Chapter 571
AN ACT
SB 109
Relating to charitable organizations; creating new provisions; amending
ORS 128.620, 128.630, 128.650, 128.660, 128.670, 128.680 and 128.735; and
declaring an emergency.
Be It Enacted by the People of
the State of
SECTION 1.
ORS 128.670 is amended to read:
128.670. (1) Except as
otherwise provided, every charitable [corporation
and trustee] organization subject to ORS 128.610 to 128.750 shall,
in addition to filing copies of the instruments previously required, file with
the Attorney General periodic written reports setting forth information as to
the nature of the assets held for charitable purposes and the administration
thereof by the corporation or trustee.
(2) The Attorney General
may classify trusts and other relationships concerning property held for a
charitable purpose as to purpose, nature of assets, duration of the trust or
other relationship, amount of assets, amounts to be devoted to charitable
purposes, nature of trustee, or otherwise, and may establish different rules
for the different classes as to time and nature of the reports required to the
ends that:
(a) The Attorney General
shall receive reasonably current, periodic reports as to all charitable trusts
or other relationships of a similar nature, which will enable the Attorney
General to ascertain whether they are being properly administered; and
(b) Periodic reports
shall not unreasonably add to the expense of the administration of charitable
trusts and similar relationships.
(3) The Attorney General
may suspend the filing of reports as to a particular charitable trust or
relationship for a reasonable, specifically designated time after the Attorney
General has filed in the register of charitable trusts a written statement that
the interests of the beneficiaries will not be prejudiced thereby and that
periodic reports are not required for proper supervision by the Attorney
General’s office.
(4) A copy of an account
filed by the trustee in any court having jurisdiction of the trust or other
relationship, if the account substantially complies with the rules of the
Attorney General, may be filed as a report required by this section.
(5) The first report for
a trust or similar relationship hereafter established, unless the filing thereof
is suspended as provided in subsection (3) of this section, shall be filed not
later than four months and 15 days following the close of the first calendar or
fiscal year in which any part of the income or principal is authorized or
required to be applied to a charitable purpose. Subsequent annual reports shall
be submitted not later than four months and 15 days following the close of each
calendar or fiscal year adopted by the charitable [corporation or trustee] organization.
(6) The Attorney General
shall make rules as to the time for filing reports, the contents thereof, and
the manner of executing and filing them. The Attorney General may make
additional rules and amend existing rules as necessary for the proper
administration of the Charitable Trust and Corporation Act.
[(7) Each charitable corporation, trustee, or other charitable
organization filing a report required by this section shall pay to the
Department of Justice, with such report, a fee based in part on the total
amount of its income and receipts during the time covered by the report and in
part on its fund balance at the close of the calendar or fiscal year adopted by
the charitable corporation or trustee:]
[(a) The fee based on income and receipts shall be as follows:]
[(A) $10, if it received no income and receipts during the time covered
by the report or if it received less than $25,000;]
[(B) $25, if $25,000 or more but less than $50,000;]
[(C) $45, if $50,000 or more but less than $100,000;]
[(D) $75, if $100,000 or more but less than $250,000;]
[(E) $100, if $250,000 or more but less than $500,000;]
[(F) $135, if $500,000 or more but less than $750,000;]
[(G) $170, if $750,000 or more but less than $1 million; or]
[(H) $200, if $1 million or more.]
[(b) The fee based on the fund balance shall be one-hundredth of one
percent of the fund balance. The fee shall be rounded off to whole dollars;
amounts under 50 cents shall be dropped and amounts from 50 cents to 99 cents
shall be increased to the next dollar. The fee shall allow for the following
exceptions:]
[(A) Any amount of a fund balance over and above $10 million shall not
be subject to the fund balance fee.]
[(B) No fee shall be due under this paragraph if the fund balance is
less than $50,000.]
[(C) With respect to foreign organizations, only the fund balance of
assets held in
[(D) The fee shall not apply to fixed assets held for use in the
operation of a charitable organization.]
(7)(a) A charitable
organization, when filing a report required under this section, shall pay a fee
to the Department of Justice in accordance with a fee schedule established by
the department by rule.
(b) The fee schedule
shall consist of the following elements:
(A) A fee that the
department shall set according to a scale graduated on the basis of the
charitable organization’s receipts and income during the time covered by the
report, with a lower fee applying to lower receipts and income and a higher fee
applying to higher receipts and income. The minimum applicable fee is $10 and
the maximum applicable fee is $400.
(B) A fee based on a
percentage of the fund balance the charitable organization has at the close of
the organization’s calendar or fiscal year. The department shall set the fee
under this subparagraph at not more than 0.02 of one percent of the fund
balance or $2,000, whichever is less.
(c) The charitable
organization shall pay a fee that consists of both elements set forth in
paragraph (b) of this subsection at the time the organization files a report
required under this section.
(d) In calculating the
fee element set forth in paragraph (b)(B) of this subsection, the department
may not include in the fund balance any fixed assets that the charitable
organization uses for operations.
(e) The department shall
ensure that the aggregate amount of fees paid under this section is sufficient
to pay the department’s expenses in administering ORS 128.610 to 128.750 and
128.801 to 128.898.
(8)(a) If the charitable
organization does not pay the fee prescribed by rules adopted under
subsection (7) of this section [is not
paid when due or if the charitable corporation or trustee] or fails
to file a report by the date due, [a
penalty charge of an additional $20 shall be paid to the Department of Justice.]
the charitable organization, in addition to the fee due, shall pay a
delinquency fee in an amount the department specifies by rule. The department
may increase the delinquency fee or charge additional delinquency fees based on
the length of time the payment or report is delinquent.
[(b) The Attorney General may at any time after a fee or report is
delinquent give written notice by certified mail to the charitable corporation,
trustee or other charitable organization of the delinquency, requiring it to
correct the delinquency and informing it of the Attorney General’s authority to
impose an additional penalty if it fails to do so within a specified number of
days thereafter, but not less than 10. Thereafter, unless the fee, including
the penalty charge prescribed by paragraph (a) of this subsection, or the
report, or both, are filed within the specified number of days, the Attorney
General may impose an additional penalty, not exceeding the greater of $300 or
twice the fee prescribed by subsection (7) of this section which is due with
the delinquent report, in the manner provided by ORS 183.745.]
(b) In addition to
charging any delinquency fee required under paragraph (a) of this subsection,
the Attorney General, in compliance with the procedures set forth in ORS
chapter 183, may take either or both of these actions:
(A) Impose a civil
penalty of not more than $1,000 on any charitable organization that fails to
file a delinquent report or fails to pay a delinquency fee or a fee due under
subsection (7) of this section within 90 days after receiving notice of the
delinquency; or
(B) Order any charitable
organization to cease soliciting contributions until the charitable
organization has paid a fee or delinquency fee imposed under this section or
has filed a report required under this section.
(c) In any
judicial review of the order of the Attorney General, the order shall be
reversed or modified only if the court finds that the Attorney General lacked
authority to issue the order or impose the penalty or that the
amount of the penalty imposed was unconscionable in the circumstances.
[(c)] (d) The Attorney General may grant an extension of time
for a reasonable period for filing a report upon written application filed by
or on behalf of the charitable [corporation
or trustee] organization stating the reason that additional time
should be allowed for filing the report beyond the ordinary due date. If the
request is submitted on or prior to the due date for filing the report, the [$20 penalty charge] delinquency fee
described in paragraph (a) of this subsection will not be due unless the
report and fee are thereafter not filed within the extended period granted for
filing the report, or, if the request is denied, within 10 days after the denial
is received by the corporation.
(9) All fees and
penalties received by the Department of Justice under subsections (7) and (8)
of this section shall be paid over to the State Treasurer monthly for deposit
in the Department of Justice Operating Account created under the provisions of
ORS 180.180. Amounts deposited pursuant to this subsection are continuously
appropriated to the Attorney General to pay the expenses of the Department of
Justice in administering [the Charitable
Trust and Corporation Act and the Charitable Solicitations Act as established
in] ORS 128.610 to 128.750 and 128.801 to 128.898 and for no other
purpose.
SECTION 2.
ORS 128.620 is amended to read:
128.620. As used in ORS
128.610 to 128.750:
(1) “Charitable
corporation” means any nonprofit corporation organized under the laws of this
state for charitable or eleemosynary purposes and any similar foreign
corporation doing business or holding property in this state for such purposes.
The mere making of grants or donations to institutions or beneficiaries within
the State of Oregon, or the investigation of applicants for such grants or
donations, [shall] does not
constitute doing business in this state. However, the solicitation of funds for
charitable purposes in this state shall constitute doing business therein.
[(2) “Trustee” means:]
[(a) Any individual, group of individuals, corporation or other legal
entity holding property in trust pursuant to any charitable trust;]
[(b) Any corporation which has accepted property to be used for a
particular charitable corporate purpose as distinguished from the general
purposes of the corporation; and]
[(c) A corporation formed for the administration of a charitable trust,
pursuant to the directions of the settlor or at the instance of the trustee.]
(2) “Charitable
organization” includes charitable corporations, trustees and other charitable
organizations not specifically exempted from the application of ORS 128.610 to
128.750.
(3) “Charitable purpose”
means any purpose to promote the well-being of the public at large, or for the
benefit of an indefinite number of persons, including but not limited to
educational, literary, or scientific purposes, or for the prevention of cruelty
to children or animals, or for the benefit of religion, rehabilitation
services, public recreation, civic improvement, or services which lessen the
burdens of government.
(4) “Religious
organization” means any organized church or group organized for the purpose of
divine worship, religious teaching, or other directly ancillary purposes.
(5) “Trustee” means:
(a) Any individual,
group of individuals, corporation or other legal entity holding property in
trust pursuant to any charitable trust;
(b) Any corporation that
has accepted property to be used for a particular charitable corporate purpose
as distinguished from the general purposes of the corporation; and
(c) A corporation formed
for the administration of a charitable trust, pursuant to the directions of the
settlor or at the instance of the trustee.
SECTION 3.
ORS 128.630 is amended to read:
128.630. (1) ORS 128.610
to 128.750 apply to all charitable [corporations
and trustees] organizations holding property for charitable purposes
over which the state or the Attorney General has enforcement or supervisory powers.
(2) ORS 128.610 to
128.750 shall apply regardless of any contrary provisions of any instrument.
SECTION 4.
ORS 128.650 is amended to read:
128.650. The Attorney
General shall establish and maintain a register of charitable [corporations and trustees] organizations
subject to ORS 128.610 to 128.750 and of the particular trust or other
relationship under which [they] the
charitable organizations hold property for charitable purposes and, to that
end, may conduct whatever investigation is necessary, and shall obtain from
public records, court officers, taxing authorities, trustees, and other
sources, whatever information, copies of instruments, reports and records that
are needed for the establishment and maintenance of the register.
SECTION 5. ORS
128.660 is amended to read:
128.660. Every
charitable [corporation and trustee] organization
subject to ORS 128.610 to 128.750 [who]
that has received property for charitable purposes shall file with the
Attorney General, upon receiving possession or control of such property, a copy
of the articles of incorporation, trust agreement or other instrument providing
for title, powers or duties.
SECTION 6.
ORS 128.735 is amended to read:
128.735. (1) In any suit
or action against a [charitable
corporation or trustee or any other] charitable organization to enforce any
fiduciary or other duty arising under ORS 128.610 to 128.750 or to enforce any
fiduciary duty arising under the common law, the court in its discretion may
award the prevailing party reasonable attorney fees at trial and on appeal and,
as part of costs and disbursements, reasonable investigative expenses and
reasonable expert witness fees.
(2) If the Attorney
General prevails, the attorney fees, costs and disbursements of the Attorney
General may, in the discretion of the court, be a judgment against the
responsible officers of the charitable corporation or trustee of a charitable
trust, or may be paid out of the corpus of the trust.
SECTION 7.
ORS 128.680 is amended to read:
128.680. The Attorney
General may investigate transactions and relationships of [corporations and trustees] charitable organizations subject
to ORS 128.610 to 128.750 for the purpose of ascertaining whether or not the
purposes of the [corporation or trust]
charitable organization are being carried out in accordance with the
terms and provisions of the articles of incorporation or other instrument,
whether a person or organization has engaged in a violation of [the Charitable Trust and Corporation Act,]
ORS 128.610 to 128.750 or whether such a person or organization has breached a
fiduciary duty arising under the common law. The Attorney General may require
any agent, trustee, fiduciary, beneficiary, institution, association or
corporation, or other person to appear, at a named time and place, in the
county designated by the Attorney General, where the person resides or is
found, to give information under oath and to produce books, memoranda, papers,
documents of title, and evidence of assets, liabilities, receipts or disbursements
in the possession or control of the person ordered to appear.
SECTION 8. Except
as provided in section 11 of this 2007 Act, the amendments to ORS 128.670 by
section 1 of this 2007 Act apply to all fees paid or penalties imposed on or
after the operative date of the amendments to ORS 128.670 by section 1 of this
2007 Act for reports required to be filed by charitable corporations, trustees
and other charitable organizations subject to ORS 128.610 to 128.750.
SECTION 9. The
amendments to ORS 128.620, 128.630, 128.650, 128.660, 128.670, 128.680 and
128.735 by sections 1 to 7 of this 2007 Act become operative on January 1,
2008.
SECTION 10. The
Attorney General may take any action before the operative date of the
amendments to ORS 128.670 by section 1 of this 2007 Act that is necessary to
enable the Attorney General to exercise, on and after the operative date of the
amendments to ORS 128.670 by section 1 of this 2007 Act, all the duties,
functions and powers conferred on the Attorney General by the amendments to ORS
128.670 by section 1 of this 2007 Act.
SECTION 11. (1)
If on January 1, 2008, the Department of Justice has not adopted rules
establishing the fee schedule and the delinquency fee amount described in ORS
128.670 as amended by section 1 of this 2007 Act, a charitable organization
shall pay a fee or delinquency fee in accordance with the provisions of ORS
128.670 that are operative on December 31, 2007, until such time as the
Department of Justice adopts final rules to establish a fee schedule and
delinquency fee amount under ORS 128.670 as amended by section 1 of this 2007
Act. On and after the effective date of final rules adopted by the Department
of Justice under ORS 128.670 as amended by section 1 of this 2007 Act, the
charitable organization shall pay a fee or delinquency fee in accordance with
the fee schedule established by the final rules.
(2) The Department of
Justice shall adopt final rules under ORS 128.670 as amended by section 1 of
this 2007 Act not later than December 31, 2008.
(3) This section is
repealed on January 2, 2010.
SECTION 12. This
2007 Act being necessary for the immediate preservation of the public peace,
health and safety, an emergency is declared to exist, and this 2007 Act takes
effect on its passage.
Approved by the Governor June 25, 2007
Filed in the office of Secretary of State June 27, 2007
Effective date June 25, 2007
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