HOUSE OF REPRESENTATIVES ]
RECEIVEO

Republic of the Philippines DATES. . i 2016

HOUSE OF REPRESENTATIVES = TIME:
Constitution Hills
Quezon City |

REE" VION ge
BILLS AND INDEX SBBVIGE
SEVENTEENTH CONGRES:

First Regular Session

179

House Bill No. __"_

~_Introduced by: Rep. Josephi

EXPLANATORY NOTE

This bill aims to protect the general public from the unscrupulous solicitation,
thus, establishing the standards and guidelines for organizations, agencies, groups
and individuals undertaking such activities. Furthermore, it aims to strengthen the
system of granting permits and/ or authorization to solicit funds and/ or donations
from the public for charitable, social, and public welfare purposes. It is also the
intention of this bill to ensure that solicited funds are properly utilized according to
its intended purposes and given to its rightful beneficiaries.

In view of the foregoing, the immediate passage of this bill is earnestly
sought.

HOM. JOSEPHINE Y, |
1 Distfict pf Occidfftdl Mindoro


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills
‘Quezon City

SEVENTEENTH CONGRESS
First Regular Session

73

House Bill No.

Introduced by: Rep. Josephine Y. Ramirez Sato

AN ACT REGULATING PUBLIC SOLICITATIONS AND PROVIDING
PENALTIES FOR VIOLATION THEREOF, REPEALING FOR THE PURPOSE
PRESIDENTIAL DECREE NO. 1564, OTHERWISE KNOWN AS THE
SOLICITATION PERMIT LAW

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Short Title. - This Act shall be known as the “Public Solicitation
Act”.

SEC. 2. Declaration of Policy. - It is hereby declared a policy of the State to
regulate public solicitation undertaken by organizations, agencies, groups and
individuals in order to protect the general public from unscrupulous solicitation and
to ensure that funds are properly utilized for the intended purpose and beneficiaries.
Towards this end, standards and guidelines are hereby established to strengthen the
system of granting permits or authorization primarily to solicit funds or donations
from the public.

SEC. 3. Definitions of Terms. - As used in this Act:

(a) Administrative cost refers to the cost incurred in the management and
operation of the conduct of the solicitation activity which include the
application fee for a solicitation permit, cost of mailing, printing of
letters of appeal and other paraphernalia;

(b) Beneficiaries refer to Filipino citizens who are poor, vulnerable,
marginalized and disadvantaged sectors or entities who will benefit
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from the proceeds of public solicitation conducted. These include:

(1) Children who are abandoned, neglected, orphaned,
voluntarily committed, abused and exploited, street
children, children with disabilities, children in conflict with
the law, children in need of special protection, children in
cultural communities, and children victims of natural
disasters;

(2) Out-of-school youth and other youth with special needs;

(3) Women in especially difficult circumstances;

(4) Persons with disabilities;

(5) Senior citizens;

(6) Individuals, families, and communities who are in crisis
situation, including those who are internally displaced due
to armed conflict and other developmental projects, and
victims of natural and human-induced calamities or
disasters;

(7) Indigenous persons;

(8) Rebel returnees and families who are victims of armed
conflict situation; and

(9) Poor or dysfunctional families in depressed communities
among others

(c) Charitable purpose refers to the intent to provide services or conduct of
activities for the improvement of the quality of life of beneficiaries as
defined in this section, or to promote the welfare of the general public
which include the conduct of educational, arts and cultural activities;

(a) Donor refers to an individual, organization or agency that donates
something for charitable or public welfare purposes;

(e) Organization or agency refers to all national government agencies
(NGAs), government-owned and -controlled corporations (GOCCs),
state universities and colleges (SUCS), local government units (LGUs)
and other government agencies; nongovernment organizations (NGOs)
including faith-based organizations, civil society organizations,
people's organizations; associations and similar organizations, chapters
and affiliates of similar international organizations operating in the
Philippines desiring to solicit or receive contributions from the public
for charitable or public welfare purposes;

() Program cost refers to all direct and indirect expenses incurred in the
provision of services or goods to the beneficiaries of the public
solicitation including expenses of the donee person, organization or
agency in its operation and the implementation of relevant programs
and services;

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(@) Public refers to the populace, society, masses or people in general
within the Philippine territory where the public solicitation is to be
undertaken;

(h) Public solicitation refers to any activity or project intended to generate
funds, goods, or other assistance from the public for charitable or
public welfare purposes;

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Public welfare purpose refers to any activity or project relative to the
promotion of health, education, peace, social welfare and protection,
environmental safety, rights, security and safety of citizens and similar
circumstances or conditions including disaster relief operations and
management; and

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Solicitation permit refers to a certificate of authority issued by the
Department of Social Welfare and Development (DSWD), the
Provincial Social Welfare and Development Office (PSWDO), the City
Social Welfare and Development Office (CSWDO), or the Municipal
Social Welfare and Development Office (MSWDO) to an individual,
organization or agency applying for an authorization to solicit
donations or voluntary contributions for charitable or public welfare
purposes.

SEC. 4. Coverage. - This Act shall apply to all NGAs, GOCCs, SUCs, LGUs
and other government agencies; individuals, NGOs including faith-based
organizations, civil society organizations, people’s organizations; associations and
similar organizations, chapters and affiliates of similar international organizations
operating in the Philippines which are partly or fully financed with funds solicited
from or contributed by the public or private sector for charitable or public welfare
purposes.

SEC. 5. Exemption from Coverage, - Organizations and agencies created by laws
that specifically confer authority on these organizations and agencies to solicit or
conduct fund campaign for charitable or public welfare purposes shall continue to
be covered by their charters and shall not be required to acquire a solicitation permit:
Provided, That the DSWD, the PSWDO, the CSWDO, and the MSWDO shall have
the authority to monitor their activities and to require these organizations and
agencies to submit reports pertaining to the conduct of the public solicitation and the
utilization of funds solicited.

Caroling during religious festivals or celebrations as a form of solicitation and
solicitation for the construction of a church, mosque, or any structure for worship
shall also not require a solicitation permit.

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SEC. 6. Solicitation Permit; Requirements, - No solicitation permit shall be
issued to an individual, organization or agency without first complying with the
documentary requirements set by the DSWD which shall include the following:

(a) Duly accomplished application form signed by the individual,
organization or agency head or an authorized representative;

(b) Project proposal approved by the head of the applicant organization or
agency on the intended public solicitation activity including the work
and financial plan on the activity to be undertaken;

(c) Certified true copy of Certificate of Registration and Articles of
Incorporation and Bylaws with the Securities and Exchange
Commission (SEC) or other regulatory government agency which has
jurisdiction to regulate the organization or agency;

(@) Updated certification of good standing from the SEC or other
regulatory government agency which has jurisdiction to regulate the
organization or agency;

(©) Notarized written agreement or any similar document signifying the
concurrence of the intended beneficiaries as recipient of the solicitation
activity; and

( Notarized board resolution or other written authorization for the
organization or agency’s planned solicitation activity which shall
ensure strict compliance to the standard ratio on fund utilization.

SEC. 7. Authority to Issue Permit. - The following officials are authorized to
grant a solicitation permit to an eligible individual, organization or agency that will
conduct solicitation activities for charitable and public welfare purposes:

(a) Secretary of the DSWD or a duly authorized Undersecretary of the
DSWD for national public solicitations;

(b) DSWD Regional Director or any duly authorized representative for
regional public solicitations;

(c) Provincial Governor through the PSWDO Chief or any duly authorized
representative for provincial public solicitations; and

(@) City or Municipal Mayor through the CSWDO Chief or the MSWDO
Chief or any duly authorized representative for local public
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solicitations.

SEC. 8. Validity of Pernit, - All solicitation permits issued by the DSWD, the
PSWDO, the CSWDO, or the MSWDO shall be valid only on the approved date of
coverage which in no case shall exceed one (1) year within the specified city,
municipality, region or areas in the Philippines. Its validity shall not extend outside
of the Philippines even if the target beneficiaries and donors are Filipinos.

An organization or agency with a good track record in conducting, public
solicitation, as determined by the DSWD, the PSWDO, the CSWDO, or the MSWDO
may be granted a solicitation permit with a longer validity period which shall not
exceed two (2) years.

SEC. 9. Types of Public Solicitation. ~ Public solicitation shall be categorized as
follows:

(a) Local public solicitation refers to a solicitation activity conducted
within a city or municipality;

(b) Provincial public solicitation refers toa s titation activity conducted
within two (2) or more cities or municipalities in the same province;

(©) Regional public solicitation refers to a solicitation activity conducted
within two (2) or more provinces in a region; and

(a) National public solicitation refers to a solicitation activity conducted in
two (2) or more regions.

SEC. 10. Solicitation During Calamiities or Disasters. ~ In times of natural or
human-induced calamities or disasters, and the intended beneficiaries of the public
solicitation are disaster-stricken areas or communities where a state of calamity has
been declared by the President of the Philippines or by the local sanggunian, a
temporary solicitation permit may be issued to the applicant individual,
organization or agency upon submission of a duly accomplished application form,
as provided for in Section 6(a) of this Act, signed by the applicant individual, or
head of the organization or agency or an authorized representative.

‘The validity of the temporary solicitation permit shall be determined by the
concerned DSWD office, PSWDO, CSWDO, or MSWDO depending on their
assessment of the impact of the calamity or disaster to the affected areas. The
applicant individual, organization or agency shall comply with the requirements
provided under Section 6 of this Act within the period set forth by the concerned
DSWD office, PSWDO, CSWDO, or MSWDO.

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SEC. 11. Fees and Charges, - For national and regional public solicitations, the
DSWD may charge reasonable fees corresponding to the cost only of preparing the
solicitation permit. The fees shall be remitted to the National Treasury, recorded as a
Special Account in the General Fund and shall be available to the DSWD through a
Special Budget pursuant to Section 35 of Executive Order No. 292, otherwise known
as the “Administrative Code of 1987”. For provincial and local public solicitations,
the governor, city or municipal mayor may impose reasonable fees corresponding to
the cost only of preparing the solicitation permit, subject to the provisions of
Republic Act No. 7160, otherwise known as the “Local Government Code of 1991”
and other existing laws.

SEC. 12. Methods of Public Solicitation. - Public solicitation may be done
through any of the following:

(a) Written request such as letters of appeal, envelopes, cards and other
similar forms;

(b) Mass media campaign through television, cinema, radio, magazines,
newspapers, billboards, social media and other similar forms;

(©) Distribution, circulation, publication or posting of written
advertisement or other similar forms;

(a) Rummage sales and sale of goods including souvenir items;

(e) Benefit shows including concerts, fashion shows and other forms of
entertainment;

(© Fun runs, marathon, cycling, and other forms of sports activities;
(g) Popularity contests;

(h) Donation boxes, coin banks and other similar forms; and (i) Other
methodologies that may be allowed by the DSWD, the PSWDO, the
CSWDO, or the MSWDO.

SEC. 13. Allocation of Proceeds. - Not more than twenty percent (20%) of the
total proceeds from the fund raising activity of any individual, organization or
agency shall be expended for administrative cost, The remaining eighty percent
(80%) shall be utilized entirely for projects or programs for the targeted beneficiaries.
Unless compliance with this section is satisfactorily established on the basis of the
report required in Section 14 of this Act, no individual, organization or agency shall
be issued any subsequent solicitation permit. Funds collected during public

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solicitations shall be deposited in a banking institution regulated by the Bangko
Sentral ng Pilipinas (BSP) in the name of the individual, organization or agency to
which the permit was issued. A book of accounts shall also be required in the
monitoring and validation of the report.

The date, duration and place where the consolidation and accounting of
proceeds shall be undertaken and the date of the awarding or turnover of the
proceeds to the beneficiaries shall be witnessed by the authorized representatives
from the DSWD, the PSWDO, the CSWDO, or the MSWDOfor national and regional,
provincial, city, or municipal public solicitation, respectively.

SEC. 14. Monitoring of Public Solicitation, - The individual, organization or
agency to which the solicitation permit was issued shall submit to the concerned
DSWD office, the PSWDO, the CSWDO, or the MSWDO not later than sixty (60)
days after the expiration of the solicitation permit, a report signed and sworn to by
the individual or by at least two (2) authorized officers of the organization or agency,
indicating whether the solicitation permit was used or not.

(a) If the solicitation permit was used, the following additional documents shall
be submitted:

(1) Notarized fund utilization report of its income and expenditures sworn
to by the individual, or in the case of an organization or agency, the
president and treasurer of the organization or agency;

(2) List of donors with their corresponding addresses and contact numbers,
and the amount of donations;

(3) List of beneficiaries, their corresponding addresses and contact numbers
and amount or types of assistance extended;

(4) List of projects completed, location and cost; and
(6) Expired original solicitation permit.
(b) If the issued solicitation permit is not used, the individual, organization or
agency shall submit to the appropriate DSWD office, PS>WDO, CSWDO, or
MSWDO the following:

(1) Justification for not conducting or continuing the solicitation activity
within the validity period; and

(2) Expired solicitation permit.


SEC. 15. Reportorial Requirements for Exempt Organizations. - An organization
or agency which conducts a public solicitation but is not required to acquire a
solicitation permit as provided for in Section 5 of this Act shall submit to the
concerned DSWD office, PSWDO, CSWDO, or MSWDO at the end of the fiscal year
during which it conducted the public solicitation the following documents:

(a) Notarized fund utilization report of its collections, income and
expenditures sworn to by the president and treasurer of the
organization or agency;

(b) List of donors and their corresponding addresses and contact numbers;

(c) List of beneficiaries with their corresponding signatures, addresses and
contact numbers and amount or types of assistance extended;

(a) List of projects completed, location and cost with complete
documentation on the project including pictures, videos and
testimonies of beneficiaries; and

(e) Other documents which the concerned offices may require in order to
make an assessment of the performance of the organization or agency
in conducting public solicitation and utilization of the proceeds of the
public solicitation.

IC. 16, Regulatory Powers, ~ The DSWD, the PSWDO, the CSWDO, or the
MSWDO may, in the exercise of their regulatory powers, verify the authenticity of
the report submitted by conducting spot investigations or reviewing the book of
accounts of the concerned individual, organization or agency. Further, the
individual, organization or agency shall, for each solicitation activity, maintain and
preserve an accurate and detailed book of accounts for not less than three (3) years
after the completion of such public solicitation activity, which shall be available for
inspection, at all times, upon demand by the DSWD, the PSWDO, the CSWDO, or
the MSWDO. Likewise, the DSWD, the PSWDO, the CSWDO, or the MSWDO shall
keep a record of the reports and supporting documents submitted by individuals,
organizations or agencies previously granted a solicitation permit.

SEC. 17. Filing of Complaints. - The DSWD, the PSWDO, the CSWDO, or the
MSWDO shall, on its own initiative or upon a verified complaint of any person, refer
to the appropriate law enforcement agency or the prosecutor’s office for
investigation and the filing of complaint in the appropriate court any violation of the
provisions of this Act.

Any individual or law enforcement agency may file a complaint before the
appropriate court against any individual, organization or agency which shall commit
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or is engaged in any of the acts punishable under Section 19 of this Act.

SEC. 18, Role of Law Enforcement Agencies. - All law enforcement agencies
shall assist the DSWD, the PSWDO, the CSWDO, or the MSWDO in the efficient and.
effective enforcement of this Act.

SEC. 19. Prohibited Acts. ~ The following acts are punishable under this Act:

(a) Soliciting without securing a solicitation permit from the DSWD, the
PSWDO, the CSWDO, or the MSWDO;

(b) Soliciting beyond the allowed area of coverage or violating the mode of
solicitation as indicated in the approved solicitation permit;

(©) Using a falsified or tampered solicitation permit;

(@) Soliciting with an expired solicitation permit;

(¢) Using the solicited funds for purposes other than those indicated in the
application form;

(8 Including the beneficiaries as part of the strategy or mechanism in
conducting the solicitation activity which tends to exploit the
beneficiaries;

(g) Use of lottery and other games of chance; and

(h) Using solicitation paraphernalia which portray a dehumanizing
picture, information or situation of the intended beneficiaries.

20. Other Offense. - Failure to comply with the reportorial requirements
as required under Sections 14 and 15 of this Act shall be punished with a fine of not
less than one hundred thousand pesos (P100,000.00) but not more than five hundred
thousand pesos (P500,000.00)

Additionally, for the first offense, the solicitation permit of the individual,
organization or agency shall be revoked and no permit shall be issued to the
offending party for a period of one (1) year from the date of violation.

For the second offense, the solicitation permit of the individual, organization

or agency shall be revoked and no permit shall be issued to the offending party for a
period of two (2) years from the date of violation.

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For the third offense, the individual, organization or agency shall be
permanently banned from conducting any solicitation activity.

SEC. 21. Forfeiture of Proceeds. ~ All solicited funds from an unauthorized
public solicitation shall be forfeited in favor of the government.

iC. 22. Penalties, ~ Any individual, organization or agency who violates the
provisions of Section 19 of this Act shall be punished with imprisonment of not less
than one (1) year but not more than three (3) years or a fine of not less than One
hundred thousand pesos (P100,000.00) but not more than five hundred thousand
esos (P500,000.00), or both, at the discretion of the court.

Additionally, for the first offense, the solicitation permit of the individual,
organization or agency shall be revoked and no permit shalll be issued to them for a
period of two (2) years from the date of violation. For the second offense, the
individual, organization or agency shall be permanently banned from conducting
any solicitation activity.

A final and executory judgment finding an organization or agency liable for
violating any of the prohibited acts under Section 19 of this Act for a second time
shall be a ground for the cancellation and revocation of the organization or agency's
registration or license to operate and shall be endorsed to the concerned government
regulatory agency for its appropriate action,

If the offender is an organization or agency, the incumbent officers of the
organization or agency at the time of the commission of the offense who have
knowingly participated or who shall have knowingly permitted or failed to prevent
its commission shall be held liable.

If the offender is a foreigner, the offender shall be immediately deported and
barred permanently from entering the country after having served the sentence.

SEC. 23. Information Dissemination, - The DSWD, the PSWDO, the CSWDO, or
the MSWDO shall periodically publish a list of all individuals, organizations or
agencies with public solicitation permits. The list shall include the permit number,
duration period, methodology to be used and the areas covered. They shall also
publish a list of individuals, organizations or agencies whose solicitation permits
have been cancelled or revoked.

SEC. 24. Implementing Rules and Regulations. ~ Within ninety (90) days from
the approval of this Act, the Secretary of the DSWD, in consultation with the
Secretary of the Department of the Interior and Local Government, the Secretary of

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the Department of Transportation and Communications, the Director General of the
Philippine National Police (PNP), the Commissioner of the SEC, the Association of
PSWDO, the Association of CSWDO, the Association of MSWDO, and three (3)
representatives selected by the DSWD from among the academe, NGOs and media
organizations, shall promulgate the necessary rules and regulations for the effective
implementation of this Act.

SEC. 25. Repealing Clause. ~ Presidential Decree No. 1564, otherwise known
as the Solicitation Permit Law, is hereby repealed. Section 444(b)(3)(v) and Section
455(b)(3)(v) of the Local Government Code of 1991 and all other laws, decrees,
executive orders and proclamations, rules and regulations or parts thereof
inconsistent with this Act are hereby repealed, amended or modified accordingly.

. 26, Separability Clause. - If any provision or part of this Act is held
invalid or unconstitutional, the remaining parts or provisions not affected shall
remain in full force and effect.

SEC. 27. Effectivity, - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,

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