H.B. 259 Enrolled

CHARITABLE SOLICITATIONS ACT AMENDMENTS
2001 GENERAL SESSION
STATE OF UTAH
Sponsor: Patrice M. Arent
Afton B. Bradshaw

This act modifies the Charitable Solicitations Act. The act defines a charitable sales
promotion and requires the filing of a notice before a promotion is conducted. The act
repeals the bonding requirement for professional fund raisers. The act repeals the
requirement to issue an information card. The act amends the exemptions to the Charitable
Solicitations Act. The act imposes fiduciary duties upon solicitors. The act makes other
technical changes.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
13-22-2, as last amended by Chapter 187, Laws of Utah 1996
13-22-5, as last amended by Chapter 187, Laws of Utah 1996
13-22-8, as last amended by Chapter 187, Laws of Utah 1996
13-22-9, as last amended by Chapter 187, Laws of Utah 1996
13-22-12, as last amended by Chapter 187, Laws of Utah 1996
13-22-14, as last amended by Chapter 187, Laws of Utah 1996
13-22-15, as last amended by Chapter 187, Laws of Utah 1996
13-22-16, as enacted by Chapter 280, Laws of Utah 1993
ENACTS:
13-22-22, Utah Code Annotated 1953
13-22-23, Utah Code Annotated 1953
REPEALS:
13-22-10, as last amended by Chapter 187, Laws of Utah 1996
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 13-22-2 is amended to read:
13-22-2. Definitions.

As used in this chapter:
(1) (a) "Charitable organization" or "organization" means any person, joint venture,
partnership, limited liability company, corporation, association, group, or other entity[, excluding
the state and its political subdivisions]:
(i) that is or holds itself out to be:
(A) a benevolent, educational, voluntary health, philanthropic, humane, patriotic, religious
or eleemosynary, social welfare or advocacy, public health, environmental or conservation, or civic
organization;
(B) for the benefit of a public safety, law enforcement, or firefighter fraternal association;
or
(C) established for any charitable purpose;
(ii) who solicits or obtains contributions solicited from the public for a charitable purpose;
or
(iii) in any manner employs a charitable appeal as the basis of any solicitation or employs
an appeal that reasonably suggests or implies that there is a charitable purpose to any solicitation.
(b) "Charitable organization" includes a "chapter," "branch," "area," "office," or similar
"affiliate" or any person soliciting contributions within the state for a charitable organization that has
its principal place of business outside the state.
(2) "Charitable purpose" means any benevolent, educational, philanthropic, humane,
patriotic, religious, eleemosynary, social welfare or advocacy, public health, environmental,
conservation, civic, or other charitable objective or for the benefit of a public safety, law
enforcement, or firefighter fraternal association.
(3) "Charitable solicitation" or "solicitation" means any request, directly or indirectly, for
money, credit, property, financial assistance, or any other thing of value on the plea or representation
that it will be used for a charitable purpose. A charitable solicitation may be made in any manner,
including:
(a) any oral or written request, including any [telephonic] request by telephone, radio or
television, or other advertising or communications media;

- 2 -

(b) the distribution, circulation, or posting of any handbill, written advertisement, or
publication; or
(c) the sale of, offer or attempt to sell, or request of donations in exchange for any
advertisement, book, card, chance, coupon, device, magazine, membership, merchandise,
subscription, ticket, flower, flag, button, sticker, ribbon, token, trinket, tag, souvenir, candy, or any
other article in connection with which any appeal is made for any charitable purpose, or the use of
the name of any charitable organization or movement as an inducement or reason for making any
purchase donation, or, in connection with any sale or donation, stating or implying that the whole
or any part of the proceeds of any sale or donation will go to or be donated to any charitable purpose.
(4) "Charitable sales promotion" means an advertising or sales campaign, conducted by a
commercial co-venturer, which represents that the purchase or use of goods or services offered by
the commercial co-venturer will benefit, in whole or in part, a charitable organization or purpose.
(5) "Commercial co-venturer" means a person who for profit is regularly and primarily
engaged in trade or commerce other than in connection with soliciting for charitable organizations
or purposes.
[(4)] (6) (a) "Contribution" means the pledge or grant for a charitable purpose of any money
or property of any kind, including any of the following:
(i) a gift, subscription, loan, advance, or deposit of money or anything of value;
(ii) a contract, promise, or agreement, express or implied, whether or not legally enforceable,
to make a contribution for charitable purposes; and
(iii) fees, dues, or assessments paid by members, when membership is conferred solely as
consideration for making a contribution.
(b) "Contribution" does not include:
(i) money loaned to a charitable organization by a financial institution in the ordinary course
of business; or
(ii) fees, dues, or assessments paid by members when membership is not conferred solely
as consideration for making a contribution.
[(5)] (7) "Contributor" means any donor, pledgor, purchaser, or other person who makes a

- 3 -

contribution.
[(6)] (8) "Director" means the director of the Division of Consumer Protection.
[(7)] (9) "Division" means the Division of Consumer Protection of the Department of
Commerce.
[(8)] (10) "Material fact" means information that a person of ordinary intelligence and
prudence would consider relevant in deciding whether or not to make a contribution in response to
a charitable solicitation.
[(9) (a) "Paid solicitor" means any person who, for financial or other consideration:]
[(i) solicits contribution for charitable purposes; or]
[(ii) acts as an employee or agent for any charitable organization or professional fund raiser
to solicit contributions for charitable purposes.]
[(b) "Paid solicitor" does not include any clerical employee who is not primarily involved
with soliciting.]
[(10)] (11) (a) "Professional fund raiser," except as provided in Subsection [(10)] (11)(b),
means any person who:
(i) for compensation or any other consideration solicits contributions for charitable purposes,
or plans or manages the solicitation of contributions for or on behalf of any charitable organization
or any other person;
(ii) engages in, or who holds himself out to persons in this state as being independently
engaged in, the business of soliciting contributions for a charitable organization;
(iii) manages, supervises, or trains any [paid] solicitor whether as an employee or otherwise;
or
(iv) uses a vending device or vending device decal for financial or other consideration that
implies a solicitation of contributions or donations for any charitable organization or charitable
purposes.
(b) "Professional fund raiser" does not include a bona fide officer, director, volunteer, or
full-time employee of a charitable organization.
[(11)] (12) (a) "Professional fund raising counsel or consultant" or other comparable

- 4 -

designation or title means a person who:
(i) for compensation plans, manages, advises, counsels, consults, or prepares material for,
or with respect to, the solicitation in this state of contributions for a charitable organization, whether
or not at any time the person has custody of contributions from a solicitation;
(ii) does not solicit contributions; and
(iii) does not employ, procure, or engage any compensated person to solicit or receive
contributions.
(b) "Professional fund raising counsel or consultant" does not include an attorney,
investment counselor, or banker who in the conduct of that person's profession advises a client when
actually engaged in the giving of legal, investment, or financial advice.
[(12)] (13) "Vending device" means a container used by a charitable organization[, paid
solicitor,] or professional fund raiser, for the purpose of collecting a charitable solicitation,
contribution, or donation whether or not the device offers a product or item in return for the
contribution or donation. "Vending device" includes machines, boxes, jars, wishing wells, barrels,
or any other container.
[(13)] (14) "Vending device decal" means any decal, tag, or similar designation material that
is attached to a vending device, whether or not used or placed by a charitable organization[, paid
solicitor,] or professional fund raiser, that would indicate that all or a portion of the proceeds from
the purchase of items from the vending device will go to a specific charitable organization.
Section 2. Section 13-22-5 is amended to read:
13-22-5. Registration required.
(1) It is unlawful for any organization that is not exempt under Section 13-22-8 to knowingly
solicit, request, promote, advertise, or sponsor the solicitation in this state of any contribution for a
charitable purpose, unless the organization is registered with the division.
(2) Subsection (1) does not prohibit an organization from receiving an unsolicited
contribution.
(3) It is unlawful for any professional fund raiser to knowingly solicit, request, promote,
advertise, or sponsor the solicitation in this state of any contribution for a charitable organization,

- 5 -

whether or not the charitable organization is exempt under Section 13-22-8 , unless the professional
fund raiser [is] and any nonexempt charitable organization that is benefitted are registered with the
division.
(4) It is unlawful for any professional fund raising counsel or consultant to knowingly plan,
manage, advise, counsel, consult, or prepare material for, or with respect to, the solicitation in this
state of a contribution for a charitable organization, whether or not the charitable organization is
exempt under Section 13-22-8 , unless the professional fund raising counsel or consultant [is] and
any nonexempt charitable organization that is benefitted are registered with the division.
Section 3. Section 13-22-8 is amended to read:
13-22-8. Exemptions.
(1) Section 13-22-5 does not apply to:
(a) a solicitation that an organization conducts among its own established and bona fide
membership exclusively through the voluntarily donated efforts of other members or officers of the
organization;
(b) a bona fide religious, ecclesiastical, or denominational organization if:
(i) the solicitation is made for a church, missionary, religious, or humanitarian purpose; and
(ii) the organization is either:
(A) a lawfully organized corporation, institution, society, church, or established physical
place of worship, at which nonprofit religious services and activities are regularly conducted and
carried on;
(B) a bona fide religious group:
(I) that does not maintain specific places of worship;
(II) that is not subject to federal income tax; and
(III) not required to file an IRS Form 990 under any circumstance; [and] or
(C) a separate group or corporation that is an integral part of an institution that is an income
tax exempt organization under 26 U.S.C. Sec. 501(c)(3) and is not primarily supported by funds
solicited outside its own membership or congregation;
(c) a solicitation by a broadcast media owned or operated by an educational institution or

- 6 -

governmental entity, or any entity organized solely for the support of that broadcast media;
(d) except as provided in Subsection 13-22-21 (1), a solicitation for the relief of any person
sustaining a life-threatening illness or injury specified by name at the time of solicitation if the entire
amount collected without any deduction is turned over to the named person;
(e) a political party authorized to transact its affairs within this state and any candidate and
campaign worker of the party if the content and manner of any solicitation make clear that the
solicitation is for the benefit of the political party or candidate;
(f) a political action committee or group soliciting funds relating to issues or candidates on
the ballot if the committee or group is [registered with the lieutenant governor's office under:]
required to file financial information with a federal or state election commission;
[(i) Title 20A, Chapter 11, Part 6, Political Action Committee Registration and Financial
Reporting Requirements; or]
[(ii) Title 20A, Chapter 11, Part 8, Political Issues Committees - Registration and Financial
Reporting;]
(g) any school accredited by the state, any accredited institution of higher learning, or club
or parent, teacher, or student organization within and authorized by the school in support of the
operations or extracurricular activities of the school;
(h) a public or higher education foundation established under Title 53A or 53B;
(i) a television station, radio station, or newspaper of general circulation that donates air time
or print space for no consideration as part of a cooperative solicitation effort on behalf of a charitable
organization, whether or not that organization is required to register under this chapter; [and]
(j) a volunteer fire department, rescue squad, or local civil defense organization whose
financial oversight is under the control of a local governmental entity[.]; and
(k) any governmental unit of any state or the United States.
(2) Any organization claiming an exemption under this section bears the burden of proving
its eligibility for, or the applicability of, the exemption claimed.
(3) Each organization exempt from registration pursuant to this section that makes a material
change in its legal status, officers, address, or similar changes shall file a report informing the

- 7 -

division of its current legal status, business address, business phone, officers, and primary contact
person within 30 days of the change.
(4) The division may by rule:
(a) require organizations exempt from registration pursuant to this section to file a notice of
claim of exemption;
(b) prescribe the contents of the notice of claim; and
(c) require a filing fee for the notice, as determined under Section 63-38-3.2 .
Section 4. Section 13-22-9 is amended to read:
13-22-9. Professional fund raiser's or fund raising counsel's or consultant's permit.
(1) It is unlawful for any person or entity to act as a professional fund raiser or professional
fund raising counsel or consultant, whether or not representing an organization exempt from
registration under Section 13-22-8 , without first obtaining a permit from the division by complying
with all of the following application requirements:
(a) pay an application fee as determined under Section 63-38-3.2 ; and
(b) submit a written application, verified under oath, on a form approved by the division that
includes:
(i) the applicant's name, address, telephone number, facsimile number, if any;
(ii) the name and address of any organization or person controlled by, controlling, or
affiliated with the applicant;
(iii) the applicant's business, occupation, or employment for the three-year period
immediately preceding the date of the application;
(iv) whether it is an individual, joint venture, partnership, limited liability company,
corporation, association, or other entity;
(v) the names and residence addresses of any officer or director of the applicant;
(vi) the name and address of the registered agent for service of process and a consent to
service of process;
(vii) if a professional fund raiser:
(A) the purpose of the solicitation and use of the contributions to be solicited;

- 8 -

(B) the method by which the solicitation will be conducted and the projected length of time
it is to be conducted;
(C) the anticipated expenses of the solicitation, including all commissions, costs of
collection, salaries, and any other items;
(D) a statement of what percentage of the contributions collected as a result of the
solicitation are projected to remain available to the charitable organization declared in the
application, including a satisfactory statement of the factual basis for the projected percentage and
projected anticipated revenues provided to the charitable organization, and if a flat fee is charged,
documentation to support the reasonableness of the flat fee; and
(E) a statement of total contributions collected or received by the professional fund raiser
within the calendar year immediately preceding the date of the application, including a description
of the expenditures made from or the use made of the contributions;
(viii) if a professional fund raising counsel or consultant:
(A) the purpose of the plan, management, advise, counsel or preparation of materials for, or
respect to the solicitation and use of the contributions solicited;
(B) the method by which the plan, management, advise, counsel, or preparation of materials
for, or respect to the solicitation will be organized or coordinated and the projected length of time
of the solicitation;
(C) the anticipated expenses of the plan, management, advise, counsel, or preparation of
materials for, or respect to the solicitation, including all commissions, costs of collection, salaries,
and any other items;
(D) a statement of total fees to be earned or received from the charitable organization
declared in the application, and what percentage of the contributions collected as a result of the plan,
management, advise, counsel, or preparation of materials for, or respect to the solicitation are
projected after deducting the total fees to be earned or received remain available to the charitable
organization declared in the application, including a satisfactory statement of the factual basis for
the projected percentage and projected anticipated revenues provided to the charitable organization,
and if a flat fee is charged, documentation to support the reasonableness of such flat fee; and

- 9 -

(E) a statement of total net fees earned or received within the calendar year immediately
preceding the date of the application, including a description of the expenditures made from or the
use of the net earned or received fees in the planning, management, advising, counseling, or
preparation of materials for, or respect to the solicitation and use of the contributions solicited for
the charitable organization;
(ix) disclosure of any injunction, judgment, or administrative order against the applicant or
the applicant's conviction of any crime involving moral turpitude;
(x) a copy of any written agreements with any charitable organization;
(xi) the disclosure of any injunction, judgment, or administrative order or conviction of any
crime involving moral turpitude with respect to any officer, director, manager, operator, or principal
of the applicant;
(xii) a copy of all agreements to which the applicant is, or proposes to be, a party regarding
the use of proceeds;
(xiii) an acknowledgment that fund raising in the state will not commence until both the
professional fund raiser or professional fund raising counsel or consultant and the charity, its parent
foundation, if any, are registered and in compliance with this chapter; and
(xiv) any additional information the division may require by rule.
(2) If any information contained in the application for a permit becomes incorrect or
incomplete, the applicant or registrant shall, within 30 days after the information becomes incorrect
or incomplete, correct the application or file the complete information required by the division.
(3) In addition to the permit fee, an applicant failing to file a permit application or renewal
by the due date or filing an incomplete permit application or renewal shall pay an additional fee of
$25 for each month or part of a month after the date on which the permit application or renewal were
due to be filed.
[(4) (a) Each applicant shall provide proof that the applicant is either bonded or provide a
letter of credit in the amount of at least $25,000.]
[(b) The bond or letter or credit shall be payable to the state for the benefit of parties who
may be damaged by any violation of this chapter.]

- 10 -

[(c) (i) The issuer of a bond shall be a surety authorized to transact surety business in this
state.]
[(ii) The letter of credit shall be from a federally insured depository institution.]
[(d) The applicant shall maintain the bond or letter of credit for the entire duration of the
permit and for a period of not less than one year after the division received notice in writing from
the professional fund raiser or professional fund raising counsel or consultant that all activities in
the state have ceased.]
[(e) The division may prescribe rules under which parties may recover on the bond or letter
of credit.]
Section 5. Section 13-22-12 is amended to read:
13-22-12. Grounds for denial, suspension, or revocation.
(1) The director may, in accordance with Title 63, Chapter 46b, Administrative Procedures
Act, issue an order to deny, suspend, or revoke an application, registration, permit, or information
card, upon a finding that the order is in the public interest and that:
(a) the application for registration or renewal is incomplete or misleading in any material
respect;
(b) the applicant or registrant or any officer, director, agent, or employee of the applicant or
registrant has:
(i) violated this chapter or committed any of the prohibited acts and practices described in
this chapter;
(ii) been enjoined by any court, or is the subject of an administrative order issued in this or
another state, if the injunction or order includes a finding or admission of fraud, breach of fiduciary
duty, material misrepresentation, or if the injunction or order was based on a finding of lack of
integrity, truthfulness, or mental competence of the applicant;
(iii) been convicted of a crime involving moral turpitude;
(iv) obtained or attempted to obtain a registration or a permit by misrepresentation;
(v) materially misrepresented or caused to be misrepresented the purpose and manner in
which contributed funds and property will be used in connection with any solicitation;

- 11 -

(vi) caused or allowed any paid solicitor to violate any rule made or order issued under this
chapter by the division;
(vii) failed [reasonably to supervise his agents, employees, paid solicitors or, in the case of
an organization, its professional fund raisers or professional fund raising counsels or consultants]
to take corrective action with its solicitors who have violated this chapter or committed any of the
prohibited acts and practices of this chapter;
(viii) used, or attempted to use a name that either is deceptively similar to a name used by
an existing registered or exempt charitable organization, or appears reasonably likely to cause
confusion of names;
(ix) failed to timely file with the division any report required in this chapter or by rules made
under this chapter; or
(x) failed to pay a fine imposed by the division in accordance with Section 13-22-3 ; or
[(c) a professional fund raiser or professional fund raising counselor or consultant does not
have a bond or letter of credit in force as required by Subsection 13-22-9 (4); or]
[(d)] (c) the applicant for registration or renewal has no charitable purpose.
(2) The director may, in accordance with Title 63, Chapter 46b, Administrative Procedures
Act, issue an order to revoke or suspend a claim of exemption filed under Subsection 13-22-8 (4),
upon a finding that the order is in the public interest and that:
(a) the notice of claim of exemption is incomplete or false or misleading in any material
respect; or
(b) any provision of this chapter, or any rule made or order issued by the division under this
chapter has been violated in connection with a charitable solicitation by any exempt organization.
Section 6. Section 13-22-14 is amended to read:
13-22-14. Accuracy not guaranteed.
(1) By issuing a permit [or by providing forms for an information card], the state does not
guarantee the accuracy of any representation contained in the permit [or information card], nor does
it warrant that any statement made by the holder of the permit [or information card] is truthful. The
state makes no certification as to the charitable worthiness of any organization on whose behalf a

- 12 -

solicitation is made nor as to the moral character of the holder of the permit [or information card].
(2) The following statement shall appear on each permit [and information card in uppercase
letters, in close proximity to the seal or acknowledgment required under Subsection 13-22-10 (3)(b):
"THE STATE OF UTAH DOES NOT WARRANT THAT THE INFORMATION CONTAINED
ON THIS CARD IS TRUE."]: "THE STATE OF UTAH MAKES NO CERTIFICATION AS TO
THE CHARITABLE WORTHINESS OF ANY ORGANIZATION ON WHOSE BEHALF A
SOLICITATION IS MADE NOR AS TO THE MORAL CHARACTER OF THE HOLDER OF
THE PERMIT."
(3) No solicitation for charitable purposes shall use the fact or requirement of registration
or of the filing of any report with the division pursuant to this chapter with the intent to cause or in
a manner tending to cause any person to believe that the solicitation, the manner in which it is
conducted, its purposes, any use to which the proceeds will be applied or the person or organization
conducting it has been or will be in any way endorsed, sanctioned, or approved by the division or
any governmental agency or office.
Section 7. Section 13-22-15 is amended to read:
13-22-15. Financial reports required.
(1) Each charitable organization registered under this chapter shall[, during its first year of
registration, provide quarterly financial reports to] file each year of registration an annual financial
report or an IRS Form 990, 990EZ, or 990PF. The financial report or IRS Form 990, 990EZ, or
990PF shall be filed with the division within 30 days after the end of the [quarter] year reported.
[Each] If an annual financial report or IRS Form 990, 990EZ, or 990PF are not available during its
first year of registration, the charitable organization shall provide quarterly financial reports to the
division within 30 days after the end of the quarter reported.
(2) Each financial report shall disclose:
(a) the gross amount of contributions received;
(b) the amount of contributions disbursed or to be disbursed to each charitable organization
or charitable purpose represented;
(c) aggregate amounts paid to any professional fund raiser;

- 13 -

(d) amounts spent for overhead, expenses, commissions, and similar purposes; and
(e) the name and address of any [paid solicitor] professional fund raiser used by the
organization.
[(2) After the first year of continuous registration, a charitable organization shall file an
annual financial report or IRS Form 990 on an annual basis within 30 days after the end of the year
reported.]
(3) Each report required under this section shall be signed under oath by an officer or
principal of the organization.
(4) The registration of any organization that fails to file a timely report or IRS Form 990,
990EZ, or 990PF as required in this section or files an incomplete report or IRS Form 990, 990EZ,
or 990PF is automatically suspended pending a final order of the division under Section 13-22-12 .
The division may reinstate the registration after receiving:
(a) a report or IRS Form 990, 990EZ, or 990PF fulfilling the requirements of this section;
(b) an application for renewed registration; and
(c) a penalty of $25 for each month or part of a month after the date on which the quarterly
report or IRS Form 990 was due to be filed.
Section 8. Section 13-22-16 is amended to read:
13-22-16. Separate accounts and receipts required.
(1) Each organization required to be registered under this chapter and each professional fund
raiser [and paid solicitor] shall segregate and maintain all contributed funds in an account held
separately from its operating account. [The account shall be held in Utah at a depository institution
regulated by the Department of Financial Institutions.] Each contribution in the control or custody
of the professional solicitor shall, in its entirety and within ten days of its receipt, be deposited in an
account at a bank or other federally insured financial institution which shall be in the name of the
charitable organization. The charitable organization shall maintain and administer the account and
shall have sole control of all withdrawals.
(2) Each organization required to be registered under this chapter and each professional fund
raiser [and paid solicitor] shall maintain and use duplicate receipts for contributions of money,

- 14 -

securities, and cash equivalents so that one receipt is issued to each contributor and one is maintained
by the charitable organization.
Section 9. Section 13-22-22 is enacted to read:
13-22-22. Charitable sales promotions.
(1) Every charitable organization which agrees to permit a charitable sales promotion to be
conducted by a commercial co-venturer on its behalf shall file with the division a notice of the
promotion prior to its commencement within this state. The notice shall state:
(a) the names of the charitable organization and commercial co-venturer;
(b) that the charitable organization and the commercial co-venturer will conduct a charitable
sales promotion; and
(c) the date the charitable sales promotion is expected to commence.
(2) Prior to the commencement of a charitable sales promotion within this state, every
charitable organization which agrees to permit a charitable sales promotion to be conducted in its
behalf, shall obtain a written agreement, containing such terms as may be required by rule of the
division, from the commercial co-venturer which shall be available to the division upon request.
(3) A commercial co-venturer shall keep the final accounting for each charitable sales
promotion conducted in this state for three years after the final accounting date and make the
accounting available to the division upon request.
(4) The commercial co-venturer shall disclose in each advertisement for a charitable sales
promotion the dollar amount or percent per unit of goods or services purchased or used that will
benefit the charitable organization or purpose.
Section 10. Section 13-22-23 is enacted to read:
13-22-23. Fiduciary capacity.
Every person soliciting, collecting, or expending contributions for charitable purposes, and
every officer, director, trustee, or employee of any person concerned with the solicitation, collection,
or expenditure of those contributions, shall be considered to be a fiduciary and acting in a fiduciary
capacity.
Section 11. Repealer.

- 15 -

This act repeals:
Section 13-22-10, Obtaining, use and display of permits and information cards.

- 16 -