BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 918
                                                                  Page  1

          Date of Hearing:   April 14, 2009

                           ASSEMBLY COMMITTEE ON JUDICIARY
                                  Mike Feuer, Chair
                     AB 918 (Adams) - As Amended:  April 13, 2009

                    PROPOSED CONSENT (As Proposed to be Amended)
           
          SUBJECT  :   SALVAGEABLE PERSONAL PROPERTY: COLLECTION BOXES

           KEY ISSUE  :  SHOULD COLLECTION BOXES USED FOR THE SOLICITATION  
          AND COLLECTION OF SALVAGEABLE PERSONAL PROPERTY DISPLAY ON THEIR  
          EXTERIOR SPECIFIED INFORMATION ABOUT THE ORGANIZATION THAT OWNS  
          THE BOX, AND SHOULD LOCAL JURISDICTIONS HAVE AUTHORITY TO  
          PROHIBIT THE USE OF SUCH BOXES THAT DO NOT FULLY DISCLOSE THIS  
          INFORMATION?

           FISCAL EFFECT  :   As currently in print this bill is keyed  
          non-fiscal.

                                      SYNOPSIS
          
          This bill, sponsored by the California Council of Goodwill  
          Industries, would require an organization that owns an  
          unattended collection box to conspicuously display specified  
          information about itself on the exterior of all such boxes it  
          uses for soliciting or collecting donations of salvageable  
          personal property.  In addition, this bill authorizes local  
          jurisdictions to prohibit an organization from using or  
          employing such collection boxes if it does not adhere to these  
          disclosure requirements.  Supporters reasonably contend that  
          organizations which utilize unattended donation boxes to solicit  
          donated goods should be required to provide proper disclosure of  
          information about their organization, to ensure that the public  
          knows clearly if donations to the box will be going to a  
          non-profit charitable organization, as opposed to a for-profit  
          organization, and if so, what specific charitable cause will  
          benefit from their donation.  There is no known opposition to  
          the bill.

           SUMMARY  :   Requires an organization that owns an unattended  
          collection box, used for soliciting or collecting donations of  
          personal property, to conspicuously display specified  
          information about itself on the exterior of all such collection  
          boxes, and authorizes local jurisdictions to prohibit the  








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          organization from employing any collection box if it does not  
          adhere to these disclosure requirements.  Specifically,  this  
          bill  :   

          1)Defines a "collection box" to mean an unattended canister,  
            box, receptacle, or similar device, used for soliciting and  
            collecting donations of salvageable personal property.

          2)Defines a "commercial fundraiser" to mean an entity that, for  
            compensation or other consideration, directly or indirectly  
            solicits or receives contributions for or on behalf of a  
            charitable organization or charitable purpose, or that is  
            engaged in, or is held out as being independently engaged in,  
            the business of soliciting or receiving contributions for  
            those purposes.  

          3)Defines two types of "covered organizations", having specified  
            characteristics, to which the disclosure requirements shall  
            apply: (a) nonprofit organizations; and (b) for-profit  
            organizations, including but not limited to commercial  
            fundraisers, as defined.

          4)Requires that a collection box that is owned by a covered  
            organization clearly and conspicuously display on its exterior  
            the name, address, telephone number, and website address of  
            the organization that owns the box, in addition to a statement  
            in at least two-inch type that states whether the box is owned  
            and operated by a for-profit organization or a nonprofit  
            organization.  

          5) Requires, in the case that the collection box is owned by a  
            commercial fundraiser, that the box display, in at least  
            two-inch type, a statement that the box is owned and operated  
            by a for-profit organization but that the proceeds will  
            benefit a charitable cause.

          6)Requires, in the case the collection box is owned by a  
            nonprofit organization or a commercial fundraiser, that the  
            box display the following additional information: 

             a)   The organization's charitable trust number issued by the  
               Attorney General;
             b)   The organization's California business license number;
             c)   A statement describing the previous year's charitable  
               activity, including the percentage of the organization's  








                                                                  AB 918
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               total donation proceeds that was used for the charitable  
               cause.
              
          7)Requires, in the case the collection box is owned by a  
            for-profit organization, that the box display the following  
            additional information: 

             a)   The for-profit organization's California business  
               license number;
             b)   A statement that the contribution is not tax deductible.

          8)Authorizes a local jurisdiction to prohibit a person or  
            eligible organization from placing, using, or employing a  
            collection box for solicitation purposes if the box does not  
            adhere to these disclosure requirements.  Further provides,  
            however, that nothing in this proposed legislation shall be  
            deemed to limit a local jurisdiction from adopting ordinances  
            or regulations regarding collection boxes that go beyond these  
            provisions, nor shall it supersede or limit existing federal  
            authority over fundraising for charitable purposes.

           EXISTING LAW  :  

          1)Provides that it shall be unlawful for any association of  
            persons to engage, directly or indirectly, in soliciting  
            donations of salvageable personal property, or in selling  
            salvageable personal property obtained by soliciting, except  
            an association which is exempt under section 23701d or 23701f  
            of the Revenue and Taxation Code from any tax imposed by the  
            Bank and Corporations Tax Law.  (Welfare and Institutions Code  
            Section 148.3.)

          2)Defines "solicit" to mean, among other things, requests made  
            by means of any box or receptacle, upon any public street,  
            sidewalk or way, or in any public park or in any publicly  
            owned or controlled place; or by means of any box or  
            receptacle in any place immediately abutting upon any public  
            sidewalk or way, or in any place of business open to the  
            public, or in any room, hallway, corridor, lobby, or  
            entranceway, or other place open or accessible to the public.   
            Defines "salvageable personal property" to mean any type of  
            corporeal personalty, new or used, but not including money or  
            evidences of debt.  (Welfare and Institutions Code Section  
            148.)









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          3)Provides that a "commercial fundraiser for charitable  
            purposes" shall include any person, association of persons,  
            corporation, or other entity that obtains a majority of its  
            inventory for sale by the purchase, receipt, or control for  
            resale to the general public, of salvageable personal property  
            solicited by an organization qualified to solicit donations  
            pursuant to Section 148.3 of the Welfare and Institutions  
            Code.  (Government Code 12599(a).)

          4)Governs the activities of charitable organizations and  
            corporations and specifically regulates their fundraising  
            activities through the Uniform Supervision of Trustees and  
            Fundraisers for Charitable Purposes Act.  (Government Code  
            Section 12580 et seq.)

          5)States that, while the charitable solicitation industry has a  
            significant impact upon the well-being of the people of this  
            state, regulation of solicitations and sale solicitations is  
            necessary for the public welfare.  (Business and Professions  
            Code Section 17510.)

          6)Endows local governments with the power to regulate the time,  
            manner, and place of activities within their respective  
            jurisdictions in order to promote order and protect the health  
            and safety of their citizens.  (California Constitution,  
            article XI.)

           COMMENTS  :   This bill, sponsored by the California Council of  
          Goodwill Industries, would require an organization that owns an  
          unattended collection box to conspicuously display specified  
          information about itself on the exterior of all such boxes it  
          uses for soliciting or collecting donations of personal  
          property.  In addition, this bill authorizes local jurisdictions  
          to prohibit an organization from using or employing such  
          collection boxes if it does not adhere to these disclosure  
          requirements.  

          According to the author, the specific disclosure requirements  
          contained in this bill will ensure that individuals donating  
          their personal property through use of unattended collection  
          boxes are informed that their donation is going to either a  
          non-profit charitable organization or a for-profit organization.  
           In the case of non-profit organizations or commercial  
          fundraisers, individuals will also be informed from the box's  
          exterior what percentage of the organization's total donation  








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          proceeds was used for the charitable cause in the previous year.

          The sponsor, the Council of California Goodwill Industries  
          (Goodwill), writes that the purpose of this bill is to create a  
          level playing field for all non-profit organizations that rely  
          on private clothing and household items donated to support their  
          charitable programs.  Goodwill also states:

               It is important that organizations which utilize  
               unattended donation boxes to solicit donated goods  
               for resale, for profit, or charitable use are  
               required to provide proper disclosure about their  
               organization so the public knows clearly what  
               charitable cause will benefit from their donation.

          The California Association of Nonprofits (CAN) also supports  
          this bill, stating that the improved disclosure requirements for  
          unattended collection boxes will help protect the public from  
          being misled and discourage unscrupulous operators from entering  
          the clothing donation arena.

           Technical Amendment re: Definition of "Commercial Fundraiser"  :   
          The bill as amended defines the term "commercial fundraiser."   
          However, the term "commercial fundraiser" is already defined in  
          similar but not identical language in a related section,  
          Government Code Section 12599(a).  In the interest of clarity,  
          the Committee has recommended that the author take a technical  
          amendment to conform the definition of "commercial fundraiser"  
          under this bill by cross-reference to Government Code Section  
          12599(a).

           Prior Legislation  :  AB 2610 (Davis) of 2008, sought to authorize  
          local jurisdictions to implement a detailed permitting process,  
          as specified, for the use of unattended collection boxes,  
          including the authority to collect local fees for the permit and  
          authority to determine the physical placement of collection  
          boxes based on safety criteria.  AB 2610 was vetoed by the  
          Governor.
           
          REGISTERED SUPPORT / OPPOSITION  :   

          Support 
           
          California Council of Goodwill Industries (sponsor)
          California Association of Nonprofits (CAN)








                                                                  AB 918
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           Opposition 
           
          None on file
           
          Analysis Prepared by  :    Anthony Lew / JUD. / (916) 319-2334