LRB-4473/1
ARG:wlj&amn
2015 - 2016 LEGISLATURE
January 22, 2016 - Introduced by Senators Marklein,
Olsen and Petrowski,
cosponsored by Representatives
Craig, Ballweg, Gannon, Horlacher,
Katsma, Kremer, Murphy, A. Ott and Tranel. Referred to Committee on
Revenue, Financial Institutions, and Rural Issues.
SB631,2,22
1An Act to repeal 202.02 (5), 202.02 (6) (d), 202.025 (title), 202.025 (1) (title),
2202.025 (2) and (3) (title), 202.025 (3) (b), 202.03 (title), 202.035 (title), (1) and
3(2) (intro.), 202.04 (title), 202.05, 202.055 (title), 202.06 (1) (title), 202.095
4(title), 202.12 (1) (b) 1. and 2., 202.12 (1) (c) and (d), 202.12 (2), 202.12 (3) (a) 1.,
52., 3. and 4., 202.12 (3) (am), 202.12 (3) (c), 202.12 (4), 202.13 (1) (b) 1., 202.13
6(1) (c) and (d), 202.14 (1) (b) 1., 202.14 (1) (c) and (d), 202.14 (3) (a), (b), (c), (d),
7(e) and (f), 202.14 (4) (b), (c) and (d), 202.14 (5) (title), 202.155 (3) (intro.),
8202.155 (3) (b), 202.22 (2) (a), (b), (c), (d) and (e), 202.22 (4) (c), 202.22 (7) (a),
9202.22 (8) and 202.26 (1) and (3);
to renumber 202.02 (1), 202.02 (2), 202.055
10(2), 202.06 (1), 202.07 (1), 202.07 (2), 202.07 (4), 202.09, 202.155 (1) (c) and
11202.155 (3) (c);
to renumber and amend 202.02 (title), 202.02 (3), 202.02 (4),
12202.02 (6) (a), 202.02 (6) (b), 202.02 (6) (c), 202.02 (6) (e), 202.02 (7), 202.025 (1)
13(a), 202.025 (1) (b), 202.025 (3) (a) 1., 202.025 (3) (a) 2., 202.03, 202.035 (2) (a),
14202.035 (2) (b), 202.04, 202.055 (1), 202.055 (3), 202.06 (2), 202.07 (3), 202.08,
1202.095, 202.12 (1) (b) 3., 202.12 (3) (a) (intro.), 202.12 (8), 202.13 (1) (b) 3.,
2202.14 (1) (b) 3., 202.14 (3) (intro.), 202.14 (5), 202.155 (title), 202.155 (1)
3(intro.), 202.155 (1) (a), 202.155 (1) (b), 202.155 (2), 202.155 (3) (a) and 202.155
4(4);
to consolidate, renumber and amend 202.26 (intro.) and (2);
to amend
5202.06 (3), 202.11 (5) (intro.), 202.11 (7) (d), 202.11 (10), 202.12 (1) (title), 202.12
6(1) (b) 2g., 202.12 (1) (b) 2r., 202.12 (3) (title), 202.12 (3) (b), 202.12 (3) (bm),
7202.12 (5) (a) 3., 202.12 (5) (b), 202.13 (1) (b) 2., 202.13 (2), 202.13 (4) (a), 202.14
8(1) (b) 2., 202.14 (2), 202.14 (4) (a), 202.14 (7), 202.16 (1) (intro.), 202.16 (1) (g),
9202.17 (1), 202.17 (4) (a), 202.18 (1) (b), 202.21 (1), 202.22 (2) (intro.), 202.22 (4)
10(title), (a) and (b), 202.22 (5) (a), 202.22 (5) (d), 202.22 (6), 202.22 (7) (b), 202.22
11(7) (c), 202.22 (9) (am), 202.23 (1) and 202.23 (2);
to repeal and recreate 202.07
12(title), 202.12 (1) (b) (intro.), 202.12 (7), 202.13 (1) (b) (intro.) and 202.14 (1) (b)
13(intro.); and
to create 202.01 (1m), 202.021 (title), (1) (title) and (a), (2) (title),
14(bn), (c) and (d), (3) (title) and (c), and (4) (title) and (a) (intro.), 1. and 4., 202.031
15(5) (a) and (6), 202.06 (2) (d), (f) and (g), 202.12 (1) (e), 202.12 (3) (d), 202.12 (5)
16(a) 9., 202.12 (6m) (a) 3., 202.12 (6m) (d), 202.12 (8) (b) and (c), 202.13 (1) (e),
17202.13 (2m), 202.13 (4) (d), 202.14 (1) (e), 202.14 (2m), 202.14 (4) (e), 202.14 (11)
18(title), (a), (c), (d) and (f), 202.16 (1) (h), (i), (j), (k) and (L), 202.22 (3) and 227.01
19(13) (yx) of the statutes;
relating to: registration and other requirements for
20charitable organizations, professional fund-raisers, fund-raising counsel, and
21professional employer organizations and modifying rules promulgated by the
22Department of Financial Institutions.
Analysis by the Legislative Reference Bureau
This bill makes various changes relating to registration, reporting, and other
requirements applicable to charitable organizations, persons involved with
solicitations on behalf of charitable organizations, and professional employer
organizations. The bill modifies many of the administrative procedures by which the
Department of Financial Institutions (DFI) regulates charitable organizations,
persons involved with solicitations on behalf of charitable organizations, and
professional employer organizations.
Charitable organizations, professional fund-raisers, and fund-raising
counsel
Under current law, subject to exceptions, DFI regulates the following, and the
following must be registered with DFI: a charitable organization that solicits, or has
solicited on its behalf, contributions in this state (charitable organization); a person
who, for compensation, solicits, or employs or engages others who are paid to solicit,
contributions in this state for a charitable organization (professional fund-raiser);
and a person who, for compensation, plans or manages, or advises or prepares
material with respect to, solicitations in this state for a charitable organization, but
who does not make solicitations or employ or engage others to make solicitations, and
who has custody of contributions solicited for a charitable organization (fund-raising
counsel).
This bill makes numerous changes relating to DFI's regulation of charitable
organizations, professional fund-raisers, and fund-raising counsel, including all of
the following:
1. The bill modifies DFI's application procedures and requirements for initial
or renewal registration with DFI as a charitable organization, professional
fund-raiser, or fund-raising counsel, as well as certain post-registration
requirements.
2. The bill increases, from $5,000 to $25,000, subject to adjustment for
inflation, the amount of annual contributions a charitable organization may receive
without being required to register with DFI if other conditions are satisfied.
3. The bill modifies requirements for financial information included with an
application for registration as a charitable organization. Current law requires the
applicant to submit to DFI an annual financial report if the charitable organization
received annual contributions of more than $5,000 but not more than $100,000 and
an audited financial statement if the charitable organization received annual
contributions of more than $100,000. The bill requires initial registration
applications to include a reviewed financial statement if the charitable organization
received annual contributions of more than $300,000 but not more than $500,000
and an audited financial statement if the charitable organization received annual
contributions of more than $500,000, with these amounts subject to adjustment for
inflation. The reviewed and audited financial statements must be prepared in
accordance with generally accepted accounting principles (GAAP). The reviewed
financial statement must include a review of the financial statement by an
independent certified public accountant (CPA), and the audited financial statement
must include the opinion of an independent CPA.
4. The bill modifies the requirements for charitable organizations' annual
reporting to DFI. Under the bill, a charitable organization must file an annual report
with DFI, in a form prescribed by DFI, rather than an annual financial report as
under current law. The bill also eliminates certain content requirements for the
report. The bill increases, from $200,000 to $300,000, subject to adjustment for
inflation, the contribution threshold that triggers a requirement that a charitable
organization annually file with DFI a financial statement prepared in accordance
with GAAP and reviewed by an independent CPA. The bill also increases, from
$400,000 to $500,000, subject to adjustment for inflation, the contribution threshold
that triggers a requirement that the financial statement be audited and include the
opinion of an independent CPA. Under the bill, the financial statement or audited
financial statement is in addition to the charitable organization's annual report, not
in lieu of its annual financial report as under current law, and the bill extends the
filing deadline for the financial statement. The bill also creates a process by which
DFI may waive the financial statement filing requirement and eliminates an
exception to the current law requirement that a charitable organization file an
annual financial report.
5. The bill requires fund-raising counsel and professional fund-raisers to file
an annual report with DFI, in a form prescribed by DFI.
6. The bill requires a charitable organization for which a fund-raising counsel
or professional fund-raiser performs services to take certain actions, which include
ensuring that the fund-raising counsel or professional fund-raiser is registered with
DFI or is not required to be registered, contracting in writing with the fund-raising
counsel or professional fund-raiser, retaining certain documentation, and satisfying
certain financial institution account requirements.
7. The bill modifies content requirements for the required contract between a
charitable organization and a professional fund-raiser.
8. The bill modifies content requirements for a solicitation notice required to
be filed by a professional fund-raiser before performing services for a charitable
organization, eliminating specific requirements and instead providing DFI with
discretion over the contents of the notice.
9. The bill modifies disclosure requirements related to requests made by
professional fund-raisers, or by persons who solicit but are not professional
fund-raisers or their employees (unpaid solicitors), for contributions on behalf of
charitable organizations and creates an exception to disclosure requirements if the
charitable organization is not required to be registered with DFI or has obtained a
disclosure exemption. The bill eliminates the requirement that DFI specify by rule
criteria for this disclosure exemption, instead allowing DFI to prescribe forms and
procedures without rule making, and changes the definition of an unpaid solicitor to
expressly exclude bona fide employees of professional fund-raisers.
10. The bill shifts the requirement for retaining certain accounting records
from the charitable organization receiving the records to the fund-raising counsel
or professional fund-raiser generating the records, and requires the records to be
made available to DFI upon DFI's request.
11. The bill modifies a provision relating to prohibited acts in the planning,
management, or execution of a solicitation or charitable sales promotion so that the
provision applies more specifically to a charitable organization, fund-raising
counsel, or professional fund-raiser, rather than to a "person," but also applies more
broadly to the conduct of the affairs of the charitable organization, fund-raising
counsel, or professional fund-raiser, not solely to the planning, management, or
execution of a solicitation or charitable sales promotion. The bill also adds certain
acts to the list of prohibited acts, including acts related to misrepresenting the
tax-deductible status of contributions, misrepresenting a person's prior
contributions or a person's prior agreement to make a contribution, or failing to apply
contributions consistently with the solicitation.
12. The bill allows DFI to adjust, without rule making, certain threshold dollar
amounts related to registration or reporting, but creates a passive review process
with the Joint Committee for Review of Administrative Rules for these adjustments.
13. The bill makes changes to DFI's rules relating to charitable organizations,
professional fund-raisers, and fund-raising counsel, which changes correspond to
statutory changes.
Professional employer organizations
Under current law, a person engaged in the business of contracting to provide
to its clients a nontemporary, ongoing employee workforce, paid by the person from
its own account (professional employer organization), but not including a temporary
help agency or temporary help company, must be registered with DFI. This bill
makes changes relating to DFI's regulation of professional employer organizations,
including all of the following:
1. The bill modifies DFI's application procedures and requirements for initial
or renewal registration with DFI as a professional employer organization, as well as
certain post-registration requirements.
2. The bill modifies provisions related to the financial capability requirements
for professional employer organizations, which under current law may be satisfied
by maintaining working capital of at least $100,000 or, as an alternative,
maintaining a bond, certificate of deposit, escrow account, or irrevocable letter of
credit in at least a specified amount. The bill eliminates an exception to the $100,000
working capital requirement and provides that the only alternative to meeting this
working capital requirement is to maintain a bond.
3. The bill eliminates a requirement that DFI's alternative registration process
for professional employer organizations be specified by DFI rule, and makes the
alternative registration process permissive rather than mandatory.
4. The bill eliminates a requirement that DFI maintain on its Internet site a
list of all professional employer organizations, but requires DFI to make this list
available on request.
Other changes
The bill makes other changes applicable to charitable organizations,
professional fund-raisers, fund-raising counsel, and professional employer
organizations, including all of the following:
1. The bill eliminates a provision that allows an individual, if the individual
must provide to DFI his or her social security number, telephone number, street
address, or e-mail address (personal identifier) in connection with a registration, to
opt out of disclosure of the individual's personal identifier in any list that contains
personal identifiers of at least ten individuals and that DFI furnishes to other
persons.
2. The bill eliminates a requirement that DFI cooperate with certain other state
agencies to develop and maintain a computer linkup to provide access to registration
information.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB631,1
1Section
1. 202.01 (1m) of the statutes is created to read:
SB631,6,32
202.01
(1m) "Application" includes an application for initial registration and
3an application for renewal of a registration.
SB631,2
4Section
2. 202.02 (title) of the statutes is renumbered 202.031 (title) and
5amended to read:
SB631,6,6
6202.031 (title)
General duties and powers.
SB631,3
7Section
3. 202.02 (1) of the statutes is renumbered 202.07 (2m).
SB631,4
8Section
4. 202.02 (2) of the statutes is renumbered 202.031 (1).
SB631,5
9Section
5. 202.02 (3) of the statutes is renumbered 202.031 (2), and 202.031
10(2) (b), as renumbered, is amended to read:
SB631,6,1311
202.031
(2) (b) Post a notice in a conspicuous place in the registrant's office or
12place of business
, or on the registrant's Internet site, describing the procedures for
13filing a complaint against the registrant.
SB631,6
14Section
6. 202.02 (4) of the statutes is renumbered 202.021 (1) (b) and
15amended to read:
SB631,7,216
202.021
(1) (b) 1. The department shall require each applicant to provide his
17or her social security number with the applicant's application
for a registration or
1registration renewal, or, if the applicant is not an individual, the department shall
2require the applicant to provide its federal employer identification number.
SB631,7,83
2. If an applicant is an individual who does not have a social security number,
4the applicant shall submit a statement to the department made or subscribed under
5oath that the applicant does not have a social security number. The department of
6children and families shall prescribe the form of the statement. A registration issued
7in reliance upon a false statement submitted under this
paragraph subdivision is
8invalid.
SB631,7,139
3. The department may not disclose a social security number obtained under
10par. (a) subd. 1. to any person except the department of children and families to
11administer s. 49.22, the department of revenue to request certifications under s.
1273.0301 and administer state taxes, and the department of workforce development
13to request certifications under s. 108.227.
SB631,7
14Section
7. 202.02 (5) of the statutes is repealed.
SB631,8
15Section
8. 202.02 (6) (a) of the statutes is renumbered 202.021 (2) (a) and
16amended to read:
SB631,8,217
202.021
(2) (a) The department may conduct an investigation
of the applicant,
18including the applicant's members, officers, trustees, and directors, to determine
19whether
an the applicant satisfies
any all of the
eligibility requirements specified for
20the registration
, including whether the applicant does not have. The investigation
21may include determining whether any of the applicant's members, officers, trustees,
22or directors has an arrest or conviction record. In conducting an investigation under
23this paragraph, the department may require an applicant to provide any information
24that is necessary for the investigation
, except that, for an investigation of an arrest
1or conviction record, the department shall comply with the requirements under par.
2(d).
SB631,9
3Section
9. 202.02 (6) (b) of the statutes is renumbered 202.031 (3) and
4amended to read:
SB631,8,85
202.031
(3) A registrant
, or a registrant's officer, director, trustee, or member,
6who is convicted of a felony or misdemeanor anywhere shall send a notice of the
7conviction by 1st class mail to the department within 48 hours after the entry of the
8judgment of conviction.
SB631,10
9Section
10. 202.02 (6) (c) of the statutes is renumbered 202.07 (1m) (b) and
10amended to read:
SB631,8,1511
202.07
(1m) (b) The department may investigate whether
an applicant or a 12registrant
, or an officer, director, trustee, or member of a registrant, has been charged
13with or convicted of a crime.
In conducting this investigation, the department may
14require a person for whom the department conducts an investigation to provide any
15information that is necessary for the investigation.
SB631,11
16Section
11. 202.02 (6) (d) of the statutes is repealed.
SB631,12
17Section
12. 202.02 (6) (e) of the statutes is renumbered 202.021 (2) (b) and
18amended to read:
SB631,8,2219
202.021
(2) (b)
The If an officer, director, or member of an applicant has been
20convicted or has an arrest or conviction record, the department
shall may charge an
21applicant the fees, costs, or other expenses the department incurs for conducting an
22investigation under this subsection.
SB631,13
23Section
13. 202.02 (7) of the statutes is renumbered 202.021 (1) (c) and
24amended to read:
SB631,9,3
1202.021
(1) (c) The department may require the electronic submission of an
2application
for registration or registration renewal or any other document or
3information that may be submitted to the department under this chapter.
SB631,14
4Section
14. 202.021 (title), (1) (title) and (a), (2) (title), (bn), (c) and (d), (3)
5(title) and (c), and (4) (title) and (a) (intro.), 1. and 4. of the statutes are created to
6read:
SB631,9,12
7202.021 (title)
Registration. (1) (title)
Applications for registration. (a)
8Applicants for registration under this chapter shall apply to the department, on
9forms and in the manner prescribed by the department. Forms prescribed by the
10department under this paragraph may contain any content or requirement that the
11department, in its discretion, determines necessary and these forms may be modified
12or updated as necessary by the department to carry out the purposes of this chapter.
SB631,9,13
13(2) (title)
Completion of registration process.
SB631,9,1614
(bn) Subject to ss. 111.321, 111.322, and 111.335, the department may deny or
15limit the registration of an applicant or registrant that has a member, officer, trustee,
16or director who has been convicted of a felony or misdemeanor.
SB631,9,1817
(c) Except as provided in sub. (4), the department shall, after its review of an
18application, issue a certificate of registration to the applicant.
SB631,9,1919
(d) A registration issued under this chapter is not assignable or transferable.
SB631,9,20
20(3) (title)
Renewal of registration.
SB631,9,2421
(c) 1. A registrant may apply to renew its registration by submitting to the
22department an application, fees, and any financial statement required by s. 202.22.
23For the renewal application to be timely, the renewal fee and application must be
24received by the department on or before the registration's expiration date.
SB631,10,4
12. Subject to subd. 4., a registrant whose renewal fee and completed application
2are not received by the department on or before the registration's expiration date, but
3are received within 60 days after the expiration date, must pay the late fee
4determined by the department under s. 202.041.
SB631,10,75
3. A registrant whose renewal fee and completed application are not received
6by the department within 60 days after the expiration date of the registration must
7submit an application for a new registration.
SB631,10,128
4. After the expiration date, a registrant that is required to renew its
9registration may not continue to conduct the activity for which the registration is
10required unless the registrant's certificate has been renewed by the department or
11the registrant has paid the renewal fee and filed a completed renewal application on
12or before the registration's expiration date.
SB631,10,14
13(4) (title)
Denial of application. (a) (intro.) The department may not issue or
14renew a registration under this chapter if any of the following applies:
SB631,10,1815
1. The applicant has failed to submit a complete application to the department.
16Before denying an incomplete application, the department shall notify the applicant
17of any deficiencies in the application and give the applicant a reasonable amount of
18time to resolve the deficiencies.
SB631,10,2019
4. The department is not satisfied that the applicant or registrant will comply
20with this chapter and any rules promulgated under this chapter.
SB631,15
21Section
15. 202.025 (title) of the statutes is repealed.
SB631,16
22Section
16. 202.025 (1) (title) of the statutes is repealed.
SB631,17
23Section
17. 202.025 (1) (a) of the statutes is renumbered 202.021 (3) (a) and
24amended to read:
SB631,11,3
1202.021
(3) (a) The department shall give a notice of renewal to each registrant
2at least 30 days before the
renewal expiration date of the registration. The
3department may give that notice by electronic transmission.