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AN ACT Relating to charitable solicitations; amending RCW 19.09.020, 19.09.100, 19.09.190, 19.09.275, 19.09.340, 9.91.130, 42.17.095, and 42.17.243; adding new sections to chapter 19.09 RCW; repealing RCW 19.09.010, 19.09.065, 19.09.075, 19.09.076, 19.09.078, 19.09.079, 19.09.085, 19.09.095, 19.09.097, 19.09.271, 19.09.315, and 19.09.355; and prescribing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. RCW 19.09.020 and 1986 c 230 s 2 are each amended to read as follows:

When used in this chapter, unless the context otherwise requires:

(1) A "bona fide officer or employee" of a charitable organization is one (a) whose conduct is subject to direct control by such organization; (b) who does not act in the manner of an independent contractor in his or her relation with the organization; and (c) whose compensation is not computed on funds raised or to be raised.

(2) "Charitable organization" means any entity that solicits or collects contributions from the general public where the contribution is or is purported to be used to support a charitable activity. "Charitable" (a) is not limited to its common law meaning unless the context clearly requires a narrower meaning; (b) does not include religious or political activities; and (c) includes, but is not limited to, educational, recreational, social, patriotic, legal defense, benevolent, or health causes.

(3) "Compensation" means salaries, wages, fees, commissions, or any other remuneration or valuable consideration.

(4) "Contribution" means the donation, promise or grant, for consideration or otherwise, of any money or property of any kind or value which contribution is wholly or partly induced by a solicitation. Reference to dollar amounts of "contributions" or "solicitations" in this chapter means in the case of payments or promises to pay for merchandise or rights of any description, the value of the total amount paid or promised to be paid for such merchandise or rights less the reasonable purchase price to the charitable organization of any such tangible merchandise, rights, or services resold by the organization, and not merely that portion of the purchase price to be applied to a charitable purpose.

(5) "Cost of solicitation" means and includes all direct and indirect costs, expenditures, debts, obligations, salaries, wages, commissions, fees, or other money or thing of value paid or incurred in making a solicitation. Cost of solicitation does not include the reasonable purchase price to the charitable organization of any tangible goods or services resold by the organization as a part of its fund raising activities.

(6) "Entity" means an individual, organization, group, association, partnership, corporation, agency or unit of state government, or any combination thereof.

(7) "General public" or "public" means any individual located in Washington state without a membership or other official relationship with a charitable organization before a solicitation by the charitable organization.

(8) "Independent fund raiser" or "independent fund-raising entity" means any entity that for compensation or other consideration, plans, conducts, manages, or administers any drive or campaign in this state for the purpose of soliciting contributions for or on behalf of any charitable organization or charitable or religious purpose, or that is engaged in the business of or is held out to persons in this state as independently engaged in the business of soliciting contributions for such purposes, or the business of planning, conducting, managing, or carrying on any drive or campaign in this state for such solicitations. However, a nonprofit fund raiser or bona fide officer or other employee of a charitable organization shall not be deemed an independent fund raiser.

(9) "Membership" means that for the payment of fees, dues, assessments, etc., an organization provides services and confers a bona fide right, privilege, professional standing, honor, or other direct benefit, in addition to the right to vote, elect officers, or hold office. The term "membership" does not include those persons who are granted a membership upon making a contribution as the result of solicitation.

(10) "Nonprofit fund raiser" means an entity registered as a nonprofit corporation under Title 24 RCW, or any entity exempt from federal income tax under section 501(c) of the Internal Revenue Code, that solicits and receives contributions exceeding five thousand dollars in any accounting year on behalf of a charitable or religious organization other than the nonprofit corporation.

(11) "Other employee" of a charitable organization means any person (a) whose conduct is subject to direct control by such organization; (b) who does not act in the manner of any independent contractor in his or her relation with the organization; and (c) who is not engaged in the business of or held out to persons in this state as independently engaged in the business of soliciting contributions for charitable or religious purposes.

(12) "Parent organization" means that part of a charitable organization that coordinates, supervises, or exercises control over policy, fund raising, or expenditures, or assists or advises one or more chapters, branches, or affiliates of such organization in the state of Washington.

(13) "Political activities" means those activities subject to chapter 42.17 RCW or the Federal Elections Campaign Act of 1971, as amended.

(14) "Religious activities" means those religious, evangelical, or missionary activities under the direction of a religious organization duly organized and operating in good faith that are entitled to receive a declaration of current tax exempt status for religious purposes from the United States government and the duly organized branches or chapters of those organizations.

(15) ((~~"Secretary" means the secretary of state.~~

~~(16)~~)) "Solicitation" means any oral or written request for a contribution, including the solicitor's offer or attempt to sell any property, rights, services, or other thing in connection with which:

(a) Any appeal is made for any charitable purpose; or

(b) The name of any charitable organization is used as an inducement for consummating the sale; or

(c) Any statement is made that implies that the whole or any part of the proceeds from the sale will be applied toward any charitable purpose or donated to any charitable organization.

The solicitation shall be deemed completed when made, whether or not the person making it receives any contribution or makes any sale.

Bingo activities, raffles, and amusement games conducted under chapter 9.46 RCW and applicable rules of the Washington state gambling commission are specifically excluded and shall not be deemed a solicitation under this chapter.

Sec. 2. RCW 19.09.100 and 1986 c 230 s 11 are each amended to read as follows:

The following conditions apply to charitable solicitations ((~~as defined by RCW 19.09.020~~)):

(1) Each person or organization soliciting charitable contributions shall disclose orally or in writing to each person or organization solicited:

(a) The name of the individual making the solicitation;

(b) The name of the charitable organization; and

(d) Whether the charitable organization is or is not properly registered under this chapter, and if registered, that information relating to its financial affairs is available by contacting the office of the secretary of state, giving the secretary's toll-free telephone number, if available)).

(2) Each person or organization soliciting charitable contributions shall conspicuously disclose in writing to each person or organization solicited:

(a) If the solicitation is conducted by a charitable organization, the percentage relationship between (i) the total amount of money applied to charitable purposes; and (ii) the dollar value of support received from solicitations and from all other sources received on behalf of the charitable purpose of the organization((~~, as contained in the organization's most recent solicitation report filed in accordance with RCW 19.09.075(7)~~));

(b) If the solicitation is conducted by an independent or nonprofit fund raiser, the percentage relationship between (i) the amount of money disbursed to charitable organizations for charitable purposes; and (ii) the total value of contributions received on behalf of charitable organizations by the independent or nonprofit fund raiser((~~, as contained in the fund raiser's most recent solicitation report filed in accordance with RCW 19.09.079(7) or 19.09.078~~)).

(3) ((Each person or organization soliciting charitable contributions by telephone shall make the disclosures required by RCW 19.09.100(2) (a) or (b) in writing within five days of the receipt of any contribution. If the person or organization sends any materials to the person or organization solicited before the receipt of any contribution, those materials shall include the disclosures required in RCW 19.09.100(1)(d), and 19.09.100 (2) (a) or (b), whichever is applicable.

~~(4)~~)) Each person or organization soliciting charitable contributions shall not represent orally or in writing that:

(a) The charitable contribution is tax deductible unless the charitable organization for which charitable contributions are being solicited or to which tickets for fund raising events or other services or goods will be donated, has applied for and received from the internal revenue service a letter of determination granting tax deductible status to the charitable organization;

(b) The person soliciting the charitable contribution is a volunteer or words of similar meaning or effect that create the impression that the person soliciting is not a paid solicitor unless such person is unpaid for his or her services;

(c) The person soliciting the charitable contribution is a member, staffer, helper, or employee of the charitable organization or words of similar meaning or effect that create the impression that the person soliciting is not a paid solicitor if the person soliciting is employed, contracted, or paid by an independent fund raiser.

((~~(5)~~)) (4) If the charitable organization is associated with, or has a name that is similar to, any unit of government each person or organization soliciting contributions shall disclose to each person solicited whether the charitable organization is or is not part of any unit of government and the true nature of its relationship to the unit of government.

((~~(6)~~)) (5) A charitable organization shall comply with all local governmental regulations that apply to soliciting for or on behalf of charitable organizations.

((~~(7)~~)) (6) The advertising material and the general promotional plan for a solicitation shall not be false, misleading, or deceptive, and shall afford full and fair disclosure.

((~~(8)~~)) (7) Solicitations shall not be conducted by a charitable organization or independent fund raiser that has, or if a corporation, its officers, directors, or principals have, been convicted of a crime involving solicitations for or on behalf of a charitable organization in this state, the United States, or any other state or foreign country within the past ten years or has been subject to any permanent injunction or administrative order or judgment under RCW 19.86.080 or 19.86.090, involving a violation or violations of RCW 19.86.020, within the past ten years, or of restraining a false or misleading promotional plan involving solicitations for charitable organizations.

Failure to comply with subsections (1) through ((~~(8)~~)) (7) of this section is a violation of this chapter.

Sec. 3. RCW 19.09.190 and 1986 c 230 s 16 are each amended to read as follows:

Every independent fund raiser who (1) directly or indirectly receives contributions from the public on behalf of any charitable organization; or (2) is compensated based upon funds raised or to be raised, number of solicitations made or to be made, or any other similar method; or (3) incurs or is authorized to incur expenses on behalf of the charitable organization((~~; or (4) has not been registered with the secretary as an independent fund raiser for the preceding accounting year~~)) shall execute a surety bond as principal with one or more sureties whose liability in the aggregate as such sureties will equal at least fifteen thousand dollars. ((~~The secretary may, by rule, provide for the reduction and reinstatement of the bond required by this section.~~))

The issuer of the surety bond shall be licensed to do business in this state((~~, and shall promptly notify the secretary when claims or payments are made against the bond. The bond shall be filed with the secretary in the form prescribed by the secretary~~)). The bond shall run to the state and to any person who may have a cause of action against the obligor of said bond for any malfeasance, misfeasance, or deceptive practice in the conduct of such solicitation.

Sec. 4. RCW 19.09.275 and 1986 c 230 s 18 are each amended to read as follows:

Any person who willfully and knowingly violates any provision of this chapter or who willfully and knowingly gives false or incorrect information to the ((~~secretary,~~)) attorney general((,)) or county prosecuting attorney in filing statements required by this chapter, whether or not such statement or report is verified is guilty of a gross misdemeanor punishable under chapter 9A.20 RCW.

Any person who violates any provisions of this chapter or who gives false or incorrect information to the ((~~secretary,~~)) attorney general((,)) or county prosecuting attorney in filing statements required by this chapter, whether or not such statement or report is verified, is guilty of a misdemeanor punishable under chapter 9A.20 RCW.

Sec. 5. RCW 19.09.340 and 1983 c 265 s 12 are each amended to read as follows:

(1) The commission by any person of an act or practice prohibited by this chapter is hereby declared to be an unfair act or practice or unfair method of competition in the conduct of trade or commerce for the purpose of application of the consumer protection act, chapter 19.86 RCW.

(2) ((~~The secretary may refer such evidence, as may be available, concerning violations of this chapter to the attorney general or the prosecuting attorney of the county wherein the alleged violation arose.~~)) In addition to any other action they might commence, the attorney general or the county prosecuting attorney may bring an action in the name of the state((~~, with or without such reference,~~)) against any person to restrain and prevent the doing of any act or practice prohibited by this chapter: PROVIDED, That this chapter shall be considered in conjunction with chapters 9.04 and 19.86 RCW((~~, as now or hereafter amended, and~~)). The powers and duties of the attorney general and the prosecuting attorney as they may appear in ((~~the aforementioned~~)) chapters((,)) 9.04 and 19.86 RCW shall apply against all persons subject to this chapter.

NEW SECTION. Sec. 6. A new section is added to chapter 19.09 RCW to read as follows:

If it appears to the attorney general that a person has engaged or is about to engage in an act or practice constituting a violation of a provision of this chapter or a rule adopted or order issued under this chapter, the attorney general may, in the attorney general's discretion, issue an order directing the person to cease and desist from continuing the act or practice. Reasonable notice of and opportunity for a hearing shall be given. The attorney general may issue a temporary order pending the hearing, which shall remain in effect until ten days after the hearing is held and which shall become final if the person to whom the notice is addressed does not request a hearing within fifteen days after the receipt of the notice.

NEW SECTION. Sec. 7. A new section is added to chapter 19.09 RCW to read as follows:

(1) The attorney general may assess against any person or organization who violates this chapter, or any rule adopted under this chapter, a civil penalty of not more than one thousand dollars for each violation.

(2) Such person or organization shall be afforded the opportunity for a hearing, upon request made to the attorney general within thirty days after the date of issuance of the notice of assessment. The hearing shall be conducted in accordance with chapter 34.05 RCW.

(3) If any person fails to pay an assessment after it has become a final and unappealable order, or after the court has entered final judgment in favor of the state, the attorney general may recover the amount assessed by action in the appropriate superior court. In such action, the validity and appropriateness of the final order imposing the penalty shall not be subject to review.

Sec. 8. RCW 9.91.130 and 1987 c 385 s 1 are each amended to read as follows:

(1) It is unlawful for any person to throw, drop, deposit, discard, or otherwise dispose of any trash, including, but not limited to items that have deteriorated to the extent that they are no longer of monetary value or of use for the purpose they were intended; garbage, including any organic matter; or litter, in or around a receptacle provided by a charitable organization((~~, as defined in RCW 19.09.020(2),~~)) for the donation of clothing, property, or other thing of monetary value to be used for the charitable purposes of such organization.

(2) Charitable organizations must post a clearly visible notice on the donation receptacles warning of the existence and content of this section and the penalties for violation of its provisions, as well as a general identification of the items which are appropriate to be deposited in the receptacle.

(3) Any person violating the provisions of this section shall be guilty of a misdemeanor, and the fine for such violation shall be not less than fifty dollars for each offense.

(4) Nothing in this section shall preclude a charitable organization which maintains the receptacle from pursuing a civil action and seeking whatever damages were sustained by reason of the violation of the provisions of this section. For a second or subsequent violation of this section, such person shall be liable for treble the amount of damages done by the person, but in no event less than two hundred dollars, and such damages may be recovered in a civil action before any district court judge.

Sec. 9. RCW 42.17.095 and 1982 c 147 s 8 are each amended to read as follows:

The surplus funds of a candidate, or of a political committee supporting or opposing a candidate, may only be disposed of in any one or more of the following ways:

(1) Return the surplus to a contributor in an amount not to exceed that contributor's original contribution;

(2) Transfer the surplus to the candidate's personal account as reimbursement for lost earnings incurred as a result of that candidate's election campaign. Such lost earnings shall be verifiable as unpaid salary or, when the candidate is not salaried, as an amount not to exceed income received by the candidate for services rendered during an appropriate, corresponding time period. All lost earnings incurred shall be documented and a record thereof shall be maintained by the candidate or the candidate's political committee. The committee shall include a copy of such record when its expenditure for such reimbursement is reported pursuant to RCW 42.17.090;

(3) Transfer the surplus to one or more candidates or to a political committee or party;

(4) Donate the surplus to a charitable organization ((~~registered in accordance with chapter 19.09 RCW~~));

(5) Transmit the surplus to the state treasurer for deposit in the general fund; or

(6) Hold the surplus in the campaign depository or depositories designated in accordance with RCW 42.17.050 for possible use in a future election campaign, for political activity, for community activity, or for nonreimbursed public office related expenses and report any such disposition in accordance with RCW 42.17.090: PROVIDED, That if the candidate subsequently announces or publicly files for office, information as appropriate is reported to the commission in accordance with RCW 42.17.040 through 42.17.090. If a subsequent office is not sought the surplus held shall be disposed of in accordance with the requirements of this section.

Sec. 10. RCW 42.17.243 and 1991 sp.s. c 18 s 4 are each amended to read as follows:

(1) Elected and appointed officials required to report under RCW 42.17.240, shall report for themselves and for members of their immediate family to the commission any contributions received during the preceding calendar year for the officials' use in defraying nonreimbursed public office related expenses. Contributions reported under this section shall be referred to as a "public office fund" and shall not be transferred to a political committee nor used to promote or oppose a candidate or ballot proposition, other than as provided by subsection (3)(a) of this section. Reimbursements or payments for travel do not constitute contributions for the purposes of this section.

A report shall be filed during the month of January of any year following a year in which such contributions were received for or expenditures made from a public office fund. The report shall include:

(a) The name and address of each contributor;

(b) A description of each contribution, including the date on which it was received and its amount or, if its dollar value is unascertainable, an estimate of its fair market value; and

(c) A description of each expenditure made from a public office fund, including the name and address of the recipient, the amount, and the date of each such expenditure.

(2) No report under subsection (1) of this section shall be required if:

(a) The receipt of the contribution has been reported pursuant to RCW 42.17.065 (continuing political committee reports) or RCW 42.17.090 (political committee reports); or

(b) The contribution is in the form of meals, refreshments, or entertainment given in connection with official appearances or occasions where public business was discussed.

(3) Any funds which remain in a public office fund after all permissible public office related expenses have been paid may only be disposed of in one or more of the following ways:

(a) Returned to a contributor in an amount not to exceed that contributor's original contribution; or

(b) Donated to a charitable organization ((~~registered in accordance with chapter 19.09 RCW~~)); or

NEW SECTION. Sec. 11. The following acts or parts of acts are each repealed:

(1) RCW 19.09.010 and 1986 c 230 s 1 & 1973 1st ex.s. c 13 s 1;

(2) RCW 19.09.065 and 1986 c 230 s 3 & 1983 c 265 s 4;

(3) RCW 19.09.075 and 1986 c 230 s 4 & 1983 c 265 s 5;

(4) RCW 19.09.076 and 1986 c 230 s 5;

(5) RCW 19.09.078 and 1986 c 230 s 6;

(6) RCW 19.09.079 and 1986 c 230 s 7 & 1983 c 265 s 15;

(7) RCW 19.09.085 and 1986 c 230 s 8 & 1983 c 265 s 8;

(8) RCW 19.09.095 and 1986 c 230 s 9 & 1983 c 265 s 6;

(9) RCW 19.09.097 and 1986 c 230 s 10;

(10) RCW 19.09.271 and 1986 c 230 s 17;

(11) RCW 19.09.315 and 1983 c 265 s 17; and

(12) RCW 19.09.355 and 1983 c 265 s 18.