CERTIFICATION OF ENROLLMENT

SUBSTITUTE HOUSE BILL 1777



60th Legislature
2007 Regular Session

Passed by the House April 17, 2007
  Yeas 98   Nays 0


________________________________________    
Speaker of the House of Representatives


Passed by the Senate April 6, 2007
  Yeas 45   Nays 0



________________________________________    
President of the Senate
CERTIFICATE

I, Richard Nafziger, Chief Clerk of the House of Representatives of the State of Washington, do hereby certify that the attached is SUBSTITUTE HOUSE BILL 1777 as passed by the House of Representatives and the Senate on the dates hereon set forth.



________________________________________    
Chief Clerk
Approved 









________________________________________    
Governor of the State of Washington
FILED







Secretary of State
State of Washington


_____________________________________________ 

SUBSTITUTE HOUSE BILL 1777
_____________________________________________

AS AMENDED BY THE SENATE

Passed Legislature - 2007 Regular Session
State of Washington60th Legislature2007 Regular Session

By House Committee on Judiciary (originally sponsored by Representatives Rodne, Lantz, Darneille, Kirby, Ahern, Ross, Flannigan, Moeller, Kenney and Morrell; by request of Secretary of State)

READ FIRST TIME 02/16/07.   



     AN ACT Relating to charitable organizations that solicit contributions from the public; amending RCW 19.09.010, 19.09.020, 19.09.075, 19.09.076, 19.09.079, 19.09.085, 19.09.097, 19.09.100, 19.09.210, and 19.09.440; adding new sections to chapter 19.09 RCW; prescribing penalties; and repealing RCW 19.09.095.

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

Sec. 1   RCW 19.09.010 and 1986 c 230 s 1 are each amended to read as follows:
     The purpose of this chapter is to:
     (1) P
rovide citizens of the state of Washington with information relating to persons and organizations who solicit funds from the public for public charitable purposes in order to prevent (((1))) (a) deceptive and dishonest practices in the conduct of soliciting funds for or in the name of charity; and (((2))) (b) improper use of contributions intended for charitable purposes;
     (2) Improve the transparency and accountability of organizations that solicit funds from the public for charitable purposes; and
     (3) Develop and operate educational programs or partnerships for charitable organizations, board members, and the general public that help build public confidence and trust in organizations that solicit funds from the public for charitable purposes
.

Sec. 2   RCW 19.09.020 and 2002 c 74 s 1 are each amended to read as follows:
     When used in this chapter, unless the context otherwise requires:
     (1) A "bona fide officer or employee" of a charitable organization is one (a) whose conduct is subject to direct control by such organization; (b) who does not act in the manner of an independent contractor in his or her relation with the organization; and (c) whose compensation is not computed on funds raised or to be raised.
     (2) "Charitable organization" means any entity that solicits or collects contributions from the general public where the contribution is or is purported to be used to support a charitable ((activity)) purpose, but does not include any commercial fund raiser ((or)), commercial fund-raising entity, commercial coventurer, or any fund-raising counsel, 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.)) Churches and their integrated auxiliaries are not charitable organizations, but are subject to RCW 19.09.100 (12), (15), and (18).
     (3) "Charitable purpose" means any religious, charitable, scientific, testing for public safety, literary, or educational purpose or any other purpose that is beneficial to the community, including environmental, humanitarian, patriotic, or civic purposes, the support of national or international amateur sports competition, the prevention of cruelty to children or animals, the advancement of social welfare, or the benefit of law enforcement personnel, firefighters, and other persons who protect public safety. The term "charitable" is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments, or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration and juvenile delinquency.
     (4) "Commercial coventurer" means any individual or corporation, partnership, sole proprietorship, limited liability company, limited partnership, limited liability partnership, or any other legal entity, that:
     (a) Is regularly and primarily engaged in making sales of goods or services for profit directly to the general public;
     (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;
     (c) Represents to prospective purchasers that, if they purchase a good or service from the commercial coventurer, a portion of the sales price or a 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.
     (5) "Commercial fund raiser" or "commercial fund-raising entity" means any entity that for compensation or other consideration within this state directly or indirectly solicits or receives 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, a commercial coventurer, fund-raising counsel, or consultant is not a commercial fund raiser or commercial fund-raising entity.
     (6)
"Compensation" means salaries, wages, fees, commissions, or any other remuneration or valuable consideration.
     (((4))) (7) "Contribution" means the payment, donation, promise, or grant, for consideration or otherwise, of any money or property of any kind or value which contribution is wholly or partly induced by a solicitation. Reference to dollar amounts of "contributions" or "solicitations" in this chapter means in the case of payments or promises to pay for merchandise or rights of any description, the value of the total amount paid or promised to be paid for such merchandise or rights ((less the reasonable purchase price to the charitable organization of any such tangible merchandise, rights, or services resold by the organization, and not merely that portion of the purchase price to be applied to a charitable purpose)).
     (((5))) (8) "Cost of solicitation" means and includes all direct and indirect costs, expenditures, debts, obligations, salaries, wages, commissions, fees, or other money or thing of value paid or incurred in making a solicitation. ((Cost of solicitation does not include the reasonable purchase price to the charitable organization of any tangible goods or services resold by the organization as a part of its fund raising activities.
     (6)
)) (9) "Entity" means an individual, organization, group, association, partnership, corporation, agency or unit of state government, or any combination thereof.
     (((7) "General public" or "public" means any individual located in Washington state without a membership or other official relationship with a charitable organization before a solicitation by the charitable organization.
     (8) "Commercial fund raiser" or "commercial fund-raising entity" means any entity that for compensation or other consideration within this state directly or indirectly solicits or receives 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 any contribution for or on behalf of any such charitable organization; and (b) a bona fide officer or other employee of a charitable organization.
     (9)
)) (10) "Fund-raising counsel" or "consultant" means any entity or individual who is retained by a charitable organization, for a fixed fee or rate, that is not computed on a percentage of funds raised, or to be raised, under a written agreement only to plan, advise, consult, or prepare materials for a solicitation of contributions in this state, but who does not manage, conduct, or carry on a fund-raising campaign and who does not solicit contributions or employ, procure, or engage any compensated person to solicit contributions, and who does not at any time have custody or control of contributions. A volunteer, employee, or salaried officer of a charitable organization maintaining a permanent establishment or office in this state is not a fund-raising counsel. An attorney, investment counselor, or banker who advises an individual, corporation, or association to make a charitable contribution is not a fund-raising counsel as a result of the advice.
     (11) "General public" or "public" means any individual located in Washington state without a membership or other official relationship with a charitable organization before a solicitation by the charitable organization.
     (12)
"Membership" means that for the payment of fees, dues, assessments, etc., an organization provides services and confers a bona fide right, privilege, professional standing, honor, or other direct benefit, in addition to the right to vote, elect officers, or hold office. The term "membership" does not include those persons who are granted a membership upon making a contribution as the result of solicitation.
     (((10))) (13) "Other employee" of a charitable organization means any person (a) whose conduct is subject to direct control by such organization; (b) who does not act in the manner of any independent contractor in his or her relation with the organization; and (c) who is not engaged in the business of or held out to persons in this state as independently engaged in the business of soliciting contributions for charitable purposes or religious ((purposes)) activities.
     (((11) "Parent organization" means that part of a charitable organization that coordinates, supervises, or exercises control over policy, fund raising, or expenditures, or assists or advises one or more related foundations, supporting organizations, chapters, branches, or affiliates of such organization in the state of Washington.
     (12)
)) (14) "Political ((activities)) organization" means those organizations whose activities are subject to chapter 42.17 RCW or the Federal Elections Campaign Act of 1971, as amended.
     (((13) "Religious activities" means those religious, evangelical, or missionary activities under the direction of a religious organization duly organized and operating in good faith that are entitled to receive a declaration of current tax exempt status for religious purposes from the United States government and the duly organized branches or chapters of those organizations.
     (14)
)) (15) "Religious organization" means those entities that are not churches or integrated auxiliaries and includes nondenominational ministries, interdenominational and ecumenical organizations, mission organizations, speakers' organizations, faith-based social agencies, and other entities whose principal purpose is the study, practice, or advancement of religion.
     (16)
"Secretary" means the secretary of state.
     (((15))) (17) "Signed" means hand-written, or, if the secretary adopts rules facilitating electronic filing that pertain to this chapter, in the manner prescribed by those rules.
     (((16))) (18)(a) "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))) (i) Any appeal is made for any charitable purpose; ((or
     (b)
)) (ii) The name of any charitable organization is used as an inducement for consummating the sale; or
     (((c))) (iii) 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.
     (b) The solicitation shall be deemed completed when made, whether or not the person making it receives any contribution or makes any sale.
     (c) "Solicitation" does not include bingo activities, raffles, and amusement games conducted under chapter 9.46 RCW and applicable rules of the Washington state gambling commission ((are specifically excluded and shall not be deemed a solicitation under this chapter)).

Sec. 3   RCW 19.09.075 and 2002 c 74 s 2 are each amended to read as follows:
     An application for registration as a charitable organization shall be submitted in the form prescribed by rule by the secretary, containing, but not limited to, the following:
     (1) The name, address, and telephone number of the charitable organization;
     (2) The name(s) under which the organization will solicit contributions;
     (3) The name, address, and telephone number of the officers of or persons accepting responsibility for the organization;
     (4) The names of the three officers or employees receiving the greatest amount of compensation from the organization;
     (5) The purpose of the organization;
     (6)(a) Whether the organization is exempt from federal income tax; and if so the organization shall attach to its application a copy of the letter by which the internal revenue service granted such status; and
     (b) The name and address of the entity that prepares, reviews, or audits the financial statement of the organization;
     (7) A solicitation report of the organization for the preceding accounting year including:
     (a) The ((number and)) types of solicitations conducted;
     (b) The total dollar value of ((support)) contributions received from solicitations and from all other sources received on behalf of the charitable purpose of the charitable organization;
     (c) The total amount of money applied to charitable purposes, fund raising costs, and other expenses; and
     (d) The name, address, and telephone number of any commercial fund raiser used by the organization;
     (8) An irrevocable appointment of the secretary to receive service of process in noncriminal proceedings as provided in RCW 19.09.305; and
     (9) The total revenue of the preceding fiscal year.
     The solicitation report required to be submitted under subsection (7) of this section shall be in the form prescribed by rule by the secretary, or as agreed to by the secretary and a charitable organization ((or a group of charitable organizations. A consolidated application for registration may, at the option of the charitable organization, be submitted by a parent organization for itself and any or all of its related foundations, supporting organizations, chapters, branches, or affiliates in the state of Washington.
     The application shall be signed by
)). The president, treasurer, or comparable officer of the organization must sign and date the application. The application shall be submitted with a nonrefundable filing fee which shall be in an amount to be established by the secretary by rule. In determining the amount of this application fee, the secretary may consider factors such as the entity's annual budget and its federal income tax status. If the secretary determines that the application is complete, the application shall be filed and the applicant deemed registered.
     ((The secretary shall notify the director of veterans' affairs upon receipt of an application for registration as a charitable organization from an entity that purports to raise funds to benefit veterans of the United States military services. The director of veterans' affairs may advise the secretary and the attorney general of any information, reports, or complaints regarding such an organization.))

Sec. 4   RCW 19.09.076 and 1994 c 287 s 1 are each amended to read as follows:
     (1) The application requirements of RCW 19.09.075 do not apply to ((the following)):
     (((1))) (a) Any charitable organization raising less than an amount as set by rule adopted by the secretary in any accounting year when all the activities of the organization, including all fund raising activities, are carried on by persons who are unpaid for their services and no part of the charitable organization's assets or income inures to the benefit of or is paid to any officer or member of the organization;
     (((2) Any charitable organization located outside of the state of Washington if the organization files the following with the secretary:
     (a) The registration documents required under the charitable solicitation laws of the state in which the charitable organization is located;
     (b) The registration required under the charitable solicitation laws of the state of California and the state of New York; and
     (c) Such federal income tax forms as may be required by rule of the secretary.
))
     (b) Political organizations; or
     (c) Appeals for funds on behalf of a specific individual named in the solicitation, but only if all of the proceeds of the solicitation are given to or expended for the direct benefit of that individual.
     (2)
All entities soliciting ((charitable donations)) contributions for charitable purposes shall comply with the requirements of RCW 19.09.100.

Sec. 5   RCW 19.09.079 and 1993 c 471 s 5 are each amended to read as follows:
     An application for registration as a commercial fund raiser shall be submitted in the form prescribed by the secretary, containing, but not limited to, the following:
     (1) The name, address, and telephone number of the commercial fund-raising entity;
     (2) The name(s), address(es), and telephone number(s) of the owner(s) and principal officer(s) of the commercial fund-raising entity;
     (3) The name, address, and telephone number of the individual responsible for the activities of the commercial fund-raising entity in Washington;
     (4) ((A list of states and Canadian provinces in which fund raising has been performed;
     (5)
)) The names of the three officers or employees receiving the greatest amount of compensation from the commercial fund-raising entity;
     (((6))) (5) The name and address of the entity that prepares, reviews, or audits the financial statement of the organization;
     (((7))) (6) A solicitation report of the commercial fund-raising entity for the preceding accounting year, including:
     (a) The ((number and)) types of fund raising services conducted;
     (b) The names of charitable organizations required to register under RCW 19.09.065 for whom fund raising services have been performed;
     (c) The total value of contributions received on behalf of charitable organizations required to register under RCW 19.09.065 by the commercial fund raiser, affiliate of the commercial fund raiser, or any entity retained by the commercial fund raiser; and
     (d) The amount of money disbursed to charitable organizations for charitable purposes, net of fund raising costs paid by the charitable organization as stipulated in any agreement between charitable organizations and the commercial fund raiser;
     (((8))) (7) The name, address, and telephone number of any commercial fund raiser that was retained in the conduct of providing fund raising services; and
     (((9))) (8) An irrevocable appointment of the secretary to receive service of process in noncriminal proceedings as provided in RCW 19.09.305.
     The application shall be signed by an officer or owner of the commercial fund raiser and shall be submitted with a nonrefundable fee in an amount to be established by rule of the secretary. If the secretary determines that the application is complete, the application shall be filed and the applicant deemed registered.

Sec. 6   RCW 19.09.085 and 1993 c 471 s 6 are each amended to read as follows:
     (1) Registration under this chapter shall be effective for one year or longer, as established by the secretary.
     (2) Reregistration required under RCW 19.09.075 or 19.09.079 shall be submitted to the secretary no later than the date established by the secretary by rule.
     (3) Entities required to register under this chapter shall file a notice of change of information within thirty days of any change in the information contained in RCW 19.09.075 (1) through (((6))) (9) or 19.09.079 (1) through (((6))) (7).
     (4) The secretary shall notify entities registered under this chapter of the need to reregister upon the expiration of their current registration. The notification shall be by mail, sent at least sixty days prior to the expiration of their current registration. Failure to register shall not be excused by a failure of the secretary to mail the notice or by an entity's failure to receive the notice.

Sec. 7   RCW 19.09.097 and 1993 c 471 s 7 are each amended to read as follows:
     (1) No charitable organization may contract with a commercial fund raiser for any fund raising service or activity unless its contract requires that both parties comply with the law and permits officers of the charity reasonable access to: (a) The fund raisers' financial records relating to that charitable organization; ((and)) (b) the fund raisers' operations including without limitation the right to be present during any telephone solicitation; and (c) the names of all of the fund raisers' employees or staff who are conducting fund raising or charitable solicitations on behalf of the charitable organization. In addition, the contract shall specify the amount of raised funds that the charitable organization will receive or the method of computing that amount, the amount of compensation of the commercial fund raiser or the method of computing that amount, and whether the compensation is fixed or contingent.
     (2) Before a charitable organization may contract with a commercial fund raiser for any fund raising service or activity, the charitable organization and commercial fund raiser shall complete and file a registration form with the secretary. The registration shall be filed by the charitable organization ((with the secretary,)) in the form prescribed by the secretary((, within five working days of the execution of the contract containing,)). The registration shall contain, but not be limited to, the following information:
     (a) The name and registration number of the commercial fund raiser;
     (b) The name of the surety or sureties issuing the bond required by RCW 19.09.190, the aggregate amount of such bond or bonds, the bond number(s), original effective date(s), and termination date(s);
     (c) The name and registration number of the charitable organization;
     (d) The name of the representative of the commercial fund raiser who will be responsible for the conduct of the fund raising;
     (e) The type(s) of service(s) to be provided by the commercial fund raiser;
     (f) The dates such service(s) will begin and end;
     (g) The terms of the agreement between the charitable organization and commercial fund raiser relating to:
     (i) Amount or percentages of amounts to inure to the charitable organization;
     (ii) Limitations placed on the maximum amount to be raised by the fund raiser, if the amount to inure to the charitable organization is not stated as a percentage of the amount raised;
     (iii) Costs of fund raising that will be the responsibility of the charitable organization, regardless of whether paid as a direct expense, deducted from the amounts disbursed, or otherwise; and
     (iv) The manner in which contributions received directly by the charitable organization, not the result of services provided by the commercial fund raiser, will be identified and used in computing the fee owed to the commercial fund raiser; and
     (h) The names of any entity to which more than ten percent of the total anticipated fund raising cost is to be paid, and whether any principal officer or owner of the commercial fund raiser or relative by blood or marriage thereof is an owner or officer of any such entity.
     (3) A correct copy of the contract shall be filed with the secretary before the commencement of any campaign.
     (4) The registration form shall be submitted with a nonrefundable filing fee in an amount to be established by rule of the secretary and shall be signed by an owner or principal officer of the commercial fund raiser and the president, treasurer, or comparable officer of the charitable organization.

Sec. 8   RCW 19.09.100 and 1994 c 287 s 2 are each amended to read as follows:
     The following conditions apply to solicitations as defined by RCW 19.09.020:
     (1) A charitable organization, whether or not required to register pursuant to this chapter, that directly solicits contributions from the public in this state shall make the following clear and conspicuous disclosures at the point of solicitation:
     (a) The name of the individual making the solicitation;
     (b) The identity of the charitable organization and the city of the principal place of business of the charitable organization;
     (c) If requested by the solicitee, the published number in the office of the secretary for the donor to obtain additional financial disclosure information on file with the secretary.
     (2) A commercial fund raiser shall clearly and conspicuously disclose at the point of solicitation:
     (a) The name of the individual making the solicitation;
     (b) The name of the entity for which the fund raiser is an agent or employee and the name and city of the charitable organization for which the solicitation is being conducted; and
     (c) If requested by the solicitee, the published number in the office of the secretary for the donor to obtain additional financial disclosure information on file with the secretary. The disclosure must be made during an oral solicitation of a contribution, and at the same time at which a written request for a contribution is made.
     (3) A person or organization soliciting charitable contributions by telephone shall make the disclosures required under subsection (1) or (2) of this section in the course of the solicitation but prior to asking for a commitment for a contribution from the solicitee, and in writing to any solicitee that makes a pledge within five working days of making the pledge. If the person or organization sends any materials to the person or organization solicited before the receipt of any contribution, those materials shall include the disclosures required in subsection (1) or (2) of this section, whichever is applicable.
     (4) In the case of a solicitation by advertisement or mass distribution, including posters, leaflets, automatic dialing machines, publication, and audio or video broadcasts, it shall be clearly and conspicuously disclosed in the body of the solicitation material that:
     (a) The solicitation is conducted by a named commercial fund raiser, if it is;
     (b) The notice of solicitation required by the charitable solicitation act is on file with the secretary's office; and
     (c) The potential donor can obtain additional financial disclosure information at a published number in the office of the secretary.
     (5) A container or vending machine displaying a solicitation must also display in a clear and conspicuous manner the name of the charitable organization for which funds are solicited, the name, business address, and telephone number of the individual and any commercial fund raiser responsible for collecting funds placed in the containers or vending machines, and the following statement: "This charity is currently registered with the secretary's office under the charitable solicitation act, registration number . . . ."
     (6) A commercial fund raiser shall not represent that tickets to any fund raising event will be donated for use by another person unless all the following requirements are met:
     (a) The commercial fund raiser prior to conducting a solicitation has written commitments from persons stating that they will accept donated tickets and specifying the number of tickets they will accept;
     (b) The written commitments are kept on file by the commercial fund raiser for three years and are made available to the secretary, attorney general, or county prosecutor on demand;
     (c) The contributions solicited for donated tickets may not be more than the amount representing the number of ticket commitments received from persons and kept on file under (a) of this subsection; and
     (d) Not later than seven calendar days prior to the date of the event for which ticket donations are solicited, the commercial fund raiser shall give all donated tickets to the persons who made the written commitments to accept them.
     (7) Each person or organization soliciting charitable contributions shall not represent orally or in writing that:
     (a) The charitable contribution is tax deductible unless the charitable organization for which charitable contributions are being solicited or to which tickets for fund raising events or other services or goods will be donated, has applied for and received from the internal revenue service a letter of determination granting tax deductible status to the charitable organization;
     (b) The person soliciting the charitable contribution is a volunteer or words of similar meaning or effect that create the impression that the person soliciting is not a paid solicitor unless such person is unpaid for his or her services;
     (c) The person soliciting the charitable contribution is a member, staffer, helper, or employee of the charitable organization or words of similar meaning or effect that create the impression that the person soliciting is not a paid solicitor if the person soliciting is employed, contracted, or paid by a commercial fund raiser.
     (8) If the charitable organization is associated with, or has a name that is similar to, any unit of government each person or organization soliciting contributions shall disclose to each person solicited whether the charitable organization is or is not part of any unit of government and the true nature of its relationship to the unit of government. This subsection does not apply to a foundation or other charitable organization that is organized, operated, or controlled by or in connection with a registered public charity, including any governmental agency or unit, from which it derives its name.
     (9) No person may, in conducting any solicitation, use the name "police," "sheriff," "firefighter," "firemen," or a similar name unless properly authorized by a bona fide police, sheriff, or firefighter organization or police, sheriff, or fire department. A proper authorization shall be in writing and signed by two authorized officials of the organization or department and shall be filed with the secretary.
     (10) A person may not, in conducting any solicitation, use the name of a federally chartered or nationally recognized military veterans' service organization as determined by the United States veterans' administration unless authorized in writing by the highest ranking official of that organization in this state.
     (11) A charitable organization shall comply with all local governmental regulations that apply to soliciting for or on behalf of charitable organizations.
     (12) ((The advertising material and the general promotional plan for a solicitation shall not be false, misleading, or deceptive, and shall afford full and fair disclosure)) An entity soliciting contributions for a charitable purpose shall not include in any solicitation, or in any advertising material for a solicitation, or in any promotional plan for a solicitation, any statement that is false, misleading, or deceptive. All solicitations, advertising material, and promotional plans must fully and fairly disclose the identity of the entity on whose behalf the solicitation is made.
     (13) Solicitations shall not be conducted by a charitable organization or commercial fund raiser that has, or if a corporation, its officers, directors, or principals have, been convicted of a crime involving solicitations for or on behalf of a charitable organization in this state, the United States, or any other state or foreign country within the past ten years or has been subject to any permanent injunction or administrative order or judgment under RCW 19.86.080 or 19.86.090, involving a violation or violations of RCW 19.86.020, within the past ten years, or of restraining a false or misleading promotional plan involving solicitations for charitable organizations.
     (14) No charitable organization or commercial fund raiser subject to this chapter may use or exploit the fact of registration under this chapter so as to lead the public to believe that registration constitutes an endorsement or approval by the state, but the use of the following is not deemed prohibited: "Currently registered with the Washington state secretary of state as required by law. Registration number . . . ."
     (15) No entity may engage in any solicitation for contributions for or on behalf of any charitable organization or commercial fund raiser unless the charitable organization or commercial fund raiser is currently registered with the secretary.
     (16) No ((entity)) charitable organization or commercial fundraiser may engage in any solicitation for contributions unless it complies with all provisions of this chapter.
     (17)(((a))) No entity may place a telephone call to a donor or potential donor for the purpose of charitable solicitation ((that will be received by the solicitee)) before eight o'clock a.m. or after nine o'clock p.m. pacific time.
     (((b))) (18) No entity may, ((while placing a telephone call)) when contacting a donor or potential donor for the purpose of charitable solicitation, engage in any conduct the natural consequence of which is to harass, intimidate, or torment any person in connection with the ((telephone call)) contact.
     (((18))) (19) Failure to comply with subsections (1) through (((17))) (18) of this section is a violation of this chapter.

Sec. 9   RCW 19.09.210 and 1993 c 471 s 12 are each amended to read as follows:
     Upon the request of the attorney general or the county prosecutor, a charitable organization or commercial fund raiser shall submit a financial statement containing, but not limited to, the following information:
     (1) The gross amount of the contributions pledged and the gross amount collected.
     (2) The amount thereof, given or to be given to charitable purposes represented together with details as to the manner of distribution as may be required.
     (3) The aggregate amount paid and to be paid for the expenses of such solicitation.
     (4) The amounts paid to and to be paid to commercial fund raisers or charitable organizations.
     (5) Copies of any annual or periodic reports furnished by the charitable organization((,)) of its activities during or for the same fiscal period((, to its parent organization, subsidiaries, or affiliates, if any)).

Sec. 10   RCW 19.09.440 and 1993 c 471 s 42 are each amended to read as follows:
     (1) Annually, the secretary of state shall publish a report indicating:
     (a) For each charitable organization registered under RCW ((19.09.065)) 19.09.075 the percentage relationship between (i) the total amount of money applied to charitable purposes; and (ii) the dollar value of ((support received from solicitations and received from all other sources on behalf of the charitable purpose of the organization)) total expenditures, including the total amount of money applied to charitable purposes, fund raising costs, and administrative expenses;
     (b) For each commercial fund raiser registered under RCW ((19.09.065)) 19.09.079 the percentage relationship between (i) the amount of money disbursed to charitable organizations for charitable purposes; and (ii) the total value of contributions received on behalf of charitable organizations by the commercial fund raiser; and
     (c) Such other information as the secretary of state deems appropriate.
     (2) The secretary of state may use the latest information obtained pursuant to RCW 19.09.075, 19.09.079, or otherwise under chapter 19.09 RCW to prepare the report.

NEW SECTION.  Sec. 11   A new section is added to chapter 19.09 RCW to read as follows:
     Charitable organizations must ensure that their boards, or a committee thereof, have reviewed and accepted any financial report that the organization may be required to file with the office of the secretary. Charitable organizations must also ensure that the financial information included in the filing fairly represents, in all material respects, the financial condition and results of operations of the organization as of, and for, the periods presented to the secretary for filing. If the financial information submitted to the secretary is incorrect in any material way, the charitable organization may be subject to penalties as provided under RCW 19.09.279.

NEW SECTION.  Sec. 12   A new section is added to chapter 19.09 RCW to read as follows:
     The secretary may, in conjunction with the attorney general, develop and operate an education program for charitable organizations, their board members, and the general public. To the extent practicable, the secretary shall consult with the nonprofit and charitable sector and the charitable advisory council created in section 16 of this act to develop curriculum and other materials intended to educate charitable organizations, their board members, and the general public.

NEW SECTION.  Sec. 13   A new section is added to chapter 19.09 RCW to read as follows:
     (1) To provide for a charitable organization education program as authorized in section 12 of this act, the secretary may establish fees on registrations for entities filing with the secretary as organizations pursuant to this chapter.
     (2) The fees authorized in this section are in addition to the existing fees established by the secretary in rule for organizations required to register under this chapter.

NEW SECTION.  Sec. 14   A new section is added to chapter 19.09 RCW to read as follows:
     The charitable organization education account is created in state treasury. All receipts from the fees authorized in section 13(1) of this act must be deposited into the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only for the charitable organization education program authorized in section 12 of this act.

NEW SECTION.  Sec. 15   A new section is added to chapter 19.09 RCW to read as follows:
     The secretary is authorized to adopt rules, in accordance with chapter 34.05 RCW, that establish a set of tiered independent financial reporting requirements for charitable organizations required to register with the secretary pursuant to this chapter. Rules adopted under this section shall include, but not be limited to, substantially the following:
     (1) An initial filing requirement for all charitable organizations as currently required in this chapter;
     (2) A financial reporting requirement for charitable organizations that have more than one million dollars in annual gross revenue averaged over the last three fiscal years. The secretary may require charitable organizations that meet this threshold to have the federal financial reporting forms the organization normally files to be completed or reviewed by a third party who normally prepares or reviews the forms in the ordinary course of their business. These forms must be submitted to the secretary; and
     (3) A financial reporting requirement for charitable organizations with more than three million dollars in annual gross revenue averaged over the last three fiscal years. The secretary may require charitable organizations that meet this threshold to submit to the secretary audited financial statements prepared by an independent certified public accountant.

NEW SECTION.  Sec. 16   A new section is added to chapter 19.09 RCW to read as follows:
     (1) The secretary is authorized to create a charitable advisory council to consist of at least eleven, but not more than twenty-one, members. Members of a charitable advisory council shall:
     (a) Be appointed by the secretary, with all members serving at the pleasure of the secretary and all terms expiring no later than the term of the appointing secretary;
     (b) Represent a broad range of charities by size, purpose, geographic region of the state, and general expertise in the management and leadership of charitable organizations; and
     (c) Annually vote to elect one of its members to serve as chairperson.
     (2) The secretary shall not compensate members of the charitable advisory council but may provide reimbursement to members for expenses that are incurred in the conduct of their official duties.
     (3) The charitable advisory council shall advise the secretary in determining training and educational needs of charitable organizations and model policies related to governance and administration of charitable organizations in accordance with fiduciary principles, assist the secretary in identifying emerging issues and trends affecting charitable organizations, and advise the secretary on other related issues at the request of the secretary.

NEW SECTION.  Sec. 17   A new section is added to chapter 19.09 RCW to read as follows:
     (1) The secretary may enter into reciprocal agreements with the appropriate authority of any other state for the purpose of exchanging information with respect to charitable organizations and commercial fund raisers.
     (2) Pursuant to such agreements the secretary may:
     (a) Accept information filed by a charitable organization or commercial fund raisers with the appropriate authority of another state in lieu of the information required to be filed in accordance with this chapter, if the information is substantially similar to the information required under this chapter; and
     (b) Grant exemptions from the requirements for the filing of annual registration statements with the office to charitable organizations organized under the laws of another state having their principal place of business outside this state whose funds are derived principally from sources outside this state and that have been exempted from the filing of registration statements by the statute under whose laws they are organized if such a state has a statute similar in substance to this chapter.
     (3) The secretary may adopt rules relating to reciprocal agreements consistent with this section.

NEW SECTION.  Sec. 18   RCW 19.09.095 (Subsidiary organizations--Requirement to register -- Exemptions) and 1986 c 230 s 9 & 1983 c 265 s 6 are each repealed.

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