THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY GREENLEAF, BAKER, RAFFERTY, EICHELBERGER, ERICKSON, SOLOBAY AND YUDICHAK, MAY 29, 2012

REFERRED TO STATE GOVERNMENT, MAY 29, 2012  

AN ACT

Amending Title 10 (Charities) of the Pennsylvania Consolidated

Statutes, consolidating the Solicitation of Funds for

Charitable Purposes Act; consolidating the Institutions of

Purely Public Charity Act; and making related repeals.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Title 10 of the Pennsylvania Consolidated

Statutes is amended by adding parts to read:

PART I

PRELIMINARY PROVISIONS

Chapter

  1.  General Provisions

CHAPTER 1

GENERAL PROVISION

Sec.

101.  Short title of title.

§ 101.  Short title of title.

This title shall be known and may be cited as the "Charities

Code."

PART II

GAMES

(RESERVED)

PART III

OPERATION

Chapter

11.  General Provisions (Reserved)

13.  Solicitation of Funds for Charitable Purposes

CHAPTER 11

GENERAL PROVISIONS

(RESERVED)

CHAPTER 13

SOLICITATION OF FUNDS FOR CHARITABLE PURPOSES

Sec.

1301.  Scope of chapter.

1302.  Legislative intent.

1303.  Definitions.

1304.  Powers and duties of secretary.

1305.  Registration of charitable organizations; financial

reports; fees; failure to file.

1306.  Exemptions from registration.

1307.  Short form registration.

1308.  Registration of professional fundraising counsel and

contracts.

1309.  Registration of professional solicitors; contract and

disclosure requirements; bonds; records; books.

1310.  Contracts voidable by charitable organizations.

1311.  Information filed to become public records.

1312.  Records to be kept by charitable organizations,

professional fundraising counsels and professional

solicitors; inspection; retention.

1313.  Limitation on activities of charitable organizations;

disclosure requirements.

1314.  Reciprocal agreements.

1315.  Prohibited acts.

1316.  Investigation; subpoenas; injunctions; court orders.

1317.  Administrative enforcement and penalties.

1318.  Criminal penalties.

1319.  Civil penalties.

1320.  Additional regulations by counties, municipalities or

consolidated government.

1321.  Charitable organizations deemed fiduciary.

1322.  Prior registration unaffected.

1323.  Repeals.

§ 1301.  Scope of chapter.

This chapter relates to solicitation of funds for charitable

purposes.

§ 1302.  Legislative intent.

It is the intention of the General Assembly that this chapter

shall not merely require proper registration of charitable

organizations, professional fundraisers and professional

solicitors, but shall protect the citizens of this Commonwealth

by requiring full public disclosure of the identity of persons

who solicit contributions from the public, the purposes for

which the contributions are solicited and the manner in which

they are actually used, by promoting consumer education about

charitable concerns, by providing civil and criminal penalties

for deception and dishonest statements and conduct in the

solicitation and reporting of contributions for or in the name

of charitable purposes and by publicizing matters relating to

fraud, deception and misrepresentation perpetrated in the name

of charity. This chapter shall not be construed to be exclusive

in its purview, and its application shall not operate as a bar

or otherwise prevent the contemporaneous or subsequent

application of other relevant acts.

§ 1303.  Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Administrative costs."  Management and general costs of a

charitable organization, not identifiable with a single program

or fundraising activity, but indispensable to the conduct of the

programs and activities and to an organization's existence,

including expenses for the overall direction of the

organization, business management, general recordkeeping,

budgeting, financial reporting and related activities, salaries,

rent, supplies, equipment and general overhead expenses.

"Affiliate."  A chapter, branch, auxiliary or other

subordinate unit of any charitable organization, however

designated, whose policies, fundraising activities and

expenditures are supervised or controlled by the parent

organization.

"Bureau."  The Bureau of Charitable Organizations of the

Department of State.

"Charitable organization."  A person granted tax exempt

status under section 501(c)(3) of the Internal Revenue Code of

1986 (Public Law 99-514, 26 U.S.C. § 501(c)(3)) or a person who

is or holds himself out to be established for a charitable

purpose or a person who in a manner employs a charitable appeal

as the basis of any solicitation or an appeal which has a

tendency to suggest there is a charitable purpose to any

solicitation. An affiliate of a charitable organization which

has its principal place of business outside this Commonwealth

shall be a charitable organization for the purposes of this

chapter. The term shall not be deemed to include:

(1)  A bona fide duly constituted organization of law

enforcement personnel, firefighters or other persons who

protect the public safety whose stated purpose in the

solicitation does not include a benefit to a person outside

the actual active membership of the organization.

(2)  Any bona fide duly constituted religious

institutions and separate groups or corporations which form

an integral part of religious institutions, provided that:

(i)  Religious institutions, groups or corporations

are tax exempt under the Internal Revenue Code of 1986.

(ii)  No part of the institution, group or

corporation's net income inures to the direct benefit of

an individual.

(iii)  The institution, group or corporation's

conduct is primarily supported by government grants or

contracts, funds solicited from their own memberships,

congregations or previous donors and fees charged for

services rendered.

"Charitable promotion."  An advertising or sales campaign,

event or performance, conducted, produced, promoted,

underwritten, arranged or sponsored by a commercial coventurer,

which represents that the purchase or use of goods or services

or attendance at events or performances offered or sponsored by

the commercial coventurer will benefit, in whole or in part, a

charitable organization or purpose.

"Charitable purpose."  A benevolent, educational,

philanthropic, humane, scientific, patriotic, social welfare or

advocacy, public health, environmental conservation, civic or

other eleemosynary objective, including an objective of a bona

fide duly constituted organization of law enforcement personnel,

firefighters or other persons who protect the public safety if a

stated purpose of the solicitation includes a benefit to a

person outside the actual active membership of the organization.

"Commercial coventurer."  A person who for profit is

regularly and primarily engaged in trade or commerce other than

in connection with the raising of funds or any other thing of

value when offered at the usual retail price comparable to

similar goods or services in the market for a charitable

organization and who advertises that the purchase or use of

goods, services, entertainment or any other thing of value will

benefit a charitable organization.

"Contribution."  The promise, grant or pledge of money,

credit, property, financial assistance or other thing of any

kind or value, excluding volunteer services, in response to a

solicitation, including the payment or promise to pay in

consideration of a performance, event or sale of a good or

service. Payment by members of an organization for membership

fees, dues, fines or assessments or for services rendered to

individual members, if the fees, dues, fines or assessments

confer a bona fide right, privilege, professional standing,

honor or other direct benefit, shall not be deemed

contributions, provided that membership is not conferred solely

as consideration for making a contribution in response to a

solicitation. Government grants or contracts shall not be deemed

a contribution.

"Department."  The Department of State of the Commonwealth.

"Federated fundraising organization."  A federation of

independent charitable organizations which have voluntarily

joined together, including, but not limited to, a United Way or

Community Chest, for purposes of raising and distributing money

for and among themselves and where membership does not confer

upon the federated group organization operating authority and

control of the individual agencies.

"Firefighters."  A person who is or represents or holds

itself out to represent, aid, train or otherwise benefit a paid

or volunteer firefighter, active or retired, or his family.

"Fundraising costs."  Those costs incurred in inducing others

to make contributions to a charitable organization for which the

contributors will receive no direct economic benefit.

Fundraising costs normally include, but are not limited to,

salaries, rent, acquiring and maintaining mailing lists,

printing, mailing and direct and indirect costs of soliciting,

as well as the cost of unsolicited merchandise sent to encourage

contributions. Fundraising costs do not include the direct cost

of merchandise or goods sold or the direct cost of fundraising

dinners, bazaars, shows, circuses, banquets, dinners, theater

parties or any other form of benefit performances.

"Law enforcement personnel."  A person who is or represents

or holds itself out to represent, aid, train or otherwise

benefit a police officer, sheriff or deputy sheriff, constable

or deputy constable, county detective, fire police or other

person who is empowered to make arrests, serve warrants, issue

summons or otherwise enforce the laws of this Commonwealth to

include retired law enforcement personnel and the families of

law enforcement personnel.

"Net proceeds."  The total proceeds received from the

solicitation of contributions reduced by the direct cost of

merchandise or other goods sold or fundraising events of any

kind.

"Owner."  A person who has a direct or indirect interest in a

professional fundraising counsel or professional solicitor.

"Parent organization."  That part of a charitable

organization which coordinates, supervises or exercises control

of policy, fundraising and expenditures, or assists or receives

funds from or advises one or more affiliates.

"Person."  An individual, organization, corporation,

association, partnership, trust, foundation or any other entity

however styled.

"Professional fundraising counsel."  A person who is retained

by a charitable organization for a fixed fee or rate under a

written agreement to plan, manage, advise, consult or prepare

material for or with respect to the solicitation in this

Commonwealth of contributions for a charitable organization, but

who does not solicit contributions or employ, procure or engage

a compensated person to solicit contributions and who does not

have custody or control of contributions. A bona fide salaried

officer or regular, nontemporary employee of a charitable

organization shall not be deemed to be a professional

fundraising counsel provided that the individual is not employed

or engaged as professional fundraising counsel or as a

professional solicitor by another person.

"Professional solicitor."  Any person who is retained for

financial or other consideration by a charitable organization to

solicit in this Commonwealth contributions for charitable

purposes directly or in the form of payment for goods, services

or admission to fundraising events, whether the solicitation is

performed personally or through his agents, servants or

employees or through agents, servants or employees especially

employed by or for a charitable organization who are engaged in

the solicitation of contributions, the sale of goods or services

or the production of fundraising events under the direction of

the person, or a person who plans, conducts, manages, carries

on, advises, consults, whether directly or indirectly, in

connection with the solicitation of contributions, sale of goods

or services or the production of fundraising events for or on

behalf of any charitable organization, but does not qualify as a

professional fundraising counsel within the meaning of this

chapter. A person who is otherwise a professional fundraising

counsel shall be deemed a professional solicitor if his

compensation is related to the amount of contributions received.

A bona fide salaried officer or regular, nontemporary employee

of a charitable organization shall not be deemed to be a

professional solicitor provided that the individual is not

employed or engaged as professional fundraising counsel or as a

professional solicitor by any other person.

"Secretary."  The Secretary of the Commonwealth.

"Solicitation."  A direct or indirect request for a

contribution on the representation that the contribution will be

used in whole or in part for a charitable purpose, including,

but not limited to, any of the following:

(1)  An oral request that is made in person, by

telephone, radio or television or other advertising or

communication media.

(2)  A written or otherwise recorded or published request

that is mailed, sent, delivered, circulated, distributed,

posted in a public place or advertised or communicated by

press, telegraph, television or other media.

(3)  A sale of, offer or attempt to sell an

advertisement, advertising space, sponsorship, book, card,

chance, coupon, device, food, magazine, merchandise,

newspaper, subscription, ticket or other service or tangible

good, thing or item of value.

(4)  An announcement requesting the public to attend an

appeal, assemblage, athletic or competitive event, carnival,

circus, concert, contest, dance, entertainment, exhibition,

exposition, game, lecture, meal, party, show, social

gathering or other performance or event of any kind.

§ 1304.  Powers and duties of secretary.

The secretary shall have the following powers and duties to:

(1)  Provide for and regulate the registration of

charitable organizations, professional fundraising counselors

and professional solicitors.

(2)  Decide matters relating to the issuance, renewal,

suspension or revocation of registrations.

(3)  Promulgate, adopt and enforce the rules and

regulations necessary to carry out this chapter.

(4)  Promulgate regulations altering fees and fines

established in this chapter sufficient to meet expenditures

of the bureau.

(5)  Take appropriate action to initiate civil or

criminal proceedings necessary to enforce this chapter, in

accordance with the act of October 15, 1980 (P.L.950,

No.164), known as the Commonwealth Attorneys Act.

(6)  Conduct hearings and make adjudications.

(7)  Keep a record showing the names and addresses of all

registered charitable organizations, professional fundraising

counsel and professional solicitors.

(8)  Submit annually, on or before September 30, to the

Governor, to the State Government Committee of the Senate and

to the State Government Committee of the House of

Representatives, as well as to interested parties, a report

on the number of registered charities, the number of

charities ordered to cease and desist solicitation, the

number of charities contracting with professional solicitors

and the compensation of professional solicitors for each

solicitation campaign in relation to the funds raised and

administrative costs.

(9)  Delegate to a division director of his office the

powers and duties under this chapter as he may deem

appropriate.

(10)  Exercise other authority accorded to him by this

chapter.

§ 1305.  Registration of charitable organizations; financial

reports; fees; failure to file.

(a)  Registration and approval required.--A charitable

organization, unless exempted from registration requirements

under section 1306 (relating to exemptions from registration),

shall file a registration statement with the department. This

statement must be refiled annually within 135 days after the

close of its fiscal year in which the charitable organization

was engaged in solicitation activities. The department shall

review the statement under subsection (r). No charitable

organization shall solicit contributions or have contributions

solicited in its behalf before approval of its registration

statement by the department.

(b)  Filing of statement.--It shall be the duty of the

president, chairman or principal officer of each charitable

organization to file the registration statement, financial

report and fee required under this section. The registration

statement shall be made by two authorized officers subject to 18

Pa.C.S. § 4904 (relating to unsworn falsification to

authorities), including the chief fiscal officer of the

organization, and shall contain the following information:

(1)  The name of the organization and any other name or

names under which it intends to solicit contributions.

(2)  The principal address and telephone number of the

organization and the addresses and telephone numbers of

offices in this Commonwealth. If the organization does not

maintain an office, the name and address of the individual

having custody of its financial records.

(3)  The names and addresses of any affiliates which

share in the contributions or other revenue raised in this

Commonwealth.

(4)  The names and addresses of the officers, directors

and trustees and the principal salaried executive staff

officers.

(5)  A copy of the financial report required under

subsection (e).

(6)  A copy of any determination of the organization's

tax-exempt status under the Internal Revenue Code of 1986

(Public Law 99-514, 26 U.S.C. § 1 et seq.) and, for

organizations granted tax-exempt status under section 501(c)

(3) of the Internal Revenue Code of 1986, a copy of the last

filed Internal Revenue Service Form 990 and Schedule A for

every charitable organization and parent organization.

(7)  The date when the organization's fiscal year begins.

(8)  Whether:

(i)  The organization is authorized by any other

governmental authority to solicit contributions.

(ii)  The organization or any of its present

officers, directors, executive personnel or trustees are

or have ever been enjoined in any jurisdiction from

soliciting contributions or have been found to have

engaged in unlawful practices in the solicitation of

contributions or administration of charitable assets.

(iii)  The organization's registration or license has

been denied, suspended or revoked by any governmental

agency together with the reasons for the denial,

suspension or revocation.

(iv)  The organization has voluntarily entered into

an assurance of voluntary discontinuance or agreement

similar to that set forth in section 1319(b) (relating to

civil penalties), together with a copy of that agreement.

(9)  A clear description of the specific programs for

which contributions will be used and a statement whether the

programs are planned or in existence.

(10)  The names and addresses of professional solicitors,

professional fundraising counsels and commercial coventurers

who are acting or have agreed to act on behalf of the

organization.

(11)  The names of the individuals or officers of the

organization who are in charge of any solicitation

activities, who will have final responsibility for the

custody of the contributions and who will be responsible for

the final distribution of the contributions.

(12)  Whether any of the organization's officers,

directors, trustees or employees are related by blood,

marriage or adoption to each other or to officers, agents or

employees of professional fundraising counsel or professional

solicitor under contract to the organization or to a supplier

or vendor providing goods or services to the organization,

and the names and business and residence addresses of any

related parties. Where the number of employees or vendors

renders it impractical for the registrant to contact them on

an individual basis regarding the existence of the

relationships set forth under this section, the registrant

may file an affidavit stating which relationships, if any,

exist to the best of the affiant's information and belief.

(13)  Other information required by the regulations of

the department.

(c)  Additional filings.--With the initial registration only,

each charitable organization required to be registered shall

also file with the department the following documents:

(1)  A copy of the organization's charter, articles of

organization, agreement of association, instrument of trust,

constitution or other organizational instrument and bylaws.

(2)  A statement setting forth where and the date when

the organization was legally established, the form of its

organization and its tax-exempt status together with a copy

of the letter of exemption, if any, issued by the Internal

Revenue Service.

(d)  Federal tax exemption determination.--Each charitable

organization registered with the department shall file with the

department a copy of a Federal tax exemption determination

letter received after the initial registration within 30 days

after receipt, and any amendments to its organizational

instrument within 30 days after adoption.

(e)  Financial report.--With each registration statement

filed under this section, a charitable organization must file a

financial report for the immediately preceding fiscal year,

which shall contain a balance sheet and statements of revenue,

expenses and changes in fund balances indicating the

organization's gross revenue, the amount of funds received from

solicitations or other fundraising activities and expenditures

for supplies, equipment, goods, services, programs, activities

or other expenses, a detailed list of salaries and wages paid

and expenses allowed to an officer or employee if the

organization is not required to file an Internal Revenue Service

Form 990 and the disposition of the net proceeds received from

solicited contributions or other fundraising activities.

(f)  Audit of certain financial reports.--The financial

report of every charitable organization which receives annual

contributions of $300,000 or more shall be audited by an

independent certified public accountant or public accountant.

Every charitable organization which receives annual

contributions of at least $100,000, but less than $300,000,

shall be required to have a review or audit of their financial

statements performed by an independent certified public

accountant or public accountant. Every charitable organization

which receives annual contributions of at least $50,000, but

less than $100,000, shall be required to have a compilation,

review or audit of their financial statements performed by an

independent certified public accountant or public accountant. A

compilation, audit or review is optional for a charitable

organization which receives annual contributions of less than

$50,000. Audits shall be performed in accordance with generally

accepted auditing standards, including the Statements on

Auditing Standards of the American Institute of Certified Public

Accountants, but reviews shall be performed in accordance with

the Statements on Standards for Accounting and Review Services

of the American Institute of Certified Public Accountants.

(g)  Governmental audits.--Government audits of government

grants shall be accepted and shall be included as part of the

financial statements.

(h)  Other acceptable reports.--The department may accept a

copy of a current financial report previously prepared by a

charitable organization for a governmental agency in another

jurisdiction in compliance with the laws of that jurisdiction,

provided that the report filed with the other governmental

agency shall be substantially similar in content to the report

required by this section.

(i)  Reports to accompany audit.--Audited and reviewed

financial statements must be accompanied by the report prepared

and signed by the independent public accountant.

(j)  Optional departmental action.--The department shall have

the discretion to require that an audit or review be submitted

by a charitable organization which files a registration

statement. The department shall also have the discretion to

accept the financial statement submitted by the organization in

lieu of an audit or review where special facts and circumstances

are presented.

(k)  Time extension for filings.--For good cause shown, the

department may extend the time for the annual filing of a

registration statement or financial report for a period not to

exceed 180 days during which time the previous registration

remains in effect.

(l)  Cancellation of registration.--In no event shall the

registration of a charitable organization continue in effect

after the date the organization should have filed, but failed to

file, its financial report in accordance with this section. The

organization shall not be eligible to file a new registration

statement until it shall have filed the required financial

report with the department.

(m)  Reports by affiliates.--

(1)  Each affiliate whose parent organization has its

principal place of business in this Commonwealth may

separately file the registration statement or financial

information required by this section, or report the required

information to its parent organization which shall then file

a combined registration statement and financial report for

its Pennsylvania affiliates. There shall be appended to each

combined report a schedule, containing information as

prescribed in the regulations of the department, reflecting

the activities of each affiliate, which shall contain a

certification, under oath, by an official of the

organization, that the information contained in the schedule

is true. The failure of a parent organization to file a

combined registration statement and financial report shall

not excuse either the parent organization or its affiliates

from complying with the requirements of this section.

(2)  If an affiliate is soliciting in this Commonwealth

but its parent organization has its principal place of

business outside this Commonwealth, both the affiliate and

the parent organization shall independently comply with the

registration requirements of this section.

(n)  Federated organizations.--An independent member agency

of a federated fundraising organization shall independently

comply with the provisions of this section unless specifically

exempted or unless it receives allocations solely from the

federated fundraising organization and does not independently

solicit contributions. Donor choice programs are deemed to be

independent solicitations. 

(o)  Retention of records.--Each charitable organization

required to register shall maintain records, books and reports

for at least three years after the end of the period of

registration to which they relate, which shall be available for

inspection upon demand by the department and the Office of

Attorney General.

(p)  Annual registration fees.--A charitable organization

which submits a short form registration statement under section

1307 (relating to short form registration) or receives

contributions of $25,000 or less during the immediately

preceding fiscal year shall pay an annual registration fee of

$15. A charitable organization which receives contributions in

excess of $25,000 but less than $100,000 during the immediately

preceding fiscal year shall pay an annual registration fee of

$100. A charitable organization which receives contributions in

excess of $100,000 but not exceeding $500,000 during the

immediately preceding fiscal year shall pay an annual

registration fee of $150. A charitable organization which

receives contributions in excess of $500,000 during the

immediately preceding fiscal year shall pay an annual

registration fee of $250. A parent organization filing on behalf

of one or more affiliates and a federated fundraising

organization filing on behalf of its member agencies shall pay a

single annual registration fee for itself and other affiliates

or member agencies included in the registration statement.

(q)  Late filing fees.--In addition to the registration fee,

an organization failing to file a registration application by

the due date shall pay an additional fee of $25 for each month

or part of the month after the date on which the registration

statement and financial report were due to be filed or after the

period of extension granted for the filing.

(r)  Department review.--The department shall examine each

registration statement and supporting documents filed by a

charitable organization and shall determine whether the

registration requirements are satisfied. If the department

determines that the registration requirements are not satisfied,

the department must notify the charitable organization within

ten working days of its receipt of the registration statement,

otherwise the registration statement is deemed to be approved.

Within seven days after receipt of a notification that the

registration requirements are not satisfied, the charitable

organization may request a hearing. The hearing must be held

within seven days of receipt of the request, and a determination

must be rendered within three working days of the hearing.

(s)  Administration of charitable contributions.--A

charitable organization shall maintain and administer the

contributions raised on its behalf through an account in the

name of the charitable organization and under its sole control.

(t)  Updating information.--A material change in information

filed with the department under this section shall be reported

in writing by the registrant to the department not more than 30

days after the change occurs.

§ 1306.  Exemptions from registration.

(a)  General rule.--The following charitable organizations

shall be exempt from the registration requirements of this

chapter:

(1)  Educational institutions, the curricula of which in

whole or in part are registered with or approved by the

Department of Education, either directly or by acceptance of

accreditation by an accrediting body recognized by the

Department of Education, and any auxiliary associations,

foundations and support groups which are directly responsible

to educational institutions.

(2)  Hospitals which are subject to regulation by the

Department of Health or the Department of Public Welfare and

the hospital foundation, if any, which is an integral part of

the hospitals.

(3)  A local post, camp, chapter or similarly designated

element or a county unit of the elements of:

(i)  any veterans' organization chartered under

Federal law and any service foundation recognized in the

bylaws of the organization;

(ii)  a bona fide organization of volunteer firemen;

(iii)  a bona fide ambulance association;

(iv)  a bona fide rescue squad association; or

(v)  a bona fide auxiliary or affiliate of any

organization or association under subparagraph (i), (ii),

(iii) or (iv);

provided that all fundraising activities of an organization

or association under subparagraph (i), (ii), (iii), (iv) or

(v) are carried on by volunteers, members or an auxiliary or

affiliate of the organization or association, and those

volunteers, members or affiliates receive no compensation

directly or indirectly for the fundraising activities.

(4)  Public nonprofit library organizations which receive

financial aid from State and municipal governments and file

an annual fiscal report with the State Library System.

(5)  Senior citizen centers and nursing homes which are

nonprofit and charitable and which have been granted tax-

exempt status under the Internal Revenue Code of 1986 (Public

Law 99-514, 26 U.S.C. § 1 et seq.), provided that all

fundraising activities are carried on by volunteers, members

or officers of the senior citizen center and those

volunteers, members or officers receive no compensation,

directly or indirectly, for the fundraising activities.

(6)  Bona fide parent teacher associations or parent

teacher organizations as recognized in a notarized letter

from the school district in which they are located.

(7)  Any corporation established by an act of Congress of

the United States that is required by Federal law to submit

annual reports of its activities to Congress containing

itemized accounts of all receipts and expenditures after

being fully audited by the Department of Defense.

(8)  Any charitable organization which receives

contributions of $25,000 or less annually, provided that the

organization does not compensate any person who conducts

solicitations. Charitable organizations which receive more

than $25,000 in contributions shall file the appropriate

registration statement within 30 days after the contributions

are received.

(b)  Effect of exemption.--Exemption from the registration

requirements of this chapter shall in no way limit the

applicability of other provisions of the act to a charitable

organization or any professional solicitor or professional

fundraising counsel acting on its behalf, except that written

notice under sections 1309(k) (relating to registration of

professional solicitors; contract and disclosure requirements;

bonds; records; books) and 1313(c) (relating to limitation on

activities of charitable organizations; disclosure requirements)

shall not apply.

§ 1307.  Short form registration.

(a)  Organizations required to file.--The following

charitable organizations shall be required to file short form

annual registration statements with the department in lieu of

the registration statement required by section 1305 (relating to

registration of charitable organizations; financial reports;

fees; failure to file):

(1)  Persons or charitable organizations accepting

contributions for the relief of any individual specified by

name at the time of acceptance or solicitation when all of

the contributions collected without any deductions whatsoever

are turned over to the named beneficiary for his use;

provided that all contributions collected shall be held in

trust and shall be subject to the provisions of 20 Pa.C.S.

Ch. 77 (relating to trusts). The secretary, the Attorney

General, any contributor or any person who provides any goods

or services for which funds are expressly or implicitly

solicited shall have the right to petition the court of

common pleas of the county in which the trust is located for

an accounting of all contributions. For purposes of this

paragraph, the trust shall be deemed to be located in the

county where the principal place of business of the

charitable organization is located. If a charitable

organization has its principal place of business outside this

Commonwealth, all of the following shall apply:

(i)  If an affiliate is soliciting contributions

within this Commonwealth, the trust shall be deemed to be

located in the county where the principal place of

business of the affiliate is located.

(ii)  If a person is soliciting contributions within

this Commonwealth, the trust shall be deemed to be

located in the county where the principal place of

business or the residence of the person is located.

(iii)  If there is no place of business or residence

within this Commonwealth, the trust shall be deemed to be

located in the county of Dauphin.

(2)  Organizations which only solicit within the

membership of the organization by the members of the

organization; provided that the term "membership" shall not

include those persons who are granted a membership solely

upon making a contribution as the result of solicitation. For

the purpose of this paragraph, "member" means a person having

membership in a nonprofit corporation, or other organization,

in accordance with the provisions of its articles of

incorporation, bylaws or other instruments creating its form

and organization and having bona fide rights and privileges

in the organization such as the right to vote, to elect

officers and directors, to hold office or position as

ordinarily conferred on members of the organizations.

(3)  Charitable organizations whose fundraising

activities are carried on by volunteers, members, officers or

permanent employees and which do not receive contributions in

excess of $25,000 during a fiscal year, if no part of their

assets or income inures to the benefit of or is paid to any

officer or member, professional fundraising counsel,

professional solicitor or commercial coventurer. Charitable

organizations which do not intend to solicit and receive in

excess of $25,000, but do receive contributions in excess of

that amount shall file the financial report required in

section 1305 within 30 days after contributions are received

in excess of that amount.

(4)  Organizations described in section 1306(a)(3)

(relating to exemptions from registration) which do not

receive contributions in excess of $100,000 during a fiscal

year if no part of their assets or income inures to the

benefit of or is paid to a professional solicitor.

(b)  Contents of statement.--The short form annual

registration statements required to be filed under this section

shall include any information required by the regulations of the

department.

(c)  Financial report.--Charitable organizations which file a

short form registration statement need not file the financial

report required under section 1305 (relating to registration of

charitable organizations; financial reports; fees; failure to

file).

(d)  Updating of information.--Any material change in any

information filed with the department pursuant to this section

shall be reported in writing by the registrant to the department

not more than 30 days after the change occurs.

§ 1308.  Registration of professional fundraising counsel and

contracts.

(a)  Registration and approval required.--No person shall act

as a professional fundraising counsel before obtaining

department approval of a registration statement pursuant to

subsection (c) or after the expiration, suspension or revocation

of registration. A registration application shall be signed and

be made by the principal officer of the professional fundraising

counsel subject to 18 Pa.C.S. § 4904 (relating to unsworn

falsification to authorities) and shall contain all of the

following information:

(1)  The address of the principal place of business of

the applicant and any Pennsylvania addresses, if the

principal place of business is located outside this

Commonwealth.

(2)  The form of the applicant's business.

(3)  The names and residence addresses of all principals

of the applicant, including all officers, directors and

owners.

(4)  Whether any of the owners, directors, officers or

employees of the applicant are related by blood, marriage or

adoption to any other directors, officers, owners or

employees of the applicant, any officer, director, trustee or

employee of any charitable organization under contract to the

applicant or any supplier or vendor providing goods or

services to any charitable organization under contract to the

applicant.

(5)  The name of any person who is in charge of any

solicitation activity.

(6)  Any other information required by the regulations of

the department.

(b)  Registration fee.--The application for registration

shall be accompanied by a fee of $250. A professional

fundraising counsel which is a partnership or corporation may

register for and pay a single fee on behalf of all of its

partners, members, officers, directors, agents and employees.

Each registration shall be valid for one year and may be renewed

for additional one-year periods upon application to the

department and payment of the registration fee.

(c)  Department review of registration statement.--The

department shall examine each registration statement and

supporting documents filed by a professional fundraising counsel

and shall determine whether the registration requirements are

satisfied. If the department determines that the registration

requirements are not satisfied, the department must notify the

professional fundraising counsel within ten working days of its

receipt of its registration statement, otherwise the

registration statement is deemed to be approved. Within seven

days after receipt of a notification that the registration

requirements are not satisfied, the professional fundraising

counsel may request a hearing. The hearing must be held within

seven days of receipt of the request, and a determination must

be rendered within three working days of the hearing.

(d)  Written contract.--There shall be a written contract

between a charitable organization and a professional fundraising

counsel which shall be filed by the professional fundraising

counsel with the department at least ten working days prior to

the performance by the professional fundraising counsel of any

service. No solicitation or services pursuant to the contract

shall begin before the department has approved the contract

pursuant to subsection (e). The contract must be signed by two

authorized officials of the charitable organization, one of whom

must be a member of the organization's governing body, and the

authorized contracting officer for the professional fundraising

counsel. The contract shall contain all of the following

provisions:

(1)  The legal name and address of the charitable

organization as registered with the department unless that

charitable organization is exempt from registration.

(2)  A statement of the charitable purpose for which the

solicitation campaign is being conducted.

(3)  A statement of the respective obligations of the

professional fundraising counsel and the charitable

organization.

(4)  A clear statement of the fees which will be paid to

the professional fundraising counsel.

(5)  The effective and termination dates of the contract,

or, if the contract does not have a set termination date, the

contract shall contain a clause allowing either party a

reasonable period to terminate the contract or notify the

other party if either party chooses not to renew. The

contract shall also contain the date services will commence

with respect to solicitation in this Commonwealth of

contributions for a charitable organization.

(6)  A statement that the professional fundraising

counsel will not at any time have custody or control of

contributions.

(7)  A statement that the charitable organization

exercises control and approval over the content and volume of

any solicitation.

(8)  Any other information required by the regulations of

the department.

(e)  Department review of contract.--The department shall

examine each contract filed by a professional fundraising

counsel and shall determine whether the contract contains the

required information. If the department determines that the

requirements are not satisfied, the department must notify the

professional fundraising counsel within ten working days of its

receipt of the contract, otherwise the contract is deemed to be

approved. Within seven days after receipt of a notification that

the requirements are not satisfied, the professional fundraising

counsel may request a hearing. The hearing must be held within

seven days of receipt of the request, and a determination must

be rendered within three working days of the hearing.

§ 1309.  Registration of professional solicitors; contract and

disclosure requirements; bonds; records; books.

(a)  Registration and approval required.--No person shall act

as a professional solicitor before obtaining department approval

of a registration statement pursuant to subsection (d) or after

the expiration, suspension or revocation of registration. A

registration application shall be signed and made by the

principal officer of the professional solicitor subject to 18

Pa.C.S. § 4904 (relating to unsworn falsification to

authorities) and shall contain all of the following information:

(1)  The address of the principal place of business of

the applicant and any Pennsylvania addresses, if the

principal place of business is located outside this

Commonwealth.

(2)  The form of the applicant's business.

(3)  The names and residence addresses of all principals

of the applicant, including all officers, directors and

owners.

(4)  Whether any of the owners, directors, officers or

employees of the applicant are related by blood, marriage or

adoption to any other directors, officers, owners or

employees of the applicant, any officer, director, trustee or

employee of any charitable organization under contract to the

applicant or any supplier or vendor providing goods or

services to any charitable organization under contract to the

applicant.

(5)  The name of all persons in charge of any

solicitation activity.

(6)  Any other information required by the regulations of

the department.

(b)  Registration fee.--The application for registration

shall be accompanied by a fee of $250. A professional solicitor

which is a partnership or corporation may register for and pay a

single fee on behalf of all of its partners, members, officers,

directors, agents and employees. Each registration shall be

valid for one year and may be renewed for additional one-year

periods upon application to the department and payment of the

registration fee.

(c)  Bond.--A professional solicitor shall, at the time of

making application for registration and renewal of registration,

file with and have approved by the department a bond, in which

it shall be the principal obligor in the sum of $25,000, or a

greater amount as prescribed by the regulations of the

department and which shall have one or more sureties

satisfactory to the department whose liability in the aggregate

as sureties will at least equal that sum and maintain the bond

in effect as long as the registration is in effect. The bond

shall run to the Commonwealth for use of the secretary, Attorney

General and any person who may have a cause of action against

the obligor for any losses resulting from malfeasance,

nonfeasance or misfeasance in the conduct of solicitation

activities. A professional solicitor which is a partnership or

corporation may file one $25,000 bond or an amount specified by

regulation of the department on behalf of all its partners,

members, officers, directors, agents and employees.

(d)  Department review of registration statement.--The

department shall examine each registration statement and

supporting documents filed by a professional solicitor and shall

determine whether the registration requirements are satisfied.

If the department determines that registration requirements are

not satisfied, the department must notify the professional

solicitor within ten working days of its receipt of its

registration statement, otherwise the registration statement is

deemed to be approved. Within seven days after receipt of a

notification that the regulation requirements are not satisfied,

the professional solicitor may request a hearing. The hearing

must be held within seven days of receipt of the request, and a

determination must be rendered within three working days of the

hearing.

(e)  Contract filing.--No less than ten working days prior to

the commencement of each solicitation campaign, event or

services, a professional solicitor shall file with the

department a copy of the contract described in subsection (f)

and a written solicitation notice. No solicitation or services

pursuant to the contract shall begin before the department has

approved the contract pursuant to subsection (g). The

solicitation notice shall be accompanied by a fee of $25 and

shall be signed and sworn to by the authorized contracting

officer for the professional solicitor. If more than one event

or campaign is conducted under a contract, then a solicitation

notice addendum must be filed no less than ten working days

prior to the commencement of each additional event or campaign.

No additional fee is required to file the addendum. The

solicitation notice and addendum shall contain all of the

following information:

(1)  A description of the solicitation event or campaign.

(2)  Each location and telephone number from which the

solicitation is to be conducted.

(3)  The legal name and resident address of each person

responsible for directing and supervising the conduct of the

campaign and each person who is to solicit during the

campaign.

(4)  A statement as to whether the professional solicitor

will at any time have custody or control of contributions.

(5)  The account number and location of each bank account

where receipts from the campaign are to be deposited.

(6)  A full and fair description of the charitable

program for which the solicitation campaign is being carried

out.

(7)  The date the solicitation campaign or event will

begin or be held within this Commonwealth and the termination

date for each campaign or event.

(8)  Any other information required by the regulations of

the department.

(f)  Written contract.--There shall be a written contract

between a professional solicitor and a charitable organization

for each solicitation campaign which shall be signed by two

authorized officials of the charitable organization, one of whom

must be a member of the organization's governing body, and the

authorized contracting officer for the professional solicitor.

The contract shall contain all of the following provisions:

(1)  The legal name and address of the charitable

organization as registered with the department, unless that

charitable organization is exempt from registration.

(2)  A statement of the charitable purpose for which the

solicitation campaign is being conducted.

(3)  A statement of the respective obligations of the

professional solicitor and the charitable organization.

(4)  A statement of the guaranteed minimum percentage of

the gross receipts from contributions which will be remitted

to or retained by the charitable organization, if any, or, if

the solicitation involves the sale of goods, services or

tickets to a fundraising event, the percentage of the

purchase price which will be remitted to the charitable

organization, if any. Any stated percentage shall exclude any

amount which the charitable organization is to pay as

fundraising costs.

(5)  A statement of the percentage of the gross revenue

which the professional solicitor will be compensated. The

stated percentage shall include any amount which the

professional solicitor is to be reimbursed as payment for

fundraising costs. If the compensation of the professional

solicitor is not contingent upon the number of contributions

or the amount of revenue received, his compensation shall be

expressed as a reasonable estimate of the percentage of the

gross revenue, and the contract shall clearly disclose the

assumptions upon which the estimate is based. The stated

assumptions shall be based upon all of the relevant facts

known to the professional solicitor regarding the

solicitation to be conducted by the professional solicitor.

(6)  The effective and termination dates of the contract,

or, if the contract does not have a set termination date, the

contract shall contain a clause allowing either party a

reasonable period to terminate the contract or notify the

other party if either party chooses not to renew. The

contract shall also contain the date solicitation activity is

to commence within this Commonwealth.

(7)  Any other information required by the regulations of

the department.

(g)  Department review of contract.--The department shall

examine each contract and solicitation notice filed by a

professional solicitor and shall determine whether the contract

and notice contain the required information. If the department

determines that the requirements are not satisfied, the

department must notify the professional solicitor within ten

working days of its receipt of the contract and notice,

otherwise the contract and notice are deemed to be approved.

Within seven days after receipt of a notification that the

requirements are not satisfied, the professional solicitor may

request a hearing. The hearing must be held within seven days of

receipt of the request, and a determination must be rendered

within three working days of the hearing.

(h)  Required disclosures.--Prior to orally requesting a

contribution or contemporaneously with a written request for a

contribution, a professional solicitor shall be responsible for

clearly and conspicuously disclosing:

(1)  The name of the professional solicitor as on file

with the department and that the solicitation is being

conducted by a professional solicitor who is being paid for

his services.

(2)  If the individual acting on behalf of the

professional solicitor identifies himself by name, the

individual's legal name.

(3)  The legal name of the charitable organization as

registered with the department and a description of how the

contributions raised by the solicitation will be utilized for

a charitable purpose or, if there is no charitable

organization, a description as to how the contributions

raised by the solicitation will be utilized for a charitable

purpose.

(i)  Responses.--Any responses given by or on behalf of a

professional solicitor to an oral or written request for

information shall be truthful.

(j)  Information on disclosure.--In the case of a

solicitation campaign conducted orally, whether by telephone or

otherwise, any written confirmation, receipt and reminder sent

to any person who has contributed or has pledged to contribute

shall include a clear and conspicuous disclosure of the

information required by subsection (h).

(k)  Notice.--In addition to the information required by

subsection (j), any written confirmation, receipt and reminder

of a contribution made pursuant to an oral solicitation and any

written solicitation shall conspicuously state verbatim:

The official registration and financial information of

(insert the legal name of the charity as registered with

the department) may be obtained from the Pennsylvania

Department of State by calling toll free, within

Pennsylvania, 1 (800) 000-0000. Registration does not

imply endorsement.

(l)  Financial reports.--Within 90 days after a solicitation

campaign or event has been completed and on the anniversary of

the commencement of a solicitation campaign lasting more than

one year, a professional solicitor shall file with the

department a financial report for the campaign, including gross

revenue and an itemization of all expenses incurred. This report

shall be signed and sworn to by the authorized contracting agent

for the professional solicitor and two authorized officials of