1997 Regular Session
To: Judiciary B
By: Representative Holland
House Bill 995
AN ACT TO REQUIRE CHARITABLE ORGANIZATIONS AND CERTAIN OTHER PERSONS TO PLACE A DISCLOSURE LABEL IN A CONSPICUOUS PLACE ON CONTAINERS OR OTHER RECEPTACLES WITH PRODUCT FOR OFFER OF SALE FOR THE PURPOSE OF SOLICITING FUNDS OR DONATIONS FOR A CHARITABLE PURPOSE; TO DEFINE THE CRIME OF UNLAWFUL CHARITABLE SOLICITATION AND PROVIDE PENALTIES FOR VIOLATIONS THEREOF; TO PROVIDE EXCEPTIONS; TO AMEND SECTIONS 79-11-501 AND 79-11-503, MISSISSIPPI CODE OF 1972, IN CONFORMITY TO THE PROVISIONS OF THIS ACT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. The following words and phrases shall have the meanings ascribed herein unless a different meaning is required by the context:
(a) "Charitable organization" means a person or nonprofit corporation who is or holds himself or herself out to be established for a benevolent, educational, philanthropic, humane, scientific, artistic, patriotic, social welfare or advocacy, public health, environmental, conservation, civic, or other eleemosynary purpose, or a person who employs a charitable appeal as the basis for any solicitation or appeal that suggests, directly, or indirectly, that the solicitation is for a charitable purpose. Charitable organization includes a person, chapter, branch, area office, or a similar affiliate, or agent of any of these, soliciting contributions within the state for a charitable organization or cause that has its principal place of business within or without the state.
(b) "Charitable purpose" means any charitable, benevolent, philanthropic, humane, patriotic, scientific, artistic, public health, social welfare, advocacy, environmental, conservation, civic, or other eleemosynary purpose as defined and amended, from time to time, by the Internal Revenue Code.
(c) "Container" means a box, carton, package, receptable, canister, jar, dispenser, or machine that offers a product for sale or distribution, for solicitation purposes.
(d) "Disclosure label" means a printed or typed notice affixed to a container, in a conspicuous place and accessible to the public, that is easily readable and legible that informs the public of the following:
(i) The approximate annual percentage paid, if any, to any individual or organization to maintain, service, or collect the contributions raised by the solicitation.
(ii) The net percentage or sum annually paid for the most recent calendar year paid to the specific charitable purpose.
(iii) If the maintenance, service, and collection from the container is done by volunteers or by paid individuals.
SECTION 2. Any container used by any person, nonprofit corporation, or charitable organization, or an agent of any of these, whether paid or not paid, in a public place to solicit contributions by offering a product for sale or distribution for solicitation purposes shall have a disclosure label as defined by Section 1 of this act.
SECTION 3. Any person or organization who knowingly violates this act shall be guilty of unlawful charitable solicitation. Unlawful charitable solicitation is a misdemeanor and shall be punished by a fine not to exceed Two Thousand Dollars ($2,000.00) or imprisonment not to exceed one (1) year, or both. It is an absolute defense to any criminal prosecution under this section if the charitable organization has given one hundred percent (100%) of the receipts generated by the container to the designated charitable organization for whom the person, nonprofit corporation, charitable organization, or an affiliate or branch of either, or solicitor, represented the funds being solicited.
SECTION 4. No charitable organization shall be liable under this act to place a disclosure label on any container that generates less than One Hundred Dollars ($100.00) gross per annum or a charitable organization that generates less than Five Hundred Dollars ($500.00) per year from all sources for any charitable purpose or purposes combined.
SECTION 5. The provisions of this act are severable. If any part of this act is declared invalid or unconstitutional, that declaration shall not affect the part which remains.
SECTION 6. This act shall be construed together with any law relating to charitable fraud or fraudulent practices, except in the event of a direct conflict with this act.
SECTION 7. Section 79-11-501, Mississippi Code of 1972, is amended as follows:
79-11-501. The following words and phrases as used in Sections 79-11-501 through 79-11-529 shall have the meanings ascribed herein unless a different meaning is required by the context:
(a) "Charitable organization" means any voluntary health and welfare, benevolent, philanthropic, patriotic or eleemosynary organization or one purporting to be such which solicits and collects funds for charitable purposes and includes each local, county or area division within this state of such charitable organization, provided such local, county or area division has authority and discretion to disburse funds or property otherwise than by transfer to any parent organization and charitable organization shall also include the meaning ascribed in Section 1 of House Bill No. , 1997 Regular Session.
(b) "Contribution" means the promise or grant of any money or property of any kind or value, including the promise to pay, except payments by members of an organization for membership fees, dues, fines, assessments or for services rendered to individual members, if membership in such organization confers a bona fide right, privilege, professional standing, honor or other direct benefit, other than the right to vote, elect officers or hold offices, and except money or property received from any governmental authority. Reference to the dollar amount of "contributions" in Sections 79-11-501 through 79-11-529 means in the case of promises to pay, or payments for merchandise or rights of any other description, the value of the total amount promised to be paid or paid for such merchandise or rights and not merely that portion of the purchase price to be applied to a charitable purpose.
(c) "Person" means any individual, organization, group, association, partnership, corporation, trust or any combination of them.
(d) "Professional fund-raiser" means any person who for compensation or other consideration plans, conducts, manages or carries on any drive or campaign in this state for the purpose of soliciting contributions for or on behalf of any charitable organization or any other person, or who engages in the business of or holds himself out as independently engaged in the business of soliciting contributions for such purposes. A bona fide officer or employee of a charitable organization shall not be deemed a professional fund-raiser unless his salary or other compensation is paid as a commission which is computed on the basis of funds to be raised or actually raised.
(e) "Professional solicitor" means any person who is employed or retained for compensation by a professional fund-raiser to solicit contributions for charitable purposes from persons in this state.
(f) "Charitable purpose" means any voluntary health and welfare, charitable, benevolent, philanthropic, patriotic or eleemosynary purpose.
(g) "Trustee" means (i) any individual, group of individuals, corporation or other legal entity holding property in trust pursuant to any charitable trust; (ii) any corporation which has accepted property to be used for a particular charitable corporate purpose as distinguished from the general purposes of the corporation; or (iii) a corporation formed for the administration of a charitable trust, pursuant to the directions of the settlor or at the instance of the trustee.
SECTION 8. Section 79-11-503, Mississippi Code of 1972, is amended as follows:
79-11-503. (1) Except as otherwise provided in Section 79-11-505 and prior to any solicitation of contributions, every charitable organization as defined in Section 79-11-501 and Section 1 of House Bill No. , 1997 Regular Session, which solicits or intends to solicit contributions by any means whatsoever shall file a registration statement with, and pay a filing fee of Fifty Dollars ($50.00) to, the Secretary of State. A registration statement that contains false, misleading, deceptive or incomplete information or documentation shall not be considered sufficient. The registration statement shall be on forms prescribed by the Secretary of State and shall contain the following information and such other information that the Secretary of State may require:
(a) The name of the organization and the name or names under which it intends to solicit contributions;
(b) The names and addresses of the officers, directors, trustees and chief executive officer of the organization;
(c) The addresses of the organization and any offices in this state. If the organization does not maintain a principal office, the name and address of the person having custody of its financial records;
(d) Where and when the organization was legally established, the form of its organization and its tax exempt status;
(e) The purpose for which the organization and the purpose or purposes for which the contributions to be solicited will be used;
(f) The date on which the fiscal year of the organization ends;
(g) 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;
(h) The names and addresses of any professional fund-raisers who are acting or have agreed to act on behalf of the organization;
(i) Methods by which solicitation will be made;
(j) Copies of contracts between charitable organizations and professional fund-raisers relating to financial compensation or profit to be derived by the professional fund-raisers. If any such contract is executed after filing of a registration statement, a copy thereof shall be filed within ten (10) days of the date of execution;
(k) Disclosure of the exact percentage to be awarded to the charity by any solicitor; and
(l) The board, group or individual having final authority over the distribution and use of contributions received.
(2) The registration statement shall be signed by the president or other authorized officer and the chief fiscal officer of the organization.
(3) The Secretary of State shall issue a certificate of registration to a charitable organization once the Secretary of State determines that such organization has complied with all provisions of this chapter. No charitable organization required to be registered under this section shall solicit funds without a valid certificate of registration.
(4) Such registration shall remain in effect for one (1) year, unless renewed by the filing of forms as prescribed by the Secretary of State and upon payment of the Fifty Dollars ($50.00) renewal fee.
(5) Every registered organization shall notify the Secretary of State within thirty (30) days of any change in the information required to be furnished by such organization under paragraphs (a) through (l) of subsection (1) of this section.
(6) In no event shall a registration of a charitable organization continue, or be continued, in effect after the date such organization should have filed, but failed to file, the annual report in accordance with the requirements of Section 79-11-507, and such organization shall not be eligible to file a new registration until it shall have filed the required annual report with the Secretary of State. If such report is subsequently filed, such organization may file a new registration.
(7) Every person subject to Sections 79-11-501 through 79-11-529 shall maintain accurate and detailed books and records at the principal office of the organization to provide the information required herein. All such books and records shall be open to inspection at all reasonable times by the Secretary of State or the Attorney General, or their duly authorized representatives.
(8) If any local, county or area division of a charitable organization is supervised and controlled by a superior or parent organization, incorporated, qualified to do business, or doing business within this state, such local, county or area division shall not be required to register under this section if the superior or parent organization files a registration statement on behalf of the local, county or area division in addition to or as part of its own registration statement. If a registration statement has been filed by a superior or parent organization as provided in Section 79-11-503(1), it shall file the annual report required under Section 79-11-507 on behalf of the local, county or area division in addition to or as part of its own report, but the accounting information required under Section 79-11-507 shall be set forth separately and not in consolidated form with respect to every local, county or area division which raises or expends more than Four Thousand Dollars ($4,000.00).
(9) The Secretary of State may make rules of procedure and regulations necessary for the administration of Sections 79-11-501 through 79-11-529, subject to the provisions of the Mississippi Administrative Procedures Law. The Secretary of State, in his discretion, may honor written requests from interested persons for interpretative opinions regarding registration and exemptions from registration.
SECTION 9. This act shall take effect and be in force from and after July 1, 1997.