74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 954
 
                           A-Engrossed
 
                         Senate Bill 109
                  Ordered by the Senate April 5
            Including Senate Amendments dated April 5
 
Printed pursuant to Senate Interim Rule 213.28 by order of the
  President of the Senate in conformance with presession filing
  rules, indicating neither advocacy nor opposition on the part
  of the President (at the request of Attorney General Hardy
  Myers for Department of Justice)
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
 
    { - Permits Attorney General to set by rule fees due from
charitable organizations. - }   { + Requires Department of
Justice to establish graduated fee schedule for charitable
organizations based on receipts and income. + } Permits Attorney
General to charge delinquency fees and impose civil penalties on
charitable organizations that fail to file required reports or
pay required fees after 90 days.
  Declares emergency, effective on passage.
 
                        A BILL FOR AN ACT
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 Oregon:
  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 Oregon shall be subject to the fee due
under this paragraph. - }
    { - (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. + }
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