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When it meets next month in New Orleans, the ACS Council will act on one petition to amend the society's constitution and bylaws and will select candidates to stand in this fall's election for ACS president-elect. If passed, the petition would result in increased funding for local sections and especially for divisions. It is a complicated petition, touching on many areas in the ACS constitution and bylaws. As some reflection of this complexity, this is the third time that ACS councilors will have seen some version of it in their agendas. The current petition, presented below, is the result of work done by the ACS Committee on Constitution & Bylaws in conjunction with petitioners. Petitioners say that local sections and divisions of ACS are currently underfunded and that the society will be less able to fulfill its missions if local sections and divisions are having financial difficulty. They aim to start to remedy this situation with a large infusion of money for local sections and divisions in 2004, and increase the amount of the infusion each year through 2007--and then hold it steady. For Divisions. In 2002, ACS alloted $377,843 to its divisions. Petitioners propose to increase that amount, which represents about 3% of member dues, to 4.5% of dues in 2004, 6% in 2005, 7.5% in 2006, and 9% in 2007 and thereafter. This new funding would be made available to divisions in proportion to the number of members of that division as well as on other factors. For Local Sections. Current allocations to the 189 local sections come to about $1.3 million annually, which is about 10% of ACS dues revenues. Petitioners are recommending an increase to 11% in 2004 and to continue at that level thereafter. Thus, total support for divisions and local sections would rise, by 2007, to 20% of member dues. A task force was appointed by ACS Board Chair Nina I. McClelland and 2002 ACS President Eli M. Pearce to determine a mechanism for funding the petition. The task force consisted of representatives from the ACS Divisional Activities Committee, the Local Section Activities Committee, the Society Committee on Budget & Finance (B&F), the Council Policy Committee, the Membership Affairs Committee, the Committee on Constitution & Bylaws, and the ACS Board of Directors. The ACS Board, at its December 2002 meeting, approved the funding mechanism that will swing into effect if the petition is passed by the council. It goes like this: By 2007, the cost of the petition will end up being $9.00 per member per year, $1.00 of which is to be realized through cost savings within ACS operations. The remaining $8.00 per member per year necessary to pay for this will be phased in starting in 2004 as an assessment to be paid by each dues-paying ACS member. This temporary, progressive surcharge will be levied on ACS member dues and will be in addition to normal dues increases. If the petition is passed, a $2.00 surcharge will be tacked onto member dues in 2004; a $4.00 surcharge in $2005; $6.00 in 2006; and $8.00 in 2007. ACS governance will be tasked with determining a suitable mechanism for funding after 2007. This plan will be reviewed annually by the ACS board to determine if surcharge levels can be reduced. The funding mechanism is explained more fully by B&F Chair James D. Burke on page 41 of this issue. In addition to acting on the petition, councilors will select two candidates for 2004 president-elect from a field of four nominees. The four, chosen by the Committee on Nominations & Elections, are William F. Carroll Jr., vice-president of Occidental Chemical Corp., Dallas; David F. Eaton, fellow, DuPont Corporate Ventures, Wilmington, Del.; Michael E. Strem, president, Strem Chemicals, Newburyport, Mass.; and Kathleen C. Taylor, director (retired), Materials & Processes Laboratory, General Motors. Each of the nominees is scheduled to be introduced to the council and to give a brief oral statement. Councilors then will choose two of the four by paper ballot. The two successful candidates--along with any candidates who may be on the ballot by petition--will vie in this fall's election for the three-year presidential succession, 2004 to 2006. Following are the text and associated reports of the petition scheduled for action at the ACS Council meeting in New Orleans. The meeting will be held on Wednesday, March 26, beginning at 8 AM, in the Morial Convention Center, LaLouisanne.
Petition for Division and We, the undersigned councilors of the American Chemical Society, hereby petition to amend the constitution and bylaws as follows (additions italicized; deletions in brackets): ARTICLE XII a. Local Sections shall receive a share of the annual Society dues of [its] Society members and Affiliates, as provided elsewhere in [Article XV of] this Constitution and as determined by provisions described in the Bylaws. ARTICLE XIII a. Divisions shall receive a share of the annual Society dues of Society members and Affiliates, as provided elsewhere in this Constitution and as determined by provisions described in the Bylaws. [a] b. A Division may assess dues and raise or collect funds to be expended for its own purposes in harmony with the provisions of the Charter of the Society and may have the entire management and control of said funds. [b] c. A Division may receive donations or bequests made to said Division, and may expend or invest the same in the interest of said Division at the discretion of its governing body. [c] d. Each Division shall prepare an annual report as specified in the Bylaws. ARTICLE XV The allotment to a Local Section or Division established during the Society's financial year shall be based on [its] the membership count of the Local Section or Division when established. Funds may be drawn in proportion to the fraction of the financial year remaining. A Local Section or Division established during a financial year shall receive funds for the following financial year also based upon the membership count when established. Sec. 5. The payment of the allotment to a Local Section or Division may be conditioned on the fulfillment of reporting requirements, as provided in the Bylaws.
BYLAW III d. Standing Committees of the Council (1) The names and duties of the Standing Committees of the Council shall inter alia include: (c) Committee on Divisional Activities (iv) promoting [interdivisional] both formal and informal cooperation and communication of Divisions with Local Sections and other Divisions, [both formal and informal]; (v) cooperating with the Committee on Meetings and Expositions, Society bodies related to publications, and other committees in areas of mutual interest; (vi) determining the formula for distribution of dues funds allocated to Divisions as provided elsewhere in these Bylaws and conveying that formula for approval by Council; [(vi)] (vii) acting for the Council, in collaboration with the Committee on Constitution and Bylaws, in approving the affiliation of Divisions with other technical organizations. (d) Committee on Local Section Activities (i) studying and making recommendations to the Council concerning [problems of] Society policy affecting the [activities] interests of Local Sections; (ii) assisting Local Sections in coordinat-ing their efforts with Society and Division activities; (iii) promoting, both formal and informal cooperation and communication of Local Sections with Divisions and other Local Sections; [(ii)] (iv) exploring possibilities of assisting Local Sections in enriching their program of activities; [(iii)] (v) receiving reports on and rating the effectiveness of Local Section activities; [(iv)] (vi) receiving, considering, and making recommendations to the Council concerning petitions for chartering new Local Sections and for changes in territory or name; [(v)] (vii) making recommendations to the Council concerning combining or dissolving Local Sections; [(vi)] (viii) studying the needs for financial support of local activities in relation to the Society's program and making recommendations to the Council concerning proper allotments for this purpose; (ix) determining the formula for distribution of dues funds allocated to Local Sec-tions as provided elsewhere in these Bylaws and conveying that formula for approval by Council; [(vii)] (x) acting for the Council in resolving any member's appeal from adverse action on a request for assignment to a Local Section in accordance with the provisions of these Bylaws.
BYLAW VII a. Dues funds allocated by provisions elsewhere in these Bylaws for the support of Local Sections shall be distributed in accordance with procedures developed by the Committee on Local Section Activities and approved by Council. The Committee on Local Section Activities shall review the procedures and may present recommendations for changes at any spring meeting of the Council. Once every three years, or earlier if requested by the Committee on Local Section Activities, Council shall at its spring meeting review these procedures and provide for such changes as it shall deem appropriate. This distribution shall be contingent upon receipt of the annual report prior to a forfeiture date as specified by the Committee on Local Section Activities and shall include a base allotment, an allotment tied to total membership, and distributions based on other factors such as Society initiatives, strategic planning and Board directives. [Apportionment of funds to Local Sections shall be made on a sliding scale, as follows: a. Each Local Section, irrespective of size, shall receive a basic allotment. For 1986 the basic allotment shall be $2400. For 1987 and each succeeding year, the basic allotment shall be calculated by multiplying the value of the basic allotment established for the preceding year by the same factor as that used to calculate national dues for the same year, with amounts rounded to the nearest ten dollars. At its spring meeting, the Council may set the basic allotment for the succeeding year at that calculated amount or at the amount of the previous year's basic allotment or at some intermediate dollar amount divisible by ten. Should the Council not act, the basic allotment shall become the rounded calculated amount. However, no change in the basic allotment shall exceed the proportionate change in national dues for that year. The basic allotment so determined shall be announced to the Sections by the Treasurer of the Society by mail and in the official organ of the Society at least six months before the effective date of each change. b. Each Local Section shall receive an additional allotment based on the sum as of December 31 of the second preceding year of the number of its members and the number of National Affiliates assigned to it, in accordance with the following schedule: For 1986 $3.00 per member and National Affiliate for the first 2000; $2.00 per member and National Affiliate for all those over 2000. For 1987 and each succeeding year, the per capita allotment shall be calculated by multiplying the value of the per capita allotment established for the preceding year by the same factor as that used to calculate national dues, with amounts rounded to the nearest cent. The additional allotment, to be added to the basic allotment, shall be rounded to the nearest dollar.] Sec. 9. a. The Treasurer of a Local Section shall forward to the Executive Director of the Society an [application] annual request for the funds to which the Section is entitled under Sec. 8 of this Bylaw. [Such application may request payment of all or part of the funds at any one time, but all requests shall be made prior to November 30 of the year for which apportionment of funds has been made, and no application shall be valid until the annual report required by Sec. 11 has been received by the Society.] Upon receipt of such [valid application] annual request, the Executive Director shall make payment to the Treasurer of the said Local Section, except that the Executive Director may once annually transmit ten percent of the allotment upon receipt of a statement of need.
BYLAW VIII a. Dues funds allocated by provisions elsewhere in these Bylaws for the support of Divisions shall be distributed in accordance with procedures developed by the Committee on Divisional Activities and approved by Council. The Committee on Divisional Activities shall review the procedures and may present recommendations for changes at any spring meeting of the Council. Once every three years, or earlier if requested by the Committee on Divisional Activities, Council shall at its spring meeting review these procedures and provide for such changes as it shall deem appropriate. This distribution shall be contingent upon receipt of the annual report prior to a forfeiture date as specified by the Committee on Divisional Activities and shall include a base allotment, an allotment tied to total membership, and distributions based on other factors such as programming, Society initiatives, strategic planning and Board directives. [a. Each Division, irrespective of size, shall receive a basic annual allotment. For 1993 the allotment shall be $500. For 1994 and each succeeding year, the basic allotment shall be calculated by multiplying the value of the basic allotment established for the preceding year by the same factor as that used to calculate national dues for the same year, with amounts rounded to the nearest ten dollars. At its spring meeting, the Council may set the basic allotment for the succeeding year at that calculated amount or at the amount of the previous year's basic allotment or at some intermediate dollar amount divisible by ten. Basic annual Division allotments set by Council for each year must use the same factor as used for setting Local Section allotments for the same year. Should the Council not act, the basic allotment shall become the rounded calculated amount. However, no change in the basic allotment shall exceed the proportionate change in national dues for that year. The basic allotment so determined shall be announced to the Divisions by the Treasurer of the Society by mail and in the official organ of the Society at least six months before the effective date of each change. b. Each Division shall receive an additional yearly allotment based on the total number, as of December 31 of the second preceding year, of paid members of the Division and of paid National Affiliates. In 1993 this additional annual allotment shall be calculated by multiplying the foregoing sum by $1.00. For 1994 and each succeeding year, the per capita allotment shall be calculated by multiplying the value of the per capita allotment established for the preceding year by the same factor as that used to calculate national dues, with amounts rounded to c. The Divisions shall receive further allotments for participation and programming at national meetings. The total dollar value of these allotments shall be twice the amount distributed under Sec. 6,a and 6,b of this Bylaw and shall be derived from national meetings and expositions income. Half of this total amount shall be distributed to the Divisions as seed money for future participation in national meetings and half shall be distributed based on the success of their programs in attracting registrants to national meetings for the previous calendar year. The procedure for determining the details of funds distribution under this section shall be developed by the Council Committee on Divisional Activities and approved by the Council.] [d] b. The Treasurer of a Division shall forward to the Executive Director of the Society an [application] annual request for the funds to which the Division is entitled under Sec. 6,a [b, and c] of this Bylaw. [Such application may request payment of all or part of the funds at any one time, but no application shall be valid until the annual report required by Sec. 7,a of this Bylaw has been received. All requests shall be made prior to November 30 of the calendar year for which apportionment of funds has been made.] Upon receipt of such [a valid application] annual request, the Executive Director shall make payment to the Treasurer of the said Division except that [. In the absence of a valid application,] the Executive Director may once annually transmit ten percent of the allotment upon receipt [from the Division] of a statement of need. Renumber c. to e.
BYLAW XII b. An annual allocation from Society funds equivalent to 20% of the Society dues revenue for the second preceding year shall be made c. All funds collected as Society dues revenue are obligated for Local Section and Division support use up to the amount of the allocation. The Society must distribute allocations to each Local Section and Division, unless a Local Section or Division is not in compliance with reporting requirements. Unclaimed allocations will stay in either the Local Section or Division fund pool for redistribution in the current year. The formula for such redistribution shall be at the discretion of the Committee on Local Section Activities or the Committee on Divisional Activities, respectively. Renumber b–j as d–l.
EFFECTIVE DATE The provisions of this petition shall take effect according to the attached proviso.
EXPLANATION The proposed bylaws changes are in response to the recommendations in the report of the Presidential Task Force on Society Support to Divisions & Local Sections, chaired by Paul H. L. Walter, and submitted to Ed Wasserman in October of 2000. The findings and recommendations of the task force were primarily that both divisions and local sections face financial hardship; divisions are funded at a lower level than local sections per capita and the distribution between funds to divisions and local sections should be adjusted to achieve a more equitable distribution; increased support for divisions must not come at the expense of local sections; divisions and local sections should collaborate more; and the specific dollar amounts should be removed from the bylaws to make allocation adjustments easier. The proposed bylaws changes respond to the recommendations with a proposed increase in the allocations to both divisions and local sections. The changes also attempt to treat division and local section units similarly, while recognizing their differences. To accomplish this, the total amount of money allocated to divisions and local sections will be set to a percentage (20%) of individual members' dues paid to the society. This allows the contributions to these units to change with the total amount of ACS dues collected. It was originally proposed that the split in funds between the two units would depend on the percentage of total memberships of each. In the original petition, this percentage was to be redetermined each year. However, it was made clear at the Orlando meeting that many councilors were not in favor of this approach. Consequently, the petition was rewritten to incorporate the percentages for the year 2000, which would apply to the allocation for the year 2004 and beyond. For the year 2000, the percentage is 55% for Local Sections and 45% for Divisions. In the proposed bylaw changes the specific allocation of funds to divisions and local sections are removed from the bylaws, in Bylaw VII, Sec. 8, a, b, and Bylaw VIII, Sec. 6, a and b. This was done to make allocation adjustments easier. However, this does not mean that the allocation will not be based in large part on a basic allotment for each division and local section and an allotment per member of each group. Under the proposed bylaws, the Committee on Divisional Activities and the Committee on Local Section Activities will determine the mechanism for distribution of all allocations, which will be approved by council. We anticipate that, initially, the distribution mechanism would be similar to what is currently written in the bylaws, with contributions set at a basic allotment plus an additional amount per member. Additional distributions based on other factors of importance to society objectives would constitute a smaller fraction of the allocation. Changes in the procedures would require council approval, with a council review every three years. The proposed bylaws also provide for promotion of division and local section cooperation. The proposed deletion of Bylaw VIII, Sec. 6, c removes from the bylaws the allotments that divisions receive for participation and programming at national meetings. However, specific allocation of national meeting funds could put the society in the category of a "major supporter" in terms of the Internal Revenue Service (IRS) as described below. Thus, although the Committee on Divisional Activities intends to include a component for participation and programming at national meetings in its allocation process, the funds for that component must come from society dues and not from national meeting funds. The new Bylaw XII, Sec. 3, c, was added to address concerns about the public support test imposed by the IRS on not-for-profit organizations. Currently, for some divisions and local sections, funding from the society may place the society in the category of a "major supporter" (as defined by the IRS) of that division or local section. This designation could have adverse ramifications to these society units. Increased funding from the society could also affect the divisions and local sections. On the other hand, a portion of the society membership dues expended on division and local section support would constitute "public support" (as defined by the IRS) if the funds collected on behalf of divisions and local sections, as part of the Society membership dues, be accounted for and held separately from the remainder of the membership dues. It is also necessary that the bylaws indicate that the monies being collected on behalf of the local sections and divisions are absolutely obligated to be used for division and local section support, up to the amount of the allocation as stated in the bylaws with no discretion allowed to the society not to pay those funds unless a division and local section is not in compliance with its reporting requirements. To receive its share of the allocations, divisions and local sections must have submitted an annual report to the society by the specified deadline for the previous year. To maintain the policy's effectiveness, undistributed monies forfeited by lack of this required reporting by a division and local section would go back into the pool and be distributed to eligible units. An example rough guide to the costs of the proposed changes, if they were in affect for FY 2002, is based on FY 2000 membership figures, and is as follows: For 2002, 20% of the total dues collected would be roughly $2,602,000. This amount would be split between local sections (55% = 1,431,000) and divisions (45% = 1,171,000). For comparison, the 2002 allocation for local sections was $1,317,605 and for divisions was $377,843. The increase in total allocation would be $906,552 which by itself is a very large number. However, when compared with the total assets of the society or the annual expense budget of $390,000,000, this is a relatively small fraction. Petitioners believe that increased financial support for divisions and local sections is indeed a worthy use of society money and feel that the board of directors of the society can identify the funds to support these units. If enacted by council, the amendments to the constitution would be submitted to the membership for ratification.
SIGNED: V. Dean Adams, Bruce Ault, Lawrence Barton, Frank D. Blum, Theodore M. Brown, Ben B. Chastain, Dean W. Cooke, William H. Daly, Margaret (Lissa) A. Dulany, Edward M. Eyring, John W. Finley, Ruth Ann Hathaway, George E. Heinze, Roland F. Hirsch, Warren D. Hull Jr., Larry K. Krannich, Alvin L. Kwiram, Melanie J. Lesko, Will Lynch, Les W. McQuire, John G. Nikelly, Attila E. Pavlath, Eli M. Pearce, Joseph Peterson, Theodore Provder, Elsa Reichmanis, Yorke E. Rhodes, Donald C. Songstad, James Visintainer, Steven W. Yates
This petition has been referred to the Council Policy Committee (committee having primary substantive responsibility), the Committee on Membership Affairs, the Committee on Meetings & Expositions, the Committee on Divisional Activities, the Committee on Local Section Activities, the Society Committee on Budget & Finance, and the Committee on Constitution & Bylaws.
FINAL STATEMENT OF FINANCIAL IMPACT In the analysis of the petition and considering the proviso, the Budget & Finance Subcommittee on the Financial Impact of Constitution & Bylaw Changes finds that it will have a significant negative impact on the finances of the society ($100,000--$500,000) the first year of implementation and, due to the progressive nature of the distributions, the full impact of the petition will not be realized until the year 2007 at which time this petition will have, and maintain perpetually, an extraordinary negative impact on the finances of the society (greater that $1 million). Also, the subcommittee requests that in the fifth paragraph of the explanation section, the phrase, "it is necessary that these funds be" be changed to read, "it may be necessary that these funds be" such that it reads, "For a portion of dues to be expended on local section and division support, and be tax exempt, it may be necessary that these funds be segregated from the total membership dues into a separate bank account."
FINAL REPORT OF THE COMMITTEE ON CONSTITUTION & BYLAWS The Committee on Constitution & Bylaws has examined the petition and finds that it is legal and consistent with other provisions of the society's documents. In addition, this committee has examined how the proposed petition meets the stated intents of the petitioners and has found that it does meet the stated intents of the petitioners. A few minor editorial and clarity problems were found but they are correctable without altering the original intent of the petitioners. The intent of the petitioners is to implement the recommendations of the Presidential Task Force on Support to Divisions & Local Sections with regard to funding. In order to accomplish this, the petition includes amendments to both the articles of the ACS Constitution and to the bylaws of the society. The petition provides for increases in total allocations by changing the method for determining individual allotments for divisions and local sections. It removes from the bylaws, the fixed formulas for funding individual divisions and local sections and replaces it with fixed percentages. The amendments propose that the Divisional Activities Committee and Local Section Activities Committee, with the approval and periodic review by council, determine individual allotments for divisions and local sections respectively. Comments and suggestions from committees, petitioners, and other interested members on the substance of the petition should be directed to the Council Policy Committee, which has primary substantive responsibility for the petition or the Committee on Constitution & Bylaws. Charles E. Thomas, 2002 chair
PROVISO: RELATED TO IMPLEMENTATION OF THE PETITION FOR DIVISION AND LOCAL SECTION SUPPORT For the year 2003, the total allotments to local sections and divisions shall be determined by the method in effect prior to adoption of the bylaw changes. For the year 2004 and thereafter, the total allotments to local sections shall be increased to the amount set by the new annual allotment method. This amount is 11% of the society dues revenue for the second preceding year. For the year 2004, the total allotments to divisions to shall be equal to the allotments for the year 2003 increased by an amount equal to 25% of the difference between the allotments calculated by the new annual allotment method and the actual 2003 allotments. This amount is approximately 3.0% of the society dues revenue for the second preceding year. For the year 2005, the total allotments to divisions shall be equal to the allotments for the year 2003 increased by an amount equal to 50% of the difference between the allotments calculated by the new annual allotment method and the actual 2003 allotments. This amount is approximately 5.0% of the society dues revenue for the second preceding year. For the year 2006, total allotments to divisions shall be equal to the allotments for the year 2003 increased by an amount equal to 75% of the difference between the allotments calculated by the new annual allotment method and the actual 2003 allotments. This amount is approximately 7.0% of the society dues revenue for the second preceding year. For the year 2007 and thereafter, the total allotments for divisions shall be increased to the amount set by the new annual allotment method. This amount is 9% of the society dues revenue for the second preceding year. |
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