H. B. 2183
(By Delegates Staton, Rowe and Smirl)
[Introduced January 13, 1999; 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 threshold for audits of
organizations 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" mean 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) (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) (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.