CHAPTER 541
S.P. 623 - L.D. 1691
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 9 MRSA §5003, sub-§1, as amended by PL 1999, c. 386, Pt. A, §2, is further amended to read:
1. Charitable organization. "Charitable organization" means any person or entity, including any person or entity organized in a foreign state, that is or holds itself out to be organized or operated for any charitable purpose or that solicits, accepts or obtains contributions from the public for any charitable purpose and by any means, including, but not limited to, personal contact, telephone, mail, newspaper advertisement, television or radio. Status as a tax-exempt entity does not necessarily qualify that entity as a charitable organization. A chapter, branch, area office or similar affiliate or any person soliciting contributions for any charitable purpose within the State for a charitable organization that has its principal place of business outside the State is considered a charitable organization for the purposes of this Act. For purposes of this chapter, an organization established for and serving bona fide religious purposes is not a charitable organization.
Sec. 2. 9 MRSA §5003, sub-§3, as amended by PL 1999, c. 221, §1, is amended to read:
3. Commercial co-venturer. "Commercial co-venturer" means any person who, for profit or other commercial consideration, is regularly and primarily engaged in trade or commerce in this State, other than in connection with the raising of funds for charitable organizations or purposes, and who conducts, promotes, underwrites, arranges or sponsors a sale, performance, event or collection or and sale of donated goods or event of any kind that is advertised in conjunction with the name of any charitable organization. Any such person who will benefit in good will only may not be considered a commercial co-venturer if the collection and distribution of the proceeds of the sale, performance or event, or the collection and sale of donated goods, are supervised and controlled by the benefiting charitable organization.
Sec. 3. 9 MRSA §5003, sub-§4-B is enacted to read:
4-B. Department. "Department" means the Department of Professional and Financial Regulation.
Sec. 4. 9 MRSA §5003, sub-§9, as amended by PL 1977, c. 654, §1, is further amended to read:
9. Professional fund-raising counsel. "Professional fund-raising counsel" means any person who, for a flat fixed fee under a written agreement or for a fee computed under a written agreement on the basis of funds actually raised or to be raised, or for any financial consideration of any kind or amount, plans, conducts, manages, carries on, advises or acts as a consultant, whether directly or indirectly, in connection with soliciting contributions for or on behalf of any charitable organization is retained, for compensation, by a charitable organization to plan, manage, advise or provide consultation services with respect to the solicitation in this State of contributions, but who does not solicit contributions, has neither custody nor control of contributions and does not directly or indirectly employ, procure or engage any person compensated to solicit contributions. A bona fide salaried officer or employee of a charitable organization, including an employee of a parent organization, shall not be deemed to be a professional fund-raising counsel unless that person's salary or other compensation is computed on the basis of funds to be raised or actually raised or the services performed by the person are performed on behalf of some organization other than the one which employs that person or a chapter, branch or affiliate thereof nontemporary salaried officer or employee of a charitable organization is not considered to be a professional fund-raising counsel. No An attorney, investment counselor or banker who advises any person to make a contribution to a charitable organization shall be deemed is not, as the result of such advice, to be a professional fund-raising counsel.
Sec. 5. 9 MRSA §5004, sub-§3, ¶N, as repealed and replaced by PL 1979, c. 678, §5, is amended to read:
N. The total amount of money received as contributions during the organization's preceding fiscal year and the dates of the fiscal year; and
Sec. 6. 9 MRSA §5004, sub-§3, ¶O, as enacted by PL 1977, c. 488, §1, is amended to read:
O. The estimated percentage of each dollar contribution which that will be expended in Maine.; and
Sec. 7. 9 MRSA §5004, sub-§3, ¶P is enacted to read:
P. A determination letter from the federal Internal Revenue Service, confirming the tax-exempt status of the charitable organization.
Sec. 8. 9 MRSA §5004, sub-§4, as amended by PL 2001, c. 323, §§2 and 3, is repealed and the following enacted in its place:
4. Renewal of registration as charitable organization. The following provisions govern the application and qualifications for renewal of a registration as a charitable organization.
A. A person or entity that holds a valid registration must submit to the office a completed application for renewal prior to the date of expiration of the registration. A registration expires on the stated date of expiration. The department shall mail an application form to the registrant's last known address not less than 30 days prior to the expiration date of the current registration.
B. An application may not be considered for approval until it is complete. If the application is incomplete, the applicant must include a letter documenting the specific reasons the application is incomplete. If that letter is not included, the incomplete application must be returned for completion.
C. A charitable organization that submits an application for renewal after the expiration date must include with the application:
(1) A financial report covering the most recently audited fiscal year;
(2) The required filing fee and the required fee for renewal of registration; and
(3) A completed application.
D. The complete packet for renewal of registration application must include all the requirements identified in subsection 3 as well as the following:
(1) An audited financial statement, including federal Internal Revenue Service 990 and Schedule A forms or a 990 EZ form. Failure to file an audited financial statement of the organization's most recent audited fiscal year may be grounds for disciplinary action as provided under Title 10, section 8003, subsection 5. The office shall adopt rules governing the content of the audited financial statement. Rules adopted pursuant to this subparagraph are routine technical rules pursuant to Title 5, chapter 375, subchapter 2-A; and
(2) The nonrefundable fee for renewal of registration plus the required filing fee for charitable organizations receiving more than $30,000 in gross contributions.
Sec. 9. 9 MRSA §5005, as amended by PL 2001, c. 323, §4, is repealed.
Sec. 10. 9 MRSA §5005-B is enacted to read:
§5005-B. Annual fund-raising activity reports to be filed by charitable organizations
1. Content of report. A charitable organization shall submit to the office an annual fund-raising activity report that reflects data from the preceding calendar year, on a form prescribed by the office, at least 60 days prior to the registration expiration date. The report must state, at a minimum, the following:
A. The charitable organization's mailing address, telephone number and registration number;
B. The name, mailing address, telephone number and registration number of each professional solicitor, professional fund-raising counsel and commercial co-venturer with which the charitable organization contracts;
C. The date of each fund-raising campaign;
D. The total dollar amount raised during each fund-raising campaign;
E. The total dollar amount received by the charitable organization from each fund-raising campaign and for the year;
F. The total dollar amount retained by any professional solicitor from each fund-raising campaign and for the year;
G. The total amount paid to any professional fund-raising counsel from each fund-raising campaign and for the year; and
H. The total amount received from any commercial co-venturer from each fund-raising campaign and for the year.
2. Failure to file; discrepancies. Failure to file the annual fund-raising activity report required under this section or disagreement between the report filed by the charitable organization and that submitted by the professional solicitor, professional fund-raising counsel or commercial co-venturer with which the charitable organization has contracted may result in disciplinary action as provided under Title 10, section 8003, subsection 5.
3. Contracting with unregistered entities prohibited. A charitable organization may not contract with an unregistered professional solicitor, professional fund-raising counsel or commercial co-venturer. A violation of this subsection may result in disciplinary action as provided under Title 10, section 8003, subsection 5.
Sec. 11. 9 MRSA §5007, first ¶, as amended by PL 1981, c. 456, Pt. A, §31, is further amended to read:
Any A charitable organization, professional fund-raising counsel, professional solicitor, professional fund-raising counsel or commercial co-venturer having its principal place of business without the State, or organized under and by virtue of the laws of a foreign state, which that solicits contributions from the people in this State by whatever means, including, but not limited to, personal contact, telephone, mail, newspaper advertisement, television or radio, or acts on behalf of a charitable organization in this State, shall be is deemed to have irrevocably appointed the commissioner as its agent upon whom may be served any summons, subpoena, subpoena duces tecum or other process directed to such a charitable organization, professional fund-raising counsel, professional solicitor, professional fund-raising counsel or commercial co-venturer or to any partner, principal, officer or director thereof, in any action or proceeding brought by the Attorney General under this chapter.
Sec. 12. 9 MRSA §5008, as amended by PL 2001, c. 323, §§6 and 7, is further amended to read:
§5008. Registration renewal, records and reporting by professional solicitors, professional fund-raising counsel and commercial co-venturers
1. Registration. A person or entity may not act as a professional fund-raising counsel, a professional solicitor, a professional fund-raising counsel or a commercial co-venturer before that person or entity has registered with the office. Applications for registration or reregistration must be in writing, under oath, in the form prescribed by the office and accompanied by an application fee and a registration fee. The application fee is nonrefundable. The applicant shall, at the time of making application for registration or reregistration, file with and have approved by the office a bond, in which the applicant must be the principal obligor and the State the obligee, in the sum of $25,000, with one or more responsible sureties whose liability in the aggregate as such sureties at least equals that sum. The bond runs to any person or entity who may have a cause of action against the principal obligor of the bond for any malfeasance or misfeasance in the conduct of charitable solicitation in this State. Registration is for a period of one year. The registration fee and bond required by this chapter must be waived for an auctioneer, when that auctioneer engages in conduct for which that auctioneer is already bonded, who is licensed by the Department of Professional and Financial Regulation and who has otherwise complied with the requirements of Title 32, chapter 5-B.
1-A. Renewal of registration as professional solicitor, professional fund-raising counsel or commercial co-venturer. The following provisions govern application and qualification for renewal registration as a professional solicitor, professional fund-raising counsel or commercial co-venturer.
A. An entity that holds a valid registration must submit a completed application for renewal before the date of expiration of the registration. A registration expires on the stated date of expiration. The office must shall mail an application form to the registrant's last known address.
B. An application may not be considered for approval until complete. If the application is in-complete, the applicant must include a letter documenting the specific reasons for the incompleteness the application is incomplete. If no such letter is included, the incomplete application must be returned for completion.
C. The complete application packet must include:
(1) All forms required in this section;
(2) A bond approved by the department in the sum of $25,000 with one or more responsible sureties whose liability in the aggregate as such sureties at least equals that sum. The bond must expire on the stated date of expiration and be kept on file in the office for 3 years; and
(3) A $200 renewal of registration fee.
D. A professional solicitor, professional fund-raising counsel or commercial co-venturer that who submits an application for renewal of registration after the expiration date must submit:
(1) A bond in the sum of $25,000 that expires on the stated date of expiration;
(2) A renewal of registration fee; and
(3) The completed original application.
E. Annual reports must be submitted on a form provided by the office 60 days before the registration expiration date. The reports must state, at a minimum, the following:
(1) For a professional solicitor or professional fund-raising counsel:
(a) The person's address and telephone number;
(b) The person's registration number;
(c) The name, address and telephone number of each charitable organization;
(d) The registration number of each charitable organization in division (c);
(e) The date or dates of fund-raising campaigns;
(f) The total amount raised by the professional solicitor or professional fund-raising counsel; and
(g) The total amount received by each charitable organization in division (c); and
(2) For a commercial co-venturer:
(a) The person's name, address and telephone number;
(b) The person's registration number;
(c) The name, address and telephone number of each charitable organization;
(d) The registration number of each charitable organization in division (c);
(e) The date or dates of fund-raising campaigns;
(f) The total amount raised by the commercial co-venturer; and
(g) The total amount received by each charitable organization in division (c).
F. Failure to file the annual report may result in disciplinary action as provided under Title 10, section 8003, subsection 5. Applications for renewal of registration may not be accepted unless the annual report has been filed with the department.
2. Records. A professional fund-raising counsel, professional solicitor, professional fund-raising counsel or commercial co-venturer shall maintain accurate and complete books and records of fund-raising activities and telephone solicitation scripts and shall keep those books and records available for inspection by the Attorney General or the office for a period of 3 years after the conclusion of each specific instance in which that person acts as a professional fund-raising counsel, professional solicitor, professional fund-raising counsel or commercial co-venturer.
3-A. Annual fund-raising activity reports to be filed by professional solicitors, professional fund-raising counsel and commercial co-venturers. Filing of annual fund-raising activity reports by professional solicitors, professional fund-raisers and commercial co-venturers is governed by this subsection.
A. Each professional solicitor, professional fund-raising counsel or commercial co-venturer shall file with the office an annual fund-raising activity report on a form prescribed by the office at least 60 days prior to the registration expiration date that reflects data from the preceding calendar year. The report must state, at a minimum, the following:
(1) The name, mailing address, telephone number and registration number of the professional solicitor, professional fund-raising counsel or commercial co-venturer making the report;
(2) The mailing address, telephone number and registration number of each charitable organization with which the professional solicitor, professional fund-raising counsel or commercial co-venturer has contracted;
(3) The date of any fund-raising campaign in which the professional solicitor, professional fund-raising counsel or commercial co-venturer was involved;
(4) The total dollar amount raised during each fund-raising campaign;
(5) The total dollar amount remitted to the charitable organization from each fund-raising campaign and for the year;
(6) The total dollar amount retained by the professional solicitor from each fund-raising campaign and for the year;
(7) The total dollar amount received by the professional fund-raising counsel from each fund-raising campaign and for the year; and
(8) The total dollar amount remitted by the commercial co-venturer from each fund-raising campaign and for the year.
B. Failure to file the annual fund-raising activity report or disagreement between that report and the report submitted by the charitable organization with which the professional solicitor, professional fund-raising counsel or commercial co-venturer has contracted may result in disciplinary action as provided under Title 10, section 8003, subsection 5.
C. Contracting with an unregistered entity is prohibited and may result in disciplinary action as provided under Title 10, section 8003, subsection 5.
4. Exemption. This section does not apply to a national bank, a federal savings bank, a subsidiary of a national bank or federal savings bank or any other financial institution or credit union chartered under the laws of the United States or any state and subject to supervision and regulation by a federal financial regulatory agency.
Sec. 13. 9 MRSA §5009, sub-§1, as enacted by PL 1999, c. 386, Pt. A, §17, is amended to read:
1. Contracts to be filed. All contracts entered into between a professional fund-raising counsel, a professional solicitor, a professional fund-raising counsel or a commercial co-venturer and any charitable organization, whether or not the organization is exempted under section 5006, must be in writing, and a true and correct copy of each contract must be filed by the professional fund-raising counsel, professional solicitor, professional fund-raising counsel or commercial co-venturer who is a party to the contract with the office before services are performed under the contract. The contract must contain the following provisions:
A. A statement of the charitable purpose for which a solicitation campaign is being conducted; and
B. A In the case of a professional solicitor, a statement of the percentage of gross proceeds collected to be paid to the charitable organization.; and
C. The signatures and legibly printed or typed names of individuals representing the contracting parties.
True and correct copies of contracts must be kept on file in the offices of the charitable organization and the professional fund-raising counsel, professional solicitor, professional fund-raising counsel or commercial co-venturer during the term of the contract and for 3 years after the date of solicitation of contributions provided for in the contract.
Sec. 14. 9 MRSA §5011, as amended by PL 1981, c. 456, Pt. A, §37, is further amended to read:
All information required to be filed under this chapter shall be is a public records record and shall must be available to the public at the office of the commissioner or in any manner the commissioner may prescribe.
Sec. 15. 9 MRSA §5011-A is enacted to read:
§5011-A. Professional solicitor disclosure
A professional solicitor or person who a professional solicitor employs or engages, directly or indirectly, to solicit contributions may not:
1. Misrepresentation of relationship. Misrepresent, directly or indirectly, that person's relationship to a charitable organization;
2. Misrepresentation of fact. Misrepresent, directly or indirectly, to a contributor or potential contributor any fact relating to the solicitation, including, but not limited to, the percentage of the contribution that will be paid over to the charitable organization or the purpose for which the contribution will be used;
3. Use of contributions. Represent, directly or indirectly, that any part of the contributions received will be given or donated to any charitable organization unless the organization has previously consented in writing to the use of its name; or
4. Disclosure of information. Solicit a contribution from any person in this State without clearly and conspicuously disclosing to the person, prior to the time the person makes or authorizes payment of a donation:
A. The name and address of the professional solicitor;
B. That the solicitor is being paid by the charitable organization on whose behalf the solicitation is being made; and
C. How the potential contributor may obtain information from the State on the respective percentages of contributions that will be paid to the charitable organization and to the paid fund-raiser.
This section does not apply to a national bank, a federal savings bank, a subsidiary of a national bank or federal savings bank or any other financial institution or credit union chartered under the laws of the United States or any state and subject to supervision and regulation by a federal financial regulatory agency.
Sec. 16. 9 MRSA §5012, as amended by PL 1999, c. 656, §4, is amended to read:
§5012. Charitable solicitation disclosure
It shall be is a violation of this chapter for:
1. Solicitation of contributions. Any person or entity to solicit contributions from a prospective donor without fully disclosing to the prospective donor, at the time of solicitation but prior to the request for contributions, the name and address of the charitable organization for which the solicitation is being conducted; and.
2. Solicitation by a professional charitable fund raiser. Any professional fund-raising counsel, professional solicitor or commercial coventurer, or any of its agents or persons acting on its behalf, to solicit contributions from a prospective donor without fully disclosing to the prospective donor at the time of solicitation but prior to the request for contributions:
A. The name and address of the professional fund-raising counsel, professional solicitor or commercial coventurer; and
B. The following statement:
"(Insert name of professional fund-raising counsel, professional solicitor or commercial coventurer) is a professional charitable fund raiser."
A charitable organization that employs a commercial co-venturer to solicit goods through the placement of containers in public places shall post the disclosure required in this section in writing that is clearly visible to a person placing a contribution in the container.
This section does not apply to a national bank, a federal savings bank, a subsidiary of a national bank or federal savings bank or any other financial institution or credit union chartered under the laws of the United States or any state and subject to supervision and regulation by a federal financial regulatory agency.
Sec. 17. 9 MRSA §5012-A, as enacted by PL 1999, c. 221, §4, is amended to read:
§5012-A. Commercial co-venturer disclosure
A commercial co-venturer who is engaged in the solicitation of goods is guilty of a deceptive and prohibited practice if that commercial co-venturer charges a charitable organization a sum of money for the goods and the co-venturer's services in the collection of those goods that far exceeds the fair market value of those goods and services. Such an action constitutes a fraud against the charity and its donors. Fair market value may be established in any commercially acceptable fashion including a comparison of the amount paid for similar goods and services by a similar charity. Any promotional materials used by a commercial co-venturer to disclose that a component of the purchase price of the goods will accrue to the benefit of a charitable organization must also state either the percentage of the purchase price or the dollar amount to be remitted. This section does not apply to a national bank, a federal savings bank, a subsidiary of a national bank or federal savings bank or any other financial institution or credit union chartered under the laws of the United States or any state and subject to supervision and regulation by a federal financial regulatory agency.
Sec. 18. 9 MRSA §§5017 and 5018 are enacted to read:
§5017. Denial or refusal to renew registration
The commissioner may deny or refuse to renew a registration under this chapter for fraud, misrepresentation or deception on an application for violation of any provision of statute or rule adopted under this chapter.
The commissioner shall propose, revise, adopt and enforce rules necessary to carry out this chapter. Rules adopted pursuant to this chapter are routine technical rules pursuant to Title 5, chapter 375, subchapter 2-A.
Effective July 30, 2004, unless otherwise indicated.
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