PRINTER'S NO. 2089
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1240
Session of
2015
INTRODUCED BY QUINN, DELOZIER, BARBIN, DEAN, DeLUCA, EVERETT,
MURT, MUSTIO, PASHINSKI, PICKETT, REESE AND WATSON,
AUGUST 10, 2015
REFERRED TO COMMITTEE ON COMMERCE, AUGUST 10, 2015
AN ACT
Amending the act of December 19, 1990 (P.L.1200, No.202),
entitled "An act providing for the registration and
regulation of solicitations by charitable organizations,
professional fundraisers and other solicitors; imposing
additional powers on the Department of State and the Office
of Attorney General; prescribing civil and criminal
penalties; and making a repeal," further providing for
definitions, for powers and duties of secretary and for
registration of charitable organizations, financial reports,
fees and failure to file; providing for supplemental
financial disclosure and for financial statements for
specific disaster relief solicitations; further providing for
registration of professional fundraising counsel and
contracts, for registration of professional solicitors,
contract and disclosure requirements, bonds, records and
books; providing for individual licensure of professional
solicitor officers, employees and agents; further providing
for investigation, subpoenas, injunctions and court orders,
for administrative enforcement and penalties and for criminal
penalties; and establishing the Charitable Organization
Regulation Account.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 3 of the act of December 19, 1990
(P.L.1200, No.202), known as the Solicitation of Funds for
Charitable Purposes Act, is amended by adding definitions to
read:
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Section 3. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
* * *
"Crisis." An event that garners widespread national or
global media coverage due to an actual or perceived threat or
harm to an individual, a group or community.
* * *
"Disaster." A natural, technological or civil event,
including, but not limited to, an explosion, chemical spill,
earthquake, tsunami, landslide, volcanic activity, avalanche,
wildfire, tornado, hurricane, drought or flood, which affects
one or more countries and causes damage of sufficient severity
and magnitude to result in:
(1) an official declaration of a state of emergency; or
(2) an official request for international assistance.
* * *
"Program service costs." Expenses incurred primarily to
accomplish a charitable organization's stated purposes. The term
does not include fundraising costs.
* * *
Section 2. Section 4 of the act is amended by adding a
paragraph to read:
Section 4. Powers and duties of secretary.
The secretary shall have the following powers and duties to:
* * *
(2.1) Provide for the licensure of professional
solicitors and certain employees thereof.
* * *
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Section 3. Section 5(p) and (q) of the act, amended July 9,
1992 (P.L.436, No.92), are amended and the section is amended by
adding subsections to read:
Section 5. Registration of charitable organizations; financial
reports; fees; failure to file.
* * *
(p) Annual registration fees.--A charitable organization
which submits a short form registration statement pursuant to
section 7 or receives contributions of $25,000 or less during
the immediately preceding fiscal year shall pay an annual
registration fee of [$15] $30. 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] $200. 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] $300.
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] $500. 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 such 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] $50 for each
month or part of the month after the date on which the
registration statement and financial report were due to be filed
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or after the period of extension granted for such filing.
* * *
(u) Prohibited conduct.--A charitable organization, or an
officer, director, trustee, or employee thereof, may not
knowingly allow an officer, director, trustee or employee of the
charitable organization to solicit contributions on behalf of
the charitable organization if the officer, director, trustee or
employee has, regardless of adjudication, been convicted by a
court of a state or the United States of a felony or misdemeanor
involving dishonesty or arising from the conduct of a
solicitation for a charitable organization or purpose.
(v) Denial or revocation of registration.--The department
may deny or revoke the registration of a charitable organization
if the charitable organization, or an officer, director or
trustee thereof, has had the right to solicit contributions
revoked in a state or has been ordered by a court or
governmental agency to cease soliciting contributions within a
state.
(w) Duty to notify department.--A charitable organization
registered under this section which ends solicitation activities
or participation in charitable sales promotions in this State
shall immediately notify the department in writing of the date
such activities ceased.
Section 4. The act is amended by adding sections to read:
Section 5.1. Supplemental financial disclosure.
(a) Duty to file.--If, for the immediately preceding fiscal
year, a charitable organization had more than $1,000,000 in
total revenue and spent less than 25% of the organization's
total annual functional expenses on program service costs, in
addition to any financial report required, the charitable
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organization shall file the following supplemental financial
information on a form prescribed by the department:
(1) The dollar amount and the percentage of total
revenue and charitable contributions allocated to funding
each of the following administrative functions:
(i) Total salaries of all persons employed by the
charitable organization.
(ii) Fundraising, including the names of any
professional solicitors, amounts paid to professional
solicitors and contributions received from professional
solicitors' campaigns.
(iii) Travel expenses.
(iv) Overhead and other expenses related to managing
and administering the charitable organization.
(2) The names of and specific sums earned by or paid to
all employees or consultants who earned or were paid more
than $100,000 during the immediately preceding fiscal year.
(3) The names of and specific sums paid to all service
providers who were paid more than $100,000 during the
immediately preceding fiscal year and a brief description of
the services provided.
(4) The dollar amount and percentage of total revenue
and charitable contributions allocated to programs.
(5) The details of any economic or business transaction
between the charitable organization and:
(i) an officer, trustee or director of the
charitable organization;
(ii) the immediate family of an officer, trustee or
director of the charitable organization;
(iii) an entity controlled by an officer, trustee or
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director of the charitable organization;
(iv) an entity controlled by the immediate family of
an officer, trustee or director of the charitable
organization;
(v) an entity that employed or engaged for
consultation an officer, trustee or director of the
charitable organization; and
(vi) an entity that employed or engaged for
consultation the immediate family of an officer, trustee
or director of the charitable organization.
As used in this paragraph, the term "immediate family" means
a parent, spouse, child, sibling, grandparent, grandchild,
brother-in-law, sister-in-law, son-in-law, daughter-in-law,
mother-in-law or father-in-law.
(6) Any additional clarifying information.
(b) Time period for filing.--The supplemental financial
information required under subsection (a) shall be filed with
the department by the charitable organization within 30 days
after receiving a request for the information from the
department.
Section 5.2. Financial statements for specific disaster relief
solicitations.
(a) Duty to file.--A charitable organization that solicits
contributions in this Commonwealth for a charitable purpose
related to a specific disaster or crisis and receives at least
$50,000 in contributions in response to the solicitation shall
file quarterly disaster relief financial statements with the
department on a form prescribed by the department. The quarterly
statements shall detail the contributions secured as a result of
the solicitation and the manner in which the contributions were
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expended.
(b) Time period for filing.--The first quarterly statement
shall be filed on the last day of the third month following the
accrual of at least $50,000 in contributions after the
commencement of solicitations for the specific disaster or
crisis. The charitable organization shall continue to file
quarterly statements with the department until the quarter after
all contributions raised in response to the solicitation are
expended.
(c) Public posting.--The department shall post notice on its
publicly accessible Internet website of each disaster or crisis
subject to the reporting requirements of this section within 10
days after the disaster or crisis.
(d) Exemption.--A charitable organization that has been
registered with the department for at least four consecutive
years immediately before soliciting contributions for a
charitable purpose related to a specific disaster or crisis
shall be exempt from the reporting requirements of this section.
Section 5. Section 8(b) of the act, amended July 9, 1992
(P.L.436, No.92), is amended and the section is amended by
adding subsections to read:
Section 8. Registration of professional fundraising counsel and
contracts.
* * *
(b) Registration fee.--The application for registration
shall be accompanied by a fee of [$250] $500. 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
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for additional one-year periods upon application to the
department and payment of the registration fee.
* * *
(d.1) Prohibited conduct.--A person may not act as a
professional fundraising counsel, or an officer, director,
trustee or employee thereof, and may not knowingly employ an
officer, trustee, director or employee, if the person has,
regardless of adjudication, been convicted by a court of a state
or the United States of a felony or misdemeanor involving
dishonesty or arising from the conduct of a solicitation for a
charitable organization or purpose.
(d.2) Denial or revocation of registration.--The department
may deny or revoke the registration of a professional
fundraising counsel if the professional fundraising counsel, or
any of its officers, directors or trustees, has had the right to
solicit contributions revoked in a state or has been ordered by
a court or governmental agency to cease soliciting contributions
within a state.
* * *
Section 6. Section 9(a), (b), (e), (g), (j), (k) and (l) of
the act, amended July 9, 1992 (P.L.436, No.92) and June 22, 2001
(P.L.588, No.45), are amended to read:
Section 9. 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 such registration. A
registration application shall be signed and made by the
principal officer of the professional solicitor subject to 18
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Pa.C.S. ยง 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 and the names and license numbers of
all individuals engaged in the solicitation.
(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] $500. 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
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of the registration fee.
* * *
(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] $50
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 and license
number of each person responsible for directing and
supervising the conduct of the campaign and each person who
is to solicit during such 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
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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.
* * *
(g) Department review of contract.--
(1) 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.
(2) If the department determines that the contract and
notice contain the required information, the department shall
notify the professional solicitor within five working days of
its approval of the contract and notice. The department shall
also post a copy of the contract on its publicly accessible
Internet website.
(3) 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.
(4) 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.
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* * *
(j) Information on disclosure.--
(1) 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).
(2) If requested by a person being solicited, the
professional solicitor shall:
(i) (A) provide in writing, within 14 days after
receipt of the request, the fixed percentage of the
gross revenue or the reasonable estimate of the
percentage of the gross revenue that the charitable
organization will receive as a benefit from the
solicitation campaign; or
(B) immediately notify the person being
solicited that the information is available on the
department's publicly accessible Internet website or
by calling the department's toll-free telephone
number; and
(ii) (A) provide in writing, within 14 days after
receipt of the request, the percentage of the
contribution which may be deducted as a charitable
contribution under Federal income tax laws; or
(B) immediately notify the person being
solicited that the information is available on the
department's publicly accessible Internet website or
by calling the department's toll-free telephone
number.
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(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 visiting the department's publicly
accessible Internet website or 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
the charitable organization. The report shall be posted on the
publicly accessible Internet website of the department.
* * *
Section 7. The act is amended by adding a section to read:
Section 9.1. Individual licensure of professional solicitor
officers, employees and agents.
(a) General rule.--No individual may engage in solicitation
for a professional solicitor without holding a valid current
license issued by the department. Each officer, director, owner,
employee, agent or servant of a professional solicitor shall
obtain a solicitor license from the department before engaging
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in solicitation.
(b) Application.--An individual required to obtain a
solicitor license shall submit a written application in a form
prescribed by the department which application shall be subject
to the penalties under 18 Pa.C.S. ยง 4904 (relating to unsworn
falsification to authorities). The application form shall
require disclosure of criminal convictions as specified in
subsection (d), and any consent orders, fines or disciplinary
action imposed by a registration or licensing authority in a
state.
(c) Fees.--The application shall be accompanied by a fee,
the amount of which shall be established by regulation by the
department. A solicitor license shall be valid for one year and
may be renewed for additional one-year periods upon application
to the department and payment of the licensure fee.
(d) Denial of license.--The department may deny a solicitor
license to an individual who has been convicted by a court of a
state or the United States of a felony or misdemeanor involving
dishonesty or arising from the conduct of a solicitation for a
charitable organization or purpose.
Section 8. Section 16(f) of the act is amended to read:
Section 16. Investigation; subpoenas; injunctions; court
orders.
* * *
(f) Compliance.--Any person upon whom a notice is served
pursuant to this section shall comply with the terms thereof
unless otherwise provided by an order of court. Any person who
fails to appear or, with intent to avoid, evade or prevent
compliance, in whole or in part, with any civil investigation
under this act, removes from any place, conceals, withholds or
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destroys, mutilates, alters or by any other means falsifies any
documentary material in the possession, custody or control of
any person subject to any notice, or knowingly conceals any
relevant information, shall be assessed a civil penalty of not
more than [$5,000] $10,000. The Attorney General or the district
attorney may petition for an order of court for enforcement of
this section. Additionally, the secretary may take appropriate
action to petition for an order of court for the enforcement of
this section in accordance with the act of October 15, 1980
(P.L.950, No.164), known as the Commonwealth Attorneys Act. Any
disobedience of any final order entered under this section by
any court shall be punished as contempt thereof.
* * *
Section 9. Sections 17, 18 and 19(a)(6) of the act are
amended to read:
Section 17. Administrative enforcement and penalties.
(a) General rule.--The secretary may refuse to license or
register or may revoke or suspend the license or registration of
any charitable organization, professional fundraising counsel or
professional solicitor whenever he finds that a charitable
organization, professional fundraising counsel or professional
solicitor, or an agent, servant or employee thereof:
(1) Has violated or is operating in violation of any of
the provisions of this act, the regulations of the
department, or an order issued by the secretary.
(2) Has refused or failed or any of its principal
officers has refused or failed, after notice, to produce any
records of such organization or to disclose any information
required to be disclosed under this act or the regulations of
the department.
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(3) Has made a material false statement in an
application, statement or report required to be filed under
this act.
(b) Additional actions.--When the secretary finds that the
license or registration of any person may be refused, suspended
or revoked under the terms of subsection (a), the secretary may:
(1) Revoke a grant of exemption to any of the provisions
of this act.
(2) Issue an order directing that the person cease and
desist specified fundraising activities.
(3) Impose an administrative fine not to exceed [$1,000]
$2,000 for each act or omission which constitutes a violation
of this act and an additional penalty, not to exceed [$100]
$200 for each day during which such violation continues.
[Registration] License and registration will be automatically
suspended upon final affirmation of an administrative fine
until the fine is paid or until the normal expiration date of
the license or registration. No license or registration shall
be renewed until the fine is paid.
(4) Place the licensee or registrant on probation for
such period of time and subject to such conditions as he may
decide.
(c) Administrative procedures.--All actions of the secretary
shall be taken subject to the right of notice, hearing and
adjudication and the right of appeal therefrom in accordance
with Title 2 of the Pennsylvania Consolidated Statutes (relating
to administrative law and procedure).
Section 18. Criminal penalties.
(a) Deceit or fraud violation.--Any person who willfully and
knowingly violates any provisions of this act with intent to
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deceive or defraud any charity or individual, commits a
misdemeanor of the first degree and shall, upon conviction, be
sentenced to pay a fine not exceeding [$10,000] $50,000 or
imprisonment for not more than five years, or both.
(b) Other violations.--Any other violation of this act shall
constitute a misdemeanor of the third degree punishable, upon
conviction, by a fine not exceeding [$2,500] $5,000 or
imprisonment for not more than one year, or both.
(c) Location of offense.--Any offense committed under this
act involving a solicitation may be deemed to have been
committed at either the place at which the solicitation was
initiated or at the place where the solicitation was received.
Section 19. Civil penalties.
(a) General rule.--Whenever the Attorney General or any
district attorney shall have reason to believe, or shall be
advised by the secretary, that the person is operating in
violation of the provisions of this act, the Attorney General or
district attorney may bring an action in the name of the
Commonwealth against such person who has violated this act, to
enjoin such person from continuing such violation and for such
other relief as the court deems appropriate. In any proceeding
under this subsection, the court may make appropriate orders,
including:
* * *
(6) the assessment of a civil penalty not exceeding
[$1,000] $2,000 per violation of the act, which penalty shall
be in addition to any other relief which may be granted; and
* * *
Section 10. The act is amended by adding a section to read:
Section 22.1. Charitable Organization Regulation Account.
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(a) Establishment.--The Charitable Organization Regulation
Account is established as a restricted account within the
General Fund.
(b) Funding sources.--The Charitable Organization Regulation
Account shall be funded from the following sources:
(1) Ten percent of the fees collected under sections 5,
8 and 9.
(2) All of the fees collected under section 9.1.
(3) Any funds appropriated or transferred to the
Charitable Organization Regulation Account.
(c) Appropriation.--The money in the Charitable Organization
Regulation Account is hereby appropriated to the department on a
continuing basis for the purpose of enforcement, licensing
requirements and enhanced investigations of charitable
organizations, professional fundraising counsels and
professional solicitors as provided in this act.
Section 11. This act shall take effect July 1, 2015, or in
60 days, whichever occurs later.
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