Corporate Matters Corporate Matters Corporate Matters

Beginning in the September 2005 issue of The New Vision, the Diocese of Tucson publication, and continuing through the publication's February 2006 issue, Bob Scala, a member of the Diocese of Tucson Parish Incorporation Study Committee and chair of the Committee's Presentation Subcommittee, wrote monthly articles explaining the "who, what, when, where, why and how" of parish incorporation. The articles chart the progress of the incorporation process.



2005: September October November December

2006: January February


September 2005

Separate Incorporation: What does it mean for parishes?


On or around Sept. 25, barring the unexpected, the Diocese of Tucson will reach the "effective date" of its reorganization plan and officially will emerge from Chapter 11 federal bankruptcy protection.
The reorganization of the Diocese is detailed in the plan approved by creditors and confirmed by U.S. Bankruptcy Judge James W. Marlar last July.
Under the plan, the Diocese is "specifically authorized and directed to transfer legal title to the Parish Real Property to the Parish owning such Parish Real Property upon its formation as a religious non-profit corporation."
For the past 10 months, hopeful of and anticipating confirmation of the reorganization plan, a "Parish Incorporation Committee" comprised of clergy and laity under the direction of Father Al Schifano, Moderator of the Curia, developed a model plan of incorporation, with articles of incorporation, by laws and related agreements. 
After review by the diocesan Presbyteral, Finance and Pastoral councils and with the unanimous recommendation of those councils for approval, Bishop Gerald F. Kicanas approved the model plan, which he has said has the intent of allowing the Diocese and the parishes to reflect in civil law the separate identity of parishes under canon law.
With the reaching of the effective date of the reorganization plan, the next step toward separate incorporation of each of the 74 parishes in the Diocese will be a series of presentations in each vicariate (region of the Diocese) during October.
At each presentation, all priests, deacons, sisters, members of finance and parish councils, parish staff and any and all parishioners who have an interest will be introduced to the "nuts and bolts" of parish incorporation: what does incorporation mean for a parish; what stays the same and what will be different; and when will incorporation take place.
The presentation team will include the chair of the Presentation Subcommittee of the Parish Incorporation Committee, a civil lawyer, a canon lawyer and other diocesan representatives.
I urge you to attend the presentation for the vicariate in which your parish is located.
It will be an opportunity for you to become informed about this important effort.
The incorporations of parishes are slated to take effect over four months, beginning in November.
I will be reporting each month in The New Vision on the progress of the incorporations.

October 2005

Reorganizing the Diocese. Parish Incorporation Moves Ahead


The effective date for its Plan of Reorganization has been reached and the Diocese of Tucson has emerged from Chapter 11 bankruptcy protection. 
It took just one year, but under the guidance of U.S. Bankruptcy Judge James W. Marlar and with the sincere efforts of all parties, the Chapter 11 bankruptcy has been concluded and the Diocese is no longer under the oversight of the U.S. Bankruptcy Court. 
The Diocese is moving forward rapidly to implement the Parish Incorporation phase of the Plan. 
Preliminary documents are in preparation by legal counsel, and Sister Rosa Maria Ruiz, C.F.M.M., the diocesan Superintendent of Schools, is ensuring the orderly transition of required certifications and licenses for schools.
Information presented here in The New Vision and in local news media has created much conversation in the parishes about incorporation. 
A good attendance is anticipated this month at the vicariate presentations at which priests, deacons, sisters, Parish Councils, Finance Councils, parish staff and all interested parishioners will be introduced to the details of parish incorporation.
As parishioners become more aware of the upcoming incorporations, some interesting questions have emerged. 
Among these has been the issue of governance:
Will we be "congregationalist" parishes once incorporated? 
The answer to that question is "No."
"Congregationalism" is a form of church governance associated with some non-Catholic denominations in which each local congregation is autonomous in governance and matters of faith and beliefs. 
The individually incorporated parishes in the Diocese of Tucson, while they have legal autonomy in civil matters and certain canonical matters, will not be autonomous from canon law nor from the ecclesiology (the nature, constitution, mission, functions, etc.) of the Roman Catholic Church.
They must comply with canon law and also must conform to the ecclesiology of the Church. The Church has taught and Vatican II reinforced the concept of subsidiarity. That is, what can be best done at the local level ought to be done there.
That is why dioceses are individual corporations and parishes also should be individual corporations.
In simple terms, our ecclesiology states that the Church was founded by Christ, is empowered by the Holy Spirit and led by the Apostles and their successors, in union with the Pope, the Vicar of Christ. 
Our Bishop is a successor of the Apostles, responsible here in the Diocese of Tucson for his flock, and he is aided in this responsibility by pastors who shepherd their respective parishes.
This will not change because of the incorporation of a parish.
Another frequently asked question is, "Why incorporate?"
Here, too, the answer is quite clear. 
The Diocese wishes to recognize in civil law, the law of the State of Arizona, what has been abundantly clear in church law (canon law): parishes are separate entities from the Diocese. Canon law itself urges the Local Church to conform to the civil law. In fact, the Vatican has recommended the separate incorporation of parishes for the last 100 years!
In this process of incorporation, each parish will hold title to all its property. Until incorporation, the title to parish property is held by the Bishop in trust for the parish. 
An additional and important aspect of the incorporation is the expectation that each parish will establish and maintain functioning Parish and Finance councils by which the laity of the parish will provide the pastor with sound advice and counsel.
It is hoped that the vicariate presentations will clear up any lingering questions regarding the purpose and process of parish incorporation.
Please attend, and please bring your questions!

November 2005

Reorganizing the Diocese. Parish incorporation to begin this month

Detailed presentations on the parish incorporation process have been made in all 11 vicariates in the Diocese of Tucson, setting the stage for the individual incorporation of parishes to begin formally this month.
From Safford to Yuma and from Miami to Sierra Vista, members of the Parish Incorporation Presentation Team spoke in October to more than 1,000 priests, deacons, religious women and laity of the Diocese about the background leading up to incorporation and plans for the 74 parishes in the Diocese to become individual non-profit corporations under Arizona law by early next year.
As often as his schedule permitted, Bishop Gerald F. Kicanas also participated in the meetings.
From my vantage as a presenter and facilitator at the meetings, I feel the overall tone was one of great general interest, with an increasing awareness of the value of incorporation to the individual parishes and an appreciation for the support that will be provided to guide parishes through this effort.
The presentations were made by Father Al Schifano, Moderator of the Curia and Chair of the Parish Incorporation Committee, and by me in my role as Chair of the Presentation Sub-Committee. 
The format for each meeting was the same.
Father Al outlined the history of the parish incorporation process, beginning with the outreach by Bishop Kicanas to the Presbyteral Council and the Diocesan Pastoral Council, the Diocese's major consultative councils.
He emphasized the important role the laity had in the recommendation to Bishop Kicanas from both councils that individual incorporation of parishes be included in the Diocese's Plan of Reorganization that was submitted in the Chapter 11 process.
 Father Al shared the 1911 letter from the Vatican to the Bishops of the U.S. that urged parish incorporation as the preferred model for the civil structure of all U.S. dioceses. 
He also outlined the basic teachings of the Church regarding Apostolic succession and the leadership roles of bishops and pastors under canon law, emphasizing that the individual incorporation of parishes does not affect or change those teachings.
With that background, I presented the directive from Judge James Marlar of the U.S. Bankruptcy Court in his order confirming the Diocese's Chapter 11 Plan of Reorganization that upon their formation as non-profit corporations parishes are to receive title to their properties. 
I then described how non-profit parish corporations would be formed under Arizona law and what their articles of incorporation and bylaws would look like. 
Following my portion of the presentation, participants were invited to gather around their pastors to discuss what they had heard and to suggest questions to be asked.
In his Monday Memo of Oct. 10, Bishop Kicanas shared his observations of that part of the meeting, writing, "I was so impressed to see our priests huddled with their people, working together and collaborating. What wonders we can work when we pull in the same direction and work together!"
The question and answer period that followed produced lively discussions.
Members of the incorporation team, including Diocesan Attorney Gerry O'Meara, Diocesan Chief Financial Officer Tom Arnold, Diocesan Finance Council Chair Nancy Stephan, Judicial Vicar Father John Lyons and Father Al, fielded the questions. 
Time constraints meant that not all questions could be addressed, but attendees were given index cards on which to write their queries and an e-mail address to which they could be sent. 
A sample of the most frequently asked questions of broad general interest and their answers follows, and all relevant questions and their answers are available at www.diocesetucson.org, under "Reorganizing the Diocese."
Also available on the diocesan Web site is an abbreviated version of the presentation made at the parish incorporation information meetings.
1. What would be the process under incorporation if a parish wishes to buy or sell land? 
Parish corporations will have to execute purchase or sale documents by and through those people who are authorized by the Board of Directors to execute such documents.
The execution of the documents will no longer be done by the Diocese. Nonetheless, the parish is still subject to the restrictions imposed by canon law, which require the Bishop's consent to acquire real property or to sell the same.
2. Can a layperson be re-elected to the Board? Can the bylaws be changed to include term limits?
Yes, laity may be re-elected to the Board. As currently drafted, neither the proposed articles nor the proposed bylaws provide for term limits for lay members of the Board. Yes, bylaws may be amended by the parishes to mandate term limits for lay members.
3. Lay persons who are elected to serve on the Board of Directors must be in "Full Communion" with the Catholic Church. What does that mean?
"Full communion" is defined in canon law as follows: "Those baptized are fully in the communion of the Catholic Church on this earth who are joined with Christ in its (the Church's) visible structure by the bonds of the profession of faith, the sacraments, and ecclesiastical governance."
4. What is the timetable for incorporation?
The articles of incorporation for each parish will be filed this month. A fee will be paid for expedited handling. The articles are expected to be approved and returned by December or early January.
The parishes then will publish (in three consecutive issues) the articles in a newspaper of general circulation in the county in which the parish church is physically located in order to complete the incorporation process under Arizona law.
The effective date of incorporation is the date the articles actually are delivered to the Arizona Corporation Commission, even though the Corporation Commission will not file or approve the articles until a later date.
Once the publication is complete, an affidavit of publication (with an actual cut-out copy of the articles as printed in the newspaper) will be filed with the Arizona Corporation Commission to complete the incorporation process.
The organizational board meeting for each of the parishes will be held in late January, 2006.
Property currently held in trust by the Diocese will be deeded over to each parish following incorporation and before April 15, 2006.
5. What is the decision making process as it relates to the authority of the pastor? How does that work and affect the normal operations of the parish?
The pastors do not abdicate their authority to shepherd their parishes. Under canon law, the pastors are responsible for the spiritual care of their parishes.
The day-to-day operations of the parish will continue as in the past because the pastor is the one responsible for responding to the pastoral and religious needs of the parishioners.
6. For parish operated pre-schools and after-school programs presently licensed and certified under the Diocese, what happens during the gap between incorporation and re-licensing?
The Diocese will continue to be the operating party -- the licensed party.
The parishes will apply for licenses and will take over as the operating parties as soon as their licenses are issued. If need be, there may be a contract between the Diocese and the parishes in question to have the Diocese contractually agree to continue the operations under the Diocese's license.
7. Does a parish have to file for exemption from property tax?
Yes. Real property tax exemptions are applied for every January. A form is sent out by the county assessor to apply for the exemption. The form must be filed in January along with other documents (e.g., copy of the articles of incorporation, bylaws and the certification by the Diocese that the parish is included in the Official Catholic Directory).

December 2005

Reorganizing the Diocese. Parish incorporation in process


The formal incorporation of all 74 parishes in the Diocese of Tucson is in process following the filing of signed articles of incorporation for each parish with the Arizona Corporation Commission (ACC).
Attorney Gerry O'Meara, who serves as the statutory agent for parish incorporation and who is the Diocese of Tucson attorney, Father Al Schifano, diocesan Moderator of the Curia, and Kathy Rhinehart, executive assistant for corporate affairs, hand delivered the documents to the ACC's Tucson office and watched as ACC staff member Nanette Brantly stamped each set of articles with the filing date of Nov. 15.
When all the remaining steps for incorporation are complete, that date becomes the official date of each parish's incorporation. 
Those remaining steps include the publication of the articles in a "newspaper of record" in the county where the parish is located.
A document that includes a copy of the actual newspaper publication confirming that the Articles were published then will be filed with the ACC.
It is expected that publication of the Articles and filing of the confirmation of publication will be completed by early in January. 
When it receives each parish's confirmation of publication, the ACC will declare the parish incorporated retroactive to the date of initial filing, Nov. 15. 
The first meeting of each parish's board of directors -- the organizational meeting -- will take place on Jan. 19 and 20 in Cathedral Hall at St. Augustine Cathedral.
 Parish by parish, each pastor and the two lay members of the board will meet with Bishop Gerald F. Kicanas and Father Al Schifano, Moderator of the Curia. (See graphic to the right for the composition of the parish board of directors.)
This first board meeting will be very brief, with the first business being the nomination and election of a secretary and treasurer, positions that are held by the two lay members of each board.
The board then will proceed to adopt the model bylaws, the "Parish Services Agreement" and the Corporate Resolutions.
In October, each parish received a draft copy of the bylaws that detail the composition, duties and procedures of the board, a draft copy of the "Parish Services Agreement" that basically outlines those administrative services the Bishop will provide to assist the parish in its operations and a series of draft Corporate Resolutions that provide the means by which the parish adopts various diocesan plans and programs and agrees to pay for them.
(The purpose and content of each of these documents were outlined in some detail at each Parish Incorporation Information Meeting that was held last October in the 11 vicariates of the Diocese. Additional information is available on-line at www.diocesetucson.org under "Reorganizing the Diocese.")
The final versions of the bylaws, "Parish Services Agreement" and Corporate Resolutions will be in the hands of each pastor and the lay members of each board of directors by early January.
These first organizational meetings of each parish's board of directors will be historic, and we are planning a celebration appropriate for the occasion.
Once the incorporation of the parishes is official, the properties of the parishes, currently held in trust by the Diocese of Tucson, will be deeded over to each parish. 
The transfer of properties will be the concluding activity for the Parish Incorporation Process. Thereafter, each parish corporation will be responsible for meeting its obligations as a corporation in the contexts of civil law and canon law.
The Parish Incorporation Study Committee continues to welcome your questions about parish incorporation.
The questions that were communicated at the Parish Incorporation Information Meetings have been compiled and are available at www.diocesetucson.org under "Reorganizing the Diocese."
If you have a question, please write to Kathy Rhinehart, the executive assistant for corporate matters, at the Diocese of Tucson, P.O. Box 31, 85702 or kathyr@diocesetucson.org.
Kathy is assisting parishes now in the incorporation process. After incorporation, she will be assisting parishes with record-keeping and other legal requirements of incorporation.
There is one question that I want to answer here as we head into the home stretch of parish incorporation.
It's a question I continue to hear: "Why are parishes incorporating?"
A four-part answer:
-- By incorporating, there will be civil recognition under the laws of Arizona of what has always been true under canon law, the laws of the Church: parishes are and always have been separate entities. They are legally separate from each other and from the Diocese. 
-- By incorporating, parishes can assure the proper and prudent management of parish assets with greater accountability, transparency and openness. 
-- By incorporating, there will be a degree of protection of the parish from any legal liabilities incurred by other parishes or the Diocese.
-- By incorporating, the parishes can move forward with their mission in step with our Bishop, who wholeheartedly supports incorporation and who sees it as a valuable step in restoring trust and accountability in all aspects of diocesan and parish activities.
Next month, I'll update you on the incorporation process and the preparations for the organizational meetings of each parish's board of directors.

January 2006

Final Steps in Parish Incorporation


With the articles of incorporation for all 74 parishes in the Diocese having been filed on Nov. 15 with the Arizona Corporation Commission (ACC), there are two more steps in the incorporation process to be accomplished as we begin the New Year.
During December, the articles of incorporation for each parish were formally published in a newspaper of record in the county where that parish is located. This month, the parishes will file with the ACC a document with the actual publication copy of the articles.
The incorporation process will be complete once the ACC has received that document.
The last big step will be the deeding of the properties of each parish to that parish. This must be accomplished by April 15. The properties presently are held in trust by the Diocese for the parishes.
The highlight of this month, however, will be the events surrounding the first meeting of each parish corporation board of directors.
The first board meetings for all parishes will be held on Jan. 19 and 20 in Cathedral Hall at St. Augustine Cathedral. The meetings will be very brief and oriented toward organization of the board.
The model bylaws, parish services agreements and corporate resolutions will be adopted by board vote. These documents, as well as the agenda for the initial board meeting, have been provided in advance to each member of the board of each parish, thanks to the diligent efforts of Kathy Rhinehart, executive assistant for corporate affairs at the Diocese's Pastoral Center.
This historic event will be accompanied by music, food, entertainment and fellowship.
Imagine, if you can, the representatives of 35 or so parishes gathering in Cathedral Hall on two consecutive days.
On a very tight time schedule developed by Father Al Schifano, the chair of the Parish Incorporation Committee and Moderator of the Curia, each board will be called into the meeting room, convene its meeting, conduct its business and adjourn -- all in a space of about 10 to 12 minutes.
When not involved in the meeting, these representatives, plus other parishioners, will be enjoying the food, music and entertainment in Cathedral Hall.
The presentation made at the parish incorporation information meetings at each vicariate during October has attracted considerable attention both within and outside the Diocese of Tucson, resulting in numerous requests for information.
In response to such requests and to document the process for posterity, Father Al and I made one final presentation last month in front of a video camera. This presentation will be made available soon on DVD or VHS.
Any parish, inside or out of the Diocese, that wishes to understand why and how we came to incorporate our individual parishes may obtain a copy. Availability of the DVD or VHS will be announced in The New Vision.

February 2006

Parish Incorporation – A summary and a personal reflection

Over the past several months, I have written a series of articles for The New Vision reporting on the process of the incorporation of the 74 parishes in the Diocese of Tucson.
Now that the individual incorporation of the parishes has been accomplished, I offer this summary and share my personal reflection as a witness of and participant in the process.
First, some background.
The individual incorporation of parishes was part of the Plan of Reorganization that the Diocese submitted to U.S. Bankruptcy Judge James Marlar as part of the Chapter 11 bankruptcy proceedings.
Why was it part of the plan?
When the Diocese entered Chapter 11 in September of 2004, there was the possibility that the ownership of parish properties might be raised as an issue for Judge Marlar to decide.
Going in to the Chapter 11, it was the position of the Diocese that the Bishop of Tucson, while listed on property titles as owner of the parishes, really was holding those properties in trust for the Catholic people of the Diocese.
Therefore, the Diocese believed, the parish properties were separate and distinct from the assets of the Diocese and could not be used to settle claims of creditors against the Diocese.
This belief is consistent with canon law, the law of the Church, which recognizes a parish as a separate "legal person" from a diocese.
It was Bishop Gerald F. Kicanas' decision early on in the Chapter 11 process to not wait to see if the issue would be raised and to examine the possibility of incorporating each of the parishes under Arizona law. This would reflect in civil law the status enjoyed by the parishes under canon law.
Bishop Kicanas convened a Parish Incorporation Study Group to conduct the examination that would include a focus on how dioceses and archdioceses around the country already had individually incorporated their parishes.
As a member of the Diocesan Pastoral Council (DPC), I was asked to join the Study Group, whose membership included two representatives from the DPC, two from the Diocesan Finance Council, two from the Presbyteral Council (priests representing the vicariates in the Diocese), plus a civil lawyer and a canon lawyer. The group was chaired by Father Al Schifano, the Moderator of the Curia.
We began our work in November of 2004 and met virtually every month.
From our study, reading and discussions emerged a plan for incorporation, draft articles of incorporation and bylaws and a series of resolutions defining the relationship between the Diocese and the parishes.
The Study Group divided itself into three small work groups. One dealt with articles and bylaws and the second with operating guidelines and the management agreement. The third group was charged with developing a communications model to inform pastors, staff and parishioners of the content of the incorporation documents and the process whereby incorporation would occur.
After review by the DPC, the Finance Council, the Presbyteral Council and many other individuals, Bishop Kicanas gave his approval to proceed with including the plan in the Diocese's Chapter 11 Plan of Reorganization.
As it turned out, the question of parish ownership was never raised during the Chapter 11 proceedings, and last July Judge Marlar confirmed the Diocese's Plan of Reorganization.
I was asked to lead the communications effort that would explain the why and how of parish incorporation.
A major component of the communications was the development of a presentation that was made to each of the 11 vicariates in the Diocese. I hope that many readers of the New Vision have had a chance to see and hear that presentation, which can be viewed on-line at www.diocesetucson.org under "Reorganizing the Diocese."
Once our presentation team had met with all the vicariates in October, I reflected on what a wonderful experience it was to meet with fellow Catholics across the 43,000 square miles of our Diocese.
We were warmly greeted everywhere we went. If our travels brought us to the host parish at mealtime, we were well fed. The audience responses were very enlightening. There was great general interest on the part of those present, and I was pleased to see the increasing awareness of the value of incorporation to their parish.
Based on questions raised at the earliest meetings, we continually revised our presentation to incorporate new or explanatory material. There was never enough time to answer all questions from the audience, but these were collected, answers prepared and the material posted on the Diocesan Web site.
I recall what Bishop Kicanas once wrote about what can happen when we work together to reach common goals. That certainly happened here.
Even though the parishes are now individually incorporated, Father Al has decided to keep the Study Group intact for most of this year to be available for assisting parishes with needs and questions arising from incorporation, to receive feedback on the process and the documents and to be able to propose revisions where appropriate.
In addition, my pastor at Our Mother of Sorrows Parish, Msgr. Tom Cahalane, invited me to be one of the two lay members of the first board of directors of our parish corporation.
That appointment has given rise to another wonderful set of experiences. Our pastor is not only a spiritual leader, but also an efficient executive in a large urban parish.
It should be no surprise that Brenda Carrillo, the other lay member of the board, and I had some preliminary unofficial meetings to be certain we were prepared for operation as a corporation.
Our first official board meeting was Jan. 13. After a brief session with Gerry O'Meara, the diocesan attorney, to sign some documents, we gathered as a board with Bishop Kicanas and Father Al, who are members of each parish's board of directors.
The first order of business was to have a photo taken of this inaugural board. We then in short order had an incorporators' meeting and a board meeting.
In his remarks, Bishop Kicanas described parish incorporation as a "new dawn," a fresh beginning for the Diocese and a clear example of the Church's principle of subsidiarity – granting authority and responsibility down to the parish level.
At the same time, we acknowledge our bond to our Bishop and to the global Church.
I was on "cloud nine" for the rest of the day! 
This has been a great effort on the part of many.
A pattern has been set for our Diocese for many years to come, and I feel privileged to be a part of it.