Maryland Senate Bill SB956

Maryland 2023 Regular Session

• Introduced: 2/27/23
• Refer: 2/27/23
• Refer: 3/14/23

Caption

Corporations and Associations - Cooperatives - Nonescheat Capital Credits

Impact

With the enactment of SB956, state law will see an alteration in how cooperatives handle unclaimed funds, emphasizing support for members and contributions to charitable initiatives. The bill mandates that any nonescheat capital credits that remain unexpended for three years will be treated as abandoned property. This requirement could encourage cooperatives to be more proactive in utilizing these funds, ensuring they benefit their communities rather than languishing unspent.

Summary

Senate Bill 956 aims to clarify the status of nonescheat capital credits within cooperatives in Maryland. It stipulates that unclaimed funds held by a cooperative that are due to past members should not be classified as abandoned property. This legislative change allows cooperatives greater flexibility in managing these funds by permitting them to use the money to assist their members or to make donations to approved charitable organizations, as long as certain conditions are met regarding the timing of such expenditures.

Contention

Discussion surrounding SB956 has focused on the implications of redefining unclaimed funds. Supporters of the bill argue that it protects member interests and promotes goodwill by encouraging cooperatives to provide assistance or donate to charity rather than having these funds unproductively reside on their balance sheets. However, some critics may raise concerns about accountability and oversight regarding the allocation of these funds, emphasizing the need to ensure that cooperatives genuinely prioritize member benefits and charitable contributions over financial convenience.