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 AB 918 Page 2 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 Page 3 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.) AB 918 Page 4 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 AB 918 Page 5 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 Page 6 Opposition None on file Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334