ARIZONA STATE SENATE
Phoenix, Arizona
charitable organizations;
filings; exemptions
Purpose
Requires the Secretary of
State to establish by rule a format for charitable organization fund raising
statements. Requires a charitable
organization to file a registration statement with the Secretary of State
before soliciting its first contribution.
Repeals several exemptions to registration requirements. Establishes fines and failure to register as
a class 1 misdemeanor.
Background
Charitable organizations are
statutorily required to file a written statement at no cost with the Secretary
of State no later than three days after soliciting their first
contribution. Often the Secretary of
State receives calls from citizens who have been approached by charitable
organizations for donations and has no registration information regarding the
charitable organization on file. This
legislation requires a charitable organization to file a statement prior to
soliciting its first contribution. No
penalties exist for nonfiling by charitable organizations. This legislation allows the Secretary of
State to send notice of failure to file that requires an organization to
register within 30 days, creates a mandatory $25 registration penalty for late
filing and establishes noncompliance as a class 1 misdemeanor.
Present financial record
practice among charitable organizations makes filing specific financial records
difficult each January. This legislation
moves the January filing requirement to September in an attempt to synchronize
state filing requirements with existing practice.
Finally, statute provides
numerous exemptions to the requirement to file. This legislation removes the majority of these exemptions.
The fiscal impact of this
legislation is unknown.
Provisions
1. Requires charitable organizations to file with the Secretary of State prior to soliciting their first contribution. Removes requirement that a charitable organization file a written fund raising statement with the Secretary of State no later than three days after the organization solicits its first contribution.
2. Allows the Secretary of State to deliver by certified mail a notice of failure to file a registration of fund raising to any charitable organization that is required to file and fails to do so.
3. Requires the charitable organization to comply with registration requirements within 30 days after receiving a notice of failure to register from the Secretary of State and to pay a late registration penalty of $25.
4. Establishes failure to comply with registration requirements as a class 1 misdemeanor.
5. Changes the month during which charitable organizations must file required statements regarding continuing fund raising from January to September.
6. Requires the Secretary of State to prescribe and adopt a format for written fund raising statements and rules for filing and preserving fund raising statements. Removes statutory requirements of, and authorizations regarding, the charitable organization’s fund raising statement.
7. Allows tax exempt organizations, instead of filing a registration statement, to either:
a) file with the Secretary of State a copy of the organization’s annual information return as defined in the Internal Revenue Code and applicable regulations, or
b) provide the Secretary of State with the address on the Internet where the organization’s annual information return is available.
8. Exempts charitable religious institutions and entities that are an integral part of religious institutions from filing any financial disclosure information if:
a)
the
religious institution is tax exempt pursuant to the Internal Revenue Code,
b)
no
part of the religious institution’s or entity’s net income inures to the direct
benefit of any individual, and
c)
the
religious institution or entity only solicits monies from its members or
previous donors and the institution’s or entity’s conduct and fees charged for
services are primarily supported and paid through government grants or
contracts.
9. Removes the exemption from registration requirements from:
a)
charitable
organizations established and operated within Arizona for a charitable purpose
that has a board of directors that serves without pay and that conducts
solicitations through volunteers that serve without pay, through bona fide paid
employees of the charitable organization or at meetings or assemblies of the
membership or with individual members of the charitable organization.
b)
schools,
colleges and universities and their associations and foundations.
c)
nonprofit
hospitals and their foundations.
d)
nonprofit
blood banks and their foundations.
e)
licensed
public radio and television stations that are raising money for their own
operations.
f)
solicitations
solely from private foundations.
g)
radio,
television and printed advertising indicating that a portion of the proceeds
will be donated in an amount indicted to a charitable organization or used for
some charitable purpose.
h)
charitable
organization that is engaged in assistance operations in foreign countries and
that has obtained a certificate of registration from a United States agency.
i)
persons
exempt from filing federal tax returns.
j)
charitable
organizations that do not intend or do not receive more than $25,000 during a
fiscal year.
k)
nonprofit,
tax-exempt associations of public safety employees and law enforcement
agencies.
l)
a
tax exempt organization as determined by the internal revenue service that
sponsors, conducts or operates professional sporting events.
10. Maintains exemptions for political parties, candidates for federal, state or local office and campaign committees required to file financial information with federal, state or local election agencies.
11. Makes clarifying changes.
12. Provides for a general effective date.
Amendments
Adopted by the House of Representatives
1.
Allows
tax exempt organizations, instead of filing a registration statement, to
either:
a)
file
with the Secretary of State a copy of the organization’s annual information
return as defined in the Internal Revenue Code and applicable regulations, or
b)
provide
the Secretary of State with the address on the Internet where the
organization’s annual information return is available.
2. Exempts
from registration statement requirements:
a)
any
charitable organization that is a bona fide and duly constituted religious
institution.
b)
any
other entity that is an integral part of a religious institution if:
i) the religious institution or entity is a tax
exempt institution or entity pursuant to the Internal Revenue Code,
ii) no part
of the religious institution’s or entity’s net income inures to the direct
benefit of any individual, and
iii)the
religious institution or entity only solicits monies from the institution’s or
entity’s membership, congregation or previous donors and the institution’s or
entity’s conduct and fees charged for services are primarily supported and paid
through government grants or contracts.
3.
Removes
stipulation that statement retention occur pursuant to the Secretary of State’s
rules.
4.
Makes
clarifying changes.
Amendments
Adopted by Conference Committee
1.
Exempts
charitable religious institutions and entities that are an integral part of
religious institutions from filing any financial disclosure information if:
a)
the
religious institution is tax exempt pursuant to the Internal Revenue Code,
b)
no
part of the religious institution’s or entity’s net income inures to the direct
benefit of any individual, and
c)
the
religious institution or entity only solicits monies from its members or
previous donors and the institution’s or entity’s conduct and fees charged for
services are primarily supported and paid through government grants or
contracts.
2.
Removes
the exemption from registration statement requirements for charitable religious
institutions.
3.
Exempts
the state, counties and municipalities and their agencies from registration
requirements.
4.
Expands
exemption from registration requirements from political entities required to
file financial information with the Secretary of State to those political
entities required to file financial information with federal, state or local
agencies.
Senate Action House Action
GOV 2/5/01 DP 5-0-1-0 RGO 4/3/01 DPA 10-0-0-0
3rd Read 2/19/01 27-1-2-0 3rd Read 4/11/01 54-0-6-0
Final Read 5/2/01 28-0-2-0 Final Read 5/2/01 54-1-5-0
Signed by Governor 5/7/01
Chapter 363
Prepared by Senate Staff
May 25, 2001