Bill > H3516

This bill, titled "Regulating compensation of board members for public charities," proposes to amend Chapter 12 of the General Laws by inserting a new section, 8F 1/2, which will regulate the compensation of board members for Massachusetts-based public charities. "Compensation" is defined as anything given for services, excluding reasonable reimbursement for expenses. An "independent officer, director or trustee" is someone who serves on the board but is not an employee of the charity. A "Massachusetts based public charity" is an organization incorporated or organized in Massachusetts, or one that primarily operates in the state even if organized elsewhere. Under the proposed law, these charities cannot pay their independent board members for their service without the approval of the Director of the Division, who will establish guidelines for granting such approval. The criteria for approval will acknowledge that board service is typically voluntary and will require a strong showing that compensation is necessary to attract and keep qualified individuals. If approved, the compensation must be reasonably necessary for the charity's purposes, and the Director can revoke approval if compensation is found to be excessive. This new section will become effective six months after the bill's enactment.