Senate Bill No. 660
(By Senators Yost and Klempa)
[Introduced February 20, 2012; referred to the Committee on Government Organization; and then to the Committee on the Judiciary.]
A BILL to amend and reenact §29-19-5 of the Code of West Virginia, 1931, as amended, relating to requirements for a charitable organization to submit an audit report or statement of financial review by an independent certified public accountant.
Be it enacted by the Legislature of West Virginia:
That §29-19-5 of the Code of West Virginia, 1931, as amended, be amended and reenacted to read as follows:
ARTICLE 19. SOLICITATION OF CHARITABLE FUNDS ACT.
§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, donations or grants within this state or to have funds solicited or received 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 the charitable organization is engaged in solicitation activities. If an organization discontinues solicitation at any time after its last registration filing, then it shall file a registration statement reflecting its activities during its last fiscal year in which solicitation in West Virginia took place. It is the duty of the president, chairman or principal officer of the charitable organization to file the statements required under this article. The 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 and 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 to the fundraising and showing how the funds were disbursed or allocated for the same fiscal year: Provided, That in addition to the financial documents required by this subdivision:
(A) Charitable organizations raising more than $200,000 $500,000 per year in contributions, excluding grants from governmental agencies or private foundations, shall submit a report of an audit by an independent certified public accountant; and
(B) Charitable organizations raising more than $100,000 per year but less than $200,001 $500,001 per year in contributions, excluding grants from governmental agencies or private foundations, shall submit a statement of financial review by an independent certified public accountant. Organizations are required to report the amount of money received 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, donations or grants from the public directly or have other solicitation done on its behalf by others;
(9) Whether the organization is authorized by any other governmental authority to solicit contributions, donations or grants 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 in subsection (d), section seven of this article.
(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 the information regarding 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 defined in section two of this article, 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 receiving less than $1 million during any year which submits an independent registration to the Secretary of State shall pay an annual registration fee of $15; every charitable organization collecting more than $1 million during one year which submits an independent registration to the Secretary of State shall pay an annual registration fee of $50; and 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 $50 for itself and the chapters, branches or affiliates included in the registration statement. All fees and moneys collected by the Secretary of State pursuant to the provisions of this article shall be deposited by the Secretary of State as follows: One-half shall be deposited in the State General Revenue Fund and one-half shall be deposited in the services fees and collections account established by section two, article one, chapter fifty-nine of this code for the operation of the office of the Secretary of State. The Secretary of State shall dedicate sufficient resources from that fund or other funds to provide the services required in this article.
(e) For good cause shown, the Secretary of State may extend the due date for the annual filing of a registration statement or report by a charitable organization or a professional fundraiser for a period not to exceed ninety days. During that period, the previously filed registration statement or report of the charitable organization which has been granted the extension remains in effect.
(f) In addition to the registration fee required by this section, a charitable organization or professional fundraiser, or both, which fails to file a registration statement or report by the original or extended due date for filing as required by this section shall, for each month or part of the month thereafter in which the registration statement or report is not filed, pay an additional fee of $25: Provided, That the total amount of the additional fees for a registration statement or report required to be filed in any one year may not exceed $500. All fees and moneys collected by the Secretary of State pursuant to the provisions of this article shall be deposited by the Secretary of State as follows: One-half shall be deposited in the state General Revenue Fund and one-half shall be deposited in the service fees and collections account established by section two, article one, chapter fifty-nine of this code for the operation of the Office of the Secretary of State. The Secretary of State shall dedicate sufficient resources from that fund or other funds to provide the services required in this article.
NOTE: The purpose of this bill is to raise the threshold amount from $200,000 to $500,000 for which a charitable organization would be required to submit an audit report from an independent certified public accountant.