SENATE AMENDED
PRIOR PRINTER'S NO. 745 PRINTER'S NO. 2099
No. 672 Session of 2001
INTRODUCED BY FLICK, FREEMAN, SATHER, ARGALL, ARMSTRONG, BARD,
BELFANTI, CLARK, COLAFELLA, COY, DALEY, GODSHALL, HENNESSEY,
HERMAN, HERSHEY, HUTCHINSON, KAISER, LAUGHLIN, LYNCH, MAHER,
MELIO, R. MILLER, READSHAW, STABACK, STERN, T. STEVENSON,
E. Z. TAYLOR, THOMAS, TRELLO, WILT, ZIMMERMAN, SAYLOR,
SCHULER, M. BAKER, WALKO, SOLOBAY, SHANER, McILHATTAN, HESS,
McCALL, CALTAGIRONE, WATSON, JAMES, PIPPY, PETRARCA, HANNA,
BROWNE, BARRAR, MICOZZIE, SEMMEL, WOJNAROSKI, M. COHEN and J.
TAYLOR, FEBRUARY 13, 2001
SENATOR LEMMOND, STATE GOVERNMENT, IN SENATE, AS AMENDED,
JUNE 5, 2001
AN ACT
1 Amending the act of December 19, 1990 (P.L.1200, No.202),
2 entitled "An act providing for the registration and
3 regulation of solicitations by charitable organizations,
4 professional fundraisers and other solicitors; imposing
5 additional powers on the Department of State and the Office
6 of Attorney General; prescribing civil and criminal
7 penalties; and making a repeal," further providing for
8 reports by charitable organizations, FOR REGISTRATION OF <--
9 PROFESSIONAL FUNDRAISING COUNSEL AND CONTRACTS, FOR
10 REGISTRATION OF PROFESSIONAL SOLICITORS, FOR CONTRACT AND
11 DISCLOSURE REQUIREMENTS AND FOR RESTRICTION ON MATERIALS.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. Section 5(f) 5(B) AND (F) of the act of December <--
15 19, 1990 (P.L.1200, No.202), known as the Solicitation of Funds
16 for Charitable Purposes Act, is ARE amended to read: <--
17 Section 5. Registration of charitable organizations; financial
18 reports; fees; failure to file.
1 * * *
2 (B) FILING OF STATEMENT.--IT SHALL BE THE DUTY OF THE <--
3 PRESIDENT, CHAIRMAN OR PRINCIPAL OFFICER OF EACH CHARITABLE
4 ORGANIZATION TO FILE THE REGISTRATION STATEMENT, FINANCIAL
5 REPORT AND FEE REQUIRED UNDER THIS SECTION. THE REGISTRATION
6 STATEMENT SHALL BE [SWORN TO] MADE BY TWO AUTHORIZED OFFICERS
7 SUBJECT TO 18 PA.C.S. § 4904 (RELATING TO UNSWORN FALSIFICATION
8 TO AUTHORITIES), INCLUDING THE CHIEF FISCAL OFFICER OF THE
9 ORGANIZATION, AND SHALL CONTAIN ALL OF THE FOLLOWING
10 INFORMATION:
11 (1) THE NAME OF THE ORGANIZATION AND ANY OTHER NAME OR
12 NAMES UNDER WHICH IT INTENDS TO SOLICIT CONTRIBUTIONS.
13 (2) THE PRINCIPAL ADDRESS AND TELEPHONE NUMBER OF THE
14 ORGANIZATION AND THE ADDRESSES AND TELEPHONE NUMBERS OF ANY
15 OFFICES IN THIS COMMONWEALTH. IF THE ORGANIZATION DOES NOT
16 MAINTAIN AN OFFICE, THE NAME AND ADDRESS OF THE INDIVIDUAL
17 HAVING CUSTODY OF ITS FINANCIAL RECORDS.
18 (3) THE NAMES AND ADDRESSES OF ANY AFFILIATES WHICH
19 SHARE IN THE CONTRIBUTIONS OR OTHER REVENUE RAISED IN THIS
20 COMMONWEALTH.
21 (4) THE NAMES AND ADDRESSES OF THE OFFICERS, DIRECTORS
22 AND TRUSTEES AND THE PRINCIPAL SALARIED EXECUTIVE STAFF
23 OFFICERS.
24 (5) A COPY OF THE FINANCIAL REPORT REQUIRED UNDER
25 SUBSECTION (E).
26 (6) A COPY OF ANY DETERMINATION OF THE ORGANIZATION'S
27 TAX-EXEMPT STATUS UNDER THE INTERNAL REVENUE CODE OF 1986
28 (PUBLIC LAW 99-514) AND, FOR ORGANIZATIONS GRANTED TAX-EXEMPT
29 STATUS UNDER SECTION 501(C)(3), A COPY OF THE LAST FILED
30 INTERNAL REVENUE SERVICE FORM 990 AND SCHEDULE A FOR EVERY
20010H0672B2099 - 2 -
1 CHARITABLE ORGANIZATION AND PARENT ORGANIZATION.
2 (7) THE DATE WHEN THE ORGANIZATION'S FISCAL YEAR BEGINS.
3 (8) WHETHER:
4 (I) THE ORGANIZATION IS AUTHORIZED BY ANY OTHER
5 GOVERNMENTAL AUTHORITY TO SOLICIT CONTRIBUTIONS;
6 (II) THE ORGANIZATION OR ANY OF ITS PRESENT
7 OFFICERS, DIRECTORS, EXECUTIVE PERSONNEL OR TRUSTEES ARE
8 OR HAVE EVER BEEN ENJOINED IN ANY JURISDICTION FROM
9 SOLICITING CONTRIBUTIONS OR HAVE BEEN FOUND TO HAVE
10 ENGAGED IN UNLAWFUL PRACTICES IN THE SOLICITATION OF
11 CONTRIBUTIONS OR ADMINISTRATION OF CHARITABLE ASSETS;
12 (III) THE ORGANIZATION'S REGISTRATION OR LICENSE HAS
13 BEEN DENIED, SUSPENDED OR REVOKED BY ANY GOVERNMENTAL
14 AGENCY TOGETHER WITH THE REASONS FOR SUCH DENIAL,
15 SUSPENSION OR REVOCATION; AND
16 (IV) THE ORGANIZATION HAS VOLUNTARILY ENTERED INTO
17 AN ASSURANCE OF VOLUNTARY DISCONTINUANCE OR AGREEMENT
18 SIMILAR TO THAT SET FORTH IN SECTION 19(B), TOGETHER WITH
19 A COPY OF THAT AGREEMENT.
20 (9) A CLEAR DESCRIPTION OF THE SPECIFIC PROGRAMS FOR
21 WHICH CONTRIBUTIONS WILL BE USED AND A STATEMENT WHETHER SUCH
22 PROGRAMS ARE PLANNED OR IN EXISTENCE.
23 (10) THE NAMES AND ADDRESSES OF ANY PROFESSIONAL
24 SOLICITORS, PROFESSIONAL FUNDRAISING COUNSELS AND COMMERCIAL
25 COVENTURERS WHO ARE ACTING OR HAVE AGREED TO ACT ON BEHALF OF
26 THE ORGANIZATION.
27 (11) THE NAMES OF THE INDIVIDUALS OR OFFICERS OF THE
28 ORGANIZATION WHO ARE IN CHARGE OF ANY SOLICITATION
29 ACTIVITIES, WHO WILL HAVE FINAL RESPONSIBILITY FOR THE
30 CUSTODY OF THE CONTRIBUTIONS AND WHO WILL BE RESPONSIBLE FOR
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1 THE FINAL DISTRIBUTION OF THE CONTRIBUTIONS.
2 (12) WHETHER ANY OF THE ORGANIZATION'S OFFICERS,
3 DIRECTORS, TRUSTEES OR EMPLOYEES ARE RELATED BY BLOOD,
4 MARRIAGE OR ADOPTION TO EACH OTHER OR TO ANY OFFICERS, AGENTS
5 OR EMPLOYEES OF ANY PROFESSIONAL FUNDRAISING COUNSEL OR
6 PROFESSIONAL SOLICITOR UNDER CONTRACT TO THE ORGANIZATION OR
7 TO ANY SUPPLIER OR VENDOR PROVIDING GOODS OR SERVICES TO THE
8 ORGANIZATION, AND THE NAMES AND BUSINESS AND RESIDENCE
9 ADDRESSES OF ANY SUCH RELATED PARTIES. WHERE THE NUMBER OF
10 EMPLOYEES OR VENDORS RENDERS IT IMPRACTICAL FOR THE
11 REGISTRANT TO CONTACT THEM ON AN INDIVIDUAL BASIS REGARDING
12 THE EXISTENCE OF ANY OF THE RELATIONSHIPS SET FORTH UNDER
13 THIS SECTION, THE REGISTRANT MAY FILE AN AFFIDAVIT STATING
14 WHICH RELATIONSHIPS, IF ANY, EXIST TO THE BEST OF THE
15 AFFIANT'S INFORMATION AND BELIEF.
16 (13) ANY OTHER INFORMATION REQUIRED BY THE REGULATIONS
17 OF THE DEPARTMENT.
18 * * *
19 (f) Audit of certain financial reports.--The financial
20 report of every charitable organization which [received]
21 receives annual contributions [in excess of $100,000] of
22 $125,000 or more shall be audited by an independent certified
23 public accountant or public accountant. Except for the
24 charitable organizations described in section 6(a)(3), [the
25 financial report of] every charitable organization which
26 receives annual contributions [in excess] of at least [$25,000]
27 $50,000, but less than [$100,000] $125,000, shall be [reviewed
28 or audited] required to have a review or audit of their
29 financial statements performed by an independent certified
30 public accountant or public accountant. An audit or review is
20010H0672B2099 - 4 -
1 optional for any charitable organization which receives annual
2 contributions of less than [$25,000] $50,000 or for any
3 charitable organization described in section 6(a)(3) which
4 receives annual contributions of less than [$100,000] $125,000.
5 Audits shall be performed in accordance with the [Statement]
6 Statements on Auditing Standards of the American Institute of
7 Certified Public Accountants [and], whereas reviews shall be
8 performed in accordance with the [Statement] Statements on
9 Standards for Accounting and Review Services of the American
10 Institute of Certified Public Accountants.
11 * * *
12 SECTION 2. SECTIONS 8(A) AND (D) AND 9(A) AND (F) OF THE <--
13 ACT, AMENDED JULY 9, 1992 (P.L.436, NO.92), ARE AMENDED TO READ:
14 SECTION 8. REGISTRATION OF PROFESSIONAL FUNDRAISING COUNSEL AND
15 CONTRACTS.
16 (A) REGISTRATION AND APPROVAL REQUIRED.--NO PERSON SHALL ACT
17 AS A PROFESSIONAL FUNDRAISING COUNSEL BEFORE OBTAINING
18 DEPARTMENT APPROVAL OF A REGISTRATION STATEMENT PURSUANT TO
19 SUBSECTION (C) OR AFTER THE EXPIRATION, SUSPENSION OR REVOCATION
20 OF SUCH REGISTRATION. A REGISTRATION APPLICATION SHALL BE SIGNED
21 AND [SWORN TO] BE MADE BY THE PRINCIPAL OFFICER OF THE
22 PROFESSIONAL FUNDRAISING COUNSEL SUBJECT TO 18 PA.C.S. § 4904
23 (RELATING TO UNSWORN FALSIFICATION TO AUTHORITIES) AND SHALL
24 CONTAIN ALL OF THE FOLLOWING INFORMATION:
25 (1) THE ADDRESS OF THE PRINCIPAL PLACE OF BUSINESS OF
26 THE APPLICANT AND ANY PENNSYLVANIA ADDRESSES, IF THE
27 PRINCIPAL PLACE OF BUSINESS IS LOCATED OUTSIDE THIS
28 COMMONWEALTH.
29 (2) THE FORM OF THE APPLICANT'S BUSINESS.
30 (3) THE NAMES AND RESIDENCE ADDRESSES OF ALL PRINCIPALS
20010H0672B2099 - 5 -
1 OF THE APPLICANT, INCLUDING ALL OFFICERS, DIRECTORS AND
2 OWNERS.
3 (4) WHETHER ANY OF THE OWNERS, DIRECTORS, OFFICERS OR
4 EMPLOYEES OF THE APPLICANT ARE RELATED BY BLOOD, MARRIAGE OR
5 ADOPTION TO ANY OTHER DIRECTORS, OFFICERS, OWNERS OR
6 EMPLOYEES OF THE APPLICANT, ANY OFFICER, DIRECTOR, TRUSTEE OR
7 EMPLOYEE OF ANY CHARITABLE ORGANIZATION UNDER CONTRACT TO THE
8 APPLICANT OR ANY SUPPLIER OR VENDOR PROVIDING GOODS OR
9 SERVICES TO ANY CHARITABLE ORGANIZATION UNDER CONTRACT TO THE
10 APPLICANT.
11 (5) THE NAME OF ANY PERSON WHO IS IN CHARGE OF ANY
12 SOLICITATION ACTIVITY.
13 (6) ANY OTHER INFORMATION REQUIRED BY THE REGULATIONS OF
14 THE DEPARTMENT.
15 * * *
16 (D) WRITTEN CONTRACT.--THERE SHALL BE A WRITTEN CONTRACT
17 BETWEEN A CHARITABLE ORGANIZATION AND A PROFESSIONAL FUNDRAISING
18 COUNSEL WHICH SHALL BE FILED BY THE PROFESSIONAL FUNDRAISING
19 COUNSEL WITH THE DEPARTMENT AT LEAST TEN WORKING DAYS PRIOR TO
20 THE PERFORMANCE BY THE PROFESSIONAL FUNDRAISING COUNSEL OF ANY
21 SERVICE. NO SOLICITATION OR SERVICES PURSUANT TO THE CONTRACT
22 SHALL BEGIN BEFORE THE DEPARTMENT HAS APPROVED THE CONTRACT
23 PURSUANT TO SUBSECTION (E). THE CONTRACT MUST BE SIGNED BY TWO
24 AUTHORIZED OFFICIALS OF THE CHARITABLE ORGANIZATION, ONE OF WHOM
25 MUST BE A MEMBER OF THE ORGANIZATION'S GOVERNING BODY, AND THE
26 AUTHORIZED CONTRACTING OFFICER FOR THE PROFESSIONAL FUNDRAISING
27 COUNSEL. THE CONTRACT SHALL CONTAIN ALL OF THE FOLLOWING
28 PROVISIONS:
29 (1) THE LEGAL NAME AND ADDRESS OF THE CHARITABLE
30 ORGANIZATION AS REGISTERED WITH THE DEPARTMENT UNLESS THAT
20010H0672B2099 - 6 -
1 CHARITABLE ORGANIZATION IS EXEMPT FROM REGISTRATION.
2 (2) A STATEMENT OF THE CHARITABLE PURPOSE FOR WHICH THE
3 SOLICITATION CAMPAIGN IS BEING CONDUCTED.
4 (3) A STATEMENT OF THE RESPECTIVE OBLIGATIONS OF THE
5 PROFESSIONAL FUNDRAISING COUNSEL AND THE CHARITABLE
6 ORGANIZATION.
7 (4) A CLEAR STATEMENT OF THE FEES WHICH WILL BE PAID TO
8 THE PROFESSIONAL FUNDRAISING COUNSEL.
9 (5) THE EFFECTIVE AND TERMINATION DATES OF THE CONTRACT
10 [AND THE] OR IF THE CONTRACT DOES NOT HAVE A SET TERMINATION
11 DATE, THE CONTRACT SHALL CONTAIN A CLAUSE ALLOWING EITHER
12 PARTY A REASONABLE PERIOD TO TERMINATE THE CONTRACT OR NOTIFY
13 THE OTHER PARTY IF EITHER PARTY CHOOSES NOT TO RENEW. THE
14 CONTRACT SHALL ALSO CONTAIN THE DATE SERVICES WILL COMMENCE
15 WITH RESPECT TO SOLICITATION IN THIS COMMONWEALTH OF
16 CONTRIBUTIONS FOR A CHARITABLE ORGANIZATION.
17 (6) A STATEMENT THAT THE PROFESSIONAL FUNDRAISING
18 COUNSEL WILL NOT AT ANY TIME HAVE CUSTODY OR CONTROL OF
19 CONTRIBUTIONS.
20 (7) A STATEMENT THAT THE CHARITABLE ORGANIZATION
21 EXERCISES CONTROL AND APPROVAL OVER THE CONTENT AND VOLUME OF
22 ANY SOLICITATION.
23 (8) ANY OTHER INFORMATION REQUIRED BY THE REGULATIONS OF
24 THE DEPARTMENT.
25 * * *
26 SECTION 9. REGISTRATION OF PROFESSIONAL SOLICITORS; CONTRACT
27 AND DISCLOSURE REQUIREMENTS; BONDS; RECORDS;
28 BOOKS.
29 (A) REGISTRATION AND APPROVAL REQUIRED.--NO PERSON SHALL ACT
30 AS A PROFESSIONAL SOLICITOR BEFORE OBTAINING DEPARTMENT APPROVAL
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1 OF A REGISTRATION STATEMENT PURSUANT TO SUBSECTION (D) OR AFTER
2 THE EXPIRATION, SUSPENSION OR REVOCATION OF SUCH REGISTRATION. A
3 REGISTRATION APPLICATION SHALL BE SIGNED AND [SWORN TO] MADE BY
4 THE PRINCIPAL OFFICER OF THE PROFESSIONAL SOLICITOR SUBJECT TO
5 18 PA.C.S. § 4904 (RELATING TO UNSWORN FALSIFICATION TO
6 AUTHORITIES), AND SHALL CONTAIN ALL OF THE FOLLOWING
7 INFORMATION:
8 (1) THE ADDRESS OF THE PRINCIPAL PLACE OF BUSINESS OF
9 THE APPLICANT AND ANY PENNSYLVANIA ADDRESSES, IF THE
10 PRINCIPAL PLACE OF BUSINESS IS LOCATED OUTSIDE THIS
11 COMMONWEALTH.
12 (2) THE FORM OF THE APPLICANT'S BUSINESS.
13 (3) THE NAMES AND RESIDENCE ADDRESSES OF ALL PRINCIPALS
14 OF THE APPLICANT, INCLUDING ALL OFFICERS, DIRECTORS AND
15 OWNERS.
16 (4) WHETHER ANY OF THE OWNERS, DIRECTORS, OFFICERS OR
17 EMPLOYEES OF THE APPLICANT ARE RELATED BY BLOOD, MARRIAGE OR
18 ADOPTION TO ANY OTHER DIRECTORS, OFFICERS, OWNERS OR
19 EMPLOYEES OF THE APPLICANT, ANY OFFICER, DIRECTOR, TRUSTEE OR
20 EMPLOYEE OF ANY CHARITABLE ORGANIZATION UNDER CONTRACT TO THE
21 APPLICANT OR ANY SUPPLIER OR VENDOR PROVIDING GOODS OR
22 SERVICES TO ANY CHARITABLE ORGANIZATION UNDER CONTRACT TO THE
23 APPLICANT.
24 (5) THE NAME OF ALL PERSONS IN CHARGE OF ANY
25 SOLICITATION ACTIVITY.
26 (6) ANY OTHER INFORMATION REQUIRED BY THE REGULATIONS OF
27 THE DEPARTMENT.
28 * * *
29 (F) WRITTEN CONTRACT.--THERE SHALL BE A WRITTEN CONTRACT
30 BETWEEN A PROFESSIONAL SOLICITOR AND A CHARITABLE ORGANIZATION
20010H0672B2099 - 8 -
1 FOR EACH SOLICITATION CAMPAIGN WHICH SHALL BE SIGNED BY TWO
2 AUTHORIZED OFFICIALS OF THE CHARITABLE ORGANIZATION, ONE OF WHOM
3 MUST BE A MEMBER OF THE ORGANIZATION'S GOVERNING BODY, AND THE
4 AUTHORIZED CONTRACTING OFFICER FOR THE PROFESSIONAL SOLICITOR
5 AND WHICH SHALL CONTAIN ALL OF THE FOLLOWING PROVISIONS:
6 (1) THE LEGAL NAME AND ADDRESS OF THE CHARITABLE
7 ORGANIZATION AS REGISTERED WITH THE DEPARTMENT, UNLESS THAT
8 CHARITABLE ORGANIZATION IS EXEMPT FROM REGISTRATION.
9 (2) A STATEMENT OF THE CHARITABLE PURPOSE FOR WHICH THE
10 SOLICITATION CAMPAIGN IS BEING CONDUCTED.
11 (3) A STATEMENT OF THE RESPECTIVE OBLIGATIONS OF THE
12 PROFESSIONAL SOLICITOR AND THE CHARITABLE ORGANIZATION.
13 (4) A STATEMENT OF THE GUARANTEED MINIMUM PERCENTAGE OF
14 THE GROSS RECEIPTS FROM CONTRIBUTIONS WHICH WILL BE REMITTED
15 TO OR RETAINED BY THE CHARITABLE ORGANIZATION, IF ANY, OR, IF
16 THE SOLICITATION INVOLVES THE SALE OF GOODS, SERVICES OR
17 TICKETS TO A FUNDRAISING EVENT, THE PERCENTAGE OF THE
18 PURCHASE PRICE WHICH WILL BE REMITTED TO THE CHARITABLE
19 ORGANIZATION, IF ANY. ANY STATED PERCENTAGE SHALL EXCLUDE ANY
20 AMOUNT WHICH THE CHARITABLE ORGANIZATION IS TO PAY AS
21 FUNDRAISING COSTS.
22 (5) A STATEMENT OF THE PERCENTAGE OF THE GROSS REVENUE
23 WHICH THE PROFESSIONAL SOLICITOR WILL BE COMPENSATED. THE
24 STATED PERCENTAGE SHALL INCLUDE ANY AMOUNT WHICH THE
25 PROFESSIONAL SOLICITOR IS TO BE REIMBURSED AS PAYMENT FOR
26 FUNDRAISING COSTS. IF THE COMPENSATION OF THE PROFESSIONAL
27 SOLICITOR IS NOT CONTINGENT UPON THE NUMBER OF CONTRIBUTIONS
28 OR THE AMOUNT OF REVENUE RECEIVED, HIS COMPENSATION SHALL BE
29 EXPRESSED AS A REASONABLE ESTIMATE OF THE PERCENTAGE OF THE
30 GROSS REVENUE, AND THE CONTRACT SHALL CLEARLY DISCLOSE THE
20010H0672B2099 - 9 -
1 ASSUMPTIONS UPON WHICH THE ESTIMATE IS BASED. THE STATED
2 ASSUMPTIONS SHALL BE BASED UPON ALL OF THE RELEVANT FACTS
3 KNOWN TO THE PROFESSIONAL SOLICITOR REGARDING THE
4 SOLICITATION TO BE CONDUCTED BY THE PROFESSIONAL SOLICITOR.
5 (6) THE EFFECTIVE AND TERMINATION DATES OF THE CONTRACT
6 [AND] OR IF THE CONTRACT DOES NOT HAVE A SET TERMINATION
7 DATE, THE CONTRACT SHALL CONTAIN A CLAUSE ALLOWING EITHER
8 PARTY A REASONABLE PERIOD TO TERMINATE THE CONTRACT OR NOTIFY
9 THE OTHER PARTY IF EITHER PARTY CHOOSES NOT TO RENEW. THE
10 CONTRACT SHALL ALSO CONTAIN THE DATE SOLICITATION ACTIVITY IS
11 TO COMMENCE WITHIN THIS COMMONWEALTH.
12 (7) ANY OTHER INFORMATION REQUIRED BY THE REGULATIONS OF
13 THE DEPARTMENT.
14 * * *
15 Section 2 3. This act shall take effect in 60 days. <--
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