HB4315 94TH GENERAL ASSEMBLY

LRB094 15819 RAS 51035 b

94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
HB4315

Introduced 12/27/2005, by Rep. James D. Brosnahan

SYNOPSIS AS INTRODUCED:

225 ILCS 460/1	from Ch. 23, par. 5101
225 ILCS 460/8.5 new
225 ILCS 460/9	from Ch. 23, par. 5109
225 ILCS 460/12	from Ch. 23, par. 5112

Amends the Solicitation for Charity Act. Requires the registration of contributions collection agents in the form and manner prescribed by the Attorney General. Defines "contributions collection agent" as any person who, for compensation or other consideration, collects charitable contributions in the form of property, including without limitation automobiles, motorcycles, and boats, on behalf of a charitable organization or trustee for a charitable purpose and oversees the resale of such property and the distribution of funds collected from the resale of the property to the charitable organization or trustee. Provides that no person may register as a contributions collection agent who has been convicted of any felony or of a misdemeanor involving fiscal wrongdoing, breach of fiduciary duty, or a violation of the Act. Requires contributions collection agents to maintain accurate and detailed records regarding all property collected, which shall be open to inspection at all reasonable times by the Attorney General or his or her duly authorized representative. Makes other changes.

CORRECTIONAL BUDGET AND IMPACT NOTE ACT MAY APPLY

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Solicitation for Charity Act is amended by changing Sections 1, 9, and 12 and by adding Section 8.5 as follows:

(225 ILCS 460/1) (from Ch. 23, par. 5101)

Sec. 1. The following words and phrases as used in this Act shall have the following meanings unless a different meaning is required by the context.

(a) "Charitable organization" means any ." Any benevolent, philanthropic, patriotic, or eleemosynary person 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.

(b) "Contribution" means the ." The promise or grant of any money or property of any kind or value, including the promise to pay, except payments by union members of an organization. Reference to the dollar amount of "contributions" in this Act 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. Contribution shall not include the proceeds from the sale of admission tickets by any not-for-profit music or dramatic arts organization which establishes, by such proof as the Attorney General may require, that it has received an exemption under Section 501(c)(3) of the Internal Revenue Code and which is organized and operated for the presentation of live public performances of musical or theatrical works on a regular basis. For purposes of this subsection, union member dues and donated services shall not be deemed contributions.

(b-5) "Contributions collection agent" means any person who, for compensation or other consideration, collects charitable contributions in the form of property, including without limitation automobiles, motorcycles, and boats, on behalf of a charitable organization or trustee for a charitable purpose and oversees the resale of such property and the distribution of funds collected from the resale of the property to the charitable organization or trustee.

(c) "Person" means any ." Any individual, organization, group, association, partnership, corporation, trust or any combination of them.

(d) "Professional fund raiser" means any ." Any person who for compensation or other consideration, conducts, manages, or carries on any solicitation drive or campaign in this State or from this State or on behalf of a charitable organization residing within 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 to persons in this State as independently engaged in the business of soliciting contributions for such purposes. A bona fide director, officer, employee or unpaid volunteer of a charitable organization shall not be deemed a professional fund raiser unless the person is in a management position and the majority of the individual's salary or other compensation is computed on a percentage basis of funds to be raised, or actually raised.

(e) "Professional fund raising consultant" means any ." Any person who is retained by a charitable organization or trustee for a fixed fee or rate that is not computed on a percentage of funds to be raised, or actually raised, under a written agreement, to only plan, advise, consult, or prepare materials for a solicitation of contributions in this State, but who does not manage, conduct or carry on a fundraising campaign and who does not solicit contributions or employ, procure, or engage any compensated person to solicit contributions and who does not at any time have custody or control of contributions. A volunteer, employee or salaried officer of a charitable organization or trustee maintaining a permanent establishment or office in this State is not a professional fundraising consultant. An attorney, investment counselor, or banker who advises an individual, corporation or association to make a charitable contribution is not a professional fundraising consultant as a result of the advice.

(f) "Charitable purpose" means any ." Any charitable, benevolent, philanthropic, patriotic, or eleemosynary purpose.

(g) "Charitable Trust" means any relationship whereby property is held by a person for a charitable purpose.

(h) "Education Program Service" means any activity which provides information to the public of a nature that is not commonly known or facts which are not universally regarded as obvious or as established by common understanding and which informs the public of what it can or should do about a particular issue.

(i) "Primary Program Service" means the program service upon which an organization spends more than 50% of its program service funds or the program activity which represents the largest expenditure of funds in the fiscal period.

(j) "Professional solicitor" means any natural person who is employed or retained for compensation by a professional fund raiser to solicit contributions for charitable purposes from persons in this State or from this State or on behalf of a charitable organization residing within this State.

(k) "Program Service Activity" means the actual charitable program activities of a charitable organization for which it expends its resources.

(l) "Program Service Expense" means the expenses of charitable program activity and not management expenses or fund raising expenses. In determining Program Service Expense, management and fund raising expenses may not be included.

(m) "Public Safety Personnel Organization" means any person who uses any of the words "officer", "police", "policeman", "policemen", "troopers", "sheriff", "law enforcement", "fireman", "firemen", "paramedic", or similar words in its name or in conjunction with solicitations, or in the title or name of a magazine, newspaper, periodical, advertisement book, or any other medium of electronic or print publication, and is not a governmental entity. No organization may be a Public Safety Personnel Organization unless 80% or more of its voting members or trustees are active, retired, or disabled police officers, peace officers, firemen, fire fighters, emergency medical technicians - ambulance, emergency medical technicians - intermediate, emergency medical technicians - paramedic, ambulance drivers, or other medical assistance or first aid personnel.

(m-5) "Public Safety Personnel" includes police officers, peace officers, firemen, fire fighters, emergency medical technicians - ambulance, emergency medical technicians - intermediate, emergency medical technicians - paramedic, ambulance drivers, and other medical assistance or first aid personnel.

(n) "Trustee" means any person, individual, group of individuals, association, corporation, not for profit corporation, or other legal entity holding property for or solicited for any charitable purpose; or any officer, director, executive director or other controlling persons of a corporation soliciting or holding property for a charitable purpose.

(Source: P.A. 91-301, eff. 7-29-99.)

(225 ILCS 460/8.5 new)

Sec. 8.5. Contributions collection agent registration; records.

(a) No person may act as a contributions collection agent unless he or she has registered with the Attorney General in the form and manner prescribed by the Attorney General.

(b) No person convicted of a felony may register as a contributions collection agent. No person convicted of a misdemeanor involving fiscal wrongdoing, breach of fiduciary duty, or a violation of this Act may register as a contributions collection agent.

(c) Every contributions collection agent must maintain accurate and detailed records regarding all property collected in the form and manner prescribed by the Attorney General. For any contributions collection agent who collects and oversees the resale of any motor vehicle, these records must include the following information for each vehicle collected and resold:

(1) The vehicle identification number.

(2) The resale amount of the vehicle.

(3) The fee collected by the contributions collection agent from the charitable organization or trustee for the collection and resale of the vehicle.

(4) The total amount distributed to the charitable organization upon the resale of the vehicle. All such records shall be open to inspection at all reasonable times by the Attorney General or his or her duly authorized representative.

(d) Any person who violates the provisions of this Section is guilty of a Class A misdemeanor.

(e) Any person who violates the provisions of this Section shall not be entitled to keep or receive fees, salaries, commissions, or any compensation as a result or on account of the collections, and at the request of the Attorney General a court may order that such fees, salaries, commissions, or compensation shall be forfeited and distributed for charitable use.

(f) The Attorney General may adopt any rules and procedures necessary for the administration of this Section.

(225 ILCS 460/9) (from Ch. 23, par. 5109)

Sec. 9. (a) An action for violation of this Act may be prosecuted by the Attorney General in the name of the people of the State, and in any such action, the Attorney General shall exercise all the powers and perform all duties which the State's Attorney would otherwise be authorized to exercise or to perform therein.

(b) This Act shall not be construed to limit or restrict the exercise of the powers or the performance of the duties of the Attorney General which he otherwise is authorized to exercise or perform under any other provision of law by statute or otherwise.

(c) Whenever the Attorney General shall have reason to believe that any charitable organization, professional fund raiser, or professional solicitor, or contributions collection agent is operating in violation of the provisions of this Act, or if any of the principal officers of any charitable organization has refused or failed, after notice, to produce any records of such organization or there is employed or is about to be employed in any solicitation or collection of contributions for a charitable organization any device, scheme, or artifice to defraud or for obtaining money or property by means of any false pretense, representation or promise, or any false statement has been made in any application, registration or statement required to be filed pursuant to this Act, in addition to any other action authorized by law, he may bring in the circuit court an action in the name, and on behalf of the people of the State of Illinois against such charitable organization and any other person who has participated or is about to participate in such solicitation or collection by employing such device, scheme, artifice, false representation or promise, to enjoin such charitable organization or other person from continuing such solicitation or collection or engaging therein or doing any acts in furtherance thereof, or to cancel any registration statement previously filed with the Attorney General.

In connection with such proposed action the Attorney General is authorized to take proof in the manner provided in Section 2-1003 of the Code of Civil Procedure.

(d) Upon a showing by the Attorney General in an application for an injunction that any person engaged in the solicitation or collection of funds for charitable purposes, either as an individual or as a member of a copartnership, or as an officer of a corporation or as an agent for some other person, or copartnership or corporation, has been convicted in this State or elsewhere of a felony or of a misdemeanor where such felony or misdemeanor involved the misappropriation, misapplication or misuse of the money or property of another, he may enjoin such persons from engaging in any solicitation or collection of funds for charitable purposes.

(e) The Attorney General may exercise the authority granted in this Section against any charitable organization or person which or who operates under the guise or pretense of being an organization exempted by the provisions of Section 3 and is not in fact an organization entitled to such an exemption.

(f) In any action brought under the provisions of this Act, the Attorney General is entitled to recover costs for the use of this State.

(g) Any person who knowingly violates this Section may be enjoined from such conduct, removed from office, enjoined from acting for charity and subject to punitive damages as deemed appropriate by the circuit court.

(h) Any person who violates this Section shall not be entitled to keep or receive monies, fees, salaries, commissions or any compensation, as a result of the solicitations or fund raising campaigns, and at the request of the Attorney General such monies, fees, salaries, commissions or any compensation shall be forfeited and subject to distribution to charitable use as a court of equity determines.

(i) The Attorney General may publish an annual report of all charitable organizations based on information contained in reports filed hereunder stating the amount of money each organization received through solicitation and the amount of money which was expended on program service activity and the percentage of the solicited assets that were expended on charitable activity.

(j) The Attorney General shall cancel the registration of any organization, professional fund raiser, or professional solicitor, or contributions collection agent who violates the provisions of this Section.

(k) Any person who solicits financial contributions or the sale of merchandise, goods, services, memberships, or advertisements in violation of the prohibitions of subsection (d-1) of Section 11 of this Act, or commits false personation, use of title, or solicitation as defined by Section 17-2 of the Criminal Code of 1961 shall, in addition to any other penalties provided for by law, be subject to civil remedy by cause of action brought by the Attorney General or a Public Safety Personnel Organization affected by the violation.

In addition to equitable relief, a successful claimant or the Attorney General shall recover damages of triple the amount collected as a result of solicitations made in violation of this Act, plus reasonable attorney's fees and costs.

A plaintiff in any suit filed under this Section shall serve a copy of all pleadings on the Attorney General and the State's Attorney for the county in which the suit is filed.

(Source: P.A. 91-301, eff. 7-29-99.)

(225 ILCS 460/12) (from Ch. 23, par. 5112)

Sec. 12. Registration under this Act shall not be deemed to constitute an endorsement by the State of Illinois of the charitable organization, professional fund raiser, or professional solicitor, or contributions collection agent so registered. It shall be unlawful for any charitable organization, professional fund raiser, or professional solicitor, or contributions collection agent to represent, directly or indirectly, for the purpose of solicitation and collection of funds for charitable purposes, in any form or manner whatsoever by advertising or otherwise, that it has registered or otherwise complied with the provisions of this Act. The Attorney General may, in his discretion, cancel the registration of any organization, professional fund raiser, or professional solicitor, or contributions collection agent which or who violates the provisions of this Section. The Attorney General shall, by rule, set forth the standards by which he shall make this determination. Such standards shall be stated as precisely and clearly as practicable, to inform fully those persons affected.

(Source: P.A. 83-1282.)