6–402
28- Annotated Code of Maryland
29- (2015 Replacement Volume and 2022 Supplement)
24+Business Regulation – Charitable Contribution – Definition Organizations 2
3025
31- SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
32-That the Laws of Maryland read as follows:
26+FOR the purpose of altering the definition of “charitable contribution” to exclude donations 3
27+of property made with a certain intent and an authorization for or a discount on the 4
28+use of certain services or materials, equipment, or facilities for purposes of provisions 5
29+of law regulating charitable organizations and charitable representatives; 6
30+authorizing the Maryland Secretary of State to accept certain documentation in place 7
31+of an audit or review in connection with a charitable organization’s registration 8
32+statement; and generally relating to charitable contributions organizations. 9
3333
34-Article – Business Regulation
34+BY repealing and reenacting, without amendments, 10
35+ Article – Business Regulation 11
36+Section 6–101(a) 12
37+ Annotated Code of Maryland 13
38+ (2015 Replacement Volume and 2022 Supplement) 14
3539
36-6–101.
40+BY repealing and reenacting, with amendments, 15
41+ Article – Business Regulation 16
42+Section 6–101(c) and 6–402 17
43+ Annotated Code of Maryland 18
44+ (2015 Replacement Volume and 2022 Supplement) 19
3745
38- (a) In this title the following words have the meanings indicated.
46+ SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 20
47+That the Laws of Maryland read as follows: 21
48+ 2 SENATE BILL 254
3949
40- (c) (1) “Charitable contribution” means a contribution made on a
41-representation that it will be used for a charitable purpose.
4250
43- (2) “Charitable contribution” includes the payment, transfer, or
44-enforceable pledge of financial help, including money, credit, property, or services.
51+Article – Business Regulation 1
4552
46- (3) “Charitable contribution” does not include:
53+6–101. 2
4754
48- (i) an unsolicited gift;
49- Ch. 380 2023 LAWS OF MARYLAND
55+ (a) In this title the following words have the meanings indicated. 3
5056
51-– 2 –
52- (ii) a government grant or government money;
57+ (c) (1) “Charitable contribution” means a contribution made on a 4
58+representation that it will be used for a charitable purpose. 5
5359
54- (iii) membership assessments, dues, or fines;
60+ (2) “Charitable contribution” includes the payment, transfer, or 6
61+enforceable pledge of financial help, including money, credit, property, or services. 7
5562
56- (iv) a payment for property sold or services rendered by a charitable
57-organization, unless the property is sold or the services are rendered in connection with a
58-charitable solicitation; [and]
63+ (3) “Charitable contribution” does not include: 8
5964
60- (v) a public safety contribution as defined in subsection (j) of this
61-section; AND
65+ (i) an unsolicited gift; 9
6266
63- (VI) A DONATION OF PROPER TY THAT IS INTENDED TO BE
64-REDISTRIBUTED WITHOU T CHARGE FOR A BENEV OLENT, EDUCATIONAL ,
65-ELEEMOSYNARY , HUMANE, PATRIOTIC, PHILANTHROPIC , OR RELIGIOUS PURPOSE ;
66-AND
67+ (ii) a government grant or government money; 10
6768
68- (VII) AN AUTHORIZATION FOR OR A DISCOUNT ON THE USE OF
69-SERVICES OR MATERIAL S, EQUIPMENT, OR FACILITIES , INCLUDING THOSE
70-RELATING TO:
69+ (iii) membership assessments, dues, or fines; 11
7170
72- 1. ADVERTISING; AND
71+ (iv) a payment for property sold or services rendered by a charitable 12
72+organization, unless the property is sold or the services are rendered in connection with a 13
73+charitable solicitation; [and] 14
7374
74- 2. BROADCAST AIRTIME , INCLUDING PUBLI C SERVICE
75-ANNOUNCEMENTS .
75+ (v) a public safety contribution as defined in subsection (j) of this 15
76+section; AND 16
7677
77-6–402.
78+ (VI) A DONATION OF PROPER TY THAT IS INTENDED TO BE 17
79+REDISTRIBUTED WITHOU T CHARGE FOR A BENEV OLENT, EDUCATIONAL , 18
80+ELEEMOSYNARY , HUMANE, PATRIOTIC, PHILANTHROPIC , OR RELIGIOUS PURPOSE ; 19
81+AND 20
7882
79- (a) A registration statement shall be on the form that the Secretary of State
80-provides.
83+ (VII) AN AUTHORIZATION FOR OR A DISCOUNT ON THE USE OF 21
84+SERVICES OR MATERIAL S, EQUIPMENT, OR FACILITIES , INCLUDING THOSE 22
85+RELATING TO: 23
8186
82- (b) Except as provided in subsection (c) of this section, the registration statement
83-shall contain or be accompanied by:
87+ 1. ADVERTISING; AND 24
8488
85- (1) the name and address of the charitable organization and of any affiliate,
86-branch, or chapter in the State;
89+ 2. BROADCAST AIRTIME , INCLUDING PUBLIC SERVICE 25
90+ANNOUNCEMENTS . 26
8791
88- (2) the name and address of:
92+6–402. 27
8993
90- (i) each officer, including each principal salaried executive staff
91-officer, and each other person with final responsibility for the custody and final distribution
92-of the charitable contributions made to the charitable organization; or
94+ (a) A registration statement shall be on the form that the Secretary of State 28
95+provides. 29
96+ SENATE BILL 254 3
9397
94- (ii) each person who has custody of the financial records of the
95-charitable organization if the charitable organization does not have a local office in the
96-State; WES MOORE, Governor Ch. 380
9798
98-– 3 –
99+ (b) Except as provided in subsection (c) of this section, the registration statement 1
100+shall contain or be accompanied by: 2
99101
100- (3) a statement of:
102+ (1) the name and address of the charitable organization and of any affiliate, 3
103+branch, or chapter in the State; 4
101104
102- (i) the purposes for which the charitable organization was
103-organized;
105+ (2) the name and address of: 5
104106
105- (ii) the purposes for which charitable contributions will be used; and
107+ (i) each officer, including each principal salaried executive staff 6
108+officer, and each other person with final responsibility for the custody and final distribution 7
109+of the charitable contributions made to the charitable organization; or 8
106110
107- (iii) whether the charitable organization intends to solicit directly or
108-to have a professional solicitor or fund–raising counsel solicit charitable contributions on
109-its behalf;
111+ (ii) each person who has custody of the financial records of the 9
112+charitable organization if the charitable organization does not have a local office in the 10
113+State; 11
110114
111- (4) a copy of the articles of incorporation or other governing instrument of
112-the charitable organization;
115+ (3) a statement of: 12
113116
114- (5) a copy of a letter from the Internal Revenue Service, or other evidence,
115-showing the tax–exempt status of the charitable organization;
117+ (i) the purposes for which the charitable organization was 13
118+organized; 14
116119
117- (6) (i) a copy of federal Form 990 that the charitable organization
118-submits to the Internal Revenue Service; or
120+ (ii) the purposes for which charitable contributions will be used; and 15
119121
120- (ii) information that the charitable organization states on a form
121-that the Secretary of State provides;
122+ (iii) whether the charitable organization intends to solicit directly or 16
123+to have a professional solicitor or fund–raising counsel solicit charitable contributions on 17
124+its behalf; 18
122125
123- (7) (i) an audit by an independent certified public accountant if the
124-gross income from charitable contributions in the most recently completed fiscal year is at
125-least $750,000; or
126+ (4) a copy of the articles of incorporation or other governing instrument of 19
127+the charitable organization; 20
126128
127- (ii) a review by an independent certified public accountant if the
128-gross income from charitable contributions in the most recently completed fiscal year is at
129-least $300,000 but less than $750,000;
129+ (5) a copy of a letter from the Internal Revenue Service, or other evidence, 21
130+showing the tax–exempt status of the charitable organization; 22
130131
131- (8) an affidavit signed by the chairman, president, or other principal officer
132-attesting to the truth of the registration statement and each supporting document;
132+ (6) (i) a copy of federal Form 990 that the charitable organization 23
133+submits to the Internal Revenue Service; or 24
133134
134- (9) (i) a certification that all taxes due from the applicant to the State
135-or to Baltimore City or a county of the State for the preceding fiscal year have been paid,
136-and all taxes the applicant was required to collect and pay over to the State or to Baltimore
137-City or a county of the State for the preceding fiscal year have been collected and paid over;
138-or
135+ (ii) information that the charitable organization states on a form 25
136+that the Secretary of State provides; 26
139137
140- (ii) a certification that the taxes due from the applicant to the State
141-or to Baltimore City or a county are under dispute and the dispute has not been finally
142-resolved; and
143- Ch. 380 2023 LAWS OF MARYLAND
138+ (7) (i) an audit by an independent certified public accountant if the 27
139+gross income from charitable contributions in the most recently completed fiscal year is at 28
140+least $750,000; or 29
144141
145-– 4 –
146- (10) any other information that the Secretary of State requires by
147-regulation.
142+ (ii) a review by an independent certified public accountant if the 30
143+gross income from charitable contributions in the most recently completed fiscal year is at 31
144+least $300,000 but less than $750,000; 32
145+ 4 SENATE BILL 254
148146
149- (c) The Secretary of State may accept other documentation in place of any item
150-required under subsection (b) of this section, INCLUDING, IN PLACE OF THE AUDI T OR
151-REVIEW REQUIRED BY S UBSECTION (B)(7) OF THIS SECTION , SUPPORTING
152-DOCUMENTS INDICATING , AND AN AFFIDA VIT ATTESTING, THAT:
153147
154- (1) THE CHARITABLE ORGAN IZATION:
148+ (8) an affidavit signed by the chairman, president, or other principal officer 1
149+attesting to the truth of the registration statement and each supporting document; 2
155150
156- (I) PRIMARILY SOLICITS I N–KIND CONTRIBUTIONS ;
151+ (9) (i) a certification that all taxes due from the applicant to the State 3
152+or to Baltimore City or a county of the State for the preceding fiscal year have been paid, 4
153+and all taxes the applicant was required to collect and pay over to the State or to Baltimore 5
154+City or a county of the State for the preceding fiscal year have been collected and paid over; 6
155+or 7
157156
158- (II) RECEIVES DONATIONS O F PROPERTY , INCLUDING
159-HOUSEHOLD GOODS , FURNITURE, APPLIANCES, AND CLOTHING , THAT ARE
160-INTENDED TO BE REDIS TRIBUTED TO IND IVIDUALS RESIDING IN THE STATE
161-WITHOUT CHARGE ;
157+ (ii) a certification that the taxes due from the applicant to the State 8
158+or to Baltimore City or a county are under dispute and the dispute has not been finally 9
159+resolved; and 10
162160
163- (III) DOES NOT EMPLOY A PR OFESSIONAL SOLICITOR OR
164-FUND–RAISING COUNSEL ;
161+ (10) any other information that the Secretary of State requires by 11
162+regulation. 12
165163
166- (IV) USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
167-TO DETERMINE THE VAL UE OF PROPERTY RECEI VED AS CHARITABLE
168-CONTRIBUTIONS DURIN G THE IMMEDIATELY PR ECEDING FISCAL YEAR ;
164+ (c) The Secretary of State may accept other documentation in place of any item 13
165+required under subsection (b) of this section, INCLUDING, IN PLACE OF THE AUDI T OR 14
166+REVIEW REQUIRED BY S UBSECTION (B)(7) OF THIS SECTION , SUPPORTING 15
167+DOCUMENTS INDICATING , AND AN AFFIDAVIT ATTESTING , THAT: 16
169168
170- (V) HAS CASH RECEIPTS FR OM CHARITABLE CONTRI BUTIONS
171-NOT EXCEEDING $300,000 AND AMOUNTING TO 20% OR LESS OF THE CHARI TABLE
172-ORGANIZATION ’S GROSS INCOME DURIN G THE IMMEDIATELY PR ECEDING FISCAL
173-YEAR THAT ARE USED F OR PROGRAM SERVICES O R MANAGEMENT AND GEN ERAL
174-EXPENSES OF THE CHAR ITABLE ORGANIZATION , AS SET FORTH UNDER COMAR
175-01.02.04.04.A AND C;
169+ (1) THE CHARITABLE ORGAN IZATION: 17
176170
177- (VI) IS CURRENT AND UP TO DATE IN ALL REGISTRA TION AND
178-REPORTING REQUIREMEN TS UNDER THIS TITLE ;
171+ (I) PRIMARILY SOLICITS I N–KIND CONTRIBUTIONS ; 18
179172
180- (VII) IS IN GOOD STA NDING WITH THE STATE DEPARTMENT OF
181-ASSESSMENTS AND TAXATION, IF APPLICABLE; AND
173+ (II) RECEIVES DONATIONS O F PROPERTY , INCLUDING 19
174+HOUSEHOLD GOODS , FURNITURE, APPLIANCES, AND CLOTHING , THAT ARE 20
175+INTENDED TO BE REDIS TRIBUTED TO INDIVIDUALS RESID ING IN THE STATE 21
176+WITHOUT CHARGE ; 22
182177
183- (VIII) HAS TAX–EXEMPT STATUS UNDER § 501(C)(3) OF THE
184-INTERNAL REVENUE CODE;
178+ (III) DOES NOT EMPLOY A PR OFESSIONAL SOLICITOR OR 23
179+FUND–RAISING COUNSEL ; 24
185180
186- (2) THE CHARITABLE CONTR IBUTIONS OF PROPERTY ARE:
181+ (IV) USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLES 25
182+TO DETERMINE THE VAL UE OF PROPERTY RECEI VED AS CHARITABLE 26
183+CONTRIBUTION S DURING THE IMMEDIA TELY PRECEDING FISCA L YEAR; 27
187184
188- (I) DIRECTLY RELATED TO THE PURPOSES FOR WHICH THE
189-CHARITABLE ORGANIZAT ION WAS ORGANIZED ; AND WES MOORE, Governor Ch. 380
185+ (V) HAS CASH RECEIPTS FR OM CHARITABLE CONTRI BUTIONS 28
186+NOT EXCEEDING $300,000 AND AMOUNTING TO 20% OR LESS OF THE CHARI TABLE 29
187+ORGANIZATION ’S GROSS INCOME DURIN G THE IMMEDIATELY PR ECEDING FISCAL 30
188+YEAR THAT ARE USED FOR PROGRAM SER VICES OR MANAGEMENT AND GENERAL 31
189+EXPENSES OF THE CHAR ITABLE ORGANIZATION , AS SET FORTH UNDER COMAR 32
190+01.02.04.04.A AND C; 33
191+ SENATE BILL 254 5
190192
191-– 5 –
192193
193- (II) WILL BE USED IN COND UCTING THE CHARITABL E
194-ORGANIZATION ’S PROGRAMS; AND
194+ (VI) IS CURRENT AND UP TO DATE IN ALL REGISTRA TION AND 1
195+REPORTING REQUIREMEN TS UNDER THIS TITLE ; 2
195196
196- (3) THE GOVERNING BODY O F THE CHARITABLE ORG ANIZATION:
197+ (VII) IS IN GOOD STANDING WITH TH E STATE DEPARTMENT OF 3
198+ASSESSMENTS AND TAXATION, IF APPLICABLE; AND 4
197199
198- (I) IS COMPOSED OF AT LE AST THREE INDEPENDEN T AND
199-UNRELATED DIRECTORS ; AND
200+ (VIII) HAS TAX–EXEMPT STATUS UNDER § 501(C)(3) OF THE 5
201+INTERNAL REVENUE CODE; 6
200202
201- (II) COMPLETED AN ONBOARD ING AND TRAINING PRO GRAM
202-DURING THE IMMEDIATE LY PRECEDING FISCAL YEAR, PROVIDED INTERNALLY OR
203-EXTERNALLY , THAT COVERED :
203+ (2) THE CHARITABLE CONTR IBUTIONS OF PROPERTY ARE: 7
204204
205- 1. THE CHARITABLE ORGAN IZATION’S MISSION;
205+ (I) DIRECTLY RELATED TO THE PURPOSES FOR WHICH T HE 8
206+CHARITABLE ORGANIZAT ION WAS ORGANIZED ; AND 9
206207
207- 2. THE POLICIES, PROCEDURES , AND OPER ATIONS OF
208-THE CHARITABLE ORGAN IZATION; AND
208+ (II) WILL BE USED IN COND UCTING THE CHARITABL E 10
209+ORGANIZATION ’S PROGRAMS; AND 11
209210
210- 3. THE DUTIES AND RESPO NSIBILITIES OF DIREC TORS
211-AND OFFICERS AS FIDU CIARIES OF THE CHARI TABLE CONTRIBUTIONS THAT THE
212-CHARITABLE ORGANIZAT ION COLLECTS AND SPE NDS.
211+ (3) THE GOVERNING BODY O F THE CHARITABLE ORG ANIZATION: 12
213212
214- (d) The Secretary of State may require an audit or review if the amount of gross
215-income is less than $750,000.
213+ (I) IS COMPOSED OF AT LE AST THREE INDEPENDEN T AND 13
214+UNRELATED DIRECTORS ; AND 14
216215
217- SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
218-October 1, 2023.
216+ (II) COMPLETED AN ONBOARD ING AND TRAINING PRO GRAM 15
217+DURING THE IMMEDIATE LY PRECEDING FISCAL YEAR, PROVIDED INTERNALLY OR 16
218+EXTERNALLY , THAT COVERED : 17
219219
220-Approved by the Governor, May 3, 2023.
220+ 1. THE CHARITABLE ORGAN IZATION’S MISSION; 18
221+
222+ 2. THE POLICIES, PROCEDURES , AND OPERATIONS OF 19
223+THE CHARITABLE ORGAN IZATION; AND 20
224+
225+ 3. THE DUTIES AND RESPO NSIBILITIES OF DIREC TORS 21
226+AND OFFICERS AS FIDU CIARIES OF THE CHARI TABLE CONTRIBUTIONS THAT THE 22
227+CHARITABLE ORGANIZAT ION COLLECTS AND SPE NDS. 23
228+
229+ (d) The Secretary of State may require an audit or review if the amount of gross 24
230+income is less than $750,000. 25
231+
232+ SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 26
233+October 1, 2023. 27
234+