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SENATE BILL 259
57
TH LEGISLATURE
-
STATE
OF
NEW
MEXICO
-
FIRST SESSION
,
2025
INTRODUCED BY
Katy M. Duhigg
AN ACT
RELATING TO CHARITIES; AMENDING THE CHARITABLE SOLICITATIONS
ACT TO STRENGTHEN REQUIREMENTS FOR PROFESSIONAL FUNDRAISERS AND
THIRD-PARTY SOLICITORS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 57-22-2 NMSA 1978 (being Laws 1983,
Chapter 140, Section 2, as amended) is amended to read:
"57-22-2. PURPOSE.--The purpose of the Charitable
Solicitations Act is to authorize the attorney general to
monitor, supervise and enforce the charitable purposes of
charitable organizations and regulate professional fundraisers
and third-party solicitors operating in this state."
SECTION 2. Section 57-22-3 NMSA 1978 (being Laws 1983,
Chapter 140, Section 3, as amended) is amended to read:
"57-22-3. DEFINITIONS.--As used in the Charitable
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Solicitations Act:
A. "charitable organization" means [any ] an entity
that has been granted exemption from the federal income tax by
the United States commissioner of internal revenue as an
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended, or identifies itself to the
public as having a charitable purpose;
B. "charitable purpose" means a benevolent, social
welfare, scientific, educational, environmental, philanthropic,
humane, patriotic, public health, civic or other eleemosynary
objective or an activity conducted in support of or in the name
of law enforcement officers, firefighters or other persons who
protect public safety;
C. "contribution" means the promise, grant or
pledge of [any] money, credit or property of any kind or value
provided to a charitable organization in response to a
solicitation, but does not include program service revenue or
bona fide membership fees, dues or assessments; provided that
bona fide membership fees, dues or assessments do not include
contributions made in exchange for membership in a charitable
organization unless membership confers rights and benefits in
addition to receiving literature of the charitable
organization;
D. "educational institution" means:
(1) an entity organized and operated primarily
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as a school, college or other instructional institution with a
defined curriculum, student body and faculty, conducting
classes on a regular basis; and
(2) auxiliary entities, including parent-
teacher organizations, booster and support clubs that support,
encourage or promote a school, college or other instructional
institution and its defined curriculum, student body, faculty,
facilities or activities;
E. "professional fundraiser" means a person that
solicits or employs or directs others to solicit contributions
from the public on behalf of a charitable organization in
exchange for compensation and has custody or control of the
contributions; provided that "professional fundraiser" does not
include a director, officer, bona fide employee or salaried
officer, volunteer, attorney, accountant or investment
counselor of a charitable organization;
F. "professional fundraising counsel" means a
person that provides services or employs or directs others to
provide services for compensation to a charitable organization
in the solicitation of contributions, including managing or
preparing materials to be used in conjunction with [any ] a
solicitation; provided that the person does not:
(1) directly solicit contributions; or
(2) receive, have access to or control any
contribution received in response to the solicitation; provided
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further that "professional fundraising counsel" does not
include a director, officer, bona fide employee or salaried
officer, volunteer, attorney, accountant or investment
counselor of a charitable organization;
G. "religious organization" means a church,
organization or group organized for the purpose of divine
worship or religious teaching or other specific religious
activity or any other organization that is formed in
association with or to primarily encourage, support or promote
the work, worship, fellowship or teaching of the church,
organization or group; [and ]
H. "solicit" or "solicitation" means [any ] the
donation of nonperishable goods or a communication requesting a
contribution or offering an opportunity to participate in a
game of chance, raffle or similar event with the representation
that the contribution or participation will support a
charitable purpose, and includes:
(1) [any] a verbal request made in person or
by telephone, radio, television, electronic communication or
other media;
(2) [any] a written or published request
mailed, sent, delivered, circulated, distributed, posted in a
public place, advertised or communicated through any medium to
the public;
(3) [any] a sale or attempt to sell a good or
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service; and
(4) [any] an invitation to attend an assembly,
event, exhibition, performance or social gathering of any kind.
A contribution is not required for a solicitation to have
occurred, and "solicit" or "solicitation" does not include
direct grants or allocation of funds received or solicited from
[any] an affiliated fundraising organization by a member agency
or unsolicited contributions received from [any ] an individual
donor, foundation, trust, governmental agency or other source,
unless such contributions are received in conjunction with a
solicitation drive; and
I. "third-party solicitor" means a person that
contracts with a charitable organization to facilitate the sale
of nonperishable goods as a fundraising mechanism ."
SECTION 3. Section 57-22-6.1 NMSA 1978 (being Laws 1999,
Chapter 124, Section 12) is amended to read:
"57-22-6.1. PROFESSIONAL FUNDRAISERS AND THIRD-PARTY
SOLICITORS--REGISTRATION.--
A. Professional fundraisers and third-party
solicitors shall, before entering into a contract with [any ] a
charitable organization, except a religious organization, to
solicit for or on its behalf money, nonperishable goods or
other things of value :
(1) register with the attorney general on a form
provided by the attorney general, pay a registration fee of two
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hundred dollars ($200) and submit the names and addresses of
all officers, employees, agents and contractors within five
business days of their hiring or engagement ;
(2) file with the attorney general a surety bond
[pursuant to the Charitable Solicitations Act ] at the time of
registration in the amount of twenty-five thousand dollars
($25,000); and
(3) file with the attorney general a copy of the
intended written contract between the professional fundraiser
or third-party solicitor and the charitable organization on
whose behalf the professional fundraiser or third-party
solicitor intends to conduct a solicitation campaign or set up
collection receptacles or a charitable store or other means of
collecting donated nonperishable goods for a charitable
organization.
B. The contract between [the ] a professional
fundraiser and [the] a charitable organization shall clearly
describe the:
(1) compensation and authority of the
professional fundraiser;
(2) solicitation campaign;
(3) location and telephone numbers from where
solicitations are intended to be conducted;
(4) list of names and addresses of all
employees, agents or other persons who are to solicit during
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the campaign; and
(5) copies of the solicitation literature,
including scripts of any written or verbal solicitation.
C. The contract between a third-party solicitor and a
charitable organization shall clearly describe the:
(1) authority and compensation of the third-
party solicitor and the share, if any, of money earned on the
sale of donated nonperishable goods that does not go to the
charitable organization;
(2) location of collection receptacles, a
charitable store or other means of collecting donated
nonperishable goods for a charitable organization and, if a
store, the store's telephone number;
(3) list of names and addresses of all officers
and agents of the third-party solicitor and of all managers and
supervisors in stores in New Mexico, by location; and
(4) other information the attorney general deems
necessary.
[C.] D. The charitable organization on whose behalf
the professional fundraiser or third-party solicitor is acting
shall certify that the contract and solicitation and other
information and materials filed with the attorney general are
true and complete.
[D.] E. Within ten business days after receiving a
registration pursuant to this section, the attorney general
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shall notify the professional fundraiser or third-party
solicitor of any deficiencies in the registration, contract or
bond; otherwise the filing is deemed approved as filed.
[E.] F. A professional fundraiser or third-party
solicitor who fails to register with the attorney general may
be assessed a late registration fee of five hundred dollars
($500). In addition to the late fee, a professional fundraiser
or third-party solicitor who fails to comply with registration
or reporting requirements shall be assessed an administrative
penalty of two hundred dollars ($200) per violation. "
SECTION 4. Section 57-22-6.3 NMSA 1978 (being Laws 1999,
Chapter 124, Section 14) is amended to read:
"57-22-6.3. GENERAL PROVISIONS--CHARITABLE
ORGANIZATIONS--PROFESSIONAL FUNDRAISERS--THIRD-PARTY
SOLICITORS--PROHIBITED PRACTICES.--A charitable organization or
a professional fundraiser or third-party solicitor shall not:
A. engage in deceptive fundraising or third-party
soliciting practices, meaning any false or misleading verbal or
written statement, description or representation of any kind
knowingly made in connection with a solicitation and that may,
tends to or does deceive or mislead [any ] a person and
includes:
(1) using the name or likeness of [any ] a person
in solicitation literature without the express written consent
of the person; provided that publication of previous
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contributors' names to acknowledge their contributions shall
not require their express written consent;
(2) using a name, symbol or statement that is so
closely related or similar to that used by another charitable
organization or governmental agency that the use would tend to
confuse or mislead the public; [and ]
(3) misrepresenting, confusing or misleading
[any] a person to reasonably believe incorrectly that the
contributions being solicited are or will be used for purposes,
persons or programs in the state; [or ]
(4) misleading a person regarding sponsorship,
endorsement or approval of the solicitation;
(5) representing that a charitable organization
will receive a greater percentage of revenue than outlined in
the professional fundraiser's or third-party solicitor's
contract; and
(6) failing to disclose the market value of
donated nonperishable goods to the charitable organization; or
B. collect or attempt to collect a contribution in
person or by courier [unless ] if:
(1) the solicitation and collection [or attempt
to collect occur contemporaneously ] occurs simultaneously ; or
(2) the solicitation [includes ] involves the
sale of goods or items and the collection [or attempt to
collect occurs contemporaneously ] occurs simultaneously with
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the delivery of the goods or items agreed to be purchased by
the contributor."
SECTION 5. Section 57-22-6.4 NMSA 1978 (being Laws 1999,
Chapter 124, Section 15) is amended to read:
"57-22-6.4. PROFESSIONAL FUNDRAISER--THIRD-PARTY
SOLICITOR--RECORDS AND REPORTS.--
A. At least every six months, the professional
fundraiser shall account in writing to the charitable
organization for all contributions received and all expenses
incurred under their contract. The charitable organization
shall maintain a copy of the accounting of contributions and
expenses for three years and make it available to the attorney
general upon request. The professional fundraiser shall
maintain a record of written commitments from recipients of
donated tickets and provide those records to the attorney
general upon request.
B. All contributions of money received by the
professional fundraiser shall be deposited in an account at a
federally insured financial institution within two days after
receipt. The account shall be established and maintained in
the name of the charitable organization. Disbursements from
the account shall be made upon warrants signed by an authorized
representative of the charitable organization and may also be
signed by the professional fundraiser.
C. The professional fundraiser shall include the
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following information in its accounting required by Subsection
A of this section to the charitable organization:
(1) the name and address of each person
contributing to the charitable organization and the date and
amount of the contribution. This information shall not be
publicly disclosed and shall be used only for law enforcement
purposes;
(2) the name and residence address of each
employee, agent or other person involved in the solicitation;
(3) the script or other instructional
information provided by the charitable organization or
professional fundraiser to employees, agents or other persons
conducting solicitations;
(4) a description of the location and telephone
numbers from which the solicitation campaign will be conducted
if conducted by telephone;
(5) an audio recording of each telephone
solicitation conducted by the professional fundraiser;
[(4)] (6) a record of expenses incurred by the
professional fundraiser that the charitable organization paid;
[and]
[(5)] (7) the name and address of each financial
institution and the account number of each account in which the
professional fundraiser deposited contributions received from
the solicitation;
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(8) the gross revenue received and an itemized
list of expenses incurred; and
(9) a sworn statement certifying that the
solicitation campaign records are true and correct .
D. The professional fundraiser and the employees of
the professional fundraiser shall disclose the following in
solicitations:
(1) the name of the charitable organization; and
(2) the fact that the solicitation is made by or
through a professional fundraiser.
E. No later than ninety days after the completion of
a solicitation campaign, the professional fundraiser shall
provide a detailed financial report, including gross revenue
and expenses, to the charitable organization and file a copy
with the attorney general.
F. On a schedule provided in the contract with a
charitable organization, the third-party solicitor shall
account in writing to the charitable organization for the
market value of the total weight of goods donated within the
reporting period and a detailed financial report, including
gross revenue and expenses for the period. The third-party
solicitor shall file a copy of the report with the attorney
general.
[E.] G. Every professional fundraiser, third-party
solicitor and charitable organization shall have either a
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registered agent in the state or shall file a consent to
service of process with the attorney general. The consent to
service shall be in the form prescribed by the attorney general
and shall be irrevocable."
SECTION 6. A new section of the Charitable Solicitations
Act, Section 57-22-6.5 NMSA 1978, is enacted to read:
"57-22-6.5. [NEW MATERIAL ] COLLECTION RECEPTACLES--
INFORMATION REQUIRED.--The operator of a collection receptacle
shall display the following information on the receptacle in
clear and legible letters at least three inches in height:
A. the name, address and telephone number of the
charitable organization that will receive goods collected in
the receptacle;
B. if operated by a professional fundraiser or
third-party solicitor, the name, address and telephone number
of the professional fundraiser or third-party solicitor; and
C. a statement that financial arrangements between
the professional fundraiser or third-party solicitor and the
charitable organization are on file with the attorney general."
SECTION 7. Section 57-22-9.1 NMSA 1978 (being Laws 1999,
Chapter 124, Section 16) is amended to read:
"57-22-9.1. INVESTIGATIVE DEMAND--CIVIL PENALTY.--
A. Whenever the attorney general has reason to
believe that [any] a person may be in possession, custody or
control of information or documentary material, including an
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original or copy of [any ] a book, record, report, memorandum,
paper, communication, tabulation, chart, photograph, mechanical
transcription or other tangible document or recording, that the
attorney general believes to be relevant to the subject matter
of an investigation of a probable violation of the Charitable
Solicitations Act, the attorney general may, prior to the
institution of a civil proceeding, execute in writing and cause
to be served upon the person a civil investigative demand. The
demand shall require the person to answer interrogatories or to
produce documentary material and permit the inspection and
copying of the material. The demand of the attorney general
shall not be a matter of public record and shall not be
published by [him] the attorney general except by order of the
court.
B. Each demand shall:
(1) state the general subject matter of the
investigation;
(2) describe with reasonable certainty the
information or documentary material to be provided;
(3) identify the time period within which the
information or documentary material is to be provided, which in
no case shall be less than ten days after the date of service
of the demand; and
(4) state the date on which [any ] documentary
material [shall be] is available for inspection and copying.
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C. No demand shall:
(1) contain [any] a requirement that would be
unreasonable or improper if contained in a subpoena duces tecum
issued by a court of the state;
(2) require the disclosure of [any ]
documentary material that would be privileged or that for any
other reason would not be required by a subpoena duces tecum by
a court of the state; or
(3) require the removal of [any ] documentary
material from the custody of the person upon which the demand
is served except in accordance with the provisions of
Subsection E of this section.
D. Service of the demand may be made by:
(1) delivering a duly executed copy of the
demand to the person to be served or, if the person is not a
natural person, to the registered or statutory agent for the
person to be served;
(2) delivering a duly executed copy of the
demand to the principal place of business in New Mexico of the
person to be served; or
(3) mailing by registered mail or certified
mail a duly executed copy of the demand addressed to the person
to be served at [his] the person's principal place of business
in the state or, if the person has no place of business in the
state, to [his] the person's principal place of business.
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E. Documentary material demanded pursuant to
Subsection A of this section shall be produced for inspection
and copying during normal business hours at the principal place
of business of the person served or may be inspected and copied
at such other times and places as may be agreed upon by the
person served and the attorney general.
F. Documentary material and its contents produced
pursuant to a demand or answers to interrogatories shall not be
produced for inspection or copying by anyone other than an
authorized employee of the attorney general. The district
court in the county in which the person resides or has [his ]
the person's principal place of business or is about to perform
or is performing the practice that is alleged to be unlawful
[under] pursuant to the Charitable Solicitations Act may order
documentary material, its contents or answers to
interrogatories to be produced for inspection or copying by
someone other than an authorized employee of the attorney
general.
G. At any time before the return date of the
demand, a petition to set aside the demand, modify the demand
or extend the return date on the demand may be filed in the
district court in the county in which the person resides or has
[his] the person's principal place of business or is about to
perform or is performing the practice that is alleged to be
unlawful [under] pursuant to the Charitable Solicitations Act,
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and the court upon showing of good cause may set aside the
demand, modify it or extend the return date on the demand.
H. If after service of the demand the person
neglects or refuses to comply with the demand, the attorney
general may invoke the aid of the court in the enforcement of
the demand.
I. This section shall not be applicable to criminal
prosecutions.
J. In an action brought pursuant to the Charitable
Solicitations Act, if the court finds that a person has
violated a provision of that act or rules promulgated pursuant
to that act, the attorney general may recover, on behalf of the
state, a maximum civil penalty of five thousand dollars
($5,000) per violation.
K. The attorney general may require a financial
audit, conducted by an independent certified public accountant,
for any charitable organization, professional fundraiser or
third-party solicitor. "
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