UPDATE JUNE 1, 2011, Chicago
Yesterday we posted on legislation (the budget) that passed the Massachusetts Senate on a fast track basis. This legislation was brought to our attention by members of the Massachusetts bar. A staff member of the Massachusetts Legislature confirmed that the legislation we were reviewing had been adopted by the Senate. That confirmation was consistent with what was published on the Massachusetts Legislature's web site.
We are now hearing that something else may have superseded the amendment we wrote about. This is the problem when legislators try to gain advantage by fast tracking legislation and do not hold hearings (at least that is what we have been told). We have now spoken with someone who has spoken to a representative from the Senate Ways & Means Committee, who informed our source that Senate Amendments 204.2 and 209 have replaced Senate Amendment 204. If that is true, it certainly is good news. Amendment 204.2 provides as follows:
SECTION____. Notwithstanding any general or special law to the contrary the attorney general may review the compensation of any officer, director or senior manager acting in an executive capacity of a public charity required to be registered under section 8E and to file annual reports under section 8F to consider the appropriate compensation levels given the nature and mission of the public charity. In so doing, the attorney general may examine the compensation standards of not-for-profit public charities, both within the commonwealth and nationwide. For the purposes of this section, compensation shall include salary, bonus payments, incentive payments, deferred compensation, severance payments, below market rate loans, and the lease or rental of real estate, personal property or any vehicle. The attorney general shall report the findings of this review, which may include recommendations about excessive compensation, to the clerks of the senate and house of representatives of the great and general court by December 31, 2011.
On the other hand, Amendment 209 does place limits on board member compensation. In part, it provides:
b) No Massachusetts based public charity required to be registered under section 8E and to file annual reports under section 8F, shall provide compensation to any independent officer, director or trustee for service as such independent officer, director or trustee except with the approval of the Director in accordance with the provisions of this section.
“Massachusetts based public charity”, a public charity incorporated or otherwise organized in Massachusetts or, if incorporated or organized outside of Massachusetts, that primarily conducts its business in Massachusetts.
The definitional provision would seem to prevent Massachusetts charities from avoiding the provision by reincorporating outside of Massachusetts but leaving their operations in Massachusetts otherwise untouched.
Before commenting further on substance, we will wait to receive confirmation that this is the only amendment that passed--in another phone call our source was told all three amendments had passed.
We offer no apologies. When spokespeople for a legislative body are unable to tell a straight story, its their problem, not ours, particularly when legislators are working under cover of night, so to speak. This is truly the story of the gang who couldn't shoot straight.
P.S. The language we did report on didn't come out of nowhere and you can bet, if not enacted now, that the language will still be on the computer, ready for resurrection at the next opportune time.
DATELINE: May 31, 2011, Chicago
You see that woman
Who walks the street
You see that police
Upon his beat
But when the Lord gets ready
You gotta move
You gotta move
The Rolling Stones, You Gotta Move, on Sticky Fingers (originally penned by Mississippi Fred McDowell)
The Massachusetts State Senate approved legislation that would cap the pay of officers, directors acting in an executive capacity, and senior managers of Massachusetts nonprofits at $500,000 per annum if the organization receives more than $1,000,000 in gross revenues. Compensation is defined as "salary, bonus payment, inventive payments, deferred compensation, severance payments, below-market rate loans, and the lease or rental of any vehicle." The bill also prohibits a nonprofit from paying compensation to directors.
If finally signed into law, this legislation will pose all sorts of problems for larger universities, hospitals, cultural institutions, and other nonprofits. Massachusetts residents will see a decline...
