H. B. 4641
(By Delegates Staton, Rowe, Smirl, L. White and Hutchins)
[Introduced February 27, 1998; referred to the Committee on the Judiciary then Finance.]
A BILL to amend and reenact sections two and five, article
nineteen, chapter twenty-nine of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, updating and
clarifying provisions of the "Solicitations of Charitable
Funds Act"; expanding the definition of "solicit" and
"solicitation" to cover requests made by electronic means;
raising the dollar threshhold for audits of organazations by
an independent public accountant; identifying organizations
required to provide information regarding tax-exempt status;
requiring the filing of copies of written solicitation
materials and scripts; and clarifying who must file a
registration statement or report.
Be it enacted by the Legislature of West Virginia:
That sections two and five, article nineteen, chapter twenty-
nine of the code of West Virginia, one thousand nine hundred thirty-one, as amended,be amended and reenacted, to read as
follows:
ARTICLE 19. SOLICITATIONS OF CHARITABLE FUND ACT.
§29-19-2. Definitions.
As used in this article:
(1) "Charitable organization" means a person who is or holds
itself out to be a benevolent, educational, philanthropic, humane,
patriotic, religious or eleemosynary organization, or any person
who solicits or obtains contributions solicited from the public for
charitable purposes, or any person who in any manner employs any
appeal for contributions which may be reasonably interpreted to
suggest that any part of such contributions will be used for
charitable purposes. A chapter, branch, area, office or similar
affiliate or any person soliciting contributions within the state
for a charitable organization which has its principal place of
business outside the state is a charitable organization for the
purposes of this article.
(2) "Contribution" means the promise or grant of any money or
property of any kind or value.
(3) "Solicit" and "solicitation" means the request or appeal,
directly or indirectly, for any contribution on the plea or
representation that such contribution will be used for a charitable
purpose, including, without limitation, the following methods of
requesting such contribution:
(a) (A) Any oral or written request;
(b) (B) Any announcement to the press, over the radio or
television, or by telephone, or telegraph or other electronic
means, concerning an appeal or campaign to which the public is
requested to make a contribution for any charitable purpose
connected therewith;
(C) The distribution, circulation, posting or publishing of
any handbill, written advertisement or other publication which
directly or by implication seeks to obtain public support; or
(D) The sale of, offer or attempt to sell, any advertisement,
advertising space, subscription, ticket or any service or tangible
item in connection with which any appeal is made for any charitable
purpose or where the name of any charitable or civic organization
is used or referred to in any such appeal as an inducement or
reason for making any such sale, or when or where in connection
with any such sale, any statement is made that the whole or any
part of the proceeds from any such sale will be donated to any
charitable purpose.
"Solicitation", as defined herein, shall be deemed to occur
when the request is made, at the place the request is received,
whether or not the person making the same actually receives any
contribution.
(4) "Federated fund-raising organization" means a federation
of independent charitable organizations which have voluntarily joined together, including, but not limited to, a united fund or
community chest, for purposes of raising and distributing money for
and among themselves and where membership does not confer operating
authority and control of the individual agencies upon the federated
group organization.
(5) "Parent organization" is that part of a charitable
organization which coordinates, supervises or exercises control
over policy, fund raising and expenditures, or assists, receives
funds from or advises one or more chapters, branches or affiliates
in the state.
(6) "Person" means any individual, organization, trust,
foundation, group, association, partnership, corporation, society
or any combination of them.
(7) "Professional fund-raising counsel" means any person who
for a flat fixed fee under a written agreement plans, conducts,
manages, carries on, advises or acts as a consultant, whether
directly or indirectly, in connection with soliciting contributions
for, or on behalf of any charitable organization but who actually
solicits no contributions as a part of such services. A bona fide
salaried officer or employee of a charitable organization
maintaining a permanent establishment within the state shall not be
deemed to be a professional fund-raising counsel.
(8) "Professional solicitor" means any person who, for a
financial or other consideration, solicits contributions for, or on behalf of a charitable organization, whether such solicitation is
performed personally or through said person's agents, servants or
employees specially employed by, or for a charitable organization,
who are engaged in the solicitation of contributions under the
direction of such person, or a person who plans, conducts, manages,
carries on, advises or acts as a consultant to a charitable
organization in connection with the solicitation of contributions
but does not qualify as "professional fund-raising counsel" within
the meaning of this article. A bona fide salaried officer or
employee of a charitable organization maintaining a permanent
establishment within the state is not a professional solicitor.
No attorney, investment counselor or banker, who advises any
person to make a contribution to a charitable organization, shall
be considered, as the result of such advice, a professional
fund-raising counsel or a professional solicitor.
§29-19-5. Registration of charitable organizations; fee.
(a) Every charitable organization, except as provided in
section six of this article, which intends to solicit contributions
within this state or to have funds solicited on its behalf shall,
prior to any solicitation, file a registration statement with the
secretary of state upon forms prescribed by him or her, which shall
be good for one full year and which shall be refiled in the next
and each following year in which such charitable organization is
engaged in solicitation activities. If an organization discontinues solicitation at any time after its last registration
filing, then it must file a registration statement reflecting its
activities during its last fiscal year in which solicitation in
West Virginia took place. It shall be the duty of the president,
chairman or principal officer of such charitable organization to
file the statements required under this article. Such statements
shall be sworn to and shall contain the following information:
(1) The name of the organization and the purpose for which it
was organized;
(2) The principal address of the organization and the address
of any offices in this state. If the organization does not
maintain an office, the name and address of the person having
custody of its financial records;
(3) The names and addresses of any chapters, branches or
affiliates in this state;
(4) The place where and the date when the organization was
legally established, the form of its organization;
(5) The names and addresses of the officers, directors,
trustees and the principal salaried executive staff officer;
(6) A copy of a balance sheet and a statement or report of
income and expenses for the organization's immediately preceding
fiscal year, or a financial statement reporting information showing
the kind and amount of funds raised during the preceding fiscal
year, the costs and expenses incidental thereto and showing how the funds were disbursed or allocated for the same fiscal year:
Provided, That for organizations raising more than fifty one
hundred thousand dollars per year in contributions, the balance
sheet and income and expense statement, or financial statement
provided, shall be audited by an independent public accountant.
Organizations are required to report the amount of money raised in
the state and the amount spent in the state for charitable
purposes;
(7) A copy of any determination of the organization's tax
exempt status under the provisions of 26 U.S.C. §501(c)(3) and a
copy of the last filed Internal Revenue Service form 990 and
Schedule A for every charitable organization and any parent
organization;
(8) Whether the organization intends to solicit contributions
from the public directly or have such done on its behalf by others;
(9) Whether the organization is authorized by any other
governmental authority to solicit contributions and whether it is
or has ever been enjoined by any court from soliciting
contributions;
(10) The general purpose or purposes for which the
contributions to be solicited shall be used;
(11) The name or names under which it intends to solicit
contributions;
(12) The names of the individuals or officers of the organization who will have final responsibility for the custody of
the contributions;
(13) The names of the individuals or officers of the
organization responsible for the final distribution of the
contributions; and
(14) Copies of all contract documentation from professional
fund-raising counsels and professional solicitors as provided for
in subsection (d), section seven of this article.
(15) Copies of all written solicitation materials and copies
of all scripts to be used in fund-raising.
(b) Each chapter, branch or affiliate, except an independent
member agency of a federated fund-raising organization, may
separately report the information required by this section, or
report the information to its parent organization which shall then
furnish such information as to its West Virginia affiliates,
chapters and branches in a consolidated form to the secretary of
state. An independent member agency of a federated fund-raising
organization, as hereinbefore defined, shall comply with the
provisions of this article independently. Each organization shall
file a separate registration form for each name under which funds
will be solicited.
(c) The registration forms and any other documents prescribed
by the secretary of state shall be signed by an authorized officer
or by an independent public accountant and by the chief fiscal officer of the charitable organization and shall be verified under
oath.
(d) Every charitable organization collecting less than one
million dollars during any year which submits an independent
registration to the secretary of state shall pay an annual
registration fee of fifteen dollars; every charitable organization
collecting more than one million dollars during one year which
submits an independent registration to the secretary of state shall
pay an annual registration fee of fifty dollars; a parent
organization filing on behalf of one or more chapters, branches or
affiliates or a single organization filing under different names
shall pay a single annual registration fee of fifty dollars for
itself and such chapters, branches or affiliates included in the
registration statement.
(e) For good cause shown, the secretary of state may extend
the due date for the annual filing of a registration statement or
report for a period not to exceed ninety days. During such period,
the previously filed registration statement or report of the
charitable organization which has been granted the extension shall
remain in effect.
(f) In addition to the registration fee required by this
section, a charitable organization, professional fund raiser or
professional fund-raising counsel which fails to file a
registration statement or report by the original or extended due date therefor as required by this section shall, for each month or
part of the month thereafter in which the same is not filed, pay an
additional fee of twenty-five dollars: Provided, That the total
amount of such additional fees for a registration statement or
report required to be filed in any one year shall not exceed five
hundred dollars. Any such additional fees received shall be paid
into the charitable organization fund established pursuant to the
provisions of section fifteen-b of this article.
NOTE: The purpose of this bill is to update and clarify
provisions of the "Solicitation of Charitable Funds Act."
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.