BILL NUMBER: HR 20 AMENDED BILL TEXT AMENDED IN ASSEMBLY MAY 1, 2008 INTRODUCED BY Assembly MemberLieuMullin AUGUST 28, 2007 Relative toCheck Sellers, Bill Payers, and Proratersthe Dalai Lama and Tibet Awareness Day . LEGISLATIVE COUNSEL'S DIGEST HOUSE OR SENATE RESOLUTIONS DO NOT CONTAIN A DIGEST WHEREAS, His Holiness the XIVth Dalai Lama, Tenzin Gyatso, is the spiritual and temporal leader of the Tibetan people; and WHEREAS, The Dalai Lama was born to a peasant family in the small village of Takster in northeastern Tibet; and WHEREAS, In 1951, the Chinese People's Liberation Army invaded Tibet, and the Dalai Lama was forced into exile in India after the Chinese military occupation of Tibet; and WHEREAS, March 10, 2008, marked the 49th anniversary of the uprising against Chinese rule over the Tibetan people, which forced His Holiness, the Dalai Lama, to escape into exile; and WHEREAS, Since establishing the Tibetan government-in-exile in Dharamsala, India, in 1960, the Dalai Lama has struggled to uphold and promote Tibetan language, history, religion, and culture; and WHEREAS, His Holiness, the Dalai Lama, has used his leadership to promote democracy, freedom, and peace for the Tibetan people through a negotiated settlement of the Tibet issues, based on autonomy within the context of China; and WHEREAS, The freedom of expression, assembly, and religious beliefs are fundamental human rights that belong to all people and are recognized as such under the United Nations Universal Declaration of Human Rights and the International Covenant on Civic and Political Rights; and WHEREAS, The United Nations General Assembly passed Resolutions 1353 (XIV), 1723 (XVI), and 2079 (XX) calling for the cessation of practices that deprive the Tibetan people of their fundamental human rights and freedoms, including the right to self-determination; and WHEREAS, Numerous Californians and California-based nonprofit organizations support His Holiness, the Dalai Lama's vision for a better world, including the Dalai Lama Foundation, the Tibetan Association of Northern California, and the Tibetan Association of Southern California; and WHEREAS, The Dalai Lama spoke at the California Governor and First Lady's Conference on Women in September 2006 in Long Beach, California, about compassionate leadership; and WHEREAS, The United States Congress, in recognition of the Dalai Lama's outstanding moral and religious leadership and his advocacy of nonviolence, awarded him with the Congressional Gold Medal on October 17, 2007; and WHEREAS, The Dalai Lama was recognized for his contribution to world peace when he received the Nobel Peace Prize in 1989, and has received worldwide recognition and praise for his leadership in seeking nonviolent solutions to international problems; now, therefore, be it Resolved by the Assembly of the State of California, That the Assembly recognizes His Holiness, the Dalai Lama, for his contributions to world peace and leadership in seeking nonviolent solutions to international problems; and be it further Resolved, That the Assembly recognizes March 10 as Dalai Lama and Tibet Awareness Day to educate Californians about the teachings of the Dalai Lama and his efforts to preserve the Tibetan culture; and be it further Resolved, That the Assembly supports the Olympic Charter and the Dalai Lama's view of the charter, which calls for the games of the Olympics "to represent respect for universal fundamental ethical principles and the harmonious development of man, with a view to promoting a peaceful society concerned with the preservation of human dignity. Any form of discrimination with regard to a country or a person on grounds of race, religion, politics, gender or other reason is inconsistent with membership in the Olympic Movement"; and be it further Resolved, That the Chief Clerk of the Assembly transmit copies of this resolution to the author for appropriate distribution.WHEREAS, As California's investment and financing authority, the Department of Corporations administers and enforces the Check Sellers, Bill Payers and Proraters Law (the "Proraters Law"); andWHEREAS, The Proraters Law sets forth licensing and financial requirements, contract and fee limitations, prohibitions against unlawful and fraudulent practices, and other consumer protections; andWHEREAS, Enacted more than 60 years ago, the Proraters Law makes it unlawful to engage in various services, including prorating, without a license from the Department of Corporations, or unless an exemption from licensing is available; andWHEREAS, Prorating involves the business of receiving money from consumers and paying their creditors in exchange for compensation, and these services can play an important part in helping financially distressed consumers; andWHEREAS, Only three proraters are currently licensed under the Proraters Law, numerous exemptions from licensing have been added to this law over the years, and there is a lack of licensing revenue to support a more comprehensive regulatory program under this law; andWHEREAS, Over 50 nonprofit community service organizations are claiming exemptions from licensing under the Proraters Law at this time and are therefore operating without a license; andWHEREAS, Experience has shown that both for-profit and nonprofit businesses, including credit counselors, may arrange or provide prorating services through debt management plans and debt settlement plans, without supervision and oversight; andWHEREAS, Debts are paid for a consumer on a periodic basis in a typical debt management arrangement, and the consumer's debts are paid in one lump sum in a typical debt settlement arrangement, exposing consumers to misrepresentation, mismanagement, and misappropriation of funds; andWHEREAS, In the past five years, the credit counseling, debt management, and debt settlement industries have been subject to more intense scrutiny and oversight due to abuses in the marketplace; andWHEREAS, Several actions have been taken by regulators and public-policy makers at the state and federal levels to help curb fraudulent and unlawful activities of unscrupulous operators; andWHEREAS, The Department of Corporations assisted the Assembly in drafting Assembly Bill 2293 of the 2001-02 Regular Session (Chapter 779 of the Statutes of 2002) to modernize and enforce standards of accountability for certain nonprofit credit counselors claiming exemptions from licensing under the Proraters Law; andWHEREAS, Assembly Bill 403 of the 2003-04 Regular Session (Chapter 360 of the Statutes of 2004) made further adjustments to fees, regulations, and consumer protections that are applicable to these exempt credit counseling organizations under the Proraters Law; andWHEREAS, Assembly Bill 535 o f the 2005-06 Regular Session, which would have established a licensing program for nonprofit credit advisers and managers, was vetoed by the Governor in 2005, based on significant fiscal, policy, and program concerns; andWHEREAS, The Department of Corporations has taken notable enforcement action against unlicensed and unlawful operators over the past few years, including actions with other regulators such as the Federal Trade Commission, to help protect distressed debtors; andWHEREAS, The federal Bankruptcy Abuse Prevention and Consumer Protection Act has required debtors for the past two years to undergo counseling from nonprofit counseling agencies approved by the United States Trustee; andWHEREAS, The Internal Revenue Service continues to revoke the tax-exempt status of credit counselors that use their nonprofit status to lure consumers into unsuitable debt payment programs; andWHEREAS, Congress has held hearings and published reports criticizing the abuses in the credit counseling industry and recommending greater oversight; andWHEREAS, The National Conference of Commissioners on Uniform State Laws adopted the Uniform Debt-Management Services Act of 2005 (the Uniform Act), with regulations including, among other things, registration, bonding, disclosure, and penalties for noncompliance; andWHEREAS, As shown by the comments to the Uniform Act, this model law applies not only to debt management services, but also to debt settlement services and credit counseling services, even if they do not have control over the consumer's money; now, therefore, be itResolved by the Assembly of the State of California, That a task force is hereby established consisting of the members of the Assembly Banking and Finance Committee or their designees, with technical assistance to be provided to the task force by the Commissioner of Corporations, or his designee; and be it furtherResolved, That the task force shall conduct a study and make recommendations to the Legislature by February 1, 2008, on whether and how the Proraters Law should be revised; and be it furtherResolved, That in conducting this study and making recommendations, the task force shall obtain input from interested stakeholders including consumer groups, industry groups, and regulatory agencies, and the task force shall take into consideration the burdens and benefits to impacted parties, including, but not limited to, any economic, legal, and fiscal impacts; and be it furtherResolved, That in conducting this study and making recommendations, the task force shall consider existing California law and programs, the laws and programs administered by other state or federal agencies, the Uniform Act and other model acts, regulatory actions and funding mechanisms, published reports, and other information that the task force deems appropriate; and be it furtherResolved, That the Chief Clerk of the Assembly transmit a copy of this resolution to the Commissioner of Corporations.