§ 131F-16. License required for solicitors.
§ 131F‑16. Licenserequired for solicitors.
(a) Licensure Required. Unless exempted under G.S. 131F‑3, a person shall not act as asolicitor in this State unless that person has obtained a license from theDepartment and paid the applicable fees.
(b) Applications. Applications for a license or renewal of a license shall be submitted on a formprovided by the Department, shall be signed under oath, and shall include thefollowing information:
(1) The street addressand telephone number of the principal place of business of the applicant andany North Carolina street addresses if the principal place of business islocated outside this State.
(2) The form of theapplicant's business.
(3) The place and datewhen the applicant, if other than an individual, was legally established.
(4) The names andresidence addresses of all officers, directors, and owners.
(5) A statement as towhether any of the owners, directors, officers, or employees of the applicantare related as parent, spouse, child, or sibling to:
a. Any other directors,officers, owners, or employees of the applicant.
b. Any officer,director, trustee, or employee of any charitable organization or sponsor undercontract to the applicant.
c. Any supplier orvendor providing goods or services to any charitable organization or sponsorunder contract to the applicant.
(6) A statement as towhether the applicant or any of the directors, officers, persons with acontrolling interest in the applicant, or employees or agents involved insolicitation have been convicted, within the last five years, of any felony, orof a misdemeanor arising from the conduct of a solicitation for any charitableorganization or sponsor or charitable or sponsor purpose, or been enjoined fromviolating a charitable solicitation law in this or any other state.
(7) The names of allpersons in charge of any solicitation activity.
(c) Fees. Theapplication for an initial or renewal license shall be accompanied by a fee oftwo hundred dollars ($200.00). A solicitor that is a partnership or corporationmay register for and pay a single fee on behalf of all of the partners,members, officers, directors, agents, and employees. In that case, the namesand street addresses of all the officers, employees, and agents of thesolicitor and all other persons with whom the solicitor has contracted to workunder that solicitor's direction, including solicitors, shall be listed in thelicense application or furnished to the Department within five days after thedate of employment or contractual arrangement. Each license is valid for oneyear or a part of one year and expires on March 31 of each year. The licensemay be renewed on or before March 31 of each year for an additional one‑yearperiod upon application to the Department and payment of the license fee.
(d) Bond. A solicitorshall, at the time of application or renewal of the license, file with and haveapproved by the Department a bond with a surety authorized to do business inthis State and to which the solicitor is the principal obligor. The amount ofthe bond shall be determined as follows:
(1) Twenty thousanddollars ($20,000), if the contributions received for the last fiscal year wereless than one hundred thousand dollars ($100,000).
(2) Thirty thousanddollars ($30,000), if the contributions received for the last fiscal year wereat least one hundred thousand dollars ($100,000) but less than two hundredthousand dollars ($200,000).
(3) Fifty thousanddollars ($50,000), if the contributions received for the last fiscal year wereat least two hundred thousand dollars ($200,000).
Thesolicitor shall maintain the bond in effect as long as the license is ineffect. The liability of the surety under the bond shall not exceed an all‑timeaggregate liability of fifty thousand dollars ($50,000). The bond, which may bein the form of a rider to a larger blanket liability bond, shall be payable tothe State and to any person who may have a cause of action against theprincipal obligor of the bond for any liability arising out of a violation by theobligor of any provision of this Chapter or any rule adopted under thisChapter.
(d1) In lieu of the bondrequired under subsection (d) of this section, a solicitor may submit acertificate of deposit in the amount as for a bond pursuant to subsection (d)of this section. The certificate of deposit shall be payable to the State andunrestrictively endorsed to the Department; or, in the case of a negotiablecertificate of deposit, unrestrictively endorsed to the Department; or, in thecase of a nonnegotiable certificate of deposit, assigned to the Department in aform satisfactory to the Department. Access to the certificate of deposit infavor of the State is subject to the same conditions as for a bond undersubsection (d) of this section and shall extend for a period not less than fouryears after the solicitor ceases activities that are subject to this Chapter.The Department shall deliver to the State Treasurer certificates of depositsubmitted under this section.
(e) DepartmentalReview. The Department shall examine each application filed by a solicitor.If the Department determines that the requirements are not satisfied, theDepartment shall notify the solicitor within 10 days after its receipt of theapplication. If the Department does not respond within 10 days, the license isdeemed approved. Within seven days after receipt of a notification that therequirements are not satisfied, the applicant may request a hearing. The stateshall bear the burden of proof at such hearing. The hearing shall be heldwithin seven days after receipt of the request. Any recommended order, if oneis issued, shall be rendered within three days after the hearing. The finalorder shall then be issued within two days after the recommended order. Ifthere is no recommended order, the final order shall be issued within five daysafter the hearing. The proceedings shall be conducted in accordance withChapter 150B of the General Statutes, except that the time limits and provisionset forth in this subsection prevail to the extent of any conflict. Theapplicant shall be permitted to continue to operate or continue operationspending judicial review of the Department's denial of the application. TheDepartment shall make rules regarding the custody and control of any funds collectedduring the review period and disposal of such funds in the event the denial ofthe application is affirmed on appeal.
(f) SolicitationNotice. No less than five days before commencing any solicitation campaign orevent, the solicitor shall file with the Department a solicitation notice on aform provided by the Department. The notice shall be signed and sworn to by thecontracting officer of the solicitor and shall include:
(1) A description of thesolicitation event or campaign.
(2) Each location andtelephone number from which the solicitation is to be conducted.
(3) The legal name andresidence address of each person responsible for directing and supervising theconduct of the campaign.
(4) A statement as towhether the solicitor will, at any time, have custody of contributions.
(5) The account numberand location of each bank account where receipts from the campaign are to bedeposited.
(6) A full and fairdescription of the charitable or sponsor program for which the solicitationcampaign is being carried out as provided in the contract between the solicitorand the charitable organization or sponsor.
(7) The fund‑raisingmethods to be used.
(8) A copy of thecontract executed in accordance with subsection (g) of this section.
(g) Contracts. Each contractor agreement between a solicitor and a charitable organization or sponsor foreach solicitation campaign shall be in writing, shall be signed by twoauthorized officials of the charitable organization or sponsor, one of whomshall be a member of the organization's governing body and one of whom shall bethe authorized contracting officer for the solicitor. Each contract oragreement shall contain all of the following provisions:
(1) A statement of thecharitable or sponsor purpose and program for which the solicitation campaignis being conducted.
(2) A statement of therespective obligations of the solicitor and the charitable organization orsponsor.
(3) A statement of theguaranteed minimum percentage of the gross receipts from contributions whichwill be remitted to the charitable organization or sponsor. If the solicitationinvolves the sale of goods, services, or tickets to a fund‑raising event,the percentage of the purchase price which will be remitted to the charitableorganization or sponsor. Any stated percentage shall exclude any amount whichthe charitable organization or sponsor shall pay as fund‑raising costs.
(4) A statement of thepercentage of the gross revenue for which the solicitor shall be compensated.If the compensation of the professional solicitor is not contingent upon thenumber of contributions or the amount of revenue received, the compensationshall be expressed as a reasonable estimate of the percentage of the grossrevenue, and the contract shall clearly disclose the assumptions upon which theestimate is based. The stated assumptions shall be based upon all of therelevant facts known to the solicitor regarding the solicitation to beconducted by the solicitor.
(5) The effective andtermination dates of the contract.
(h) Financial Report. Within 90 days after a solicitation campaign has been completed and on theanniversary of the commencement of a solicitation campaign lasting more thanone year, the solicitor shall provide to the charitable organization or sponsorand file with the Department a financial report of the campaign, including thegross revenue received, an itemization of all expenses incurred, and the fixedpercentage of the gross revenue that the charitable organization or sponsorreceived as a benefit from the solicitation campaign. The report shall becompleted on a form provided by the Department and shall be signed by anauthorized official of the solicitor who shall certify under oath that thereport is true and correct.
(i) Handling ofContributions. Each contribution collected by or in the custody of thesolicitor shall be solely in the name of the charitable organization or sponsoron whose behalf the contribution was solicited. Not later than two days afterreceipt of each contribution, the solicitor shall deposit the entire amount ofthe contribution in an account at a bank or other federally insured financialinstitution, which account shall be in the name of that charitable organizationor sponsor. The charitable organization or sponsor shall have sole control ofall withdrawals from the account and the solicitor shall not be given theauthority to withdraw any deposited funds from the account.
(j) Records ofSolicitors. During each solicitation campaign, and for not less than threeyears after its completion, the solicitor shall maintain the following records:
(1) The date and amountof each contribution received and the name, address, and telephone number ofeach contributor.
(2) The name andresidence street address of each employee, agent, and any other person, howeverdesignated, who is involved in the solicitation, the amount of compensationpaid to each, and the dates on which the payments were made.
(3) A record of allcontributions that at any time are in the custody of the solicitor.
(4) A record of allexpenses incurred by the solicitor for the payment of which the solicitor isliable.
(5) A record of allexpenses incurred by the solicitor for the payment of which the charitableorganization or sponsor is liable.
(6) The location of eachbank or financial institution in which the solicitor has deposited revenue fromthe solicitation campaign and the account number of each account in which thedeposits were made.
(7) A copy of each pitchsheet or solicitation script used during the completed solicitation campaign.
(8) If a refund of acontribution has been requested, the name and address of each person requestingthe refund. If a refund was made, the amount and the date it was made.
(k) Records of Tickets. If the solicitor sells tickets to any event and represents that the ticketswill be donated for use by another person, the solicitor shall maintain for atleast three years the following records:
(1) The name and addressof each contributor who purchases or donates tickets and the number of ticketspurchased or donated by the contributor.
(2) The name and addressof each organization that receives the donated tickets for the use of others,and the number of tickets received by the organization.
(l) Review of Records. Any of the records described in this section shall be made available to theDepartment upon request and shall be furnished within 10 days after therequest.
(m) Change inInformation. Unless otherwise provided in this Chapter, any change in anyinformation filed with the Department under this section shall be reported inwriting to the Department within seven days after the change occurs.
(n) License Rescinded. Any person licensed as a solicitor shall permanently lose that person'slicense if it is determined that that person, any officer or director thereof,any person with a ten percent (10%) or greater interest therein, or any personthe solicitor employs, engages, or procures to solicit for compensation, hasbeen convicted in the last five years of a crime arising from the conduct of asolicitation for a charitable organization or sponsor or a charitable purposeor sponsor purpose. (1981, c. 886, s. 1; 1985, c. 497, s. 1; 1989, c. 566, s. 2; 1993 (Reg.Sess., 1994), c. 759, s. 2; 1997‑124, s. 1; 2003‑373, s. 2.)