Senate Bill No. 704
(By Senators Kessler and Sprouse)
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[Introduced February 19, 2007; referred to the Committee on the
Judiciary.]
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A BILL to amend and reenact §31E-1-129 of the Code of West
Virginia, 1931, as amended, relating to nonprofit corporations
generally; prohibiting destruction, alteration or
falsification of documents; establishing whistle-blower
protections; and providing criminal penalties.
Be it enacted by the Legislature of West Virginia:
That §31E-1-129 of the Code of West Virginia, 1931, as
amended, be amended and reenacted to read as follows:
ARTICLE 1. GENERAL PROVISIONS.
§31E-1-129. Penalty for signing false document; penalty for
altering documents; protection for employees who
provide evidence of fraud; and penalty for taking
retaliation against informants.
(a) Any person who signs a document he or she knows is false
in any material respect and knows that the document is to be delivered to the Secretary of State for filing is guilty of a
misdemeanor and, upon conviction thereof, shall be fined not more
than one thousand dollars or confined in
the county or regional
jail not more than one year, or both.
(b) Any officer, employee, member of the board of directors or
agent of a nonprofit corporation who knowingly alters, destroys,
mutilates, conceals, covers up, falsifies or makes a false entry in
any record, document or tangible object with the intent to impede,
obstruct or influence the investigation or proper administration of
any matter with the jurisdiction of any department or agency of the
State of West Virginia or any case filed in any court, or in
relation to or contemplation of any such matter or case, is guilty
of a misdemeanor and, upon conviction thereof, shall be fined not
more than one thousand dollars or confined in jail for not more
than one year, or both.
(c) Every nonprofit corporation shall have a written,
mandatory document retention and periodic destruction policy, which
includes guidelines for handling electronic files and voice mail;
back-up procedures, archiving of documents and regular check-ups of
the reliability of the system. Electronic documents and voice mail
messages have the same status as paper files in litigation-related
cases.
(d) Any officer, employee, member of the board of directors or
agent of a nonprofit corporation who knowingly discharges, demotes,
suspends, threatens, harasses or in any other manner discriminates against an employee in the terms and conditions of employment
because of any lawful act done by the employee, such as reporting
suspected illegal activities within the corporation or board of
directors is guilty of a misdemeanor and, upon conviction thereof,
shall be fined not more than one thousand dollars or confined in
jail not more than one year, or both.
(e) A nonprofit corporation shall develop, adopt and disclose
a formal process to deal with complaints, including the
establishment of a confidential and anonymous mechanism to
encourage employees and volunteers to report any inappropriateness
within the entity's financial management and prevent retaliation.
Management shall take employee and volunteer complaints seriously,
investigate the situation and correct any problems or justify why
corrections are not necessary.
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(NOTE: The purpose of this bill is to establish procedures
related to nonprofit corporations that conform to the federal
Sarbanes-Oxley Act of 2002.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.)
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