0001| SENATE BILL 333 | 0002| 43RD LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 1998 | 0003| INTRODUCED BY | 0004| DEDE FELDMAN | 0005| | 0006| | 0007| | 0008| FOR THE LEGISLATIVE HEALTH AND HUMAN SERVICES COMMITTEE | 0009| | 0010| AN ACT | 0011| RELATING TO CHARITIES; AMENDING THE NMSA 1978; REQUIRING | 0012| REGISTRATION, REPORTING AND STANDARDS OF CONDUCT FOR | 0013| CHARITABLE ORGANIZATIONS AND PROFESSIONAL FUNDRAISERS. | 0014| | 0015| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0016| Section 1. Section 57-22-1 NMSA 1978 (being Laws 1983, | 0017| Chapter 140, Section 1) is amended to read: | 0018| "57-22-1. SHORT TITLE.--~[This act]~ |Chapter 57, | 0019| Article 22 NMSA 1978| may be cited as the "Charitable | 0020| ~[Organizations and]~ Solicitations Act"." | 0021| Section 2. Section 57-22-2 NMSA 1978 (being Laws 1983, | 0022| Chapter 140, Section 2) is amended to read: | 0023| "57-22-2. PURPOSE.--~[Whereas charitable organizations | 0024| which have been granted tax-exempt status are required to | 0025| serve the public interest]~ The purpose of the Charitable | - 1 - 0001| ~[Organizations and]~ Solicitations Act is to authorize the | 0002| attorney general to monitor, supervise and enforce the | 0003| charitable purposes of ~[those]~ charitable organizations |and | 0004| regulate professional fundraisers| operating in this state." | 0005| Section 3. Section 57-22-3 NMSA 1978 (being Laws 1983, | 0006| Chapter 140, Section 3) is amended to read: | 0007| "57-22-3. DEFINITIONS.--As used in the Charitable | 0008| ~[Organizations and]~ Solicitations Act: | 0009| A. "charitable organization" means|| ~[any trust | 0010| or nonprofit corporation which: | 0011| (1) has applied for or has received tax- | 0012| exempt status under Section 501(c)(3) of the Internal Revenue | 0013| Code; and | 0014| (2) does business in this state or holds | 0015| property in this state for charitable purposes]~ |any entity | 0016| that has been granted exemption from the federal income tax by | 0017| the United States commissioner of internal revenue as an | 0018| organization described in Sections 501(c)(3) and 501(c)(4) of | 0019| the Internal Revenue Code of 1986, as amended, or identifies | 0020| itself to the public as having a charitable purpose|; | 0021| B. "charitable purpose" means ~[any purpose for | 0022| which a charitable organization has been established to | 0023| promote, directly or indirectly, the well-being of the public | 0024| at large or the benefit of an indefinite number of persons]~ | 0025| |a benevolent, social welfare, scientific, educational, | - 2 - 0001| environmental, philanthropic, humane, patriotic, public | 0002| health, civic or other eleemosynary objective or an activity | 0003| conducted in support of or in the name of law enforcement | 0004| officers, firefighters or other persons who protect public | 0005| safety;| | 0006| |C. "contribution" means the promise, grant or | 0007| pledge of any money, credit or property of any kind or value | 0008| provided to a charitable organization in response to a | 0009| solicitation, but does not include program service revenue or | 0010| bona fide membership fees, dues or assessments; provided that | 0011| bona fide membership fees, dues or assessments do not include | 0012| contributions made in exchange for membership in a charitable | 0013| organization unless membership confers rights and benefits in | 0014| addition to receiving literature of the charitable | 0015| organization;| | 0016| ~[C.]~ |D.| "educational institution" means: ~[a]~ | 0017| | | 0018| (1) an entity organized and operated | 0019| primarily as a| school, college or other |instructional| | 0020| institution with a defined curriculum, student body and | 0021| faculty, conducting classes on a regular basis; |and| | 0022| |(2) auxiliary entities, including parent- | 0023| teacher organizations, booster and support clubs that support, | 0024| encourage or promote a school, college or other instructional | 0025| institution and its defined curriculum, student body, faculty, | - 3 - 0001| facilities or activities;| | 0002| |E. "professional fundraiser" means a person that | 0003| solicits or employs or directs others to solicit contributions | 0004| from the public on behalf of a charitable organization in | 0005| exchange for compensation and has custody or control of the | 0006| contributions; provided that "professional fundraiser" does | 0007| not include a director, officer, bona fide employee or | 0008| salaried officer, volunteer, attorney, accountant or | 0009| investment counselor of a charitable organization; | 0010| | |F. "professional fundraising counsel" means a | 0011| person that provides services or employs or directs others to | 0012| provide services for compensation to a charitable organization | 0013| in the solicitation of contributions, including managing or | 0014| preparing materials to be used in conjunction with any | 0015| solicitation provided that the person does not: | 0016| (1) directly solicit contributions; or | 0017| (2) receive, have access to or control any | 0018| contribution received in response to the solicitation; | 0019| provided further that "professional fundraising counsel" does | 0020| not include a director, officer, bona fide employee or | 0021| salaried officer, volunteer, attorney, accountant or | 0022| investment counselor of a charitable organization;| | 0023| ~[D.]~ |G.| "religious organization" means ~[any | 0024| church or group organized for the purpose of divine worship, | 0025| religious teaching or other specifically religious activity; | - 4 - 0001| and]~ |a church, organization or group organized for the | 0002| purpose of divine worship or religious teaching or other | 0003| specific religious activity or any other organization that is | 0004| formed in association with or to primarily encourage, support | 0005| or promote the work, worship, fellowship or teachings of the | 0006| church, organization or group; and| | 0007| ~[E.]~ |H. "solicit" or| "solicitation" means|| | 0008| ~[any request or appeal, either oral or written, or any | 0009| endeavor to obtain, seek or plead for funds, property, | 0010| financial assistance or other thing of value, including the | 0011| promise or grant of any money or property of any kind or value | 0012| for a charitable purpose, but excluding]~ |any public | 0013| communication requesting a contribution or offering an | 0014| opportunity to participate in a game of chance, raffle or | 0015| similar event with the representation that the contribution or | 0016| participation will support a charitable purpose, and includes: | 0017| (1) any verbal request made in person or by | 0018| telephone, radio, television, electronic communication or | 0019| other media;| | 0020| |(2) any written or published request mailed, | 0021| sent, delivered, circulated, distributed, posted in a public | 0022| place, advertised or communicated through any medium to the | 0023| public;| | 0024| |(3) any sale or attempt to sell a good or | 0025| service; and | - 5 - 0001| (4) any invitation to attend an assembly, | 0002| event, exhibition, performance or social gathering of any | 0003| kind.| | 0004| |A contribution is not required for a solicitation to | 0005| have occurred and "solicit" or solicitation" does not include| | 0006| ~[(1)]~ direct grants or allocation of funds received or | 0007| solicited from any affiliated ~[fund raising]~ |fundraising| | 0008| organization by a member agency ~[and (2)]~ |or| unsolicited | 0009| contributions received from any individual donor, foundation, | 0010| trust, governmental agency or other source, unless such | 0011| contributions are received in conjunction with a solicitation | 0012| drive." | 0013| Section 4. Section 57-22-4 NMSA 1978 (being Laws 1983, | 0014| Chapter 140, Section 4) is amended to read: | 0015| "57-22-4. APPLICATION OF ACT.-- | 0016| A. The Charitable ~[Organizations and]~ | 0017| Solicitations Act shall |not| apply to ~[all charitable | 0018| organizations except: | 0019| (1)]~ |a| religious ~[organizations]~ | 0020| |organization, even if it is a charitable organization|. | 0021| |B. Exempt from the registration and reporting | 0022| requirements of the Charitable Solicitations Act are:| | 0023| ~[(2)]~ |(1)| educational institutions and | 0024| |organizations defined in Section 6-5A-1 NMSA 1978|; | 0025| ~[(3)]~ |(2) a| charitable ~[organizations | - 6 - 0001| which do]~ |organization that does| not actually raise or | 0002| receive contributions in cash, goods or services valued in | 0003| excess of ~[two thousand five hundred dollars ($2,500)]~ |five | 0004| thousand dollars ($5,000)| during a twelve-month period; | 0005| |provided that the organization does not use a professional | 0006| fundraiser and submits information required by the attorney | 0007| general to qualify for the exemption available pursuant to | 0008| this subsection; and | 0009| (3) persons soliciting for an individual or | 0010| group that has suffered a medical or other catastrophe and: | 0011| (a) the individual or group is | 0012| identified by name at the time of the solicitation; | 0013| (b) the purpose for the solicited | 0014| contribution is clearly stated; and | 0015| (c) the gross contributions collected, | 0016| without any deductions for or by the solicitor or any other | 0017| person, are deposited directly to an account in the name of | 0018| the individual or group in a local federally insured financial | 0019| institution established for that sole purpose and solely used | 0020| for the direct benefit of the named individual or group as | 0021| beneficiary.| | 0022| ~[B.]~ |C.| The Charitable ~[Organizations and]~ | 0023| Solicitations Act shall apply |to charitable organizations and | 0024| professional fundraisers| regardless of any contrary | 0025| provisions of any instrument." | - 7 - 0001| Section 5. Section 57-22-5 NMSA 1978 (being Laws 1983, | 0002| Chapter 140, Section 5) is amended to read: | 0003| "57-22-5. ATTORNEY GENERAL TO MAINTAIN REGISTER OF | 0004| CHARITABLE ORGANIZATIONS AS PUBLIC RECORD.--The attorney | 0005| general shall establish and maintain a register of all | 0006| documents filed by charitable organizations in accordance with | 0007| the Charitable ~[Organizations and]~ Solicitations Act. The | 0008| register shall be open to public inspection except that the | 0009| attorney general may withhold from public inspection documents | 0010| or information obtained in the course of an investigation | 0011| undertaken pursuant to the provisions of that act or ~[which]~ | 0012| |that| otherwise may be withheld from public inspection by | 0013| law." | 0014| Section 6. Section 57-22-6 NMSA 1978 (being Laws 1983, | 0015| Chapter 140, Section 6, as amended) is amended to read: | 0016| "57-22-6. FILING OF REQUIRED DOCUMENTS.-- | 0017| ~[A. Every charitable organization shall file with | 0018| the office of the attorney general within six months of the | 0019| effective date of the Charitable Organizations and | 0020| Solicitations Act or within six months of the date on which | 0021| the charitable organization becomes subject to the Charitable | 0022| Organizations and Solicitations Act, whichever shall occur | 0023| ||first: | 0024| (1) an initial registration to be submitted | 0025| on the form provided for that purpose by the attorney general; | - 8 - 0001| and | 0002| (2) a copy of the articles of incorporation | 0003| or other instrument creating the charitable organization and | 0004| defining its purpose, powers and duties. | 0005| B. In addition to the documents required in | 0006| Subsection A of this section, every charitable organization | 0007| shall file, within seventy-five days of the close of the | 0008| fiscal year first following registration and of each fiscal | 0009| year thereafter, an annual report, under oath, on the form | 0010| provided by the attorney general for that purpose.]~ | 0011| |A. A charitable organization subject to the | 0012| Charitable Solicitations Act's registration and reporting | 0013| requirements that intends to solicit or have another person or | 0014| a professional fundraiser solicit on its behalf shall, before | 0015| it may solicit or have solicitations made on its behalf in | 0016| this state: | 0017| (1) register with the attorney general on a | 0018| form provided by the attorney general; | 0019| (2) provide a copy of its articles of | 0020| incorporation, articles of association and certificate of | 0021| authority if a foreign corporation, or the instrument creating | 0022| a charitable trust and defining its purpose, powers and duties | 0023| with its registration filing; and | 0024| (3) correct any deficiencies in its | 0025| registration filing after notification by the attorney general | - 9 - 0001| of deficiencies, if any.| | 0002| ~[C.]~ |B.| The attorney general |shall notify | 0003| each charitable organization required to register within ten | 0004| business days of his receipt of the registration form of any | 0005| deficiencies in the registration and| may make ~[such]~ rules | 0006| ~[and regulations]~ in accordance with the State Rules Act as | 0007| are necessary for the proper administration of this section, | 0008| including ~[but not limited to]~: | 0009| (1) requirements for filing additional | 0010| information, |including disclosure of professional fundraising | 0011| counsel retained by the charitable organization|; and | 0012| (2) provisions for suspending the filing of | 0013| reports ~[where]~ |or granting an exemption from the | 0014| registration and reporting requirements of this section for a | 0015| charitable organization subject to audit, registration, | 0016| charter or other requirements of a statewide, regional or | 0017| national association and if| it is determined that such | 0018| reports ~[are no longer]~ |or registration is not| necessary | 0019| for the protection of the public interest. | 0020| ~[D. This section shall not apply to any local | 0021| affiliate of a statewide or national organization for which | 0022| all local fundraising expenses are paid by the parent | 0023| organization if the parent organization files a report | 0024| required by this section. | 0025| E.]~ |C.| In addition to any other reporting | - 10 - 0001| requirements pursuant to the Charitable ~[Organizations and]~ | 0002| Solicitations Act, every charitable organization ~[to which | 0003| that act applies and]~ that has received tax-exempt status | 0004| ~[under]~ |pursuant to| Section 501(c)(3) |or 501(c)(4)| of | 0005| the federal Internal Revenue Code of 1986, as amended, and is | 0006| required to file a form 990 ~[or]~, 990EZ |or 990PF| pursuant | 0007| to the Internal Revenue Code of 1986, as amended, shall file | 0008| that form and the accompanying schedule A annually with the | 0009| office of the attorney general |up to six months following the | 0010| close of the charitable organization's fiscal year. | 0011| Extensions of time for filing may be allowed at the discretion | 0012| of the attorney general for good cause shown|. Such forms | 0013| shall be public records and available for public inspection. | 0014| |Organizations that do not file a form 990, 990EZ or 990PF | 0015| pursuant to the Internal Revenue Code of 1986, as amended, | 0016| shall file an annual report, under oath, on the form provided | 0017| by the attorney general for that purpose. The financial | 0018| report of a charitable organization that received total | 0019| revenue in excess of five hundred thousand dollars ($500,000) | 0020| shall be audited by an independent certified public | 0021| accountant. Audits shall be performed in accordance with | 0022| acceptable accounting and auditing standards.| | 0023| |D. A charitable organization that fails to | 0024| register before a solicitation is made or fails to timely file | 0025| its tax filings with the attorney general pursuant to | - 11 - 0001| Subsection C of this section may be assessed a late filing fee | 0002| of one hundred dollars ($100).|" | 0003| Section 7. Section 57-22-7 NMSA 1978 (being Laws 1983, | 0004| Chapter 140, Section 7) is amended to read: | 0005| "57-22-7. RESTRICTION ON USE OF FACT OF FILING IN | 0006| SOLICITATION.--No solicitation ~[of funds]~ for charitable | 0007| purposes shall use the fact or requirement of registration or | 0008| of the filing of any report with the attorney general pursuant | 0009| to the Charitable ~[Organizations and]~ Solicitations Act with | 0010| the intent to cause or in a manner tending to cause any person | 0011| to believe that ~[such]~ |the| solicitation, the manner in | 0012| which it is conducted, its purposes, any use to which the | 0013| proceeds will be applied or the person or organization | 0014| conducting it ~[have]~ |has| been or will be in any way | 0015| endorsed, sanctioned or approved by the attorney general or | 0016| any governmental agency or office." | 0017| Section 8. Section 57-22-8 NMSA 1978 (being Laws 1983, | 0018| Chapter 140, Section 8) is amended to read: | 0019| "57-22-8. DISCLOSURE OF ~[FUND RAISING]~ |FUNDRAISING| | 0020| COSTS.-- | 0021| A. All charitable organizations subject to the | 0022| Charitable ~[Organizations and]~ Solicitations Act shall | 0023| disclose upon request the percentage of the funds solicited | 0024| ~[which]~ |that| are spent on the costs of ~[fund raising]~ | 0025| |fundraising|. For purposes of this section, costs of ~[fund | - 12 - 0001| raising]~ |fundraising| shall include all money directly | 0002| expended on ~[fund raising]~ |fundraising| and that portion of | 0003| all administrative expenses and salaries of the charitable | 0004| organization attributable to ~[fund raising]~ |fundraising| | 0005| activities. | 0006| B. Whenever a solicitation ~[of funds]~ on behalf | 0007| of a charitable organization subject to |the| Charitable | 0008| ~[Organizations and]~ Solicitations Act is undertaken by a | 0009| professional fundraiser, the professional fundraiser ~[must]~ | 0010| |shall| disclose that fact to prospective contributors. ~[For | 0011| purposes of this section, a professional fundraiser shall mean | 0012| any individual, corporation, association or other enitity | 0013| employed or retained or otherwise compensated by or on behalf | 0014| of a charitable organization to solicit funds.]~" | 0015| Section 9. Section 57-22-9 NMSA 1978 (being Laws 1983, | 0016| Chapter 140, Section 9) is amended to read: | 0017| "57-22-9. AUTHORITY OF THE ATTORNEY GENERAL.-- | 0018| A. The attorney general ~[is authorized]~ |may|, | 0019| on behalf of the state, ~[to]~ examine and investigate any | 0020| charitable organization subject to the Charitable | 0021| ~[Organizations and]~ Solicitations Act to ascertain the | 0022| conditions of its affairs and to what extent, if at all, it | 0023| fails to comply with the trusts ~[which]~ |that| it has | 0024| assumed or |if it| has departed from the purposes for which it | 0025| ~[is]~ |was| formed. In the case of such failure or | - 13 - 0001| departure, the attorney general may institute, in the name of | 0002| the state, the proceedings necessary to correct the | 0003| noncompliance or departure by any remedy available under the | 0004| common law. | 0005| B. The attorney general ~[is authorized]~ |may|, | 0006| in the name of the state, ~[to initiate appropriate | 0007| proceedings to enjoin the solicitation of funds by any | 0008| charitable organization which]~ |seek injunctive relief, civil | 0009| penalties, financial accounting or restitution from any person | 0010| who| has failed to comply with the |registration|, filing or | 0011| disclosure provisions of the Charitable ~[Organizations and]~ | 0012| Solicitations Act or ~[which]~ |who| has ~[filed any false or | 0013| misleading report or has made any false or misleading | 0014| disclosure]~ |otherwise violated the provisions of that act|. | 0015| C. The attorney general ~[is authorized]~ |may|, | 0016| in the name of the state, ~[to]~ initiate appropriate | 0017| proceedings to seek compliance with the provisions of the | 0018| Charitable ~[Organizations and]~ Solicitations Act and with | 0019| any rules ~[and regulations duly]~ promulgated by the attorney | 0020| general ~[thereunder]~ |pursuant to that act. The attorney | 0021| general may promulgate rules for the proper administration of | 0022| that act|. | 0023| D. Nothing in this section shall be construed to | 0024| preclude ~[any]~ |a| person or group ~[or]~ |of| persons from | 0025| asserting ~[any]~ |a| private cause of action ~[they]~ |it| | - 14 - 0001| might have against a charitable organization |or professional | 0002| fundraiser|." | 0003| Section 10. Section 57-22-10 NMSA 1978 (being Laws 1983, | 0004| Chapter 140, Section 10) is amended to read: | 0005| "57-22-10. STANDARD OF CARE.--All officers, directors, | 0006| managers, trustees, |professional fundraisers| or other | 0007| persons having access to the ~[funds]~ |money| of a charitable | 0008| organization intended for use for charitable purposes shall be | 0009| held to the standard of care defined for fiduciary trustees | 0010| under common law." | 0011| Section 11. Section 57-22-11 NMSA 1978 (being Laws 1983, | 0012| Chapter 140, Section 11) is amended to read: | 0013| "57-22-11. EXEMPTIONS FROM STATE AND LOCAL TAXATION.-- | 0014| Every officer, agency, board or commission of this state, or | 0015| political subdivision ~[thereof]~ |of this state| receiving | 0016| applications for exemption from taxation shall provide to the | 0017| attorney general copies of all ~[such]~ |the| applications, | 0018| supporting documents and official responses." | 0019| Section 12. A new section of the Charitable | 0020| Solicitations Act is enacted to read: | 0021| "[|NEW MATERIAL|] PROFESSIONAL FUNDRAISERS-- | 0022| REGISTRATION.-- | 0023| A. Professional fundraisers shall, before entering | 0024| into a contract with any charitable organization, except a | 0025| religious organization, to solicit for or on its behalf: | - 15 - 0001| (1) register with the attorney general on a | 0002| form provided by the attorney general; | 0003| (2) file with the attorney general a surety | 0004| bond pursuant to the Charitable Solicitations Act; and | 0005| (3) file with the attorney general a copy of | 0006| the intended written contract between the professional | 0007| fundraiser and the charitable organization on whose behalf the | 0008| professional fundraiser intends to conduct a solicitation | 0009| campaign. | 0010| B. The contract between the professional | 0011| fundraiser and the charitable organization shall clearly | 0012| describe the: | 0013| (1) compensation and authority of the | 0014| professional fundraiser; | 0015| (2) solicitation campaign; | 0016| (3) location and telephone numbers from where | 0017| solicitations are intended to be conducted; | 0018| (4) list of names and addresses of all | 0019| employees, agents or other persons who are to solicit during | 0020| the campaign; | 0021| (5) copies of the solicitation literature, | 0022| including scripts of any written or verbal solicitation; and | 0023| (6) estimated annual amount of gross and net | 0024| revenue the charitable organization is projected to receive as | 0025| a result of the activities outlined in the contract. | - 16 - 0001| C. The charitable organization on whose behalf the | 0002| professional fundraiser is acting shall certify that the | 0003| contract and solicitation materials filed with the attorney | 0004| general are true and complete. | 0005| D. Within ten business days after receiving a | 0006| registration pursuant to this section, the attorney general | 0007| shall notify the professional fundraiser of any deficiencies | 0008| in the registration, contract or bond; otherwise the filing is | 0009| deemed approved as filed. | 0010| E. A professional fundraiser who fails to register | 0011| with the attorney general may be assessed a late registration | 0012| fee of one hundred dollars ($100)." | 0013| Section 13. A new section of the Charitable | 0014| Solicitations Act is enacted to read: | 0015| "[|NEW MATERIAL|] PROFESSIONAL FUNDRAISERS--BOND.--A | 0016| professional fundraiser shall file a surety bond at the time | 0017| of the registration with the attorney general in an amount and | 0018| on a form provided by the attorney general. The professional | 0019| fundraiser shall maintain the surety bond, or alternative | 0020| financial assurances approved by the attorney general, as long | 0021| as the fundraiser solicits in the state." | 0022| Section 14. A new section of the Charitable | 0023| Solicitations Act is enacted to read: | 0024| "[|NEW MATERIAL|] GENERAL PROVISIONS--CHARITABLE | 0025| ORGANIZATIONS--PROFESSIONAL FUNDRAISERS--DECEPTIVE | - 17 - 0001| PRACTICES.--A charitable organization or a professional | 0002| fundraiser shall not engage in deceptive fundraising | 0003| practices, meaning any false or misleading verbal or written | 0004| statement, description or representation of any kind knowingly | 0005| made in connection with a solicitation and that may, tends to | 0006| or does deceive or mislead any person and includes: | 0007| A. using the name or likeness of any person in | 0008| solicitation literature without the express written consent of | 0009| the person; provided that publication of previous | 0010| contributors' names to acknowledge their contributions shall | 0011| not require their express written consent; | 0012| B. using a name, symbol or statement that is so | 0013| closely related or similar to that used by another charitable | 0014| organization or governmental agency that the use would tend to | 0015| confuse or mislead the public; and | 0016| C. misrepresenting, confusing or misleading any | 0017| person to reasonably believe incorrectly that the | 0018| contributions being solicited are or will be used for | 0019| purposes, persons or programs in the state." | 0020| Section 15. A new section of the Charitable | 0021| Solicitations Act is enacted to read: | 0022| "[|NEW MATERIAL|] PROFESSIONAL FUNDRAISER--RECORDS AND | 0023| REPORTS.-- | 0024| A. At least every six months, the professional | 0025| fundraiser shall account in writing to the charitable | - 18 - 0001| organization for all contributions received and all expenses | 0002| incurred under his contract. The charitable organization | 0003| shall maintain a copy of the accounting of contributions and | 0004| expenses for three years and make it available to the attorney | 0005| general upon request. | 0006| B. All contributions of money received by the | 0007| professional fundraiser shall be deposited in an account at a | 0008| federally insured financial institution within two days after | 0009| receipt. The account shall be established and maintained in | 0010| the name of the charitable organization. Disbursements from | 0011| the account shall be made upon warrants signed by the | 0012| professional fundraiser and an authorized representative of | 0013| the charitable organization. | 0014| C. The professional fundraiser shall include the | 0015| following information in its accounting required by Subsection | 0016| A of this section to the charitable organization: | 0017| (1) the name and address of each person | 0018| contributing to the charitable organization and the date and | 0019| amount of the contribution; | 0020| (2) the name and residence address of each | 0021| employee, agent or other person involved in the solicitation; | 0022| (3) the script or other instructional | 0023| information provided by the charitable organization or | 0024| professional fundraiser to employees, agents or other persons | 0025| conducting solicitations; | - 19 - 0001| (4) a record of expenses incurred by the | 0002| professional fundraiser that the charitable organization paid; | 0003| and | 0004| (5) the name and address of each financial | 0005| institution and the account number of each account in which | 0006| the professional fundraiser deposited contributions received | 0007| from the solicitation. | 0008| D. The professional fundraiser and the employees | 0009| of the professional fundraiser shall disclose the following in | 0010| solicitations: | 0011| (1) the name of the charitable organization; | 0012| and | 0013| (2) the fact that the solicitation is made by | 0014| or through a professional fundraiser. | 0015| E. Every professional fundraiser and charitable | 0016| organization shall have either a registered agent in the state | 0017| or shall file a consent to service of process with the | 0018| attorney general. The consent to service shall be in the form | 0019| prescribed by the attorney general and shall be irrevocable." | 0020| Section 16. A new section of the Charitable | 0021| Solicitations Act is enacted to read: | 0022| "[|NEW MATERIAL|] INVESTIGATIVE DEMAND--CIVIL PENALTY.-- | 0023| A. Whenever the attorney general has reason to | 0024| believe that any person may be in possession, custody or | 0025| control of information or documentary material, including an | - 20 - 0001| original or copy of any book, record, report, memorandum, | 0002| paper, communication, tabulation, chart, photograph, | 0003| mechanical transcription or other tangible document or | 0004| recording, that the attorney general believes to be relevant | 0005| to the subject matter of an investigation of a probable | 0006| violation of the Charitable Solicitations Act, the attorney | 0007| general may, prior to the institution of a civil proceeding, | 0008| execute in writing and cause to be served upon the person a | 0009| civil investigative demand. The demand shall require the | 0010| person to answer interrogatories or to produce documentary | 0011| material and permit the inspection and copying of the | 0012| material. The demand of the attorney general shall not be a | 0013| matter of public record and shall not be published by him | 0014| except by order of the court. | 0015| B. Each demand shall: | 0016| (1) state the general subject matter of the | 0017| investigation; | 0018| (2) describe with reasonable certainty the | 0019| information or documentary material to be provided; | 0020| (3) identify the time period within which the | 0021| information or documentary material is to be provided, which | 0022| in no case shall be less than ten days after the date of | 0023| service of the demand; and | 0024| (4) state the date on which any documentary | 0025| material shall be available for inspection and copying. | - 21 - 0001| C. No demand shall: | 0002| (1) contain any requirement that would be | 0003| unreasonable or improper if contained in a subpoena duces | 0004| tecum issued by a court of the state; | 0005| (2) require the disclosure of any documentary | 0006| material that would be privileged or that for any other reason | 0007| would not be required by a subpoena duces tecum by a court of | 0008| the state; or | 0009| (3) require the removal of any documentary | 0010| material from the custody of the person upon which the demand | 0011| is served except in accordance with the provisions of | 0012| Subsection E of this section. | 0013| D. Service of the demand may be made by: | 0014| (1) delivering a duly executed copy of the | 0015| demand to the person to be served or, if the person is not a | 0016| natural person, to the registered or statutory agent for the | 0017| person to be served; | 0018| (2) delivering a duly executed copy of the | 0019| demand to the principal place of business in New Mexico of the | 0020| person to be served; or | 0021| (3) mailing by registered mail or certified | 0022| mail a duly executed copy of the demand addressed to the | 0023| person to be served at his principal place of business in the | 0024| state or, if the person has no place of business in the state, | 0025| to his principal place of business. | - 22 - 0001| E. Documentary material demanded pursuant to | 0002| Subsection A of this section shall be produced for inspection | 0003| and copying during normal business hours at the principal | 0004| place of business of the person served or may be inspected and | 0005| copied at such other times and places as may be agreed upon by | 0006| the person served and the attorney general. | 0007| F. No documentary material or copies of the | 0008| documentary material produced pursuant to a demand shall be | 0009| produced for inspection or copying by anyone other than an | 0010| authorized employee of the attorney general, nor shall the | 0011| contents of the documentary material be disclosed to anyone | 0012| other than an authorized employee of the attorney general or | 0013| in court in an action relating to a violation of the | 0014| Charitable Solicitations Act. The district court in the | 0015| county in which the person resides or has his principal place | 0016| of business or is about to perform or is performing the | 0017| practice that is alleged to be unlawful under the Charitable | 0018| Solicitations Act may order documentary material to be | 0019| produced for inspection or copying by someone other than an | 0020| authorized employee of the attorney general. | 0021| G. At any time before the return date of the | 0022| demand, a petition to set aside the demand, modify the demand | 0023| or extend the return date on the demand may be filed in the | 0024| district court in the county in which the person resides or | 0025| has his principal place of business or is about to perform or | - 23 - 0001| is performing the practice that is alleged to be unlawful | 0002| under the Charitable Solicitations Act, and the court upon | 0003| showing of good cause may set aside the demand, modify it or | 0004| extend the return date on the demand. | 0005| H. If after service of the demand the person | 0006| neglects or refuses to comply with the demand, the attorney | 0007| general may invoke the aid of the court in the enforcement of | 0008| the demand. In appropriate cases the court shall issue its | 0009| order requiring the person to appear and produce the | 0010| documentary material required in the demand. Upon failure of | 0011| the person to comply with the court order, the court shall | 0012| punish the person for contempt of court. | 0013| I. This section shall not be applicable to | 0014| criminal prosecutions. | 0015| J. In an action brought pursuant to the Charitable | 0016| Solicitations Act, if the court finds that a person has | 0017| violated a provision of that act or rules promulgated pursuant | 0018| to that act, the attorney general may recover, on behalf of | 0019| the state, a maximum civil penalty of five thousand dollars | 0020| ($5,000) per violation." | 0021| Section 17. EFFECTIVE DATE.--The effective date of the | 0022| provisions of this act is July 1, 1998. | 0023|  |