New Surety Bond Requirement for Paid Solicitors Effective August 10, 2016

Beginning August 10, 2016, paid solicitors who register or renew their registration with the Colorado Secretary of State will need to attach evidence of a $15,000 surety bond with their filings. They will also need to disclose whether any of their officers, directors, or employees serve on the board of directors of a charitable organization, direct the operations of a charitable organization, or otherwise have a financial interest in a charitable organization for which the applicant solicits contributions. These are changes in law resulting from the passage of House Bill 16-1129 during the 2016 General Assembly. 

Other changes included in HB 16-1129:

  • Increased civil penalties for violations of 6-16-111(1) (a) to (1) (g), CR.S. to $10,000 per violation, with a cap of $3 million for a related series of violations.
  • Misrepresenting that a membership organization for which the person is soliciting has a significant membership of a certain type, including active police, sheriff, patrol, firefighters, first responders, or veterans when the organization does not have a significant membership of that type will constitute charitable fraud.  "Significant membership" means ten percent of the membership of the organization or one hundred members, whichever is less.
  • If a paid solicitor commits charitable fraud in the course of making a solicitation for a charitable organization, the charitable organization will also be liable if the charitable organization knew or should have known that the paid solicitor was engaged in charitable fraud.  This does not extend personal liability to board members of a charitable organization beyond the personal liability allowed by section 13-21-116 (2) (b) (I), C.R.S., or as otherwise allowed by law prior to the effective date of Aug. 10, 2016.

Please contact the Colorado Secretary of State’s Charities Program at charitable@sos.state.co.us or (303) 894-2200 option 2, if you have any questions about the late fees, House Bill 16-1129.

 

Published July 19, 2016