Be it enacted by the Senate and House of Representatives
in General Court assembled, and by the authority of the same,
SECTION 1. Chapter 68 of the General Laws is hereby amended by striking out section 18 to section 33, inclusive, and inserting in place thereof the following eighteen sections:-
Section 18. When used in this section, and in sections nineteen to thirty-five, inclusive, the following terms shall have the following meanings:-
"Charitable", including but not limited to benevolent, educational, philanthropic, humane, patriotic, scientific, literary, religious, eleemosynary, health, safety or welfare-related, or in furtherance of governmental or civic objectives, and benefiting the general public or some indefinite class thereof;
"Charitable organization", any person whose purposes or actual operation are charitable in nature or one holding himself out to be a charitable organization in whole or in part, including any person who in any manner employs a charitable appeal as the basis of any solicitation or an appeal which could be reasonably interpreted to suggest that there is a charitable purpose to any such solicitation;
"Commercial co-venturer", any person who for profit or other commercial consideration, conducts, produces, promotes, underwrites, arranges or sponsors a performance, event, or sale to the public of a good or service which is advertised in conjunction with the name of any charitable organization or as benefiting to any extent any charitable purpose. Any such person who will benefit in good will only shall not be deemed a commercial co-venturer if the collection and distribution of the proceeds of the performance, event or sale are supervised and controlled by the benefiting charitable organization;
"Contributions", the promise or grant of any money, property, credit, financial assistance, sponsorship or anything of value including the payment or promise to pay in consideration of a performance, event or sale of a good or service by a charitable organization or a commercial co-venturer. Payments by members of a charitable organization for membership fees, dues, fines or assessments or for services rendered to individual members, if such fees, dues, fines or assessments confer a bona fide right, privilege, professional standing, honor or other direct benefit, shall not be deemed contributions;
"Director", the director of the division of public charities in the department of the attorney general;
"Division", the division of public charities in the department of the attorney general;
"Parent organization", that part of a charitable organization which co-ordinates, supervises or exercises control over policy, fund-raising and expenditures; or assists or advises one or more chapters, branches or affiliates in this commonwealth;
"Person", any individual, organization, trust, foundation, group, association, partnership, corporation, society or any combination of them;
"Professional fund-raising counsel", any person who is retained for a financial or other consideration by a charitable organization to plan, conduct, manage, carry on, advise or act as a consultant whether directly or indirectly in connection with the solicitation of contributions in this commonwealth for or on behalf of any charitable organization but who actually solicits no contributions and has neither custody nor control of contributions as part of such services. A bona fide salaried officer or regular, nontemporary employee of a charitable organization maintaining a permanent establishment within the commonwealth shall not be deemed to be a professional fund-raising counsel;
"Professional solicitor", any person who is retained for a 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 or services, whether such solicitation is done individually or through other persons under the direction of the professional solicitor. A person who otherwise is a professional fund-raising counsel shall be deemed a professional solicitor if at any time he has custody or control of contributions. A bona fide salaried officer or regular, nontemporary employee of a charitable organization maintaining a permanent establishment within the commonwealth shall not be deemed to be a professional solicitor. No attorney, investment counselor or banker who advises an individual corporation or association to make a charitable contribution shall be deemed, as the result of such advice, to be a professional fund-raising counsel or a professional solicitor;
"Solicit" or "solicitation", any direct or indirect request for a contribution on the representation that such contribution will be used in whole or in part for a charitable purpose, including but not limited to:
(1) any oral request that is made in person, by telephone, radio or television or other advertising or communications media;
(2) any 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) any sale of, offer or attempt to sell, any 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; or
(4) any 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.
Section 19. Every charitable organization, except one granted an exemption under the provisions of section twenty, which intends to solicit contributions from persons within the commonwealth or have contributions solicited on its behalf by other charitable organizations, commercial co-venturers, or professional solicitors shall, prior to any such solicitation, file an annual registration statement with the division upon prescribed forms, which shall be refiled in the next and each following year in which such charitable organization is engaged in solicitation activities; provided, that the provisions of this chapter have been complied with, the director of the division shall issue a certificate of registration to a charitable organization within ten days of receipt of the registration statement. No charitable organization required to be registered under this section shall solicit funds without a valid certificate of registration. The president, chairman or principal officer of such charitable organization shall file the statements required under sections eighteen to thirty-five, inclusive. Such statements shall be sworn to and shall contain the following information: (1) The name of the organization and the purpose for which it was organized; (2) the address of the organization and the address of any offices in this commonwealth or, if the organization does not maintain an office, the name and address of the person having custody of its financial records; (3) the place where and the date when the organization was legally established, the form of its organization and its tax exempt status for federal income tax purposes; (4) the names and the addresses of the officers, directors and trustees and the principal salaried executive staff officers; (5) a copy of the annual financial report for the organization's immediate preceding fiscal year as required under section eight F of chapter twelve; (6) whether the organization intends to solicit contributions from the public; (7) whether the organization is authorized by any other governmental authority to solicit contributions and whether it is or has ever been enjoined by any court from soliciting contributions; (8) the charitable purpose or purposes for which the contributions to be solicited shall be used; (9) the name or names under which it intends to solicit contributions; (10) the names of the individuals or officers of the organization who shall have final responsibility for the custody of the contributions; (11) the names of the individuals or officers of the organization responsible for the final distribution of the contributions. The registration forms and any other documents prescribed by the division shall be signed by any two authorized officers, including the chief fiscal officer, of the charitable organization and shall be verified under oath. Every charitable organization except one granted said exemption under section twenty shall pay a registration fee to be determined annually by the commissioner of administration under the provisions of section three B of chapter seven, subject to the approval of the general court. If no action is taken by the general court within sixty days of receipt of said fee, it shall be deemed approved. Every charitable organization having one or more chapters, branches or affiliates in this commonwealth and filing on behalf of such chapter, branches or affiliates shall pay a single registration fee.
Section 20. The following shall not be required to file registration statements with the division or to have a certificate of registration under section nineteen: (1) any religious corporation, trust, foundation, association or organization incorporated or established for religious purposes, nor any agency or organization incorporated or established for charitable, purposes and engaged in effectuating one or more of such purposes, which is affiliated with, operated by, or supervised or controlled by a corporation sole or other religious corporation, trust, foundation, association, or organization incorporated or established for religious purposes, nor any other religious agency or organization which serves religion by the preservation of religious rights and freedom from persecution or prejudice or by fostering religion, including the moral and ethical aspects of a particular religious faith; (2) charitable organizations which do not actually raise or receive contributions from the public in excess of five thousand dollars during a calendar year or do not receive contributions from more than ten persons during a calendar year, if all of their functions, including fund-raising activities, are carried on by persons who are unpaid for their services and if no part of their assets or income inures to the benefit of, or is paid to any officer or member; provided, however, that if the contributions raised from the public, whether or not all is received by any charitable organization during any calendar year, is in excess of five thousand dollars, it shall within thirty days after the date it shall have received total contributions in excess of five thousand dollars, register with and report to the division as required by section nineteen.
Section 21. (a) No professional solicitor or commercial co-venturer or their agents, servants or employees, including agents, servants or employees assigned to work under the direction of a professional solicitor or commercial co-venturer, shall receive compensation which in the aggregate amounts to a total in excess of twenty-five per cent of the total moneys, pledges or other property raised or received by reason of any solicitation activities or campaigns, including reimbursement for all expenses incurred in the solicitation. (b) For purposes of this section, the total moneys, funds, pledges or other property raised or received shall be adjusted by first deducting therefrom the actual cost, not to exceed fair market value, to the charitable organization or professional solicitor or commercial co-venturer of performances, events or goods sold to the public.
Section 22. (a) Every contract or agreement between a professional fund-raising counsel or a commercial co-venturer or a professional solicitor and a charitable organization required to have a certificate of registration pursuant to section nineteen shall be in writing, signed by two officers of the charitable organization, and filed with the director of the division within ten days after such contract or agreement is entered into. No solicitation shall be conducted prior to the filing of such contract or agreement. (b) Every contract or agreement between a professional solicitor or a commercial co-venturer and a charitable organization shall include: (1) a statement of the charitable purposes to be described in the solicitation; and (2) a statement of the guaranteed minimum percentage of the gross receipts from fund-raising which will be utilized exclusively for the charitable purposes described in the solicitation.
Section 23. (a) All solicitations by professional solicitors and all solicitations by commercial co-venturers shall contain, at the time of solicitation, the following disclosures: (1) the name, address and telephone number of the charitable organization and a description of how the contributions raised by the solicitation will be utilized for charitable purposes, or if there is no charitable organization, the name, address and telephone number of the professional solicitor or commercial co-venturer and a description of how the contributions raised by the solicitation will be utilized for charitable purposes; (2) the statement that the solicitation is being conducted by a "paid fund-raiser"; (3) the guaranteed minimum percentage of the gross receipts from fund-raising that will be utilized exclusively for the charitable purposes described in the solicitation; and such other disclosures as required by relevant rules and regulations promulgated under section twenty-nine. If the solicitation is for advertising, the disclosure shall also include the geographic distribution and the circulation of the publication in which the advertising will appear. (b) For purposes of this section, the guaranteed minimum percentage required to be disclosed by clause (3) of subsection (a) shall be the percentage stated in the contract or written agreement between the professional solicitor or commercial co-venturer and the charitable organization.
Section 24. (a) No person shall act as a professional fund-raising counsel, commercial co-venturer or professional solicitor for a charitable organization required to have a certificate of registration pursuant to the provisions of section nineteen, unless first having registered with the division. Applications for such registration shall be in writing under oath in the form prescribed by the division and shall contain such information as the division may require. The application for registration by a professional fund-raising counsel, commercial co-venturer or professional solicitor shall be accompanied by an annual fee to be determined annually by the commissioner of administration under the provisions of section three B of chapter seven. A partnership or corporation which is a professional fund-raising counsel, commercial co-venturer or professional solicitor may register for and pay a single fee on behalf of all its members, officers, agents and employees. (b) Commercial co-venturers and professional solicitors shall, at the time of making application, file with and have approved by the division a bond in which the applicant shall be the principal obligor in the sum of ten thousand dollars with one or more sureties satisfactory to the division whose liability in the aggregate shall at least equal said sum. Said bond shall run to the division for the use of the commonwealth and to any charitable organization which may have a cause of action against the obligor of said bond for any malfeasance or misfeasance in the conduct of solicitation activities. A partnership or corporation which is a commercial co-venturer or professional solicitor may file a consolidated bond on behalf of all its members, officers and employees. The aggregate liability of the surety for all breaches of the conditions of the bond shall, in no event, exceed the sum of said bond. (c) For each calendar year, commercial co-venturers and professional solicitors shall file with the division on a form prescribed by the division a financial report stating, for each contract or agreement with a charitable organization, the name of the charitable organization, the gross receipts collected pursuant to that contract or agreement, the amounts paid to the charitable organization to be utilized exclusively for the charitable purposes described in the solicitation, the amounts paid to the commercial co-venturer and the professional solicitor; all additional expenses not otherwise stated; and such other information as the director may require. This report shall be co-signed by representatives of the charitable organizations for whom solicitation was conducted. (d) Each completed registration shall be valid for a period of one calendar year or a part thereof and may be renewed for additional one-year periods upon written application under oath in the form prescribed by the division and containing such information as it may require, the filing of all contracts or agreements as required by section twenty-two, the bond, where applicable, and the fee prescribed by this section.
Section 25. Registration statements, applications, reports, contracts or agreements of professional fund-raising counsel, commercial co-venturers and professional solicitors, and all other documents and information required to be filed under sections eighteen to thirty-five, inclusive, or by the division, shall be public records in the office of the division and shall be open to the general public for inspection at such times as the division may prescribe.
Section 26. Every professional fund-raising counsel, commercial co-venturer, professional solicitor, and charitable organization required to have a certificate of registration under section nineteen, shall, in accordance with the rules and regulations prescribed by the division, keep true fiscal records as to such activities within the commonwealth as may be covered by sections eighteen to thirty-five, inclusive, in such form as will enable them accurately to provide the information required by said sections. Upon demand such records shall be made available to the division for inspection. Such records shall be retained for a period of at least three years after the end of the period of registration to which they relate.
Section 27. The division may enter into reciprocal agreements with the appropriate authority of any other state or of the United States for the purpose of exchanging information with respect to charitable organizations, professional fund-raising counsel, commercial co-venturers and professional solicitors. Pursuant to such agreements the division may accept information filed by a charitable organization with the appropriate authority of another state or of the United States in lieu of the information required to be filed by the charitable organization in accordance with the provisions of sections eighteen to thirty-five, inclusive, if such information is substantially similar to the information required under said sections.
Section 28. (a) No charitable organization, professional fund-raising counsel, commercial co-venturer or professional solicitor subject to the provisions of sections eighteen to thirty-five, inclusive, shall use or exploit the fact of registration so as to lead the public to believe that such registration in any manner constitutes an endorsement or approval by the commonwealth. (b) No person shall, in connection with the solicitation of contributions for or the sale of goods or services of a person other than a charitable organization, misrepresent to or mislead any one by any manner, means, practice or device whatsoever to believe that the person on whose behalf such solicitation or sale is being conducted is a charitable organization or that the proceeds of such solicitation or sale will be used for charitable purposes if such is not the fact. (c) No person shall in connection with the solicitation of contributions or the sale of goods or services for charitable purposes represent to or lead any one by any manner, means, practice or device whatsoever to believe that any other person sponsors or endorses such solicitation of contributions, sale of goods or services for charitable purposes or approves of such charitable purposes or a charitable organization connected therewith when such other person has not given consent to the use of his name for these purposes. Any member of a board of directors or trustees of a charitable organization or any other person who has agreed either to serve or to participate in any voluntary capacity in the campaign shall be deemed thereby to have given his consent to the use of his name in connection with the progress of such campaign. (d) No person shall make any representation that he is soliciting contributions for or on behalf of a charitable organization or shall use or display any emblem, device or printed matter belonging to or associated with a charitable organization for the purpose of soliciting or inducing the contribution of funds from the public without first being authorized to do so by the charitable organization. (e) No commercial co-venturer or professional solicitor shall solicit in the name of or on behalf of any charitable organization unless he has in his possession the written authorization of two officers of such organization, a copy of which shall be filed with the division, and exhibits such written authorization on request to any person solicited, to any police officer or to any agent of the division. Such authorization shall bear the signature of the solicitor and shall state on its face the period for which it is valid, which shall not exceed one year from the date issued.
Section 29. The director shall from time to time formulate such reasonable rules and regulations as may be necessary to carry out the provisions of sections eighteen to thirty-five, inclusive.
Section 30. (a) The attorney general, whenever he believes a person has violated the provisions of sections nineteen to thirty-five, inclusive, or has filed any application required under said sections which contains false or misleading information, may conduct an investigation to determine whether in fact such person is in violation of said provisions, or has filed any false or misleading information. In conducting such investigation the attorney general may: (1) take testimony under oath; (2) examine or cause to be examined any documentary material of whatever nature relevant to such alleged violations or false or misleading information; and (3) require attendance during such examination of documentary material of any person having knowledge of the documentary material and take testimony under oath or acknowledgement in respect of any such documentary material. Such testimony and examination shall take place in the county where such person resides or has a place of business or, if the parties consent or such person is a non-resident or has no place of business within the commonwealth, in Suffolk county.
(b) Notice of the time, place and cause of such taking of testimony, examination or attendance shall be given by the attorney general at least ten days prior to the date of such taking of testimony or examination.
(c) Service of any such notice may be made by (1) delivering a duly executed copy thereof to the person to be served or to a partner or to any officer or agent authorized by appointment or by law to receive service of process on behalf of such person; (2) delivering a duly executed copy thereof to the principal place of business in the commonwealth of the person to be served; or (3) mailing by registered or certified mail a duly executed copy thereof addressed to the person to be served at the principal place of business in the commonwealth or, if said person has no place of business in the commonwealth, to his principal office or place of business.
(d) Each such notice shall: (1) state the time and place for the taking of testimony or the examination and the name and address of each person to be examined, if known, and, if the name is not known, a general description sufficient to identify him or the particular class or group to which he belongs; (2) state the statute and section thereof, if any, of the alleged violation which is under investigation and state the general subject matter of the investigation; (3) describe the class or classes of documentary material to be produced thereunder with reasonable specificity, so as fairly to indicate the material demanded; (4) prescribe a return date within which the documentary material is to be produced; and (5) identify the members of the attorney general's staff to whom such documentary material is to be made available for inspection and copying.
(e) No such notice shall contain any requirement which would be unreasonable or improper if contained in a subpoena duces tecum issued by a court of the commonwealth; or require the disclosure of any documentary material which would be privileged or which for any other reason would not be required by a subpoena duces tecum issued by a court of the commonwealth.
(f) Any documentary material or other information produced by any person pursuant to this section shall not, unless otherwise ordered by a court of the commonwealth for good cause shown, be disclosed to any person other than the authorized agent or representative of the attorney general, unless with the consent of the person producing the same.
(g) The superior court for the county of Suffolk or for any county in which any person served in accordance with the section resides or has his usual place of business may, at any time prior to the date specified in the notice, or within twenty-one days after the notice has been served, whichever period is shorter, upon motion for good cause shown, extend such reporting date or modify or set aside the notice provided for in this section.
This section shall not be applicable to any criminal proceeding, nor shall information obtained under the authority of this section be admissible in evidence in any criminal prosecution for substantially identical transactions.
Section 31. Any charitable organization or professional fund-raising counsel, commercial co-venturer or professional solicitor having its principal place of business without the commonwealth or organized under and by virtue of the laws of a foreign state which solicits contributions from people in the commonwealth, subject to sections nineteen to thirty-five, inclusive, shall be subject to the provisions of said sections, and shall be deemed to have irrevocably appointed the state secretary as its agent upon whom may be served any summons, subpoena duces tecum or other process directed to such charitable organization or any partner, principal officer or director thereof, professional fund-raising counsel, commercial co-venturer or professional solicitor in any action or proceeding brought under the provisions of said sections. Service of such process upon the state secretary shall be made by personally delivering to and leaving with him a copy thereof at the office of said secretary in Boston and such service shall be sufficient service; provided notice of such service and a copy of such process shall be forthwith sent by said secretary to such charitable organization or professional fund-raising counsel, commercial co-venturer or professional solicitor by registered mail, with return receipt requested at its or his office as set forth in the registration form required to be filed in the division pursuant to sections nineteen and twenty-four, or in default of the filing of such form, at the last address known to said secretary.
Section 32. (a) If any registered charitable organization, professional fund-raising counsel, commercial co-venturer or professional solicitor fails to file any registration application or statement, annual report or other information required to be filed by the division under sections eighteen to thirty-five, inclusive, the division may notify the delinquent charitable organization, professional fund-raising counsel or professional solicitor by mailing a notice by registered mail to its last known address. If the required registration application or statement, annual report or other information is not filed within two weeks after the formal notification of receipt of such notice, the division may cancel or suspend the registration of such delinquent charitable organization, professional fund-raising counsel, commercial co-venturer or professional solicitor.
(b) If as the result of an investigation the division finds that any information contained in any application required under sections eighteen to thirty-five, inclusive, is false or misleading or that a registrant under said sections has violated said sections, it may, subject to the provisions of section thirteen of chapter thirty A of the General Laws, suspend or cancel the registration and revoke the certificate of registration.
(c) The registration of any charitable organization, professional fund-raising counsel, commercial co-venturer or professional solicitor which or who knowingly makes a false statement in any registration application or statement, annual report or other information required to be filed by the division or sections eighteen to thirty-five, inclusive, may, subject to the provisions of section thirteen of chapter thirty A of the General Laws, be revoked by the division.
(d) Any person who knowingly violates any provision of sections nineteen to thirty-five, inclusive, or who willfully and knowingly gives false or incorrect information to the division in filing statements or reports required by said sections, whether such report or statement is verified or not, may be fined not more than one thousand dollars or by imprisonment for not more than one year, or both.
(e) Whenever the attorney general or any district attorney has reason to believe that any charitable organization, professional fund-raising counsel, commercial co-venturer or professional solicitor is operating in violation of the provisions of sections eighteen to thirty-five, inclusive, or has knowingly and willfully made any false statement in any registration application or statement, report or other information required to be filed under said sections, or whenever a charitable organization has failed to file a registration statement required under said sections, or whenever there is employed or is about to be employed in any solicitation or collection of contributions for a charitable organization any unfair or deceptive acts or practices, as defined by chapter ninety-three A, or any device, scheme or artifice to defraud or to obtain money or property by means of any false pretense, representation or promise, or whenever any of the principal officers of any charitable organization have refused or failed after notice to produce any records of such organization, in addition to all other actions authorized by law, the attorney general or district attorney may bring an action in the name of the commonwealth against such charitable organization and its officers, such professional fund-raising counsel, commercial co-venturer or professional solicitor or any other person who has violated said sections or who has participated or is about to participate in any solicitation or collection by employing any unfair or deceptive acts or practices, as defined by said chapter ninety-three A, or any device, scheme, artifice, false representation or promise, to defraud or obtain money or other property, to enjoin such charitable organization or professional fund-raising counsel, commercial co-venturer or professional solicitor or other person from continuing such violation, solicitation or collection or engaging therein or doing any acts in furtherance thereof and for such other relief as to the court seems appropriate.
Section 33. Every person soliciting, collecting or expending, for charitable purposes, contributions from the public, and every officer and employee of any such person concerned with the solicitation, collection or expenditure of such funds, shall be deemed to be a fiduciary and acting in a fiduciary capacity.
Section 34. Any organization organized under the laws of the commonwealth, if eligible for membership, may become a member of The Common Fund for Nonprofit Organizations, a New York nonprofit membership corporation authorized under section eight E of chapter twelve to operate in the commonwealth and organized to aid and strengthen such corporations, community chests, funds and foundations as are organized and operated exclusively for nonproprietary and nonprofit-making purposes and otherwise eligible for membership by providing means for the investment of their funds in shares or interests in one or more common funds. Any such organization may, either as fiduciary or otherwise, and in addition to any other lawful investment, invest any part or all of the funds which it holds for investment in shares or interests in a common fund or funds established by The Common Fund for Nonprofit Organizations; provided, however, that in the case of funds held as fiduciary, such investment is not prohibited by the language of the will, deed or other instrument creating the fiduciary relationship.
Section 35. Any person who solicits contributions from the public by door-to-door visitation or in person for any charitable, civic or political cause or purpose, and who receives for such solicitation a wage, salary, percentage of the donations received, or other contractual remuneration or thing of value, but not to include reimbursements for expenses incurred in soliciting, shall inform each person so solicited that the solicitation is a paid solicitation. Such information shall be so provided in writing or in the form of a clearly displayed badge or sign bearing the words "Paid Solicitor". Any person who violates this section shall be punished by a fine of one hundred dollars for each such violation.
The provisions of this section shall not apply to the finance chairman, accountant, treasurer or auditor of any organization, trust committee, foundation, group, association, partnership, corporation, society, or any combination thereof; provided, however, that such financial officer is not directly soliciting; nor shall such provisions apply to any ordained clergyman, minister, priest, rabbi, officer or any duly authorized member of any religious order or any other tax exempt religious organization.
SECTION 2. If any provision of sections eighteen to thirty-five, inclusive, of chapter sixty-eight of the General Laws, amended by section one of this act, or the application of such provisions to any person, body or circumstances shall be held invalid, the remainder of said sections of said chapter, or the application of such provisions thereof to persons, bodies or circumstances other than those which shall have been held invalid shall not be affected hereby.