D R A F T
FOR DISCUSSION ONLY
PROTECTION OF CHARITABLE ASSETS ACT
_____________________________________________________
NATIONAL CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE LAW
______________________________________________________
For April 1-3, 2011 Committee Meeting
With Prefatory Note and Comments
Strike and Score Version
Copyright © 2011
By
NATIONAL CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE LAWS
____________________________________________________________________________________________
The ideas and conclusions
set forth in this draft, including the proposed statutory language and any
comments or reporter’s notes, have not been passed upon by the National
Conference of Commissioners on Uniform State Laws or the Drafting Committee. They do not necessarily reflect the views of
the Conference and its Commissioners and the Drafting Committee and its Members
and Reporter. Proposed statutory
language may not be used to ascertain the intent or meaning of any promulgated
final statutory proposal.
February 24, 2011
DRAFTING COMMITTEE ON PROTECTION OF CHARITABLE ASSETS ACT
The Committee appointed by and
representing the National Conference of Commissioners on Uniform State Laws in drafting
this Act consists of the following individuals:
K. KING BURNETT, P.O. Box 910, Salisbury, MD 21803-0910, Chair
JAMES BOPP, 1 S. 6th St., Terre Haute, IN 47807
MARY JO H. DIVELY, Carnegie Mellon University, Warner Hall, 6th Floor, 5000 Forbes Ave., Pittsburgh, PA 15213
BARRY C. HAWKINS, 300 Atlantic St., Stamford, CT 06901
LYLE W. HILLYARD, 595 S. Riverwoods Pkwy., Suite 100, Logan, UT 84321
THOMAS L. JONES, University of Alabama Law School, University Station, P. O. Box 865557, Tuscaloosa, AL 35486-0050
CARL H. LISMAN, 84 Pine St., P.O. Box 728, Burlington, VT 05402
JOHN J. MCAVOY, 3110 Brandywine St., N.W., Washington, DC 20008
FREDERICK P. STAMP, U.S. District Court, P.O. Box 791, Wheeling, WV 26003
CHARLES A. TROST, 511 Union St., Suite 2700, Nashville, TN 37219-1760
DAVID S. WALKER, Drake University Law School, 2507 University Ave., Des Moines, IA 50311
SUSAN N. GARY,
University of Oregon, 1515 Agate St., Eugene, OR 97403, Reporter (November 2010 - ), Co-Reporter
(January - November 2010)
LAURA B. CHISOLM,
Case Western Reserve University, 11075 East Blvd., Cleveland, OH 44106, Reporter (December 2007 - January 2010),
Co-Reporter (January - November 2010)
EX OFFICIO
ROBERT A. STEIN,
University of Minnesota Law School, 229 19th Ave. S., Minneapolis, MN 55455, President
BARRY C. HAWKINS,
300 Atlantic St., Stamford, CT 06901, Division
Chair
AMERICAN BAR ASSOCIATION ADVISOR
CYNTHIA ROWLAND, One Ferry Bldg., Suite 200, San Francisco, CA 94111, ABA Section Advisor
LISA A. RUNQUIST,
17554 Community St., Northridge, CA 91325-3922, ABA Section Advisor
ELAINE WATERHOUSE WILSON, 300 N. LaSalle St., Suite 4000, Chicago, IL 60654-5141, ABA Section Advisor
EXECUTIVE DIRECTOR
JOHN A. SEBERT, 111 N. Wabash Ave., Suite 1010, Chicago, IL 60602, Executive Director
Copies of this Act may be obtained from:
NATIONAL CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE LAWS
111 N. Wabash Ave., Suite 1010
Chicago, Illinois 60602
312/450-6600www.nccusl.org
PROTECTION OF CHARITABLE ASSETS ACT
TABLE OF CONTENTS
SECTION 3. AUTHORITY OF
[ATTORNEY GENERAL] TO PROTECT CHARITABLE ASSETS.
SECTION 4. INVESTIGATION BY
[ATTORNEY GENERAL].
SECTION 6. NOTICE TO [ATTORNEY
GENERAL] of Reportable event.
SECTION 7. NOTICE to attorney
general OF action or PROCEEDING.
SECTION 10. COOPERATION WITH
OTHER OFFICIAL.
SECTION 10. UNIFORMITY OF
APPLICATION AND CONSTRUCTION.
SECTION 11. RELATION TO
ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT.
PROTECTION OF CHARITABLE ASSETS ACT
The Charitable
Sector. [Importance
of charitable sector in the U.S. and history of charitable sector in the U.S. ] American charities provide a wide range of
services and benefits – from arts organizations, to hospitals, to the relief of
poverty, to educational institutions, to environmental protections. American charities manage substantial
funds in conjunction with carrying out their charitable purposes, holding some
funds for current operating needs and others as endowments. [cite to recent
data] Charities carry out important
functions, lessening the role of government in some cases and improving the
quality of life for many people.
Public confidence in charities will
help maintain the vibrancy of the charitable sector. If potential donors worry that charities will
misuse contributed funds, donors are unlikely to contribute. The good work charities do will suffer if
reports of abuse, fraud, or other types of misbehavior reduce public confidence
in the sector.
The regulation of charities remains
minimal, and yet the importance of public confidence in the sector points to
the need for some modicum of oversight.
In the charitable sector, self-regulation has always been important and
will continue to be important. [note third sector report]
The Internal Revenue Service has begun to increase its role in
charitable supervision, by expanding the information required under the Form
990 annual report that many charities must file. In order to protect the role of the states in
protecting
charitable assetssupervising charities, the role of the
Aattorney
Ggeneral
should be clarified.
Charity regulators in some states
are more active than those in other states, but the committee has not seen
evidence of overreaching by charitable regulators. Instead, the concern voiced by some observers
of the sector is that many states should increase resources available to
charity regulators, so they can do a better job of providing the appropriate
level of oversight and protectionregulation. [A number of states have adopted legislation
to elaborate on the common law. Many of
these statutes are relative complex (cites), some require registration, as in
the Uniform Supervision of Trustees for Charitable Purposes Act (1954) which
this replaces. (cites). Other states with
legislation include_____________________].
Goals
of the Act. The Uniform ProtectionOversight
of Charitable Assets Act will articulate and confirm the role of the state Aattorney Ggeneral
in protecting charitable assets. The Aattorney
Ggeneral’s
oversight function exists in most states in the common law or by statute, but
in some states the scope of the authority is unclear. The Aattorney
Ggeneral’s
authority is broad and this Act will not limit or narrow that authority.
The Act will also make sureprovide
the Aattorney Ggeneral
with
at least an inventory of basic has
the information needed to perform the oversight
function, without overburdening the
charities or the Aattorney Ggeneral
with excessive reporting requirements.
The Act specifies which transactions and legal proceedings require
notice to the Aattorney Ggeneral
and provides for registration and annual reports for some charities. It is based on a rather minimalist or basic
platform, designed for those states that lack any significant legislation,
although all states can benefit from its concepts and clarity.
The Act will replace the Uniform Supervision of Trustees
for Charitable Purposes Act (1954). That
Act has been adopted in a small number of states and is out-of-date.
The term “Aattorney
Ggeneral”
is used to mean the charity regulator in a state. In many states, the Office of the Attorney
General has a division called the Charity Section or something similar. A lawyer in that section typically has the
title Assistant Attorney General, but the person in that role may have a
different title.
It is useful to remember that the Aattorney
Ggeneral
has an educational role and a facilitative role as well as a regulative
role. The Aattorneys
Ggeneral
now
generally wants to educate charities and work
with charities to help them become more efficient and more effective. The Aattorney
Ggeneral
will be better able to perform these roles with adequate information about the
charities operating in the state.
Which Charities Does the Statute Cover? The Aattorney Ggeneral
has oversight authority to
protect over all charitable assets in a state
and oversight over all charities
registered in a state, so the Act logically applies
broadly to charities. Certain sections
of the Act (registration, reporting, and notice) apply more narrowly. The Act does not cover governmental entities
and businesses, except to the extent that those non-charities hold charitable
assets.
General Authority of the Attorney
General. The Act states the broad duty of the Aattorney
Ggeneral
to represent the public interest in the protection of charitable assets. The
Act states that the Aattorney Ggeneral
may enforce the use of charitable assets by a charity for the purposes for
which the assets were given to the charity, may take action to prevent or
correct a breach of a fiduciary duty in connection with the administration of a
charity or charitable assets, and may intervene in an action brought to correct
a misapplication of charitable funds, a departure from the purpose of the
charity, or a breach of a fiduciary duty owed the charity.
Registration. A charity covered by the registration section must register with the Aattorney
Ggeneral
within a specified period of time after the charity receives property. The charity must provide basic information
about the charity (name, address, statutory agent, federal identification
number, and contact personpurpose)
and a copy of the charity’s organizing document (articles of incorporation or
trust instrument). The Act includes a
one-page statutory form of registration.
Annual Reports. Charities with assets above a minimum amount will file an annual report
with the Aattorney Ggeneral. The annual report will provide basic
information and will require that the charity attach a copy of any report the
charity files with the Internal Revenue Service (e.g., a Form 990 or a Form
990-EZ).
Notice of “Life Events.” One of the concerns the Drafting Committee sought to address was the
problem that occurs when an Aattorney
Ggeneral
learns about the loss of charitable assets after a charity has disposed of the
assets. The Act requires a charity to file a notice of the following, a
specified number of days [20, 30 or 60 days] before the event occurs. Events that require notice include the
following:
·
In addition, the
personal representative of an estate or the trustee of a trust that involves
the distribution of property to a charity must send the Aattorney
Ggeneral
a copy of the will or a description of the charitable interests in the trust.
Any person who asserts a claim in a
proceeding involving a charity or charitable assets must give written notice to
the attorney general if the value of the charitable assets involved is at least
$25,000. The notice must include a copy
of the pleading. The proceedings that
require notice are the following:
Cooperation with Other Officials. The Act permits the Aattorney Ggeneral
to cooperate with any official of the state, of another state, or of the United
States. The Aattorney
Ggeneral
can provide information or documents concerning an investigation or proceeding
to the other official in connection with the other official’s role in the
oversight of charities and charitable assets.
The Aattorney Ggeneral
can also acquire information or documents from the other official.
PROTECTION OF CHARITABLE ASSETS ACT
SECTION 1. SHORT TITLE. This [act] may be
cited as the [Uniform][Model] Protection of Charitable
Assets Act.
SECTION 2. DEFINITIONS. In this [act]:
(1)
“Charitable asset” means property that is [irrevocably
dedicated][legally committed
or held] for
a charitable purpose.
(2) “Charitable purpose” means the relief of poverty, the advancement of education or religion, the promotion of health, the promotion of a governmental purpose, or any other purpose the achievement of which is beneficial to the community.
(3) “Person” means an individual, corporation,
business trust, statutory trust, estate, trust, partnership, limited
liability company, association, joint venture, public corporation,
government or governmental subdivision, agency, or instrumentality, or any
other legal or commercial entity.
(4) “Record”
means information that is inscribed on a tangible medium or that is stored in
an electronic or other medium and is retrievable in perceivable form.
(5) “Responsible individual” means an individual
who, with respect to a person holding charitable assets:
(A) is generally familiar with the affairs of the
person; and
(B) participates, directly or indirectly, in the control or
management of the person or, in the case of a person being formed, will
participate in the control or management of the person.; and
(C) is
not participating in the control or management of the person as a nominee of
another person solely for the purpose of satisfying the requirement of this
[act] that the person designate a responsible individual.
(6) “State” means [get
standard definition].
Subsection
(1). Charitable Asset. The term property includes all interest in real or tangible or
intangible personal property, including remainder interests and conservation or
preservation easements or restrictions. Property that a donor has pledged to
a charity is not yet “irrevocably dedicated to a charitable purpose” unless
state law considers the pledge binding.
Subsection
(2). Charitable
purposes. The definition of
charitable purposes follows that of UTC § 405, Restatement (Third) of Trusts §
28 (2003), and UPMIFA § 2(1) (2006).
This long-familiar standard derives from the English Statute of
Charitable Uses, enacted in 1601.
Some 17 states have created
statutory definitions of charitable purpose for various reasons. See,
e.g., 10 Pa. Cons. Stat. § 162.3 (2005) (defining charitable purpose within
the Solicitation of Funds for Charitable Purposes Act to include “humane,” “patriotic,” “social
welfare and advocacy,” and “civic” purposes).
The definition in subsection (4) applies for purposes of this Act and
does not affect other definitions of charitable purpose.
Subsection
(3). Person. The Act uses as the definition of person
the definition approved by the Uniform Law Commission. The definition includes individuals as well
as entities. Charities are typically
organized as nonprofit corporations or charitable trusts and both are included
within this definition.
Subsection
(4). Record. Record is defined, using the standard
Uniform Law Commission standard definition, in order to use one
word instead of several when the act deals with papers, reports,
instruments, and records, and to make clear thatwith
traditional forms of paper, as well as information in electronic
form is included.
Subsection
(5). Responsible
Individual. This term
describes someone the Aattorney Ggeneral
could contact for information about the charity. Often the Aattorney
Ggeneral
will be able to resolve a question about a charity’s use of assets informally,
and having someone identified as a contact person for the charity will make
that informal discussion more efficient and effective. A responsible individual should be someone
who is generally familiar with, among other things, how the charity is managed
but the person need not be a director or trustee. The definition is based on one in the Uniform
Law Enforcement Access to Entity Information Act (2009).
(a) The [Aattorney
Ggeneral]
represents the [public interest] [interest
of the public] in the oversight and protection
of charities and charitable
assets.
(b) The [Attorney General]
may:
(1)
enforce the
application and prevent the misapplication or diversion of
a
charitable assets for in accordance with:
(A) the charitable purposes or
terms, if any, for which the asset was s are
held, given or committed; and
(B);
and
the charitable purposes of
a person holding charitable assets; and
(2)
act to prevent or
remedy a breach of fiduciary or other legal duty:
(A) in the
governance, management, or
administration of a person holding a charitable asset; or
(B) in the governance of a
person organized primarily for charitable purposes;
(3)
seek declaratory, injunctive, or other equitable
relief to determine that an asset is a charitable asset;
(4)
.
(c) The [attorney
general] may commence or intervene in an action to:
(A) preventenjoin,
remedy, or obtain damages for a violation of this [act]; or
, (B) or seek other remedy to enforce a provision of this
[act]. or
(c) The [Attorney General] may conduct an investigation,
including exercising administrative subpoena power, if the [Attorney General]
has reason to believe the investigation is
necessary to determine whether action may be advisable under this [act].
to prevent
or remedy:
(1) a misapplication or diversion of charitable
assets from use for the
charitable purposes of a person holding the charitable assets;
(2) a departure from the charitable
purpose for which charitable assets were given;
or
(3) a breach of fiduciary or other legal duty in the
governance of a person
holding charitable assets.
(d) This [act] does not limit or restrict the
powers and duties of the [Aattorney Ggeneral]
under law of this state other than this [act].
Comment
One of the major goals of the
Act is to articulate the Aattorney
Ggeneral’s
oversight
protection authority to
protectover charitable assets. In most states, whether or not that function
is embodied in a statute, the authority is inherent in the common law powers of
the [Aattorney Ggeneral]. In at least a few states, however, it has
been held that no such common law authority exists, and in some other states,
whether it exists and what it consists of is not clear. The drafting committee intends that the Act
clarify and articulate [Aattorney Ggeneral]
authority to protect charitable assets.
At the same time, that authority is not unlimited. The [Aattorney
Ggeneral]’s
legitimate role is to correct abuses, but not to take over governance or to
substitute the [Aattorney Ggeneral]’s
judgment for the legitimate judgment of the charity’s board or trustees; to
protect the interests of the indefinite beneficiaries of charity, while
recognizing that charitable assets are private, not quasi-public property; and
to protect the donor’s expressed intent and hold the charity to its expressed
purposes.
Section (b)(1)(B). Although
a charity’s purposes need not be static, the terms of the organizing documents
in effect at the time the charity receives assets constrain the use of those
assets.
Legislative Note: States vary with
respect to process and procedure relating to Attorney General investigative
authority. States that detail Attorney
General subpoena power in code sections dealing
broadly with Attorney General power will have no need for this section. States that provide in their codes for
Attorney General civil subpoena power specifically in connection with another
Attorney General function (such as consumer protection) can use that language
in this section with any necessary adaptations.
In many states the Attorney General has civil jurisdiction but not
criminal jurisdiction. For example, in
Connecticut the Attorney General is the civil charitable regulator but if the
Attorney General wishes to initiate a criminal proceeding the Attorney General
must do so through the chief state’s attorney.
In other states (e.g. Maryland) the county state’s attorney has general
criminal jurisdiction. The committee
also needs to determine whether the addition of a new crime in this subsection
is appropriate. In some states crimes
can only be created in the criminal code.
Subsection (d) reflects the
committee’s desire to articulate that the statute does not replace any common
law or other statutory powers the [attorney general] may have.
[add
discussion of relator statutes and consider adding a legislative note for
states with relator statutes]
The Act
does not, either expressly or by implication, affect existing law concerning
the rights of persons other than the [Aattorney
Ggeneral]
to standing in connection with a matter involving a charity.
Although
a charity’s purposes need not be static, the terms of the organizing documents
in effect at the time the charity receives assets constrain the use of those
assets.
SECTION 4. INVESTIGATION BY [ATTORNEY GENERAL]. The [attorney general] may
conduct an investigation, including exercising administrative subpoena power,
if the [attorney general] has reasonable belief that:
(1) an action may be advisable within the authority of
the [attorney general] pursuant to Section 3;
(2)
a law or legal duty concerning the use or management
of charitable assets has been violated; or
(3)
this [act] has been violated.
Legislative Note: If a state does not provide through other law
for the process the attorney general uses for civil
investigative demands, the state should consider making the text of this
section subsection (a) and enacting the following provisions as part of this
section. A separate possible Section
concerning enforcement is also set out for consideration of the states:
[(b) The [attorney
general] may sign and cause to be served on a person that is believed to have information, documentary
material, or physical evidence relevant to the subject matter of an
investigation pursuant to subsection (a) a civil investigative demand
requiring the person to appear and testify, or to produce documentary material
or physical evidence for examination, at a reasonable time and place stated in
the demand. Service of a civil investigative demand, notice, or subpoena may be
made by any person authorized by
law to serve process or by any duly authorized employee of the
[attorney general].
(c) A
civil investigative demand must:
(1) state the general
subject matter of the investigation and grounds for the alleged violation being
investigated;
(2) describe the class
or classes of information, documentary material, or physical evidence to be
produced, with reasonable specificity so as fairly to indicate the material
demanded;
(3) prescribe a return
date by which the information,
documentary material, or physical evidence is to be produced; and
(4) identify the member
of the [attorney general's] staff to whom the information, documentary
material, or physical evidence requested is to be produced.
(d) A civil investigative demand may not:
(1) contain a
requirement that would be unreasonable or improper if contained in a subpoena
duces tecum issued by a court of this state; or
(2) require the
disclosure of information that would be privileged or, for any other reason,
could not be required by a subpoena
duces tecum issued by a court of this state.
(e) Service of a civil investigative demand,
notice, or subpoena may be made by [state rules]:
(1) delivering a duly
executed copy thereof to the person to be served, or to an officer or agent
authorized by appointment or by law to receive service of process on behalf of
the person;
(2) delivering a duly
executed copy thereof to the principal place of business or the residence in
this state of the person to be served;
(3) mailing a duly executed
copy thereof by registered or certified mail , addressed to the person to be
served, to the principal place of business or the residence in this state of
the person or, if the person has no place of business or residence in this
state, to the principal
office or place of business or the residence of the person; or
(4) mailing a duly executed copy thereof by
registered or certified mail, requesting a return receipt signed by the
addressee only, to the last known place of business, residence, or abode
within or without this state of the person to be served.
(f) An individual may not refuse to answer a
material question, produce documentary material, or testify in an investigation
pursuant to this section on the ground that the testimony or documentary
material may tend to incriminate the individual or subject the individual to a
penalty. If the individual asserts a
right against self-incrimination, the individual may not be subjected to
criminal prosecution or an action for a criminal penalty or forfeiture
because of a transaction, matter, or thing about which the individual may
testify or produce documentary material. An individual may assert the right
against self-incrimination on the record or make the assertion known to the
[attorney general].
(g) Information, documentary material, or
physical evidence demanded pursuant to a civil investigative demand must be
produced during normal business hours at the principal office or place of
business of the person served, or at such other time and place as may be
agreed by the person served and the [attorney general].
(h) No information, documentary material, or
physical evidence requested pursuant to a civil investigative demand shall,
unless otherwise ordered by a court for good cause shown, be produced for or
the contents thereof be disclosed to, any person other than the [attorney
general] without the consent of the person that produced the information,
documentary material, or physical evidence; provided, that under such
reasonable terms and conditions as the
[attorney general] shall prescribe, such information, documentary material or
physical evidence shall be made available for inspection and copying by the
person who produced such information, documentary material or physical
evidence, or any duly
authorized representative of the person.
(i) Material containing trade secrets must not be
presented before any c except with the approval of the court in which the
action is pending after adequate notice to the person furnishing the material
or, in the case of disclosure to
agencies of other states, the approval of the [court].
(j) At any time before the return date specified
in a civil investigative demand or not later than 20 days after the demand has
been served, whichever period is shorter, the person
served with the demand may petition the [court] to extend the return date for,
or to modify or set aside the demand, stating good cause.
(k) A person on which a civil
investigative demand is served shall comply with its terms unless otherwise
provided by order of a court. A person that, with intent to avoid, evade,
or in whole or in part prevent compliance with a civil investigative demand,
removes from a place, conceals, withholds, destroys, mutilates, alters, or
falsifies information, documentary material,
or physical evidence in the possession, custody, or control of the person,
which is the subject of the demand, is guilty of [XX]. The [attorney general]
shall have original jurisdiction to enforce the provisions of this subsection.
(l) If a person fails
to comply with a civil investigative demand duly served on the person or the
person refuses to surrender material when whenever satisfactory copying or
reproduction of the material cannot be done, the [attorney general] may file,
in the [trial court of
general jurisdiction] in a county or judicial district in which the person
resides, is found, or transacts business, and serve upon the person, a petition
for an order of the court for enforcement of the demand. If the person transacts business in more than
one county or judicial district the petition must be filed in the county or
judicial district in which the person maintains the person’s principal place of
business, or in such
other county or judicial district as may be agreed by the parties. When the petition is filed, the court shall
have jurisdiction to hear and determine the matter presented, and to enter an
order required to enforce the provisions of this [act]. A final order may be appealed to the [state
supreme court]. Disobedience of a final
order entered under this section may be punished as a contempt of court.
SECTION ___. ORDER TO STOP; ASSURANCE OF VOLUNTARY
COMPLIANCE.
(a) When it appears to the [attorney general]
that a person has engaged in, is engaging in, or is about to engage in a
misapplication of charitable assets, a breach of fiduciary duty, or a violation
of this [act] or law of this state other than this [act] concerning the use or
management of charitable assets, the [attorney general] may issue an order to
stop, prohibiting the person and any
other person that participated, is participating or is about to participate in
the act, from engaging or continuing to engage in the act. The order must not
be issued until the [attorney general] has given notice to each person that will
be subject to the order of the nature of the alleged violation and the act that
is the basis of the alleged violation and the time for the person to file an
answer has expired. A person that will
be subject to the order may file with the [attorney
general] an answer to the notice not later than two business days after
delivery of the notice.
(b) An order issued by the [attorney general]
under subsection (a) must be served on each person that is subject to the order
in the manner provided [in Section 4
for service of a civil investigative demand].
The order expires 10 days after being served.
(c) A person that has been duly served with an
order issued under this section and willfully and knowingly violates a
provision of the order while the order
remains in effect, either as originally issued or as modified, is guilty of
[XXX]. The [attorney general] may commence a criminal action for the violation.
(d) The [attorney general] may accept an
assurance of voluntary compliance with respect to an act that
would be subject to an order to stop pursuant to subsection (a). The assurance
of voluntary compliance must be in writing and must be filed with and approved
by the [court] of the county in which the alleged violator resides or has its
principal place of business. An
assurance of voluntary compliance must not be considered for any purpose as an
admission of violation. A person that
violates the terms of an assurance of voluntary compliance shall pay to the
state a civil penalty of not more than $[ ] per
violation. A [court] approving an assurance of voluntary compliance retains
jurisdiction to award a civil penalty under this subsection, and the attorney
general acting in the name of the state may petition for recovery of the civil
penalty.]
Comment
The Act articulates the attorney general’s authority to
undertake an investigation as a means of fulfilling the authority articulated
in Section 3. The attorney general acts
in the public interest to protect charitable assets. The Drafting Committee discussed the
threshold for initiating an investigation.
Some states (e.g., Massachusetts) require court approval before
beginning a civil investigation. Others
do not, and specify no particular threshold standard to justify commencing a
civil investigation. The committee
concluded that a less demanding threshold standard is appropriate. Information often comes to the attorney
general in a form much less formal than a sworn complaint; for example,
information about abuses and misdeeds is often brought to light in newspaper
stories. The committee was sensitive to
the burden that an investigation can impose on a charity, but concluded that a
reasonable amount of discretion and flexibility in the attorney general is more
often likely to diminish the burden on charities than to justify inappropriate
intrusion.
States vary with respect to process and procedure
relating to attorney general investigative authority. States that detail attorney general subpoena
power in code sections dealing broadly with attorney general power will have no
need for this section. States that
provide in their codes for attorney general civil subpoena power specifically
in connection with another attorney general function (such as consumer
protection) can use that language in this section. The language used in this section is modeled
on Missouri code sections concerning consumer protection. The language in subsection (b) that refers to
Section 4 will have to be modified after a decision on how best to proceed with
the language about civil investigative demands.
Language
specifying the attorney general’s authority to issue an order to stop or to
seek an assurance of voluntary compliance is provided in the Legislative Note
following Section 4. States that provide
for similar instruments to exercise attorney general authority elsewhere in the
state code, for instance, in the consumer protection statutes, will want to
coordinate the language here with that language. Some states may want to enact this material
as a separate section.
Subsection (c) of new Section in Legislative Note. In many states the attorney general has civil
jurisdiction but not criminal jurisdiction.
For example, in Connecticut the attorney general is the civil charitable
regulator but if the attorney general wishes to initiate a criminal proceeding
the attorney general must do so through the chief state’s attorney. In other states (e.g. Maryland) the county
state’s attorney has general criminal jurisdiction. The committee also needs to determine whether
the addition of a new crime in this subsection is appropriate. In some states crimes can only be created in
the criminal code.
(a) The [Aattorney
Ggeneral]
shall establish and maintain a registry of persons required to register under
this section.
(b) A person isshall
be required to register under this section if :
(1)
the person holds or administers a
charitable assets in excess of $5,000 and:
(1A)
is organized
under the law of this state or if it is a trust has its situs in this state;
(2B) has its principal
place of business in this state;
(3C)
holds
charitable assets in this state other than assets held
primarily for investment purposes in this state;
(4D) conducts activities
in this state; or
(5E) holds assets that
are given or committedspecifically dedicated
to the benefit of a persons in this
state.;
(c) The following are exempt from the requirement
in subsection (b) to register: (2) and if the person is not:
(1A) a government, governmental
subdivision, agency, or instrumentality, except to the extent
that it holds charitable assets;
(B) a corporation
sole or other religious organization which holds
property for religious purposes; or any agency
or organization affiliated with and directly supervised by such a
religious organization; or an
officer, director or trustee of any such
religious organization who holds
property in an official capacity for religious purposes;
(C) a person not organized primarily for
charitable purposes except to the extent that it holds charitable assets;
(2D) an organization the
primary purpose of which is to influence elections;
(3E) a financial
institution, investment company, or storage facility that holds charitable
assets that belong to another person; or
(4F)
an
individual holding a charitable asset other than in a fiduciary capacity;
(5) a
[personal representative] of a decedent’s
estate that holds a charitable asset,
during the period of administration of the estate;
(6) a trustee of a
revocable trust that becomes irrevocable because of the settlor’s death, during
a period of administration following
the settlor’s death not to exceed one year[.][; or]
Alternative A
[(7) a religious organization that
holds property for religious purposes, an agency or organization affiliated
with and directly supervised by the religious organization, or an officer,
director, or trustee of the religious organization which holds property in an
official capacity for religious purposes.]
Alternative B
[(7) [religious
organization as defined by Internal Revenue Code].]
End of Alternatives.
(dc)
The following activities do not constitute conducting activities in thisa
state within the meaning of section (b)(41)(D):
(1) maintaining,
defending, mediating, arbitrating, or
settling an action ory
proceeding;
(2) holding a meetings
of trustees, directors, or members;
(3) maintaining anbank
accounts in a financial
institution or an investment accounts;
(4) owning, without
more, real or personal property;
(5) conducting an
isolated transaction that is completed in not more thanwithin
30 days and that is not one in the
course of repeated similar transactions of a
like nature; and
(6) soliciting or
accepting contributions; and
(7) making
a grant to a person in this state..
(ed) A person required to register under this
section shall register with the [Aattorney
Ggeneral]
on
or before thenot later than later of [three3]
months after the date the person receives charitable assets in excess of $[$5,000].
(fe)
The registration required by subsection
(b) must include:
(1)
the name and
address of the person;
(2) the name and address
of the statutory agent of the person or of the
individual on whom service of process may be made;
(3) the name and address
of a responsible individual of the person; [and]
(4)
a short statement of the person’s
primary activities;
(5) a true copy
of the current version of the
person’s articles of incorporation, trust
instrument, or other record, if any, that serves as the organizational document
of the person; and
(46) the federal employer
identification number, if any, for the person[.][;]
[(5) if the person is organized primarily for
charitable purposes, a copy of the person’s articles of incorporation and bylaws,
trust instrument, or other record, if any, that serves as the organizational
document of the person; [and]
(6) if the
person is not organized primarily for charitable purposes, a copy of the
portion of the person’s articles of incorporation and bylaws, trust instrument,
or other record, if any, that relates to the use and administration of the
charitable asset held by the person.][; and]
[(7) whether the person
has registered under [the state’s
solicitation statute] and if
so, under what name and under what registration number, if any.]
(f) The [attorney
general] may collect a filing
fee of [$15.00] with the
registration required by this section and a late fee of [$25.00] per
month up to a maximum of [$200]. The
funds collected will be used for services provided for under this [act]. The [attorney
general] may extend the
time for filing for good cause shown.
(gg) The registry established pursuant to
subsection (a) and records filed with the [Aattorney
Ggeneral]
are public records, except that the [Aattorney
Ggeneral]
shall:
(1) withhold from public inspection a record or
any part of a record filed with the [Aattorney
Ggeneral]
or with a governmental agency of this state, another state, or the United
States, or any governmental subdivision thereof, which is required by law to be
kept confidential; and
(2) on the written
request of a person required to register under this section, withhold from
public inspection a record or any part of a record filed which does not relate
to a charitable purpose or charitable assets and is not otherwise a public
record.
[(h) The [Attorney General] may collect a
filing fee of $[15.00] with the registration required by this section and a
late fee of $[100.00]. The funds
collected will be used for services provided for under this [act]. The [Attorney General] may extend the time
for filing for good cause shown.]
Comment
The main
thrust of the 1954 Uniform Supervision of Trustees for Charitable Purposes Act
was to provide a mechanism to facilitate the supervisory role of the Attorney
General by providing for registration that would alert the Attorney General to
the existence and administration of charitable trusts. This Act continues to incorporate that function. The Drafting Committee has opted to keep the
registration obligation simple, so as to avoid overburdening either charitable
organizations or Aattorneys
Ggeneral. It is expected that the registration function
will move to an electronic system, thereby reducing some of the burden. Electronic registration will be sufficient to
meet the requirements of Section 5, and the Drafting Committee hopes that
states will be able to accommodate electronic registration. While a large organization that operates in
many states will likely have an obligation to register in multiple states, the
committee hopes that the Act’s move toward uniformity will minimize the burden
of multiple registrations. The Act
includes a statutory form of registration so that states can ease the burden on
charities by adopting a requirement that is consistent across states.
Registration
is important for several reasons. First,
the list of registered charities can serve as a quick resource of information
for the Aattorney Ggeneral
and for the public. If the Aattorney
Ggeneral
receives a question from a member of the public, the Aattorney
Ggeneral
may be able to answer the question simply by reviewing the information provided
in the registration. No further inquiry
may be necessary, and both the Aattorney Ggeneral
and the charity will save time and expense.
Also, a
potential donor may consult the list of registered charities to determine
whether a charity requesting a donation is current in its filings with the Aattorney
Ggeneral. If the charity is not registered, the donor
will want to investigate further before making a donation. If the charity has consistently made the
required filings, that information suggests a well-managed charity, with
fiduciaries who comply with their duties.
Finally, the
requirement to register serves as a reminder to someone organizing a charity of
the seriousness of the fiduciary role an individual undertakes when acting as a
director or trustee of a charity. If the
individual does not want the responsibility of managing charitable assets under
the oversight of the Aattorney Ggeneral,
the individual can give the assets to an existing charity or start a donor
advised fund.
Subsection (b) sets forth which
organizations will be required to register under the Act. The registration requirement applies to
entities of any legal form that hold or administer property dedicated to or
donated for charitable purposes. The scope
of the requirement is broad enough to take in not only organizations
traditionally thought of as charitable, but also non-charitable organizations
that hold or administer assets dedicated to charitable purposes or that have
been donated for charitable purposes. The
obligation to register is limited to organizations that have significant contacts in the state. The Drafting Committee believes that the
threshold strikes an appropriate balance between the risk of overburdening
charities that have little contact with a particular state and the need for the
Aattorney
Ggeneral
to be alerted to the existence of charitable organizations and assets in the
state that might call for oversight.
Simply having a bank account or investment account in the state does not
cause an entity to fall within the definition, and financial institutions and
investment companies are not included within the definition by virtue of having
accounts owned by charities, unless the institution serves as trustee for a
charity.
The term “principal place of business” is used to mean principal place of administration, governance, activities, and operation. Although using the term “business” for charitable activities sounds odd, the term is used to bring with it the substantial caselaw connected with the term.
Although the types of contact
listed in subsection (b) are not limited by the terms “substantial” or “significant,”
the intention is that a negligible level of activity or other contact not be
considered sufficient to cause an Aattorney
Ggeneral
to assert oversight protection powers. The state constitution will control the level
of activity necessary for Aattorney
Ggeneral
oversightprotection.
Subsection (b)(2)(A) excludes governments from the Act, but if a government accepts an asset for charitable purposes, the Act will provide oversight for that asset. For example, a local government might accept the donation of land for a public park or might accept a conservation easement over land in the state.
Subsection (b)(2)(C) excludes persons not organized primarily for charitable purposes. The Drafting Committee intends to exclude entities like benefit corporations and L3Cs even though those entities may be established in part for charitable purposes. The committee also intends to exclude labor organizations, social organizations, and trade associations.
Subsection (b)(2)(F) excludes individuals who may hold charitable assets as volunteers but not in a fiduciary capacity. For example, a volunteer might hold assets in connection with a school’s PTO fundraiser. The PTO will register, but a volunteer who holds assets connected with the fundraiser do not need to register.
Subsection (d) indicates that the
threshold amount for filing is $5,000.
The Drafting Committee chose this amount because it is the same as the
amount that necessitates filing a Form 1023, Recognition of Exempt Status, with
the Internal Revenue Service. The
information required to register with the Aattorney
Ggeneral
is significantly less than the information required to complete a Form 1023, so
an organization should not face an undue burden if required to register with
the Aattorney Ggeneral.
Legislative
Note to Subsection (g) – if a state FOIA statute requires more
here, then add.
In some states an amendment to FOIA may be necessary. Some states will delete.
(a) A person required to register under Section 4 which holds
charitable assets valued in excess of $[5,000] at the end of the
person’s most recent accounting period5
or
has total revenue in excess of $[--] for the person’s most
recent accounting period shall file shall file with the [Aattorney
Ggeneral],
not later than 5five months
and 15fifteen
days after the end of the person’s accounting period, a, the
following:
(1) a copy of the person’s most recent federal
information return, if any; and
(2) an annual report providing
and certify providing the
accuracy of the following information:
(1A) a current list of
the names of the individuals
responsible for the management of the person charity’s directors,
trustees, and officers;
(2B) the person’s total
revenue for its most recent accounting period;
(3C) the person’s total
assets as of the last day of its most recent accounting period;
(4) a description of the
person’s most significant program activities, not exceeding three activities,
during the accounting period;
(5) a copy of any amendment during the accounting period of the person’s articles of incorporation and bylaws, trust instrument, or other record that serves as the person’s organizational documents;
(6) whether during the
accounting period the person:
(A) engaged in a reportable
event under Section 6;
Alternative A
( [(BD) entered into a
description
of any contract, loan, lease, or other financial transaction during
the accounting period between the person andwith
any
officer, director, trustee, or other fiduciary, either directly or with an
entity in which the officer, director, trustee, or other fiduciary had a
material financial interest;]
Alternative B
[(B) entered into a financial transaction that
materially benefits an officer, director, trustee, or other fiduciary, other
than a transaction related to the individual’s role as a fiduciary,
or entered into a financial transaction that materially benefits an entity in
which the fiduciary had a material financial
interest;]
End of Alternatives
(CE) a description of anybecame
aware of a material embezzlement, theft, or diversion,
or
misuse of the charity’s person’s charitable
assetss;
of
which the person became aware during the accounting period;
(DF) became aware a list
of any instances of which the person became aware during the accounting period of
use of a charitable assetthe person’s funds
to pay any penalty, fine, or judgment;
(EG) became aware of a list
of any instances of which the person became aware during the accounting period
of the payment by an officer, director, trustee, or other
fiduciary of a penalty, fine, or judgment with respect to the person; and
(H) a statement describing any change in the
person’s federal or state, tax
exempt status during the accounting period;
((FI) a statement describing
any use during the accounting period or of which the person became aware during
the accounting periodbecame aware of the use
of restricted funds for a purpose other than the purposeose
specified in the restriction; ; and
(7) an explanation of any
affirmative answer reported under paragraph (6); and
(8) a
change to any information provided under Section 4.
(b) If the
person is required to file a Form 990, Form 990-PF,
or Form 990-EZ with
the Internal Revenue Service, then
the person shall attach a copy
of the form to the
annual report.(J) a description of the person’s most
significant program activities, not to
exceed three activities, during the accounting period.
Comment
Many charities will be able to meet the annual report requirement of Section 6 simply by filing a copy of the federal tax return the charity files. If the charity files a Form 990, Form 990-EZ, or a Form 990-PF, the charity may file a copy of that return and need not file an additional report. If the charity files Form 990-N, the charity will need to file an additional report, because the Form 990-N does not request a significant level of information. This draft states the requirement without reference to specific tax return numbers because the return numbers may change over time. The difficulty with stating the requirement in this way, however, is to convey the idea that a return that provides information similar to that required by this section (Form 990, Form 990-EZ, Form 990-PF) is sufficient but a return that provides only a minimal level of information (Form 990-N) is not. The committee will compare the requirements of Section 6 with the requirements of the tax returns and consider whether to require information beyond that listed in the tax returns.
The Internal Revenue Code requires a private foundation to file a copy of its Form 990-PF, IRC 6033(c)(2), with the state, so we should be able to exempt private foundations who already file that form with the state. The committee needs to consider this exemption, but the committee will likely be able to exempt private foundations from Section 6.
States that require annual reporting under a statute that regulates charitable solicitation will want to coordinate the report required here with that required by the solicitation statute and may find the reporting requirement in Section 6 duplicative and unnecessary.
The
drafting committee did not reach consensus on the optimal threshold for the
small organization exception. Some committee
members noted that the reporting requirement can encourage good governance, and
some members also noted that the small organizations are often the ones that
get into trouble. The Aattorney Ggeneral
needs to receive information in a timely fashion to be able to address problems
before charitable assets are lost. The
registration and reporting requirements are important in promoting appropriate oversight
protection of charitable assets.
(a) A person required to register under Section 45
shall give written notice in a record
to the [Aattorney Ggeneral]
not later than [20] [30] days before a reportable event
occurs.
(b) The
following are
reportable events under this section:any of
the following occur:
(1) a dissolution of the
person;
(2) a termination of the
person:
(3) a disposition by the
person of all or substantially all of the person’s charitable assets,
unless the disposition occurs in the usual or regular course of the person’s
activities;
(4)
the consummation of a merger, conversion, or
domestication;
(5) a change
in the situs of the principal place of business of the personremoval
of the person from the jurisdiction of this state; or
(6) a removal of
significant charitable assets from this state.
(cb) A transfer of aNo
charitable assets may be transferred in
connection with any event described in subsection
(b) which occurs earlier than that
requires the provision of notice under section (a) by a person to the [attorney
general] until
the earliest of:
(1) [20] days
after delivery of the notice required by this
section subsection (a)has been
delivered to the [Aattorney Ggeneral] shall
be a violation of this [act] unless;
(2) the before the
transfer the person’s receives
the consentreceipt of the [Aattorney
Ggeneral]’s
consent in a recordwriting to a
proposed transfer; or
(3)
the the person’s
receivespt of written
notice in a record that the [Aattorney
Ggeneral]
will take no action regarding the transfer.
(dc) If a decedent’s
probate estate opened by a court
in this state involves, or may involve, the distribution of property to a
person holding or authorized to hold charitable assets, unless the person
authorized to hold charitable assets will distribute the assets to a specified
charity , the [personal representative], not later than [ninety[30]
daysdays
after the date of the [personal representative’s]
is
appointedtment, shall deliver to the [Aattorney
Ggeneral] a true copy
of the will; a copy
of the petition for probate or application for
unsupervised probate; and a copy
of the inventory, or if none is filed
with the court, then a statement of the estimated value of the estate, unless the distribution
is a specific devise with a value of less than $100,000 to a named person
holding charitable assets,.
(ed) If a revocable trust having its principal
place of administration administered
in this state becomes irrevocable [because of
the settlor’s death] and if itthe
provides
for a distribution of property distribution under the
trust involves, or may involve, distribution of property to a
person holding or authorized to hold charitable assets, unless the person
authorized to hold charitable assets will distribute the assets to a specified
charity, the trustee, not later than [ninety30] days days
after the date of the settlor’s death, shall deliver to the [Aattorney
Ggeneral]
a description of the charitable interests and a statement of the
estimated value of the trust assets, unless the
distribution is a specific distribution with a value of less than $100,000 to a
named person holding charitable assets..
(e) A person who holds
a charitable asset in this state shall give notice to the [attorney
general] of a decision to
file for bankruptcy not later than the date on which the charity files
a bankruptcy petition under Title 11 of the United States Code, files a
receivership under [state receivership statute] or any similar receivership
statute of another state, makes an assignment for the benefit of creditors, or
initiates any other insolvency proceeding.
(f) A person required to register under
Section 4in this state shall give notice in a
record to the [Aattorney Ggeneral]
not later than [20]
days after:
(1) receipt of any notice of revocation,n or
modification, or denial of its federal or state [income]
tax exemption.; or
(2)
adoption of any amendment to its articles of incorporation, trust instrument,
or other record creating the person if the amendment changes the purposes of
the person or results in a material change to the structure, governance, or
activities of the person.
(g) A notice required to be given under this
section shall include the name of the
person, an explanation of the event that causes the
notice requirement to apply, and
the approximate value of the charitable asset involved.
(h) Failure to provide notice as required under
this section [shall result in ….][will be considered a breach of fiduciary duty.]
Comment
The Act requires notice to the Aattorney
Ggeneral
of a variety of transactions and events that raise particular opportunities for
misapplication of charitable assets, so that the Aattorney
Ggeneral
has an opportunity to monitor the events in time to prevent problems in
addition to correcting problems that have already arisen.
Subsection (a). Disposition or removal of all or significantly all assets. If the charity will terminate or dispose of substantially all of its
assets, the charity must notify the Aattorney
Ggeneral
before the charity gives up control of the assets. This notice provision gives the Aattorney
Ggeneral
time to review the proposed transaction and recommend changes if necessary
while the assets can still be reached.
If the Aattorney Ggeneral
objects to the proposed transaction, the Aattorney
Ggeneral
must deliver the objection to the charity in writing and then the charity
cannot proceed with the transaction until the Aattorney
Ggeneral
consents (presumably after negotiations between the charity and the Aattorney
Ggeneral)
or a court approves the transaction. This subsection gives the Aattorney
Ggeneral
the information needed to work with the charity on an appropriate plan of
distribution or other transfer, and then provides for a court determination if
the Aattorney Ggeneral
and the charity cannot reach agreement.
Subsection
(c) Probate
estate. If a probate estate contains a gift to a
charity, the personal representative must notify the Aattorney
Ggeneral
of the distribution of an estate that may involve the distribution of
charitable assets. This provision is necessary, because the public’s interest in a charitable
bequest may not be protected if an heir contests the will and the Aattorney
Ggeneral
does not know that a charitable bequest existed.
Subsection
(d). Revocable trust. If a
decedent’s property will be distributed through a revocable trust rather than
through probate, the Aattorney general
General should still get notice of any
significant charitable gifts. The amount
that is “significant” is left in brackets for states to consider. The Drafting Committee thought that gifts to
charity worth at least $25,000 collectively represented a “significant”
charitable interest.
Subsection
(e). Bankruptcy. The [Aattorney
Ggeneral]
should be aware of a charity’s decision to file for bankruptcy so that the [Aattorney
ggeneral]
can protect the public’s interest in the charitable assets. [Moved to Section 8]
Subsection
(f)(1). Revocation of tax exemption.
The revocation of a federal or state tax exemption may signal
problems with a charity that the Aattorney
Ggeneral
should consider. This subsection
requires provides for notification to the Aattorney
Ggeneral
of revocation or modification of a charity’s exempt status for any tax purpose.
Subsection
(f)(2). Amendment. This subsection requires a charity to file
with the Aattorney Ggeneral
any amendment to its governing documents that changes the purpose of the
charity or results in a material change to the structure, governance, or
activities of the charity. For example, a charity should report a change
in voting structure, either the elimination of a class of voting members or the
creation of voting members. [Add examples of other “material” changes].
(a) This section applies to:
(1)
an action against or on behalf of a person
holding a charitable asset or an action seeking to enforce a the term terms
governing the use or managementrelating to a gift
of a charitable asset;
(2)
an action against a person concerning the
use of an application ofa
charitable assets or a breach of fiduciary duty or
other legal dutyobligation owed to a
person holding a charitable asset; ;
(3) a
proceeding by, against, or on behalf of a person holding a charitable
assets seekingfor:
(A)
instruction, injunction, or
declaratory relief relating to the management, use, or distribution of a charitable
assets or income produced by charitable assets;
(B) construction of a
record under which a charitable assets is are
held;
(C) modification, interpretation,
or termination of the terms of a record under which a
charitable asset iss are held;
or
(D)
removal, appointment of,
or replacement of a trustee of a charitable trust;
(E4)
a proceeding relating
to the administration of a probatea
challenge to the administration of or
a distribution from a decedent’s
estate or a trust in which matters affecting a charitable
assets may be decided; and
(F) bankruptcy under Title
11 of the United States Code, receivership under [state receivership statute]
or a similar receivership statute of another state, or any
other insolvency proceeding. d
(5) a proceeding to contest or set aside the
probate of a will or establishment, funding or dissolution of a trust under
which property is given for charitable purposes.
(b) When a person commences an action or
proceeding to which this section applies, the person shall give notice in a
record to the [Aattorney Ggeneral]. if the value of the
charitable assets involved in the action or proceeding is at least $[25,000]. The notice must include a copy
of the initial pleading. AnNo
order, decree, or judgment rendered in any
action inas to which
notice is required by under this section is notshall
be binding upon the [Aattorney
Ggeneral]
if the required notice has not been
given. The statute of
limitations for the [attorney general] to bring an action shall not commence
until such time as the requisite notice has been given.
Comment
The list of kinds of proceedings
that require notice to the Aattorney Ggeneral
is adapted from provisions found in charitable corporation, trust, and probate
sections of various state codes, although no one state provides a model for the
entire section. The Drafting Committee concluded
that the Aattorney Ggeneral
ought to be made aware of a wide range of proceedings that might affect charitable
assets or the structure or governance of a charity. [Might include examples
here, too. For example, changing
the membership structure by eliminating one or more classes of voting members, should require notification.]
Legislative Note: In states where the Aattorney
Ggeneral
is a necessary party to any or all of the kinds of actions addressed in this
section, parts or all of the section will be unnecessary.
SECTION 9. EQUITABLE
RELIEF.
If a person required to register
under Section 4, file an annual report under Section 5, provide notice of a
reportable event under Section 7, or provide notice of an action or
proceeding under Section 8 fails to do so, the [Attorney General] may seek
appropriate equitable relief.
SECTION
9. PARTICIPATION BY [ATTORNEY GENERAL]
IN PROCEEDING INVOLVING COVERED CHARITY. The [attorney general] may commence an action
pursuant to this [act] and may intervene in an action or proceeding listed in
Section 8(a).
Comment
This
section articulates Aattorney
Ggeneral
authority to bring an action or intervene in a proceeding brought by someone
else. The committee intends to make the Aattorney
Ggeneral
a proper party to a wide array of proceedings involving charities, charitable
fiduciaries, or charitable assets, so that the Aattorney
Ggeneral
may exercise the discretion to participate or refrain from participating in
court proceedings that relate the Aattorney
Ggeneral
duty and authority under this Act.
(a) The [Aattorney
Ggeneral]
may cooperate with an official of this state, another state, or the United
States, or any political subdivision or agency thereof any
of the foregoing, charged with overseeing covered
charities orthe protection of charitable
assets.
(b) The [Aattorney
Ggeneral]
may:
(1) notify an official described
in subsection (a) of the commencement, status, or resolution of an
investigation or proceeding pursuant to this [act];
(2) make available to
the official a statement, record, or other information
relating to a covered charitycharitable asset
which is relevant to the official’s oversight protection
of covered charities and charitable
assets; or
(3) request from the official a statement, record, or
other information relevant to an investigation pursuant to Section
34.
Comment
This section authorizes cooperation
between a state Aattorney
Ggeneral
and relevant officials of other states and the federal government.
SECTION 101. UNIFORMITY OF APPLICATION
AND CONSTRUCTION. In applying and construing this uniform act,
consideration must be given to the need to promote uniformity of the law with
respect to its subject matter amongin the
states that enacadopt it.
SECTION 112. RELATION TO ELECTRONIC
SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT. This [act] modifies,
limits, and supersedes the federal Electronic Signatures in Global and National
Commerce Act, 15 U.S.C. Section 7001, et seq., but does not modify, limit, or
supersede Section 101(c) of that act, 15 U.S.C. Section 7001(c), or authorize
electronic delivery of any of the notices described in Section 103(b) of that
act, 15 U.S.C. Section 7003(b).
SECTION 123. REPEALS. The following acts
and parts of acts are repealed:
SECTION 134.
EFFECTIVE DATE. This [act] takes
effect . . . .