Republic of the Philippines

HOUSE OF REPRESENTATIVES
REPRESS

Constitution Hills if oN
Quezon City /? receved
22 OCT 2013 _
SIXTEENTH CONGRESS
First Regular Session
House Bill No.8225

Introduced by: Honorable Josephine Y. Ramirez Sato

EXPLANATORY NOTE

This bill aims to protect the general public from 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 passage of this measure is earnestly urged.

HON. JOSEP}



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills
Quezon City

SIXTEENTH CONGRESS
First Regular Session

House Bill No. 3225

Introduced by: Honorable Josephine Y. Ramirez Sato

“AN ACT TO REGULATE PUBLIC SOLICITATION PROVIDING FUNDS
THEREFORE AND FOR OTHER PURPOSES”

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 “The Public Solicitation
Act of 2013”

SECTION 2. Purpose - It shall be the purpose of this Act to regulate public
solicitation undertaken by organizations and agencies, groups and individuals in
order to protect the general public from unscrupulous solicitation. It also aims to
establish standards and guidelines and strengthen the system of granting permits
or authorization primarily to solicit funds or donations from the public for
charitable, social and public welfare purposes to ensure that funds are properly
utilized for the intended purpose and beneficiaries.

SECTION 3. Coverage - This Act shall apply to all National Government
Agencies (NGAs), Government Owned and Controlled Corporations (GOCCs),
State Colleges/Universities, Local Government Units (LGUs) and other
government agencies; Non-Government Organizations (NGOs) including faith
based, people’s organization and civil society organizations, associations, branch
offices 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 sectors for charitable
or public welfare purpose/s.


SECTION 4. Exemption on the 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 its charter. Provided, the DSWD, PSWDO and
C/MSWDO shall have the authority to monitor their activities and to require
these organizations and agencies to submit but not limited to the following
documents:

p

. Audited fund utilization report of its collections, income and expenditures
and other financial documents;

s

Lists of donors and their corresponding addresses and contact numbers;

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

e

List of projects completed, location and cost with complete documentation
on the project e.g. pictures, videos and testimonies of beneficiaries.

Other documents which the DSWD may require in order to make
assessment of performance of the organization and agency.

Caroling during Christmas season as a form of solicitation and the solicitation
within the church/mosque or building for religious purposes or
Christian/Muslim worship is also exempted from the application of solicitation
permit. However, approval of the concerned PSWDO or C/MSWDO that has
jurisdiction over the areas, must be first obtained prior the solicitation activities
for religious purposes that are to be conducted outside the peripheral of the
Christian/Muslim worship.

SECTION 5. Definitions of Terms - For purposes of this Act, the following terms
shall be defined as:

a. Administrative Cost - refers to the costs incurred in the management and
operation of the conduct of the solicitation activity such as mails, print of
letter of appeal and other paraphernalia etc.

bal

Beneficiaries - refer to the poor, vulnerable, marginalized and
disadvantaged sectors or entities who will be benefiting from the proceeds
of the public solicitation conducted. These include but are not limited to:
(1) neglected, abandoned, orphaned, exploited children or children under
difficult circumstances; (2) children in conflict with the law, out of school
youth and other youth with special needs; (3) persons with disabilities; (4)
senior citizens; (8) victims of natural or man-made calamities; (6)
disadvantaged women and women in especially difficult circumstances; (7)
indigenous peoples and communities; (8) rebel returnees and families who
are victims of armed conflict situation, and (9) poor or dysfunctional
families and depressed communities among others.


c. Charitable purpose - refers to the intent to provide services or conduct of
activities for the beneficiaries indicated on letter b of this Section.

d. Donors - refers to a person, organization or agency who/that donates
something for charitable or public welfare purposes

e. Memorandum of Agreement - refers to a notarized contract executed between
parties stating among others, the amount or percentage from the proceeds
to be given to the beneficiaries or the project to be undertaken, the date and
place where the activity shall be undertaken and date of awarding of
proceeds or turn-over of project. It should clearly state the date and
duration of the awarding of proceeds.

f. Organization or agency ~ refers to all National Government Agencies
(NGAs), Government Owned and Controlled Corporations (GOCCs), State
Colleges/Universities, Local Government Units (LGUs) and other
government agencies, Non-Government Organizations (NGOs) including
religious and civil society organizations, people's organizations,
associations, branch offices 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 purpose/s

g. Program Cost - refers to all expenses incurred in the direct or indirect
provision of services or goods to the beneficiary including expenses of the
donee person or agency in its operation and the implementation of relevant
programs and services.

h, Public Solicitation - refers to any activity or project intended to generate

funds, goods, or other assistance from the public sectors for charitable
and/or public welfare purposes. Categories of public solicitation:

h.1. Local Public Solicitation - refers to a solicitation activity conducted
within the city or municipality

h.2. Provincial Public Solicitation - refers to a solicitation activity conducted
within two or more cities or municipalities in a province.

h.3. Regional Public Solicitation - refers to a solicitation activity conducted
within two or more provinces in a region

h.4. National Public Solicitation - refers to a solicitation activity conducted in
two or more regions in the country

i, Public Welfare Purpose/s - refers to any activity or project relative to health,

education, peace, social welfare and protection, environmental safety,

rights, security and safety of citizens and similar circumstances or

conditions.

SECTION 6. Authority to Issue Permit - The following are the authorized
officials of government agencies who will grant permits to eligible organization


or agency that will conduct solicitation acti
purposes:

a. Department of Social Welfare and Development (DSWD)
Secretary/Undersecretary or Regional Director for national or regional
public solicitation respectively.

b. Provincial Governor through the Provincial Social Welfare and
Development Office (PSWDO) Chief or his/her representative/s for
provincial public solicitation

c. City/Municipal Mayor through the City/Municipal Social Welfare and

Development Office (C/MSWDO) Chief or his/her representative/s for
local public solicitation

ies for public welfare and charitable

SECTION 7. Requirements - Prior the issuance of the permit to conduct public
solicitation, the organization or agency shall comply with the requirements that
may be set by the DSWD, PSWDO or C/MSWDO respectively including but not
limited to the following:

a. Duly accomplished application form, prescribed by the DSWD, PSWDO or
C/MSWDO, signed by the organization or agency head or his/her
authorized representative.

b. Project proposal 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 by-laws with the Securities and Exchanges Commission
(GEC) or other regulatory government agency which has jurisdiction to
regulate the applying organization or agency, if non-government
organization or private agency.

d. Certification of status of operation and updated certification from SEC or
other regulatory government agency, which has jurisdiction to regulate the
applying organization or agency on the validity of its registration, if non-
government organization or private agency.

e. Notarized Memorandum of Agreement or other written document
signifying the intended beneficiary concurrence as recipient of the
solicitation activity. It shall entails (i) Statement of the purpose for which
the solicitation is being conducted; (ii) Statement of the amount or
percentage from the proceeds to be given to the beneficiaries or the project
to be undertaken; and (iii) the date, duration and place where the activity
shall be undertaken and the date of awarding of proceeds or turn-over of
project.

f. Notarized Board Resolution on their planned solicitation activity and ensure
the strict compliance to the standard ratio on fund utilization.


SECTION 8. Validity of Permit - All permits for the purpose of undertaking
public solicitation shall be issued by the DSWD, PSWDO or C/MSWDO for a
stated period of time. The solicitation permit 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 of the Philippine territory. Its validity does not
extend to other countries regardless of whether or not the target beneficiaries and
donors are Filipinos. In such cases, the organization or agency should comply
with the rules and regulations of the concerned countries.

SECTION 9. Fees and Charges - For national and regional coverage, the DSWD.
shall charge and collect corresponding fees to be determined by the Department
for the effective implementation of this Act. 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,
Chapter 5, Book VI of Executive Order No. 292. Likewise, the provincial governor
and city/municipal mayors shall impose corresponding fees for the provincial
and local public solicitation respectively, consistent with the Local Government
Code and its amendments.

SECTION 10. Methods of Public Solicitation - Public solicitation may be done
using any of the following but not limited to:

a. Written request such as letter of appeal, envelopes, and cards etc and other
similar forms

b. Mass media campaign through television, cinema, radio, magazine,
newspapers, and billboards, and other similar forms

c. Distribution, circulation, publication or posting of written advertisement or
other similar forms;

d. Sale of goods such as souvenir items, printing, rummage sales, among
others;

e. Benefit shows i.e. concert, fashion show and other forms of entertainment;
and

f. Donation box, coin banks and other similar forms

g. Other methodologies that may be allowed by the DSWD, PSWDO and/or
C/MSWDO

However, the ceiling amount for the cost of every paraphernalia for public

solicitation shall be set in the Implementing Rules and Regulations e.g. cost of
tickets for benefit shows, amount for request of letter of appeal among others.

SECTION 11. Tax Deduction or Exemption of Donations and Contributions -
The donor by virtue of foregoing provisions shall be entitled to allowable
deduction in his/her income tax return the equivalent amount of donations


he/she would give to public solicitation subject to such conditions as provided
under the National Internal Revenue Code, as amended.

SECTION 12. Allocation of Proceeds - Not more than fifteen percent (15%) of the
total proceeds for the fund raising activity of any organization or agency shall be
expended for the administrative cost. The remaining eighty-five percent (85%)
shall be utilized entirely for projects/programs for the targeted beneficiaries.
Unless compliance with this section is satisfactorily established on the basis of the
report as required in Section 13 hereof, no organization or agency shall be issued
any subsequent permit. Funds collected during the conduct of fund campaign
activities shall be deposited in a banking institution regulated by the Bangko
Sentral ng Pilipinas in the name of the organization or agency to which the
permit was issued. Book of accounts shall also be required in the
monitoring/ validation of report.

The date, duration and place where the consolidation and accounting of
proceeds shall be undertaken and the date of the awarding or turn-over of the
proceeds to the beneficiaries, shall be witnessed by the authorized
representatives from the DSWD, PSWDO or C/MSWDO for national/ regional,
provincial or city/ municipal fund campaign respectively.

SECTION 13. Monitoring of Public Solicitation Activity - The concerned
organization or agency to which the permit was issued shall submit to the
concerned DSWD office, PSWDO or C/MSWDO within sixty (60) days after the
expiration of the issued permit, a report signed and sworn to by at least two
authorized officers of the organization or agency, indicating whether such permit
was used or not.

a. If used, additional documents to be submitted are the following:

a.l. Audited fund utilization report of its income and expenditures and
other documents;

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

a3. List of beneficiaries, their corresponding addresses and contact
numbers and amount or types of assistance extended;

a4. List of projects completed, location and cost; and

a5. Expired original permit authorizing the conduct of national or local
fund campaign

a

. If the issued permit is unutilized, the concerned organization or agency shall
submit the following records to the respective DSWD, PSWDO or
C?2MSWDO:


b.1. Justification for not conducting or continuing the solicitation activity
within the validity period

b.2. Expired original permit authorizing the conduct of local/national fund
campaign

The DSWD, PSWDO or C/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 organization or
agency. Further, the 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,
PSWDO, or C/MSWDO. Likewise, the latter should keep the submitted report of
the organization or agency including audited fund utilization report, list of
beneficiaries and their corresponding addresses and contact numbers and
amount and type of assistance extended and list of project completed, its costs
and location.

SECTION 14. Filing of Complaints - The DSWD, PSWDO or C/MSWDO shall
on its initiative or upon the complaint of any individual initiate an investigation
and the filing of complaints in the appropriate court, if warranted, against the
organization or agency which undertake fund campaigns without the necessary
permit or which secures such permits through fraudulent representation.
Provided, however, that any concerned person, may in his/her own file a
complaint before the Regional Trial Court against any person who shall commit
any of the acts punishable under Section 16 of this Act. Any law enforcement
agency can also file a complaint against any organization, agency or individual
engaging in prohibited acts whom they have apprehended in accordance with
the Rules of Court.

SECTION 15. Handling of Complaint - There shall be a Review Committee at the
concerned DSWD office, PSWDO or C/MSWDO which will handle the
complaint against the organization or agency. The law enforcement agencies e.g.
Philippine National Police (PNP), National Bureau Investigation (NBI),
Department of Interior and Local Government (DILG), and Ombudsman among,
others shall assist in the enforcement of this Act. Said Committee shall be
organized within sixty (60) days upon effectivity of this Act. The Committee
shall be composed of minimum of seven (7) members which consist of three (3)
representatives from concerned government agencies, two (2) from Non-
Government Organizations and two (2) from DSWD and PSWDO or C/MSWDO.
The specific roles and functions of the Committee as well as the procedures in
handling of complaints shall form part of the Implementing Rules and
Regulations of this Act.


SECTION 16. Prohibited Acts - This Act prohibits any organization or agency to
do any of the following acts:

a. Soliciting without securing solicitation permit from DSWD, PSWDO or
C/MSWDO

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

._ Using falsified or tampered solicitation permit

ao

. Soliciting with expired solicitation permit

©

.. Using of solicited funds other than the intended purposes

. Using the clients or beneficiaries in conducting the solicitation activities.

g. Use of lottery and other game of chances where the source of prizes shall be
taken from the proceeds of the solicitation activity and all other means
contrary to law, public policy and morals.

h. Solicitation paraphernalia which portray a dehumanizing picture,
information or situation of the intended beneficiary

Further, all solicited funds from the prohibited acts shall be turned over to
concerned DSWD, PSWDO or C/MSWDO for the implementation of its social
welfare and development programs and services after the court disposition. ‘The
specific procedures in the management of turn-over of solicited funds from the
prohibited acts shall be stipulated in the Implementing Rules and Regulations of
this Act.

SECTION 17. Penalties - Violations of this law shall be subject to the following
penalties:

a. Any person who violates the provision 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 Pesos (500,000.00) or both at the
discretion of the court

b. Additionally, for the first offense, the solicitation permit of the concerned
organization or agency shall be revoked and no permit shall be issued to
them for a period of two (2) years from the date of violation

c. For the second offense, the concerned organization or agency shall be
permanently banned from conducting any solicitation activity. Further, its
registration or license to operate as an organization or agency issued by any
of the concerned government regulatory agency shall be cancelled and
revoked permanently.


d. When the offender is a foreigner, he/she shall be immediately deported and
be barred permanently from entering the country after having served
his/her sentence.

e. In case of a violation of this Act by an organization or association, the
incumbent officers thereof who have knowingly participated in the violation
of this Act shalll be held liable.

SECTION 18. Information Dissemination - The DSWD, PSWDO or C/MSWDO
shall disseminate information on the organizations or agencies issued with public
solicitation permits to include the permit number, duration period, methodology
to be used and the area/s covered. Likewise the DSWD, PSWDO or C/MSWDO
shall also inform the public on the list of organizations or agencies which permits
have been cancelled or revoked.

SECTION 19. Implementing Rules and Regulations - The officers or authorized
representatives of the DSWD, Association of PSWDO and Associations of
C/MSWDO in coordination with the Bureau of Internal Revenue (BIR),
Department of Finance (DOF), Department of the Interior and Local Government
(DILG), Department of Trade and Industry (DTI), Department of Transportation
and Communication (DOTC), Local Government Unit (LGU), Philippine
National Police (PNP), National Bureau Investigation (NBI), Securities and
Exchange Commission (SEC) and other concerned government agencies and
three (3) representatives selected by DSWD from the academe, NGOs, media
organizations and peoples organizations shall promulgate the necessary
implementing rules and regulations within ninety (90) working days from the
effectivity of this Act.

SECTION 20. Appropriations - The amount necessary to carry out the provisions
of this Act is hereby authorized to be appropriated in the concerned DSWD and
Local Government Units General Appropriations Act for the year following its
enactment into law and thereafter.

SECTION 21. Repealing Clause - Presidential Decree No. 1564, Local
Government Code of 1991 Book III Title Il Ch 3 Art 1 Sec 444 (b) () V) and Sec
455 (b) (3) (v) and all other laws, decrees, executive orders and proclamations,
rules and regulations or parts thereof, inconsistent with this Act are hereby
repealed or modified accordingly.

SECTION 22. Seperability Clause - In the event that any provision of this Act is
held invalid or unconstitutional, the other provisions not affected thereby shall
remain valid and subsisting



SECTION 23. Effectivity Clause - This Act shall take effect fifteen (15) days after
its publication in any two (2) newspapers or general circulation.

Approved,