Representative James A. Dunnigan proposes the following substitute bill:





Chief Sponsor: James A. Dunnigan

Senate Sponsor: Curtis S. Bramble


9     General Description:
10          This bill addresses charitable organization registration requirements.
11     Highlighted Provisions:
12          This bill:
13          ▸     creates and modifies definitions;
14          ▸     provides that an entity's application for a public grant is not a charitable solicitation;
15          ▸     exempts certain federal income tax exempt charitable organizations from registering
16     as a charitable organization in Utah; and
17          ▸     makes technical changes.
18     Money Appropriated in this Bill:
19          None
20     Other Special Clauses:
21          This bill provides a special effective date.
22     Utah Code Sections Affected:
23     AMENDS:
24          13-22-2, as last amended by Laws of Utah 2018, Chapter 267
25          13-22-8, as last amended by Laws of Utah 2018, Chapters 267 and 415


27     Be it enacted by the Legislature of the state of Utah:
28          Section 1. Section 13-22-2 is amended to read:
29          13-22-2. Definitions.
30          As used in this chapter:
31          (1) "Chapter" means a chapter, branch, area, office, or similar affiliate of a charitable
32     organization.
33          (2) (a) "Charitable organization" or "organization" means any person, joint venture,
34     partnership, limited liability company, corporation, association, group, or other entity:
35          (i) who is or holds itself out to be:
36          (A) a benevolent, educational, voluntary health, philanthropic, humane, patriotic,
37     religious or eleemosynary, social welfare or advocacy, public health, environmental or
38     conservation, or civic organization;
39          (B) for the benefit of a public safety, law enforcement, or firefighter fraternal
40     association; or
41          (C) established for any charitable purpose;
42          (ii) who solicits or obtains contributions solicited from the public for a charitable
43     purpose; or
44          (iii) in any manner employs a charitable appeal as the basis of any solicitation or
45     employs an appeal that reasonably suggests or implies that there is a charitable purpose to any
46     solicitation.
47          (b) "Charitable organization" includes a chapter or a person who solicits contributions
48     within the state for a charitable organization.
49          (3) "Charitable purpose" means any benevolent, educational, philanthropic, humane,
50     patriotic, religious, eleemosynary, social welfare or advocacy, public health, environmental,
51     conservation, civic, or other charitable objective or for the benefit of a public safety, law
52     enforcement, or firefighter fraternal association.
53          (4) "Charitable sales promotion" means an advertising or sales campaign, conducted by
54     a commercial co-venturer, which represents that the purchase or use of goods or services
55     offered by the commercial co-venturer will benefit, in whole or in part, a charitable
56     organization or purpose.

57          (5) (a) "Charitable solicitation" or "solicitation" means any request, directly or
58     indirectly, for money, credit, property, financial assistance, or any other thing of value on the
59     plea or representation that it will be used for a charitable purpose.
60          (b) "Charitable solicitation" or "solicitation" includes:
61          (i) any of the following done, or purporting to be done, for a charitable purpose:
62          (A) any oral or written request, including any request by telephone, radio, television, or
63     other advertising or communications media;
64          (B) the distribution, circulation, or posting of any handbill, written advertisement, or
65     publication; or
66          (C) an application or other request for a [grant] a private grant or, if made by an
67     individual, a public grant; or
68          (ii) the sale of, offer or attempt to sell, or request of donations in exchange for any
69     advertisement, membership, subscription, or other article in connection with which any appeal
70     is made for any charitable purpose, or the use of the name of any charitable organization or
71     movement as an inducement or reason for making any purchase donation, or, in connection
72     with any sale or donation, stating or implying that the whole or any part of the proceeds of any
73     sale or donation will go to or be donated to any charitable purpose.
74          (c) "Charitable solicitation" or "solicitation" does not include an entity's application or
75     other request for a public grant.
76          (6) "Commercial co-venturer" means a person who for profit is regularly and primarily
77     engaged in trade or commerce other than in connection with soliciting for a charitable
78     organization or purpose.
79          (7) (a) "Contribution" means the pledge or grant for a charitable purpose of any money
80     or property of any kind, including any of the following:
81          (i) a gift, subscription, loan, advance, or deposit of money or anything of value;
82          (ii) a contract, promise, or agreement, express or implied, whether or not legally
83     enforceable, to make a contribution for charitable purposes; or
84          (iii) fees, dues, or assessments paid by members, when membership is conferred solely
85     as consideration for making a contribution.
86          (b) "Contribution" does not include:
87          (i) money loaned to a charitable organization by a financial institution in the ordinary

88     course of business; or
89          (ii) fees, dues, or assessments paid by members when membership is not conferred
90     solely as consideration for making a contribution.
91          (8) "Contributor" means a donor, pledgor, purchaser, or other person who makes a
92     contribution.
93          (9) "Director" means the director of the Division of Consumer Protection.
94          (10) "Division" means the Division of Consumer Protection of the Department of
95     Commerce.
96          (11) "Material fact" means information that a person of ordinary intelligence and
97     prudence would consider relevant in deciding whether or not to make a contribution in
98     response to a charitable solicitation.
99          (12) (a) "Professional fund raiser" means a person who:
100          (i) for compensation or any other consideration, for or on behalf of a charitable
101     organization or any other person:
102          (A) solicits contributions; or
103          (B) promotes or sponsors the solicitation of contributions;
104          (ii) (A) for compensation or any other consideration, plans, manages, counsels,
105     consults, or prepares material for, or with respect to, the solicitation of contributions for a
106     charitable organization or any other person; and
107          (B) at any time has custody of a contribution for the charitable organization;
108          (iii) engages in, or represents being independently engaged in, the business of soliciting
109     contributions for a charitable organization;
110          (iv) manages, supervises, or trains any solicitor whether as an employee or otherwise;
111     or
112          (v) uses a vending device or vending device decal for financial or other consideration
113     that implies a solicitation of contributions or donations for any charitable organization or
114     charitable purposes.
115          (b) "Professional fund raiser" does not include:
116          (i) an individual acting in the individual's capacity as a bona fide officer, director,
117     volunteer, or full-time employee of a charitable organization;
118          (ii) an attorney, investment counselor, or banker who, in the conduct of that person's

119     profession, advises a client regarding legal, investment, or financial advice; or
120          (iii) a person who tangentially prepares materials, including a person who:
121          (A) makes copies;
122          (B) cuts or folds flyers; or
123          (C) creates a graphic design or other artwork without providing strategic or
124     campaign-related input.
125          (13) (a) "Professional fund raising counsel or consultant" means a person who:
126          (i) for compensation or any other consideration, plans, manages, counsels, consults, or
127     prepares material for, or with respect to, the solicitation of contributions for a charitable
128     organization or any other person;
129          (ii) does not solicit contributions;
130          (iii) does not at any time have custody of a contribution from solicitation; and
131          (iv) does not employ, procure, or engage any compensated person to solicit or receive
132     contributions.
133          (b) "Professional fund raising counsel or consultant" does not include:
134          (i) an individual acting in the individual's capacity as a bona fide officer, director,
135     volunteer, or full-time employee of a charitable organization;
136          (ii) an attorney, investment counselor, or banker who, in the conduct of that person's
137     profession, advises a client regarding legal, investment, or financial advice; or
138          (iii) a person who tangentially prepares materials, including a person who:
139          (A) makes copies;
140          (B) cuts or folds flyers; or
141          (C) creates a graphic design or other artwork without providing strategic or
142     campaign-related input.
143          (14) "Public grant" means the same as the term "grant" is defined in Section
144     63G-6a-103.
145          [(14)] (15) (a) "Vending device" means a container used by a charitable organization or
146     professional fund raiser, for the purpose of collecting a charitable solicitation, contribution, or
147     donation whether or not the device offers a product or item in return for the contribution or
148     donation.
149          (b) "Vending device" includes machines, boxes, jars, wishing wells, barrels, or any

150     other container.
151          [(15)] (16) "Vending device decal" means any decal, tag, or similar designation
152     material that is attached to a vending device, whether or not used or placed by a charitable
153     organization or professional fund raiser, that would indicate that all or a portion of the proceeds
154     from the purchase of items from the vending device will go to a specific charitable
155     organization.
156          Section 2. Section 13-22-8 is amended to read:
157          13-22-8. Exemptions.
158          (1) Section 13-22-5 does not apply to:
159          (a) a bona fide religious, ecclesiastical, or denominational organization if:
160          (i) the solicitation is made for a church, missionary, religious, or humanitarian purpose;
161     and
162          (ii) the organization is either:
163          (A) a lawfully organized corporation, institution, society, church, or established
164     physical place of worship, at which nonprofit religious services and activities are regularly
165     conducted and carried on;
166          (B) a bona fide religious group:
167          (I) that does not maintain specific places of worship;
168          (II) that is not subject to federal income tax; and
169          (III) that is not required to file an IRS Form 990 under any circumstance; or
170          (C) a separate group or corporation that is an integral part of an institution that is an
171     income tax exempt organization under 26 U.S.C. Sec. 501(c)(3) and is not primarily supported
172     by funds solicited outside the group's or corporation's own membership or congregation;
173          (b) a solicitation by a broadcast media owned or operated by an educational institution
174     or governmental entity, or any entity organized solely for the support of that broadcast media;
175          (c) subject to Subsection 13-22-21(1), an individual soliciting a contribution for the
176     relief or benefit of another individual, who is specified by name at the time of the solicitation,
177     if:
178          (i) all contributions are turned over to the named beneficiary after deducting actual
179     expenses necessary for the cost of solicitation, if any; and
180          (ii) all individuals that carry out any fund-raising function for the benefit of the named

181     individual are unpaid, directly or indirectly, for services rendered;
182          (d) a political party authorized to transact the political party's affairs within this state
183     and any candidate and campaign worker of the political party if the content and manner of any
184     solicitation make clear that the solicitation is for the benefit of the political party or candidate;
185          (e) a political action committee or group soliciting funds relating to issues or
186     candidates on the ballot if the committee or group is required to file financial information with
187     a federal or state election commission;
188          (f) (i) a public school;
189          (ii) a public institution of higher learning;
190          (iii) a school accredited by an accreditation body recognized within the state or the
191     United States;
192          (iv) an institution of higher learning accredited by an accreditation body recognized
193     within the state or the United States;
194          (v) an organization within, and authorized by, an entity described in Subsections
195     (1)(f)(i) through (iv); or
196          (vi) a parent organization, teacher organization, or student organization authorized by
197     an entity described in Subsection (1)(f)(i) or (iii) if:
198          (A) the parent organization, teacher organization, or student organization is a branch
199     of, or is affiliated with, a central organization;
200          (B) the parent organization, teacher organization, or student organization is subject to
201     the central organization's general control and supervision;
202          (C) the central organization holds a United States Internal Revenue Service group tax
203     exemption that covers the parent organization, teacher organization, or student organization;
204     and
205          (D) the central organization is registered with the division under this chapter;
206          (g) a public or higher education foundation established under Title 53E, Public
207     Education System -- State Administration, Title 53G, Public Education System -- Local
208     Administration, or Title 53B, State System of Higher Education;
209          (h) a television station, radio station, or newspaper of general circulation that donates
210     air time or print space for no consideration as part of a cooperative solicitation effort on behalf
211     of a charitable organization, whether or not that organization is required to register under this

212     chapter;
213          (i) a volunteer fire department, rescue squad, or local civil defense organization whose
214     financial oversight is under the control of a local governmental entity;
215          (j) any governmental unit of any state or the United States;
216          (k) any corporation:
217          (i) established by an act of the United States Congress; and
218          (ii) that is required by federal law to submit an annual report:
219          (A) on the activities of the corporation, including an itemized report of all receipts and
220     expenditures of the corporation; and
221          (B) to the United States Secretary of Defense to be:
222          (I) audited; and
223          (II) submitted to the United States Congress;
224          [(l) a solicitation by an applicant for a grant offered by a state agency if:]
225          [(i) the terms of the grant provide that the state agency monitors a grant recipient to
226     ensure that grant funds are used in accordance with the grant's purpose; and]
227          [(ii) the sum of the amount available to the applicant under grants offered by a state
228     agency that the applicant applies for in a calendar year is less than or equal to $1,500;]
229          [(m)] (l) a chapter of a charitable organization or a person who solicits contributions
230     for a charitable organization, if the charitable organization is registered with the division
231     pursuant to Section 13-22-5 or is exempt from registration under this section, and:
232          (i) all contributions solicited by the chapter or person are delivered directly to the
233     control of the charitable organization; or
234          (ii) (A) the charitable organization holds a United States Internal Revenue Service
235     group tax exemption that covers the chapter;
236          (B) the charitable organization provides a list of its chapters to the division with its
237     registration or renewal of registration;
238          (C) the chapter is on the list provided under Subsection [(1)(m)(ii)(B)] (1)(l)(ii)(B);
239          (D) the chapter maintains the information required under Section 13-22-15 and
240     provides the information to the division upon request; and
241          (E) solicitations by the chapter or the person are limited to the collection of
242     membership-related fees, dues, or assessments from new and existing members;

243          [(n)] (m) a solicitation in an obituary; [or]
244          [(o)] (n) a solicitation made exclusively to a family member of the individual making
245     the solicitation[.]; or
246          (o) an organization that holds federal income tax exempt status in accordance with 26
247     U.S.C. Sec. 501(c)(6).
248          (2) An organization claiming an exemption under this section bears the burden of
249     proving the organization's eligibility for, or the applicability of, the exemption claimed.
250          (3) An organization exempt from registration [pursuant to] under this section that
251     makes a material change in the organization's legal status, officers, address, or similar changes
252     shall file a report informing the division of the organization's current legal status, business
253     address, business phone, officers, and primary contact person within 30 days [of] after the day
254     on which the change is made.
255          (4) The division may by rule made in accordance with Title 63G, Chapter 3, Utah
256     Administrative Rulemaking Act:
257          (a) require an organization that is exempt from registration under this section to:
258          (i) file a notice of claim of exemption; and
259          (ii) file a renewal of a notice of claim of exemption;
260          (b) prescribe the contents of a notice of claim of exemption and a renewal of a notice
261     of claim of exemption; and
262          (c) require a filing fee for a notice of claim of exemption and a renewal of a notice of
263     claim of exemption as determined under Section 63J-1-504.
264          Section 3. Effective date.
265          If approved by two-thirds of all the members elected to each house, this bill takes effect
266     upon approval by the governor, or the day following the constitutional time limit of Utah
267     Constitution, Article VII, Section 8, without the governor's signature, or in the case of a veto,
268     the date of veto override.