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HomeMy WebLinkAboutIR 7147 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 7147 0P,*T8*f6 f ORP, To the Mayor and Members of the City Council September 9, 1986 Zi X Subject: PROPOSED CHARITABLE SOLICITATIONS ORDINANCE As a result of a recent Supreme Court decision (Secretary of the State of Maryland v. Joseph H. Munson Co.-, Inc.) regarding the regulation of charities by local ordinances, our current Charitable Solicitations ordinance No. 8868 can no longer allow the Charitable Solicitations Commission to deny a permit to a charitable organization based on the percentage of fund raising expenses incurred, nor the amount of funds raised in relation to the direct support of the stated purpose of the organization. After deliberations involving the Commission and the City's Department of Law, it has been determined that the best course of action is to amend the current ordinance to comply with the Supreme Court's decision. The proposed ordinance will allow the proposed Charitable Solicitations Review Board to insure compliance with the financial disclosure portion of the ordin- ance and to question applicants on their solicitation methods, purpose of organi- zation, and the disbursement of funds. The Board of Review can require that an organization must disclose the percentage of funds that actually benefit the charity in all written or verbal communications with the public as a condition for receiving a certificate of registration (license) to solicit in Fort Worth. The proposed ordinance is based on a revised ordinance in Houston, Texas that has been upheld. The decision to exempt religious and political entities from the requirements imposed on other non-profit organizations will be a major factor in eliminating a threat of possible litigation. The decision of the Charitable Solicitations Commission to continue as a review board was partly determined by non-profit organizations requesting that some form of review needs to be continued to ensure that obviously fraudulent enti- ties will not be allowed to solicit in competition with the respected organiza- tions. The Commission has requested that support be given for ongoing educational methods of keeping the public informed on who is registered and what methods used by solicitors may indicate fraud or misuse of donations. If additional information is required, it will be provided upon request. Douglas Harman City Manager ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS Resolutions by Charitable Solicitations Commission Whereas, the Charitable Solicitations Commission, assisted by the City Attorney' s staff and other City staff personnel, has undertaken a comprehensive and lengthy study of the City' s current ordinances regulating charitable solicitations (Chapter 32 of the Code of the City of Fort Worth) ; and Whereas, it appears that there is a need for such ordinance to be substantially amended in order that it comply with existing law; Now, therefore, the Charitable Solicitations Commission adopts the following resolutions : 1 . RESOLVED, that the Charitable Solicitations Commission hereby expresses its appreciation to and commends the following members of the City staff who have performed so ably in the review of the ordinance: Ramon Guajardo Assistant City Manager Hugh Davis Assistant City Attorney Gary Steinberger Assistant City Attorney David Yett Assistant City Attorney Carol Pollack Secretary to the Commission 2 . RESOLVED, that the Charitable Solicitations Commission hereby recommends that the City Council act as soon as possible to : A. Repeal the current ordinance regulating charitable solicitations (Chapter 32 of the Code of the City of Fort Worth) ; and B. Enact the proposed ordinance attached to this resolution. Approved by the Charitable Solicitations Commission by vote of :4 for and against this day of TL2 L�y 1986 . RUSSELL BIEGEL, Chaff man ORDINANCE NO. AN ORDINANCE AMENDING CHAPTER 32 OF THE CODE OF THE CITY OF FORT WORTH; ESTABLISHING REGISTRATION REQUIREMENTS FOR PERSONS SOLICITING FUNDS FOR CHARITABLE PURPOSES; PRE- SCRIBING CERTAIN CRIMINAL PENALTIES; MAKING OTHER PROVI- SIONS RELATIVE THERETO; PROVIDING FOR THE CREATION AND OPERATION OF THE CHARITABLE SOLICITATIONS REVIEW BOARD; REPEALING ALL PRIOR INCONSISTENT PROVISIONS; PROVIDING A SEVERABILITY CLAUSE; PROVIDING A PENALTY CLAUSE; PROVIDING A SAVINGS CLAUSE; PROVIDING FOR ENGROSSMENT AND ENROLL- MENT; PROVIDING FOR PUBLICATION IN THE OFFICIAL NEWSPAPER; AND PROVIDING AN EFFECTIVE DATE. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS: SECTION 1 . That Chapter 32 of the Code of the City of Fort Worth, Texas, is hereby amended to read as follows: "Section 32-1 . (a) The term 'solicit funds ' or 'solicitation of funds ' shall mean any request for the donation of money, property, or anything of value, or the pledge of a future donation of money, property, or anything of value; or the selling or offering for sale of any property, real or per- sonal, tangible or intangible, whether of value or not, including, but not limited to, goods, books, pamphlets, tickets, publications or subscriptions to publications, or brochures, upon the representation, express or implied, that the proceeds will be used for a charitable purpose as such term is herein defined. Expressly excluded from the meaning of 'solicit funds ' or 'solicitation of funds ' is any offer of membership in any organization. A solicita- tion of funds is complete when the solicitation is commun- icated to any individual then located within the corporate limits of the city. (b) ( 1 ) The term 'charitable purpose' shall mean philanthropic or other nonprofit objectives, including the benefit of poor, underprivileged, needy, sick, diseased, injured, refugee, disabled or handicapped persons or OOW persons in need of rehabilitation; the benefit of a patri- otic or veterans ' association or organization or for the relief or assistance of veterans of the armed forces of the United States; the benefit of any fraternal, social or civic organization ; the benefit of any educational insti- tution; or the arts or support and furtherance of the arts . ( 2) The term 'charitable purpose' shall not be construed to include the direct benefit of the individual making the solicitation . ( 3) The term 'charitable purpose ' shall not be construed to include the benefit of any political group or political organization which is subject to financial dis- closure under state or federal law or the benefit of any religious society, sect or order. (c) The term 'person ' shall mean and include any natural person, firm, partnership, corporation or associa- tion . (d ) The term ' individual ' shall mean only a natural person. (e) The term 'Secretary' shall mean the Secretary to the Charitable Solicitations Review Board, who shall be a member of the City staff appointed by the Director of the Department of Housing and Human Services of the City of Fort Worth. (f ) The term 'Solicitor ' shall mean the person making the solicitation for the charitable purpose. (g ) The term 'Professional Solicitor ' shall mean a solicitor who directs or conducts solicitation of funds for profit on behalf of another person. Section 32-2. Unlawful solicitation. (a) It shall be unlawful for any person, directly or through an agent or employee, to solicit funds for chari- table purposes within the corporate limits of the city unless such person shall have first obtained a certificate of registration as hereinafter provided. (b) It shall be unlawful for any individual , as the agent or employee of another, to solicit funds for chari- table purposes in the city unless his principal or -2- employer has received a certificate of registration as hereinafter provided. (c) It shall be unlawful for any person, directly or through an agent or employee, to solicit funds for chari- table purposes within the corporate limits of the city after the expiration of any certificate of registration issued as hereinafter provided. (d ) It shall be unlawful for the person registering or the agents or employees thereof to solicit funds for a charitable purpose other than that set out in the regis- tration statement upon which the certificate of registra- tion was issued. (e) It shall be unlawful for any person who shall solicit funds for charitable purposes in the city to rep- resent in connection with such solicitation of funds that the issuance of a certificate of registration by the city constitutes an endorsement or approval of the purposes of such solicitation of funds by the city or any officer or employee thereof . ( f) It shall be unlawful for any person issued a cer- tificate of registration hereunder to fail to file with the Secretary within thirty ( 30) days from the expiration of the certificate of registration a sworn financial statement, as provided in Section 32-7, showing the total amount collected from the solicitation of funds and the amounts and purpose for which such funds were disbursed. (g ) It shall be unlawful for any person issued a cer- tificate of registration hereunder to employ false, mis- leading or deceptive acts or practices in the conduct of any solicitation. (h) It shall be unlawful for any person, when making a solicitation of funds , whether verbal, written or by any other means, to fail to disclose affirmatively the following information: ( 1 ) the number of the registration certificate is- sued by the Secretary to the person on whose behalf the solicitation is being made. ell, ( 2) the fact that a professional solicitor is con- ducting the solicitation, if such is the case; and ( 3) the estimated percentage of funds which will be donated for the charitable purposes so stated, based on the information contained in the appli- cation for certificate of registration. (i) It shall be unlawful to conduct charitable soli- citations either by telephone or by door-to-door visita- tion at residential premises: ( 1 ) before 9:00 a.m. or after 9 :00 p.m. on any day; (2) at any time on Sundays, New Year 's Day, Independence Day, Labor Day, Thanksgiving Day or Christmas Day; provided, however , that this section shall not apply in the event that such solicitation took place at such time by request or appointment. Section 32-3. Registration statement. All persons desiring to solicit funds for charitable purposes in the city shall file with the Secretary a reg- istration statement, on forms provided by the Secretary, containing the following information: ( 1 ) The name of the person registering and desiring to solicit funds for charitable purposes. ( 2) Whether the person registering is a natural per- son, partnership, corporation or association, and (a) If a natural person, the business or resi- dence address and telephone number must be given . (b) If a partnership, the names of all partners and the principal business address and telephone number of each partner must be given. (c) If a corporation , the person registering must state whether it is organized under the laws of Texas or is a foreign corporation and must show the mailing address, business loca- tion , telephone number, name of the individual in charge of the Fort Worth office of such cor- poration , and the names of all officers and -4- Poll* directors or trustees of said corporation, and, if a foreign corporation, the place of incorpo- ration. (d) If an association, the registration state- ment shall show the association 's principal business address and telephone number, if any, and shall show names and principal business or residence addresses and telephone numbers of all members of the association unless they exceed ten ( 10) in number, in which case the applica- tion shall so state and the person registering may alternatively list the names and principal business or residence addresses and telephone numbers of the officers and directors or trus- tees of the association. If the association is part of a multi-state organization or associa- tion, the mailing address and business location of its central office shall be given, in addi- tion to the mailing address and business loca- tion of its local office. ( 3) A brief description of the person registering , the charitable purpose for which the funds are to be solicited, and an explanation of how the funds derived from the solicitation are to be expended or utilized for that purpose. ( 4) The names of all individuals authorized to dis- burse the proceeds of the solicitation. ( 5) The names, mailing address and telephone number of all individuals who will be in direct charge or control of the solicitation of funds. ( 6) The time period within which the solicitation of funds is to be made, giving the date of the be- ginning of solicitation and its projected con- clusion . ( 7) A detailed description of each of the methods and means by which the solicitation of funds is to be accomplished . ( 8) The total amount of funds proposed to be raised. ( 9) In the event the applicant has conducted any charitable solicitation (s) prior to the applica- tion being filed, furnish an audited or sworn to -5- financial statement (s ) prepared according to generally accepted accounting principals, covering each past solicitation stating the salaries, wages, fees, commissions, expenses and costs expended and paid in connection with such solicitation(s) , and the percentage of the total collections which the costs of the solicita- tion(s) comprised. ( 10) A projected income and expenses statement and a balance sheet prepared according to generally accepted accounting principles containing a projected schedule of salaries, wages, fees , commissions, expenses and costs to be expended and paid in connection with the solicitation of funds and in connection with their disbursement, and an estimated percentage of the total pro- jected collections which the projected costs of solicitation will comprise. ( 11 ) A statement to the effect that if a Certificate of Registration is granted, such Certificate will not be used as or represented to be an endorsement by the City or any of its officers or employees. ( 12) A statement whether contributions to the appli- cant pursuant to the proposed charitable solici- tation will be fully deductible for federal income tax purposes and, if not fully deduct- ible, the percentage of the contribution which will not be deductible. ( 13) The names of any officer, director, trustee , partner, or any current agent or employee engag- ing in solicitation of funds who has been con- victed of a felony or a misdemeanor involving moral turpitude within the past seven ( 7) years , and the nature of the offense,, the state where the conviction occurred, and the year of such conviction . ( 14) An explanation of the reasons, if the person registering is unable to provide any of the foregoing information, why such information is not available. ( 15) The registration statement must be signed by the applicant, if the person registering is an indi- ell vidual ; if the person registering is a partner- ship, by the partner charged with disbursing funds solicited; if a person registering is a corporation or an association, by its officer charged with disbursing the funds solicited. The individual signing the registration statement shall sign the statement and swear before an officer authorized to administer oaths that he has carefully read the registration statement and that all the information contained therein is true and correct. Section 32-4. Registration fee. Every registration statement shall be accompanied by a registration fee of $25.00 to compensate the City for the cost of administering this article,, and such fee will not be refunded if a Certificate of Registration is not issued. Section 32-5. Issuance of Certificate of Registration. After review of the registration statement , as hereinafter provided, to determine its compliance with Section 32-3 above, and, within thirty ( 30) working days of the receipt of the registration statement, the Secre- tary shall either issue a Certificate of Registration , as provided in Section 32-6 or notify the person registering that the registration statement does not comply with the requirements of Section 32-3 above and specifically point out what information or explanation has not been furnished that is required before a Certificate of Registration can be issued. Section 32-6. Form of Certificate of Registration . The Secretary shall prescribe the form of the Certif- icate of Registration. Each Certificate of Registration shall bear a registration number which is the same as the file containing the registration statement filed by the registrant . Section 32-7. Expiration of the Certificate of Registra- tion ; filing of Financial Statement within specified time of termination of solicita- tion. Every Certificate of Registration issued by the Secretary shall expire at the termination of the solicita- -7- tion period specified in the registration statement or one ( 1 ) year from the date of issuance, whichever is less. Not later than thirty ( 30) days from the expiration of the Certificate of Registration, the person registering shall file with the Secretary, on forms provided thereby, a closing statement regarding the solicitation of funds, which shall be a sworn financial statement showing the total receipts from the solicitation of funds and the purpose and amount for which such funds were disbursed by the person registering and any incurred but unpaid ex- penses resulting from the solicitation of funds. Failure to file the financial statement as required herein shall be grounds for withholding or revocation of the Certificate of Registration. Section 32-8. Public records. All registration statements, together with financial records and the application, filed with the Secretary, whether or not a Certificate of Registration has been issued, shall be a public record and shall be available for inspection by members of the public during regular business hours and copies may be obtained at the regular cost fixed by Ordinance No. 8269 or successor ordinance fixing costs to be paid for copies of records obtained from the City Secretary 's office. Section 32-9. Exceptions . The following are excepted from the provisions of this chapter : ( 1 ) The solicitation of funds for charitable pur- poses by any organization or association from its members; ( 2) Any person or organization which does not seek to obtain and does not obtain gross contribu- tions in an amount or having a value of more than $2, 500 within any consecutive twelve-month period; (3) Any church, congregation, religious society, sect, group or order which solicits funds for religious purposes; ( 4) Candidates for elective public office. -8- Section 32-10. Charitable Solicitations Review Board -- Created: Composition, Terms of Members. There is hereby created a Charitable Solicitations Review Board which shall be composed of nine members who are residents of the City of Fort Worth, who shall serve in places numbered 1 through 9, who shall serve without remuneration for their services and who shall hold office for a term of two years or until a successor is appointed and confirmed. The initial membership of the Board shall be composed of the current members of the Charitable Solicitations Commission at the time of the adoption of this chapter, who shall serve the terms for which they were appointed originally to said Commission. No member shall serve more than six consecutive years, and the terms of current members shall be counted toward such limit. Section 32-11 . Same -- Internal Organization . The Board shall elect a Chairman and a Vice-Chairman from its members and may adopt rules and regulations for conduct of its business. Five members of the Board shall constitute a quorum for thq! transaction of business. The Board shall meet once each month and at such other times as may be necessary in order to carry out its functions. Section 32-12. Same -- Functions. The Board shall examine all registration statements on file in the office of the Secretary. The Secretary shall notify each applicant of the time and place set for the meeting of the Board at which time the registration statement shall be considered. Such applicant, or a designated representative may appear for the purpose of being heard and to present any further information rele- vant to the Board 's review. At the conclusion of its review of a registration statement, the Board shall direct the Secretary to issue a certificate of registration forthwith, unless they find that the registration state- ment is not in material compliance with Section 32-3 above. In such case, the Board shall direct the Secretary to specify in writing within ten ( 10) working days those portions of the registration statement which require correction or completion in order to comply with Section 32'-3. SECTION 2. All provisions of Chapter 32 of the Code of the City of Fort Worth, Texas, existing prior to the enactment of this ordinance are hereby expressly repealed . -9- SECTION 3. If any provision, section, subsection, sentence, clause or phrase of this ordinance, or the application of same to any person or set of circumstances, is for any reason held to be unconstitu- tional , void or invalid, the validity of the remaining portions of this ordinance or their application to other persons or sets or cir- cumstances shall not be affected thereby, it being the intent of the City Council in adopting this ordinance that no portion thereof or provision, or regulation contained herein, shall become inoperative or fail by reason of any unconstitutionality of any other portions hereof and all provisions of this ordinance are declared to be sev- erable for that purpose SECTION 4. Any person, firm or corporation who violates , disobeys, omits, neglects or refuses to comply with or who resists the enforcement of any of the provisions of this ordinance shall be fined not more than Two Hundred Dollars ($200.00 ) for each offense. Each day that a violation is permitted to exist shall constitute a separate offense. SECTION 5. All rights and remedies of the City of Fort Worth, Texas, are expressly saved as to any and all violations of the provisions of Ordinance No. 8868 or any other ordinances affecting charitable solicitations which have accrued at the time of the effective date of this ordinance; and, as to such accrued violations and all Pending litigation, both civil and criminal , whether pending in -10- court or not, under such ordinances, same shall not be affected by this ordinance but may be prosecuted until final disposition by the courts . SECTION 6. The City Secretary of the City of Fort Worth is hereby directed to engross and enroll this ordinance by copying the caption and Sections 1 , 4 and 8 in the minutes of the City Council and by filing the ordinance in the ordinance records of the City. SECTION 7. The City Secretary of the City of Fort Worth, Texas, is hereby directed to publish the caption and Sections 1 , 4 and 8 of this ordinance for two ( 2) days in the official newspaper of the City of Fort Worth, Texas, as authorized by Art. 1176b-1 , Revised Civil Statutes of Texas. SECTION 8. This ordinance shall be in full force and effect from and after its passage and publication as required by law, and it is so ordained. APPROVED AS TO FORM AND LEGALITY: City Attorney Date: ADOPTED: EFFECTIVE: