Introduced Version






HOUSE BILL No. 1390

_____


DIGEST OF INTRODUCED BILL



Citations Affected: IC 23-7.

Synopsis: Disclosure of charity administration expenses. Requires a person who, for financial consideration, solicits contributions for certain charitable organizations to disclose in a written or oral solicitation the estimated percentage of the charitable contribution that will be expended for charitable purposes after administrative costs and the cost of making the solicitation have been satisfied. Provides an exclusion for a person who solicits contributions for: (1) a charitable institution that received less than $250,000 during the previous year in contributions; or (2) a church, synagogue , mosque, or certain religious organizations. Requires an officer or employee of certain charitable organizations to disclose in a written or oral solicitation the estimated percentage of the charitable contribution that will be expended for charitable purposes after administrative costs and the cost of making the solicitation have been satisfied. Provides an exclusion for: (1) a charitable institution that received less than $250,000 during the previous year in contributions; or (2) a church, synagogue, mosque or certain religious organizations. Provides that the disclosure requirement does not apply to a volunteer of a charitable organization. Provides that the consumer protection division of the attorney general's office may investigate charitable organization disclosure complaints. Provides that the attorney general's office may bring an action to enjoin disclosure violations. Provides that a court may order a charitable organization to pay the reasonable costs of investigation and prosecution incurred by the attorney general and may award the state civil penalties up to $500 for each violation.

Effective: July 1, 2011.





Heuer, Borders




    January 18, 2011, read first time and referred to Committee on Commerce, Small Business and Economic Development.







Introduced

First Regular Session 117th General Assembly (2011)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
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HOUSE BILL No. 1390



    A BILL FOR AN ACT to amend the Indiana Code concerning business and other associations.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 23-7-8-6; (11)IN1390.1.1. -->     SECTION 1. IC 23-7-8-6 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 6. (a) A professional solicitor subject to registration under this chapter or a person who is employed to solicit or act on behalf of a professional solicitor subject to registration under this chapter shall disclose at the time of the solicitation and before the donor agrees to make a contribution:
        (1) the name and, upon request, the address of the charitable organization that is being represented;
        (2) the fact that the person soliciting the contribution is, or is employed by, a professional solicitor, and the fact that the professional solicitor is compensated;
        (3) the full name of the professional solicitor and, upon request, the telephone number the person being solicited can call to confirm the information provided under this section; and
        (4) the charitable purpose for which the funds are being raised; and
         (5) in the case of a solicitation for, or on behalf of an

organization described in Section 501(c)(3) of the federal Internal Revenue Code that received at least two hundred fifty thousand dollars ($250,000) in contributions during the previous year, the estimated percentage of the charitable contribution that will be expended for charitable purposes after administrative costs and the costs of making the solicitation have been satisfied. This subdivision does not apply to a solicitation for or on behalf of a religious organization (as defined in IC 23-7-8.5-4).
    (b) If a person solicits in writing or in person, the disclosures required by subsection (a)(1), and (a)(2), and (a)(5) shall be in writing. If a person solicits by telephone, the disclosures required by subsection (a)(1), and (a)(2), and (a)(5) shall be made orally.
    (c) A written confirmation shall be mailed within ten (10) days after each solicitation in which a contribution has been given. This confirmation must include the disclosures required under subsection (a)(1), and (a)(2), and (a)(5).
    (d) All disclosures required by this section must be clear and conspicuous.
    (e) A contributor has the right to cancel a pledge for monetary contribution at any time prior to making the contribution.

SOURCE: IC 23-7-8.5; (11)IN1390.1.2. -->     SECTION 2. IC 23-7-8.5 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]:
     Chapter 8.5. Charitable Organization Solicitation Disclosures.
    Sec. 1.
(a) Except as provided in subsection (b), this chapter applies to a charitable organization described in Section 501(c)(3) of the Internal Revenue Code.
    (b) This chapter does not apply to the following:
        (1) A charitable organization that received less than two hundred fifty thousand dollars ($250,000) during the previous year in contributions.
        (2) A religious organization.
    Sec. 2. Except as otherwise provided in this chapter, the definitions in IC 23-7-8 apply throughout this chapter.
    Sec. 3. As used in this chapter, "charitable organization" means any organization described in Section 501(c)(3) of the Internal Revenue Code.
    Sec. 4. As used in this chapter, "religious organization" refers to a church, synagogue, mosque, association or convention of churches, or a religious order or religious organization that is an integral part of a church, that is tax exempt under Section

501(c)(3) of the Internal Revenue Code and is exempt from filing an annual return under Section 6033 of the Internal Revenue Code.
    Sec. 5. (a)
An officer or a bona fide employee of a charitable organization shall disclose at the time the officer or employee solicits a charitable contribution, and before the donor agrees to make a contribution, the estimated percentage of the charitable contribution that will be expended for charitable purposes after administrative costs and the costs of making the solicitation have been satisfied.
     (b) If an officer or a bona fide employee of a charitable organization solicits in writing or in person, the disclosure required by subsection (a) must be in writing. If an officer or a bona fide employee of a charitable solicits by telephone, the disclosure required by subsection (a) must be made orally.
    (c) This section does not apply to a volunteer of a charitable organization.
    Sec. 6. (a) The division may receive, investigate, and prosecute complaints concerning the activities of charitable organizations that have or may have violated this chapter. All complaints must be in writing, signed by the complainant, and filed with the division.
    (b) The attorney general may subpoena witnesses and send for and compel the production of books, records, papers, and documents of a charitable organization, for the furtherance of any investigation under this chapter. The circuit or superior court located in the county where the subpoena is to be issued shall enforce any such subpoena by the attorney general.

     (c) The attorney general may bring an action to enjoin a violation of this chapter. In the action, the court may order a person who has violated this chapter to pay the reasonable costs of investigation and prosecution incurred by the attorney general, and may award the state civil penalties of up to five hundred dollars ($500) for each violation. To obtain an order for injunctive relief, the division is not required to establish irreparable harm but only a violation of a statute or that the requested order promotes the public interest. It is an affirmative defense to the assessment of civil penalties under this subsection that the defendant acted under a good faith misunderstanding concerning the requirements of this chapter.
     (d) A charitable organization:
        (1) whose principal place of business is outside Indiana or that is organized under the laws of another state; and


        (2) that solicits contributions from persons in Indiana;
is subject to this chapter
and is considered to have appointed the secretary of state as its agent for service of process. All service of process under this subsection shall be made on the secretary of state under Rule 4.19 of the Indiana Rules of Trial Procedure.