WES MOORE, Governor Ch. 380
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Chapter 380
(Senate Bill 254)
AN ACT concerning
Business Regulation – Charitable Contribution – Definition Organizations
FOR the purpose of altering the definition of “charitable contribution” to exclude donations
of property made with a certain intent and an authorization for or a discount on the
use of certain services or materials, equipment, or facilities for purposes of provisions
of law regulating charitable organizations and charitable representatives;
authorizing the Maryland Secretary of State to accept certain documentation in place
of an audit or review in connection with a charitable organization’s registration
statement; and generally relating to charitable contributions organizations.
BY repealing and reenacting, without amendments,
Article – Business Regulation
Section 6–101(a)
Annotated Code of Maryland
(2015 Replacement Volume and 2022 Supplement)
BY repealing and reenacting, with amendments,
Article – Business Regulation
Section 6–101(c) and 6–402
Annotated Code of Maryland
(2015 Replacement Volume and 2022 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Business Regulation
6–101.
(a) In this title the following words have the meanings indicated.
(c) (1) “Charitable contribution” means a contribution made on a
representation that it will be used for a charitable purpose.
(2) “Charitable contribution” includes the payment, transfer, or
enforceable pledge of financial help, including money, credit, property, or services.
(3) “Charitable contribution” does not include:
(i) an unsolicited gift;
Ch. 380 2023 LAWS OF MARYLAND
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(ii) a government grant or government money;
(iii) membership assessments, dues, or fines;
(iv) a payment for property sold or services rendered by a charitable
organization, unless the property is sold or the services are rendered in connection with a
charitable solicitation; [and]
(v) a public safety contribution as defined in subsection (j) of this
section; AND
(VI) A DONATION OF PROPER TY THAT IS INTENDED TO BE
REDISTRIBUTED WITHOU T CHARGE FOR A BENEV OLENT, EDUCATIONAL ,
ELEEMOSYNARY , HUMANE, PATRIOTIC, PHILANTHROPIC , OR RELIGIOUS PURPOSE ;
AND
(VII) AN AUTHORIZATION FOR OR A DISCOUNT ON THE USE OF
SERVICES OR MATERIAL S, EQUIPMENT, OR FACILITIES , INCLUDING THOSE
RELATING TO:
1. ADVERTISING; AND
2. BROADCAST AIRTIME , INCLUDING PUBLI C SERVICE
ANNOUNCEMENTS .
6–402.
(a) A registration statement shall be on the form that the Secretary of State
provides.
(b) Except as provided in subsection (c) of this section, the registration statement
shall contain or be accompanied by:
(1) the name and address of the charitable organization and of any affiliate,
branch, or chapter in the State;
(2) the name and address of:
(i) each officer, including each principal salaried executive staff
officer, and each other person with final responsibility for the custody and final distribution
of the charitable contributions made to the charitable organization; or
(ii) each person who has custody of the financial records of the
charitable organization if the charitable organization does not have a local office in the
State; WES MOORE, Governor Ch. 380
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(3) a statement of:
(i) the purposes for which the charitable organization was
organized;
(ii) the purposes for which charitable contributions will be used; and
(iii) whether the charitable organization intends to solicit directly or
to have a professional solicitor or fund–raising counsel solicit charitable contributions on
its behalf;
(4) a copy of the articles of incorporation or other governing instrument of
the charitable organization;
(5) a copy of a letter from the Internal Revenue Service, or other evidence,
showing the tax–exempt status of the charitable organization;
(6) (i) a copy of federal Form 990 that the charitable organization
submits to the Internal Revenue Service; or
(ii) information that the charitable organization states on a form
that the Secretary of State provides;
(7) (i) an audit by an independent certified public accountant if the
gross income from charitable contributions in the most recently completed fiscal year is at
least $750,000; or
(ii) a review by an independent certified public accountant if the
gross income from charitable contributions in the most recently completed fiscal year is at
least $300,000 but less than $750,000;
(8) an affidavit signed by the chairman, president, or other principal officer
attesting to the truth of the registration statement and each supporting document;
(9) (i) a certification that all taxes due from the applicant to the State
or to Baltimore City or a county of the State for the preceding fiscal year have been paid,
and all taxes the applicant was required to collect and pay over to the State or to Baltimore
City or a county of the State for the preceding fiscal year have been collected and paid over;
or
(ii) a certification that the taxes due from the applicant to the State
or to Baltimore City or a county are under dispute and the dispute has not been finally
resolved; and
Ch. 380 2023 LAWS OF MARYLAND
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(10) any other information that the Secretary of State requires by
regulation.
(c) The Secretary of State may accept other documentation in place of any item
required under subsection (b) of this section, INCLUDING, IN PLACE OF THE AUDI T OR
REVIEW REQUIRED BY S UBSECTION (B)(7) OF THIS SECTION , SUPPORTING
DOCUMENTS INDICATING , AND AN AFFIDA VIT ATTESTING, THAT:
(1) THE CHARITABLE ORGAN IZATION:
(I) PRIMARILY SOLICITS I N–KIND CONTRIBUTIONS ;
(II) RECEIVES DONATIONS O F PROPERTY , INCLUDING
HOUSEHOLD GOODS , FURNITURE, APPLIANCES, AND CLOTHING , THAT ARE
INTENDED TO BE REDIS TRIBUTED TO IND IVIDUALS RESIDING IN THE STATE
WITHOUT CHARGE ;
(III) DOES NOT EMPLOY A PR OFESSIONAL SOLICITOR OR
FUND–RAISING COUNSEL ;
(IV) USED GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
TO DETERMINE THE VAL UE OF PROPERTY RECEI VED AS CHARITABLE
CONTRIBUTIONS DURIN G THE IMMEDIATELY PR ECEDING FISCAL YEAR ;
(V) HAS CASH RECEIPTS FR OM CHARITABLE CONTRI BUTIONS
NOT EXCEEDING $300,000 AND AMOUNTING TO 20% OR LESS OF THE CHARI TABLE
ORGANIZATION ’S GROSS INCOME DURIN G THE IMMEDIATELY PR ECEDING FISCAL
YEAR THAT ARE USED F OR PROGRAM SERVICES O R MANAGEMENT AND GEN ERAL
EXPENSES OF THE CHAR ITABLE ORGANIZATION , AS SET FORTH UNDER COMAR
01.02.04.04.A AND C;
(VI) IS CURRENT AND UP TO DATE IN ALL REGISTRA TION AND
REPORTING REQUIREMEN TS UNDER THIS TITLE ;
(VII) IS IN GOOD STA NDING WITH THE STATE DEPARTMENT OF
ASSESSMENTS AND TAXATION, IF APPLICABLE; AND
(VIII) HAS TAX–EXEMPT STATUS UNDER § 501(C)(3) OF THE
INTERNAL REVENUE CODE;
(2) THE CHARITABLE CONTR IBUTIONS OF PROPERTY ARE:
(I) DIRECTLY RELATED TO THE PURPOSES FOR WHICH THE
CHARITABLE ORGANIZAT ION WAS ORGANIZED ; AND WES MOORE, Governor Ch. 380
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(II) WILL BE USED IN COND UCTING THE CHARITABL E
ORGANIZATION ’S PROGRAMS; AND
(3) THE GOVERNING BODY O F THE CHARITABLE ORG ANIZATION:
(I) IS COMPOSED OF AT LE AST THREE INDEPENDEN T AND
UNRELATED DIRECTORS ; AND
(II) COMPLETED AN ONBOARD ING AND TRAINING PRO GRAM
DURING THE IMMEDIATE LY PRECEDING FISCAL YEAR, PROVIDED INTERNALLY OR
EXTERNALLY , THAT COVERED :
1. THE CHARITABLE ORGAN IZATION’S MISSION;
2. THE POLICIES, PROCEDURES , AND OPER ATIONS OF
THE CHARITABLE ORGAN IZATION; AND
3. THE DUTIES AND RESPO NSIBILITIES OF DIREC TORS
AND OFFICERS AS FIDU CIARIES OF THE CHARI TABLE CONTRIBUTIONS THAT THE
CHARITABLE ORGANIZAT ION COLLECTS AND SPE NDS.
(d) The Secretary of State may require an audit or review if the amount of gross
income is less than $750,000.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 2023.
Approved by the Governor, May 3, 2023.