WSR 03-22-075

PROPOSED RULES

SECRETARY OF STATE


[ Filed November 4, 2003, 3:10 p.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 02-10-137.

Title of Rule: Rules to enable electronic filing, and digital imaging, and to reorganize corporations divisions rules and procedures for filings with the corporations program and the charities program.

Purpose: (1) Set standards for online filing; (2) streamline procedures to facilitate digital imaging of filings; and (3) clarify operational rules for charities program and corporations division activities.

Statutory Authority for Adoption: RCW 23B.01.200(2), 24.03.007, [24.03.]008, 25.15.007, 19.09.020(15), [19.09].315, 19.77.115, and 43.07.170.

Statute Being Implemented: RCW 43.07.170.

Summary: Rule sets standards for filing online including signature standards, sets filing standards related to digital imaging of filings, reorganizes office hour, telephone and fee information and some charities program rules into a new chapter for ease of access and understanding.

Reasons Supporting Proposal: Most of these revisions are necessary to implement electronic filing and digital imaging within the corporations division. These services will be available for both the corporations and charities programs. Minor reorganizing and clarifying changes were incorporated in the process of the revision.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: William B. Kellington, 801 Capitol Way South, Olympia, WA 98501, (360) 753-2524.

Name of Proponent: Office of the Secretary of State, Corporations Division, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: (1) The rule sets standards related to the implementation of digital imaging in the corporations division. These standards relate to document quality and eliminate the existing requirement to submit duplicate originals. The division will have the authority to reject filings that are not capable of being accurately rendered and stored in a digital format. (2) The rule imposes a requirement for basic contact information to accompany each filing. Failure to provide the contact information will result in the filing being returned to the filer through the registered agent rather than to the filer once the filing is complete. (3) The rule sets signature standards for filing documents related to corporations, limited liability companies and charities registrations online. These standards will not require filers to purchase or obtain any additional hardware or software in order to sign filings submitted online. (4) The rule creates a new chapter, centralizing office hour, contact and fee information for corporations division programs including charity registrations. (5) The rule clarifies fee calculations for charity, charitable trust and commercial fundraiser registrations. (6) The rule clarifies that the $20 fee for expedited services is not refundable, since the service purchased by the $20 fee has been provided whether or not the filing is successful. (7) The rule describes the certificates issued by the corporations division and authorizes the division to create and sell commemorative certificates of incorporation for new business entities. (8) The rule implements legislative authorization to charge a fee of $50 per class for the registration of trademarks in more than one class.

Proposal Changes the Following Existing Rules: (1) Current statutes and rules require persons filing corporations, limited liability company, limited partnership and trademark documents to submit duplicate original documents. These statutes now authorize this office to change that requirement by rule. This rule eliminates the requirement for duplicate originals. (2) Rules relating to office hours and address, telephone contact information, are to be repealed and readopted in one new chapter. (3) Several rules related to charitable solicitation, commercial fundraisers and charitable trusts have been rewritten for clarity. These revisions do not impose new substantive requirements.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The rule relates to the process for filing or applying for licenses or permits and is exempt under RCW 19.85.025(3). In addition, the revision does not impose more than minor costs on any business. These revisions will not require any business to obtain professional services in order to comply, and impose no new record-keeping requirements.

RCW 34.05.328 does not apply to this rule adoption. This rule relates to filing requirements for a license or permit, and does not impose new substantive standards, the violation of which subjects a person to penalty. Therefore the revision is not a significant legislative rule within the meaning of RCW 34.05.328(5).

Hearing Location: Office of the Secretary of State, Conference Room, 520 Union, Olympia, WA 98504, on December 9, 2003, at 10:00 a.m.

Assistance for Persons with Disabilities: Contact Bill Kellington by December 2, 2003, TDD (360) 753-1485.

Submit Written Comments to: William B. Kellington, Corporations Division, P.O. Box 40234, Olympia, WA 98501-0234, fax (360) 586-4989, by December 9, 2003.

Date of Intended Adoption: December 9, 2003.

November 4, 2003

Steve Excell

Assistant Secretary of State

OTS-6515.2


NEW SECTION
WAC 434-12-005   Trademark filing -- Fees -- Office hours -- Location.   (1) Trademarks are filed with the corporations division. Please refer to chapter 434-112 WAC for corporations division office hours, location, filing procedures and telephone numbers.

(2) Filing and other fees for trademarks are set forth in WAC 434-112-080 through 434-112-090.

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NEW SECTION
WAC 434-12-025   Document and specimen standards for trademark filing.   (1) In addition to the requirements of WAC 434-112-040, the following rules apply to trademark filings.

(a) Specimens submitted in support of a trademark filing must:

(i) Be of sufficient quality, size and clarity to allow the corporations division to create and maintain an accurate digital image of the specimen; and

(ii) Demonstrate that the trademark is in use in commerce; preliminary design artwork is not acceptable.

(b) Specimens submitted in support of a trademark reservation:

(i) Must be of sufficient quality, size and clarity to allow the corporations division to create and maintain an accurate digital image of the specimen; and

(ii) May be in the form of preliminary design artwork so long as the design clearly describes the trademark to be reserved.

(2) Corporations division staff may reject submissions that do not meet these requirements.

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OTS-6376.2


AMENDATORY SECTION(Amending WSR 93-20-072, filed 10/1/93, effective 11/1/93)

WAC 434-110-100   Registered office address -- Requirements.   (1) A post office box address may be used in ((conjunction with)) addition to a registered geographic office address when((:

(1))) the United States Postal Service cannot or will not deliver to the street address((; and)).

(2) ((The post office box address is in the same Washington city or town as the registered office address; and

(3))) The registered agent ((notifies)) is required to notify the office of the secretary of state and the corporation of any changes in either the street address or the post office box address. Change of address is subject to the fee stated in WAC 434-112-085 (1)(j).

[Statutory Authority: 1993 c 269 and 356, Titles 23, 23B, 24 and 46 RCW and chapter 43.07 RCW. 93-20-072, 434-110-100, filed 10/1/93, effective 11/1/93.]


REPEALER

     The following sections of the Washington Administrative Code are repealed:
WAC 434-110-070 Fees.
WAC 434-110-080 Fee prepayment -- When required.
WAC 434-110-090 Original signature requirement -- Original retained.

OTS-6377.3

Chapter 434-112 WAC

Corporations Division and Charities Program Services


NEW SECTION
WAC 434-112-010   Services provided by the corporations division and charities program.   (1) The corporations division includes the corporations program and the charities program.

(2) The corporations program provides the following services:

(a) Business filings under chapters 18.100, 23.78, 23.86, 23.90 RCW, and Titles 23B and 25 RCW;

(b) Nonprofit organization filings under Title 24 RCW;

(c) Trademark registration under chapter 19.77 RCW;

(d) Certification authority licensing under chapter 19.34 RCW, the Electronic Authentication Act;

(e) Registration of international student exchange programs under chapter 19.166 RCW;

(f) Registration under the Immigration Assistant Practices Act, chapter 19.154 RCW;

(g) Apostilles under RCW 42.44.180;

(h) Agent for service of process on motorists under RCW 46.64.040;

(i) Agent for service of process for those entities and under those circumstances listed in subsection (2)(a), (b), and (c) of this section.

(3) The charities program provides the following services:

(a) Registrations under the Charitable Solicitations Act, chapter 19.09 RCW including:

(i) Charitable organizations;

(ii) Commercial fund-raisers; and

(iii) Fund-raising contracts;

(b) Registration of charitable trusts under chapter 11.110 RCW;

(c) Publication of the trust directory; and

(d) Agent for service of process for those entities and under those circumstances listed in subsection (3)(a) and (b) of this section.

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NEW SECTION
WAC 434-112-020   Corporations division address, telephone number and office hours.   (1) The mailing address of the corporations division is: P.O. Box 40234-0234, Olympia, Washington 98504-40234.

(2) The corporations division is located in the James M. Dolliver Building at 801 Capitol Way South, Olympia, Washington.

(3) The telephone numbers for corporations division services are 360-753-7115 and 360-753-7120. The TDD line is 360-753-1485. Telephone services are available from 8:00 a.m. to 5:00 p.m. Pacific time, Monday through Friday, except for state holidays.

(4) The telephone number for charities program services is 360-753-0863. The toll free number in Washington is 1-800-332-GIVE (1-800-332-4483). The TDD number for the charities program is 1-888-658-1485. Telephone services are available from 8:00 a.m. to 5:00 p.m. Pacific time, Monday through Friday, except for state holidays.

(5) The corporations division counter is open for corporations and charities program services to in-person requests from 8:00 a.m. to 5:00 p.m. each business day. The corporations division is unable to guarantee same day processing of any filing or request submitted after 4:30 p.m. on that day. See WAC 434-112-080 for fees and regulations related to expedited processing.

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NEW SECTION
WAC 434-112-025   Documents delivered after normal working hours.   (1) Documents, including substitute service of process on the secretary of state, delivered after the normal working hours will be deemed to be received on the next working day.

(2) Filings submitted on-line will be deemed to be received as of the date and time the corporations division computer system records the complete submission and credit card approval for the transaction.

(3) The secretary assumes no responsibility for any form of delivery other than that:

(a) Received personally by an employee of the office of the secretary of state; or

(b) Received by the corporations division computer system as a result of an on-line filing.

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NEW SECTION
WAC 434-112-030   Certificates for business filings.   (1) Certificates issued by the secretary of state or the secretary's designee in furtherance of duties under Titles 18, 19, 23, 23B, 24 and 25 RCW shall:

(a) Bear a rendition of the Washington state seal;

(b) Bear a mechanical or electronic reproduction of the secretary's signature; and

(c) Be regarded as the secretary of state's official certification of the matters itemized in the certificate.

(2) The secretary may make commemorative certificates available. When such certificates are available, any person or entity completing a filing under the authority listed in WAC 434-112-010 (2)(a) through (d) may purchase a commemorative certificate bearing a gold foil seal documenting the filing.

(a) The cost for a commemorative certificate is one hundred dollars;

(b) Expedited service is not available for commemorative certificates.

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NEW SECTION
WAC 434-112-040   Document standards for filings -- Cover sheet requirement and document quality.   (1) A completed contact information cover sheet shall be submitted with each filing with the corporations division or the charities program if:

(a) The filing party is not the registered agent and would like the completed filing returned to them directly;

(b) The filing party would like expedited service under WAC 434-112-080; or

(c) The filing party would like correspondence related to a charities program filing sent to an individual at an address other than the mailing address of record.

(2) The cover sheet will include contact telephone and address information related to the filing, and provide an opportunity to advise the corporations division whether the request is for expedited service and designate the address to which the corporations division is to return the completed request.

(3) All corporations related filings received without a contact information cover sheet will be returned to the registered agent for the entity when processing is complete.

(4) Correspondence pertaining to a charities program filing received without a contact information cover sheet will be sent to the entity's mailing address of record when processing is complete.

(5) The corporations division including the charities program may reject and return documents and copies that are not legible or not capable of being recorded as an image with adequate resolution and clarity.

(a) Paper and ink must be of weight and color capable of producing a legible image regardless of the system used by the corporations division for creating the image.

(b) Documents completed in pencil will not be accepted for filing.

(c) All filings except on-line filings must be submitted on 8 1/2 x 11 paper.

(d) All text must be written or printed in eight point type or larger.

(6) All filings not presented on forms provided by the office of the secretary of state must have a three-inch top margin on page one, with one-inch side and bottom margins. Pages after page one must have a one-inch margin on the top, bottom and sides.

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NEW SECTION
WAC 434-112-045   Requests for information or fees.   (1) The corporations division and the charities program may pend action on documents submitted for filing that are unacceptable for filing by reason of incomplete information or insufficient fees, pending provision of the required information and fees.

(2) Additional information or payment may be requested by telephone, fax, e-mail or letter.

(3) The corporations division and the charities program may pend action for up to thirty days to await additional information or funds needed to complete the filing. This time may extend to forty-five days if the filing party is making good faith efforts to complete the filing.

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NEW SECTION
WAC 434-112-050   Duplicate originals not required.   (1) Persons submitting business filings under chapter 18.100, 19.77 or Titles 23, 23B, 24 and 25 RCW shall submit one original copy of the document submitted for filing.

(2) Subsection (1) of this section does not apply to:

(a) Filings completed on-line;

(b) Summons and complaints; and

(c) Specimens provided in support of a trademark filing.

(3) The corporations division will retain a digital image of the record submitted for filing, and on completion of the filing will return to the filer a copy of the digital image bearing a filing endorsement.

(4) The corporations division may return the completed filing via e-mail or other electronic means if the filer indicates that an electronic response is acceptable.

(5) The corporations division may reject and return documents and copies that are not legible or not capable of being recorded as a digital image with adequate resolution and clarity.

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NEW SECTION
WAC 434-112-065   On-line filing -- Consent of registered agent.   (1) When completing and submitting an on-line filing for any entity required by Washington law to appoint a registered agent the filing party shall affirm under oath that they have obtained and have in their possession the signed, written consent of the person appointed as registered agent.

(2) When the person submitting the filing is the person appointed as registered agent, they are not required to obtain separate written consent.

(3) Submitting a false affirmation is punishable as a gross misdemeanor under RCW 43.07.210.

(4) The corporation or other entity required to maintain a registered agent must:

(a) Retain the original of the registered agent's signed consent;

(b) Make the original of the registered agent's signed consent available for inspection on request; and

(c) Submit the original to the corporations division or the office of the attorney general within ten business days upon demand.

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NEW SECTION
WAC 434-112-070   On-line filing -- Application for certificate of authority -- Certificate of good standing.   (1) When a foreign corporation or limited liability company submits an on-line application for certificate of authority under RCW 23B.15.030, 24.03.325, or an on-line registration under RCW 25.15.315, the filing party may meet the statutory requirement for submitting a certificate of good standing or a certificate of existence by submitting a digital image of a certificate of good standing or certificate of existence meeting the requirements of the statute.

(2) The image must be in a format specified as acceptable on the on-line filing website.

(3) The certificate of good standing must meet the requirements of chapters 23B.15 or 25.15 RCW for certificates of authority submitted in support of an application for certificate of authority.

(4) The corporation or limited liability company must:

(a) Retain the original certificate of good standing;

(b) Make the original certificate of good standing available for inspection on request; and

(c) Submit the original to the corporations division or the office of the attorney general within ten business days upon demand.

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NEW SECTION
WAC 434-112-075   On-line services.   (1) The corporations division website is located at www.secstate.wa.gov/. The website provides a variety of services for charities and corporations including on-line lookup, on-line filing and downloadable forms. Please see the website for the most up to date list of services available.

(2) The following business entities may pay their annual license fees and submit their annual reports on-line, provided they meet the requirements of this subsection:

(a) Domestic or foreign profit corporations organized under Title 23B RCW, including professional service corporations under chapter 18.100 RCW; and Massachusetts trusts under chapter 23.90 RCW.

(b) Foreign and domestic limited liability companies registered or formed under chapter 25.15 RCW, including limited liability companies formed under RCW 25.15.045 to provide professional services.

(3) Entities filing annual reports on-line must have twenty-five or fewer board members, officers, shareholders, members or managers to report.

(4) On-line filings for foreign and domestic corporations, foreign and domestic limited liability companies, and registrations under the charities programs:

(a) Will be processed as expedited filings under WAC 434-112-065;

(b) Will be subject to the expedited processing fee set forth in WAC 434-112-065; and

(c) Be treated as received when the corporations division system records receipt of the completed transaction including payment authorization.

(5) When submitting an on-line filing, the person completing the filing shall sign the application by: Typing their full name in the space provided on the web form; stating their capacity with the entity addressed in the filing; and following the directions for signing the web form.

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NEW SECTION
WAC 434-112-080   In-person or expedited service -- Special fees.   (1) The corporations division counter is open for corporations and charities program services to in-person requests from 8:00 a.m. to 5:00 p.m. each business day.

(a) Staff provides expedited, same-day processing of documents or requests submitted in person prior to 4:30 p.m. on that day. The corporations division is unable to guarantee same day processing of any filing or request submitted after 4:30 p.m. on that day.

(b) Expedited requests submitted by fax, mail or on-line will be completed within two working days of submission, or as soon thereafter as possible.

(2) Expedited services under this section are available for the following transactions:

(a) Business filing transactions:

(i) Charter document review and filing;

(ii) Name reservation review and filing;

(iii) Document certification;

(iv) Document copying or status certificates;

(v) Status change filings;

(vi) Reinstatements; and

(vii) Trademark filings.

(b) Charities program filings:

(i) Document review and filing including initial registration and renewals of charities, commercial fund-raisers and charitable trusts;

(ii) Document copying and status verification letters;

(iii) Status change filings.

(c) Apostille requests submitted at the corporations division counter.

(3) The fee for same-day service is twenty dollars for single or multiple transactions within each new or existing corporation program file, or charities program file. In addition, the filing fee for each transaction will apply.

(4) Except for on-line filings, the filing party shall indicate that expedited processing is requested by:

(a) Submitting a completed contact information cover sheet as described by WAC 434-112-040 indicating that the document is submitted for expedited filing; or

(b) Placing the word "expedite" conspicuously on either the face of the document to be filed, or on any cover letter submitted with the document.

(5) All documents submitted for filing on-line and corporations documents submitted via facsimile transmission are treated as expedited processing requests. Registrations with the charities program may not be submitted by facsimile. Documents transmitted via facsimile will receive expedited forty-eight hour processing when the documents are received between 8:00 a.m. and 5:00 p.m. Pacific time each business day. The fee for facsimile filings is twenty dollars for single or multiple transactions within each new or existing corporation or trademark file. In addition, the filing fee for each transaction will apply.

(6) There is no expedited fee for the following transactions, unless they are submitted via facsimile transmission as set forth under subsection (3) of this section:

(a) Registered agent or address change;

(b) Initial reports;

(c) License renewal and required annual report;

(d) Amended annual reports;

(e) In-person inspection or review of corporation files or other public documents located in the corporations division office;

(f) Documents left at the counter for processing with mail-in documents received the same day; or

(g) A search for nonactive corporations less than twenty years old or trademark files less than six years old.

(7) If staff cannot complete the expedited service request before the end of the same day, or the second consecutive business day for facsimile filings, the transaction will be completed on the following business day.

(8) Emergency services needed outside regular business hours requiring employee overtime are one hundred fifty dollars per hour plus regulatory or statutory fees due for the form of the filing. When the division receives an emergency request, staff notifies the customer of the service fee and any other reasonable conditions set by the director. The customer must agree to pay the fees or have received a fee waiver before emergency services are provided.

(9) Service may be limited under extraordinary circumstances.

(a) Over-the-counter service hours may be shortened under extraordinary circumstances.

(b) Separate over-the-counter service requests by one person may be limited to those relating to three corporations per day.

(c) Documents submitted by courier services or document-handling companies may receive twenty-four-hour service.

(d) A customer may make alternate arrangements with the director prior to bringing or sending in documents, if a sudden, unexpected situation occurs during the business day.

(10) A person submitting a filing or request may submit a written request asking the secretary to waive emergency or penalty fees.

(a) The request must include the special circumstances justifying the fee waiver.

(b) Under special circumstances the secretary may waive emergency or penalty fees.

(11) Fees for expedited or in-person processing will not be refunded if processing the request is delayed or not completed due to documents that lack required information, that contain provisions prohibited by Washington law, or are not presented in a manner that can be legibly preserved in the records of the office of the secretary of state.

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NEW SECTION
WAC 434-112-085   Fees and penalties.   (1) For Washington registered profit domestic and foreign corporations, including profit cooperative associations, employee cooperative associations, limited liability companies, limited partnerships, Massachusetts trusts and limited liability partnerships, fees and penalties are as follows:

(a) Articles of incorporation, certificates of formation, partnership agreements and other original filings, one hundred seventy-five dollars;

(b) Articles of amendment, restatement, correction, or revocation of dissolution, thirty dollars;

(c) License renewal with required annual report filed after due date and before administrative dissolution, penalty fee of twenty-five dollars, plus the statutory fee of fifty dollars and the department of licensing handling fee of nine dollars;

(d) Reinstatement, one hundred dollars plus all delinquent license or annual fees and a twenty-five percent penalty computed on the total amount;

(e) Articles of merger or exchange, twenty dollars for each listed company;

(f) Resignation of registered agent, twenty dollars;

(g) Resignation of officer or director, an initial report or amended annual report, and the appointment or change of registered agent or change of registered address, ten dollars;

(h) Registration, reservation, or transfer of name, thirty dollars;

(i) Articles of dissolution, certificate of withdrawal, dissolution by judicial decree, or revocation of certificate of authority by either failure to renew or judicial decree, no fee;

(j) Agent's consent to act as agent, agent's resignation if appointed without consent, or annual report when filed concurrently with annual license fee, no fee; and

(k) Other statement or report filed, ten dollars.

(2) For Washington registered domestic and foreign nonprofit corporations, nonprofit miscellaneous and mutual corporations, building corporations, and other associations and corporations under Title 24 RCW, fees and penalties are as follows:

(a) Articles of incorporation and other original filings, thirty dollars;

(b) Articles of amendment, restatement, or correction, twenty dollars;

(c) Articles of dissolution or certificate of withdrawal, no fee;

(d) Revocation of dissolution, twenty dollars;

(e) Reinstatement following administrative dissolution, thirty dollars plus all delinquent annual fees and a five-dollar penalty;

(f) Articles of merger or exchange, twenty dollars for each listed corporation;

(g) Resignation of officer or director, an initial report or amended annual report, the appointment or change of registered agent, or change of registered address, ten dollars;

(h) Resignation of registered agent, twenty dollars;

(i) Registration, reservation, or transfer of reservation of name, twenty dollars;

(j) Certificate of election adopting provisions of chapter 24.03 RCW as described in RCW 24.03.017, thirty dollars; and

(k) Other statement or report filed, ten dollars.

(3) For registering trademarks for use within the state, the fees are as follows:

(a) For a five-year registration or renewal, fifty dollars for each class in which the trademark is registered;

(b) For recording the assignment of a trademark and its registration or application for registration, ten dollars;

(c) For a new certificate with the name of the new assignee, five dollars;

(d) For reservation of a trademark for one hundred eighty days, thirty dollars for each class in which the trademark is reserved;

(e) For amendment of a trademark to add new classes of goods or services, fifty dollars for each class added by the amendment;

(f) Cancellation of trademark, no fee; and

(g) Other statement or report filed, ten dollars.

Under special circumstances, the filing party may petition the secretary in writing to request a waiver of emergency or penalty fees.

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NEW SECTION
WAC 434-112-090   Miscellaneous fees.   (1) For photocopies, fees are as follows:

(a) Each annual report, five dollars;

(b) Application for registration or any single document, ten dollars;

(c) Application and amended notices, twenty dollars;

(d) Copy of annual notice, five dollars;

(e) Surcharge for files exceeding one hundred pages of copy, thirteen dollars for each fifty-page increment (number of pages determined by weight of copies);

(2) For certificates of existence fees are as follows:

(a) With complete historical data, under embossed seal, thirty dollars;

(b) Computer generated twenty dollars;

(c) Duplicate certificate twenty dollars.

(3) For verifying the signature of a notary or public official for an apostille or certification authenticating a sworn document, the fee is fifteen dollars. This includes:

(a) A ten-dollar fee for verifying the signature of a notary or public official; and

(b) A five-dollar fee for providing a certificate under seal pursuant to RCW 47.03.120 (1)(b).

(4) For each certified copy of any document the fee is ten dollars plus a ten-dollar copy fee per document.

(5) For any service of process the fee is fifty dollars.

(6) Dishonored checks. If a person, corporation or other submitting entity has attempted to pay any fee due to the secretary of state by means of a check, and the check is dishonored by the financial institution when presented, the secretary of state will impose a twenty-five-dollar penalty, payable to the secretary of state.

In the event a valid replacement check and dishonor charge is not received in the office of the secretary of state within the time prescribed by its accounting division, the transaction covered by the dishonored check will be canceled and all other late filing fees and penalties will be instituted.

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NEW SECTION
WAC 434-112-095   Fee prepayment -- When required.   (1) All fees must be prepaid before the corporations division can take action.

(2) Anyone desiring a service for which the exact fee may not be known in advance may send a request accompanied by a check made payable to the "secretary of state," with the phrase "not to exceed (specified dollar amount)" above the space intended for the written dollar amount. The staff person who processes the request will fill in the exact fee amount and include a memo indicating the exact amount of the check with the certificate or other document.

(3) With permission of the secretary, a customer may set up a prepaid account by depositing a specified sum of money with the fiscal office.

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OTS-6378.4


NEW SECTION
WAC 434-120-017   Office hours and location for charities program services.   Chapter 434-112 WAC provides information on charities program office hours, office location, mailing address, and telephone numbers.

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AMENDATORY SECTION(Amending WSR 97-16-036, filed 7/30/97, effective 8/30/97)

WAC 434-120-025   Definitions.   (1) "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, but does not include any commercial fund-raiser or commercial fund-raising entity as defined in this section. "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, and health causes.

(2) "Charitable trust" means any real or personal property right held by an entity or person that is intended to be used for a charitable purpose(s). The trust may be created by will, deed, articles of incorporation, or other governing instrument. It may be express or constructive.

(3) "Commercial coventurer" means a corporation, partnership, sole proprietorship, limited liability company, limited partnership, limited liability partnership, individual, or other entity that:

(a) Is regularly and primarily engaged in making sales of goods or services for profit directly to the general public; and

(b) Is not otherwise regularly or primarily engaged in making charitable solicitations in this state or otherwise raising funds in this state for one or more charitable organizations; and

(c) Represents to prospective purchasers that if they purchase a good or service from the commercial coventurer, a specified portion of the sales price or a certain sum of money or some other specified thing of value will be donated to a named charitable organization; and

(d) Does not ask purchasers to make checks or other instruments payable to a named charitable organization or any entity other than the commercial coventurer itself under its regular commercial name.

(4) "Compensation," means salaries, wages, fees, commissions, or any other remuneration or valuable consideration. Compensation shall not include reimbursement for expenses incurred and documented or noncash awards or prizes, valued at one hundred dollars or less, given annually to each volunteer.

(5) "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; or

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

(6) "Solicitation," as defined in RCW 19.09.020(((15))) (16), for the purposes of these regulations, shall not include any of the following:

(a) An application or request for application for a grant, contract, or similar funding from any foundation, corporation, governmental agency or similar entity which has an established application and review procedure for reviewing such requests;

(b) The attempt to sell a service or good which constitutes the basis of the charitable organization's activities under which the federal income tax exemption was granted, or is the primary purpose for the existence of the charitable organization. This includes, but is not limited to, admission to a theatrical or other performance presented by a charitable organization that is a drama, musical, dance, or similar group and fees for services such as a hospital provides or use of the charitable organization's facilities; or

(c) Bingo activities, raffles, and amusement games conducted under chapter 9.46 RCW and applicable rules of the Washington state gambling commission.

(7) "Commercial fund-raiser" or "commercial fund-raising entity" means any entity that for compensation or other consideration within this state directly or indirectly solicits, receives or raises contributions for or on behalf of any charitable organization or charitable 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 or receiving contributions for such purposes. However, the following shall not be deemed a "commercial fund-raiser" or "commercial fund-raising entity":

(a) Any entity that provides fund-raising advice or consultation to a charitable organization within this state but neither directly nor indirectly solicits or receives or raises any contribution for or on behalf of any such charitable organization; or

(b) A bona fide officer or other employee of a charitable organization.

(8) "Renewal date" means the fifteenth day of the fifth month after the close of the organization's fiscal or accounting year.

(9) "Secretary" means the secretary of state or the secretary's designee, or authorized representative.

[Statutory Authority: RCW 19.09.079, 19.09.190 and 19.09.315. 97-16-036, 434-120-025, filed 7/30/97, effective 8/30/97. Statutory Authority: RCW 11.110.070 and 19.09.315. 95-11-135, 434-120-025, filed 5/24/95, effective 6/24/95. Statutory Authority: Chapters 34.05, 19.09, 11.110 and 43.07 RCW and 1993 c 471. 94-01-004, 434-120-025, filed 12/1/93, effective 1/1/94. Formerly WAC 434-19-020.]


AMENDATORY SECTION(Amending WSR 97-16-035, filed 7/30/97, effective 8/30/97)

WAC 434-120-040   Public information derived from registration.   (1) Registration forms, and attachments, filed by charitable organizations and commercial fund-raisers pursuant to WAC 434-120-105 and WAC 434-120-215 are available for public inspection or copying. For purposes of public reports derived from that registration information, the secretary shall calculate, and make available to the public, the following information:

(((1))) (2) For charitable organizations, the percentage of total expenditures in a reporting year allocated to charitable program services. This shall be calculated ((as follows:

(a) For organizations required to file a federal information tax return, by dividing the amount reported as "program services" (e.g., line 13 of the form 990) by the amount reported as "total expenses" (e.g., line 17 of form 990) and multiplying by 100; or

(b) For organizations not required to file a federal informational tax return,)) by dividing the amount reported as expended for charitable purposes by the amount reported as total expenses, and multiplying by 100.

(((2))) (3) For commercial fund-raisers the percentage of the proceeds of charitable solicitations which are paid to or retained by charitable organizations. This shall be calculated by dividing the amount reported pursuant to WAC 434-120-215 (2)(((n))) (l)(iii)(B) by the amount reported pursuant to WAC 434-120-215 (2)(((n))) (l)(iii)(A), and multiplying by 100.

[Statutory Authority: RCW 19.09.075, 19.09.079 and 19.09.210. 97-16-035, 434-120-040, filed 7/30/97, effective 8/30/97.]


NEW SECTION
WAC 434-120-045   Change in status, notification.   An entity required to register under this chapter shall notify the charities program of a change in:

(1) Principal officer, owner, or Washington representative within thirty days after the change.

(2) Business structure within thirty days, register the restructured or newly named entity as a new commercial fund-raiser and include evidence of separate bonding.

(3) Business name within thirty days, register the new name, and include evidence of bonding in the new name. If the fund-raiser will use both the existing name and the new name, include evidence of separate bonding for each name and include a fee of ten dollars.

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NEW SECTION
WAC 434-120-050   Signatures for on-line filings.   When submitting an on-line filing, the person completing the filing shall sign the application by: Typing their full name in the space provided on the web form; stating their capacity with the entity addressed in the filing; and following the directions for signing the web form.

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AMENDATORY SECTION(Amending WSR 95-11-135, filed 5/24/95, effective 6/24/95)

WAC 434-120-103   Required forms and filings.   (1) A charitable organization complies with the filing and registration requirements of this chapter by filing the following documents with the secretary of state at the times, and in the manner, prescribed by these rules either the:

(a) ((Uniform)) State registration form described in WAC 434-120-105. This form is available through the charities program; or

(b) Unified Registration Statement(( - Charitable/Public Benefit Form)) developed by the National Association of State Charity Officials (NASCO), if accompanied by the components identified for filing in Washington in the unified registration statement appendix.

((This form is)) (2) These forms are used ((as an)) for original registration form, as well as ((a)) for periodic renewal ((form)). The purpose of this report is to provide basic information about the organization, as described in RCW 19.09.075((; and)).

(((b))) (3) The state registration form or the unified registration statement must be filed together with:

(a) Solicitation report. This ((form)) financial report is filed ((periodically)) by all charitable organizations, except those exempted by these rules. The purpose of this report is to provide information regarding solicitations conducted during the reporting period((, of an informational nature to the public)). Solicitation reports are filed as part of ((a periodic)) an annual renewal((, and as provided by WAC 434-120-105(4) for newly registered organizations)); and

(((c))) (b) All contracts between the commercial fund-raiser and all charitable organizations for which it solicits, as provided by WAC 434-120-240.

(((2))) (4) The unified registration statement and the appendix are available for download at: http://www.nonprofits.org/library/gov.

(5) The financial statement required by WAC 434-120-130 does not need to be filed with the office of the secretary of state. The purpose of this statement is to verify and support the information filed in the solicitation report. This statement must be available upon request as provided in this chapter.

(((3))) (6) This section is intended to be explanatory of other rules in this chapter, and not to modify or diminish the requirements of those rules.

[Statutory Authority: RCW 11.110.070 and 19.09.315. 95-11-135, 434-120-103, filed 5/24/95, effective 6/24/95.]


AMENDATORY SECTION(Amending WSR 97-19-043, filed 9/11/97, effective 10/12/97)

WAC 434-120-105   Charitable organization registration -- Form and requirements.   (1) Charitable organizations registering under this act shall ((use)) submit the registration form ((available in the office of the corporations division)) described in WAC 434-120-103. ((The secretary of state shall develop a form in compliance with this rule.)) The secretary's failure to affirmatively reject or return an incomplete registration or other filing that does not fully comply with these rules or chapter 19.09 RCW shall not excuse the failure to comply. ((The secretary may accept the Uniform Registration Statement developed by the National Association of State Charity Officials if accompanied by an addendum developed by the secretary for use in Washington, if the uniform form and addendum contain all of the information required by this rule.))

(2) A registration ((form)) is not complete, and will not be accepted for filing, unless it includes:

(a) The name of the organization, and every address (including both physical address and any mailing address if different), telephone number(s), fax number(s), and taxpayer identification number, including those of all offices, chapters, branches, and affiliates used in charitable solicitations reflected in the registration including any electronic mail or Internet addresses used by the organization;

(b) All of the names under which the organization will solicit contributions, including, but not limited to, the names of all offices, chapters, branches, and affiliates used in charitable solicitations reflected in the registration;

(c) ((If incorporated, the corporate name, unified business identifier number, state and date of incorporation, or if not incorporated,)) The type of organization, the unified business identifier, if the organization is registered in Washington and date established, and if the organization is incorporated, the state and date of incorporation;

(d) The end date of its current fiscal or accounting year;

(e) The court or other forum, case number and title of all legal actions, if any, in which a judgment or final order was entered, or action is currently pending, against any organization or individual required to be identified in the registration. "Actions" include any administrative or judicial proceeding alleging that the entity has failed to comply with these rules, chapter 19.09 RCW, or state or federal laws pertaining to taxation, revenue, charitable solicitation, or recordkeeping, whether such action has been instituted by a public agency or a private person or entity;

(f) A list of all states where the organization is registered for charitable solicitations((, including any other names under which the organization is currently registered or has been registered in the past three years));

(g) The name, address, and telephone number of the officers or of persons accepting responsibility for the organization, including the:

(i) Members of the board of directors or any committee or group serving the function of a board of directors, regardless of the name of the committee or group; and

(ii) Officers of the charitable organization, or the persons serving the function of officers, regardless of the title of the position;

(h) The names of the three officers or employees receiving the greatest amount of compensation from the organization;

(i) The purpose of the charitable organization, including, if applicable, the names and addresses of any specific beneficiaries which the charitable organization supports and to whom assets would be distributed to in the event of dissolution. When filing a renewal or an updated registration, the organization is not required to submit a list of beneficiaries if there have been no changes to that list;

(j) ((Whether the charitable organization is exempt from federal income tax, and, if so, attaching to its initial registration)) A statement indicating whether the organization is exempt from federal income tax, and copy of the letter by which the Internal Revenue Service granted ((such)) the organization tax exempt status if the Internal Revenue Service has granted the organization such status. The organization shall indicate the section of the Internal Revenue Code under which they are exempt from the federal income tax;

(k) The name and address of the person or entity with authority for the preparation of financial statements or the maintenance of financial information on behalf of the organization;

(l) The name, address, and telephone number of an individual with expenditure authority who can respond to questions regarding expenditures of funds, and the names and addresses of any commercial fund-raiser and any commercial coventurer who have the authority to expend funds or incur obligations on behalf of the organization;

(m) An irrevocable appointment of the secretary to receive service of process in noncriminal proceedings as provided in RCW 19.09.305;

(n) A solicitation report of the charitable organization for the preceding fiscal or accounting year including, but not limited to:

(i) The types of solicitations conducted; ((and))

(ii) The name, physical address, and telephone number of any commercial fund-raiser, including any commercial coventurer conducting solicitations on behalf of the organization in Washington during the period covered by this report; and

(iii) ((Either:

(A) A copy of the charitable organization's federal informational tax return (Form 990 or Form 990 PF, but not Form 990 EZ) covering the period covered by this report. The form shall include lines on which to report the amounts reported on the return as "program services" and "total expenses"; or

(B) If, for the fiscal year covered by the report, the charitable organization either filed a federal informational tax return using Form 990 EZ, or did not file a federal informational tax return, (I) the total dollar value of all support received from solicitations, (II) the total dollar value of revenue from all other sources, (III) total expenditures, including amounts paid to or retained by a commercial fund-raiser, during the reporting period and (IV) the amount of those expenditures devoted directly to charitable program services. Amounts paid to or retained by a commercial fund-raiser include all revenue, as defined by WAC 434-120-025, including, without limitation, fees for services, contributions, proceeds from the sale of goods or services (including tickets to events), and all other revenue from solicitations;

(o) The form shall also include a space within which any)) The total dollar value of all support received from solicitations, which includes but is not limited to, special events, sale of inventory, and amounts collected on behalf of the charitable organization by a commercial fund-raiser or commercial coventurer;

(iv) The total dollar value of revenue from all other sources;

(v) Gross receipts, including amounts collected on behalf of the charitable organization by a commercial fund-raiser or commercial coventurer regardless of custody of funds. "Gross receipts" include, but are not limited to, contributions, gross revenue from special events, sales of inventory, goods or services (including tickets to events), and all other revenue from solicitations;

(vi) The amount of total expenditures used directly for charitable program services, including payments to affiliates if costs involved are not connected with the administrative or fund-raising functions of the reporting organization;

(vii) The amount of total expenditures used for administrative and fund-raising costs, including amounts paid to or retained by a commercial fund-raiser or commercial coventurer. "Administrative and fund-raising costs" include, but are not limited to, the following expenses if not directly related to program services; salaries, wages, compensation, legal, accounting, occupancy, equipment costs, printing and publications, telephone, postage, supplies, travel, meetings, fees for services (including fund-raising consultation), and cost of goods or inventory sold that are not directly related to program services.

(viii) Total expenditures, including, but not limited to, amounts paid to or retained by a commercial fund-raiser, or commercial coventurer, amounts expended for charitable program services, administrative expenses, fees for services, and fund-raising costs incurred by the charitable organization.

(ix) Beginning assets; and

(x) Ending assets.

(o) A copy of the charitable organization's federal informational tax return (Form 990, Form 990PF, or Form 990EZ) reflecting the fiscal or accounting year covered by this report;

(p) The charitable organization may provide additional information which the organization believes would be of assistance in understanding other reported information, or to provide context for reported information.

(3) ((Solicitation reports shall not report estimates, but shall report actual figures. If the organization did not directly or indirectly conduct any charitable solicitations in the previous accounting year, it shall file a supplemental registration form no later than the end of the ninth month after registering which provides a complete solicitation report with actual figures from the first six months of activity after registering, if its gross revenue from solicitations exceeds twelve thousand five hundred dollars during that six-month period or otherwise ceases to qualify for an exemption under WAC 434-120-100 (2)(c).)) The organization shall report actual figures, and shall not use estimates, when completing a solicitation report or a supplemental solicitation report.

(4) A parent organization may file a consolidated registration form((, including the solicitation report,)) when registering, including the solicitation information required for each of its related foundations, supporting organizations, chapters, branches, or affiliates that solicit in the state of Washington, which are supervised or controlled by the parent organization. ((A parent organization may report financial information)) Registration and subsequent financial reporting requirements may be satisfied either separately or in consolidated form for all subsidiary organizations. A filing by the parent organization relieves each subsidiary organization identified in that filing of any duty to file independently.

(5) All charitable solicitation organization registrations shall be signed by the president, treasurer, or comparable officer of the organization or, in the absence of officers, person responsible for the organization((, whose signature shall be notarized)).

[Statutory Authority: RCW 19.09.075. 97-19-043, 434-120-105, filed 9/11/97, effective 10/12/97. Statutory Authority: Chapters 34.05, 19.09, 11.110 and 43.07 RCW and 1993 c 471. 94-01-004, 434-120-105, filed 12/1/93, effective 1/1/94.]


NEW SECTION
WAC 434-120-110   Organizations exempt from filing requirements -- Optional filing.   (1) Charitable organizations exempt from the filing requirements of this chapter under RCW 19.09.076(1) and WAC 434-120-100 (2)(b) or (c) may register with the charities program.

(2) Charitable organizations choosing to register under this section shall register by:

(a) Completing the registration form specified by the secretary; and

(b) Paying the registration fee of twenty dollars.

(3) Charitable organizations registered under this section may change or update their registration by:

(a) Filing the update with the charities program; and

(b) Paying the ten-dollar update fee.

(4) Expedited processing under WAC 434-112-080 is available for registrations and updates under this section.

(5) The secretary offers this optional registration because some grant making entities and programs require registration with the charities program.

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AMENDATORY SECTION(Amending WSR 95-11-135, filed 5/24/95, effective 6/24/95)

WAC 434-120-145   Fees.   (1) Original registration: Entities registering as charitable organizations shall pay a fee of twenty dollars for the first year of registration. ((The fee shall be waived for those who first register under this act at the same time as filing nonprofit incorporation papers.))

(2) Annual ((reregistration)) renewal: Organizations reregistering shall pay a fee of ten dollars. ((If reregistering at the same time as filing nonprofit corporation annual reports, the organization shall pay a combined fee of fifteen dollars. If an organization files renewals under the Nonprofit Corporation Act, the Charitable Solicitations Act, and the Charitable Trusts Act, the fee shall be thirty dollars for all three. The fee shall be thirty dollars if renewing under the Charitable Trusts Act, the Charitable Solicitations Act, the public benefits provision, and filing a nonprofit corporation annual report.))

(3) Information changes: Organizations filing changes of information described in WAC 434-120-220(3), shall pay a fee of ten dollars for each submittal of change(s).

(4) Photocopy fees: For copy of a charitable organization registration form or letter, including the finance and solicitation reports, the fee is five dollars.

(5) Expedited service fees: For in-person service at the counter, or on-line filings, the fee is twenty dollars for one or more transactions in each charitable organization file requested.

(6) For service of process on a registered charity, commercial coventures, commercial fund-raiser, or charitable trust, the fee is fifty dollars.

[Statutory Authority: RCW 11.110.070 and 19.09.315. 95-11-135, 434-120-145, filed 5/24/95, effective 6/24/95. Statutory Authority: Chapters 34.05, 19.09, 11.110 and 43.07 RCW and 1993 c 471. 94-01-004, 434-120-145, filed 12/1/93, effective 1/1/94.]


AMENDATORY SECTION(Amending WSR 94-01-004, filed 12/1/93, effective 1/1/94)

WAC 434-120-160   ((Penalty)) Fees for late registration.   ((The corporations division will send notice of the time to renew the charitable solicitations registration when it mails notice of the annual report or license renewal due date.)) (1) A charitable organization that fails to ((reregister at the time the corporation annual report or license renewal is due,)) renew its registration by its renewal date shall pay a late ((penalty)) fee of ((twenty-five)) fifty dollars ((when the reregistration is made, if made prior to administrative corporate dissolution. If the corporation has been administratively dissolved, it)). The charitable organization shall pay an additional fifty dollar ((penalty)) late fee for each year, including the current year, that it was not registered under this act ((for which it wishes to reinstate its corporation registration. A charitable organization not registered as a corporation shall be assessed a penalty of twenty-five dollars if registering within sixty-five days of the renewal date. Thereafter, the penalty fee shall be fifty dollars for each year, including the current year, it has failed to register)), but was required to do so. If the registration has lapsed for a period of more than two years, the entity shall ((register)) provide solicitation information for the previous two years, and shall reregister as a new charitable organization.

(2) The ((penalty)) fees for late registration shall be in addition to ((any other)) the filing fees under WAC 434-120-145, and any other, remedies that may be imposed by law, including penalties for soliciting without being registered.

(3) The charitable organization may ask the secretary to waive fees for late registration. The request must include a description of the circumstances that justify a waiver of the late fees. Under special circumstances the ((charitable organization may ask the)) secretary ((of State to)) may waive ((all penalty)) fees for late registration that are imposed by these regulations.

[Statutory Authority: Chapters 34.05, 19.09, 11.110 and 43.07 RCW and 1993 c 471. 94-01-004, 434-120-160, filed 12/1/93, effective 1/1/94.]


AMENDATORY SECTION(Amending WSR 94-01-004, filed 12/1/93, effective 1/1/94)

WAC 434-120-170   Use of particular names in solicitations.   (1) In addition to registration under this act, any entity conducting a solicitation using the name police, sheriff, fire fighter, firemen, or similar name shall file with the ((corporations division)) charities program, an original copy of the authorization to use the name in the solicitation. The authorization shall be signed by two officers or other persons responsible for carrying out the purpose of the bona fide department or organization that is giving its permission to use one of the above names. For the purposes of this section, "bona fide organization" shall mean a government department or agency of police, sheriffs, fire fighters, firemen, or similarly named government employer or an entity in which some or all of its members are employed by a government department or agency of police, sheriffs, fire fighters, firemen, or similar name.

(2) In addition to registration under this act, any entity conducting a solicitation using the name of a military veterans' service organization listed in the most current annual Directory of Veterans Service Organizations published by The Department of Veterans Affairs, Office of the Secretary, in Washington, D.C., shall ((file with the corporations division an original copy of the signed)) obtain written authorization to use the name in the solicitation. The ((signatory shall be)) written permission must be signed by the highest ranking official of the organization in the state who is listed in the "commanders list" maintained by the Washington department of veterans affairs. Organizations shall retain the authorization in their records, and make the original signed authorization available to the secretary, the office of the attorney general or the office of a county prosecutor on request.

(3) In addition to registration under this act, any entity using the name of a military veterans' service organization that is not affiliated with a national military veterans' service organization shall ((file with the corporations division an original copy of the authorization granting)) obtain written permission to use the name((. The signatory shall be)) signed by the service organization's highest ranking official in the state of Washington. Organizations shall retain the authorization in their records, and make the original signed authorization available to the secretary, the office of the attorney general or the office of a county prosecutor on request.

[Statutory Authority: Chapters 34.05, 19.09, 11.110 and 43.07 RCW and 1993 c 471. 94-01-004, 434-120-170, filed 12/1/93, effective 1/1/94.]


AMENDATORY SECTION(Amending WSR 97-16-036, filed 7/30/97, effective 8/30/97)

WAC 434-120-212   Registration by commercial coventurers.   (1) A commercial coventurer shall register with the secretary as either a commercial fund-raiser or a commercial coventurer before conducting any solicitations. If a commercial coventurer chooses to register as a commercial fund-raiser, it shall comply with all registration requirements for commercial fund-raisers as set forth in chapter 19.09 RCW and chapter 434-120 WAC. If a commercial coventurer chooses to register as a commercial coventurer, it shall do all of the following:

(a) Pay a registration fee as specified in WAC 434-120-250(7) and file the registration form required by this rule((. An entity which is entitled to and does register as a commercial coventurer need not:

(i) File the form specified in WAC 434-120-215; nor

(ii) Post a bond pursuant to RCW 19.09.190)); and

(b) File with the secretary a copy of its written agreement with each charitable organization for which it solicits. This agreement must state the name, address and telephone number of the commercial coventurer and the charitable organization; must be signed by an officer of the charitable organization and the person in charge of the commercial coventurer; must specify how the commercial coventurer's contribution to the organization as a result of this promotion shall be calculated, based upon an aggregate fixed dollar amount, a fixed dollar amount per sale, or a fixed percentage of gross sales revenue; and must state the charitable organization's permission to use its name; and

(c) Report:

(i) A brief description of the fund-raising activity;

(ii) The name of each charitable organization with which it has contracted as a commercial coventurer; and

(iii) A disclosure of the planned financial contribution pursuant to contract with the named charitable organizations. A commercial coventurer shall comply with this requirement by specifying how the commercial coventurer's contribution to the organization as a result of this promotion shall be calculated, based upon an aggregate fixed dollar amount, a fixed dollar amount per sale, or a fixed percentage of gross sales revenue.

(d) Keep on file at its principal place of business a financial statement reflecting the results of its campaign(s) on behalf of each charitable organization for which it raises funds, which shall include at a minimum all of the information required by RCW 19.09.079(7), and shall produce this statement upon demand to the attorney general within ten business days.

(2) The commercial coventurer is not required to complete the solicitation report described by WAC 434-120-215 (2)(l).

(3) The form for registration ((form required by this rule)) as a commercial coventurer shall be the same as the form described in WAC 434-120-215 ((except as follows:)).

(a) ((It shall omit)) The commercial coventurer is not required to provide the information required by WAC 434-120-215 (2)(e) and (h); and

(b) ((Instead of the solicitation report described by WAC 434-120-215 (2)(n), the form shall include a solicitation report on which the commercial coventurer must report:

(i) A brief description of the fund raising activity;

(ii) The name of each charitable organization with which it has contracted as a commercial coventurer; and

(iii) A disclosure of the planned financial contribution pursuant to contract with the named charitable organizations. A commercial coventurer shall comply with this requirement by specifying how the commercial coventurer's contribution to the organization as a result of this promotion shall be calculated, based upon an aggregate fixed dollar amount, a fixed dollar amount per sale, or a fixed percentage of gross sales revenue.

(3))) An entity which is entitled to and does register as a commercial coventurer need not post a bond pursuant to RCW 19.09.190.

(4) Unless specifically excused by this rule, a commercial coventurer shall comply with all other terms of chapter 19.09 RCW and this chapter.

(5) Interpretive note: An entity that is regularly engaged in the business of promoting events, including but not limited to concerts, circuses, rodeos, and sporting events, by selling tickets to such events through the use of a charitable solicitation, shall be deemed to be regularly or primarily engaged in making charitable solicitations or otherwise raising funds for one or more charitable organizations, and therefore is not a commercial coventurer.

(((4))) (6) Interpretive note: A transaction is not one for the purchase of a good or service, and therefore the seller is not a commercial coventurer, if the item ostensibly sold is of slight or grossly disproportionate value in relation to the price or contribution sought in exchange, or if it is described as a prize, gift, reward or award, or similar term, for contributions made or solicited.

(a) Example: A solicitor tells a prospective contributor that if he or she will contribute one hundred dollars to a named charity, the solicitor will send him or her a paper bookmark embossed with the charity's logo as a reward. The solicitor is not a commercial coventurer.

(b) Example: A solicitor offers to sell an individual a coffee mug, with a fair market value of five dollars, for one hundred dollars, with the representation that fifty percent of the purchase price would be contributed to a named charity. The solicitor is not a commercial coventurer. Caution: A person selling a good or service at fair market value is still not a commercial coventurer if he or she is regularly engaged in charitable fund-raising (see WAC 434-120-025 (3)(b)), or is selling tickets to events (see WAC 434-120-212(((3))) (5)), or otherwise fails to qualify.

(((5))) (7) Interpretive note: An entity that acts as a commercial coventurer, and that does not engage in any commercial fund-raising in this state other than as a commercial coventurer, may register as a commercial coventurer in Washington even if it acts as a commercial fund-raiser in other states.

(((6))) (8) Interpretive note: A retail establishment that offers for sale a product that is marketed by others as a commercial coventurer, is not required to register unless it makes an independent appeal to charity or otherwise acts as a commercial coventurer or commercial fund-raiser.

(a) Example: A supermarket includes in its merchandise line a product, with a label that states that a portion of the purchase price will go to charity, but the supermarket makes no other appeal to charity with regard to the product. The supermarket is not required to register as a commercial coventurer or commercial fund-raiser, but the manufacturer will be considered a commercial coventurer if it otherwise satisfies the definition in WAC 434-120-025.

(b) Example: The supermarket in example (a) publishes as advertisement stating that a portion of the purchase price of a product will be devoted to charity. The supermarket is a commercial coventurer if it otherwise satisfies the definition in WAC 434-120-025.

(((7) Unless specifically excused by this rule, a commercial coventurer shall comply with all other terms of chapter 19.09 RCW and chapter 434-120 WAC.))

[Statutory Authority: RCW 19.09.079, 19.09.190 and 19.09.315. 97-16-036, 434-120-212, filed 7/30/97, effective 8/30/97.]


AMENDATORY SECTION(Amending WSR 97-16-035, filed 7/30/97, effective 8/30/97)

WAC 434-120-215   Commercial fund-raiser registration -- Form and requirements.   (1) Commercial fund-raisers registering under this act shall use the commercial fund-raiser registration form available in the office of the ((corporations division)) charities program. ((The secretary of state shall develop a form in compliance with this rule.)) The secretary's failure to affirmatively reject or return an incomplete registration or other filing that does not fully comply with these rules or chapter 19.09 RCW, shall not excuse the failure to comply. The secretary's acceptance of a registration or other filing which violates these rules or chapter 19.09 RCW shall not excuse the violation. ((A registration form is not complete, and will not be accepted for filing, unless it includes:))

(2) A registration ((form)) is not complete, and will not be accepted for filing, unless it includes:

(a) The name of the organization, and every address (including both physical address and any mailing address if different), telephone number(s), fax number(s), of the commercial fund-raising entity under which contributions are being solicited or received, including any electronic mail or Internet addresses used by the organization;

(b) The name(s); address(es); and telephone number(s) of the individual(s) responsible for fund-raising activities of the entity in Washington state;

(c) ((If incorporated, the corporate name, unified business identifier number, state and date of incorporation, or if not incorporated,)) The type of organization, the unified business identifier if the organization is registered in Washington and date established, and if the organization is incorporated, the state and date of incorporation;

(d) The end date of its current fiscal or accounting year;

(e) The court or other forum, case number and title of all legal actions, if any, in which a judgment or final order was entered, or action is currently pending, against any organization or individual required to be identified in the registration. "Actions" include any administrative or judicial proceeding alleging that the entity has failed to comply with these rules, chapter 19.09 RCW, or state or federal laws pertaining to taxation, revenue, charitable solicitation, or recordkeeping, whether such action has been instituted by a public agency or a private person or entity;

(f) A list of all states where the organization is registered for fund-raising, including any other names under which the organization is currently registered or has been registered in the past three years;

(g) The name, address, and telephone number of the officers or of persons accepting responsibility for the organization;

(h) The names of the three officers or employees receiving the greatest amount of compensation from the organization;

(i) The name and address of the person or entity with authority for the preparation of financial statements or the maintenance of financial information on behalf of the organization;

(j) The name, address, and telephone number of an individual with expenditure authority who can respond to questions regarding expenditures of funds, and the names and addresses of any charitable organizations who have given the commercial fund-raiser authority to expend funds or incur obligations on behalf of the organization;

(k) An irrevocable appointment of the secretary to receive service of process in noncriminal proceedings as provided in RCW 19.09.305;

(l) A solicitation report of the fund-raising activities of the entity for the preceding fiscal or accounting year including, but not limited to:

(i) The types of fund-raising services conducted;

(ii) The name of each charitable organization to whom this entity has provided fund-raising services;

(iii) The total dollar value of the following:

(A) Contributions received, either by ((your organization)) the commercial fund-raiser or the charities with ((whom you contract)) which the commercial fund-raiser contracts, as a result of services provided by ((your organization)) the commercial fund-raiser during the year shown above. (This is the total amount of money raised, regardless of who has possession of funds.)

(B) Funds either retained by, or paid to, the charities with whom ((you contract)) the commercial fund-raiser contracts, after ((your)) fees and any expenses have been subtracted. (This is the portion of money raised that the charities receive or keep after all fund-raising expenses have been deducted.)

(iv) The name, address, and telephone number of any other commercial fund-raiser retained in the conduct of providing fund-raising services;

(((m))) (3) The ((form shall also include a space within which any of the organization)) commercial fund-raiser may provide additional information which the ((organization)) commercial fund-raiser believes would be of assistance in understanding other reported information, or to provide context for reported information.

(((3) Solicitation reports shall not report estimates, but shall report actual figures. If the organization did not directly or indirectly conduct any fund-raising activities in the previous accounting year, it shall file a supplemental registration form no later than the end of the ninth month after registering which provides a complete solicitation report with actual figures from the first six months of activity after registering.))

(4) The commercial fund-raiser shall report actual figures and shall not use estimates when completing a solicitation report or a supplemental solicitation report.

(5) All commercial fund-raiser registrations shall be signed by an officer or owner of the commercial fund-raiser.

[Statutory Authority: RCW 19.09.075, 19.09.079 and 19.09.210. 97-16-035, 434-120-215, filed 7/30/97, effective 8/30/97. Statutory Authority: RCW 11.110.070 and 19.09.315. 95-11-135, 434-120-215, filed 5/24/95, effective 6/24/95. Statutory Authority: Chapters 34.05, 19.09, 11.110 and 43.07 RCW and 1993 c 471. 94-01-004 and 94-02-011, 434-120-215, filed 12/1/93 and 12/22/93, effective 1/1/94 and 1/23/94.]


AMENDATORY SECTION(Amending WSR 94-01-004, filed 12/1/93, effective 1/1/94)

WAC 434-120-240   Contract between a commercial ((organization)) fund-raiser and a charitable organization.   (1) A commercial fund-raiser and charitable organization entering into a contract shall register the contract by completing the ((corporations division)) contract registration form ((and)), attaching a copy of the written contract, and filing the form and contract with the secretary. ((It)) The contract shall be ((filed)) registered before the commencement of the campaign. ((There is a ten dollar fee for filing the copy of the contract in the corporations division.))

(2) The charitable organization is responsible for registering the contract.

(3) The fee for registering a contract under this section is ten dollars.

(4) Both the contract and registration form shall be signed by the commercial fund-raiser owner or principal and the charitable organization president, treasurer, or comparable officer.

(5) In addition to the statutory requirements of RCW 19.09.097, the terms of the contract shall ((include)) specify who will maintain the donor list. ((The commercial fund raiser shall be responsible for filing the contract.))

[Statutory Authority: Chapters 34.05, 19.09, 11.110 and 43.07 RCW and 1993 c 471. 94-01-004, 434-120-240, filed 12/1/93, effective 1/1/94.]


AMENDATORY SECTION(Amending WSR 97-16-036, filed 7/30/97, effective 8/30/97)

WAC 434-120-250   Fees.   All commercial fund-raisers shall pay an original registration fee at the time of filing and a yearly ((reregistration)) registration renewal fee.

(1) The fee for original registration in this state is two hundred fifty dollars.

(2) The annual registration renewal fee is one hundred seventy-five dollars.

(3) The fee for filing changes in any information previously filed under RCW ((19.09.075,)) 19.09.079, and WAC 434-120-215 or for filing a contract is ten dollars.

(4) The ((penalty)) late fee is fifty dollars for failing to ((reregister within sixty days of)) renew registration by the due date. ((Beginning on the sixty-sixth day or following administrative dissolution of the corporation, whichever is later,)) The commercial fund-raiser shall pay an additional ((penalty)) late fee of one hundred dollars for each ((unregistered)) year ((for up to two years or shall register as a new entity. These penalties are cumulative)) that it was required to register under this act and failed to do so, including the current year. If the registration has lapsed for more than two years, the entity shall provide solicitation information for the previous two years and shall register as a new commercial fund-raiser under RCW 19.09.079, in addition to paying any late fees due under this section.

Any commercial fund-raiser failing to ((reregister)) renew registration and conducting business may be subject to other penalties and remedies((, which may be cumulative and not exclusive and)) that may be imposed by law, including penalties for soliciting without being registered. These penalties are cumulative.

(5) The fee for expedited in-person service, and on-line filings, is twenty dollars for any and all transactions within one commercial fund-raiser file, in addition to regular fee for the transaction.

(6) The photocopy fee is ten dollars for copies of the annual registration form or letter.

(7) A commercial coventurer shall pay a registration fee of twenty dollars when it registers with the secretary or renews its registration.

[Statutory Authority: RCW 19.09.079, 19.09.190 and 19.09.315. 97-16-036, 434-120-250, filed 7/30/97, effective 8/30/97. Statutory Authority: Chapters 34.05, 19.09, 11.110 and 43.07 RCW and 1993 c 471. 94-01-004, 434-120-250, filed 12/1/93, effective 1/1/94.]


AMENDATORY SECTION(Amending WSR 95-11-135, filed 5/24/95, effective 6/24/95)

WAC 434-120-260   Surety bonds.   (1) In compliance with RCW 19.09.190 a registering commercial fund-raiser, as principal, shall submit proof of execution of a surety bond with one or more sureties whose liability in the aggregate will equal at least fifteen thousand dollars. Except as provided in WAC 434-120-265, commercial fund-raisers must provide proof of bonding ((in the following year)) if the commercial fund-raiser engages, or plans to engage, in one or more of the following practices:

(a) The fund-raiser directly or indirectly receives contributions from the public on behalf of any charitable organization; or

(b) The fund-raiser is compensated based upon funds raised or to be raised, number of solicitations made or to be made, or any similar method, even if the fund-raiser does not directly or indirectly receive the contributions; or

(c) The fund-raiser incurs or is authorized to incur expenses on behalf of the charitable organization; or

(d) Has not been registered with the secretary as a commercial fund-raiser for the preceding fiscal or 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.

(2) A commercial fund-raiser is considered to solicit or receive contributions from the public directly if they are solicited or received by the fund-raiser or by any officer, employee, principal, or shareholder of the commercial fund-raiser, including immediate family members. Contributions are solicited or received indirectly if they are solicited or received by:

(a) Any organization owned or controlled by the commercial fund-raiser or owned or controlled by any officer, employee, principal, or shareholder of the commercial fund-raiser, including immediate family members; or

(b) Any person or organization, other than the charitable organization for which funds are solicited, with which the commercial fund-raiser has a contractual relationship governing the solicitation or receipt of contributions. Solicitations shall be deemed received by the fund-raiser if they are deposited into bank accounts wholly or partially owned or controlled by the commercial fund-raiser or other entity with which the commercial fund-raiser maintains a contractual relationship.

(3) If a commercial fund-raiser does business under more than one name, each name used by that entity must be registered and bonded separately.

[Statutory Authority: RCW 11.110.070 and 19.09.315. 95-11-135, 434-120-260, filed 5/24/95, effective 6/24/95. Statutory Authority: Chapters 34.05, 19.09, 11.110 and 43.07 RCW and 1993 c 471. 94-01-004, 434-120-260, filed 12/1/93, effective 1/1/94.]


AMENDATORY SECTION(Amending WSR 98-18-034, filed 8/26/98, effective 9/26/98)

WAC 434-120-305   ((Registration and reporting.)) Who shall register.   (((1) The Charitable Trust Act requires those trustees described by RCW 11.110.051 to complete an initial registration with the secretary of state, and thereafter to file with the secretary copies of the trust's United States tax or information return. This section generally describes these registration and reporting requirements, with reference to the applicable statutes. These rules do not repeat all statutory requirements.

(2) Who shall register and report:)) The registration and reporting requirements of chapter 11.110 RCW apply to every trustee, as defined by RCW 11.110.020, who is required to register by RCW 11.110.051. The secretary of state has determined, pursuant to RCW 11.110.051 (1)(a), that no trustee shall be required to register or report unless, as to a particular charitable trust, the trustee holds assets, invested for income-producing purposes, exceeding a value of two hundred fifty thousand dollars, and otherwise meets the description of RCW 11.110.051.

(((3) Initial registration: Every trustee required to register by RCW 11.110.051 shall do so, in the time and in the manner described by RCW 11.110.060. Trustees shall use the registration form described by WAC 434-120-310, and file all other documents required by RCW 11.110.060. Trustees required to register shall also file with the secretary any later amendments to the trust instrument within four months of making the amendment.

(4) Periodic reporting: After the initial registration, every trustee required to register by RCW 11.110.051 shall report annually as required by RCW 11.110.070. The annual reporting requirement is fully satisfied by filing a copy of the trust's United States tax or information return, forms 990, 990 PF, or 990 EZ, with the secretary of state at the same time as it is required to be filed with the Internal Revenue Service. Any trustee who is not required by federal law to file any of the named forms with the Internal Revenue Service shall either complete a federal return and file it with the secretary, or may instead file the form described by WAC 434-120-320 by no later than the fifteenth day of the fifth month after the end of its fiscal year.))

[Statutory Authority: RCW 11.110.051, 11.110.060 and 11.110.070. 98-18-034, 434-120-305, filed 8/26/98, effective 9/26/98. Statutory Authority: RCW 11.110.070 and 19.09.315. 95-11-135, 434-120-305, filed 5/24/95, effective 6/24/95. Statutory Authority: Chapters 34.05, 19.09, 11.110 and 43.07 RCW and 1993 c 471. 94-01-004, 434-120-305, filed 12/1/93, effective 1/1/94.]


NEW SECTION
WAC 434-120-307   Required filings.   (1) Initial registration: Every trustee required to register by RCW 11.110.051 shall do so, in the time and in the manner described by RCW 11.110.060. Trustees shall use the registration form described by WAC 434-120-310, and file all other documents required by RCW 11.110.060. Trustees required to register shall also file with the secretary any later amendments to the trust instrument within four months of making the amendment.

(2) Periodic reporting: Every trustee required to register by RCW 11.110.051 shall report annually as required by RCW 11.110.070. The annual reporting requirement is satisfied by filing the renewal form described by WAC 434-120-310(3) and filing a copy of the trust's federal informational tax return, with the secretary of state no later than the fifteenth day of the fifth month after the end of its fiscal or accounting year.

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AMENDATORY SECTION(Amending WSR 98-18-034, filed 8/26/98, effective 9/26/98)

WAC 434-120-310   ((How to register -- Form.)) Charitable trust registration -- Form and requirements.   (1) Trustees registering under chapter 11.110 RCW shall use the registration form available in the office of the secretary of state. ((The secretary of state shall develop a form in compliance with this rule.)) The secretary's failure to affirmatively reject or return an incomplete registration or other filing that does not fully comply with these rules or chapter 11.110 RCW shall not excuse the failure to comply.

(2) ((A)) An initial registration form is not complete, and will not be accepted for filing, unless it includes:

(a) The trustee's name;

(b) The trustee's mailing address, and physical address if different;

(c) The name of the trust ((to be registered)), its Federal Employer Identification Number, if any, or other identifying information sufficient to distinguish the trust from other registered trusts;

(d) A brief description of the charitable purposes of the trust, which may, at the trustee's option, include the names and addresses of any charitable organizations ((benefitted)) benefited by the trust;

(e) The market value of all trust assets invested for incoming-producing purposes as of the date on which the trustee received possession or control of the trust corpus; ((and))

(f) ((The signature of)) A copy of the governing instrument creating the trust;

(g) A statement indicating whether the trust is exempt from federal income tax, and, if exempt, the section of the Internal Revenue Code under which the trust is exempt from federal income tax;

(h) A copy of the letter by which the Internal Revenue Service granted the trust tax exempt status if the Internal Revenue Service has granted the trust such status;

(i) The end date of its current fiscal or accounting year;

(j) A financial report of the trust for the preceding fiscal or accounting year, including, but not limited to:

(i) Beginning assets;

(ii) Total revenue;

(iii) Grants, contributions, and the amount of expenditures used directly for program services;

(iv) Compensation of officers, directors, trustees, etc.;

(v) Total expenses; and

(vi) Ending assets.

(k) A copy of the trust's federal informational tax return (Form 990, Form 990PF, or Form 990EZ) reflecting the fiscal or accounting year contained in this report;

(l) The name and telephone number of the preparer of the trust registration, if different from trustee.

(3) The renewal registration form required by this rule shall be the same as the form described in WAC 434-120-310 except that the information required by WAC 434-120-310 (2)(d), (e), (f), (g) and (h) is not required.

(4) The trust shall report actual figures, and shall not use estimates, when completing a financial report.

(5) All charitable trust registrations shall be signed by the trustee, or, if the trustee is a corporation, of the corporate officer or employee responsible for the trust.

(((3))) (6) A copy of the governing instrument creating the trust shall not be deemed sufficient to meet the requirements of this section.

[Statutory Authority: RCW 11.110.051, 11.110.060 and 11.110.070. 98-18-034, 434-120-310, filed 8/26/98, effective 9/26/98. Statutory Authority: RCW 11.110.070 and 19.09.315. 95-11-135, 434-120-310, filed 5/24/95, effective 6/24/95. Statutory Authority: Chapters 34.05, 19.09, 11.110 and 43.07 RCW and 1993 c 471. 94-01-004, 434-120-310, filed 12/1/93, effective 1/1/94.]


AMENDATORY SECTION(Amending WSR 95-11-135, filed 5/24/95, effective 6/24/95)

WAC 434-120-330   Annual fees.   (1) Charitable trusts ((registering for the first time)) filing initial or renewal registrations shall pay a fee of twenty-five dollars. ((If an organization files a noncombined renewal, the fee shall be twenty-five dollars. When renewal is combined with filing an annual nonprofit corporation report the fee shall be twenty-five dollars. If an organization simultaneously files renewals under the Nonprofit Corporations Act, the Charitable Solicitations Act, and the Charitable Trust Act, the annual renewal fee shall be thirty dollars for all three, or if renewing under the Charitable Trusts Act, the Charitable Solicitations Act, the public benefits provision, and filing a nonprofit corporation annual report, the fee shall be thirty dollars for all four.))

(2) For all expedited in-person service, or on-line filing, the fee is twenty dollars for one or more transactions within one charitable trust file, in addition to the regular fee for the transaction.

(3) For a photocopy of an Internal Revenue Service Form 990EZ the fee is five dollars and for a copy of Form 990 or 990-PF the fee is ten dollars with a surcharge for forms exceeding 100 pages of copy, which is thirteen dollars for each fifty page increment.

(4) For a photocopy of a charitable trust registration form, the fee is five dollars.

[Statutory Authority: RCW 11.110.070 and 19.09.315. 95-11-135, 434-120-330, filed 5/24/95, effective 6/24/95. Statutory Authority: Chapters 34.05, 19.09, 11.110 and 43.07 RCW and 1993 c 471. 94-01-004, 434-120-330, filed 12/1/93, effective 1/1/94.]


NEW SECTION
WAC 434-120-345   Late registration fees.   (1) A charitable trust that fails to renew its registration at the time its renewal is due, shall pay a late fee of fifty dollars when the reregistration is made. The trust shall pay an additional fifty-dollar late fee for each year, including the current year, it was not registered under this act. If the registration has lapsed for a period of more than two years, the entity shall register as a new trust and pay any late fees, which shall be cumulative.

(2) The fees for late registration shall be in addition to any other filing fees or remedies that may be imposed by law, including penalties for not being registered.

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NEW SECTION
WAC 434-120-355   Change in status, notification.   A charitable trust shall notify the charities program of a change in trust instrument, trustee, principal officer, tax status, fiscal year, or any other information filed under RCW 11.110.060 or WAC 434-120-310 within four months after the change. Organizations filing changes of information described in RCW 11.110.060 or WAC 434-120-310 shall pay a fee of ten dollars for each submittal of change.

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NEW SECTION
WAC 434-120-360   Dissolution of trust, procedure and notification.   (1) A charitable trust shall submit written notification of its intent to dissolve to the charities program thirty days prior to dissolution.

(2) Upon dissolution, the trust shall provide information regarding the disposition of its assets, including, but not limited to, the amount and type of assets, and the name and address of the entity in receipt of such assets.

(3) Upon dissolution, the charitable trust shall provide the information specified in subsection (2) of this section to:

(a) The charities program in the office of the secretary of state if the dissolution is in accordance with the specific terms of the trust; or

(b) Both the charities program in the office of the secretary of state and the office of the attorney general if the dissolution is the result of:

(i) A merger;

(ii) A voluntary dissolution outside the specific terms of the trust;

(iii) A change in the state of domicile of the trust; or

(iv) Any other change in the trust giving rise to the obligation to notify the attorney general under RCW 11.110.120.

(4) Notice to the charities program under subsection (3)(b) of this section is not required for those trusts that are not required to register with the charities program in the office of the secretary of state.

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REPEALER

     The following sections of the Washington Administrative Code are repealed:
WAC 434-120-015 Official address and telephone number.
WAC 434-120-020 Office hours.
WAC 434-120-155 Public benefit nonprofit corporation registration -- Annual fee.
WAC 434-120-320 Content of annual reports for trusts not required to file United States tax or information returns.

OTS-6379.1


REPEALER

     The following sections of the Washington Administrative Code are repealed:
WAC 434-130-020 Official address and telephone number.
WAC 434-130-030 Office hours.

OTS-6380.1


REPEALER

     The following sections of the Washington Administrative Code are repealed:
WAC 434-135-020 Official address and telephone number.
WAC 434-135-030 Office hours.
WAC 434-135-070 Filing duty of secretary of state.

OTS-6381.1


REPEALER

     The following section of the Washington Administrative Code is repealed:
WAC 434-180-110 Office address, hours, and telephone number.

Legislature Code Reviser 

Register

Washington State Code Reviser's Office