An Act to Revoke the Tax-exempt Status of an Organization That
Maine Legislature, Session 132, LD 1499
Committee: Taxation
Sponsors: MACIAS

Legislative Document
No. 1499
H.P. 983
House of Representatives, April 8, 2025
An Act to Revoke the Tax-exempt Status of an Organization That 
Fails to Report Sexual Assaults Committed by Employees, Board 
Members, Volunteers or Affiliates
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative MACIAS of Topsham.
Cosponsored by Representatives: OSHER of Orono, RAY of Lincolnville.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA c. 933 is enacted to read:
CHAPTER 933
NONPROFIT ORGANIZATION ACCOUNTABILITY
§7351.  Definitions
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings.
1.  Failure to report.  "Failure to report" or "fails to report" means the willful or 
negligent failure to report allegations of sexual assault involving a tax-exempt 
organization's employees, board members, volunteers or affiliates to the appropriate law 
enforcement authorities, as required by state or federal law.
2.  Sexual assault.  "Sexual assault" means any criminal act that constitutes a sexual 
offense under state or federal law, including, but not limited to, sexual assaults as prohibited 
pursuant to Title 17-A, chapter 11 and sexual exploitation of minors as prohibited pursuant 
to Title 17-A. chapter 12.
3.  Tax-exempt organization.  "Tax-exempt organization" means an entity that 
qualifies for tax-exempt status under the Code, Section 501(c), including, but not limited 
to, a religious, charitable, educational or nonprofit organization.
§7352.  Mandatory reporting compliance
1.  Compliance.  A tax-exempt organization shall comply with all state and federal 
laws requiring the reporting of allegations of sexual assault involving that tax-exempt 
organization's employees, board members, volunteers or affiliates to law enforcement 
authorities.
2.  Reporting.  A tax-exempt organization shall implement and enforce policies to 
ensure that all allegations of sexual assault are reported promptly and transparently.
§7353.  Penalty for noncompliance
1.  Loss of tax-exempt status; determination and report.  If a tax-exempt 
organization fails to report allegations of sexual assault on 2 separate occasions within a 
10-year period, that organization is no longer entitled to tax-exempt status in this State.  
Each instance of failure to report must involve a distinct allegation of sexual assault and 
must be substantiated by a court of law or administrative proceeding.  The court or fact 
finder shall report its findings to the bureau.
2.  Revocation process.  Upon being notified pursuant to subsection 1 that a tax-
exempt organization has failed to report allegations of sexual assault on at least 2 separate 
occasions within a 10-year period, the bureau shall initiate proceedings to revoke that 
organization's tax-exempt status for all activities conducted within the State.  The bureau 
shall inform the tax-exempt organization in writing of its decision and provide the 
organization an opportunity to appeal the decision within 30 days.
§7354.  Record keeping and public reporting
1.  Record keeping.  A tax-exempt organization shall maintain records of all reported 
allegations of sexual assault and make those records available for audit by law enforcement 
agencies or other designated authorities upon request.
2.  Public reporting.  A tax-exempt organization that is found in violation of this 
chapter shall publicly disclose the details of its failure to report, including any corrective 
actions taken.
§7355.  Reinstatement of tax-exempt status
An organization whose tax-exempt status has been revoked pursuant to section 7353 
may apply for reinstatement of tax-exempt status after a period of 5 years.  In order for tax-
exempt status to be reinstated, the organization must demonstrate:
1.  Compliance.  Full compliance with mandatory reporting pursuant to section 7352;
2.  Policies.  Implementation of comprehensive child protection policies and training 
programs; and
3.  Cooperation.  Cooperation with law enforcement investigations related to prior 
failures to report.
§7356.  Rules
The bureau shall adopt rules to implement this chapter, including the process for 
notification, appeal and requests for reinstatement of tax-exempt status.  Rules adopted 
pursuant to this section are routine technical rules pursuant to Title 5, chapter 375, 
subchapter 2-A.
SUMMARY
This bill requires an organization that is tax exempt pursuant to the Internal Revenue 
Code, Section 501(c), including a religious, charitable, educational or nonprofit entity, to 
report all allegations of sexual assault involving that organization's employees, board 
members, volunteers or affiliates to law enforcement authorities.  "Sexual assault" is 
defined as any criminal act that constitutes a sexual offense under state or federal law.
If a tax-exempt organization fails to report at least 2 separate allegations of sexual 
assault within a 10-year period, as determined by a court or fact finder in an administrative 
hearing, that must be reported to the Department of Administrative and Financial Services, 
Bureau of Revenue Services, which is required to revoke the organization's tax-exempt 
status for all activities conducted within the State and provide the organization with the 
opportunity to appeal that revocation.
An organization may apply for reinstatement of tax-exempt status after 5 years by 
demonstrating full compliance with reporting laws, implementation of child protection 
policies and training programs and cooperation with law enforcement investigations related 
to prior failures to report.