1 AUGUST 2003

 1 August 2003

 MEMORANDUM

 TO:  NHA Members

 FR:  John Hammer and Jessica Jones

 RE:  New FCC regulations for faxed advertisements

 The Federal Communications Commission (FCC) recently issued new

 federal regulations regarding "unsolicited advertisements" sent by

 fax.  Although there is likely to be clarification of the new

 regulations, nonprofit organizations are directly affected and may

 have to institute changes to remain in compliance.

 Americans for the Arts, an organization with which NHA collaborates on

 advocacy issues, recently circulated a memorandum on the new FCC regs

 and included a very helpful Q&A prepared by their attorneys Webster,

 Chamberlain and Bean (one of the top DC law firms on nonprofit tax

 issues).  With the permission of AFTA, we are sending this information

 on to NHA members.

 __________________________________________________________________

 MEMBER ALERT

 TO:  Americans for the Arts Member and Friends

 FROM:  Robert L. Lynch, President and CEO

 DATE:  July 29, 2003

 RE:  New Federal Rules for Fax Marketing

 Americans for the Arts has recently learned that the Federal

 Communications Commission (FCC) has issued new federal regulations

 that will require any person or organization who wishes to market its

 products or services using "unsolicited advertisements" sent by fax,

 to first obtain written permission from those who are to receive such

 fax advertisements. There is no exemption for nonprofits, such as many

 local arts agencies and institutions, or for service organizations and

 associations such as Americans for the Arts.

 The FCC defines an unsolicited advertisement as any material

 advertising the commercial availability or quality of any property,

 goods, or services which is transmitted to any person without that

 person's prior express invitation or permission.

 Since this ruling will directly affect the way we all communicate

 information on our programs, products, and services we wanted to share

 an update with you immediately. Below is a Q and A on the new ruling

 that was prepared by our law firm, Webster, Chamberlain and Bean to

 help us gain a better understanding of the how the regulation will

 affect us and our membership. Please understand, however, that the

 FCC, which issued the regulations, has provided no guidance, and the

 regulations and the original statute include several undefined terms

 which could be interpreted broadly or narrowly.

 Although the rule is final and there is no formal comment period,

 Americans for the Arts will continue to monitor the ruling and keep

 you informed about our progress in working with the entire association

 community, including <http://www.independentsector.orgIndependent

 Sector and the <http://www.asaenet.orgAmerican Society of Association

 Executives, to get a stay, revision, or withdrawal of the regulation.

 __________________________________________________________________

 FROM WEBSTER, CHAMBERLAIN and BEAN

 New Fax Rules: Questions and Answers

 1. How does federal law restrict fax advertising?

 In 1992, Congress passed a law that prohibits any person or entity

 from sending an unsolicited fax that advertises the commercial

 availability or quality of any property, goods, or services without

 the "prior express invitation or permission" of the person receiving

 the fax.

 2. If this law was enacted in 1992, why has it suddenly become an

 issue?

 The regulations issued by the FCC originally said that any person with

 whom the sender of the fax has an "established business relationship"

 is assumed to have given permission. For associations and other

 nonprofits, this included most of the people or entities to which they

 would send a fax, such as current and former members, contributors,

 supporters, customers, and meeting attendees. So the law was rarely a

 concern.

 3. What has now changed?

 The FCC has reversed itself and decided that an established business

 relationship is not sufficient to assume permission. Instead, the FCC

 regulations now say that an organization must have written permission

 from each person to whom it wishes to send an unsolicited fax

 advertisement. Presumably this would apply even to current members of

 an organization, for example.

 4. When do the new rules become effective?

 The fax rules are part of a much larger regulation that becomes

 effective August 25, 2003. The fax rules, however, still need to be

 approved by the Office of Management and Budget. While it is not known

 when that approval will occur, it likely will be after October 1,  2003.

 5. Do we need written consent before we send any fax?

 No. This law applies only to faxes that are unsolicited advertisements

 of property, goods, or services.

 6. So what kind of materials may be sent by fax without obtaining

 written consent?

 Again, anything that is not an advertisement for property, goods, or

 services may be freely sent. This includes:

  Newsletters and other informational materials

  Legislative or other alerts

  Membership promotions

  Membership renewals

  Membership surveys

  Agendas and other materials for Board or committee meetings

  Fundraising solicitations

  Invitations to events such as fundraisers, award ceremonies, etc.,

 even if there is

  a required contribution

  PAC solicitations

  Requests for proposals

 7. What are examples of faxes that would require advance written

 consent?

 Certainly any fax that promotes a product, such as a book, magazine,

 video, or CD-ROM, would come within the restrictions of the law.

 Conferences and other meetings at which there are educational sessions

 are in a gray area, but the general thinking seems to be that these

 would constitute services by an organization, and therefore, sending a

 fax to promote an event such as these likely would require advance

 written permission.

 8. What about a fax that is primarily informational but also includes

 advertising?

 Common sense dictates that a newsletter or other bona fide

 informational product that also includes some advertising would not

 require advance written permission in order to be faxed. Unless, and

 until, the FCC or a court states to the contrary, we believe that

 sending a fax such as this without written authorization would not

 violate the law.

 9. If someone orally requests that we send them a fax can we do so or

 do we still need written permission?

 You may send a fax under these circumstances without written

 permission. This is because the fax would, by definition, not be

 unsolicited. For example, if a person telephoned an organization and

 asked that materials regarding the annual conference be faxed, this

 could be done without written consent. However, for ongoing or blanket

 permission to send fax advertisements of property, goods, or services,

 permission would need to be in writing.

 10. If we send faxes to several persons within the same organization

 or company, do we need a separate written permission from each person?

 Not necessarily. If a person with authority gives written permission

 to send unsolicited advertisements to the fax machine(s) of the

 company or organization generally, this is sufficient; further written

 permission of every person in that organization who might be sent a

 fax is not necessary.

 11. How do we obtain the necessary written consent?

 Many associations and organizations are preparing forms to be sent to

 members, supporters, and others, and asking that these forms be signed

 and returned. This may also be accomplished electronically with

 electronic or digital signatures.

 Another option would be to secure written authorization as part of the

 membership application or membership renewal invoice. In fact,

 appropriate language could be included on all invoices or

 applications, so when any person purchases a product or attends a

 meeting, they are asked to give the written consent.

 12. What are consequences if we do not obtain written consent?

 While the FCC may initiate an enforcement action and impose fines up

 to $11,000, the focus of the FCC is likely to continue to be on major

 for-profit firms that deluge people with thousands and even millions

 of fax ads for items such as printer cartridges, toner, etc.

 Any person who receives an unsolicited fax advertisement without

 having given permission may also bring suit. They may recover $500 per

 fax, though this can be increased to $1,500 if it is shown that the

 sender knowingly violated the law.

 Our counsel has prepared this Q and A based on their interpretation of

 the new regulation. There are currently differing opinions as to the

 meaning of some of language in the new regulation. Americans for the

 Arts suggests that you seek the advice of your counsel for

 recommendations specific to your environment.