House of Representatives

HB 2396

charitable solicitors; disclosure and responsibility

Sponsors: Representatives Anderson, Pierce, Cooley, et al.

 

DPA

 S/E

Committee on Human Services

X

Committee on Commerce & Economic Development

 

Caucus and COW

 

Third Read

 

 

As Passed the House

HB 2396 outlines registration requirements for charitable organizations and contracted fund raisers that must be filed with the Secretary of State.  The bill sets up contractual requirements and stipulates record-keeping and notice responsibilities of fund raisers.  In addition, the bill requires the Secretary to establish a means for reporting fraudulent solicitations and clarifies that practices in soliciting contributions are unlawful. 

 

Current Status

HB 2396 passed the Human Services Committee with a strike-everything amendment authorizing the Secretary of State to revoke or deny the registration of a charitable organization or fund raiser if prescribed provisions are not met and establishes requirements for independent solicitors to follow when soliciting.

 

Provisions of HB 2396

·        Outlines registration requirements for charitable organizations and contracted fund raisers that must be filed with the Secretary of State. 

·        Establishes contractual requirements for fund raisers.

·        Stipulates record-keeping and notice responsibilities of fund raisers. 

·        Requires the Secretary to establish a means for reporting fraudulent solicitations and clarifies that practices in soliciting contributions are unlawful. 

            

Provisions of the Strike-everything Amendment

A strike-everything amendment was adopted to HB 2396 in the Human Services Committee.  The amendment contains the following provisions:

·          Defines an independent solicitor as a person who for profit engages to solicit on behalf of a charitable organization [organization] or on behalf of a contracted fund raiser [fund raiser].

 

·          Stipulates that an organization exempt from federal income taxes at the time of initial registration shall submit a copy of the IRS’s written determination of the exemption to the Secretary of State [Secretary].

 

·          Requires the previous fiscal year return to be used when an organization files with the Secretary.

 

·          Authorizes the Secretary to deny organization applicant if the name is misleading or deceptively similar to any existing, licensed, or registered name.

 

·          Requires the Secretary to deny an application or revoke a registration of an organization or fund raiser for any of the following reasons: 1) material in the application is misstated or omitted; 2)  an employee, member, officer, or director holding proprietary or beneficial interest in the organization is a convicted felon, unless civil rights have been restored; 3) engagement in deceptive, fraudulent or unlawful business practices related to solicitation; 4) violating provisions relating to the solicitation of funds for charitable purposes; or 5)  bouncing a check to the Secretary.

 

·          Requires the Secretary to notify and explain a denial within 10 days of receiving an application.

 

·          Requires independent solicitors when soliciting to do the following: 1) identify themselves as for-profit solicitors who are seeking contributions on behalf of an organization or fund raiser; 2)  state the legal name of the organization or fund raiser; 3)  reveal the legal name of the independent solicitor; and 4)  state that the purpose for soliciting is to raise charitable funds.

 

·          Requires the Attorney General to investigate unlawful solicitation acts.

 

·          Prescribes a Class 1 misdemeanor [6 months/$2,500] to an independent solicitor who fails to comply with the specified laws.  

 

·          Contains technical and conforming changes.

 

Amendment adopted to the strike-everything amendment

·        Changes “shall” to “may” permitting, versus requiring, the Secretary of State to revoke or deny the registration of a charitable organization or fund raiser if prescribed criteria are not met. 

           

 

 

 

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45th Legislature                       

Second Regular Session            3          February 6, 2002

 

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