SB 177 – AS INTRODUCED
2011 SESSION
03/09
SENATE BILL 177
AN ACT relative to training of directors and officers of nonprofit corporations.
SPONSORS: Sen. Odell, Dist 8; Sen. Carson, Dist 14; Rep. Day, Hills 7
COMMITTEE: Executive Departments and Administration
This bill requires that every publicly supported voluntary corporation ensure that its directors and chief executive officer and chief financial officer receive annual management training.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
11-1044
03/09
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eleven
AN ACT relative to training of directors and officers of nonprofit corporations.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Purpose. The purpose of this act is to safeguard public funds that are received and expended by nonprofit corporations and to deter waste, fraud, and abuse of such funds. This act also is intended to safeguard private funds prepaid to nonprofit corporations for the provision of child care and educational services. Nonprofit corporations have a significant role in the provision of care and supportive services to the citizens of New Hampshire and in the process usually receive and expend federal, state, and local public moneys. It is the opinion of the general court that the members of the boards of directors and the key administrative staff of such corporations need to be aware of their fiduciary obligations and authority and to be held accountable for the proper discharge thereof, with a particular focus on the appropriate use of public funds. This act also is intended to provide a remedy for instances of misuse or misappropriation of public funds within nonprofit corporations.
2 New Section; Voluntary Corporations; Training Requirements. Amend RSA 292 by inserting after section 6-b the following new section:
292:6-c Training Requirements; Reporting; Compliance.
I. Every publicly supported voluntary corporation shall ensure that all members of its board of directors and its chief executive officer and chief financial officer, if any, shall receive training on an annual basis with respect to the fundamental management and administrative requirements for nonprofit and charitable organizations. Under this section training shall be conducted by a person or entity independent from and not connected to the corporation whose representatives are being trained. Training shall be of at least 4 hours duration and shall include, but not be limited to, instruction on fiduciary responsibilities, financial controls, relative responsibility and authority of boards of directors and corporation employees, ethics, and federal and state laws and regulations governing nonprofit corporations. Any person assuming a position covered by this section shall complete the required training within 4 months of assuming such position. A nonprofit corporation’s board of directors may defer, for no more than one year, training for any person who received the required training during the prior year.
II. This section shall apply to every publicly supported voluntary corporation. For purposes of this section, publicly supported means that within the prior year the corporation received at least $250,000 in funds in the aggregate from all units of government, federal, state, and local. Receipt of funds shall include payments made under the provisions of contracts, grants, and provider agreements or similar means.
III. Every voluntary corporation covered by this section shall report annually to the New Hampshire department of justice, division of charitable trusts on its compliance with the requirements of this section. The report shall include information on the persons required to be trained, the person or entity providing the training, and the date, duration, and subject matter of the training provided and shall be in such form as determined by the division of charitable trusts.
IV. The director of the division of charitable trusts may impose a penalty on any publicly supported voluntary corporation for each failure to comply with a provision of this section. Penalties may include fines up to $5,000 for each instance of noncompliance and disqualification or debarment from eligibility of a publicly supported nonprofit corporation to receive public funds for a period not to exceed 2 years. The division of charitable trusts shall adopt administrative rules pursuant to RSA 541-A regarding the policy and procedures for penalties under this section.
3 Effective Date. This act shall take effect 60 days after its passage.